JUDGMENT OF THE CONSTITUTIONAL COURT OF THE REPUBLIC OF LATVIA OF 18 JANUARY 2010 in the Matter No. 2009-11-01

On the compliance of the second sentence of Paragraph 7 and Paragraph 17 of the Transitional Provisions of the Law On Judicial Power (restated on 14 November 2008) with Articles 1, 83 and 107 of the Constitution of the Republic of Latvia

The Constitutional Court of the Republic of Latvia, composed of: the Chairman of the court sitting Gunārs Kūtris, Judges Kaspars Balodis, Aija Branta, Juris Jelāgins, Kristīne Krūma and Viktors Skudra,

according to the constitutional complaints of Kristīne Kalvāne-Radziņa, Valdis Vazdiķis, Lolita Andersone, Baiba Jakobsone, Dagnija Bērziņa, Marika Bebriša, Sanita Rūtenberga, Ieva Reikmane, Inese Strelča, Skaidrīte Hrebtova, Vivita Voronova, Dace Ķeire, Marita Šalta, Signe Vilne, Jolanta Zaškina, Gunta Gultniece, Dina Suipe, Līga Hāzenfuse, Ilona Petrovska, Linda Piusa, Indra Meldere, Visvaldis Sprudzāns, Vilis Donāns, Inese Skudra, Svetlana Maršāne, Elmārs Lensis, Daina Treija, Ingūna Amoliņa, Iveta Brimerberga, Tamāra Broda, Brigita Būmeistere, Sandra Amola, Diāna Dumbre, Boriss Geimans, Smaida Gļazere, Rihards Hlevickis, Daiga Kalniņa, Signe Kalniņa, Irīna Jansone, Ligita Kuzmane, Guntars Kveska, Zinaida Lagzdiņa, Iveta Vīgante, Aina Nicmane, Aivars Uminskis, Guntars Stūris, Ināra Šteinerte, Irēna Logina, Žaneta Vēvere, Inese Laura Zemīte, Ārija Ždanova, Juris Stukāns, Sandra Strence, Aivars Zāģers, Skaidrīte Buivide, Daiga Vilsone, Juris Freimanis, Ligita Gavare, Dzintra Zvaigznekalna-Žagare, Inta Jēkabsone, Sarmīte Vamža, Valērijs Maksimovs, Silvija Sēbriņa, Jānis Bazēvičs, Līga Blūmiņa, Gunta Ozoliņa, Ineta Ozola, Marianna Terjuhana, Inese Grauda, Milda Zelmene, Lidija Pliča, Lelde Grauda, Iveta Bērziņa, Mārtiņš Sviķis, Dace Jansone, Iveta Meldere, Zane Pētersone, Mairita Šķendere, Sandra Krūmiņa, Svetlana Beļajeva, Dzintra Danberga, Tatjana Bormane, Baiba Ozoliņa, Normunds Riņķis, Gatis Štauers, Gvido Ungurs, Uldis Danga, Ilze Apse, Sanita Strakše, Viesturs Gaidukēvičs, Viktors Prudņikovs, Aija Āva, Dace Kantsone, Anna Mihailova, Kristīne Vanaga, Ilze Freimane, Ojārs Priedītis, Mārtiņš Birkmanis, Dzintars Melbārdis, Aija Reitupe, Dace Ābele, Iveta Kromāne, Kaspars Rinčs, Juris Kokins, Arvīds Ozerskis, Silva Reinholde, Rita Vīva, Astra Klaiše, Vineta Ramba, Zaiga Zaiceva, Biruta Ķeire, Laima Kraule, Roberts Lazdāns, Ingrīda Junghāne, Ināra Rozīte, Sandra Mertena, Vineta Vaiteika, Linda Vēbere, Dzintra Zemitāne, Aiga Freimane, Santa Sondare, Ineta Škutāne, Ilze Vanaga, Inta Zaļā, Ziedonis Strazds, Elita Stelte-Auziņa, Inese Siliņeviča, Lauma Šteinerte, Santa Bernharde, Žanete Žimante, Inta Rubene, Maruta Bite, Jolanta Uminska, Ināra Strautiņa, Inguna Preisa, Velta Silamiķele, Regīna Knabe, Dace Skrauple, Juris Siliņš, Daina Baltā, Anita Misiuna, Intars Bisters, Alberts Kokins, Līga Ašmane, Irina Freimane, Inita Dzerkale, Daiga Danšina, Kristīne Konderko, Judīte Mauliņa, Gunta Čepule, Iveta Salaka, Laila Fogele, Iveta Kniploka, Dace Ruško, Nellija Paņkiva, Ervīns Kušķis, Eduards Pupovs, Jāņis Tiltiņš, Andrejs Lepse, Ramona Nadežda Jansone, Inguna Radzeviča, Anita Nusberga, Anita Poļakova, Ludmila Poļakova, Ausma Keiša, Pēteris Opincāns, Iveta Krēvica, Anita Moļņika, Aelita Ignatjeva, Andrejs Mihaļčenko, Irēna Millere, Dina Bondare, Ilze Celmiņa, Inga Krigena-Jurkāne, Ina Baiko, Ilze Ošiņa, Svens Lorencs, Agita Dmitrenoka, Doloresa Bambere, Ilze Freimane, Agnese Jurevica, Dagmāra Skudra, Ilona Rūķe, Jolanta Bebriša, Inga Zālīte, Lilija Kanaviņa, Inese Belicka, Sarmīte Daukšte, Dzintra Balta, Sandra Meliņa, Imants Dzenis, Andis Celms, Rinalds Silakalns, Iveta Stuberovska, Vija Siliniece, Solvita Glaudāne, Biruta Horuna, Anda Briede, Anita Čerņavska, Arnis Dundurs, Raimonds Grāvelsiņš, Inta Lauka, Marika Senkāne, Sandra Briķe, Sanita Zakrevska, Karina Krastiņa, Linda Vīnkalna, Zita Kupce, Santa Liniņa, Ļubova Kušnire, Kaspars Berķis, Līvija Slica, Valda Zommere, Ilze Amona, Anita Šteinberga, Una Mihailova, Sandra Gintere, Edgars Puriņš, Sanita Kanenberga, Māris Birzgalis, Margarita Osmane, Vilmārs Endzelis, Iluta Kovaļova, Māra Balode, Ināra Zariņa, Sarmīte Stūrmane, Sandra Zeire, Velta Karzone-Kere, Indra Kreicberga, Antra Tiltiņa, Everita Ancāne, Ināra Zabarovska, Dainis Šaicāns, Helmuts Naglis, Skaidrīte Temļakova, Olita Blūmfelde, Mairita Zadiņa, Žanna Zujeva, Sandra Breča, Ieva Zabarovska, Vita Vjatere, Ilze Ieviņa, Antra Zute, Ilze Ieviņa, Ilga Neimane, Liāna Liepiņa, Agnese Skulme, Inese Kazjonova, Irēna Lavrinoviča, Una Melameda, Baiba Strauta, Maija Vētra, Mārīte Vesele, Irēna Cupika, Zeltīte Kusiņa, Arnis Naglis and Dainis Plaužs (hereinafter - Applicants),

on the basis of Article 85 of the Constitution of the Republic of Latvia (hereinafter - Constitution) and Section 16, Clauses 1 and 3, Section 17, Paragraph one, Clause 11, Section 19.² and Section 28.¹ of the Constitutional Court Law,

by way of written procedure, on 18 December 2009, in a sitting of the court, adjudicated the case On the compliance of the second sentence of Paragraph 7 and Paragraph 17 of the Transitional Provisions of the Law On Judicial Power (restated on 14 November 2008) with Articles 1, 83 and 107 of the Constitution of the Republic of Latvia.

