Kalvis Torgāns, Professor, Academician of the LatvianAcademy of Sciences
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Supreme Court as a Developer of the Judicature Body of Law
Allow me, please, to congratulate you with the celebration which is linked to significant years what at the same time is just a brief moment is the eternal movement of the world. I should deal with judicature but the festive mood does not let me to turn at once to the review of judgments. Today you are away from your offices, courtrooms and I invite you to try to feel a little romance, remember some quiet summer night when the whole empyrean is covered with stars, and you recalling what was taught at school, find again the Great bear, the North Star, the milky Way, notice a falling star.
It’s not so easy? You haven’t had time to watch the skies for a long time? Then, imagine that it is judicature which bows above your heads in the sky.
Here, it is something more understandable, and still as mysterious as the starry sky. Romance vanishes when you, at least the specialists in the civil law, remember that now, in accordance with Article 5 of the Civil Procedure Law when applying the legal norms you have to take judicature into account.
Comparison with the starlit sky serves to remind the huge amount which is accumulated by the court practice. As no one has counted the stars, it is impossible, as well, to count those civil, criminal and administrative cases which have been heard in courts of various instances. But, one of the differences is that you, honoured senators and all the other judges have an opportunity to create a new big star to the sky of judicature, or, God forbid, some superhuge bear or create a falling star.
There are no grounds to state that with the appearance of the term (notion) “judicature” we have had a revolution in the work of courts, but we cannot also state that nothing changes in relation to role of courts in implementation and further development of law. The main question has been raised for the law theoreticians: Out of court practice, what can be regarded as source of law? Let them deal with it! In the magazine “Rules and Law”, scientist Zupanchich wrote that independence of lower courts from the higher ones is fiction and myth. No, dependence on judicature has been legalized.
This word of Latin origin has been introduced only in the civil law, as it was mentioned, in the Civil Procedure Law. In criminal law and administrative law the courts must follow rulings, however, only within a strictly fixed scope.
Article 2, point 2 of the Criminal Procedure Law states:
When applying a legal norm of the European Union (Community), judicature of the European Court of Justice is followed, but when applying legal norms of the Republic of Latvia, interpretation of the respective legal norm given in the judgment of the Constitution is taken into account.
Article 15, part 4 of the Administrative Procedure Law contains an analogical norm on judicature of the European Court of Justice, but Article 17, part 5 states:
If the Constitutional Court has interpreted the relevant norm of law in a judgment, institutions and courts shall apply this interpretation.
Probably, these articles only single out significance of the mentioned parts of judicature. It may be concluded from the Constitution of the Republic of Latvia that there cannot exist, for example, judicature of Kuldīga and Krāslava (or, as it was said by one partly forgotten classic – legitimacy of Kaluga and Kazan).
Judicatures differ by levels: those of the Constitutional Court, the Senate, the Supreme Court Chambers, the regional courts and, most probably, of the district courts, as well. And that is here where we have heavy proof that the greatest contribution into the development of judicature is given by the Senate. This heavy proof is the thick annual volumes of rulings which, however, do not cover all the judgments and in which not all the rulings change or create new judicature.
In Article 5 of the Civil Procedure Law, by judicature we should, firstly understand the motives, interpretations expressed in judgments of higher instances without denying, secondly, that stable comprehension of law exists also in such judgments of district courts which no one has even dared to appeal. But there may exist also not appealed and completely ungrounded judgments.
We cannot acknowledge as precise the formulation that judicature is the total of published court (mainly, highest) rulings which are of principal significance and which contain legal cognitions of abstract nature as was defined by German scientists and repeated by the authors in Latvia. Publications is not important, information spreads also otherwise. Vagueness is caused by the word “mainly” because we do not know when “not mainly” is significant, too. It must be stressed especially that not the very rulings in total but the cognitions on law contained in them is what is interesting as the guiding stars therefore one should not look for judicature in the operative parts of judgments where we usually find such words as “collect” or “decline”, but in the motivation parts of judgments, in the motivations of operative parts.
Let’s see concrete examples which from the scientific point of view can illustrate the Senate’s role in development of judicature.
In everyday work when hearing cases the Senate more frequently passes judgments which do not change anything in the existing comprehension of legal norms, application and thus in judicature, in general. However, we can name cases where the Senate has declared, made public a certain stance in situations when either the law allows several versions of interpretation or does not give a concrete answer to the raised question.
Let us begin with the question regarding written form of agreements. Such form as a precondition for a claim in the court is stipulated, rather categorically, by Article 1483, point 4 of the Civil Law: “The law requires written form: 4) as a condition for a right to claim on the basis of the transaction”.
