CASE OF GANCO v. LITHUANIA (European Court of Human Rights) Application no. 42168/19

The case concerns the length of the criminal proceedings against the applicant.


SECOND SECTION
CASE OF GANČO v. LITHUANIA
(Application no. 42168/19)
JUDGMENT
STRASBOURG
13 July 2021

This judgment is final but it may be subject to editorial revision.

In the case of Gančo v. Lithuania,

The European Court of Human Rights (Second Section), sitting as a Committee composed of:

Carlo Ranzoni, President,
Egidijus Kūris,
Pauliine Koskelo, judges,
and Hasan Bakırcı, Deputy Section Registrar,

Having regard to:

the application (no. 42168/19) against the Republic of Lithuania lodged with the Court under Article 34 of the Convention for the Protection of Human Rights and Fundamental Freedoms (“the Convention”) by a Lithuanian national, Mr Nikita Gančo (“the applicant”), on 29 July 2019;

the decision to give notice of the application to the Lithuanian Government (“the Government”);

the parties’ observations;

Having deliberated in private on 22 June 2021,

Delivers the following judgment, which was adopted on that date:

INTRODUCTION

1. The case concerns the length of the criminal proceedings against the applicant.

THE FACTS

2. The applicant was born in 1975 and lives in Vilnius. He was represented by Ms K. Balevičienė, a lawyer practising in Vilnius.

3. The Government were represented by their Agent, Ms K. Bubnytė‑Širmenė.

I. Criminal proceedings against the applicant

A. Pre-trial investigation

4. On 20 December 2010 the applicant was officially notified that he was suspected of having committed financial crimes as a member of an organised group. In particular it was suspected that he had provided company L. with computer software, which he himself had created, and that the company, with the applicant’s knowledge and assistance, had used that software for fraudulent accounting and tax evasion. Over the course of the investigation, the authorities identified ten other suspects.

5. On the same day the applicant was detained. He was released from detention the following day and was ordered to register periodically with the relevant authorities and not to leave the country without their permission. The restrictions remained in place until the first-instance court’s judgment (see paragraph 16 below).

6. Between December 2010 and March 2011 the Financial Crimes Investigation Service (hereinafter “the FCIS”) and the prosecutor’s office questioned the applicant and the other suspects, carried out searches at their homes, examined various objects and documents, and interviewed several witnesses.

7. In April 2011 the FCIS asked the State Tax Inspectorate to examine the activities of company L. during 2010, in order to assess whether its accounting documents had been in order and, if not, how much tax may have been avoided. In May 2011 the FCIS provided the State Tax Inspectorate with additional relevant information. The State Tax Inspectorate presented its conclusions to the FCIS in December 2012. No other investigative measures were taken during that period.

8. In 2013 the authorities took the following measures:

– On 29 January they searched the applicant’s home again;

– On 19 July they examined the software which had been used for the alleged fraudulent accounting;

– On 21 November the applicant was notified of amendments to the suspicions against him and on 26 November he was questioned again.

9. In 2014 the authorities took the following measures:

– On 16 January the State Tax Inspectorate was granted the status of a civil claimant in the criminal proceedings;

– From 17 February to 4 March the FCIS examined various data obtained from the software used by company L.;

– In June and July the applicant and the other suspects were notified of further amendments to the suspicions and were questioned;

– On 7 August another suspect was questioned again;

– In October and November the FCIS examined records of telephone conversations and repeatedly questioned some of the suspects.

10. On 28 November the prosecutor decided to separate the pre‑trial investigation concerning two of the suspects (see paragraph 4 above) into a separate investigation.

11. On 2 December 2014 the applicant and eight other suspects were informed that the pre-trial investigation had been completed and that they had the right to access the case file and to make requests for further investigative measures.

12. On 22 January 2015 the prosecutor issued the indictment against the applicant and eight other suspects. The case was transferred to the Vilnius District Court for examination.

