FIRST SECTION

DECISION

Application no. 14746/15 Marija BOGDAN against Croatia

The European Court of Human Rights (First Section), sitting on 23 March 2021 as a Committee composed of:

Alena Poláčková, President, Péter Paczolay, Gilberto Felici, judges, and Attila Teplán, Acting Deputy Section Registrar ,

Having regard to the above application lodged on 20 March 2015,

Having regard to the observations submitted by the respondent Government and the observations in reply submitted by the applicant,

Having deliberated, decides as follows:

THE FACTS

1 . The applicant, Ms Marija Bogdan, is a Croatian national who was born in 1958 and lives in Šenkovec. She was represented before the Court by Mr D. Rašpica, an advocate practising in Zagreb.

2 . The Croatian Government (“the Government”) were represented by their Agent, Ms Š. Stažnik.

3 . The facts of the case, as submitted by the parties, may be summarised as follows.

4 . After surgery at the Rijeka Clinical Hospital Centre (hereinafter “the hospital”) on 13 March 1996, the left side of the applicant ’ s body was paralysed.

5 . On 26 March 1998 the applicant brought a civil action against the hospital in the Zagreb Municipal Court ( Općinski sud u Zagrebu ), seeking compensation for medical negligence. She sought 1,009,993.28 Croatian kunas (HRK).

6 . On 30 April 1999 the C.O. insurance company joined the proceedings as an intervener ( umješač ) on the side of the defendant hospital. The applicant did not oppose the intervention (see section 207(1) of the Civil Procedure Act, cited in paragraph 16 below). By a decision adopted at the hearing of 21 February 2000 the court allowed the intervention.

7 . During the proceedings the hospital was represented by its in-house lawyer, whereas the insurance company was represented by an advocate. The applicant was also represented by an advocate.

8 . At the last hearing that took place before the Zagreb Municipal Court, held on 6 March 2012, the intervener sought HRK 334,862.50 and the applicant sought HRK 612,700 for the costs of the proceedings.

9 . By a judgment of 21 March 2012 that court, which in the meantime had become the Zagreb Civil Municipal Court ( Općinski građanski sud u Zagrebu ), dismissed the applicant ’ s action. It also ordered the applicant to pay the insurance company HRK 161,681 for the costs of the proceedings which it had incurred as the intervener. Those costs consisted of the intervener company ’ s advocate ’ s fees for its legal representation at thirteen hearings and for the preparation of four sets of submissions, as well as the costs of the medical expert.

10 . The applicant appealed, arguing, inter alia , that awarding the costs to the intervener company had been unjustified and that the award was excessive. She submitted that the costs incurred by the intervener had been unnecessary because the intervention itself had not been necessary. She also pointed out that if an unsuccessful plaintiff always had to pay the costs of legal representation to an intervener who joined the proceedings on the side of a successful defendant, then plaintiffs would not be on an equal footing with interveners, because the latter would never run any risk of having to pay the costs of unsuccessful litigation to its opponent. That was because under the domestic law, successful plaintiffs could not claim any costs from interveners who joined proceedings on the side of unsuccessful defendants (see section 154 of the Civil Procedure Act, cited in paragraph 16 below).

11 . By a judgment of 4 June 2013 the Zagreb County Court ( Županijski sud u Zagrebu ) dismissed the applicant ’ s appeal and upheld the first ‑ instance judgment. It referred to the relevant provisions of the Civil Procedure Act entitling interveners to have their costs incurred in the proceedings reimbursed, including the costs of their representation by an advocate (see sections 154(1) and 155(1) of the Civil Procedure Act, cited in paragraph 16 below).

12 . The applicant then lodged an appeal on points of law ( revizija ) in which, as well as generally contesting the judgments of the lower courts, she again contested the decision on costs. In addition to the arguments raised in her earlier appeal (see paragraph 10 above) she argued that the costs of the legal representation by an advocate had not been necessary because the intervener, as an insurance company, had its own legal department and could therefore have appointed one of its in-house lawyers to represent the company.

