EHRM, 28-08-2018, nr. 60934/13

The applicant was born in 1939 and lives in Vác.

He was awarded a disability pension on 6 May 1995. Since he had accrued service periods in both Hungary and Austria, his pension was established accordingly, both under the Act no. LXXXI of 1997 on Social Security Pension Benefits (‘the 1997 Pensions Act’) and the Social Security Agreement between Hungary and Austria. On 1 May 2004 (the date of Hungary's accession to the EU) his monthly pension was 74,361 Hungarian forints (HUF) (approximately 250 euros (EUR)).

On 18 April 2006 he requested a review of his pension rights in accordance with Article 94(5) of Regulation 1408/71/EEC of the Council of the European Communities on the Application of Social Security Schemes to Employed Persons and their Families Moving within the Community (hereinafter ‘the Regulation’). The provision stipulated that the rights of a person to whom a pension had been awarded prior to the entry into force of the Regulation could, at the request of the person concerned, be reviewed, taking into account the provisions of the Regulation. With regard to the applicant, the date of ‘entry into force’ was Hungary's EU accession.

On 1 September 2006 the applicant's monthly pension was reviewed by the Budapest and Pest County Pensions Board (Fővárosi és Pest Megyei Nyugdíjbiztosítási Igazgatóság), acting as a first-instance pension authority. The applicant's pension was increased to HUF 134,566 (approximately EUR 449) per month with effect from 1 May 2004.

On 7 September 2006 the applicant appealed against that decision, because the pension authority had calculated an overlap period (during which he had worked in Austria but had also had to pay social security contributions in Hungary) as a mere Hungarian service period with a very low average salary.

Despite the appeal, the decision was implemented with immediate effect and the applicant received HUF 1,996,104 (approximately EUR 6,650) in arrears.

On 16 January 2007 the Central Hungary Regional Pensions Board (Közép-Magyarországi Regionális Nyugdíjbiztosítási Igazgatóság), acting as a second-instance pension authority, increased the applicant's monthly pension to HUF 135,450 (approximately EUR 452) with effect from 1 May 2004. For the period 1 May 2004 to 28 February 2007 he received a total of HUF 42,065 (approximately EUR 140) in arrears and interest.

The applicant challenged the final administrative decision in court and requested that a question concerning the correct interpretation of the Regulation be referred to the Court of Justice of the European Union (‘CJEU’) for a preliminary ruling.

On 12 October 2007 the Budapest Labour Court dismissed the applicant's action and upheld the pension authority's decision.

The applicant lodged a petition with the Supreme Court for review of the Budapest Labour Court's judgment. On 6 March 2009, in the review proceedings, he submitted written pleadings to the Supreme Court.

The pleadings were not submitted to the Court in the present proceedings and the parties' submissions differed as to the content of the document containing them. According to the Government, the applicant withdrew his request for a preliminary ruling on that date, whereas the applicant alleged that he had only submitted that the reference to the CJEU was not necessarily inevitable, provided that his interpretation of EU case-law was followed. However, in his view, this did not amount to a withdrawal of the request for a reference for a preliminary ruling.

On 3 June 2009 the Supreme Court reversed the Budapest Labour Court's judgment and ordered new proceedings, insisting that the EU law principle concerning the prevention of overlapping of benefits be taken into account.

In response to the applicant's request for a reference for a preliminary ruling, the Supreme Court held that the procedure appeared to be unnecessary ‘because the conditions had not been fulfilled’.

In the case remitted to it, the Labour Court quashed the decision of the pension authority and instructed it to recalculate the applicant's pension in accordance with EU rules (without counting the overlap period as a mere Hungarian service period). The judgment became final on 19 March 2010.

On 7 July 2010 the Central Hungary Regional Pensions Board adopted a new decision in accordance with the instructions of the Budapest Labour Court and increased the applicant's monthly pension to HUF 139,545 (approximately EUR 465) with effect from 1 May 2004. The decision ordered the payment, in arrears, of the difference between the pension due and the amount already paid.

