CASE OF RUNGAINIS v. LATVIA
No violation of Article 10 - Freedom of expression-{general} (Article 10-1 - Freedom of expression)
André Potocki;Angelika Nußberger;Erik Møse;Mārtiņš Mits;Síofra O’Leary;Gabriele Kucsko-Stadlmayer
5. The applicant was born in 1967 and lives in Riga. At the material time he was the chairman of the supervisory board of a Latvian bank – Latvijas Krājbanka (“Krājbanka” or “the Bank”). The State held 32.12% of its shares. 6. A.L. was one of the shareholders of Krājbanka. He was also the President of the Bank until January 2002, when he voluntarily stepped down from this position. In November 2002 he was elected as a member of the Latvian Parliament (Saeima), representing a newly established political party, Latvijas Pirmā Partija (the Latvia’s First Party – also referred to below as the “Pastors’ Party”), which had been established in the same year. 7. At the material time an advertising agency, Z., was contracted by both Krājbanka and the Latvia’s First Party to provide certain advertising services. 8. Neatkarīgā Rīta Avīze (“NRA”) was one of the main daily newspapers in Latvia at the material time. It was published by a joint-stock company, Preses Nams (until 2 January 2003) and, subsequently, by the limited liability company Mediju Nams. 9. On 30 September 2002 the applicant prepared a report on the advertising and marketing expenses incurred by Krājbanka in 2001 and the first seven months of 2002, which he then presented to the Bank’s supervisory board. His report was based on information which he had requested from the heads of the marketing and economics departments. According to the applicant’s report, the Bank had transferred substantial sums for advertising and marketing services to, inter alia, Z., for which no supporting documents could be found. This raised suspicions that the Bank’s funds had been misappropriated. The parties did not provide the Court with a copy of the applicant’s report, nor any further details of that report. 10. On 2 October 2002 the Bank’s supervisory board held an extraordinary meeting and ordered an internal audit to verify the applicant’s findings. At a meeting of 16 October 2002 the head of the internal audit department informed the supervisory board that no undocumented advertising and marketing expenses had been incurred. In response to press reports (see paragraphs 13 et seq. below), the internal audit had verified all deals concluded with Z. in 2002; the internal audit in relation to 2001 was ongoing. The information published in the press had not been confirmed. The conclusions of the final report, dated 30 October 2002, indicated that in 2001 no undocumented advertising and marketing expenses had been incurred. All contracted services had been received, but on some occasions no supporting documents have been kept (for example, copies of certain advertisements in the press and some printed material – such as concert posters and tickets – were no longer available). 11. On 16 October 2002 the supervisory board ordered an additional external audit. In May 2003 the audit agency in its report concluded that while the advertising and marketing expenses incurred in 2001 (755,000 Latvian lati (LVL), approximately 1,074,268 euros (EUR)) and 2002 (LVL 555,000, approximately EUR 789,694) had been greater than in previous years (in 1998 the figure had been LVL 374,000, approximately EUR 532,154; in 1999, LVL 324,000, approximately EUR 461,010; and in 2000, LVL 640,000, approximately EUR 910,638), this could be explained by the fact that the Bank had been in the process of changing its corporate identity during the period under consideration. This process had continued while the external audit was being carried out and the Bank had incurred more expenses in this regard. All contracts with Z. had been approved and signed by the Bank’s highest management. The external audit concluded that there was no evidence that payments had been made for services or goods that had not been received or that the payments had exceeded the value of the services received. No personal links had been found between A.L. or the Bank’s staff members and the advertising companies. There was no evidence that the staff members had been forced to work with the particular service provider or to prepare documents for services which the Bank had not received. 12. Meanwhile, A.L. applied to have criminal proceedings instituted in respect of the alleged intentional dissemination of false information about him. By a final decision of 13 August 2003 the prosecution refused to institute criminal proceedings. The information and conclusions, which the applicant had provided to the journalists, had been based on erroneous findings contained in the applicant’s initial report on the advertising and marketing expenses. However, there was no evidence that the applicant had intentionally disseminated false information about A.L. The latter was informed of his right to lodge a civil claim in that regard. 