The Constitutional Court found no 274 / 2022 Coll.
The Constitutional Court's finding of 19 July 2022 sp. zn.
Valid
The Constitutional Tribunal found
Text versions:
22.09.2022
274
FIND
The Constitutional Court
On behalf of the Republic
The Constitutional Court decided under sp. zn. Pl. ÚS 30 / 21 on 19 July 2022 in plenary composed of the President of the Court of Pavel Rychetský and Judges Jaroslav Fenyk, Josef Fiale, Jan Filip, Jaromír Jirsa, Tomáš Lichovník, Vladimir Sládeček, Radovan Suchanek, Pavel Šámal (Judge of the Rapporteur), Vojtěch Šimíček and David Uhír on the Ombudsman's proposal for the annulment of point 80 in the part as defined in column 2 of Annex 4 to Decree No. 278 / 2008 Coll., on the content of individual trades, as amended by Decree of Government No. 208 / 2021 Coll., for the Government as a Participant,
as follows:
Motion denied.
Reasons
Subject matter and wording of the contested provision
1. The Ombudsman (hereinafter referred to as "the appellant"), a proposal pursuant to Article 87 (1) (b) of the Constitution of the Czech Republic (hereinafter referred to as "the Constitution") and Article 64 (2) (f) of Act No. 182 / 1993 Coll., on the Constitutional Court, as amended by the Act No. 85 / 1996 Coll., hereinafter referred to as "the Law on the Constitutional Court," seeks annulment in the heading of that provision of Government Decree No. 278 / 2008 Coll., on the Commercial Business Act, as amended by § 1 of the Law No. 208 / 2021 Coll., hereinafter referred to as "the Act No. 278 / 2008 Coll.,"
2. The Government, by Regulation No 278 / 2008 Coll., which includes the contested provision, sets out the content of the individual trades and branches of trade activities free under Section 73a of the Trade Act. Regulation No 278 / 2008 Coll. sets out in point 80 of Annex 4 "Content content of the business free by branch of activity 'in the part defined in the first column the field of business free as" Provision of services for legal persons and trust funds'. The contested provision (point 80 of Annex No 4 in the part defined in column 2) then defines its content (note: the letter designation was added by the Constitutional Court) consisting of:
"(a) Negotiations for a client in the management or operation of a commercial corporation, business group or other similar unit.
(b) Negotiations on behalf of a client in the acquisition and collection of funds or other money of valuable value for the purpose of establishing, managing or controlling a commercial corporation, business group or other similar department.
(c) Negotiations on behalf of a client when setting up or managing a trust fund or by its structure or functions of a similar establishment governed by the law of another State (the Trust Fund).
(d) Negotiations on behalf of a client in the acquisition and collection of funds or other money of valuable value for the trust fund for the purpose of its establishment or administration.
(e) Establishment of legal persons and associated services, including brokering the drawing-up of instruments of incorporation, social contracts or statutes, the management of deposits and the provision of a public register.
(f) Establishment of legal persons for the purpose of transferring shares in them to a client.
(g) Services connected with the creation of a trust fund, including ensuring that the trust fund is entered in the register of trust funds, facilitating the conclusion of a contract to allocate the assets by entrustment to the administration of the trust fund, the drawing up of such a contract or acquisition in the event of death by entrustment to the administration of the trust fund or the drawing up of the Statute of the trust fund.
(h) Temporary negotiations for a legal person related to its establishment, including on behalf of a legal person prior to its establishment.
(i) Performance of the activities of the deposit manager.
(j) Temporary performance of the function of trust trustee in connection with the creation of a trust fund.
(k) Provision of premises for the location of the registered office of a legal person, unless the premises for the location of the actual registered office are concerned, administrative services connected with the location of the registered office of the legal person in those premises, such as the registration of the registered office in a public register or the receipt of mail.
(l) The exercise of shareholder rights for a client which is not a legal person whose securities are admitted to trading on a European regulated market and which is subject to disclosure requirements equivalent to those of European Union law. ';
Furthermore, the contested provision provides that:
"The content of the activity shall not include the activities of notaries, persons authorised to practice advocacy under the Law on Advocacy, persons engaged in the management or administration of an investment fund or foreign investment fund, the provision of investment services, the provision of payment services, real estate intermediation, rental of real estate, apartments and non-residential premises. '
Arguments of the appellant
3. The applicant first submits that the proposal was made on the initiative of the then President of the Czech Bar Association (hereinafter "ČAK ') by JUDr. Vladimir Jirouska. In the past, ČAK has expressed its opposition to the contested provision because it allows so-called affectionation (coercion) in breach of the Lawyer Act and is" an attack on the independent status of the lawyer' (sc. "lawyers'). ČAK's opinion was supported, inter alia, by the Executive Chamber of the Czech Republic and the Union of Prosecutor's Counsel. Since the appellant agrees with ČAK and the contested provision is already effective," immediately 'uses its authority under the Law on the Constitutional Court and proposes to repeal that provision of Government Decree No. 278 / 2008 Coll.
