On November 22, the Constitutional Court ruled on four constitutional claims regarding insignificant cases in the civil process. I was the author of one of these claims, so the comment below is inevitably my subjective and biased opinion. At the same time, I will try to react to the decision of the Constitutional Court rationally, in the sense that any court process is a rational, even if formalized, communication, and the court decision is not a dogma but an attempt to rationally convince the parties (in the first place) and the community (in the second place) in the correctness of the court’s conclusions.

Insignificant cases: what the Constitutional Court missed — Created by Katya Tsibere // Dead Lawyers Society, 2023

So, did the court manage to persuade me?

Thresholds of insignificance and their (dis) proportionality

The constitutional complaints concerned two provisions of the Civil Procedure Code of Ukraine (CPC). The first one classifies as insignificant all the cases with a claim price of up to 100 subsistence minimums for able-bodied persons, and if the case concerns the protection of consumer rights – up to 250 minimums. (For 2023, it is UAH 268,400 and UAH 671,000, respectively.) For convenience, I will call these indicators “thresholds” of insignificance. The second disputed provision concerned the limitations on cassation appeals of decisions in minor and some other cases; I will return to it later.

The Constitutional Court of Ukraine (CCU) recognized thresholds of insignificance as unconstitutional mainly because of their disproportionality. In general, the Court started from the proper grounds: the Civil Procedure Code of Ukraine contains different legal regulations for different categories of cases (insignificant and other cases), and the constitutional principle of equality requires that such a difference has a legitimate goal, the means of achieving which are appropriate and reasonable. This is a classic test of admissible discrimination, which the Constitutional Court successfully borrowed from the practice of the ECtHR and applies not for the first time.

According to the Constitutional Court of Ukraine, the legitimate purpose of separating minor cases is to ensure reasonable terms for their consideration and to reduce the costs of the parties involved in the legal process (§§ 4.6 and 4.7). Purely theoretically, the Court is probably correct. However, there is obviously no effective mechanism to achieve consideration of an insignificant case within the shortened time provided by the Code (60 days from the day of the opening of the proceedings).

In any case, the arguments the CCU uses to justify the disproportionality of specific indicators of 100 and 250 minimums are even more enjoyable. In the decision, I was able to find three separate theses on this matter:

First, the thresholds of 40 and 100, respectively, exceed the size of the minimum wage, and in order for a person to accumulate money for some operation that would lead to the emergence of a dispute with such a price of a lawsuit, they have to toil 8, or all 20 years at a minimum salary (§ 5.8).
Secondly, the thresholds in the Civil Procedure Code are higher than the threshold that determines the applicability of the European Small Claims Procedure (ESCP) in the EU (§ 5.9).
Thirdly, the Civil Procedure Code of Ukraine does not contain “prescriptions that would in any way motivate the reasonableness” of the thresholds (§ 5.8). The Constitutional Court of Ukraine expressed a similar reasoning regarding Law No. 460-IX, which supplemented the Code with a rule on the insignificance of cases regarding the protection of consumer rights with a threshold of 250 minimums, although from the point of view of the absence of “instructions for the legitimate purpose” of this amendment in the Civil Procedure Code and the Law (§ 6.6).

In my opinion, all three lines of argument are flawed in that they do not provide legislators and courts with a reliable reference point for evaluating similar norms in the future.

So, if the threshold of insignificance exceeds 40 times the minimum wage, it is too much. And if at 30 or 25? Probably, if it were at the level of 1 minimum wage, there would be no questions. The most difficult issue is to find the very optimal limit.

The attempt to compare the thresholds with the minimum wage shows that the Constitutional Court of Ukraine was aware of the problem of access to justice for all people, regardless of their wealth. However, the problem with the optimal quantitative limit is somewhat deeper: it goes to the mechanism that underlies the use of any quantitative indicators to allocate rights and responsibilities.

When the legislator introduced the threshold of 100 minimums, they implicitly meant that:

the price of the claim is a valid indicator of the complexity of the case;
generally, cases with a claim price of less than 100 are not complex (legally or procedurally) and vice versa.