Findings

1. The procedures for the calculation of work remuneration for judges were prescribed by the Law of 19 June 2003 "Amendments to the Law On Judicial Power", which came into force on 1 July 2003. The reform of the remuneration of judges commenced by the referred to Law was based upon the Concept "Work Remuneration of Judges and Judicial Employees", approved by Cabinet Order No. 706 of 19 December 2002 (hereinafter - Concept). The main objective of the Concept was to create a system of work remuneration for judges, which would be the basis for the existence of a professional, fair and independent court.

1.1. In accordance with Section 119.¹ of the Law On Judicial Power, the monthly base salary of a judge was referenced to the average monthly gross work remuneration of employees working in the State of the previous year, applying the coefficient 4.5. Concurrently, gradual transition to the amount of remuneration specified in the Law was provided for. Until 2006, the monthly base salary of a judge was calculated from the average monthly gross work remuneration of employees in 2001. Moreover, in accordance with the Transitional Provisions, 60, 70 and 80 per cent of the calculated base salary were paid in 2003, 2004 and 2005 respectively.

1.2. The amendments to the Law On Judicial Power of 23 February 2006 prescribed that the base salary is referenced to the average monthly gross work remuneration in 2001, not up to year 2006, but up to 31 December 2006. Similarly, it was prescribed in the second sentence of Paragraph 7 of the Transitional Provisions that the monthly base salary of a judge, except a judge of Land Registry Office, shall be calculated in 2007 and 2008, taking into account the average monthly gross work remuneration of employees in 2005, but in 2009 - taking into account the average monthly gross work remuneration of employees in 2006, with the coefficient 4.5 remaining unchanged.

1.3. On 14 November 2008, the Saeima of the Republic of Latvia (hereinafter - the Saeima) adopted the Law "Amendments to the Law On Judicial Power", by which Paragraph 7 of the Transitional Provisions was restated. The second sentence of this Paragraph determined that: "In 2007, 2008 and 2009, the monthly base salary of a judge, except the monthly base salary of a judge of Land Registry Offices, shall be calculated taking into account the average monthly gross remuneration for work for the workforce in 2005, with the coefficient of 4.5 remaining unchanged" (hereinafter also - the disputed Paragraph 7).

1.4. The work remuneration system for judges of Land Registry Offices was introduced concurrently with the work remuneration system for judges, incorporating Section 120.¹ into the Law On Judicial Power as follows: "The monthly base salary of a judge of a Land Registry Office shall be calculated, applying a coefficient of 2.5, from the average monthly gross remuneration for work for the workforce in the State as published in the official statistical notification of the Central Statistical Bureau of the previous year, and which is rounded to lats."

1.5. With the amendments of 8 November 2007, the coefficient 3.5 was determined, concurrently providing for a transitional period up to the year 2009.

With the amendments of 14 November 2008, the coefficient 4.5 was determined. However, Paragraph 17 of the Transitional Provisions determined:

"The monthly base salary of a judge of the Land Registry Office shall be calculated:

until 1 January 2009 - in accordance with the average monthly gross remuneration for work for the workforce in the State as published in the official statistical notification of the Central Statistical Bureau of the previous year, and which is rounded to lats, applying the coefficient of 2.5;

in 2009 - taking into account the average monthly gross remuneration for work for the workforce in 2006, applying the coefficient of 2.5;

in 2010 - in accordance with the average monthly gross remuneration for work for the workforce in the State as published in the official statistical notification of the Central Statistical Bureau of the previous year, and which is rounded to lats, applying the coefficient of 3.5" (hereinafter also - the disputed Paragraph 17; hereinafter the disputed Paragraph 7 and Paragraph 17 jointly - disputed norms).

2. The Applicants are of the opinion that, with the disputed norms, a less favourable regulation has been determined in comparison with the methodology (procedures) for the calculation of the base salary of judges previously in effect, because the disputed norms provide that the salary of judges should remain unchanged for three subsequent years - in 2007, 2008 and 2009. It actually means a reduction in the amount of the remuneration for judges.

The Applicants note that it follows from Article 107 of the Constitution which, inter alia, determines the right for every employed person to receive commensurate remuneration for work done, that commensurate remuneration is such which also reflects the nature of the work done. Therefore, in order for remuneration to be commensurate, the work to be done by a person should also be duly taken into account in the determination thereof. It also follows from the right to commensurate remuneration for the work done that, upon determining the remuneration for judges, the principle of the independence of the judiciary should be taken into account. I.e., the remuneration of a judge would only be recognised as commensurate to the work performed, if, in the determination thereof, the principle of the independence of the judiciary had been taken into account. Moreover, the methodology for determination of remuneration and the amount of the remuneration should be such that it ensures the observance of the principle of the independence of the judiciary.

The Applicants are of the opinion that, in determining the remuneration for judges, the principle of legitimate expectations, the principle of legal certainty (Article 1 of the Constitution) and the principle of the independence of the judiciary (Article 83 of the Constitution) have been violated. One of the elements of the independence of judges is their social guarantees, which are granted to a judge during the performance of his or her duties of office and after the end of the term of office. A judge should receive adequate remuneration which may not be reduced during the term of office of the judge. Any attempt to reduce the remuneration of judges or other social guarantees should be regarded as the violation of the principle of the independence of the judiciary.

The Applicants emphasise that the disputed norms also entail the violation of the principle of legal certainty. By arbitrarily amending the procedures for the calculation of the base salary specified in the Law On Judicial Power, the Applicants are denied the opportunity to base their future activities on the regulatory enactments in force and to efficiently plan their income and expenditure.

The legitimate expectations of the Applicants that the reform of the salaries of judges will not be suspended, had been even more sustained by the principle of the independence of the judiciary. I.e., they had grown to expect that the legislator will observe the principle of the independence of the judiciary and will not make such amendments to the Law which would reduce the amount of work remuneration for judges, with which the judges had reckoned beforehand.