4. First, the appellant contends that the Government issued the contested provision outside the legal authorisation and its jurisdiction, although it was based on the express legal authorisation in Section 73a of the Commercial Law and was entitled to issue the legislation under consideration on the basis of the so-called general authorisation directly resulting from Article 78 of the Constitution. The appellant expressly states that it does not question the Government's power to adopt the contested provision or the process of adopting it. However, they claim that the content of the business activity free of charge defined by the contested provision "in the most important part (and in the context of each other as a whole) 'overlaps the activities of lawyers (providing legal services). The Government has already stepped out of its scope as defined in Section 3 of the Trade Act. According to the appellant, the contested provision therefore contravenes both that provision and Article 2 of the Law on Advocacy, under which, under the conditions laid down by the same law, legal services are provided exclusively by lawyers. Paragraph 2 of the Law on Advocacy examines who is entitled to provide legal services on the territory of the Czech Republic and excludes other entities not listed here (" in accordance with Article 26 (2) of the Charter "). This does not alter the sentence of the contested provision, according to which" the activity of notaries, persons authorised to practice the lawyer under the Law on Advocate...'. In this part, the contested provision is "incomprehensible, vague and difficult to interpret '. In addition, the Law on Advocacy expressly stated in Paragraph 70 (1) that the business licences for the provision of legal services resulting from special regulations (trade law) would cease to be effective on the date of that law.
5. Furthermore, it lacks a rational basis when the contested provision was created by a group of persons who, contrary to lawyers, are satisfied only with the conditions of their own right and integrity. This is also contrary to Article 26 (2) of the Charter, as the contested provision thus allows for circumvention of the legal conditions for the pursuit of business [cf. point 22 of the Constitutional Court's finding of 11.6.2019 sp. zn. II. ÚS 3533 / 18 (N 111 / 94 SbNU 331)]. The purpose and purpose of limiting the provision of legal services under the Law on Advocacy (in the case of lawyers, compliance with qualification requirements, confidentiality obligation, disciplinary liability of the state organization, liability for damage to the client, insurance obligation) is in particular protection of the clients themselves. In addition, Article 52d (1) of the Law on Advocacy, according to which it is an offence if the person provides legal services repeatedly and in return for payment, although he is not entitled to provide them. To a greater extent, as a result of such conduct, there is a risk of criminal liability (criminal offence of illegal business pursuant to § 251 of Act No. 40 / 2009 Coll., Criminal Code).
6. Secondly, the appellant submits that the contested provision is manifestly unreasonable in view of the objectives it pursues. The appellant points out that the contested provision was incorporated in Regulation No 278 / 2008 Coll. in the context of the adoption of Act No. 527 / 2020 Coll., amending Act No. 253 / 2008 Coll., on certain measures against the legalisation of proceeds from crime and terrorist financing, as amended, and other related laws, laws relating to the adoption of the Act on the Registration of Real Owners and Act No. 186 / 2016 Coll., on gambling, as amended ("Act No. 527 / 2020 Coll. ') implementing European law on the prevention of money laundering and terrorist financing (AML - Anti Money Money Laundering).
7. The contested provision is, according to the appellant, the consequence of the incorrect transposition of Directive (EU) 2015 / 849 of the European Parliament and of the Council of 20 May 2015 on the prevention of the use of the financial system for the purposes of money laundering or terrorist financing, amending Regulation (EU) No 648 / 2012 of the European Parliament and of the Council and repealing Directive 2005 / 60 / EC of the European Parliament and of the Council and Commission Directive 2006 / 70 / EC (hereinafter "the Fourth AML Directive '), pursuant to which Article 2 (1) (3) (a) and (b) are obliged persons of auditors, external accountants and tax advisors and notaries of transactions for their clients, participating, whether acting on behalf of their client or on behalf of any financial transaction or real estate, or by assisting in the planning or execution of their client. Furthermore, according to Article 2 (1) (3) (c) of the Fourth AML Directive, providers of trust services or services for companies are obliged under the same Regulation if they are not already covered by (a) or (b). Act No. 253 / 2008 Coll., on certain measures against the legalisation of proceeds from crime and terrorist financing, as amended, then the definition of mandatory persons of the fourth AML Directive is mechanically taken over by the so-called groupage category of persons in § 2 (1) (h) without the legislator considering whether in the Czech legal order of the service in question anyone other than those authorised under the Law on Advocacy and other laws can provide.
8. From the explanatory memorandum to Act No. 527 / 2020 Coll. it is stated that in order to meet the requirements of the European so-called AML Directives, it was necessary to create a new business. The appellant claims that it is "absurd" for the requirements of Union law to be interpreted as meaning that so-called "vinculation" needs to be legalized. In doing so, no one has analysed whether, in addition to those authorised to provide legal services under the Law on Advocacy, other persons can provide services that are risky within the meaning of the European so-called AML Directives. Moreover, the content definition of the trade according to the contested provision goes beyond the requirements of the European so-called AML Directives, as it also includes services that are "not directly related to potentially risky financial flows or transactions'.
9. Thirdly, the applicant submits that the contested provision contradicts the right to legal aid under Article 37 (2) of the Charter. There is a risk that the holders of a trade licence under the contested provision will also take part in proceedings falling within the scope of Article 37 (2) of the Charter without being independent, having sufficient expertise, being bound by confidentiality and being responsible for their conduct. According to the order of the Constitutional Court of 10.2.2009 sp. zn. I. ÚS 2428 / 08 (U 2 / 52 of the SbNU 751), the purpose of excluding a general agent from representation in civil proceedings pursuant to § 27 (2) of Act No. 99 / 1963 Coll., the Civil Code, as amended by Act No. 519 / 1991 Coll., is to protect individuals from unqualified representation of persons not in the specific (professional) position of a person of the law (primarily lawyer) and the protection (in principle) of the exclusive status of lawyers in the system of protection of law. According to the obiter's discretion of that resolution, protection against so-called coercion or acclavation is a legitimate objective of democratic society, since the exclusive and binding provision of legal services to lawyers guarantees their moral integrity and expertise. The so-called coercion can lead to tax evasion. Advocacy is irreplaceable and aims to improve the functioning of justice as a whole. Finally, the appellant points out that the contested provision is not a manifestation of a system of state-guaranteed (free) legal aid; It is therefore that the contested provision authorises legal services to be provided by non-qualified professionals, in return for payment.
Observation by the party and reply by the appellant
10. The Judge-Rapporteur, pursuant to § 69 (1) of the Law on the Constitutional Court, as amended by Act No. 18 / 2000 Coll., sent the Government as a party to the proceedings a motion for observations.
11. The Government stated that it saw the independent performance of the advocacy as one of the fundamental pillars of the democratic rule of law and, by adopting the contested resolution, it did not intend to legalise the so-called renegade or incrimination. The purpose of adopting the contested provision was to reflect the requirements of the European so-called AML Directive in the Czech legal order, even if it concerns the category of obliged persons providing services of administration and establishment of legal persons or trust funds (so-called TCSP, trust and company service providers), and to lay down the conditions for the provision of services of establishment of legal persons and trust funds, including the provision of a registered office, activities linked to the establishment of so-called "ready-made legal persons, which are not in the nature of the exercise of advocacy or other provision of legal services, but which are" commercial or organisational technical '. It is not about the legalisation of previously prohibited activities, but about the unification of the existing fragmented business legislation free (consulting and consulting activities, the processing of professional studies and opinions, administrative and service services of an organisational nature or the so-called residual category of production, trade and services not elsewhere classified). The activities covered by the contested provision were therefore authorised. It is only a different internal differentiation of the existing business free and not an extension.
12. The Government underlines that the contested provision is based on Article 2 (1) (3) (c) of the Fourth AML Directive, which follows up on point 22 (e) of the Financial Action Committee's recommendation ("FATF") "International standards in the fight against money laundering, terrorist financing and proliferation" (approved in February 2012, updated in October 2020). The FATF defines the service provider for legal persons and trust funds as "the provider of services to trust funds and companies - if they prepare or conduct business for clients' concerning" the setting up of legal persons, acting as... the manager or manager of a company, a partner in a company or in a similar position vis-à-vis other legal persons, the provision of business address or location, the correspondent or administrative address of companies, a trading association or any other legal person, acting as... the manager of a trust fund or as a similar function in another form of legal entity 'and "acting as... an authorised shareholder of another person'. The activities of lawyers, notaries and other independent professions and accountants in organising contributions to the establishment, operation or management of companies, the establishment, operation or management of legal persons or other legal entities and the purchase and sale of business entities are included in point 22 (d) of the FATF Recommendation, i.e. separately.
13. The Government further points out that the contested provision also defines the subject matter of the trade in a negative way, by not including the activities of notaries, persons authorised to practice advocacy under the Law on Advocacy, persons engaged in the management or management of an investment fund or foreign investment fund, the provision of investment services and payment services, real estate intermediation and rental of real estate. The contested provision therefore respects that the exercise of advocacy (provision of legal services) belongs solely to the persons defined in the Law on advocacy. A combination of a positive and negative definition of activity justifies the interest in affecting all activities on which the fourth AML Directive requires a licence or registration, while not involving the independent and exclusive exercise of the lawyer. It is also a question of making the definition incomprehensible or overly casualistic. Each of the positively defined activities in the contested provision has its own content, even when using a lockout (negative definition), and will stand up to the definition of (free) trade.
14. The Government shall give a demonstration of the following specific situations for the various parts of point 80 of Annex 4:
Point (a) - In the case of a client's conduct in the proceedings or conduct of a commercial corporation, business group or other similar body, the exercise of the activities of a statutory body other than the management of a business, other activities of a technical / organisational nature, with the exception of representation of a client in proceedings before a registered court or drawing up documents showing legal proceedings, etc.
Point (b) - for client-to-client transactions in the acquisition and collection of funds or other valuable money for the purposes of the establishment, management or control of the entities concerned, is in particular commercial conduct for the purpose of obtaining investors for the set-up or existing corporation, with the exception of activities of persons engaged in the management or administration of an investment fund or a foreign investment fund, the provision of investment services, real estate intermediation and rental of real estate.
Point (c) - for client-to-client negotiations when establishing or managing a trust fund or a similar entity, it is an ad-a) trust fund activity.
Point (d) - for client-to-client negotiations in the collection and collection of funds or other money-worthy values for the trust fund for the purposes of its establishment or administration, is a similar ad-b activity for trust funds.
Point (e) - for the creation of legal persons and related services, including the brokering of an instrument of incorporation, social contract or statutes, the management of deposits and the provision of entry into the public register, is an activity of an illegal nature in the setting up of legal persons and an intermediary activity aimed, inter alia, at the selection of a lawyer or notary who will provide the subsequent legal services.
Point (f) - in the case of the creation of legal persons for the purpose of transferring their shares to the client, it is about preparing the so-called ready-made legal persons (legal entities so-called "turnkey ').
Point (g) - for services linked to the creation of a trust fund, including ensuring its entry in the register of trust funds, facilitating the conclusion of a contract for the assignment of assets to the administration of the trust fund by entrustment to the administration of the trust administrator, the drawing up of such a contract or acquisition in the event of death by entrustment to the administration of the trust fund, including activities leading to the selection of the lawyer or notary to ensure the subsequent legal services.
Point (h) - In the case of temporary negotiations for a legal person related to its creation, including on its behalf before its creation, it is a similar ad-a activity when establishing a legal person.
Point (i) - For the performance of the activities of the deposit manager, the activities of "effective 'deposit management, their custody, the keeping of related accounting records or the securing or brokering of their custody with the beneficiary.
Point (j) - For the temporary exercise of the function of trust trustee in connection with the creation of a trust fund, it is a similar activity ad (c) for the establishment of a trust fund.
Point (k) - In the case of the provision of premises for the location of a legal person, not of premises for the location of the actual registered office, administrative services associated with the location of the registered office in those premises, such as the registration of the registered office in a public register or the receipt of mail, are services of the provision of the so-called virtual office and the reception of mail.
Point (l) - for the exercise of shareholder rights for a client, which is not a legal person whose securities are admitted to trading on a European regulated market and which is subject to disclosure requirements, this is in particular a vote based on the client's instructions in the legal entity's bodies, an activity related to the collection and management of dividends, with the exception of the exercise of the activities of notaries and persons under the Law on Advocacy, i.e. it cannot be a representation of a client before courts, for example, when filing a so-called shareholder action.
15. According to the Government, these activities are of a commercial or organisational nature, and are not of a commercial or organisational nature, and are not of a legal or legal nature under the Law on the Law on the Law on the Law on the Law on the Law on the Law on the Law on the Law on the Law on the Law on the Law on the Law on the Law on the Law on the Law on the Law on the Law on the Law on the Law on the Protection and the Law on the Law on the Protection of the Law on the Protection of the Law on the Protection of the Law on the Protection of the Protection of the Protection of the Protection of the Protection of Human Rights. In addition, the contested provisions of the defined activity correspond to sub 12 of the FATF Recommendation. These activities can be carried out by so-called business, i.e. separately, on their own behalf, under their own responsibility, in order to achieve profit and it is legitimate that the business is free. The contested provision was therefore granted within the limits of the Trade Act. The negative definition contained in the contested provision ensures that, in specific situations, it is necessary to conclude that the defined activities cannot include legal services under the Law on Advocacy. Therefore, the contested provision does not interfere with the scope of the Law on Advocacy.
16. The Government further argues that, according to the Report of the Fifth Round of Mutual Assessment of the Czech Republic, 406 service providers were active in the Czech Republic for the evaluation of anti-money laundering and terrorist financing measures at the Council of Europe (MONEYVAL) in 2018, as estimated (in the absence of registration of subjects under investigation). These entities were assessed differently from lawyers and other advisory or legal professions. The Supreme Administrative Court has in the past acknowledged that the sale of the so-called ready-made legal persons by a transfer of a stake in a sold legal person is an enterprise (cf. Case C-676 / 16 CORPORATE COMPANIES of 25 January 2018) and the Court of Justice of the European Union has confirmed that the fourth AML of the Directive falls at such proceedings (judgment of 17 January 2018 in Case C-676 / 16 CORPORATE COMPANIES). The report on the second round of the national risk assessment process for money laundering and terrorist financing approved by the Government Resolution of 12 July 2021 No 616 also states that the field of provision of services to legal persons and trust funds has been examined differently from the legal and advisory professions and is a high risk area from the point of view of the fourth AML Directive.
17. According to the Government, it is therefore not true that the Czech Republic has erroneously transposed the personal scope of the European so-called AML Directive (cf., e.g. similar Slovak legislation) and has not evaluated whether there are entities which comply with the definition defined by the contested provision. The contested provision therefore pursues a legitimate objective and complies with international standards.
18. The appellant's claim that the contested provision contravenes the right to legal aid under Article 37 (2) of the Charter (see sub-paragraph 9 above), the Government states that even if the contested provision were to extend the scope of legal services (which is not the case), it would not therefore reduce the standard of legal assistance provided by lawyers. The contested provision does not affect the activities of lawyers. In the reference resolution sp. zn. I. ÚS 2428 / 08 it is also about limiting the possibility of a general representative representing a party, not extending the range of persons entitled to provide legal services, as the appellant claims. In this context, the Government emphasised the fact that, as a result of the contested provision, the operators concerned would be obliged to register and there would be stricter supervision of the unauthorised provision of legal services. Moreover, regulated activities called TCSP (sub 11) do not fall within an area protected by professional secrecy.
19. According to the Government, it is therefore submitted from the above that the contested provision can be interpreted in such a way that it does not interfere with the independent exercise of advocacy. It is therefore necessary to prioritise a "constitutionally conformal" interpretation. In addition, the repeal of the contested provision would interfere with the right to engage in business pursuant to Article 26 (1) of the Charter of those entities which already provide the services in question and would infringe Article 47 (1) of the Fourth AML Directive under which a Member State ensures that service providers for trust funds and trading companies are subject to a licence or registration. The Government stresses that the Constitutional Court should, where appropriate, assess the various activities and not abolish the contested provision as a whole. Finally, the Government argues that the appellant seeks, as a result, a fundamental change in legal regulation whereby the services concerned so far can be carried out in so-called business terms. Such intervention should, however, be authorised primarily by the legislator. In so doing, the appellant himself had the opportunity to proceed pursuant to § 22 (1) of Act No. 349 / 1999 Coll., on the Ombudsman, and to recommend the issue, amendment or revocation of the contested provision in order to resolve the legislation in question in a comprehensive manner and in cooperation with the parties concerned. The government proposes to reject the motion.
20. The Judge-Rapporteur sent the observations received to the appellant in his notice and in his reply, if any. The appellant has exercised its right to reply and maintains that the Government, when adopting the contested provision, has relied on the inconsistency of the transposition of point 22 (b). (e) the FATF's recommendation and insufficiently distinguished the legal services which, in the Czech legal order, can only be performed by lawyers, notaries and other independent professions.
21. The appellant stresses that the Member State will ensure only the "result" of the legislation when transposing the directive; the form and means are at his discretion. In this spirit, the legislator and the government should have looked at the risk-takers under the European so-called AML Directives. The appellant points out that point 22 (d) of the FATF Recommendation, which defines the activities of lawyers, notaries and other independent professions, contains an activity defined as "the establishment, operation or management of legal persons or other legal entities and the purchase or sale of business entities' which corresponds to the definition of an activity under the part of the contested provision of sub 14 ad points. (a) or (e). Also according to the fourth AML Directive, the set of mandatory persons providing trust services and services to companies" to a certain extent 'is a residual category which may include lawyers or notaries.
22. Furthermore, the appellant argues that the interpretation of the various activities carried out by the Government of Sub 14 does not support the interpretation of Regulation No 278 / 2008 Coll. The negative definition of the activities in the contested provision is uncertain, since the list of legal services provided by lawyers listed in Section 1 (2) of the Law on Advocacy is not closed. According to the Resolution of the Supreme Court of 30 March 2011, sp. zn. 5 Tdo 209 / 2011, the legal services of setting up limited liability companies may be the drawing up of contracts for the transfer of shares, the drawing up of purchase contracts, agreements for the transfer of member rights and obligations, custody contracts, the taking of money into custody or the provision of legal advice, the preparation of general meetings or the drawing up of actions and payment orders. According to the decision of the Ministry of Justice of 3 February 2020 No. MPS-13 / 2018- OJD-SVIN / 16, the provision of legal services and the processing, signing and filing of claims by creditors for insolvency proceedings is also required. The set of activities that would remain after "deduction" would be indefinite or even empty in some situations. If, simply or at least "with reasonable caution and effort" it is not possible to interpret the scope of the concept of legal services, it is not legitimate to ask the persons carrying out the business in each particular case to consider whether they are committing so-called coercion. In fact, everyone should at least have a framework idea as to whether their conduct is prohibited or allowed [cf. the finding of the Constitutional Court of 20 September 2006 sp. zn. II. ÚS 566 / 05 (N 170 / 42 CollNU 455)]. Such a condition is undesirable even more if it goes to clients themselves (unknown rights).
23. Finally, the appellant argues that the most problematic is consultancy. If it is an advisory activity in connection with the establishment of legal entities and trust funds, it will be the provision of legal services as it involves knowledge of legislation. If the government claims that, in the current legal situation, many entities are legally engaged in the field, all the more so, it should be able to distinguish specifically between the illegal provision of legal services and services to legal persons and trust funds. The lives covered by this activity are defined more specifically (see paragraphs 60 and 70 of Annex 4 to Regulation No 278 / 2008 Coll.) and, for example, the provision of legal advice is expressly excluded. It is not about who the legal order should allow legal persons and trust funds to provide services, but about what specific services to be provided in so-called business terms and to whom lawyers, notaries and other independent professions are authorised exclusively. The appellant maintains that the government has insufficiently defined the content of the business. This defect cannot be remedied by a constitutional interpretation, since the elements of the content of the trade are so vague that such an interpretation would be so extensive that it would effectively replace the government's action in the issuing of regulations [see paragraphs 31 and 32 of the Constitutional Court's finding of 13.1.2015 sp. zn. II. ÚS 2216 / 14 (N 3 / 76 of SbNU 63)].
Abandonment of oral proceedings
24. The Constitutional Court concluded that further clarification of the case could not be expected from oral proceedings and therefore, pursuant to Article 44 of the Constitutional Court Act, it decided on the case without its regulation.
Proceedings
25. The application was lodged by the Ombudsman, who, pursuant to Article 64 (2) (f) of the Law on the Constitutional Court, is the entitled appellant to submit an application for the annulment of another law or its individual provisions. The proposal is not inadmissible under Section 66 of the Law on the Constitutional Court, as amended by Act No. 48 / 2002 Coll., and there are no grounds for terminating the procedure under Section 67 of the same Act. Therefore, the procedural assumptions of the procedure for the repeal of another law (its individual parts) are fulfilled in the present case.
Assessment of procedural conditions and competence for the adoption of the Regulation
26. The Constitutional Court examines, in the procedure "on the control of standards" referred to in Article 87 (1) (b) of the Constitution, pursuant to Article 68 (2) of the Law on the Constitutional Court, as amended by Act No. 48 / 2002 Coll., inter alia, whether "other legislation" has been adopted and issued in a constitutional manner and within the limits of the Constitution established competence.
27. The Government shall be entitled to issue the Regulation in accordance with Article 78 of the Constitution. Decree No. 278 / 2008 Coll. was approved by the Government by Resolution No. 898 of 23.7.2008, the final text was published in the Collection of Laws on 14.8.2008 in a sum of 94 under No. 278 / 2008 Coll. and its effectiveness became effective on the same day. The amendment to the Regulation in question (which entered the contested provision into Regulation No 278 / 2008 Coll. and which was approved by the Government by Decree No 439 of 10.5.2021) was published in the Collection of Laws on 26.5.2021 in the amount 89 under No 208 / 2021 Coll. with effect from 1.7.2021.
28. The Government's regulation was adopted by a constitutive body within its scope and in a constitutional manner (Articles 76 (1) and 78 of the Constitution). The appellant does not, moreover, object to any defects concerning this.
Substantial assessment of the proposal
29. As a general rule, under Article 78 of the Constitution, the Government is entitled to issue regulations for the implementation of the law and within its limits. This means that the government does not need express authority in the relevant law. However, the regulation cannot deviate from the legal limits, so it cannot be a praeter legem. In other words, they must be kept within the limits of the law which are either expressly defined or resulting from the meaning and purpose of the law [cf. ÚS 17 / 95 (N 67 / 4 SbNU 157; 271 / 1995 Coll.) or from 29.4.1998 sp. zn. Pl. ÚS 43 / 97 (N 48 / 10 SbNU 319; 119 / 1998 Coll.)]. The regulation must therefore not deviate from the legal limits and, even with the express agreement of the legislator, the government is not entitled by regulation to regulate material outside the subject matter of the law. This negative criterion is also supplemented by a (stricter) positive criterion - the regulation should be kept within the limits of at least the purpose and meaning of the law. In other words, the legislator should show the will in the law to adjust above the legal standard. It should also be pointed out that the Regulation cannot impose primary obligations or impose limits on fundamental rights and freedoms [Article 4 (1) and (2) of the Charter, cf. recital 37 of the judgment of 18 December 2018, sp. zn.
30. The appellant's argument lies, in particular, in the assumption that the activities belonging to the free trade defined by the contested provision overlap in substance with the performance of the advocacy (provision of legal services) under the Law on Advocacy. It is based on this assumption, both if it contests the contested provision with the law (existence outside the scope of Article 3 of the Commercial Act) and if it contests with Article 37 (2) of the Charter. The Constitutional Court therefore first focused on establishing whether that claim was justified. The appellant can be attested to the fact that, if the Government were to determine by regulation the content of the business which would be consistent with the performance of the advocacy (provision of legal services) under the Law on Advocacy, it would step out of the scope of the defined (inter alia) provisions of § 3 (2) (c) of the Trade Act, according to which the business is not the activity of lawyers, notaries, patent representatives and court executors. However, the Government points out that the contested provision, in addition to the positive definition of the content of the individual activities, also provides for a negative definition. However, the appellant considers this to be vague and incomprehensible, since the negative definition operates with an open list of activities falling within the concept of "the exercise of advocacy '.
31. According to the Constitutional Court, the reason for the negative definition contained in the contested provision is not to be regarded as incomprehensible or indefinite; the constitutional requirements for clarity and predictability of law shall not be avoided. In general, the use of non-specific legal terms is legitimate; is based on the fact that the specific content of indeterminate legal terms only fulfils the application activities of public authorities without this being a breach of constitutional order (e.g. legal certainty) in the legal State. Otherwise, it would be impossible to exercise the law effectively by courts and other public authorities. Not all rules of conduct, legal terms can be formulated for futuro (exactly). For certain types of cases - because of their nature - the principles, objectives which the public authorities then put into life the application activities [cf. found on 8.7.2010 sp. zn. ÚS 8 / 08 (N 137 / 58 SbNU 115; 256 / 2010 Coll.]].
32. Such conclusions do not contradict the maximum expressed in the decision of the Constitutional Court sp. zn. II. ÚS 566 / 05 (sub 22 in fine). It is precisely indeterminate legal concepts that individuals provide a framework idea of lawful or prohibited conduct and their specific content is found by public authorities on specific matters.
33. It is therefore legitimate if the contested provision refers to the indefinite terms "legal service 'or" execution of a lawyer' whose scope is not specifically defined in advance. Their use in the contested provision (a particular situation) is justified because it reflects the flexibility and development of legal practice over time and with changes in social reality. In other words, the activities referred to as "legal services' are different and difficult to define by nature. Moreover, the appellant does not put forward any arguments that would call into question the validity of the use of indefinite legal terms in the situation currently under consideration (in the case of the provision of legal services), apart from the argument of legal certainty from the point of view of entrepreneurs and their clients, but which does not, however, refer to the particular situation of the contested provision but, in general, to the use of inspecific legal terms.
34. These indeterminate concepts necessarily also contain the legal rules which penalise the so-called coercion or accriminations (cf. § 52d (1) of the Law on Advocacy or § 251 of the Criminal Code). Ad absurdum could also be applied to those provisions or even to paragraphs 1 (1) and (2) and Article 2 of the Law on Advocacy, which is contrary to the overall reasoning of the appellant and the interest it represents (protection against the unauthorised provision of legal services). Therefore, neither the law nor the constitutional order imposes an obligation on the Government to define in an exhaustive manner what specific activities are a trade according to the contested provision or the conduct of the advocacy. Such a requirement is not justified in establishing general rules in the contested provision.
35. Furthermore, the reason for the inconstitutionality of the provision of legislation is not, in principle, any difficulty in interpreting it. If the provision does not provide a clear language response to certain situations, this does not in itself mean its unconstitutionality [cf. point 43 of the decision of 25.9.2018 sp. zn. Pl. ÚS 18 / 17 (N 156 / 90 of the SbNU 525; 261 / 2018 Coll.) or point 34 of the decision of 27.4.2021 sp. zl. ÚS 98 / 20 (206 / 2021 Coll.)]. Therefore, uncertainty in the legislation eliminates application practices (including courts). The Constitutional Court therefore enters into this area only if it goes at the same time on the violation of constitutional order and inaccuracy, insecurity and unpredictability of the legislation extremely distorting the essential requirements of the law in the rule of law [cf. point 50 of the judgment of 27.3.2008 sp. zn. Pl. ÚS 56 / 05 (N 60 / 48 CollNU 873; 257 / 2008 Coll.) or point 247 of the judgment of 30.6.2015 sp. zn. Pl. ÚS 21 / 14 (N 122 / 77 CollNU 1959; 199 / 2015 Coll.)].
36. Nor did the Constitutional Court find such defects in the contested provision. The wording of the contested provision makes it sufficiently clear and clear that it is an organisational or managerial activity, not an activity falling within the concept of providing legal services under the Law on Advocacy.
37. According to Article 1 (2) of the Law on the Law on the Law on the Law on the Law on the Law on the Law on the Law of the European Union, the provision of legal services means representation in proceedings before courts and other bodies, defence in criminal matters, the granting of legal advice, the drawing up of documents, the processing of legal analyses and other forms of legal assistance, if they are carried out consistently and in return for payment. The provision of legal services shall also mean the activity of a guardian for proceedings provided for under a specific law, where it is carried out by a lawyer. That provision therefore sets out, in addition to the signs of consistency and validity, the forms of legal services, namely representation in proceedings (before courts and other bodies), the defence, legal advice and documents, the processing of legal analyses, "other forms of legal assistance ', and the activities of the guardian carried out by the lawyer (cf. SVEJKOVSKÝ, J. et al. The Law of the Attorney General. Praha: C. H. Beck, 2012, p. 21, or KOVAR D. a kol. Law on advocacy and state regulations. Comment. Praha: Wolters Kluwer, 2017, p. 4). If there is legal advice, it can be done according to the expert literature on responding to" questions about the whole range of life problems - from property rights to fruit falling from the neighbor's garden to the possibility of applying defects of the trip "(cf. SVEJKOVSKÝ, J. et al. Law law. Praha: C. H. Beck, 2017, p. 5.).
38. None of the defined activities in the contested provision is prima facie concerned with the area of purely legal law, which the government clearly foresees in detail in its observations on the proposal (see sub-14, cf., in particular business negotiations, business management, investment services, intermediation, illegal activities in the case of the establishment of legal persons, deposit management, virtual headquarters services, voting in legal entities, dividend management, etc.). Moreover, the appellant points out in concrete terms only the problematic nature of the "consultancy 'activity; However, such activity does not now define the contested provision and is not mentioned by the Government in its context. There is no reason to consider the advice itself (" provision of advice') as "legal services under the Law on Advocacy ', if it does not relate to legal activities, but to activities of an illegal nature (organisation, business or management). It is also decisive that, from the negative definition of activities under the contested provision, the intention of the Government not to overlap those activities with the exercise of the advocacy under the Law on the Law on the Law on the Law on the Law on the Law on the Law on the Law on the Law on Legal Services can be taken into account. The intention of the government was obviously and probably not to legalise so-called wine-making or to define a new category of legal services, which was confirmed in its comments on the proposal. The text of the contested provision and the legislative solution chosen also allow for an interpretation according to which the activities defined in it are neither the performance of the advocacy nor the provision of legal services.
39. Neither are the activities related to the creation and establishment of legal entities and trust funds [activities referred to in points (a), (c), (e), (f) and (g)]. It is also clear from the wording of the contested provision itself that it should be technical or organisational activities. This is either to ensure the organisation of the process or to facilitate the various legal services. It is clear that entrepreneurs authorised to do business according to these activities are either in the position of a "project manager 'or" intermediary'. The wording of Paragraph 1 (2) of the Law on Advocacy does not imply that these activities themselves fall within the scope of the concept of legal services. Moreover, the appellant does not even claim that this should be the case.
40. It is not excluded that the lawyer also provides (as a result) services which are to a certain extent more "managerial" or "intermediary", as confirmed by commentary literature: "In addition to providing legal services... the lawyer can develop other activities.... [M] can, for example, lecture, engage in mediation, management of activities or projects, etc. '(see COVAR D., op. cit. p. 4). However, this does not mean that such activities (of a similar nature) should be regarded as providing legal services which can only be provided by persons listed in the law. This is not about what the lawyer does in his practice" in fact "(as a result), but what the law refers to as legal services. It was certainly not the intention of the legislature to introduce a monopoly in the Law on advocacy to designated bodies (lawyers, notaries, etc.) for organising projects, management activities or lectures at a professional level (consistently and in return). Nor can it be concluded that any professional activity that, even to a greater or lesser extent, requires knowledge or use of the law is a sign of" legal services. "
41. It may be admitted that there may be a risk that an entrepreneur entitled to pursue a business under the contested provision may "slide" also to provide legal services. However, it is the responsibility of the entrepreneur to assess whether or not he acts legitimately and the public authorities to assess and take appropriate measures in the light of the circumstances of each case. In particular, it should also be taken into account that the purpose of the contested legislation is to avoid a "legal vacuum 'for the purposes of combating money laundering for the provision of certain services, not the extension of a range of persons authorised to provide legal services or the legalisation of so-called vintage.
42. Where reference is made by the appellant to the order of the Supreme Court, sp. v. 5 Tdo 209 / 2011, it does not imply that the content of the activities defined in the contested provision prima facie corresponds to the scope of the concept of "legal services' or" the exercise of advocacy '. In particular, the underlying reasons for that decision are the conclusion that the concept of "legal services' is not the same as that of" the exercise of the advocacy '; The Supreme Court did not state whether or not a particular act was a legal service. It can also be overlooked that the Supreme Court has imposed an obligation on the Court of Appeal to consider whether certain conduct cannot be placed under other activities, such as "brokering, accounting or organisational and economic consultancy'. On the contrary, professional advice may also concern non-legal activities (" organisational 'and "economic').
43. If the appellant contests the contested provision with Article 37 (2) of the Charter, it should be noted that that provision combines its substantive scope with the provision of legal assistance following proceedings before courts, other state or public authorities. However, there is no procedure or other similar formalised procedure in the contested provision, which is not claimed by the appellant itself. The Constitutional Court does not dispute that the level of legal means of protection against the unauthorised provision of legal services may affect the overall level of the legal aid system provided for in Article 37 (2) of the Charter. However, the contested provision does not reduce the level of legal means of protection against the unauthorised provision of legal services. On the contrary, as the Government points out, the purpose and purpose of the contested provision is for the entities carrying out the activities referred to in point 80 of Annex 4 to be subject to registration. The Trade Register contains both the identity of the entrepreneur and the type of trade in the public domain (cf. § 60 (2) and (3) of the Trade Act). The authorities which are competent to penalise the wrongful provision of legal services or the execution of a lawyer [Ministry of Justice (see Section 52d (4) of the Law on Advocacy) or law enforcement authorities] therefore have access to information about entities entitled to exercise the trade under consideration as a result of the contested provision. On the contrary, public law control over the unauthorised provision of legal services is therefore easier.
44. If the appellant contends that Union law has been transposed erroneously, its assessment is not for the Constitutional Court. It is only a question of whether the contested provision contravenes the constitutional order or law [mutatis mutandis, for example, point 35 of the judgment of 16.1.2007 sp. zn. Pl. ÚS 36 / 05 (N 8 / 44 Coll. 83; 57 / 2007 Coll.), point 48 of the judgment of the Court of First Instance 56 / 05 or point 25 of the judgment of 22.3.2011 sp. v. ÚS 24 / 10 (N 52 / 60 SbNU 625; 94 / 2011 Coll.)]. Moreover, it can be concluded from the appellant's argument that he objected apparently and manifestly, as he wanted to point out the "manifest impartiality 'of the contested provision in relation to the objectives pursued by it (sub 6). However, it is a criterion which is not applicable in the present case [cf., for example, the finding of 22.3.2005 sp. zn. Pl. ÚS 63 / 04 (N 61 / 36 SbNU 663; 210 / 2005 Coll.)]. Nor is the alleged interference with the so-called social rights [cf. Rationality test, see e.g. the findings of 17.12.2019 sp. zn. Pl. ÚS 31 / 17 (N 212 / 97 CollU 269; 30 / 2020 Coll.), of 24.11.2020 sp. zn. Pl. ÚS 24 / 19 (7 / 2021 Coll.) or of 22.6.2021 sp. zn. Pl. ÚS 93 / 20 (288 / 2021 Coll.)].
45. It is therefore decisive that the negative definition in the contested provision ensures that the content of the activity "Provision of services for legal persons and trust funds" belonging to the free trade does not simultaneously fulfil the characteristics of the exercise of advocacy (provision of legal services) under the Law on the Advocacy. According to the above, the determination of the specific content of the contested provision belongs to the public authorities in a particular case. The Government respected the will expressed by the legislator in the Trade Act, the contested provision does not impose primary obligations or impose limits on fundamental rights and freedoms. The contested provision may be interpreted in such a way that its content does not deviate from the substantive scope defined (inter alia) in § 3 (2) (c) of the Trade Act. Therefore, the obligation of public authorities under Article 89 (2) The Constitution shall respect that the content of the "Provision of services for legal persons and trust funds' in the free trade must not overlap with the content of the performance of the lawyer (provision of legal services) under the Law on the lawyer.
46. The "constitutionally" conformal is therefore to be regarded as such an interpretation according to which the content of the business of the free "Provision of services for legal persons and trust funds" according to the contested provision covers only the activities of organization- technical, commercial, "management," in particular business meetings, business management, investment services, intermediation, non-legal activities for the establishment of legal persons, management of deposits, virtual residence services, voting in legal entities, dividend management, etc. These services are not (nor must they be) the performance of the advocacy (provision of legal services) under the Law on the advocacy (§ 1 of the Law on the advocacy). The provision of services to legal persons and trust funds shall not include legal assistance in proceedings before courts, other state bodies or public authorities pursuant to Article 37 (2) of the Charter.
Conclusion
47. For all the above reasons, the Constitutional Court rejected the application under Paragraph 70 (2) of Act No. 182 / 1993 Coll., on the Constitutional Court.
President of the Constitutional Court:
JUDr. Rychetský v. r.
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Regulation Information
| Citation | The Constitutional Court found No 274 / 2022 Coll., on the application for annulment of point 80 in the part defined in column 2 of Annex 4 to Decree No. 278 / 2008 Coll., on content of individual trades, as amended by Decree No. 208 / 2021 Coll. |
|---|---|
| Regulation Type | The Constitutional Tribunal found |
| Author | - |
| Collection | Code of Laws |
| Date of Promulgation | 22.09.2022 |
|---|---|
| Effective from | - |
| Effective until | - |
| Status | Valid |
Legal Areas:
Commercial law
Business
Public Contracts 2
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