The Senate1 has offered clarification as follows:
A circumstance when a loan has not been made in writing shall not serve as grounds to conclusion that the loan as such has not occurred. The loan has been proved by checks to payments orders. Reference in the cassation complaint to Article 1483, point 4 of the Civil Law is erroneous because a provision on a written form in the deal was not included. # In another case: It is not seen that there had existed agreement between the parties that in case of dispute references would be made only and solely to written proof. If a loan has been concluded without a special agreement, the law does not stipulate a written form.
Judicature regarding issue on separation of interest from penalty fixed in percents developed gradually and with fluctuations, and now we can say that it has strengthened. This issue is significant as accumulation of interest stops at 100 whereas penalty may be bigger. The other difference lies in the order of payments in case of repayment of several debts.
In this connection two other approaches of the Senate should be mentioned:
1. When courts of the first and second instances showed excessive formalism and interpreted each inaccuracy in terms, e.g., penalty per cents, with the help of Articles 1509 and 1509 in favour of the debtor, the Senate judgment was passed in which it was indicated with good reason that only in case there really exist uncertainties which cannot be eliminated in any other way, the mentioned articles are to be applied2. The judgments actually relates to a lease agreement where there is no problem of interest – penalty, but the Senate judgment has to strengthen judicature also in cases if any of the courts acknowledges the term “penalty percents” as completely unclear, which contains both the term “per cents” and the term “penalty”. The fact of punishment included in the term, in my opinion, allows to admit that the will expressed on the paper proves agreement on the penalty. If there is any other proof, then they should be evaluated.
2. The other approach should be called rather progressive, however, a little premature. Namely, referring to resolution No.78(3) dated January 20, 1978, of the European Council (I stress – not the European Union) on the clause of punishment in civil cases. It expresses rather authoritative position against excessive penalties, but it is actually not sufficient.
Courts gradually eliminate strict positivism in cases when penalty is obviously excessive. Certainly, it would be advisable to amend the Civil Law by supplementing it with the right of a court to reduce excessive penalties as it is in German BGB §343. But application of requirement of good virtue (i.e., Articles 1, 1415 of the Civil Law) may be of help, too.
It can be traced in the stores of judicature, but the judgments still has to be discussed regarding necessity of notarial form for a revocation agreement if the agreement to be annulled has been concluded in writing. Why doubts and discussions? There are differences between the requirement to register with the land books and the requirement of simple or notarial written form.
Where we should expect “crystallization” of judicature?
There are two rather problematic articles regarding objection, commentupon acceptance of execution of obligation. They are Articles 1668 and 1760. These articles should not become grounds which allow a negligent debtor to free himself from liability only because the creditor has not reacted quickly and strictly to the violation. The articles relate to everyday obligations and not to commercial activities, to money clearings.
Rather voluminous works, including making use of foreign judicature, awaits the courts when implementing the European Union Council regulation no.44/2001 which is binding for us on jurisdiction and acknowledgement of judgments and execution in civil cases and commercial cases which is a normative act of direct effect and does not require amendments to the Civil Procedure Law.
This regulation changes quite considerably the basic principle applied in Latvia: the claim shall be brought in accordance with the place of residence of the defendant stating numerous cases when the claim has to be brought by the plaintiff’s domicile, the place of delivery of goods and rendering services, the place where damage occurred or could occur, in most cases determining it as an alternative.
We will have to overcome difficulties in terminology part of which was created by poor translation. It seems that it will cause no problems to accept the term that in civil cases, as well, a person (defendant) is sued in the court. However, in no way such a person may be described as a defendant as it is stated in Article 6. In the title of the regulation in the Latvian language the term “jurisdiction” is used, although the English word “jurisdiction”, as well as the regulation in whole refers to both jurisdiction and subjugation of judiciary of a member state.
ON FAULT
In this conference I would like to incite judges to one rather small change in motivation of judgments. The contents of the operative part of judgments will not change. However, theoretically judgments will become more qualitative.
The problem is that judges as well as scientists who did it for a long period of time use the notion “fault” the essence of which could not be explained or defined neither by practitioners nor theoreticians. Judgments contain such formulations: “all 4 preconditions of liability have been stated: unlawful action, fault, losses, causal relation” or “four preconditions have not been stated”. In the principles of law in European agreements which were drawn up by leading scientists of Europe headed by the Danish Professor Ole Lando, do not contain either the definition of fault or even the principle “liability for fault”. These European principles is not a binding document, however it has obtained wide recognition.