After becoming acquainted with the materials of the case, the Applicant K. Kalvāne-Radziņa indicated that a judge, when hearing a court case, is granted one of the State powers prescribed by the Constitution - judicial power. Therefore, a judge, undoubtedly should be a highly qualified lawyer who performs a responsible job and, therefore, also receives remuneration commensurate thereto. However, in comparing the remuneration of judges, lawyers working in the State administration and the managers of structural units, it may be concluded that the work of judges is ranked considerably lower. It attests that the remuneration of judges had not been commensurate to the status of the office of a judge even prior to the adoption of the disputed norms. It is not comprehensible why the remuneration of judges had to remain unchanged since 2007, but the remuneration of officials of State administrative institutions has increased significantly since 2007, moreover, even in 2009. Therefore, the arguments of the Saeima about the international liabilities undertaken, which have imposed the legislator a duty to reduce the remuneration of those working in all institutions financed by the State budget, or the arguments about the principle of solidarity on which the reduction of the remuneration of employees in all branches of power are based, do not hold.

After amendments made to the Law, the work of a judge, in material terms, is no longer attractive to highly qualified lawyers.

In addition to that the judge indicates that the reference by the Saeima to the Letter of Intent signed with the International Monetary Fund on 18 December 2008 and the Memorandum of Understanding signed with the European Commission on 28 January 2009 is not correct, as the referred to documents were drawn up after adoption of the disputed norms.

3. In the answering note, the institution which issued the disputed norms, the Saeima, indicates that the adoption of the disputed norms was related to rapid economic recession, which is not over yet. The official data of the Central Statistics Bureau confirm this - a considerable reduction in the gross domestic product, a deficit in the revenue and expenditure in the public sector, a decline in the amount of manufacturing output, a decline in the amount of retail turnover and an increase in the level of unemployment. In order to compensate financial insufficiency, Latvia took international loans, for the receipt and utilisation of which several provisions were brought forward, including provisions related to reduction of remuneration. The Letter of Intent signed with the International Monetary Fund on 18 December 2008, Paragraphs 24 and 30 of which provided for the reduction of salaries in 2009 and in subsequent years, and the Memorandum of Agreement signed on 28 January 2009 with the European Commission served as the grounds for the receipt of the loan. It follows from these documents that purposeful and timely introduction of the programme for the stabilisation and recovery of growth of the economy of Latvia (approved by the Cabinet Order No. 123 of 19 February 2009) is the most significant precondition for the receipt of the international loan, and this programme also relates to the work remuneration for judges. Therefore, the measures for the prevention of economic recession are aimed towards achievement of the objectives referred to in Article 116 of the Constitution - the protection of the rights of other people and public welfare.

The Saeima is of the opinion that adoption of the disputed norms is just one of many measures which have been performed for achievement of the objectives referred to. Primarily, the disputed norms are necessary in order to ensure the interests of the State budget because the activities of the State are based on self-funding and such situation where expenditure exceeds revenues would not be acceptable in the long-term. Therefore, the objective of the restriction contained within the disputed norms is not only to ensure the interests of the State budget in circumstances of economic recession when it is necessary to reduce the expenditure of the budget and balance it with the revenue, but also to implement the rights of other persons to social security. Thus, the adoption of the disputed norms had been necessary and urgent and they have a legitimate objective - the provision of the public welfare and the protection of the rights of other persons. Moreover, the disputed norms have a fixed term.

Concurrently, the Saeima indicated that the principle of the independence of the judiciary cannot be linked only to the amount of work remuneration of judges specified in regulatory enactments. The compliance with this principle should be evaluated a complex and systemic way. The independence of the judicial system (institutional dimension) and the independence of judges (individual dimension) arises from numerous criteria: non-interference of other branches of power (executive power and legislative power) in the adjudication of a court, sufficient funding for the performance of organisational and administrative functions of the judicial system, the social security and operational guarantees of judges (selection of candidates for the office of a judge, the irrevocability of judges from the office, immunity), impartial allocation of cases, review of court adjudications in accordance with the procedures specified in regulatory enactments etc.

The Saeima emphasised that currently the work remuneration of judges specified in the State is commensurate with the nature of the work to be performed, the skills and responsibility required for the performance of the office, the requirements and restrictions prescribed by the Law, moreover, it is well-balanced with the status and work remuneration of other officials of the judicial system, as well as with the general level of salaries in the State. Thus, there are no signs of violation of Article 107 of the Constitution. Therefore, the adoption of the disputed norms logically arises from the discretionary power of the legislator and the duty to balance the interests of different groups of the society. The remuneration of judges is not the only factor which ensures the independence of the judicial power, and the suspension of the increase thereof itself does not pose a threat to the independence of the judicial power, particularly taking into account the condition that the remuneration of judges is not incommensurably low.

In the opinion of the Saeima, the determination of remuneration falls within the sphere of social rights, which is inseparably linked to the financial possibilities of the State, therefore, the legislator has been granted wide discretionary power in regulating the legal relationships referred to. The decisions of the legislator regarding the implementation of social rights have a significant political dimension, which is affected by the national economic situation and the resources available in the State, therefore, the legislator cannot be set the same strict requirements in the field of implementation of social rights as in relation to the provision of other human rights. Thus, social rights are special and different human rights.

The Saeima indicated that the disputed norms were an exceptional measure with a fixed term, which was performed in the conditions of economic recession. Moreover, prior to the adoption of the draft law in its final reading, the possible alternatives had been carefully considered. The possibility of compensating losses caused to judges, if such had been caused by Paragraph 7 or 17 of the Transitional Provisions of the Law On Judicial Power, from the funds granted to the budget sub-programme "Funds for Unforeseen Events" of the Ministry of Finance, had been considered. However, such solution had not been supported because it would not help to achieve the legitimate objective to a sufficient extent, i.e., as the disputed norms were adopted in order to save funds, there would also be insufficiency of funds for the introduction of an appropriate mechanism for compensation. In accepting the disputed norms, the Saeima had not infringed the right of judges to adequate financial security at least at a minimum level, had not acted unfairly towards individual groups of the society, as well as had balanced the rights of different groups of the society. Moreover, the reduction in remuneration had also been determined for other governmental bodies, State administrative institutions and local government institutions. The base salaries of judges are financed from the State budget. The remuneration of other officials (employees) of State and local government institutions have been reduced, but the disputed norms only provide for the suspension of the increase in remuneration for judges. Taking into account that remuneration was reduced for everyone to whom it is paid from the State budget, including the President, the Prime Minister, ministers and deputies of the Saeima, the Saeima considered that the principle of solidarity was observed. Therefore, the disputed norms comply with the principle of proportionality and do not toviolate the principle of the independence of the judiciary.

The Saeima also disagreed with the opinion of the Applicants that the disputed norms are inconsistent with the principle of legitimate expectations. The principle of legitimate expectations is one of the cornerstones of a democratic state, arising from Article 1 of the Constitution, and the purpose thereof is to promote the predictability and certainty of regulatory enactments, as well as the stability of the mutual lawful relations of the State and persons. However, the principle of legitimate expectations does not prohibit to make amendments, which conform to certain requirements, to the existing legal framework.