Each of these judgments claims to describe a certain empirical regularity and has the form of a generalization. Like any generalization, it sacrifices individual cases for the sake of generality. So, there are bound to be complex cases with claim prices up to 100 minimums and easy cases with claim prices above 100 minimums. At the same time, if “generally” these cases are exceptions, we can put up with inaccuracy for the sake of certainty: a clear quantitative limit eliminates the need to evaluate the actual complexity of the case every time, no matter what we invest in this concept.

The constitutional test of permissible discrimination can be correlated with the elements of this mechanism. I remind you that it requires (1) a legitimate purpose of the distinction, (2) propriety, and (3) appropriateness of measures to achieve it. A “legitimate purpose” is a primary characteristic that you recognize as relevant to introducing various legal regulations but is difficult to measure directly. In our situation, it is the complexity of the case: we generally do not deny that it is appropriate and fair to consider simple cases under a simplified procedure, but we have practical problems with measuring complexity case-by-case. The “proxy” we choose is a means to achieve the ultimate goal. Its validity as an indicator of a primary symptom is, in fact, a question of the appropriateness of the chosen means. After all, the proportionality test requires us to determine whether our generalization leads to biased results. Perhaps not only a few, but most cases with a claim price of up to 100 minimums in practice turn out to be complex, and we mistakenly assume that they are not.

Accordingly, several directions of attack on the constitutionality of the norm are possible. If the legitimacy of the chosen goal is not disputed, one can try to question the relationship between the quantitative indicator and the primary characteristic – or demonstrate that the proposed generalization is overinclusive.

These are not purely legal issues. Instead, they are not legal issues at all, and in the dichotomy “issue of law/issue of fact” they confidently belong to the second group. As I wrote above, this is about the existence and parameters of certain empirical regularities that require empirical confirmation or refutation. And if we want to resolve the dispute about these regularities within the framework of a formal adjudication procedure, then, in addition, we will need specific rules about burden and standards of proof.

Accordingly, the question that arose in the current case can be formulated as follows: who and how should prove/disprove that cases with a claim price of up to 100 minimums are, as a rule, really not complicated?

The Constitutional Court was unable to give a clear answer to this question. Although a certain intuitive attempt can be seen in the decision: the Court accuses the legislator that the text of the Code lacks the necessary justification. Unfortunately, the Constitutional Court did not explain why, in their opinion, the text of the Code or any other law should contain an explanation or justification of its own regulations at all – so this argument seems to me as strange as possible.

The situation with minimum thresholds of 100 and 250 is, in fact, indicative of the problems with the quality of the legislative process in Ukraine. While preparing my position in this case, I also tried to find out what the parliament was guided by when it decided to stop at these figures. Perhaps the authors of the draft laws relied on the results of studies that revealed a relationship between the cost of the lawsuit and the complexity of the case. If so, there is no publicly available information about it. The preparation of the draft laws for the second reading – both the new editions of the procedural codes in 2017 and the amendments to them in 2020 – was taken care of by working groups, which, apart from the final text of the revised draft law, did not leave any materials behind. After all, in the official position of the Verkhovna Rada, which it sent to the CCU, we will not find an explanation of such thresholds either.

The only thing I could find was a remark by the speaker at the plenary session of the Verkhovna Rada, which referred to the amendment to the rule on the insignificance of cases on the protection of consumer rights. Justifying the committee’s version (which became Article 19(6)(1) of the CPC), he noted that:

“[…] the fact is that the committee accepted this very amount – 250 units of the subsistence minimum. And therefore, it will not act in the perspective that… That is, the cost is the same. It will not interfere and this draft law is designed to establish procedural filters; they have to be there.”

Well, you got it; they just have to be there.

The Constitutional Court of Ukraine just passed these circumstances as well as the only logical conclusion that follows from them – the minimum thresholds of 100 and 250 are purely arbitrary because the parliament could not present evidence that they have any rational justification. Such reasoning would send a clear message to parliamentarians: if you do not want to question the constitutionality of the laws you pass, you should have a conscious explanation for any distinctions you introduce, at least if they have the effect of limiting the exercise of constitutional rights and freedoms.