The 1997 Pensions Act provides that if a pension authority has made a mistake to the detriment of an applicant, the difference is to be paid for only the last five years preceding the date the mistake was discovered (the duration of the statutory limitation period). Payment of the difference was therefore ordered for the period after 19 March 2005 only (namely from the date exactly five years before the date on which the Labour Court's judgment became final, see paragraph 16 above). The amount paid to the applicant in arrears and interest was HUF 581,515 (approximately EUR 1,940).

On 23 July 2010 the applicant appealed against the decision, claiming the arrears for the whole period following Hungary's EU accession.

On 11 November 2010 the Pension Appeals Board (Nyugdíjbiztosítási Jogorvoslati Igazgatóság) amended the decision of 7 July 2010 (see paragraph 17 above), reduced the applicant's monthly pension to HUF 138,170 (approximately EUR 460) with effect from 1 May 2004, but limited payment to the period following 19 March 2005.

The Appeals Department of the National Pensions Administration (Országos Nyugdíjbiztosítási Főigazgatóság Jogorvoslati Főosztály) conducted a repeated second-instance review and, in a decision dated 5 November 2011, amended the decision of 11 November 2010 (see paragraph 19 above). It increased the applicant's monthly pension to HUF 139,605 (approximately EUR 465) with effect from 1 May 2004, retaining however the limitation of payment as regards the period preceding 19 March 2005.

The applicant requested a court review of the pension authority's decision of 7 July 2010, as amended by the decisions of 11 November 2010 and 5 November 2011. He relied on Article 94(6) of the Regulation.

On 29 February 2012 the Budapest Labour Court upheld the pension authority's decisions (see paragraphs 17, 19 and 20 above).

On 22 March 2012 the applicant submitted a petition for review of the Budapest Labour Court's judgment. He argued that domestic law was to be interpreted and applied in conformity with EU law, of which the relevant provision, Article 94(6) of the Regulation, was directly applicable and had direct effect in the case. He contended, in essence, that he had a right, as acknowledged in the decisions of the pension authority, to an adjusted pension for the whole period following 1 May 2004. The national rule restricting the very payment of that pension to a shorter period of time constituted a ‘limitation of rights’ prohibited by the Regulation. He was of the opinion that the Budapest Labour Court's judgment, in giving precedence to the rule of national law over the relevant provision of the Regulation, had violated the principles of primacy and effectiveness of EU law.

In his petition for review, the applicant did not request that the case be referred to the CJEU for a preliminary ruling; instead, he requested what he considered to be a correct application of Article 94(6) of the Regulation. Nevertheless, he argued that the Budapest Labour Court's judgment had violated Article 234 of the Treaty Establishing the European Community (‘EC Treaty’, now Article 267 of the Treaty on the Functioning of the European Union (‘TFEU’)), without providing a detailed explanation on this point.

On 26 June 2013 the Kúria upheld the judgment of the Budapest Labour Court.

Both the Budapest Labour Court and the Kúria reasoned that the Regulation concerned only the acquisition of rights but not the actual payment of allowances. In the courts' view, the applicant had indeed acquired a right to an amended pension from 1 May 2004 and his rights in this regard were not subject to any forfeiture or limitation; it was only the actual payment of the increased amount which had been limited. In the courts' opinion, therefore, the relevant provisions of the 1997 Pensions Act and those of the Regulation did not conflict.

As regards the applicant's argument concerning the alleged violation of Article 234 of the EC Treaty, the Kúria's judgment did not contain any reasoning.

In parallel to the litigation described above, on 2 February 2008 the applicant lodged a petition with the Constitutional Court, arguing that the rules of the 1997 Pensions Act were in conflict with EU law. On 4 October 2010 the court rejected the petition, stating that it lacked competence to examine an alleged conflict between Hungarian and EU law (see decision no. 126/E/2008 of the Constitutional Court).

