EU Patent Reform: The reimbursement of costs in constitutional complaint proceedings 2 BvR 739/17 (UPCA I) – an almost never-ending story (Published on 21/11/2023, latest update on 25/07/2024)
I. Constitutional complaint proceedings 2 BvR 739/17 and the obligation to reimburse costs
As is known, the German Federal Constitutional Court (“BVerfG”) upheld the constitutional complaint of 31/03/2017 in its decision of 13/02/2020 and declared the first German ratification of the Agreement on a Unified Patent Court (“UPCA”) null and void. In doing so, it obliged the Federal Republic of Germany to reimburse the complainant for the necessary expenses both in the constitutional complaint proceedings and in the proceedings for an interim injunction.
As reported (see the updates from 12/02/2021), the court had set the value in dispute relevant for the calculation of fees at an unusually low level, namely EUR 250,000.00 in the main proceedings and EUR 125,000.00 in the proceedings for an interim injunction. The court had already needed around eight months to make this determination – which, unlike in other cases, is not made ex officio in constitutional complaint proceedings, but requires an application by the costs creditor. Based on these values in dispute the complainant’s total claim for reimbursement of costs amounted to EUR 6,145.60 plus expenses. This is a comparatively low amount for proceedings lasting around three years in a matter – not least according to the Federal government’s constant statements – of central importance for the European economy with a file volume of several thousand pages.
II. The procedure for determining costs
As an explanation for non-lawyer readers, it should be noted that in order to obtain reimbursement of this amount, a so-called application for the determination of costs must first be submitted to the court and a corresponding order for the determination of costs issued by it. As long as this order has not been issued, the cost debtor has no enforceable obligation to pay. Normally, a corresponding court order for the determination of costs is issued after hearing the debtor within four to six weeks of the application being submitted. However, this was not the case at the BVerfG in proceedings 2 BvR 739/17.
III. The determination of costs in proceedings 2 BvR 739/17
The corresponding applications for the determination of costs were submitted to the BVerfG at the end of November 2020.
Since the BVerfG did not send its files and, according to its notification at the beginning of November 2017, the court file was approximately twice the size of the documents submitted by the complainant, without being prepared to provide any further information, the latter had traveled to Karlsruhe for the purpose of inspecting the files. A further trip there for the purpose of inspecting the files took place after, at the beginning of February 2018, he had neither received the third-party submissions – which were due on 31/12/2017 –- nor was the court willing to provide information by telephone about the number of submissions it had received. The reimbursement of the travel expenses incurred in each case was requested in the application for the determination of costs.
The Federal German Government, represented by the Federal Ministry of Justice and Consumer Protection, recognised the amounts claimed almost in full, only the reimbursement of travel and copying costs of around EUR 900.00 was disputed.
Nevertheless, nothing happened for several years. Despite several status enquiries and complaints of delay, the application remained unprocessed. In August 2022, the Federal German Government even agreed to the voluntary payment of the undisputed amount and ordered it to be paid.
The judicial officer at the BVerfG only issued the order for the determination of costs on 10/05/2023, roughly two and a half years after the respective application had been filed. Remarkably, this order refused to reimburse any expenses beyond the lump sum of EUR 20.00, the justification is as remarkable as it is worth reading.
IV. The partial annulment of the order for the determination of costs by Senate decision of 28/09/2023
Upon the complainant’s immediate appeal, the court revoked the order for the determination of costs insofar as it rejected the reimbursability of the travel expenses and referred the matter back to the judicial officer for a new decision. The decision’s fundamental importance is reflected in the fact that it was issued by all eight judges of the Second Senate.
The judicial officer would now actually only have to declare the reimbursability of the aforementioned travel expenses confirmed as reimbursable by the Second Senate; however, she has not yet done so. Accordingly, the reimbursement of costs in proceedings 2 BvR 739/17 has not been completed even more than three years after the end of the corresponding constitutional complaint proceedings. This means that the cost assessment proceedings have now lasted longer than the constitutional complaint proceedings themselves.
First addendum
(published on 15/12/2023):
V. Further request from the judicial officer to the BMJ in October 2023
Most recently, the complainant was forwarded a letter of the judicial officer from October 2023 in which she informs the Federal Ministry of Justice (“BMJ”) – now operating under a new name –, which represents the Federal government in the present case, of her intention to determine the further costs found to be recoverable by the BVerfG in its appeal decision, and giving the Ministry the opportunity to comment.
This in itself is a somewhat strange procedure, considering that the court has confirmed the eligibility for reimbursement while the amounts in question are apparent from the respective application for the determination of costs in which they have been specified and fully proven by evidence, if not resulting from law anyway, so that they were never in dispute. Accordingly, the BMJ informed the judicial officer within a week that it would refrain from commenting. Nevertheless, for some unknown reason, the judicial officer has still not been able to bring herself to determine the further costs against the Federal Republic of Germany.
