Protection Of The ‘Human’ Rights Of Non-Natural Persons In Civil Matters & The European Convention On Human Rights

My special thanks are extended to the Alan Dignam and David Allen for their seminal work on company law and human rights which has been referred to extensively in this paper. Additionally, my gratitude is extended to the Council of Europe and the European Court of Human Rights for providing access to their internet resources for information about the work of the Council and the Court. Finally, I am grateful to my colleague Dr Nicholas Tsagourias of the University of Bristol’s Department of Law for providing the inspiration and initial framework for the writing of this paper.

Council of Europe: www.europa.coe.fr

European Court of Human Rights: www.dhcour.coe.fr

Dignam, A & Allen D Company Law and the Human Rights Act (1998) Butterworths.

Human rights have developed rapidly after World War II and now form a separate and important area of law that affects all aspects of our lives by creating a new level of protection. In this new development and in the particular context of the European Convention on Human Rights (ECHR), human rights and ‘victim’ status are accorded to natural as well as non-natural ‘legal’ persons (eg., companies) and include protection for their civil as well as criminal law rights.

The applicability of the ECHR provisions to civil issues as well as the inclusion of non-natural persons (eg., companies) in the category of eligible ‘victims’, have created new and exciting scenarios for the modern European lawyer. In that regard, although human rights lawyers and thinkers have been much-focussed on the human rights of natural persons, the reality is that from their inception, ECHR provisions have been equally concerned with non-natural persons (companies, NGOs, trade associations, etc.). The wide ambit of human rights protection for individuals therefore can be applied with equal force and certainty to non-natural persons, which creates tremendous opportunities for commercial and corporate lawyers.

With regard to the foregoing, the following will focus on how the ECHR provisions apply to non-natural persons through an examination of the case law and the provisions of the ECHR Treaty and its Protocols. It shall also focus on the growing application of Article 6 (1) of the ECHR in the context of delays in civil proceedings as well as the right to a fair trial in civil cases which may be of particular interest to lawyers in Central and Eastern Europe.

The European Convention on Human Rights was drafted by the Council of Europe (CoE – www.coe.int) a peaceful association of European states enjoying common spiritual and moral traditions and committed to the rule of law and democracy. It is entrusted with the duty to develop mechanisms for the protection of human rights. The work of the Council of Europe has been important in the human rights sphere in its general aim of securing peace and prosperity in Europe.

The ECHR was signed in 1950 and came into force in 1953. It is the most effective and fully developed system in the world and this is due to a large extent to the attitude of its members towards human rights. Slovakia became a member of the CoE on 30 June 1993. It has adopted all the ECHR protocols.

In order to become party to the ECHR, a state should first join the CoE. Furthermore, adherence to the ECHR is one of the requirements for accession to the EU.

The Treaty on European Union of 1992 (Maastricht Treaty)’s Article F2 enacts the EU shall be bound by the rights guaranteed in the ECHR and in the constitutions of the member states. As such human rights are now a general principle of EU law. Article F2 applies so that in the interpretation/ application of EU law, ECHR principles shall be observed.

The ECHR contains a list of civil and political rights such as the right to life, the prohibition of torture, inhuman or degrading treatment, the right to fair trial, the protection of private and family life, freedom of thought, conscience and religion, freedom of expression, freedom of assembly and association.

1 - State’s obligations to implement rights and freedoms locally

2 - right to life

3 - prohibition of torture and inhuman/ degrading treatment or punishment

4 - prohibition of slavery or forced labour

5 - liberty and security of a person

6 – right to a fair trial

7 - freedom from retrospective criminal offences and punishment

8 - right to respect of private life and correspondence

9 - freedom of religion

10 - freedom of expression

11 - freedom of assembly and association

12 - right to marry and have a family

13 - right to an effective national remedy

14 - freedom from discrimination in respect of protected rights

15 - derogation in times of ware and public emergencies

16 – freedom from restriction of political rights of aliens

17 - right to restriction on activities subversive of convention rights

18 - prohibition of the use of permitted restrictions under the ECHR for improper

purposes (ECHR measures to be used only in the context of ECHR objectives)

Main Protocols - some 12 Protocols have been enacted, those not enumerated below have been more or less concerned with restructuring and procedure.

1. Art 1 - right to property

1. Art. 2. right to education

1. Art. 3. right to free elections

4. Art. 1. freedom from imprisonment for contractual obligations

4. Art.3 - right of a national not to be expelled from his state and to prevent him coming back

4. Art. 4 collective expulsion of aliens

6. Art 1 abolition of death penalty

7. 1 – freedom of expulsion of individual aliens

7. 2. right to criminal review.

7.3 right to compensation for miscarriage of justice

7.4 freedom from double jeopardy.

7.5 equality of rights of spouses.

The European Court of Human Rights (ECtHR) allows a certain margin of appreciation to states in the implementation of their obligations. This means that the interpretation of certain rights should take place within the particular political, legal, social or economic context of the state concerned. However, this does not give states a blanket approval for that. As such the ECHR has retained the right to review any relevant application to it for redress and definition of the level of applicable European standard. The ECtHR in reviewing cases on the margin of appreciation considers the importance of the right involved, the characteristics of the European democratic societies which include tolerance and broadmindedness and whether a European consensus exists (Handyside v United Kingdom (1986) 1 EHRR and Modinos v Cyprus (1994) 16 EHRR). In addition to this, states can derogate from human rights in cases of emergency or war but any such derogation should be proportional. Derogations from certain rights are not permitted such as in respect to the right to life or the prohibition of torture.

There is the possibility of state against state as well as individual complaints which are both mandatory under the ECHR (Articles 33 and 34). Concerning individual petitions, these may include natural or legal persons as well as NGOs or groups of individuals. In that respect, under Article 34 (formerly Article 25), ‘victims’ as defined by the EHCR Court, are persons who are at risk of or is actually and directly affected by the act or omission by the state (Marckx v Belgium (1797 2 EHRR 330). Relatives of affected individuals are also victims:-

• Professional associations, ngos, trade unions - (as long as they can identify persons within their body who are affected and who they are authorise to act for. For example, Christians Against Racism and Fascism v United Kingdom (1980 21 DR) 138) – an association of religious groups was held to fulfil victim status after a march planned the association was banned.
• They had to show that one of their members had been affected by the band, pure public interest litigation does not exist in Strasbourg.
• Companies fulfil victim status without having to show that a member has been affected by any act. For the purpose of Article 34, a corporation is a person with human rights (see Autronic AG v Switzerland (1990) – in the context of freedom of expression, and Yarrow v United Kingdom (1983) 30 DR 155 – acts against the company were deemed to be acts against the shareholders who were awarded ‘victim’ status – also see Agrotexim v Greece (1995) 21 EHRR 250.
• Shareholders as victims under Protocol 1 Article 1 (right to property) – where the complaint is about a liquidator, receiver, or is subject to a court order. Also where the complaint is outside Protocol 1, Article 1 (eg., Article 6 - right to a fair trial) the court seems more prepared to ignore the separate personality of the company (for example shareholders (especially if they are majority shareholders) are likely to be held to be those doing their business through the company. Acts aimed at the company’s property allow shareholders to fulful victim status (Malmstom v Sweden (1983 ) 38 DR 18). In that case, the complaint alleged that the expropriation of the land offended Article 1 1 of Protocol 1 (right to property) the Commission noted that the term ‘victim’ in Article 25 (now Article 34) indicated a person directly affected by the act or omission which is at issue. The applicants were not majority shareholders, but the commission found that by ‘lifting the veil’ they are entitled to claim that they are victims of the measures affecting the company’s property. However, they (the shareholders) were held to have no locus standii as the piercing of the veil would be permitted where it was impossible for the company could not apply by virtue of its articles, or liquidator. In this case the liquidator could, but did not act.
• Ruiz-Mateos v Spain (1993) 16 EHRR 505 – shareholders and employees were ‘victims’ though the act of the state aimed at the company where shares were expropriated in an Article 6 situation. The court held that a company was merely a vehicle through which the shareholders did business. In that case the applicants held all the shares in the relevant company and were a victim of unreasonable delays in civil proceedings.
• GJ v Luxembourg (Application No. 00021156/93 (1996) – the applicant complained that the liquidation of the company in which he owned 90% of the shares were not terminated within a reasonable time (within Article 6 (1) with the result that he was compromised. The proceedings took 6 years during which time he was disbarred from being a director, shareholder or employee of a Luxembourg company for 2 years and his freedom of movement was restricted. He complained about other things as well. The Court (Commission) opined on shareholder’ standing as follows:-

Agrotexim was applied (that the victim status of a shareholder will be justified where it was impossible for the company through its articles of association to bring a complaint to the Court. The Court found this condition satisfied as the complaint relates to the activities of the liquidators.

The Court also found ‘victim’ status to be satisfied (within the meaning of Article 25 (now 34) as he was a majority shareholder and was in effect carrying out his business through the company and had a direct personal interest in the subject-matter at the time (see Ruiz-Mateos above).

1. Due to the artificial nature of a corporation, not all rights guaranteed by the ECHR apply, for example:-

Article 2 – right to life

Article 12 – right to marry

Article 3 – freedom from torture.

