Proportionality (fair balance)

Any interference with property rights, including interference which does not constitute a deprivation of property or a restriction thereon,¹⁹⁸⁶ must be fair after weighing the interests of the holders of rights on the one hand and the interests of society on the other hand. In this context, taken measures must have a legitimate aim in the general interest and, taking into account the aim, must seem appropriate. The same applies to interferences in the form of failure to respect the positive obligations of protection of the right to property.¹⁹⁸⁷ At any rate, while interfering with the right to property, the national authorities have a wide margin of appreciation, notably in complex and difficult cases, since they are the subject of controversial discussions and assessment in democratic societies, where the national authorities are in principle better suited to consider the needs and resources than international judges.¹⁹⁸⁸ Despite the wide margin of appreciation (legislative, i.e., administrative), such appreciation must not be without reasonable foundation.¹⁹⁸⁹

There is no fair balance if an excessive burden in the general interest is placed on the individual.¹⁹⁹⁰ In order to consider the question whether something constitutes an excessive burden placed on the appellant, it is usually important to consider whether the appellant is able to effectively challenge a measure before the court,¹⁹⁹¹ whether he had the possibility of receiving compensation and whether he could avail himself of procedural guarantees. A reasonable length of the proceedings also plays a significant role.¹⁹⁹²

A legal situation that is too uncertain is unacceptable, and thus is disproportional. In Case CH/97/104, such an uncertain legal situation occurred because the Federation continued restricting the appellants’ disposal of their foreign currency deposits, although meanwhile the legal basis for doing so was abolished by the Constitutional Court of the FBiH.¹⁹⁹³

The legislature can impose a law to adjourn the enforcement of claims for damages against fiscus for budgetary reasons, although in doing so it must strike a fair balance between the general interest in preventing bankruptcy of the State, i.e., the maintenance of macroeconomic stability, on the one hand and the property interests of the affected person, on the other hand. At any rate, this will not be the case if the law stipulates the adjournments for an indefinite period of time¹⁹⁹⁴ or for too long period.¹⁹⁹⁵

In order to preserve the legal certainty deriving from the principle of a legal state, retroactive deprivation of ownership status is possible only if it is justified by cogent reasons.¹⁹⁹⁶ In addition, the important question is whether a just compensation for confiscated property is offered to the injured party, i.e., compensation for costs, and whether the legal situation is sufficiently clarified.¹⁹⁹⁷ Therefore, it is disproportionate to declare the purchase contracts retroactively null by reasoning that the buyers of the aforementioned apartments comparing to the buyers of similar socially owned apartments had a particularly favourable position.¹⁹⁹⁸ Even if the aim pursued by the legislator is fully legitimate in this case, the use of means which have been discriminating from the very beginning is not allowed.¹⁹⁹⁹ Even the possibility of compensating for damage caused by the loss of ownership rights cannot justify the inadequate and discriminating deprivation of such property.²⁰⁰⁰

The retroactive deprivation of the right to interest on war-related damages in order to protect insurance companies against claims which could financially ruin them is also disproportional.²⁰⁰¹

If the interests of the former (quasi) occupancy rights holders are contrary to the interests of the current occupants or owners of disputed apartments, then in weighing the interests, the priority right is the right to return according to Article II.5 of the BiH Constitution and the aims under Article 7 of the General Framework Agreement.²⁰⁰²

Case No. U 55/02 can be classified among such cases. An important decision was taken in that case, although it did not have significant legal consequences.²⁰⁰³ The case related to the compatibility of Article 20 of the Law on Housing Relations with Article 1 of Additional Protocol No. 1 to the ECHR. This regulation orders the court to grant the occupancy right to one of the divorced spouses (who are the joint occupancy right holders) if they cannot reach an agreement by themselves. The Constitutional Court has held that the allocation of the housing right over the apartment to one of the spouses is not in violation of the right to property even if the other one completely looses the occupancy right. Why? The party who has lost that right must receive compensation for that part of the marital property in accordance with the Family Law.²⁰⁰⁴ If the obligation related to the compensation does not derive explicate from the applicable Family Law, which would not be surprising taking into account that the case relates to the occupancy right as a socialistic heritage, such an obligation is established in the decision of the BiH Constitutional Court. Therefore, Article 20 of the Law on Housing Relations should be interpreted in a way that the allocation of occupancy rights to one spouse entails the obligation to award compensation to the other one.

In determining the interest rates, the principle of equivalent value in bilateral obligation relations must be complied with.²⁰⁰⁵ In the disputes relating to taxation law, it is sufficient that the imposition of a tax had a basis in law and that its application did not impose an excessive or disproportionate burden on the individual or legal person concerned, in which case the constitutional standards have been met.²⁰⁰⁶