SECOND SECTION

CASE OF BARANYI AND OTHERS v. HUNGARY

( Application no. 52664/07 )

JUDGMENT

STRASBOURG

9 October 2012

This judgment is final but it may be subject to editorial revision.

In the case of Baranyi and Others v. Hungary ,

The European Court of Human Rights ( Second Section ), sitting as a Committee composed of:

Dragoljub Popović , President, András Sajó , Paulo Pinto de Albuquerque , judges, and Françoise Elens-Passos , Deputy Section Registrar ,

Having deliberated in private on 18 September 2012 ,

Delivers the following judgment, which was adopted on that date:

PROCEDURE

1 . The case originated in an application (no. 52664/07) against the Republic of Hungary lodged with the Court under Article 34 of the Convention for the Protection of Human Rights and Fundamental Freedoms (“the Convention”) by eleven Hungarian nationals (see Annex for details) on 12 November 2007 .

2 . On 5 September 2007 Ms Erzsébet Borsayné Sárga , the mother of the applicants Mr Balázs György Borsay and Ms Beáta Ágnes Borsay, who had been a party to the proceedings referred to below, died. On 3 March 2008 the notary public established that the legal heirs were her children. In the meantime, by a power of attor ney given to Sándor Borsay on 8 November 2007, the heirs had expressed their wish to lodge an application in respect of the unreasonable length of the proceedings to which their mother had been a party. The term “the applicants” will be used below to refer to Ms Erzsébet Borsayné Sárga and the remaining applicants who were parties to the said proceedings.

3 . The applicants were represented by Mr S. Borsay, a lawyer practising in Debrecen . The Hungarian Government (“the Government”) were represented by Mr Z. Tall ódi, Agent, Ministry of Public Administration and Justice .

4 . On 30 November 2010 the application was communicated to the Government . In accordance with Protocol No. 14, the application was allocated to a Committee of three Judges.

THE FACTS

THE CIRCUMSTANCES OF THE CASE

A. Facts giving rise to the official liability action

5 . In February 1994 the Hungarian National Bank authorised a private limited company (“the Company”) to issue payment cards to its customers. After 1995, however, purchase with such cards was no longer possible. Despite this fact, i n 1996 the applicants concluded agreements with the C ompany for so-called “savings cards” in which they invested various amounts of money.

6 . In November 1996 bankruptcy proceedi ngs were initiated against the C ompany and its insolvency was established in June 1997. The applicants recovered part of their investments through partial reimbursement by the C ompany . They sold their remaining claims against the Company to third parties.

B. The official liability action

7 . On 26 October 1998 three hundred and thirty private indivi duals, including the applicants, who were all represented by one law firm, brought an official liability action against the Hungarian National Bank before the Budapest Regional Court . They claimed that the respondent had not exercised its supervisory duties over the Company, therefore making it possible for the applicants to conclude the above-mentioned agreements which had resulted in substantial losses.

8 . On 11 January 2001 the Regional Court dismissed their action, finding that the respondent had no duty of supervision according to the relevant domestic legislation.

9 . On 28 January 2003 the Supreme Court, acting as a second-instance court, quashed the Regional Court ’ s decision and remitted the case to the first instance court due to the incomplete findings of fact.

10 . In the resumed proceedings the Budapest Regional Court found for the applicants on 6 December 2005. It established that the Company had unlawfully overstepped the boundaries of its activities, which had been known to the respondent; nevertheless, the latter could not prove that it had fulfilled its supervisory duties in this respect.

11 . On 26 October 2006 the Budapest Court of Appeal dismissed their appeal. It acknowledged that there were omissions on the respondent ’ s side. However, since the applicants had already sold their claims to third parties, the court held that they could have no substantive claims whatsoever in the circumstances.

12 . The applicants lodged a petition for review with the Supreme Court. It upheld the Court of Appeal ’ s decision on 5 June 2007, finding that the latter decision had b een in compliance with the law.

THE LAW

I. ALLEGED VIOLATION OF ARTICLE 6 § 1 OF THE CONVENTION

13 . The applicant s complained that the length of the proceedings had been incompatible with the “reasonable time” requirement of Article 6 § 1 of the Convention. In this connection they also relied on Article 13 of the Convention, without substantiating or developing further this complaint.

14 . The Gov ernment contested that argument.

15 . The Court considers that the complaint should be examined under Article 6 alone.

A. Period to be taken into consideration

16 . The Court observes that the proceedings began on 26 October 1998, when the applicants lodged their claim with the Budapest Regional Court , and ended on 5 June 2007 with the Supreme Court ’ s judgment . It thus lasted eight years and seven months for three levels of jurisdiction.

B. Reasonableness of the length of the proceedings

17 . The Court reiterates that the reasonableness of the length of proceedings must be assessed in light of the particular circumstances of the case and having regard to the criteria laid down in the Court ’ s case-law, in particular the complexity of the case, the conduct of the applicant and of the relevant authorities, and the importance of what was at stake for the applicant in the litigation (see, for instance, Frydlender v. France [GC], no. 30979/96, § 43, ECHR 2000-VII ).

18 . The Government contended that the case was particularly complex as it involved three hundred and thirty plaintiffs.