NB. However, Article 6 (right to a fair trial); Article 8 – privacy; Article 10 – freedom of expression , Article 1 – right to property, all apply.

2. Individuals within companies – shareholders (all kinds) and employees all can enjoy ECHR protection as victims.

Contracting States - ECHR rights can only be litigated against a contracting state, the German concept of Drittwirkung horizontal effect does not apply as such (where a private individual can action another on the ground that the other breached his constitutional right).

Private Individuals - horizontally - despite Drittwirkung’s non-application as such, the contracting state is under an obligation to proactively secure those rights given by the ECHR (eg., access to a court must be protected by law). For example in: Airey v Ireland (1979 2 EHRR 305) – the Court held that Article 6 may sometimes compel the state to provide legal aid when the complexity of the procedure is such that without the assistance of a lawyer it would amount to a denial of access to a court. In Marckx v Belgium (1979 3 EHRR 330) - the Court held that the right to respect family life contained in Article 8 (1) created a positive obligation on the state to ensure that when operating its domestic legal system it did so in a way that allowed those affected to lead a normal healthy life.

Drittwirkung therefore more or less applies in the ECHR system and provides an effective indirect remedy to compel the state to protect individuals against infringement of their rights by private parties. For example, the state will be responsible/ liable if these rights are breached by private parties.

• Everyone in the state (include non-nationals) is entitled to a fair and public hearing within a reasonable time by an impartial and independent tribunal established by law.
• Criminal Law (lawyers please note – the Court may consider a ‘civil matter’ to be ‘criminal’ if its effect is criminal in nature. Therefore some civil issues may be afforded criminal law protection under this measure – see Engel v Netherlands (No 2) 1979) 1 EHRR 706. ).
• Those accused of a crime are presumed innocent until proved guilty according to the law and have the following minimum rights:-
• To be informed promptly in their language in detail of the nature and cause of the accusation against them
• To have adequate time and preparation for their defence
• To defend themselves in person or through legal assistance of their own choosing and if they do not have enough money to be given free legal assistance if they want it.
• To have full rights of examination of witnesses equivalent to the other side
• To have the free assistance of an interpreter

In Delcourt v Belgium ( 1970 1 EHRR 355) the Court held that Article 6 would be interpreted very widely by it as the right to a fair administration of justice holds such a prominent place that a restrictive interpretation of Article 6 (1) would not correspond to the aim and purpose of that provision. This is applicable to Strasbourg Court as well as national courts.

The Court is particularly fussed about the concept of a fair and impartial tribunal established by law. It need not be a classic tribunal (eg., a Court), however, it must function independently of the government and there must be guarantees to enable the court or tribunal to function independently and that even a hint of dependence is avoided.

Application for non-naturals - Article 6 has been developed to protect the right of companies and their officers when they face criminal charges or are sued in the civil courts (expanded in Saunders v United Kingdom (1996) 23 EHRR 213). Therefore,

Regulatory bodies/ ministries, as well as the courts have to ensure that the standards necessary to comply with Article 6 are applied in carrying out their functions. State-owned businesses (or businesses with a significant shareholding by the state) have to ensure that their procedures comply with Article 6 or they will commit an unlawful act actionable under ECHR by those affected. A public authority cannot exclude judicial review. Judicial review must permit a review of the merits of the case as well (W v United Kingdom (1987 10 EHRR 29) otherwise a breach of Art. 6 may occur.

Alternative Dispute Resolution (ADR) proceedings potentially run foul of Art. 6 as there can be no appeal to a court as such, but individuals may waive their right to a court by voluntary submission to ADR. But there must be no element of compulsion there or their will be a violation. Furthermore, Lawyers, Police and Judicial Officers with immunity from suit may now be challenged under Art. 6. The imposition of a fee to have access to a court is not a denial of the right - however the fee will need to be reasonable.

What the Courts and Legislators have to do to comply with Art.6

• parties need to be on equal arms (access to documents and evidence)
• equal access to presenting their case and freedom from limiting factors imposed upon by the court.
• Must have a right to a public hearing which can be restricted in a limited way (security, public order, justice, etc.). Parties can waive their rights to a public hearing. Judgments must be publicly pronounced.
• The tribunal must be independent from the government and the parties. In that regard (as set out in Langborger v Sweden (1989):-

1. Appointment and remuneration systems for adjudicators must ensure their independence (in the UK, a government minister appoints judges, this is in breach of Art. 6; the Secretary of State appoints and pays lay members of employment tribunals was held to be in breach of Art. 6 (Smith v Secretary of State for Trade and Industry (1999) [2000] IRLR 6);
2. McGonnell v UK (2000) The Times, 22 February, Application No. 00028488/95 - found that the Bailiff of Guernsey is in breach of Article 6 because of his combined role as the government, administrative and judicial officer on the island.
3. The adjudicator should not be the investigator
4. There should be no actual bias, or appearance of bias.