When comparing European principles with the Civil Law, we find one difference: in accordance with the first, the courts examine justifications for non-fulfillment of agreements, the courts of Latvia – the proof for non-existence of fault, besides, on the grounds of presumption of fault. And, what is the most interesting – in both cases the same facts, respectively, justifications are examined. Only, our courts pass one “odd” stage in its way to conclusion on liability. In the European principles: unlawful action – existence of justifications – conclusions on responsibility. With us: unlawful action – presumption of fault – evaluation of presumption – conclusions on liability.
After scrutinizing the Civil Law I have come to a conclusion that although it contains the term “fault”, the main article – Article 1635 deals with accusation (in fault to what extent), thus it does not require the fault directly. Besides, it should be admitted that it is wrong to evaluate any action twice, first – whether it is unlawful, second – whether one can be accused for it. Let us turn to separate cases: if a person has lost fingers of a hand or has been overridden on the road, is it unlawful?
One may not announce an unlawful action and then start to explain whether it was self-defense or maybe the fingers were groundedly amputated by a doctor, or whether in the accident the victim intentionally threw himself under the car. There, actually, exist no categories as “formally unlawful action” and “unlawful in essence”. Conclusion: statement of unlawfulness cannot be made without evaluation of justifications (with us – refutation of presumption of fault).
Thus, we come to 3 preconditions in repayment of losses: unlawful unjustified action, existence of losses, causal relation. For a penalty it is sufficient to have the first one.
With respect to the law, we have to seek the answer of what significance would be those articles which differentiate liability separating intended offence, or due to gross or slight negligence.
Returning back to clarification of judicature, I should say with slight self-irony: it is easy for scientists, just take some 3 or 10 cases on the same issue and take out the dominating cognitions. Practitioners wish otherwise. A judge has a case in which doubts arise regarding interpretation of interconnection of law and facts. Mr. E. Levits has written that the task of courts ex officio is to seek and examine respective cases which have been heard before, but it is not clear why he has stressed that it is in the context of court practice not judicature3. Probably, because in May 2003 this issue was still in the stage of settlement and relevant amendments to the Civil Procedure Law and the Administrative Procedure Law were not adopted.
The next question: in the event that there has been only one case previously, whether one cannot speak about judicature? Certainly, one can – till the moment when representatives of the parties do not present another judgment with opposite contents. For example, in 2000, in a case on insolvency of a bank the senate in its judgment states that offset as a means of termination of a liability may have restrictions, as well, although the Civil Law does not stipulate such, neither does the applicable law “On banks”. The Senate has presented interpretation based on the law “On insolvency and bankruptcy of enterprises and entrepreneurial companies”4. Nowadays it is cognition of judicature.
In other situations where there already exist contradicting rulings the question as to what should be attributed to judicature becomes rather complicated. Most probably, numerical prevalence, e.g., three judgments to one, should not be applied. The attention may be focused on the criteria – older – later judgments. If a later judgment is better motivated and encloses critics on the older judgment or explanations why deviation from once declared position has occurred, then we could trace a turn in the court practice and evaluate whether new judicature may develop. If not, - then we just state that judicature has not stabilized. And it is not anything extraordinary on this country.
In this aspect, we can return back to examples which have already been raised in media. One of them: what actually may be appealed out of decisions passed by officials from State Revenue Service institutions: the ones passed by the director of a regional institution of State Revenue Service or the ones adopted by the general director of State Revenue Service in relation to complaint on the adopted decision? I have not managed to follow, maybe at this moment we have already judicature in the meaning that we have uniform viewpoint in the courts. But to illustrate the proceedings we can name the fact that at present in the practice 2 versions appeared: 1) the decision of the general director of State Revenue Service has to be appealed, and thus – in the court of the Centra district, and 2) the initial decisions has to be appealed unless it is followed by fine or additional tax payments.
The court practice split what was described in the Supreme Court summaries in 20035.
What can be done? The Plenary Session cannot level by force. The not existing judicature must be developed by continuing to analyse critically, abandon useless arguments, examining other fields, e.g., labour disputes. The weakest links emerge, e.g., naturally, a possibility to appeal decisions of the general director is stated in the law “On taxes and duties” (Article 37, part 6), but can we conclude that decisions of lower officials cannot be appealed? Reference to Article 81 of the Administrative Procedure Code is not very convincing: an administrative act as if obtains its final form after hearing complaint on it. Allow me to doubt it. There exists however quite distant, analogy with an individual labour dispute in which a party is not satisfied with a decisions of the commission of labour disputes.A labour dispute, actually, does not obtain its final form with the decision of the commission. And finally, maybe along with the two already indicated versions in State Revenue Service cases, we should examine the third: simultaneous appeal of a lower and higher decision evaluating a jurisdiction choice possibility depending on place of residence of one or the other. More difficult, more complicated, but not impossible.