High fees for review of National Appeal Chamber rulings are constitutional | In Principle

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High fees for review of National Appeal Chamber rulings are constitutional

In public procurement proceedings, a party dissatisfied with a ruling of the National Appeal Chamber will still have to pay high fees for judicial review.

Two companies filed a constitutional challenge to Art. 34(2) of the Act on Court Costs in Civil Cases of 28 July 2005, alleging that it violated the right of access to the courts guaranteed by Poland’s Constitution. The Constitutional Tribunal found that the fee provision was not unconstitutional but otherwise dismissed the proceeding.

Under Poland’s Public Procurement Law, a party to proceedings before the National Appeal Chamber (KIO) dissatisfied with the ruling has a right to seek review by the regional court. But this right may prove illusory for contractors who are not in a position to pay the upfront court fee for the review, even if the fee could be refunded to them later if the court ruled in their favour.

A party appealing a procurement matter to the National Appeal Chamber pays a fixed fee of PLN 7,500, 10,000, 15,000 or 20,000, depending on the subject of the appeal and the value of the procurement. If the ruling of the chamber is unfavourable, the contractor may seek review by the regional court, for which the fee is 5% of the value of the procurement, up to a maximum fee of PLN 5,000,000—whereas in other civil cases the maximum court fee is PLN 100,000.

The judgment from the Constitutional Tribunal of 14 January 2014 dashed contractors’ hopes of greater availability of judicial review. But on the merits the tribunal ruled only on the constitutionality of the fee for judicial review as a proportional (percentage) fee. For procedural reasons the tribunal did not reach the issue of the maximum fee as such, because in neither of the cases leading to the proceeding before the Constitutional Tribunal was the contractor required to pay the maximum court fee. The judges considered only the constitutionality of the proportional fee and the percentage on which it is calculated.

The companies filing the combined cases alleged that Art. 34(2) of the Act on Court Costs in Civil Cases violated their right to seek relief from the courts. They alleged that practically they were prevented from having their cases heard at a second instance by setting the court fee at a level exceeding their financial capabilities and disproportionate to the matters to be considered by the court.

The tribunal found, however, that use of a proportional fee is one of the more common mechanisms for assessing court costs, best balancing private interests with the costs incurred on the public side in connection with consideration of the individual case. It limits the cases occupying the courts to those where there is a rational justification for litigation. Other cases of judicial review governed by the same act also bear a proportional fee of 5% of the amount in dispute. This demonstrated that the constitutional right of access to the courts was not violated in the case of judicial review in public procurement cases.

The tribunal found that the level of the fee is constitutional not only because it falls within the range of legislative discretion in establishing mechanisms for payment of fees, but also because it reflects the complex nature of public procurement cases. Meanwhile, the institution of relief from court costs equalises the opportunity to initiate and participate in the case for entities that could not otherwise afford to pursue their rights. Both of the companies in this case had filed petitions for relief from court costs, which were denied. They thus took advantage of all means of mitigation available to them.

This judgment is not the first ruling by the tribunal on the constitutionality of regulations on court costs. Ruling on another provision of the same act, the tribunal followed its existing line of case law under which legislative discretion in the method of determining court fees in civil cases is a deliberate assumption that falls within the bounds of the constitutional order.

The tribunal heard the combined cases in a panel of five judges, three of whom voted in favour of the decision. Judges Leon Kieres and Andrzej Wróbel dissented from the result and the reasoning, taking the view that the amount of the fee is disproportionate and significantly hinders the constitutional right of access to the courts.

The procurement community is dissatisfied that the tribunal did not review the constitutionality of the entire Art. 34(2) of the act—considering only the percentage fee, which is comparable to that applied in other civil cases, but not considering the maximum fee, which is far higher than in other types of cases.

Anna Prigan and Hanna Drynkorn, Infrastructure & Transport and Public Procurement & PPP practices, Wardyński & Partners