Background
In 2008, Tomislav and Nevenka Borković brought a damages action against a company. After bankruptcy proceedings were opened against the company in 2012, they withdrew the civil action. The Osijek Commercial Court later ordered them to reimburse the company’s legal-representation costs.
The applicants argued that the company’s lawyers had already filed their fee claim in the bankruptcy proceedings, where it had been contested and ultimately not pursued in civil proceedings. They contended that the company had neither paid nor been required to pay those fees, so it could not recover them from the applicants. In 2019, the High Commercial Court reduced the costs award but dismissed that argument as irrelevant without further reasons. The Constitutional Court later declared their complaint inadmissible.
The Court’s Holding
The Court unanimously found a violation of Article 6 § 1 as to the fairness of the proceedings. Whether the company had actually incurred, or was obliged to pay, its lawyers’ fees was relevant to its claim for reimbursement from the applicants. The High Commercial Court was required to give a specific and express answer to that decisive argument; simply calling it irrelevant did not provide a fair hearing.
The Court did not separately examine the applicants’ legal-certainty complaint. It also found a separate Article 6 § 1 violation because the costs proceedings lasted almost seven years and eleven months across three levels of jurisdiction, an excessive period that failed the reasonable-time requirement. The property-rights complaint was inadmissible for non-exhaustion because it had not been raised, even in substance, before the Constitutional Court. No just-satisfaction award was made because the applicants had not properly submitted a claim.
Key Takeaways
- Courts must specifically address arguments that could determine whether claimed litigation costs were actually incurred.
- A conclusory statement that a decisive argument is irrelevant can breach the Article 6 right to a reasoned judgment.
- Nearly eight years to resolve a civil-costs dispute at three levels of jurisdiction was not reasonable.
Why It Matters
The judgment underscores that cost awards are not insulated from Article 6 scrutiny. Where a party challenges the factual or legal basis for a claimed expense, an appellate court must explain why the challenge succeeds or fails.
It also illustrates the need to present Convention property complaints domestically in substance before bringing them to Strasbourg.