Julius Kloiber Schlachthof GMBH and others v. Austria, ECtHR, 4 April 2013, read judgment
These ECtHR decisions are the latest in a number of claims by slaughterhouses that their rights were infringed by the exaction of a surcharge by the Austrian national agricultural board. The Court decided that (a) the process of surcharging by administrative bodies engaged the criminal part of Article 6 and (b) the Austrian courts hearing appeals against the surcharges did not have the jurisdiction to carry out a “full review” of the decision to surcharge; only that way could one turn the combination of administrative decision and court decision into a decision by a “tribunal” complying with Article 6.
Now to unpack these complex but important ECtHR rules, and to look at how they play out domestically.
The abattoirs were ordered to pay surcharges of either 10% or 60% as well as outstanding contributions to the levy. Their appeals were to the Minister of Agriculture etc, who dismissed them without a hearing. They then brought proceedings in both the Austrian Constitutional and Administrative Courts; in the former they said that their right to property had been violated, and in the latter that the Minister had not been a “Court” within EU case law such that they could not get a reference to the ECJ. Both proceedings were dismissed. So off they went to Strasbourg.
Civil or criminal?
Their path there had been smoothed by a very similar case, Steininger in April 2012. The general rules as to whether something is a civil or criminal proceeding under Article 6 are well-known, and were summarised best in Steininger at 
In the case of Jussila…., the Court found that Article 6 under its criminal head applied to proceedings on the imposition of surcharges for taxes. In doing so it examined whether the surcharge proceedings were “criminal” within the autonomous meaning of the Article, and to this end relied on three criteria, commonly known as the “Engel criteria” (see Engel and Others v. the Netherlands, 8 June 1976…), to be considered in determining whether or not there was a “criminal charge”. The first criterion is the legal classification of the offence under national law, the second is the very nature of the offence and the third is the degree of severity of the penalty that the person concerned risks incurring. The second and third criteria are alternative and not necessarily cumulative. This, however, does not exclude a cumulative approach where separate analysis of each criterion does not make it possible to reach a clear conclusion as to the existence of a criminal charge….
Easy to state, but not to apply. Domestically, the best illustration of them is in the VAT evasion surcharge case of Han: held, criminal proceedings.
Steininger held that these agricultural surcharges amounted to criminal offences under these rules.
True, under domestic Austrian law, and applying the first criterion, the surcharges were not classified as criminal but as part of the general framework of the Act on the levying of marketing charges. This however is not decisive. (Nor could it be: you can’t make something “civil” simply by calling it so).
As to the second criterion, the nature of the offence, the surcharges were not imposed by a general legal provision applying to taxpayers generally but to a more restricted group of persons – both physical and legal – who pursue a specific economic activity. But this did not therefore exclude their classification as “criminal” in the autonomous sense of the Convention.
So far, matters pointed towards civil and not criminal: 2-0 up. But, as often, the nub of the decision was in the application of the third criterion: so Steininger again
Further, given the amount which can be imposed…., namely up to double the amount due, such an amount is substantial and cannot be intended merely as pecuniary compensation for additional work. Also the sum actually imposed on the applicant company, which was 60% of the original charge, shows that the amount was not unimportant. Having regard to this, the Court considers that the surcharges were imposed by a rule which purpose was deterrent and punitive. The Court considers that this establishes the criminal nature of the offence and hence that Article 6 applies under its criminal head.
Was there a decision by an independent and impartial tribunal?
Plainly, the Minister, as the initial appellate authority, was neither independent/impartial nor a tribunal. But for many years the ECtHR has looked at the totality of the decision-making system, including the nature of the body hearing any review of the Minister’s decision. That said, narrow review is not enough to make up the inadequacies of the Minister’s decision – there must be a “full review” to comply with Article 6.
Again, a diversion into UK cases. Where you are dealing with civil proceedings, it is not enough just to say that you need a full review, it all depends on what is required given the nature of the decision in question. So in the planning context, where great chunks of any decision are policy-based, you cannot expect a full review of those elements – they have been entrusted by Parliament to the executive, rather than the Courts: see e.g. Alconbury and cases following. Therefore the “full review” has to be tailored to the relevant parts of the decision-making process. And this is a very case-specific exercise: e.g. see the debate in King, a prisoners cell confinement case, deciding that judicial review was sufficient even if the original decision by the prison engaged Article 6.
But the rules are stricter for criminal proceedings. The Court here, following previous cases, decided that neither the Administrative nor the Constitutional Court had the powers of adequate review in respect of criminal proceedings. They were restricted solely to points of law, and could not investigate the facts. Hence, the ECtHR found a violation of Article 6.
The companies brought claims under Article 1, Protocol 1 for a violation of their right to property. These failed. It was within the wide margin of discretion for a state to order 10% or 60% of the unpaid contributions and this did not amount to an excessive burden on the companies.
This conclusion led to a conclusion that the companies were not entitled to damages by way of just satisfaction; even if they had had a proper hearing before a “tribunal” it by no means followed that they would not have had to pay the surcharges anyway.
The most important reminder in this case is that you do not turn what is really a criminal penalty into a civil one, simply by calling it one. Therefore in any domestic case where there is a “civil penalty”, careful analysis is needed before deciding whether the penalty is really a civil one, and therefore what procedures (whether pre-hearing or at any hearing) are required in any appellate structure.
Not too much importance for UK Courts should be attached to the finding that the Austrian Courts did not have full jurisdiction. Though the debate about the powers of the domestic administrative court continues to rage, the fact is, it can turn itself (when it needs to for human rights reasons) into a court which decides issues directly, rather than simply deferring to the decision of some governmental body: see, for instance, the recent decision of Lang J in the R (A) v. Chief Constable of Kent (post and link here) case about disclosure of ill-treatment allegations where the judge decided whether the disclosure was in breach of Article 8, without deferring to the original decision-maker.
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