19 . The applicants disagreed with the Government and argued that a single law office represented them all , meeting every deadline .

20 . The Court is of the view that despite the large number of plaintiffs - represented by one law firm - , the Government ’ s reasoning does not sufficiently explain the length of the present case (see, mutatis mutandis , Malinowska v. Poland , no. 35843/97, § 94 , 14 December 2000 , un report ed) which otherwise disclosed no particular element of complexity . Having regard to its case-law on the subject, the Court considers that the length of the proceedings was excessive and failed to meet the “reasonable time” requirement. There has accordingly been a breach of Article 6 § 1.

21 . The applicant s also complained under Article 6 § 1 of the Convention about the outcome of the proceedings. In so far as this complaint may be understood to concern the assessment of the evidence and the result of the proceedings before the domestic courts, the Court reiterates that, according to Article 19 of the Convention, its duty is to ensure the observance of the engagements undertaken by the Contracting Parties to the Convention. In particular, it is not its function to deal with errors of fact or law allegedly committed by a national court unless and in so far as they may have infringed rights and freedoms protected by the Convention. Moreover, while Article 6 of the Convention guarantees the right to a fair hearing, it does not lay down any rules on the admissibility of evidence or the way it should be assessed, which are therefore primarily matters for regulation by national law and the national courts (see García Ruiz v. Spain [GC], no. 30544/96, § 28, ECHR 1999 I). In the present case, the Court is satisfied that the applicant s ’ submissions do not disclose any appearance that the courts lacked impartiality, or that the proceedings were otherwise unfair or arbitrary. It follows that this part of the application is manifestly ill-founded within the meaning of Article 35 § 3 (a) and must be rejected, pursuant to Article 35 § 4 of the Convention.

22 . Relying on Article 41 of the Convention, the applicant s claimed various amounts in respect of pecuniary damage and non-pecuniary damage (for the sums, see Annex) . The Government contested these claims. Rejecting the claim s for pecuniary damage, the Court considers that the applicant s must have sustained some non-pecuniary damage and , on an equitable basis , awards t hem each - with the exception of Sándor Borsay, Balázs György Borsay and Beáta Ágnes Borsay, who shall be awarded jointly -, 3,600 euros (EUR) under this head.

23 . The applicant s also claimed various amounts for the costs and expenses incurred before the domestic courts and the Court (see Annex) . The Government contested the claim s . Regard being had to the documents in its possession and to its case-law, the Court considers it reasonable to award jointly to the applicant s , who were represen ted by the same lawyer, the sum of EUR 2 ,000 in respect of all costs incurred.

24 . The Court considers it appropriate that the default interest should be based on the marginal lending rate of the European Central Bank, to which should be added three percentage points.

FOR THESE REASONS, THE COURT UNANIMOUSLY

1 . Declares the complaint concerning the excessive length of the proceedings admissible and the remainder of the application inadmissible;

2 . Holds that there has been a violation of Article 6 § 1 of the Convention;

3 . Holds

(a) that the respondent State is to pay the applicant s within three months , the following amounts, to be converted into Hungarian forints at the rate applicable at the date of settlement :

(i) EUR 3, 6 00 ( three thousand six hundred euros) each - with the exception of Sándor Borsay, Balázs György Borsay and Beáta Ágnes Borsa y, to whom the same sum is awarded jointly -, plus any tax that may be chargeable, in respect of non-pecuniary damage;

(iii) EUR 2 ,000 ( two thousand euros) jointly , plus any tax that may be chargeable to the applicant s , in respect of costs and expenses;

(b) that from the expiry of the above-mentioned three months until settlement simple interest shall be payable on the above amounts at a rate equal to the marginal lending rate of the European Central Bank during the default period plus three percentage poin ts;

4 . Dismisses the remainder of the applicant s ’ claim for just satisfaction.

Done in English, and notified in writing on 9 October 2012 , pursuant to Rule 77 §§ 2 and 3 of the Rules of Court.

             Françoise Elens-Passos Dragoljub Popović Deputy Registrar President

Last Name

First name

Year of b irth

Place of residence

Pecuniary damage claim ed (EUR)

Non-pecuniary damage claim ed (EUR)

Cost and expenses claim ed (EUR)

BARANYI

László

1927Budapest

16,357

8,000

1,263

BORSAY

Sándor

1951Debrecen

8,031

8,000

792BŐHM

Imre

1953Budapest

21,731

8,000

2,141

FÁBRI

György

1941Budapest

2,618

8,000

270FROMMER

Miklósné

1933Budapest

13,626

8,000

1,190

GEYER

Sándorné

1936Budapest .

16,987

8,000

1,698

SOLTI

Mihályné

1927Budapest

16,693

8,000

1,645

SZEMES

Tiborné

1931Budapest

8,961

8,000

924SZÅ°CS

Attila

1956Rábaszentmihály

34,496

8,000

3,501

TAMÁS

Ferenc

1946Budapest

26,618

8,000

2,643

BORSAYNÉ SÁRGA [1]

Erzsébet

1951Debrecen

2,323

8,000

230[1] Died on 5 September 2007, l egal heirs: Balázs György BORSAY and Beáta Ágnes BORSAY .