SLIVKOVA v. SLOVAKIA
Inadmissible
Nicolas Bratza
The applicant, Mrs Mária Slivková, is a Slovakian national who was born in 1943 and lives in Košice. She was represented before the Court by Mr O. Škodler, a lawyer practising in Bratislava. summarised as follows. The applicant is a dentist and runs a private dental practice in Košice. As such, under section 26 of the Health Care Act (Law no. 277/1994 Coll), as amended (Zákon o zdravotnej starostlivosti), she is under an obligation to provide health care. In 1998 and 1999 the applicant provided dental care to patients who were insured by a private insurer P. Under section 38 (3) of the Health Insurance Act (Law no. 273/1994 Coll), as amended (Zákon o zdravotnom poistení), P. was obliged to pay the applicant the costs of this care upon request within 30 days, latepayment interest being set pursuant to section 38 (4) of that Act at 1% per day. P. has however failed to make any payment. On 1 July 1999 the Ministry of Health withdrew P.'s licence to provide health insurance as it did not have the prescribed number of insurance policies. Under section 34 (3) of the Health Insurance Act the Ministry decided that P.'s insurance policies would be assigned to the Stateowned General Health Insurer (Všeobecná zdravotná poisťovňa). The Ministry noted that pursuant to section 28 (4) of that Act the State guaranteed the General Health Insurer's solvency and that, in the circumstances, the latter was the most appropriate body to secure the policyholders' constitutional right to healthcare. The Ministry ruled, lastly, that pursuant to section 34 (3) of the Act P.'s liabilities to private healthcare establishments and its receivables (insurance premiums and latepayment penalties) were transferred to the General Health Insurer. The decision became final and binding on 17 July 1999. On 1 December 2000, at the General Health Insurer's request for a review under a special procedure, the Ministry upheld the decision of 1 July 1999. It observed that under section 34 (4) of the Health Insurance Act the withdrawal of P.'s licence meant that the winding up and liquidation proceedings had begun automatically, by operation of law. The liquidator's powers were confined to liquidating P.'s assets. The exact procedure was governed by the relevant provisions of the Commercial Code. Should the liquidator discover that P.'s assets did not suffice to satisfy its creditors, he or she was required to seek an insolvency order. The Ministry held that the General Health Insurer could by no means be considered to be P.'s general legal successor. The transfer of P.'s liabilities and claims to the General Health Insurer was governed by special legal provisions contained in section 34 (3) of the Health Insurance Act. Pursuant to that provision, the liabilities of an insurer on a winding-up passed to the designated insurer only to the extent that they could not be satisfied from the assets of the insurer that was being woundup. In the present case it had not yet been established by the liquidator that P.'s assets were insufficient to satisfy its creditors. According to the Ministry, therefore, P.'s liabilities could not be considered as having been assumed by the General Health Insurer for the time being. On 20 March 2001 P.'s liquidator filed a petition with the Bratislava Regional Court (Krajský súd) seeking an insolvency order against P. The Regional Court made the order on 20 April 2001 and it became final and binding on 21 May 2001. Under Article 13a of the Bankruptcy Code the declaration of insolvency automatically stayed the liquidation proceedings. The insolvency proceedings are still pending. On 11 June 2001 the applicant unsuccessfully lodged a demand with the General Health Insurer for payment of the costs of the dental treatment. On 1 July 2001 amendment no. 233/2001 Coll. to the Health Insurance Act entered into force. It added inter alia a new paragraph 6 to section 34 of the Act. It stipulated that where the outstanding liabilities of an insurance company in liquidation were passed on to a designated insurer, like the General Health Insurer in the present case, they were to be settled within 24 months from the date the liquidation accounts were approved or an insolvency order made. Such liabilities would to be settled from the liquidated insurance company's assets, from the State budget or from other sources designated by the State. On 4 September 2001 the applicant, who was represented by a lawyer, brought a civil action against the General Health Insurer in the Bratislava V District Court (Okresný súd). She sought an order for the payment of 51,570 Slovakian korunas (SKK) for the above dental care plus latepayment interest. She submitted that the newly adopted paragraph 6 of section 34 of the Health Insurance Act was not applicable to her case as P.'s debt towards her had passed to the defendant prior to the entry into force of amendment no. 233/2001. In support of that argument she maintained that in January 2001 the defendant had settled 71.2% of P.'s outstanding debts to Stateowned pharmacies. If P.'s outstanding debts had not been assumed by the General Health Insurer, there would have been no valid legal basis for such settlement. In its observations in defence, the defendant acknowledged the 71.2% settlement but maintained that it had been financed from extrabudgetary resources which had not been intended for it or for the liquidator. On 19 December 2001, on a protest by the Prosecutor General, the Ministry quashed the ruling in its decision of 1 July 1999 that P.'s liabilities towards private healthcare establishments had been transferred to the General Health Insurer. The remainder of the decision of 1 July 1999 remained unaffected. On 16 April 2002 the District Court