The Saeima emphasised that neither the principle of legal certainty, nor the principle of equity prohibits derogation from the previous practice. It is not only permissible but even necessary in cases when the most suitable and appropriate solution should be chosen for a specific situation. In the opinion of the Saeima, deviation from the legal framework most favourable for a person was permissible in the particular situation, because the individual was given an opportunity to understand the motivation behind such action, as well as whether such framework under such circumstances is objectively necessary and whether or not the violation is arbitrary. The principle of legitimate expectations is a constitutional value. Similarly, the protection of the rights of other persons and provision of the public welfare are constitutional values, effectively dividing the joint benefit and balancing the State income with expenditure.

The Saeima was of the opinion that, in case of mutual interaction of several constitutional values, the legislator has the discretionary power to determine the most appropriate solution. Mechanical protection of legitimate expectations in cases when they would come into contradiction with other constitutional values cannot be absolute.

In addition to the arguments already referred to regarding the necessity and proportionality of the disputed norms, the Saeima indicated that the principle of legitimate expectations in this case should also be considered in the context of the principle of equality, i.e., leaving the "benefits" granted to one group of persons intact or increasing thereof automatically means a decline in the material status of another group of persons. Therefore, it is not permissible for the reduction in remuneration to affect all persons employed in the public sector, while not affecting the representatives of the judicial power, thus causing an even higher reduction in remuneration to other employees in the public sector. In evaluating the experience of other states - the Czech Republic, Canada and Lithuania - in the resolution of the matter of remuneration of judges, the Saeima had reached the conclusion that, in accordance with the case law of these states, the reduction in the remuneration of judges does not violate the principle of the independence of the judiciary or the principle of legitimate expectations.

The Saeima requested to adjudicate the disputed norms as compliant with the Constitution.

4. The Ministry of Justice indicates that it had been necessary to develop the draft law "Amendments to the Law On Judicial Power" (restated on 14 November 2008) within one week, as it had been put forward for examination at the Cabinet meeting concurrently with other draft laws of the 2009 budget package. Regardless of the objections of the Minister for Justice, the Cabinet adopted this draft law.

The Ministry of Justice is of the opinion that a reference to the infringement of the principle of legitimate expectations could be made only in case if the legal framework previously determined by the legislator had caused grounds for legitimate expectations. Moreover, the principle of legitimate expectations should be considered in context with the principle of proportionality. In applying the principle of legitimate expectations, it is also important to take into account whether the reliance of a person on a legal norm is lawful, justified and reasonable and whether the legal framework in essence is sufficiently specific and unchanging so that it could be trusted. Due to the instability of the economic situation, the norms of the Law specifying the procedures for the calculation of the remuneration of judges in 2008 and 2009 were amended repeatedly. The requirement in relation to the conformity of a legal norm with the system and present evaluations is considered a priority in comparison with the principle of legal stability and strict conformity with the previous practice even it is unacceptable anymore.

The Ministry of Justice indicated that, in observing the principle of proportionality, such situation where the reduction of remuneration affects all persons employed in the public sector, except representatives of the judicial power, is not permissible. In such case an even higher reduction in financing should be determined in other nationally significant fields. Upon comparing the infringement of the rights of judges, which has occurred by reducing their remuneration, with the infringement of all public interests in the same situation and assuming that, for example, it would be necessary to reduce funds even more in the State administration or other social sector, it may be concluded that the decision regarding the reduction in remuneration of judges was taken, observing the principle of proportionality.

Concurrently, the Ministry of Justice points towards the negative consequences in relation to the reduction in the remuneration of judges. The negative consequences can express as the difficulty to attract qualified candidates to the profession of a judge for work in the office of a judge, or as an unfavourable impact on the prestige of the judicial power. In the context of the first aspect, the Ministry of Justice informs that during the period between 2004 and 2009 there have always been vacancies for the offices of judges. I.e., it had not been possible to ensure the necessary number of judges for efficient work of courts and Land Registry Offices. The Ministry of Justice is of the opinion that competitive remuneration is a significant condition for the selection of qualified candidates for the office of a judge, as well as a stimulus to motivate highly qualified professionals to stay and work in court rather than look for another, better remunerated profession.

The number of judges determined by the Saeima has not been ensured for several years. Moreover, the workload of courts and the number of cases received in courts is growing consistently. A particularly rapid growth in the number of civil matters was observed in 2008 and 2009. For example, the number of civil matters received in 2009 in district (city) courts, in comparison with the previous year, increased by almost 100 per cent. Thus, taking into account the large increase in the workload, the legislator left the amount of the base salary of judges unchanged, which includes a probability of actually causing the negative consequences referred to, as well as the basis for the extension in the time period for adjudication of cases.

The Ministry of Justice indicates that, on one hand, judges are the persons who create and maintain the prestige of the judicial power by passing fair and justified court judgments, but, on the other hand, the prestige of the judicial power is the basis for selecting the office of a judge. Therefore, if the office of a judge is not adequately remunerated, not only the prestige of a judge, but also the prestige of the judicial power deteriorates. The executive power and the legislator, upon accepting decisions on the budget funds necessary for the judicial power, immediately and directly affect the financing of the judicial power and, therefore, efficient functioning of the judicial power. The condition that decisions related to the work of courts may be taken by the executive power and the legislator, without observing the objections expressed by the representatives of the judicial power, could be the grounds for doubting the implementation of the principle of equality of all branches of State power.

In addition to that, the Ministry of Justice draws attention to the social consequences which may be caused by the reduction in remuneration of judges. The referred to fact may have negative impact on the economy and the society in general, as the time period for adjudication of cases in courts would increase.

However, the Ministry of Justice concludes that the reduction in remuneration of judges itself neither violates the principle of the independence of the judiciary, nor the principle of legitimate expectations, and complies with the principles of equality and proportionality.

Conclusions

5. The competence of the Constitutional Court to adjudicate this case is not being disputed, however, the special nature of the case referred to compels to evaluate and justify the rights of the Constitutional Court.

One of the fundamental principles of a democratic state recorded in Article 1 of the Constitution is the principle of the division of power, which contains the control of the judicial power over the legislator and the executive power. None of the legal norms or activities of the executive power may remain outside the control of the judicial power, if they infringe upon the interests of any person [see Paragraph 1 of the Conclusions of the Judgment of the Constitutional Court of 9 July 1999 in Case No. 04-03(99). The judicial power at large and the Constitutional Court as a component thereof should ensure as complete control of the other branches of power as possible (see Paragraph 1.2 of the Conclusions of the Judgment of the Constitutional Court of 22 February 2002 in Case No. 2001-06-03).

In evaluating the competence granted to the Constitutional Court in Article 85 of the Constitution, to adjudicate cases regarding the compliance of laws with the Constitution, it may be concluded that the Constitutional Court settles specific disputes regarding the compliance of legal norms with norms of higher legal force (see Paragraph 9.2 of the Judgment of the Constitutional Court of 20 December 2006 in Case No. 2006-12-01).