The length of time for proceedings to constitute violations. This varies according to the complexity of the proceedings. The more complex, and/or the more importance the issues is for the applicant as well as the conduct of the authority will all be taken into account. Criminal trials are required to be determined quicker than civil trials.

Generally, 3 - 9yrs on a sliding scale of complexity and urgency for trials would constitute a violation of Article 6 rights. Where the issue regards compensation to the applicant, then the court insists on short time scales for determination.

Here the burden of proof is allowed to move in limited situations (eg., defendant can be asked to prove that he acted reasonably and truthfully). In criminal matters there is a right to silence and not to contribute to incriminating oneself. Evidence obtained through compulsion is not reliable. In Funke v France (1993) 16 EHRR 297 the applicant failed to produce bank statement in the course of enquires into certain customs irregularities. In consequence, he was charged with failing to produce the bank statements. The EU Court held that this was a breach of Art 6 as he had a right not to incriminate himself and to remain silent. In the case of regulatory bodies doing the statutory jobs (ie. The UK Law Society, Chamber of Advocates) Saunders v United Kingdom (1996)23 EHRR 313 is instructive - concerned competition law. Evidence obtained under compulsion by a regulatory body may not be used in a criminal trial against an applicant - this constituted a violation of Art 6. This only applies where the information obtained under compulsion is used in criminal proceedings against the applicant (see Abas v Netherlands Appl 27943/94 (1997) EHRLR 418 - here the Applicant was required to produce tax in default of fines or imprisonment. However, no criminal proceedings were brought against him as a result of the information he gave. No breach. A conviction for failure to produce documents is a violation of Art 6 (Funke v France (1993 16 EHRR 297). Search Orders - the court must act to protect the individuals in the context of Article 8 and 6 - the way the search orders are sought and how they are executed must not contravene the ECHR.

Self-incrimination and civil issues - this does not exist outside the criminal law even where a measure of compulsion is used. (in - Westminster Property Management Ltd (2000) 05 LS Gaz R 33) evidence obtained under compulsion was useable in civil proceedings = directors disqualification issue.

Right to respect of private life and family life home and correspondence. There must be no interference from the state, or public body except as in accordance with law, interests of national security (and similar) and as is necessary for the protection of life in a democratic society. Wiretapping, search of one’s home, opening and censoring of letters all are potential violations. In Hoechst v EC Commission (1989) ECR 2859) - this Article’s provisions was extended to business premises. Followed in Niemietz v Germany (1992) 16 EHRR 97. State interference may be more allowable where business premises are concerned.

This is a strictly enforced right. Everyone has the right to freedom of expression. However, licencing is permitted by the state. Again there are the caveats for restrictions for the purposes of national security, etc.. However, a free press cannot be restricted.

• everyone (including shareholders) is entitled to peaceful protection of his property (shares are property and shareholders can claim under the ECHR is something is done by the state to affect the value of their shares)
• the state can provide for the registration of property rights
• public authorities may not interfere with property rights.

Interference can be nullified by justification and the fair balance test - balance between general, wider interests and those of the individual.

"Everyone who has rights and freedoms under the Convention which are violated shall have an effective remedy before a national authority, notwithstanding that the violation was committed by a person acting in an official capacity" (does not include the legislator, so where the violation occurs because of legislation, there is no article 6 guarantee). Article 13 therefore does not allow a state’s laws to be challenged in the domestic courts on the grounds of being contrary to the convention. Furthermore, the state is not under an obligation to incorporate the convention into its domestic law

An effective remedy is one that allows for an assessment of the claim and the possibility of rectification. Self-regulating bodies, have been declared as not providing effective remedies as they do not have the required level of independence. The extent of the effective remedy required varies depending on the nature of the applicant’s complaint. The more serious the effect of the breach, the stricter the effectiveness requirement.

The contracting states to the ECHR have an obligation under Article 1 to ensure that the ECHR rights are secured in their domestic systems. Therefore persons affected are able to obtain compliance with the ECHR at domestic level (the Strasbourg Court is a supervisory court). The applicant must show that he has a good case that one of his ECHR rights has been breached.