B. Court proceedings

13. The Vilnius District Court held hearings on 24 March, 7 April, 4 May, 11 May, 20 May, 4 September, 28 September 2015 and 19 January 2016.

14. On 20 May 2015 the lawyer of one of the co-accused did not appear at the hearing. The court decided to adjourn the case until 4 September 2015.

15. On 28 September 2015 the court was informed that the prosecutor had suffered an injury and would be on sick leave for three months. The prosecutor asked the court to adjourn the case, so that he would be able to give the closing statement. The court adjourned the case until 19 January 2016.

16. On 29 February 2016 the Vilnius District Court issued the judgment. The applicant and seven other co-accused were acquitted of all charges, while one person was convicted.

17. The prosecutor lodged an appeal. On 9 November 2016 the Vilnius Regional Court partly quashed the first-instance court’s judgment and convicted all of the co-accused, including the applicant.

18. The applicant lodged an appeal on points of law. On 16 May 2017 the Supreme Court quashed the judgment of the appellate court and upheld the judgment of the first-instance court (see paragraph 16 above), thereby acquitting the applicant.

II. Civil proceedings for damages

19. In October 2017 the applicant lodged a civil claim against the State, claiming compensation in respect of pecuniary and non-pecuniary damage allegedly caused by multiple violations of his rights during the criminal proceedings, including their excessive length.

20. On 14 May 2018 the Kaunas Regional Court dismissed the applicant’s claim. It held that, although the pre-trial investigation had not been “particularly intensive”, investigative measures had been carried out constantly and there had not been periods of complete inactivity. Furthermore, the case had been complex and of a large scale, and that had justified its length.

21. The applicant lodged an appeal against that decision, but on 3 April 2019 the Court of Appeal upheld the lower court’s decision in its entirety. In addition, it held that the applicant’s own actions, such as installing the software and training company L.’s employees in how to use it, had contributed to the complexity of the case. It also pointed out that the applicant had not been detained during the proceedings and there had been no restrictions on his ability to use his property or to engage in professional activities.

22. The applicant lodged two appeals on points of law, but on 26 June and 10 July 2019 the Supreme Court refused to accept them for examination on the grounds that they did not raise any important legal issues.

THE LAW

I. ALLEGED VIOLATION OF ARTICLE 6 § 1 OF THE CONVENTION

23. The applicant complained that the length of the criminal proceedings against him had been excessive, contrary to the requirements of Article 6 § 1 of the Convention. The relevant part of that provision reads as follows:

“In the determination of … any criminal charge against him, everyone is entitled to a … hearing within a reasonable time by [a] … tribunal …”

A. Admissibility

24. The Court notes that the application is neither manifestly ill‑founded nor inadmissible on any other grounds listed in Article 35 of the Convention. It must therefore be declared admissible.

B. Merits

1. The parties’ submissions

(a) The applicant

25. The applicant submitted that the length of the criminal proceedings – almost six years and five months – had been excessive, and that it had not been justified by the alleged complexity of the case. There had been multiple periods of inactivity, and furthermore, the time taken by the State Tax Inspectorate to prepare its conclusion had been unreasonable (see paragraph 7 above). He argued that he had not done anything to prolong the proceedings and consequently their length was attributable solely to the authorities.

(b) The Government

26. The Government argued that the length of the proceedings had been justified in the circumstances. The criminal case had been complex as it had concerned financial crimes, there had been multiple suspects and the case file had consisted of many volumes. Although the State Tax Inspectorate had indeed taken a long time to prepare its conclusions, it had had to examine a very large number of documents and its task had been further complicated by the complex nature of the software created by the applicant.

27. The Government also submitted that the authorities had taken measures to speed up the proceedings, namely separating pre-trial investigations (see paragraph 10 above). Furthermore, the applicant himself had prolonged the proceedings by lodging various requests.

2. The Court’s assessment

28. The general principles concerning the length of criminal proceedings have been summarised in Idalov v. Russia ([GC], no. 5826/03, § 186, 22 May 2012, and the cases cited therein).

