SEPARATE OPINION OF JUDGE KALAYDJIEVA JOINED BY JUDGE BIANKU AS REGARDS ARTICLE 1 OF PROTOCOL NO. 1 TO THE CONVENTION

My reasons for finding a violation of Article 1 of Protocol No. 1 go further than those of the majority. In my understanding, the issues which this case raises are far from limited to the deficiencies in the procedural protection of the applicant ’ s right to peaceful enjoyment of property that were reflected in the narrow scope of the review carried out by the domestic courts and their failure to seek and strike the “fair balance” inherent in the second paragraph of Article 1 of Protocol No. 1 (see paragraph 68).

I find myself unable to agree with the majority ’ s conclusions (see paragraph 64) that the present case is analogous to previous case-law of this Court on the confiscation of the proceeds of crime (see Phillips v. the United Kingdom , no. 41087/98, and Bongiorno and Others v. Italy , no. 4514/07, 5 January 2010).

The present case appears to depart substantially from this case-law on several major points which seem to be determinative for the proper analysis of the circumstances. In the case of Phillips the Court noted that “in respect of every item taken into account the [national] judge was satisfied ... that the obvious inference was that it had come from an illegitimate source”. In the present case (which concerns the application of different domestic legislation), it has not been contested that, having entered the territory of the United Kingdom by using a false passport, the applicant used it to obtain employment and thus earn his income. Unlike in Phillips , however, it has not been submitted that such employment constituted itself a crime on the part of the applicant, or that the regulation of the domestic labour market went so far as to make any irregularly obtained employment criminal or punishable in any manner. Likewise, it has not been contended that the applicant ’ s work caused any public or private harm rather than contributing to the public welfare. Notwithstanding this situation, the applicant ’ s genuinely earned savings were defined and confiscated as the “proceeds of the crime” of using a false passport – an act for which the applicant was punished in separate proceedings. The difference between the reasonable assumption as to the criminal origin of the confiscated property in the case of Phillips and the remote or indeed non-existent link between the use of a false passport and the genuine earning of the confiscated amounts in the present case appears quite obvious.

This difference raises questions as to whether the circumstances of the present case fall to be considered under the first or the second paragraph of Article 1 of Protocol No. 1. It is true that under the established case-law of the Court, the confiscation of the proceeds of crime is seen as a measure compatible in principle with the Convention and its Protocols. However, I find myself unable to agree that in the present case the confiscated amounts could be clearly and necessarily defined as the proceeds of crime. Such an assumption is apt to regard any irregular employment as criminal, with the result that any earnings from such employment would be subject to confiscation in the exercise of “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” within the meaning of the second paragraph of Article 1 of Protocol No. 1 to the Convention. In my understanding, the Court has hitherto regarded the confiscation of the “proceeds of crime” as compatible with the Convention where a direct link between criminal conduct and the proceeds could be established or reasonably assumed. In the absence of such a direct link, I would venture to express doubts as to the clarity of the law and the foreseeability of the imposed measure.

Given that the applicant ’ s employment as such was not of a criminal nature and that the criminal origin of the confiscated earnings cannot be established or reasonably assumed, a question arises whether the circumstances in the present case fall more appropriately to be examined under the first paragraph of this provision, which calls for closer scrutiny of the public interest pursued by the measure and of the clarity and foreseeability of the conditions provided for by law for the purposes of such confiscation. In assessing compliance with Article 1 of Protocol No. 1, the Court normally makes an overall examination of the various interests in issue, bearing in mind that the Convention is intended to safeguard rights that are “practical and effective”. It must look behind appearances and investigate the realities of the situation complained of, including the conduct of the parties, the means employed by the State and their implementation (see Broniowski v. Poland [GC], no. 31443/96, § 151).

Limiting the scope of the present case to only some of its “procedural aspects”, the majority failed to express any views on whether the applicable legislation was sufficiently precise as to the conditions for forfeiture, whether the domestic courts were required to analyse the link between the assets proposed for forfeiture and the specific crime, and whether they did so in the present case.