The Constitutional Court, upon evaluating the compliance of laws with the Constitution, executes the principle of supreme command of the Constitution, thus ensuring constitutional fairness. Neither the Constitution, nor the Constitutional Court Law gives the Constitutional Court the right to refuse the evaluation of the compliance of any law or other legal norms with the Constitution, as well as neither of them give anyone the right to prohibit the court from implementing its functions or restricting the court in the implementation of the functions thereof.

Therefore, the Constitutional Court is competent to evaluate the constitutionality of the decisions taken by other branches of the judicial power, even in cases when these decisions concern the judicial power.

6. A request to examine the compliance of the disputed norms with Articles 1, 83 and 107 of the Constitution is contained in the applications. The compliance of the disputed norms with the principle of legitimate expectations, arising from Article 1 of the Constitution, within the scope of this case, should be evaluated in conjunction with the independence of judges contained in Article 83 of the Constitution. Similarly, the compliance with the right included in Article 107 of the Constitution to receive remuneration commensurate to the work done should be evaluated, observing the requirement of independence included in Article 83 of the Constitution. Therefore, firstly, it is necessary to disclose the content of Article 83 of the Constitution, therefore, the Constitutional Court will evaluate the compliance of the disputed norms with Article 83 of the Constitution at the beginning.

I

7. Article 83 of the Constitution determines that: "Judges are independent and only subject to the Law." The independence of judges and the court determined in this constitutional norm is one of the basic principles of democratic and lawful state.

"The authors of the Constitution of Latvia and constitutions of democratic states around the world insist upon an independent judicial power and special status of a judge not because it is to someone's liking, but because it is an absolutely essential component of a democratic lawful state" (Endziņš A. Tiesu sistēmas un politikas saskarsme un dinamika. Jurista Vārds, 7 May 2002, No. 9).

The task of the judicial power is to provide that, upon hearing a court case, the implementation of the State Constitution, laws and other legal acts and the observance of the principle of legality are ensured, as well as human rights and freedoms are protected (see Paragraph 26 of the Judgment of the Constitutional Court of 18 October 2007 in Case No. 2007-03-01).

The independence of the court and judges is not an end in itself, but rather a means for ensuring and strengthening democracy and legality, as well as a mandatory precondition for the implementation of the right to a fair court, therefore, the principle of the independence of the judiciary and judges contained in Article 83 of the Constitution should be examined in conjunction with Article 1 of the Constitution, which contains the principle of legality and the division of power, and the first sentence of Article 92 of the Constitution, which provides for the defence of the rights of a person to protect his or her rights and lawful interests in a fair court.

7.1. The concept "fair court" referred to in Article 92 of the Constitution incorporates two aspects, i.e., a "fair court" as an independent and impartial institution of the judicial power, which adjudicates cases, and a "fair court" as an adequate process appropriate for a legal state, in which a case is adjudicated. The first aspect is related to the principle of the independence of the judiciary contained in Article 83 of the Constitution (see Paragraph 1 of the Conclusions of the Judgment of the Constitutional Court of 4 February 2003 in Case No. 2002-06-01).

The requirement specified in international documents for the independence of judges is part of the content of the right to a fair court. Article 6 of the European Convention for the Protection of Human Rights and Fundamental Freedoms (hereinafter - Convention) specifies that anyone has the right "to a fair and public hearing within a reasonable time by an independent and impartial tribunal established by law". Article 14 of the UN International Covenant on Civil and Political Rights is similarly worded.

Apart from the already referred to international documents ratified by the Republic of Latvia, a number of documents developed by international institutions exists, which were adopted so that Member States might follow the principles contained therein in their laws and practices, for example, the UN fundamental principles for the independence of judicial power (see UN Fundamental Principles for the Independence of Judicial Power//Latvijas Vēstnesis [the official Gazette of the Government of Latvia], 28 September 1995, No. 148), Recommendation No. (94)12 of the Committee of Ministers to Member States on the Independence, Efficiency and Role of Judges of 13 October 1994, CCJE Opinion No 1 on standards concerning the independence of the judiciary and the irremovability of judges, the European Charter on the Status of Judges, Council of Judges, 8-10 July 1998, the Universal Charter of the Judge adopted by the Central Council of the International Association of Judges in 1999, the Judges' Charter in Europe adopted by the European Association of Judges on March 20, 1993. Although the documents referred to should only be regarded as guidelines, they impose strict moral and political obligations on states and should be used as a means for the clarification of the content of the criteria for the independence of judges.

In analysing the content of the concept "independent tribunal" contained in the first sentence of Paragraph one of Article 6 of the Convention, the European Court of Human Rights had concluded that several criteria should be taken into account, for example, the procedures by which the members of the relevant institutions are appointed to the office, the time period for which they are appointed, guarantees against external influences and the existence of external features of independence (see the Judgment of the European Court of Human Rights in the Case Campbell and Fell v. The United Kingdom 78.§, the Judgment in the Case Langborger v. Sweden 32. §, the Judgment in Bryan v. The United Kingdom 37. § and the Judgment in the Case Coeme and others v. Belgium 120. §). The independence of judges is important to all who turn to court and reckon with equity in hearing of a court case.

Thus, efficient implementation of human rights is not possible, if judges are not independent.

7.2. One of the principles of a democratic state is the principle of legality. Only an independent judicial power may ensure a fair outcome of court proceedings, which is the basis of the rule of law.

The requirement that judges should be protected from any unjustified interference in the hearing of a court case and the performance of duties of a judge is not only justified and reasonable, but essential for the protection of the rule of law. The UN Economic and Social Council has indicated in the pre-amble of the Bangalore Principles of Judicial Conduct (hereinafter - Bangalore Principles): a competent, independent and impartial judiciary is essential if the courts are to fulfil their role in upholding constitutionalism and the rule of law (see: Bangalore Principles of Judicial Conduct, 29 April, 2003, United Nations Commission on Human Rights resolution 2003/4, Preamble). Anyone whose court case is heard is interested in ensuring the independence of the judiciary.

Thus, the independence of judges guarantees the protection of the rule of law in the interests of the society and the State.

7.3. Only in such state where the principle of the division of power guarantees the balance and mutual control of the branches of the state power, preventing the trends for any branch to lord it over, promoting the moderation of power and, therefore, ensuring a truly independent judicial power, it is possible to ensure the independence of judges.

The purpose of the division of power is to retain the guarantees of human rights in order to prevent the replacement of the model of democratic, lawful state with authoritarian regime or autocracy of one person. The principle of the division of power in a lawful state guarantees the balance and mutual control of the branches of the state power. This very principle gives judges the opportunity to perform their duties appropriately.

Thus, the requirement for the independence of judges is closely linked with the independence of the judicial power and, therefore, with the implementation of the principle of the division of power.

8. The Constitutional Court should evaluate whether the determination of the work remuneration of judges is part of the content of the principle of the independence of judges contained in Article 83 of the Constitution.

In analysing the constitutional grounds, objectives and significance of the independence of judges, the Constitutional Court had already indicated that it is not possible to ensure the required independence of judges, if the judicial power itself, in general, is not free from unjustified influence or political pressure of the executive power or the legislator.