13 . By a judgment of 19 February 2014 the Supreme Court of Croatia ( Vrhovni sud Republike Hrvatske ) dismissed the applicant ’ s appeal on points of law. As regards the award of costs by the first-instance court, the Supreme Court held:

“The court ’ s decision on the costs of the proceedings which the plaintiff has to reimburse to the intervener is also correct ... The plaintiff mistakenly considers that the intervener who joined one of the parties ... is not entitled to the reimbursement of its costs, and that these costs were unnecessary. In particular, a person who has a legal interest in the success of one of the parties in an ongoing lawsuit between other persons may join that party (section 206(1) of the Civil Procedure Act). Each party may contest the right of the intervener to participate in the proceedings and propose that the intervener ’ s participation be refused , and the court may of its own motion refuse the intervener ’ s participation if it finds that the intervener has no legal interest (section 207(1) of the Civil Procedure Act).

However, in this case the plaintiff did not oppose the intervener ’ s participation and nor did the court of its own motion find that the intervener had no legal interest. The court therefore issued a decision allowing the intervention.

Pursuant to section 154(1) of the Civil Procedure Act, a party that loses a lawsuit must reimburse the costs not only of the opposing party but also of the intervener. In this case the amount of the intervener ’ s costs was assessed correctly, and the plaintiff herself, apart from contesting in general terms the intervener ’ s right to reimbursement of the litigation costs, does not state to what extent she challenges the amount of costs for particular procedural actions.

The plaintiff ’ s appeal on points of law, whereby she contested the second-instance decision which upheld the first-instance decision on the intervener ’ s costs, therefore has to be dismissed as ill-founded.”

14 . The applicant then lodged a constitutional complaint alleging that her constitutional right to fair proceedings had been breached. In so doing she again complained, inter alia, about the decision on costs and repeated the same arguments as she had raised in her appeals (see paragraphs 10 and 12 above).

15 . By a decision of 22 October 2014 the Constitutional Court ( Ustavni sud Republike Hrvatske ) declared the applicant ’ s constitutional complaint inadmissible, finding that the case did not raise a constitutional issue.

RELEVANT LEGAL FRAMEWORK

16 . The relevant provisions of the Civil Procedure Act ( Zakon o parničnom postupku , Official Gazette of the Socialist Federal Republic of Yugoslavia no. 4/77 with further amendments, and Official Gazette of the Republic of Croatia no. 53/91 with further amendments), as in force at the material time, read as follows:

COSTS OF PROCEEDINGS

Section 151

“The costs of proceedings involve disbursements made during, or in relation to, the proceedings.

The costs of proceedings also include fees for the services of advocates and other persons legally entitled to remuneration. ”

Section 154

“ A party that loses a lawsuit completely shall reimburse the costs of the opposing party and his or her intervener.

If a party succeeds in the proceedings in part, the court may, having regard to the success achieved, order that each party bear its own costs or that one party reimburse the other party and the intervener the corresponding part of the costs.

The court may decide that one party shall reimburse in full the costs incurred by the opposing party and his or her intervener if the opposing party was unsuccessful in only a relatively insignificant part of his or her claim, and where no special costs were generated because of that part.

...”

Section 155

“In deciding which costs shall be reimbursed to a party, the court shall take into account only those costs which were necessary for the conduct of the proceedings. When deciding which costs were necessary and their level, the court shall carefully consider all the circumstances.

If there is a prescribed scale of advocates ’ fees or other costs, these costs shall be awarded according to that scale.”

PARTICIPATION OF THIRD PARTIES IN A LAWSUIT

Participation of an intervener

Section 206

“A person who has a legal interest in the success of one of the parties in an ongoing lawsuit between other persons may join that party.

The intervener may join the lawsuit throughout the entire course of the proceedings until the time that the decision on the claim becomes final, and in the [subsequent] course of any proceedings which may be pursued by means of an extraordinary legal remedy.

The intervener may join the lawsuit by making a statement [to that effect] at a hearing or in a written submission.

The intervener ’ s submission shall be served on both parties and, if the intervener made the statement at a hearing, a copy of that part of the record shall only be served on a party that was absent from the hearing.”