29. In the present case, the criminal proceedings in respect of the applicant lasted from 20 December 2010 to 16 May 2017 (see paragraphs 4 and 18 above) – that is to say, almost six years and five months. The pre-trial investigation took four years and one month, and the court proceedings – nearly two years and four months.

30. The Court is prepared to accept that the criminal case was complex, as it concerned allegations of financial crimes and included multiple suspects. However, while the complexity of the case may justify a longer than average duration of the proceedings, it cannot justify long periods of inactivity on the part of the authorities (see Rutkowski and Others v. Poland, nos. 72287/10 and 2 others, § 137, 7 July 2015, and Girdauskas v. Lithuania, no. 70661/01, § 27, 11 December 2003).

31. The Court firstly turns to the pre-trial investigation. The domestic courts which examined the applicant’s civil claim acknowledged that it had not been “particularly intensive”, however, they considered that there had not been any periods of complete inactivity (see paragraphs 20 and 21 above). Referring to the documents submitted to it by the parties, the Court is unable to share the latter conclusion.

32. It is satisfied that from December 2010, when the applicant was notified of the suspicions against him, to March 2011 the pre-trial investigation was carried out actively (see paragraphs 4-6 above). However, from April 2011 it was effectively suspended while the investigating authorities were waiting for a conclusion from the State Tax Inspectorate, which took until December 2012 to prepare (see paragraph 7 above). The Court has no reason to doubt that the task before the State Tax Inspectorate was indeed complex (see paragraph 26 above). Nonetheless, it reiterates that it is for the State to organise its judicial system in such a way as to enable its institutions to comply with the requirements of the Convention (see Mardosai v. Lithuania, no. 42434/15, § 55, 11 July 2017, and the cases cited therein). In the present case, the Court finds that the Government have not provided sufficient justification for the excessively long time taken by the State Tax Inspectorate (compare and contrast Arewa v. Lithuania, no. 16031/18, § 54, 9 March 2021).

33. Furthermore, that was not the only delay which occurred during the pre-trial investigation. It transpires from the material in the Court’s possession that in 2013 there were only four days when the authorities were active (see paragraph 8 above) and in 2014 there were several months when no investigative measures were taken (see paragraph 9 above). The Court has not been provided with any justification for the delays and the overall slow pace of the pre-trial investigation.

34. As for the proceedings before the courts, their length – almost two years and four months before three levels of jurisdiction – cannot be considered excessive in and of itself. However, the Court emphasises that when the case was transferred to the Vilnius District Court, the pre-trial investigation had been going on for more than four years. Therefore, that court should have acted diligently in order to avoid further prolongation of the proceedings (see, mutatis mutandis, Mažukna v. Lithuania, no. 72092/12, § 86, 11 April 2017). However, the proceedings before the Vilnius District Court were adjourned from May to September 2015 because of the unavailability of one of the lawyers and from September 2015 to January 2016 because of the prosecutor’s injury (see paragraphs 14 and 15 above). The Court is mindful of the fact that those delays were caused by factors outside of the control of the domestic court. However, there is no indication that that court explored any possible ways of avoiding further delays or at least making them shorter – for example, by examining whether the lawyer’s schedule would have allowed for an earlier date or suggesting that the accused appoint a different lawyer (see Mardosai, cited above, § 57).

35. Lastly, having examined the material in its possession, the Court is unable to find that the applicant abused his procedural rights or unreasonably prolonged the proceedings in any other way. Therefore, their overall length must be attributed to the authorities.

36. There has accordingly been a violation of Article 6 § 1 of the Convention.

II. APPLICATION OF ARTICLE 41 OF THE CONVENTION

37. Article 41 of the Convention provides:

“If the Court finds that there has been a violation of the Convention or the Protocols thereto, and if the internal law of the High Contracting Party concerned allows only partial reparation to be made, the Court shall, if necessary, afford just satisfaction to the injured party.”