8.1. The UN Fundamental Principles for the Independence of Judicial Power specify that any state has a duty to ensure sufficient resources to allow the judicial power to perform its functions appropriately (see UN Fundamental Principles for the Independence of Judicial Power//Latvijas Vēstnesis, 28 September 1995, No. 148, 7.§). The UN Economic and Social Council indicated in its Resolution No. 1989/60 of 24 May 1989 that States shall pay particular attention to the need for adequate resources for the functioning of the judicial power, including appointing a sufficient number of judges in relation to case-loads, providing the courts with necessary support staff and equipment and offering judges appropriate personal security, remuneration and emoluments (see Procedures for the effective implementation of the Basic Principles on the Independence of the Judiciary, ECOSOC resolution 1989/60 of 24 May 1989).

Observing the principle of the division of power and the requirement for the independence of judges contained in the Constitution, as well as other internationally recognised requirements, the legislator has decreed in Sections 10 and 117 of the Law On Judicial Power accordingly that the judicial system is financed from the State budget. The State, providing for appropriate financing, guarantees efficient legal protection of a person in a competent and independent court. Therefore, only such financing of the judicial power conforms to the Constitution which ensures the implementation of these duties.

On one hand, observing that the budget is a means for the implementation of the State policy and decisions regarding the State budget may only be taken by the legislator, but, on the other hand, reckoning that the most objective forecasts of the amount of the resources necessary for the provision of judicial operations may be made by the institutions of the judicial power, a reasonable balance between the guarantees of the judicial power and the possibilities of the budget should be found.

The legislator, prior to taking decisions regarding judicial operations (in matters related to the implementation of both the budget and other judicial functions), should give the opportunity to the judicial power or independent institution, representing the judicial power, if such institution has been established, to express its opinion regarding matters which affect judicial operations. The Ministry of Justice also indicates: such situation where decisions related to the work of courts may be taken without observing the objections expressed by the representatives of the judicial power, "may become the grounds for doubting the implementation of the principle of equality in all branches of the state power" (case materials, Vol. 2, p. 20). In a democratic state, the principle of the division of power not only separates the branches of power, but also contains the requirement for mutual co-operation thereof, as the common objective of all branches of the judicial power is the strengthening of democracy in the interests of the nation. If, due to objective reasons, the legislator cannot agree with the opinion of the judicial power, then it shall justify the decision thereof.

8.2. The Constitutional Court agrees with that indicated in the answering note of the Saeima, that "the principle of the independence of the judiciary cannot be related only to the amount of work remuneration of judges specified in regulatory enactments, but the observance of this principle should be evaluated in a complex and systematic way" (case materials, Vol. 1, p. 94).

The independence of judges is linked with several following guarantees: guarantees of the term of office of a judge (the procedures for the appointment or approval of a judge, the qualification required for the appointment, guarantees for the retention of the office, conditions for promotion in the office and transfer to another office, conditions for the suspension and termination of authorisation), the immunity of judges, financial security (guarantees of social and material nature), the institutional (administrative) independence of a judge and the actual independence of the judicial power from the political influence of the executive power or the legislator. All these guarantees are closely linked and, if even one of them is incommensurably restricted, the principle of the independence of judges is violated and, therefore, the performance of the basic functions of the court and the provision of human rights and freedom is threatened.

One of the guarantees of the independence of judges is the financial security of judges. Several aspects of financial security of judges are indicated in the constitutional doctrine, but the financial security of judges in all democratic states is undoubtedly recognised as one of the most important elements for the provision of the independence of judges (see, for example, the Judgment of the Constitutional Court of the Czech Republic of 14 July 2005 in Case Pl. US 34/04).

As the Constitutional Court of Lithuania has concluded, it is generally recognised in democratic states that a judge who has to examine legal disputes occurring in the society, including arguments between persons and the State, should not only be highly professionally qualified with impeccable reputation, but also materially independent and has to feel confident about his or her future (see Paragraph 4.5 of the Judgment of the Constitutional Court of the Republic of Lithuania of 12 July 2001 in Case No. 13/2000-14/2000-20/2000-21/2000-22/2000-25/2000-31/2000-35/2000-39/2000-8/01-31/01 http://www.lrkt.lt.dokumentai/2001/r010712.htm). The State has a duty to determine such remuneration for judges as is commensurate with the status, functions and responsibility of the judge. Protection of the remuneration of judges is one of the guarantees of the independence of judges.

It is also indicated in documents developed by international institutions that the independence of judges can be related to the remuneration of judges and other material and financial guarantees.

The UN Human Rights Committee has indicated in the General Comment No. 32 that Member States should take specific measures guaranteeing the independence of the judiciary, protecting judges from any form of political influence in their decision-making, inter alia, also determining the remuneration of judges (see International Covenant on Civil and Political Rights, Article 14, General Comment No 32, para. 19).

The UN fundamental principles for the independence of judicial power, which have been defined in order to help Member States perform their task - to ensure and promote the independence of the judicial power, also provide, inter alia, that commensurate remuneration should be ensured by law (see Paragraph 11 of the UN Fundamental Principles for the Independence of Judicial Power//Latvijas Vēstnesis, 28 September 1995, No. 148).

Principle III of Recommendation No. R (94) 12 of the Committee of Ministers of the Council of Europe, "Proper Working Conditions", specifically Paragraph 1 (b) thereof, prescribes: "Proper conditions should be provided to enable judges to work efficiently and, in particular, by ensuring that the status and remuneration of judges is commensurate with the dignity of their profession and burden of responsibilities" [Recommendation No. R (94) 12, Principle III, para. 1.b].

Paragraph 6.1 of the European Charter on the Statute for Judges prescribes: "The remuneration of a judge shall be great enough so as to shield judges from pressures aimed at influencing their decisions and behaviour within their jurisdiction, thereby impairing their independence and impartiality" (European Charter on the Statute for Judges, para. 6.1).

In 1999 Paragraph 13 of the Universal Charter of the Judge adopted by the International Association of Judges prescribes: "The judge must receive sufficient remuneration to secure true economic independence. The remuneration must not depend on the results of the judges work and must not be reduced during his or her judicial service" (Universal Charter of the Judge, para.13).

Thus, adequate remuneration for work is included in the content of the principle of the independence of judges contained in Article 83 of the Constitution.

9. The Constitutional Court already concluded that adequate remuneration is included in the content of the independence of judges. However, as follows from the documents drawn up by international institutions already referred to in this Judgment, the remuneration for judges should be commensurate with the prestige and burden of responsibilities of their profession. In turn, the UN Economic and Social Council has indicated in the preamble of the Bangalore Principles: if courts are to fulfil their role - to uphold constitutionalism and the rule of law, not only an independent and impartial, but also a competent judicial power is essential (see: Bangalore Principles on Judicial Conduct, Preamble).