Section 207

“Each party may contest the right of the intervener to participate in the proceedings and may propose that the intervener be refused. The court may refuse the intervener ’ s participation even without any statement by the parties if it finds that the intervener has no legal interest.

Until the decision refusing the participation of the intervener becomes final, the intervener may participate in the proceedings and his or her procedural actions cannot be excluded.

No separate appeal shall be available against the court ’ s ruling allowing the participation of the intervener.”

ORDINARY REMEDIES

2. Appeal against a ruling

Section 378

“(1) Unless this Act provides that no appeal is available, an appeal may be lodged against a ruling of the first-instance court.

(2) If this Act explicitly provides that no separate appeal is available [against certain rulings], a ruling of the first-instance court may be contested only in the appeal against its last decision [that is, the decision bringing the first-instance proceedings to an end].”

17 . On 1 September 2019 the Amendments to the Civil Procedure Act ( Zakon o izmjenama i dopunama Zakona o parničnom postupku , Official Gazette of the Republic of Croatia no. 70/19, with further amendments) entered into force. They made changes to, inter alia , section 154(1) of the Civil Procedure Act. The text of that provision, as amended by the 2019 Amendments, reads as follows:

Section 154(1)

“A party who loses a lawsuit completely shall reimburse the costs of the opposing party and his or her intervener. The intervener on the side of the losing party shall reimburse the costs incurred as a result of his or her actions.”

COMPLAINT

18 . The applicant complained under Article 6 § 1 of the Convention that she had had to pay to the intervener company the costs of its intervention .

THE LAW

19 . The applicant complained that she had had to pay the costs of the intervener ’ s participation in the proceedings. She argued that those costs had been unnecessary because the intervention itself had not been necessary. She relied on Article 6 § 1 of the Convention. The relevant part of that Article reads as follows:

“In the determination of his civil rights and obligations ... everyone is entitled to a fair ... hearing ... by [a] ... tribunal ...”

20 . Being the master of the characterisation to be given in law to the facts of the case (see Guerra and Others v. Italy , 19 February 1998, § 44, Reports of Judgments and Decisions 1998 - I , and Radomilja and Others v. Croatia [GC], nos. 37685/10 and 22768/12, § 124, 20 March 2018), and having regard to its case-law (see Perdigão v. Portugal [GC], no. 24768/06, 16 November 2010), the Court, when giving notice of the application to the Government, found that this complaint should also be examined under Article 1 of Protocol No. 1 to the Convention. That Article reads as follows:

“Every natural or legal person is entitled to the peaceful enjoyment of his possessions. No one shall be deprived of his possessions except in the public interest and subject to the conditions provided for by law and by the general principles of international law.

The preceding provisions shall not, however, in any way impair the right of a State to enforce such laws as it deems necessary to control the use of property in accordance with the general interest or to secure the payment of taxes or other contributions or penalties.”

(a) The Government

21 . The Government disputed the admissibility of the application on two grounds. They argued that the applicant had failed to exhaust domestic remedies, and that the application was, in any event, manifestly ill-founded.

22 . Specifically, the Government submitted that the applicant had not exhausted domestic remedies because she had not contested the intervener ’ s participation in the proceedings (see paragraph 6 above). The Supreme Court had emphasised that point in its decision dismissing her appeal on points of law (see paragraph 13 above).

23 . As regards the issue of whether the decision on costs in the applicant ’ s case had been in line with the Supreme Court ’ s case-law, the Government stressed that she had never raised that issue before any domestic court.

24 . In addition, the Government submitted thirty-one decisions in which the Supreme Court had held that legal persons which had been successful in civil proceedings were entitled to the reimbursement of the costs of their representation by an advocate, regardless of the fact that they employed in ‑ house lawyers who could have represented them before the courts. In only one case had the Supreme Court taken a different view. However, that one decision did not mean that the Supreme Court ’ s case-law was not stable and consistent.

25 . The Government further submitted that the costs the applicant had been ordered to pay to the intervener company had not been excessive given that under domestic law, the amount of costs in proceedings depended on the value of the claim, and that the applicant had sought an unrealistically high amount of compensation (see paragraph 5 above).