It might be true that the findings of the majority with regard to the limited judicial scrutiny performed are sufficient to enable the Court to conclude that there has been a violation of Article 1 of Protocol No. 1 (see paragraph 69). However, the limited findings as to the “procedural nature” of the established violation (see paragraph 73) neither afford relevant redress in respect of Article 1 of Protocol No. 1, nor do they seem to require a subsequent domestic review with a scope sufficiently wide to satisfy the requirement of seeking and striking a “fair balance” required by the said provision (see paragraph 68). In this regard the view that it is not necessary to reach any conclusions in respect of (the lawfulness and/or) the proportionality of the confiscation order leaves the applicant ’ s essential grievances unaddressed both at the domestic level and by the Court.

For these reasons I also disagree with the majority ’ s view as to the “absence of a proximate causal link between the procedural violation found and financial loss sustained by the applicant by reason of the confiscation order” (see paragraph 73). In the absence of any subsequent examination of this causal link and/or the proportionality of the uncontested interference, the applicant should have been awarded compensation in pecuniary damage, and not merely for moral damage.

CONCURRING OPINION OF JUDGE MAHONEY

I have voted with the majority of my colleagues in finding a violation of a procedural character as regards the interference with the applicant ’ s right of property resulting from the confiscation order made against him. I did, however, have some hesitations in connection with the assessment of the scope of the review of fair balance and proportionality that the national courts are required to carry out under Article 1 of Protocol No. 1.

As regards the assessment of fair balance and proportionality, the qualifying criterion for the State ’ s exercise of its discretionary power to regulate the enjoyment of the right of property is stated in the text of Article 1 of Protocol 1 to be “the public interest” (the second sentence of the first paragraph) or “the general interest” (the second paragraph, this being the relevant provision in the present case – see paragraph 64 of the Court ’ s judgment in the present case (“the present judgment”)). “The public interest” and “the general interest” are wide-ranging notions that allow the national authorities a rather broad area of discretion. The fair-balance test under Article 1 of Protocol No. I, as the Court expressed it in the landmark judgment of Sporrong and Lönnroth v. Sweden (cited at paragraph 65 of the present judgment), requires determining whether the person who is the subject of a contested regulatory measure has had to bear “an individual and excessive burden”. Overall, what is involved is a far less constraining restriction on the State ’ s regulatory power than, for example, that of “necessity in a democratic society” in the pursuit of certain specified legitimate aims, as enunciated in Articles 8 to 11 of the Convention. The threshold of the restriction is lower. The intensity of the scrutiny that the national courts, and thereafter this Court, are called on to undertake in relation to the merits of fair balance and proportionality under Article 1 of Protocol 1 is, correspondingly, less than that under Articles 8 to 11. This is so whether the national courts effect their scrutiny in terms of domestic-law concepts (as in the present case) or in terms of the Convention and its case-law (as the British courts were henceforth enjoined to do in 2012 by the Supreme Court in the case of Waya – see paragraphs 37-39 of the present judgment).

It is true that, on this analysis, the level of protection afforded to the individual, notably as regards the substantive content of proportionality and the procedural requirement as to the intensity of any judicial scrutiny of proportionality to be carried out at national level, is lower under Article 1 of Protocol 1 than that under other Articles of the Convention, but that is the direct and inevitable consequence of the different and less constraining wording employed in Article 1 of Protocol 1 in order to define the content of the right guaranteed.

The hesitation I had was whether the reasoning employed in the present judgment does not involve too strict a standard for the scrutiny of fair balance and proportionality to be carried out by national courts in relation to measures that constitute the “control of the use of property”, within the meaning of the second paragraph of Article 1 of Protocol 1.

The reasoning of the Court of Appeal in Mr Paulet ’ s case (set out at paragraph 19 of the present judgment) was as follows:

“The reality is that throughout the period of his employment the appellant [Mr Paulet] was relying on a continuing dishonest representation to three different employers. He deceived them into thinking that he was entitled to obtain employment with them. That was a crucial element of his criminality. His earnings, of course, reflected the fact that he had done the necessary work, as we shall assume, to the satisfaction of his various employers. But the opportunity for him to do so, that is the pecuniary advantage, was unlawfully obtained. If the employee worked to his employer ’ s satisfaction, and he paid his tax and National Insurance contributions on his earnings, and his deception either lacked any significant wider public interest, or, perhaps because of the passage of time, but for whatever reason, had ceased to have any meaningful effect on his employers ’ decision to continue his employment, the resolution of the issue might well be different. As it is, there was here a wider public interest. The appellant was deliberately circumventing the prohibition against him seeking remunerative employment in this country in any capacity. No basis for interfering with the order made in the Crown Court has been shown. In our judgment the appropriate link between the appellant ’ s earnings and his criminal offences, in the context of the wider public interest, was plainly established.”