dismissed the action after hearing the parties and examining complex documentary evidence. The District Court observed that although P. had been wound up and subsequently declared insolvent, it had not been struck off the business register and had retained its legal personality. The transfer of its liabilities to the General Heath Insurer was not automatic. As the insolvency and liquidation proceedings had not yet been completed, it could not be determined whether P. had any liabilities that could not be settled from its assets. It therefore could not be said whether – and if so which – of P.'s liabilities had been transferred to the defendant. Therefore, at the material time, there had been no cause of action against the General Health Insurer. Moreover, and in any event, the action was also premature in that, even assuming that P.'s debt to the applicant had passed on to the defendant, the timelimit under section 34 (6) of the Health Insurance Act for its settlement had not yet expired. As to the temporal application of the Health Insurance Act, the District Court observed that amendment no. 233/2001 contained no transitional provisions. It concluded that the Health Insurance Act was thus to be applied as worded on the day of the judgment. The District Court dismissed the applicant's argument based on the partial settlement of P.'s debts towards State owned pharmacies observing that the settlement had been arranged by P.'s liquidator and financed from nonbudgetary resources, the defendant merely having played the role of an administrator in the transaction. The District Court observed, lastly, that the 24 month period laid down by amendment no. 233/2001 had been adopted in order to enable the State to raise the financial resources necessary to settle the liabilities of insolvent private health insurers. On 20 May 2002 the applicant, assisted by a lawyer, appealed against the judgment of 16 April 2002. She reiterated the arguments she had made in the District Court. In its observations in reply, the General Health Insurer pointed out that P.'s insolvency and the liquidation of its assets had not affected its legal existence, and it still had assets that needed to be realised and the proceeds distributed. Only then could it be established which, if any, of P.'s liabilities could not be settled and would consequently pass to the General Health Insurer. Furthermore, only at that point would it become clear what additional funds would have to be raised in order to cover the transferred liabilities, a process for which amendment no. 233/2001 had afforded a period of 24 months. On 14 November 2002 the Bratislava Regional Court upheld the judgment of 16 April 2002. It noted that the order declaring P. insolvent became effective on 21 May 2001. Pursuant to section 34 (6) of the Health Insurance Act any of P.'s liabilities which had been taken over by the General Health Insurer were not payable until 24 months after the insolvency order, that is to say until 21 May 2003. Thus, above all, the action was premature. On 1 January 2003 amendment no. 671/2002 Coll. to the Health Insurance Act entered into force. It inter alia modified the wording of section 34 (4) by providing that if the amounts obtained by realising the liquidated insurance company's assets did not suffice to cover its liabilities in full, only that portion of the outstanding liabilities that represented principal (exclusive of any penalties for late payment) was payable. In March 2003 the applicant, who was represented by a lawyer, lodged a complaint with the Constitutional Court (Ústavný súd) under Article 127 of the Constitution. She formally directed her complaint against the District Court and the Regional Court and objected that the decision to apply Article 34 (6) of the Health Insurance Act, as amended by amendment no. 233/2001, and to dismiss her the action she had brought on 4 September 2001 had infringed her right to equality of ownership (Article 11 of the Charter of Fundamental Rights and Freedoms (Listina základných práv a slobôd)), her right to equality (Article 12 §§ 1 and 2 of the Constitution), her freedom of choice of occupation and business (Article 35 § 1 of the Constitution) and her property rights (Article 20 of the Constitution and Article 1 of Protocol No. 1). She also maintained that the alleged violations constituted a breach of the principle of the rule of law enshrined in Article 1 of the Constitution. She asserted that amendment no. 233/2001 had retrospectively and substantially changed the conditions under which she had entered the entrepreneurial environment and had disproportionately and without any acceptable justification postponed the settlement of her claim. On 16 April 2003 the Constitutional Court declared the complaint inadmissible. Observing that the complaint was formally directed against the District Court and the Regional Court, it found that there was no connection between those courts' decisions, which were in conformity with the relevant laws, and the alleged violation of the applicant's right to equality, equality of ownership and freedom of choice of occupation and business. The Constitutional Court also observed that the right to freedom of choice of business did not afford any protection from entrepreneurial risk, a part of which was the risk that one's business partners may became insolvent. That part of the complaint was therefore manifestly ill-founded. In so far as the applicant complained of a violation of her property rights, the Constitutional Court observed that the task of protecting those rights had been entrusted to the ordinary courts. It therefore found that in accordance with the subsidiarity principle it had no jurisdiction to entertain that part of the applicant's complaint.