Right to compensation for damage caused by the state
Annulment of administrative measure
Liability of the state
RULING Nº 154/07
2 of March of 2007
Whilst acknowledging the difficulties of interpreting Article 22 of the Constitution (on the civil liability of the State and other public entities for acts or omissions infringing rights, freedoms or safeguards or causing injury to another), case law indicates that Article 22 has constitutionalised the principle of civil liability, in particular as regards liability of administrative authorities.
An interpretation of a legal provision to the effect that it rules out any liability in any circumstance by the State for injury caused by an administrative measure annulled for failure to give reasons is incompatible with Article 22 of the Constitution. The basis of the interpretation is that the illegality of the measure is not established until the annulment decision takes effect and the measure replaced by a new measure not containing the defect that caused the annulment. If damages are precluded, civil liability cannot perform its main function, to ensure that private individuals will receive compensation for damage caused by acts of members of State bodies, public servants or employees of the State or other public entities.
I. A fish-farming company brought an action for damages against the Portuguese State for illegal acts of public administration. Works to set up a brill farm had been authorised and had already commenced. Work was suspended by decision of an administrative authority. The suspension decision had in turn been annulled for failure to give reasons. The company sought compensation for damage sustained because of the suspension of the work brought about by the cancelled decision. It had not been possible to resume the work.
The Supreme Administrative Court judgment challenged in the Constitutional Court found that a formal irregularity in general hardly ever constituted, and failure to give reasons never constituted, illegality (in terms of liability of administrative authorities). The purpose of the legal provision requiring it was not the protection of the interests of those at whom administrative measures were aimed. That interpretation of the provision at issue removed all possibility of compensation for injury sustained even if there was a causal link with a measure annulled for failure to give reasons and no step had ever been taken to execute the annulment decision. Moreover, it had not been shown that a lawful alternative course of action would have achieved the same effect as the cancelled measure. The interpretation likewise meant that it was possible for the administrative authorities to refuse illegally to execute the annulment decision.
II. The Constitutional Court held that, whether the right to compensation established by Article 22 of the Constitution was regarded as a right similar to rights, freedoms and safeguards or simply as an "institutional guarantee", the same conclusion - that the provision at issue was unconstitutional - must be drawn, firstly, because it resulted in a restriction not authorised by Article 18 of the Constitution; and secondly because, in interfering with the principle of State liability, it exceeded the legislature's discretionary powers and weakened the core content of the guarantee.
The Court accordingly found the legislation at issue to be unconstitutional where it was interpreted as meaning that an administrative measure annulled for failure to give reasons could never, in any circumstances, be regarded as an illegal act for purposes of bringing an action against the State for non-contractual damages.
This is not the first time the Constitutional Court has dealt with a case involving an alleged breach of Article 22 of the Constitution.
In Judgment no. 153/90, the Constitutional Court examined Article 22 of the Constitution and concluded that it did not provide for contractual liability of the State. In Judgment no. 107/92 it found that Article 22 did in fact enshrine the principle of state liability for injury caused to the citizen, at least where the injury resulted from illegal measures. In Judgment no. 45/99 the conclusion was that Article 22 not only established the institutional guarantee of direct State liability but that it also recognised the right of the private individual to redress by way of indemnity and/or compensation in cases of breach of rights, freedoms or guarantees. More recently, in Judgments nos. 236/2004 and 5/2005, while pointing out the difficulties of interpretation posed by Article 22 of the Constitution, the Court held that Article 22 had constitutionalised the principle of civil liability of the State and other public entities, in particular liability of administrative authorities.
Legal doctrine regarding the precise meaning of enshrinement of this rule in the Constitution is similarly divided. Some writers take the view that the rule establishes a general principle that it remains for the ordinary legislator to put into effect, the legislature's freedom of discretion allowing it to determine in what circumstances indemnity is due. Other writers hold that implementation of the principle must stem from the interconnection of constitutional rules on the institutional status and operation of State organs, guaranteeing the "direct applicability" which Article 18.1 of the Constitution requires. Others expressly state that, in the absence of an implementing law, Article 22 is directly applicable. Yet another group of writers maintains that what is involved is a right similar to rights, freedoms and safeguards (Article 17 of the Constitution) and which is directly applicable (Article 18.1).