It can be seen, as the present judgment concedes (at paragraph 67), that the Court of Appeal did verify that there existed a general interest prompting the confiscation order. The language used by the Court of Appeal can also, I believe, be read as weighing the applicant ’ s personal interest in retaining his earnings against “the wider public interest” in upholding the prohibition against dishonestly obtaining paid employment and as concluding that the applicant ’ s case disclosed no circumstances capable of outweighing that public interest.

The judgment of the Court (at paragraph 66), in referring to the 2012 judgment by the Supreme Court in Waya , should not be understood as suggesting that only an analysis under Article 1 of Protocol 1, with explicit reference to this Court ’ s case-law on proportionality under that Article, would suffice and that a national court ’ s proceeding in substance to the same kind of examination of proportionality in terms of domestic-law concepts is not good enough. While, from this Court ’ s point of view, incorporation of the Convention and its case-law into domestic law and direct examination of issues under the Convention and its case-law represent an ideal manner for the Contracting States to implement their general obligation under Article 1 of the Convention, it is not contrary to the Convention for a guaranteed right to be implemented by means of equivalent provisions framed in terms of domestic-law concepts, provided of course that the minimum standard laid down by the Convention is complied with.

The Supreme Court did indeed state in 2012 in Waya that “the better analysis” of cases such as the applicant ’ s was that confiscation orders “ought to be refused by the judge on the grounds that they would be wholly disproportionate and a breach of [Article 1 of Protocol 1]” (see paragraph 39 of the present judgment). Until this clarification by the Supreme Court, “the appropriate remedy” was taken by the national courts to be an application for a stay of proceedings on the ground of abuse of process (see the statement of the Court of Appeal to this effect in the applicant ’ s case - paragraph 18 of the present judgment). The United Kingdom courts themselves believed that their power of review in relation to applications for a stay of a confiscation order on the ground of “oppression” was sufficiently wide to enable the issue of proportionality, for the purposes of the protection of the right of property afforded by Article 1 of Protocol 1, to be adequately examined. This is illustrated by the Court of Appeal ’ s analysis in the 2008 case of Shabir (quoted at paragraph 36 of the present judgment):

"The court retains the jurisdiction to stay an application for confiscation, as any other criminal process, where it amounts to an abuse of the court ’ s process. In the present context, that power exists where it would be oppressive to seek confiscation, or to do so on a particular basis.

...

This country ’ s confiscation regime has consistently been held to be a proportionate and legitimate response to crime and thus to occasion no infringement of [Article 1 of Protocol 1]: see for example Phillips v United Kingdom [no. 41087/98, ECHR 2001 ‑ VII] and R v Rezvi [2003] 1 AC 1099. Even if it be accepted that the Protocol may be capable of being infringed by a truly oppressive and thus disproportionate individual order for confiscation..., it is clear that the court ’ s power to stay for oppression provides the remedy. ” (Emphasis supplied.)

The question that therefore arises is whether the scrutiny carried out by the Court of Appeal in Mr Paulet ’ s case was wide enough to encompass, in substance, the considerations (fair balance, proportionality and avoidance of “an individual and excessive burden”) which are stated in the Court ’ s case-law as being those that have to be taken into account to justify any measure of interference with the right of property as guaranteed by Article 1 of Protocol No. 1.

I found the facts of the present case in that regard, notably in relation to the reading to be given to the language used by the Court of Appeal in carrying out its examination of the impact of the general interest in the particular circumstances, to be borderline . In the end, I overcame my hesitations and joined the majority of my colleagues in concluding that the national courts ’ review of lawfulness under the concepts of “abuse of process” and “oppression” was too narrow in scope to secure the applicant the balancing exercise to which he was entitled under Article 1 of Protocol No. 1, even having regard to the fact that the scrutiny of fair balance and proportionality to be carried out in relation to regulation of the enjoyment of the right of property is less intense than that required in relation to interferences with the exercise of other Convention rights. The violation found may, in any event, hopefully be regarded as an historical one, in view of the intervening guidance given by the Supreme Court in Waya.