It will be interesting to see when the matter will come to a conclusion also in terms of costs.
Second addendum
(published on 25/07/2024):
VI. The application for the determination of costs II
If the cost assessment procedure can be described as very unusual up to this point, it became downright adventurous afterwards.
Based on the aforementioned Senate decision of 28/09/2023 and the eligibility for reimbursement of all expenses incurred in connection with the inspection of the files set out therein, the complainant submitted a further – independent – application for determination of costs (“KfA II”) at the end of October 2023, applying for the reimbursement of expenses not yet claimed, concerning copies and cab costs on site on the two days of the inspection of the files at the BVerfG.
For non-lawyers, it should be noted at this point that it is common practice for courts (at least those that have come to my attention so far) to decide on each application for the determination of costs in a separate order. This often leads to costs being reimbursed in court proceedings on the basis of several cost determination orders, which are also paid separately by the cost debtor.
While a decision on the first application for the determination of costs was still pending, it was important for the BVerfG to first forward the complainant’s KfA II to the BMJ for comment; without even informing the complainant. The BMJ submitted its statement at the end of November 2023.
VII. The BVerfG’s “Cost Determination Order II”
On 06/02/2024, around four years after the decision on the merits on 13/02/2020 and around three years and two months after the filing of the first application for determination of costs in November 2020, the complainant was then served with the BVerfG’s second cost determination order dated 25/01/2024 (“KfB II”). This strangely combined the court’s pending decision on the outstanding remainder of the first cost determination application with that on KfA II to form an overall decision in which all of the expenses claimed by the complainant were now determined to be reimbursable by the Federal Republic of Germany in accordance with the application.
The decision’s confusing structure alone shows why the practice of the courts of lower instances described above of deciding on different cost determination applications in separate orders makes a lot of sense. It was therefore not surprising that KfB II was again erroneous: It determined incorrect interest periods for the claim, which, in view of the duration of the cost assessment proceedings of several years, certainly makes a difference. In order to correct the error, this decision also had to be contested, which was done immediately.
VIII. The BVerfG’s “Cost Determination Order II” 2.0
It then took almost another five months before the BVerfG corrected the error and served the correspondingly amended “Cost Determination Order II” of 19/06/2024 on the complainant on 01/07/2024. This now no longer gave rise to objections.
IX. Assessment
The impression remains of a highly peculiar procedure that is unparalleled even at the BVerfG. At least in the decisions it has published, there is no other case in which the determination of costs took anywhere near as long and was as thorny for the cost creditor as in proceedings 2 BvR 739/17. However, there are quite a few cases in which this happened much faster (e.g. proceedings 2 BvR 2506/16 [around five months after the substantive decision] or 2 BvR 1494/16 [around six months after the substantive decision]).
The peculiarities begin with the fact that it took around eight months to determine the value in dispute and that this was set at only around a quarter of the amount regularly determined in comparable proceedings. They continue in the court’s original refusal to reimburse all expenses claimed by the complainant beyond the statutory lump sum of EUR 20.00, a position which the court ultimately almost completely abandoned in the appeal proceedings. Last but not least, the total duration of the cost assessment proceedings of around four years and four months since the decision on the merits of 13/02/2020 and around three years and seven months after the first application for the determination of costs was filed in November 2020 speaks for itself. This means that the cost determination took more than one and a half times as long as the constitutional complaint proceedings themselves, which were initiated on 31/03/2017.
In view of the concentration of these circumstances in the present proceedings, each of which is unusual in itself, one may wonder whether such a handling of the – as far as can be seen – first successful constitutional complaint against the ratification of an international Agreement in German federal history, written by a self-represented lawyer, is perhaps not a coincidence. Could it be that this seeks to discourage the filing of such complaints from the outset, particularly in the context of international Agreements, by clearly signaling to potential complainants, especially lawyers acting on their own behalf, that even if they are successful, they need not expect to be reimbursed even remotely adequate costs for the considerable work involved and that even this reimbursement will only be granted to them after a laborious procedure lasting several years? (Potential) Complainants driven purely by economic considerations may be put off by this. Those for whom the defense of justice and the rule of law is more than a commercial end in itself will hardly ever be impressed; on the contrary, they will gain further motivation from this.
Irrespective of this, however, with regard to the present cost determination procedure and its handling by the highest German court, which likes to present itself as a “citizens’ court”, a fundamental question is obvious: Does the course of the present court proceedings, in which ultimately a citizen has successfully enforced his constitutionally guaranteed fundamental rights in his own name, meet the minimum requirements of the rule of law? Is this the way citizens in 2024 should imagine their fundamental rights being protected by a so-called “citizens’ court”?
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