Observing the status of judges and that a judge implements the function of hearing court cases, the legislator not only has the right but also a duty to prescribe requirements to the judge as the implementer of the judicial power in relation to special competence, qualification and experience, as well as restrictions aimed towards the provision of the independence of the judge. The requirements to be met by a judge, his or her rights and duties, as well as restrictions are prescribed in the Law On Judicial Power. In turn, in accordance with Section 7, Paragraph three of the Law On Prevention of Conflict of Interest in Activities of Public Officials, judges are only allowed to combine the status of public official with an office which they occupy in accordance with law or international agreements ratified by the Saeima, Cabinet regulations and orders, and the work of a teacher, scientist, professional sportsperson and creative work.

The Supreme Court of Canada has indicated that, in relation to the determination of the work remuneration for judges, not only the issue of the independence of judges and the judiciary is important. This requirement has two other purposes: 1) to promote the productivity of the judiciary, because the most plausible and actual assumption is that judges, who feel secure in a financial sense, shall perform their duties with a greater yield; 2) to attract capable lawyers with an impeccable reputation to the office of a judge (see the Judgment of the Supreme Court of Canada of 18 September 1997 in the Case of the Reference re Remuneration of Judges of the Provincial Court of Prince Edward Island (1997) 3 S.C.R.3].

Special requirements in relation to the remuneration of judges are also contained in the Constitutions or constitutional laws of some states. For example, Article 178, Paragraph two of the Constitution of Poland prescribes that the remuneration of judges shall be commensurate to the "honour of the profession" and the burden of responsibilities, Article 88 of the Constitution of Greece prescribes that the remuneration of judges shall be commensurate with the office of a judge.

It is only justifiable and reasonable to determine the remuneration in conformity with the responsibility and load related to the significance of the office, the requirement for independence, the restrictions arising from the office, as well as the rank of the particular office in the constitutional legal order. For example, the Constitutional Court, upon evaluating the remuneration of deputies of the Saeima, adjudicated:

"The remuneration of a deputy should comply with the responsibility and load related to the significance of the office, as well as the rank of the particular office in the constitutional legal order. […] Moreover, restrictions should be taken into account, which are prescribed by the Constitution and the Law On Corruption Prevention for economic activities of the deputies." The remuneration of a deputy "is firstly the guarantee of his or her independence" (Paragraphs 5.1 and 6.1 of the Conclusions of the Judgment of the Constitutional Court of 22 February 2002 in Case No. 2001-06-03).

The objective of the remuneration of judges is also both to ensure independence and to partly compensate the restrictions prescribed by the Law. In addition, it should be observed that a judge who is independent, but not sufficiently qualified is unable to ensure the right to a fair court, accurate interpretation of laws and the protection of the values of the Constitution.

It is undeniable that it is in the national interests to ensure not only a sufficient number of independent and competent judges, but also the activities of other independent and competent officials. The Constitutional Court agrees to that indicated by the Cabinet,that the President of the Bank of Latvia, his or her deputy, members of the Board of the Bank of Latvia and the Chairperson of the Finance and Capital Market Commission, his or her deputies and members of the Board should be both independent and competent (see case materials, Vol. 7, pp. 66-71). However, these are not the only officials in whose competence and independence the State and the society are interested.

Observing the authorisation of a judge, the qualification and competence requirements to be met by him or her, as well as the influence and significance of the decision of a judge, the office of a judge should be the highest phase of the career of a lawyer. In accordance with the requirements prescribed by the legislator this office may be occupied only after reaching the age of 30 years. In order for a lawyer who has acquired certain experience to change jobs and commence the career of a judge at this age, he or she must have not only the mandatory qualification, experience and moral certainty, but also a relevant financial security and guarantees.

Thus, the requirement to ensure a judge with adequate remuneration is related not only to the principle of the independence of the judiciary but also to the qualification and competence requirements to be met by a judge and the restrictions specified.

10. In order to determine whether the disputed norms infringe upon the independence of judges, it is necessary to evaluate whether Article 83 of the Constitution contains the prohibition to reduce the work remuneration of judges.

Article 83 of the Constitution determines that "judges shall be independent and subject only to the law". Thus, this norm does not contain expressis verbis a prohibition to reduce the work remuneration of judges. The Constitutional Court already indicated that the extent and content of the principle of the independence of judges included in the Constitution is evaluated not only in conjunction with other norms and principles of the Constitution but also taking into account the international liabilities of Latvia in the field of human rights.

10.1. It is indicated in the Judges' Charter in Europe that one of the principles of the independence of the judiciary is such that "judicial salaries must be adequate, to ensure that the Judge has true economic independence and must not be cut at any stage of a Judge's office" (Judges' Charter in Europe, para. 8). The prohibition to reduce the remuneration of judges in individual states (for example, the United States of America, Australia) is prescribed by the Constitution in a direct way.

For example, a prohibition to reduce the remuneration of judges during their term of office has been included in Article 3, Paragraph one of the Constitution of the USA since the end of the 18^th century. In 1920 the Supreme Court of the USA indicated in its judgment that the primary purpose of this norm was not to benefit the judges, but to attract fit men to the bench and insure the independence of action and judgment. Any diminution which by necessary operation and effect withholds or takes from the judge a part of that which has been promised by law for his services must be regarded as within the limitation [see Judgment of the Supreme Court of the USA in the Case Evans v. Hatter 532 U.S. 245 (1920) http://supreme.justia.com/us/253/245/case.html]. Thus, the prohibition directly included in the national constitutional law to reduce the remuneration of judges is also aimed towards the protection of the independence of judges.

10.2. The comprehension of general values, including the independence of the judicial power and democracy, depends on the history and traditions of a state. In countries where recently there was only one governing party, it is particularly difficult to accept the comprehension of how the independence of the judicial power requires separation thereof from the political power (see: The Cambridge Yearbook of European Legal Studies, Volume 4, 2001, p. 54).

The issue regarding the reduction of remuneration of judges, as well as other aspects related to the financial security of judges has been evaluated not only in those states where, due to historical reasons, there could be discussions regarding the extent and content of the independence of the judicial power (the Czech Republic, Russia, Lithuania, Poland, Slovenia); once this issue was also pertinent in Australia, the United States of America, Canada, Germany and elsewhere.