26 . As regards the principle of equality of arms, the Government argued that that principle implied that each party had to be able to present his or her case under conditions that did not place him or her at a substantial disadvantage vis-à-vis the other party. However, since under domestic law interveners were not parties to civil proceedings, the participation of the intervener company in the applicant ’ s case had not breached that principle. In any event, interveners did run the risk, to a certain degree, of having to pay the costs of the proceedings to the opposing winning party.

(b) The applicant

27 . The applicant replied that she had exhausted all domestic remedies because she had complained before every court that the decision ordering her to pay the costs of the intervener had not been justified (see paragraphs 10 and 12 above).

28 . The applicant further argued that the Supreme Court decisions submitted by the Government (see paragraph 24 above) suggested that the case-law of that court regarding the costs of legal representation of legal persons by advocates was not uniform. In any event, in her case the costs of the intervener ’ s legal representation by an advocate had been unnecessary because the intervener, which was the oldest and the largest insurance company in Croatia and which had its own legal department, could have been expertly represented by its own in-house lawyers.

29 . The applicant also submitted that the excessive award of costs to the intervener had disproportionately restricted her right of access to a court and amounted to an unjustified interference with her right to the peaceful enjoyment of her possessions.

30 . Lastly, the applicant stated that under domestic law, interveners enjoyed a very comfortable position given that unsuccessful plaintiffs always had to pay the costs of proceedings to interveners who had joined successful defendants, but successful plaintiffs had no right to claim the costs of proceedings from interveners who had joined unsuccessful defendants. Therefore, regardless of the outcome, interveners never ran any risk of having to pay the costs of proceedings. That had resulted in the breach of the principle of equality of arms in her case.

31 . The Court notes that the applicant complained that the domestic courts ’ decisions ordering her to pay the costs of the proceedings incurred by the intervener company had been unjustified (see paragraphs 10 , 12 , 14 and 19 above). Her main argument as to why she should not have been ordered to pay those costs was that they had not been necessary because the intervention itself had been unnecessary (ibid.).

32 . The Court further notes that domestic law allows the parties to oppose the participation of interveners either immediately (see section 207(1) of the Civil Procedure Act, cited in paragraph 16 above) or in the appeal against the decision bringing the first-instance proceedings to an end (see section 207(3) read in conjunction with section 378(2) of the Civil Procedure Act, cited in paragraph 16 above).

33 . The applicant did not oppose the participation of the intervener company in her case (see paragraph 6 above) – a fact which was taken into account by the Supreme Court when dismissing her appeal on points of law (see paragraph 13 above). The Government therefore argued that, by failing to do so, the applicant had not exhausted domestic remedies (see paragraph 22 above). The applicant, for her part, did not argue that opposing the intervention had not been possible for her or that this would have been ineffective (see paragraphs 27 - 30 above).

34 . That being so, and having regard to its case-law (see, for example, Vučković and Others v. Serbia (preliminary objection) [GC], nos. 17153/11 and 29 others, § 77, 25 March 2014), the Court sees no reason that could exempt the applicant from her obligation under Article 35 § 1 of the Convention to avail herself of that remedy.

35 . Therefore, in so far as the application concerns the alleged violations of the right of access to court and of the right to the peaceful enjoyment of possessions on account of the excessive costs of proceedings, as well as the alleged breach of the principle of equality of arms (see paragraphs 29 - 30 above), the Government ’ s objection regarding the exhaustion of domestic remedies must be upheld.

36 . To the extent that the applicant ’ s complaint concerns divergent case ‑ law of the Supreme Court (see paragraph 28 above), the Court also accepts the Government ’ s further objection regarding the exhaustion of domestic remedies (see paragraph 23 above) as the applicant did not argue either in her appeal or in the appeal on points of law, or in her constitutional complaint, that the decision on costs in her case had been contrary to the Supreme Court ’ s case-law.

37 . It follows that the present application is inadmissible under Article 35 § 1 of the Convention for non-exhaustion of domestic remedies and must be rejected pursuant to Article 35 § 4.

For these reasons, the Court, unanimously,

Declares the application inadmissible.

Done in English and notified in writing on 22 April 2021 .

Attila Teplán Alena Poláčková Acting Deputy Registrar President