13. Between August 2002 and May 2003 NRA published numerous articles on various topics of public interest concerning the 2002 parliamentary elections. It appears that NRA journalists contacted the applicant for a comment shortly after the meeting of 2 October 2012 of the Bank’s supervisory board had taken place. 14. In their submissions to the Court, the parties disagreed on the manner and form in which the applicant had provided the respective information to the NRA journalists. The Government stated that the applicant had provided this information to the journalists on several occasions, and that his comments, which had contained concrete descriptions of A.L.’s actions, had been provided in the form of facts susceptible of proof. The applicant, however, stated that he had only on one occasion provided a short comment to the journalists via telephone about the issues discussed at the meeting of the Bank’s supervisory board. Furthermore, the comments had constituted merely his own opinion about Krājbanka’s management; they had still needed to be verified by the Bank’s internal audit. 15. The following excerpts are from nine articles, which were published between 3 and 23 October 2002, and which were based on the information provided by the applicant in this regard: 1. “ ‘Krājbanka’s former management accused of fraud’ ... [Since] the beginning of 2001, [LVL] 522,000 has been transferred [to finance] [Krājbanka’s] advertising and marketing activities, in respect of which no documentation – the relevant contracts, delivery/acceptance deeds etc. – has been provided ... [T]he transfer of this sum in an unknown direction (nezināmā virzienā) actually amounts to the destruction of the Bank’s [available] assets. ... As [the applicant] suggested to [NRA], either ‘somebody is receiving this paid money back’ or Krājbanka’s money is being used to create advertising of a completely different kind than that indicated in the available documents. ‘This is money that has been stolen from the shareholders’, [the applicant] stated. ... Moreover, significant advance payments were made [for services to be provided within a year] shortly before [a] change in Krājbanka’s management at the beginning of [2002]. The supervisory board has ordered an internal audit to discover where these funds have disappeared to ... Documents in the possession of [NRA] show that the role of A.L. in the affair of the strange advertising [funds] transfers could be quite significant ... The [Bank’s] public relations unit has dispatched [LVL] 168,000 to who knows whom and who knows where. The Bank’s marketing department stands out even more blatantly. Of a total of [LVL] 743,000 spent, no documentary evidence exists regarding the expenditure of [LVL] 356,000.” (Information published in NRA, 3 October 2002 edition, article written by R.P. and E.L.: “Krājbanka’s former management accused of fraud”.) 2. “This week, Krājbanka’s current officials discovered massive excess expenditure on advertising that was allowed during the period of management of A.L. and V.K. –evidently these persons had been advertising themselves at the expense of Krājbanka.” (Information published in NRA, 5 October 2002 edition, article written by R.R. and U.D.: “The Pastors’ Party – a Šlesers’ family enterprise”.) 3. “ ‘Advertising for the Pastors’ Party – with Krājbanka’s money’ ... The advertising agency, Z., responsible for creating the Latvia’s First Party’s preelection campaign, is one of the companies to which Krājbanka’s former management transferred several hundred thousand [Latvian] lati at the beginning of [2002]. The transfer was carried out without documentary certification as an advance payment for advertising services ... [NRA] has already announced that since the beginning of 2001, Krājbanka has transferred [LVL] 522,000 [to finance] its advertising and marketing activities, in respect of which no documentation is available. ... As [the applicant] admitted to NRA, Z. was the very agency to which more than [LVL] 200,000 of Krājbanka’s funds was transferred at the beginning of [2002] as an advance payment; [details of the] subsequent expenditure [of those funds] are unknown. ‘It is possible that this is the money that provided the foundation for the Latvia’s First Party’s sizable advertising campaign’, admitted [the applicant]. ... Documents in the possession of NRA show that the role of A.L. in the affair of the strange advertising [funds] transfers could have been rather significant.” (Information published in NRA, 12 October 2002 edition, article written by K.P. and E.L.: “Advertising for the Pastors’ Party – with Krājbanka’s money”.) 