The applicant complained of a violation of his right to a fair trial. He argued that the domestic authorities and, in particular, the Kúria had not taken due account of the EU law provision which should have governed his case and which placed certain obligations on the national courts in respect of references for preliminary rulings, including an obligation incumbent on national courts of last instance to provide reasons for not making a reference.

He relied on Article 6 § 1 of the Convention, which, in so far as relevant, reads as follows:

The applicant complained that the length of the proceedings had been incompatible with the ‘reasonable time’ requirement of Article 6 § 1 of the Convention.

The Government contested this view.

The period to be taken into consideration began on 7 September 2006, when the applicant lodged his appeal against the decision of the first-instance pension authority concerning his request for a review of his pension rights (see paragraph 9 above); it was then that a ‘dispute’ within the meaning of Article 6 § 1 arose (see, mutatis mutandis, König v. Germany, 28 June 1978, § 98, Series A no. 27; Tóth, Magyar and Tóthné v. Hungary, no. 35701/04, § 19, 6 December 2005; Počuča v. Croatia, no. 38550/02, § 30, 29 June 2006; and Kugler v. Austria, no. 65631/01, § 36, 14 October 2010). It ended on 26 June 2013, when the Kúria upheld the judgment of the Budapest Labour Court (see paragraph 24 above). It thus lasted more than six years and nine months at two levels of administration and two levels of court.

At this juncture, the Court notes that it cannot share the Government's argument that the proceedings at issue should be considered to have comprised of two distinct parts, one concerning the amount of the applicant's pension (covering the period between 2006 and 29 February 2012) and the other concerning the applicability of section 80(1) of the 1997 Pensions Act (covering the period between 11 November 2010 and 26 June 2013). For the Court, the actual disbursement of the applicant's adjusted pension constituted a question inherently linked to the subject matter of the dispute started in 2006. It further observes that the issues raised by the application of section 80(1) of the 1997 Pensions Act were examined by the domestic courts as part of one and the same proceedings. Therefore, the separate treatment of those issues for the purposes of Article 6 § 1 of the Convention would be artificial and unjustified.

In view of such lengthy proceedings, this complaint must be declared admissible.

The Court reiterates that the reasonableness of the length of proceedings must be assessed in the light of the circumstances of the case and with reference to the following criteria: the complexity of the case, the conduct of the applicant and the relevant authorities and what was at stake for the applicant in the dispute (see, among many other authorities, Frydlender v. France [GC], no. 30979/96, § 43, ECHR 2000-VII).

The Court notes that the case was not exceptionally complex, and the applicant did not cause any delays. As regards what was at stake for the applicant, the Government argued that the subject of the dispute had been a difference of HUF 60 (approximately EUR 0.20) between what had been awarded by the pension authorities' decisions of 7 July 2010 (see paragraph 17 above) and 5 November 2011 (see paragraph 20 above), respectively. For the Court, the amount to be taken into account is rather the difference between the pension as initially fixed on 1 September 2006 and as eventually established on 5 November 2011, that is, a monthly difference of approximately EUR 16. Leaving aside the interim payments disbursed to the applicant, that difference could have added up to a total of approximately EUR 1,300 during that period. Furthermore, the proceedings also concerned the question whether or not the adjusted pension should be paid for the period between 1 May 2004 and 19 March 2005. In this regard, an amount of more than EUR 2,000 (approximately 10.5 times the monthly difference between the applicant's initial pension of approximately EUR 250 and the eventually established amount of approximately EUR 465) was also arguably at stake.

The Court has already held that special diligence is necessary in pension disputes (see, among other authorities, Pejčić v. Serbia, no. 34799/07, § 70, 8 October 2013). In such circumstances, having examined all the material submitted to it and having regard to its case-law on the subject, the Court considers that the length of the proceedings was excessive and failed to meet the ‘reasonable time’ requirement (see, mutatis mutandis, Gazsó v. Hungary, no. 48322/12, § 17, 16 July 2015).

There has accordingly been a breach of Article 6 § 1 of the Convention on account of the length of proceedings.

Article 41 of the Convention provides: