Published on 19 December 2022

SECOND SECTION

Application no. 21049/21 Julius GRUZDAS against Lithuania lodged on 2 April 2021 communicated on 28 November 2022

SUBJECT MATTER OF THE CASE

The applicant was involved in administrative litigation, regarding an authorisation for him to build a house, against the company Amber Grid , which, as it appears from publicly accessible information, is largely State-owned. The authorisation by Amber Grid was necessary since that gas pipeline passes through the applicant’s plot of land, and the company initially refused to grant such authorisation.

By a final ruling of 7 October 2020 the Supreme Administrative Court quashed, as unlawful, Amber Grid ’s decision not to issue the applicant with an authorisation, and ordered the company to examine the question of authorisation for the construction afresh. The court refused to grant the applicant’s request that he be issued the authorisation by Amber Grid . The court awarded Amber Grid 2,482 euros (EUR), payable by the applicant, for litigation costs the company had incurred because it had been represented by an advocate. It held that Amber Grid was a private company, owner of a gas pipeline, not a body set up for matters of public administration, and that therefore Amber Grid could use external legal services.

On 24 March 2021 the Supreme Administrative Court refused to re-open the administrative proceedings, notwithstanding the applicant’s claim that the question of compensation for legal costs had been decided erroneously. The company Amber Grid largely belonged to the Ministry of Energy, but the dispute between the applicant and Amber Grid had been resolved as if it had been a dispute between private parties. The Supreme Administrative Court noted that in certain situations, where internal resources of a body of public administration were insufficient, the State’s interests could be properly defended only by having recourse to professional representation by an advocate. As a result, the applicant’s request for re-opening of the proceedings was dismissed, and Amber Grid was awarded additional EUR 582 payable by the applicant for legal costs sustained.

The applicant complains under Article 6 of the Convention and under Article 1 of Protocol No. 1 to the Convention that the litigation costs awarded to a State-owned company entrusted with public authority functions put an excessive burden on him, particularly given that the State itself had not been at any financial risk. The applicant argues that the reimbursement of Amber Grid ’s litigation costs constituted a hindrance to his right of access to court. The applicant does not dispute the rationale behind the “loser pays” principle, which discourages filing weak cases. However, in his case the administrative decision at issue – Amber Grid ’s decision to refuse the applicant an authorisation for construction – had been proved to be unlawful in court. Besides, according to the applicant, he had a legitimate expectation to be able to build the house on the property, because previously he had been granted several authorisations and permits by Amber Grid and by other competent State institutions. The applicant lastly argues that, under the case-law of the Lithuanian administrative courts, disproportionately high or unjustified legal costs could always have been refused, and public authorities, first and foremost, should rely on in-house lawyers. In the applicant’s case, the risk of having to bear the costs of the State’s legal representation in administrative proceedings had been particularly high as the question concerned a State-owned company, since ab initio it enjoyed a privileged position with respect to litigation costs, and generally had much greater resources at its disposal.

QUESTIONS TO THE PARTIES

1. Has there been a breach of the applicant’s right of access to court, as provided for in Article 6 § 1 of the Convention, on account of the fact that the courts ordered him to compensate the legal expenses incurred by the company Amber Grid during administrative court proceedings regarding the authorisation for construction of the applicant’s house (see, mutatis mutandis , Steel and Morris v. the United Kingdom , no. 68416/01, §§ 59-62, ECHR 2005 ‑ II; Handölsdalen Sami Village and Others v. Sweden , no. 39013/04, § 51, 30 March 2010, and Dragan Kovačević v. Croatia , no. 49281/15, §§ 70 and 71, 12 May 2022)?

2. Has there been a breach of Article 1 of Protocol No. 1 to the Convention on account of the administrative court decisions ordering the applicant to bear the costs of legal representation of the company Amber Grid in the aforementioned litigation (see, mutatis mutandis , Perdigão v. Portugal [GC], no. 24768/06, § 72, 16 November 2010, and Cindrić and Bešlić v. Croatia , no. 72152/13, § 108, 6 September 2016)?

3. The parties are requested to provide examples of and to comment on the most recent domestic courts’ case-law regarding awards of legal costs in administrative litigation where a State body is a party.