4. “[The applicant] confirmed to [NRA] that the advertising agency, Z., the creator of Latvia’s First Party’s advertising campaign, is one of the companies to which the former management of Krājbanka transferred more than [LVL] 200,000 at the beginning of [2002] without documentary certification as an advance payment for advertising services. It has already been reported that since the beginning of 2001, Krājbanka has transferred [LVL] 522,000 [to finance] its advertising and marketing activities, in respect of which no documentation – the relevant contracts, delivery/acceptance deeds, etc. – has been provided.” (Information published in NRA, 15 October 2002 edition, article written by R.P.: “Krājbanka’s President concerned about his reputation”.) 5. “ ‘Crisis within Krājbanka’s Management’ ... The scandal revolving around the potentially unlawful activities of A.L., the former President of Krājbanka, has reached its culmination. ... A.L. has a negative opinion of [NRA’s] publications to date regarding the action of Krājbanka’s former management in transferring hundreds of thousands of [Latvian] lati to advertising firms without documentary certification in respect of the expenditure of that money ... [NRA] has already repeatedly written about the long-standing battle among Krājbanka’s shareholders, during which A.L. was accused several times of potentially unlawful actions ... This, however, has not prevented the friends of A.L. from resorting to extreme methods. [NRA] was informed by [the applicant] that ... at the last meeting of the supervisory board, a member of ‘A.L.’s group’, V.D., asked him in a forthright manner: ‘Have the folks from Ventspils insured your property?’ ‘This is an unprecedented event – the chairman of the Bank’s supervisory board being blatantly threatened!’ admitted [the applicant]. He believes that A.L. is now speculating that he will soon be afforded immunity as a member of [parliament], preventing him from being criminally prosecuted without a majority vote of [the Parliament] ... Commenting on the value of marketing, advertising and public relations contracts, [the applicant] admitted that even though it is necessary to carry out in-depth market research, during A.L.’s era various procedures were breached and payments were made whose sums currently cannot be precisely determined ... NRA has already written that [LVL] 522,000 has been transferred [to finance Krājbanka’s] advertising and marketing activities since the beginning of the year 2001, in respect of which no documentation – the relevant contracts, delivery/acceptance deeds, etc. – has been provided ... Additionally, doubts lie in respect of A.L. that certain actions regarding the administration of certificate accounts were also contrary to the interests of both the Bank and the State.” (Information published in NRA, 18 October 2002 edition, article written by R.P.: “Crisis within Krājbanka’s management”.) 6. “[NRA] has already reported that the actions of A.L. as the President of Krājbanka are being questioned in relation to advertising contracts concluded in the amount of several hundreds of thousands of [Latvian] lati. These contracts have no documentary corroboration regarding the specific measures [financed by] the money in question.” (Information published in NRA, 19 October 2002 edition, article written by R.P., E.L. and L.T.: “Repše: the Minister must be morally clean”.) 7. “NRA has already reported that in 2001, when A.L. was still the President of Krājbanka, [LVL] 522,000 was transferred without documentation, apparently for Krājbanka’s advertising and marketing activities, of which [LVL] 200,000 went to the advertising agency, Z., which also happened to be responsible for creating Latvia’s First Party’s pre-election campaign.” (Information published in NRA, 22 October 2002 edition, article written by B.L.: “Parties divide money portfolios!”) 8. “It is possible that during A.L.’s term of office [LVL] 522,000 was transferred [to finance] Krājbanka’s advertising and marketing activities, in respect of which the relevant documentation has not been provided.” (Information published in NRA, 22 October 2002 edition, article written by R.P.: “Krājbanka goes against A.L. at the prosecutor’s office”.) 9. “[NRA] has already written that [LVL] 522,000 was transferred in 2001, without any accompanying documentation, apparently for [Krājbanka’s] advertising and marketing activities, of which [LVL] 200,000 [went] to the advertising agency, Z., which was responsible for creating Latvia’s First Party’s pre-election campaign.” (Information published in NRA, 23 October 2002 edition, article written by B.L.: “Millionaires compete for power”.) 16. On 28 July 2003 A.L. lodged a claim against the applicant and the publishers of NRA seeking compensation and the retraction of a total of thirtyone allegedly defamatory articles. He also indicated that the applicant had provided false information to NRA, which had formed the basis of the above-mentioned nine articles (see paragraph 15 above). 