Yes, this is a fairly high-level model of constitutional review of statutory distinctions, and in reality, the issue is more nuanced. That is why, say, the US Supreme Court, when evaluating legislation for congruence with the Fourteenth Amendment to the Constitution, uses three different reviews (the rational basis review, the intermediate scrutiny, and the strict scrutiny), which differ in the importance of the purpose of the distinction (legitimate, important, or compelling interest, respectively) and the necessary level of connection between this purpose and the chosen criterion of distinction (rational, essential or necessary connections, respectively). The choice of one of the reviews depends on various circumstances, particularly the impact of the distinction on the realization of one of the fundamental rights and the “suspiciousness” of the chosen criterion.

I do not claim that the Constitutional Court of Ukraine should “import” the US doctrine in its unchanged form. They could develop their own methodology – it is vital that it gives the legislator feedback and at least guides what they should be ready for during constitutional control. Instead, we have a situation where the Court casually implies that the justification must be present in the text of the law itself. If this position is taken seriously, no law stands a chance of passing the test of constitutionality.

Before I move on to the cassation filters, I want to add a few words about the ESCP and its role in motivating the CCU.

Turning to EU law is an undeniably positive trend because it gives specific meaning to the 2019 constitutional amendments on Ukraine’s European integration path. And, when we are dealing with a field of law in which Ukraine has already harmonized or undertaken to harmonize its own legislation with the acquis, the use of relevant sources from EU law (for example, to take into account the objectives set out in the preamble of the adoption of a particular directive or its interpretation, granted by the EU Court) is at least natural.

In our case, the CCU appealed to the EU regulation, which introduces the ESCP – a unified procedure for consideration of small cross-border disputes, which the courts must apply alongside their own national procedures. The fact that the ECSP applicability threshold in the regulation is set at EUR 5,000 does not create any obligations for EU member states in the context of the existing procedural mechanisms for proceedings. Therefore, the comparison of these 5 thousand Euros with the thresholds in the Civil Procedure Code is a rather controversial argumentative maneuver that does not offer a specific consequence from the fact that the Ukrainian thresholds “exceed the analogous [sic] indicator established in the ECSP Regulation” (§ 5.9). Even if we leave the relevance of this comparison in parentheses, comparing such indicators in absolute values is not the best idea. We would probably get a more correct illustration if we brought them to a common macroeconomic denominator: for example, if we consider that 5,000 euros is 2.46 of the average monthly salary in the EU after taxes in 2022 (as of here), and 268,400 UAH – this is 22.46 similar indicators for Ukraine (as of here).

The appeal to the ECSP in the current case seems like shooting blanks.

Cassation filters: so many questions, so few answers

The second provision, the constitutionality of which was to be checked by the Constitutional Court of Ukraine, related to the cassation filter (Article 389(3)(2) of the CPC) – the impossibility of cassation appeal of court decisions in minor cases and, separately, all cases with a claim price of up to 250 minimum (regardless of their minor importance), with certain exceptions – for example, when the plaintiff justifies that they violate “a question of law that is of fundamental importance for the formation of a uniform law enforcement practice”, the case has “significant public interest” or is of “exceptional importance” for them.

My constitutional claim concerned precisely this provision of the Civil Procedure Code, and I presented three separate arguments in support of its unconstitutionality:

The introduction of cassation filters in 2017 and their extension to new categories of cases in 2020 was a narrowing of the scope of the right to cassation appeal and is therefore constitutionally inadmissible by virtue of Article 22(3) of the Constitution;
The claim price is not a relevant criterion for the introduction of different grounds of cassation appeal of court decisions in different cases, which is inconsistent with the principle of equality (Article 24(1) of the Constitution); and
The wording of the cassation filters is so vague that contrary to the principle of the rule of law (Article 8(1) of the Constitution), it does not meet the requirement of legal certainty.

The first of these reasons – regarding the ban on narrowing the scope of rights while adopting new laws – was completely ignored by the Constitutional Court. As can be seen from the last paragraph of § 7.10, Article 22(3) of the Constitution was not included in the range of norms for compliance with which the Court checked Article 389(3)(2) of the CPC.

Almost the same fate befell the thesis about the uncertainty of the criteria that the legislator used in the Code. The only sentence that seems to answer it can be found in § 7.9 of the decision: “The Constitutional Court of Ukraine considers that the prescription [Article 389(3)(2)] of the Code […] is clear in its content and predictable in its consequences of application.” Why and how did the CCU come to this conclusion? It seems that the Court does not consider this thought process worthy of our attention.