This relates to the physical, mental and moral integrity of individuals (and non-naturals). There is no standard definition as to what the individual terms mean and this allows for wide interpretation. In order to bring an action under Article 8, the applicant should first prove that he is a victim and secondly that he suffered damage. It may be enough to prove that the mere existence of legislation or practice constitute a threat that interferes with the enjoyment of the rights in Article 8(1) provided that the person falls within the scope of the alleged violation.

European Court of Human Rights (ECtHR) - replaces the Commission and the Committee of Ministers (old structure) in its adjudication role. All the judges sit in their personal capacity although appointed by the member states. Judges are equal to the proportion of state parties.

Each section is gender sensitive and takes into account the demography of the members and its composition is fixed for 3 years. It sits either as a Committee, Chamber, or Grand Chamber (within which the same balance is present). Each section has a President, assisted by Section Vice Presidents. Each Section President is a Vice President of the ECtHR (they are normally appointed by the Court for 3 years).

Committee - 3 judges (deal with admissibility of applications)

Chamber - 7 judges (consider admissibility and merits)

Grand Chamber - 17 judges. The President, Vice Presidents, Section Presidents and the judge elected in respect of the state concerned sit as ex officio members. Remaining judges are chosen by drawing of lots. When a Chamber has released its jurisdiction, its members are not included in the Grand Chamber court (except the President of the Chamber and the judge who sat in respect of the state party concerned). It considers important issues or where there is the possibility of conflict with a previous decision of the ECtHR. It can also respond to advisory requests from the Committee of Ministers.

Members of the Court are appointed for six years by the Parliamentary Assembly of the COE and their number is equal to the member states of the CoE (currently 41). Judges cannot engage in any activity which is incompatible with their appointment. They must retire at 70. The appointment criteria refer to the independence and the high moral character of the judges as well as to their qualifications.

Individual applications go directly to Strasbourg to allege a breach by a contracting state (see www.coe.int and Human Rights Court link there for detailed guidance).

Registry - communicates with the applicant. It screens the application and then assigns the case to a section of the Court. The President (each Section has a President) designates a Judge Rapporteur (who is responsible for summarising the case and decides whether it should go to a Committee or Chamber for admissibility).

Admissibility of Applications - admissibility criteria include the exhaustion of domestic remedies and that the action should be brought within six months from the date of the final decision in the domestic procedure.

In addition to these, the application should not be anonymous, incompatible with the convention or ill founded and the matter should not have been dealt with in a previous case or be simultaneously considered similarly elsewhere.

Normal applications - will go to a Committee to be examined by 3 judges, one of which will be a Judge Rapporteur, for admissibility. If admissible (a negative decision is final) then they go to a Chamber. The Judge Rapporteur is the primary reference point for the applicant and he is responsible for all the case management issues. Decision of the Court is by majority vote.

Chamber - it decides on admissibility and merits. Decision is by majority vote. Once admissibility is allowed, applicants are normally invited to submit further evidence from both parties and claim for ‘just satisfaction’ under Art 41. Then the Chamber moves to a full hearing on the merits. Procedure is adversarial and public. All evidence filed with the court is publicly available. Legal representation is required for a full hearing. The COE has a legal aid scheme to cover applicants who don’t have money. Application should be made when submitting the case to the registry.

Grand Chamber - may take over a case referred to it at anytime. But if a party, or the parties object, it remains with the Chamber. If the Chamber does the referral, the parties have 1 month to object. Any application to move to a Grand Chamber is considered by a Grand Chamber panel of 5 judges.

Merits of the case - once an application has been considered, if no friendly settlement has been reached, the court will give its judgment by majority. Each Chamber judge can append a statement or concurrence or disagreement.

Judgment - after judgment is given, within 3 months, any party may ask for the case to go to a Grand Chamber for review. Any application to move to a Grand Chamber is considered by a Grand Chamber panel of 5 judges. The general Grand Chamber rules will apply for the engagement of the case - serious issue of general importance, or a matter dealing with the interpretation of the ECHR. Judgment is final after 3 months have passed and no Grand Chamber review request has been made. It can be final earlier by consent of the parties.

Enforcement - dealt with by the Committee of Ministers. It must verify that the State has complied with the judgment of the ECtHR. Since 1998, the Committee of Ministers supervises the enforcement of the Court’s judgments by the defaulting (Article 46). The final weapon is the expulsion of the state from the Council of Europe. However, it should be said that most of the states accept the judgments of the Court and adopt legislative or other measures to remedy the situation.

Procedure - written submissions initially. The court may hold a full hearing if it wishes. Judgments will give reasons and be public. The Section Registrar works closely with the Chamber to facilitate a friendly settlement between the parties where this is possible. The court will also provide facilities in that respect. Stare Decisis - operates informally.