17. During a hearing of 16 January 2004 the applicant admitted before the first-instance court that the information concerning the possible misappropriation of Krājbanka’s funds, which he had provided to NRA, had proved to be incorrect. He made the following statements: “The information [was] wrong, unfounded. [As part of my duties] I was carrying out my task of managing [the Bank’s] activities. I was not interested in A.L.’s private life. I have always respected him. I tried to organise [my] work correctly. As to the mistake regarding numbers, there was one, and I apologise to A.L. and to the journalists. A.L. worked at the Bank and worked in accordance with [its] budget. A.L. made decisions. There were others responsible for [the Bank’s] budget. [The Bank] did not overpay for [its] advertisements. The mistake regarding numbers could not have offended A.L.’s honour and dignity. There were no public statements; maybe there were other [people] who [provided more information to the press].” 18. On 3 October 2005 the Riga Regional Court (Rīgas apgabaltiesa) delivered its judgment, dismissing the claims against the applicant. The court concluded that the nine articles in question (see paragraph 15 above), which had been based on the information provided by the applicant, had reported his personal opinion about the functioning of Krājbanka and its management, which could not be considered defamatory. Moreover, no claim for defamatory information to be retracted was lodged against the applicant. The claims against both publishers of NRA (Preses Nams and Mediju nams) were partly upheld in so far as they concerned six out of the nine articles which had been based on information provided by the applicant and six other articles reporting on other matters. 19. On 28 May 2007 the Civil Cases Chamber of the Supreme Court (Augstākās tiesas Civillietu tiesu palāta) – after appeals by A.L., Preses Nams, and Mediju nams – re-examined the case and delivered a new judgment. The judgment took immediate effect. 20. The appellate court noted that at the material time the press and other mass media had been widely reporting on the 2002 parliamentary elections – that is to say the political parties and their leaders, including the newly-established political party, of which A.L. was one of the leaders. He had stood for election, his candidacy had been widely advertised and it had been, accordingly, examined by the press and other mass media. NRA had published a series of articles about the money spent on the pre-election advertising of the Latvia’s First Party, linking the source of these funds to Krājbanka and its former President, A.L. It had been reported that during his time in office, LVL 522,000 had been transferred for advertising and marketing purposes without any documentary proof thereof having been preserved and that this had been considered to constitute a misappropriation of the bank’s funds. These funds had been spent on the party’s large-scale advertising; as the applicant had put it: “[T]his money has been stolen from the shareholders”. The nine articles had also contained other information provided by the applicant – that during A.L.’s time in office, there had been breaches not only in relation to the advertising expenses, but also other breaches in respect of banking operations, payments without approval, the administration of certificate accounts against the interests of the Bank and the State. 21. The appellate court stated that the information contained in those articles about the use of Krājbanka’s funds and transactions had been provided by the applicant (who had mentioned specific sums), and that the articles had contained references to his statements. 22. The appellate court found that since the applicant had provided this information to NRA journalists, he had to bear responsibility for giving and disseminating false information. The court held that this information had not corresponded to the facts and that this had been acknowledged by the applicant himself during the hearing before the first-instance court (see paragraph 17 above). This had also been confirmed by the results of the external audit and by the prosecution (see paragraphs 11 and 12). 23. The court also held that the journalists had not had a responsibility to verify the accuracy of the provided information, since the applicant’s status as the chairman of the supervisory board of Krājbanka had created a legitimate expectation that the provided information was correct. 24. Lastly, the court found that, even if the margin of permissible criticism in respect of A.L. as a member of parliament was necessarily a wider one than would normally be the case, the false information had nevertheless offended his honour and dignity, as it had contained serious allegations of unlawful activities and had given the impression that A.L. was a dishonest person. 25. Given the above, and in view of the seriousness of the interference and the applicant’s position in the Bank, the court ordered the applicant to pay compensation to A.L. in connection with the nine articles in the amount of LVL 10,000 (approximately EUR 14,229), together with statutory interest (6% per annum). 26. In addition, the court upheld the claim against Preses Nams alone in respect of one other article, and ordered it to pay compensation in the amount of LVL 5,000 (approximately EUR 7,114), together with statutory interest (6% per annum). 27. The applicant and Preses Nams were also ordered to pay A.L.’s legal costs in the amount of LVL 495 (approximately EUR 704) and LVL 375 (approximately EUR 534) respectively. 28. The appellate court dismissed A.L.’s claims against Preses Nams and Mediju Nams as regards all the other articles that had not been based on any information provided by the applicant. 29. On 28 June 2007 the applicant lodged an appeal on points of law with the Senate of the Supreme Court (Augstākās tiesas Senāts). He did not contest that the information he had provided to the journalists had turned out not to be supported by evidence. However, this information had constituted his evaluation of the actions taken by Krājbanka’s management as a whole. He had not directly mentioned A.L. by name, surname or his position when giving the information to the journalists. His allegations regarding the misappropriation of Krājbanka’s funds could only have infringed the interests of the Bank as a legal entity; it could not have offended the honour and dignity of certain executives, who had been under an obligation to inform the supervisory board and the mass media of the truth. Furthermore, the applicant had provided the information in the form of a supposition by indicating that it still needed to be verified by the Bank’s internal audit. It was the NRA journalists who had linked the applicant’s report with the allegations of wrongdoing by A.L. Thus, the applicant could not be held responsible for the manner in which the journalists had decided to present this information, since he had had no means of influencing this. 30. On 30 January 2008 the Senate of the Supreme Court delivered a new judgment, which in essence upheld the appellate court’s judgment. The relevant parts of the judgement read as follows: “[The appellate court’s] conclusion that the applicant had disseminated defamatory and false information was supported by the applicant’s own submissions before the first-instance court, in which he admitted that he had provided incorrect information to [the journalists] ... . The fact that this information was not truthful was confirmed by [the audit agency and the prosecution]. The applicant in his appeal on points of law did not contest these findings. ... He merely noted that he was a source and could not influence the evaluation given by the journalists. Having examined the testimony of [the NRA journalists], the appellate court found that the false information provided by the applicant had related not to Krājbanka’s management, as the applicant indicated, but specifically to A.L., as the then President of the Bank, thus infringing his honour and dignity. ... [The appellate court] found that the journalists had had no reason to doubt the credibility of the information, as it had been provided by the applicant [in his capacity as] chairman of the supervisory board of Krājbanka, and his position had undoubtedly created a legitimate expectation that this information was true ... Accordingly, the appellate court rightly held that the journalists had had no obligation to verify the accuracy of the information provided by the applicant. ... A.L. had requested compensation in the amount of LVL 10,000 from [the applicant]. By granting his claim, the [appellate] court, taking into account the scope of the distributed information and its audience, rightly considered it justified.” The Senate of the Supreme Court also upheld the claim against Preses Nams alone in respect of one other article; they held that A.L.’s honour and dignity had not been offended in other articles. The appellate court had referred to the Court’s case-law and had taken into account A.L.’s status and the fact that he had refused to offer comment. The appellate court had correctly applied the relevant principle that the journalistic freedom also covered possible recourse to a degree of exaggeration, or even provocation; the Senate referred to a/s Diena and Ozoliņš v. Latvia (no. 16657/03, § 84, 12 July 2007) in this regard. Referring to section 2352a of the Civil Law and section 29(3) of the Law on the Mass Media, the Senate of the Supreme Court ordered the applicant (who had disseminated that defamatory information), and not Preses Nams, to retract the relevant parts of the articles in question (see paragraph 15 above). The latter, however, still remained obliged to publish the retracted information.