A. Damage

1. The parties’ submissions

38. The applicant claimed 130,900 euros (EUR) in respect of pecuniary damage, consisting of the allegedly lost earnings which he could have made working as a programmer abroad, lost profits which he could have gained from selling his software to potential clients, and for the time spent defending himself in the criminal proceedings rather than on his work. He also claimed EUR 130,000 in respect of non-pecuniary damage for the stress, uncertainty, and damage to his reputation.

39. The Government submitted that the pecuniary damage alleged by the applicant was hypothetical and not substantiated by any documents, such as employment contracts or sale-purchase agreements. Furthermore, he had not been prohibited from working during the criminal proceedings. They also submitted that the amount which the applicant claimed in respect of non‑pecuniary damage was excessive and unsubstantiated.

2. The Court’s assessment

40. In accordance with the Court’s case-law, there must be a clear causal connection between the damage claimed by the applicant and the violation of the Convention found in the case (see Bykov v. Russia [GC], no. 4378/02, § 110, 10 March 2009). The Court does not discern any causal link between the excessive length of the criminal proceedings against the applicant and the hypothetical pecuniary losses which he alleged. It therefore dismisses his claim in respect of pecuniary damage.

41. On the other hand, the Court considers that the lengthy criminal proceedings must have caused the applicant stress, uncertainty and inconvenience which cannot be sufficiently compensated by the finding of a violation. Nonetheless, it finds the amount claimed by the applicant to be excessive. In the circumstances of the case, the Court finds it appropriate to award the applicant EUR 4,000, plus any tax that may be chargeable, in respect of non-pecuniary damage.

B. Costs and expenses

1. The parties’ submissions

42. The applicant claimed EUR 6,659 in respect of the legal costs and expenses, consisting of: EUR 3,823 in respect of the criminal proceedings, EUR 900 in respect of the civil proceedings, and EUR 1,936 in respect of the proceedings before the Court. He provided copies of his contracts with lawyers and receipts showing that he had paid those amounts.

43. The Government submitted that the expenses which the applicant claimed in respect of the criminal proceedings had not been incurred in an attempt to redress the violation of the Convention alleged in the present case. They also submitted that the documents provided by the applicant did not indicate with sufficient detail whether the expenses in the proceedings before the Court had been actually and necessarily incurred.

2. The Court’s assessment

44. The Court considers that the costs and expenses which the applicant sustained in the domestic criminal proceedings were not incurred in trying to prevent the violation found in the present case, or to obtain a redress thereof. Accordingly, it rejects that part of the claim.

45. As to the remainder of the applicant’s claim in respect of costs and expenses, the Court, having regard to the documents in its possession and the requirements established in its case-law, considers that they have been actually and necessarily incurred and are reasonable as to quantum. It therefore awards the applicant EUR 2,836, plus any tax that may be chargeable to him, under this head.

C. Default interest

46. The Court considers it appropriate that the default interest rate should be based on the marginal lending rate of the European Central Bank, to which should be added three percentage points.

FOR THESE REASONS, THE COURT, UNANIMOUSLY,

1. Declares the application admissible;

2. Holds that there has been a violation of Article 6 § 1 of the Convention;

3. Holds

(a) that the respondent State is to pay the applicant, within three months, the following amounts:

(i) EUR 4,000 (four thousand euros), plus any tax that may be chargeable, in respect of non-pecuniary damage;

(ii) EUR 2,836 (two thousand eight hundred thirty-six euros), plus any tax that may be chargeable to the applicant, in respect of costs and expenses;

(b) that from the expiry of the above-mentioned three months until settlement simple interest shall be payable on the above amounts at a rate equal to the marginal lending rate of the European Central Bank during the default period plus three percentage points;

4. Dismisses the remainder of the applicant’s claim for just satisfaction.

Done in English, and notified in writing on 13 July 2021, pursuant to Rule 77 §§ 2 and 3 of the Rules of Court.

Hasan Bakırcı                                   Carlo Ranzoni
Deputy Registrar                                 President

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