Some arguments on merit can be found only in the context of the question of whether cassation filters have a legitimate purpose (the main one, according to the CCU, is to guarantee the finality of the court decision, § 7.9) and their expediency (it is all right since the ban on cassation appeal is not is “insurmountable“, § 7.10).

I looked at this argument against my own argument set out in the constitutional complaint and expanded on it in a memorandum I submitted to the CCU in August 2023 (you can read the complaint here [Ukrainian] and the memorandum here [Ukrainian]). In order not to repeat all the arguments presented there, I will mention only a few questions, the answers to which I expected to receive from CCU (my expectations were not fulfilled):

Is there a rational relationship between the value of 250 minimums and the significance of the legal issues that arise in cases with a claim value less/more significant than this value?
Do the “second-order” filters for cases with a claim price of less than 250 minimums contained in Article 389(3)(2) of the CPC remain necessary to achieve the goals of the legislator after the introduction of general filters for all cases in 2020 (Article 389(2) of the Code)?
Does the thesis about the predictability of the application of Article 289(3)(2) of the Civil Code of Ukraine withstand empirical verification? (While preparing for the position in the summer of 2023, I conducted a small study of the practice of the new Supreme Court regarding the application of one of the criteria, the presence of “an issue of law that is of fundamental importance for the formation of a unified law enforcement practice”, to find out whether the Supreme Court was able in 5.5 years operationalize it. Spoiler: nope. You can read more about the results of this study in Appendix 2 of the memorandum at the link above.)

So what?

Understanding the reasoning of the CCU is half the battle. The second half is to understand what consequences their decision will have for those cases, which for years were considered “insignificant” with reference to Articles 19(6)(1) and (5) of the Civil Procedure Code of Ukraine, recognized as unconstitutional.

The CPC seemed to provide a tool to get out of this situation – a review of the court decision under exceptional circumstances. But upon closer examination, the situation, as always, has a lot of nuances.

For example, a participant in a case with a claim price of up to 100 minimums, to whom the Supreme Court refused to open cassation proceedings due to insignificance, may try to obtain a review of the relevant decision. On this path, the participant will first need to convince the same Supreme Court of two non-obvious things:

Firstly, the decision on refusal to open cassation proceedings is a court decision “by which the consideration of the case is closed” in the sense of Article 423(1) of the Civil Procedure Code; and
Secondly, such a decision is a court decision that is “not yet executed” within the meaning of Article 423(3)(1) of the Code.

But let’s assume that these procedural conditions are fulfilled. Then another problem will arise: even if the case was “mistakenly” classified as insignificant under the unconstitutional Article 19(6)(1) of the CPC, Article 389(3)(2) of the Code applies not only to insignificant cases but to all cases with a claim price of up to 250 minimums. In the end, the result of solving the issue of opening cassation proceedings should logically be the same.

In fact, only those litigants who were “lucky” to fall into the period from 2017 to 2020, when the restrictions in Article 389(3)(2) applied purely and only to insignificant cases, can claim to review such decisions.

We can go another way. If the insignificance of the case due to the cost of the claim up to 100 minimums was the only reason for considering the case according to the rules of simplified proceedings in the court of first instance – that is, if the norm of Article 19(6)(1) or (5) of the Civil Procedure Code was absent, according to the set of criteria in Article 274( 3) of the Code, the court should have concluded that the case should be considered in general proceedings – the decision made in this way should be reviewed due to the fact that the process had a significant procedural error.

Here, it will always be open to the court to refer to the fact that even if Article 19(6)(1) did not exist, it could still classify the case as insignificant within its Article 19(6)(2) discretion, which, again, wouldn’t change the status quo. But even this is not, strictly speaking, necessary as Article 429(4) of the CPC does not give the court reviewing the case under exceptional circumstances the opportunity to cancel the decision and order a new trial (except for the Grand Chamber when reviewing the decision based on the decision of the ECtHR). Therefore, it will probably be impossible to “replay” the process without considering the insignificance of the case.

Mykyta Yevstifeyev: Автор
Dima Gadomsky: Автор