The Constitutional Courts in the states referred to or other institutions, which perform constitutional monitoring, have determined that the remuneration of judges, in the situation of financial difficulties in the state, should be particularly protected from extreme and unfavourable fluctuations (see the Judgment of the Constitutional Tribunal of the Republic of Poland of 18 February 2004 in Case No. 12/03 http://www.trybunal.gov.pl/eng/summaries/documents/K_12_03_GB.pdf). The social and material guarantees of judges are part of the guarantees protected by the principle of the independence of judges and courts. Thus, any attempt to reduce the remuneration or social guarantees of judges or to reduce the budget for courts may be interpreted as an infringement of the independence of the judicial power (see the Judgment of the Constitutional Court of the Republic of Lithuania of 6 December 1995 in Case No. 3/95 http://www.lrkt.lt/dokumentai/1995/n5a1206a.htm). A judge has irrevocable right to remuneration which shall not be reduced (see the Judgment of the Constitutional Court of the Czech Republic of 15 September 1999 in Case Pl. US 13/99). Therefore, it is not permissible to reduce the remuneration of judges with the aim of avoiding a deficit of the budget (see the Judgment of the Supreme Court of Canada of 18 September 1997 in the Case of the Reference re Remuneration of Judges of the Provincial Court of Prince Edward Island (1997) 3 S.C.R.3]. One of the most important guarantees of the independence of the judicial power, which is protected by the Constitution, is the protection of judges from a reduction in remuneration during their term of office. Moreover, stable economic situation of judges also ensures them with high level of independence in its widest sense (see Paragraph 33 of the Judgment of the Constitutional Court of the Republic of Slovenia of 11 December 2009 in Case No. U-I-159/08-18).

In order for judges to efficiently perform their functions, observing the requirements of independence and competence, as well as the restrictions specified, the legislator, taking into account the requirements put forward by international institutions, has provided not only specific work remuneration as compensation for them, but also social and security guarantees etc. Therefore, the prohibition for reduction does not relate only to the work remuneration of judges.

The requirement to protect the work remuneration and other guarantees of judges follows from the principle of the independence of the judiciary and judges, the purpose of which is to protect judges from any influence: from the influence of the legislator, the executive power, authorities and officials, different organisations, commercial structures, legal persons and natural persons.

Therefore, Article 83 of the Constitution contains a prohibition to reduce the remuneration of judges prescribed by the Law during their term of office.

10.3. Judges do not live in a social vacuum and they are also affected by the specific situation existing in the State, regardless of the causes thereof - a natural disaster, an economic recession, the actions or the failure to act of the State, or irresponsible decisions. However, the prohibition to reduce the remuneration of judges during their term of office (authorisation) does not mean that any action of the legislator would be absolutely prohibited, which might possibly have unfavourable impact on the remuneration of judges. Judges are also citizens and their special status and role does not grant them immunity in situations where the State, in resolving a complicated situation, takes decisions in relation to the inhabitants thereof.

Other constitutional courts have also concluded that the prohibition to reduce the remuneration of judges cannot be absolute. The Constitutional Court of the Czech Republic indicated that "complete inviolability of the remuneration of judges would be illusory and contrary to elementary conditions of social reality" [Judgment of the Constitutional Court of the Czech Republic of 14 July 2005 in Case Pl. US 34/04, individual opinions of Judges Vojen Guttler, Jan Musil and Pavel Rychetsky]. The Constitutional Court of Slovenia indicated: "The protection of judges from reduction of their remuneration is not absolute, however, it contains the condition that reduction of the remuneration of judges is only justifiable in exceptional cases, taking into account the specific circumstances in each of these cases" (Judgment of the Constitutional Court of the Republic of Slovenia of 11 December 2009 in Case No. U-I-159/08-18). In the doctrine developed by the Constitutional Court of Lithuania, it is indicated that "it is prohibited to reduce remuneration, unless special circumstances exist" (Judgment of the Constitutional Court of the Republic of Lithuania of 15 January 2009 in Case No. 15/98, 33/03). The Supreme Court of Canada determines: "A temporary reduction in judicial remuneration is permitted in case of economic emergency" (Judgment of the Supreme Court of Canada of 18 September 1997 in the Case of the Reference re Remuneration of Judges of the Provincial Court of Prince Edward Island [1997] 3 S.C.R.3).

The judicial power should naturally blend in the society, and it is necessary for the society to accept and respect it. In order to achieve and ensure it, the judicial power itself, as well as the legislator and the executive power have great significance. Judges have been determined high standards of behaviour and ethics which imposes certain restrictions. However, a person, when deciding to become a judge, has to reckon with certain standards of the profession. Social solidarity in the circumstances of an economic crisis means that any citizen undertakes proportionate responsibility for the rectification of the severe consequences of the crisis, and, in turn, public officials, including judges, show solidarity with the inhabitants of the State.

The decision of the legislator to reduce the remuneration of judges may subject the independence of courts to risk. The Supreme Court of Canada has indicated that taking of a decision regarding the reduction of remuneration of judges gives the legislator a theoretical opportunity to have political influence over courts with the assistance of economic manipulation (see Judgment of the Supreme Court of Canada of 18 September 1997 in the Case of the Reference re Remuneration of Judges of the Provincial Court of Prince Edward Island [1997] 3 S.C.R.3). However, this theoretical opportunity does not allow to draw the conclusion and assert that the reduction of remuneration of judges should be considered as influencing of the judicial power or a violation of the independence of the judiciary in any circumstances. Also unjustified increase in the remuneration of judges may theoretically be regarded as the influencing of judicial power.

Thus, in special circumstances - in the situation of an economic recession when the State is forced to perform comprehensive reduction of remuneration in institutions financed from the budget - derogation from the principle of the prohibition of the reduction of remuneration of judges may be allowed.

11. In evaluating which of the actions of the legislator in the determination of the work remuneration for judges are prohibited or permitted by the principle of the independence of the judiciary and judges included in the Constitution, the Constitutional Court should examine the disputed norms in conjunction with the principle of the division of power, the principle of independence and, particularly, the financial security of judges.

The judicial system is financed from the State budget. In observing the principle of the division of power, the legislator has a very specific duty, upon developing the relevant normative regulation, to ensure remuneration commensurate to the international requirements for the independence of the judiciary - work remuneration, social and security guarantees. It would not be permissible in a democratic state that the remuneration of judges is determined by the judges themselves or the executive power or that the remuneration of officials of other independent authorities is determined by the executive power or the independent authority itself. The right to determine the work remuneration of judges, although this right is not absolute, belong, however, to the legislator. Just because the legislator decides on the remuneration of independent authorities, including courts, budget and remuneration of officials, it does not mean that the independence necessary for the performance of the respective functions is infringed upon.

11.1. Adequate work remuneration is one of the elements of financial security of judges. Financial security of judges is necessary as a guarantee against external influences and the guarantee for ensuring qualification.

The individual level (extent) of financial security depends on the lifestyle of each specific person (judge). The State cannot assume liability and it also does not have to assume liability for excessively large expenses of a judge and incommensurable financial plans. However, such a situation where the State reduces the remuneration of a judge to such extent that a judge who has undertaken financial liabilities commensurate with his or her remuneration becomes insolvent and, thereby, his or her independence is threatened, is not permissible. The State has a duty to ensure the financial security of judges at such level which is necessary for a judge for the performance of the duties of his or her office.

The financial security of a judge, which includes the determination of adequate remuneration, i.e., work remuneration, social guarantees, including pension, serves as an adequate guarantee for hearing a court case, gives grounds for imposing high requirements to a judge and allows the retention of trust in his or her competence, independence and fairness.

Thus, financial security is one of integral components of the independence of judges.

11.2. The financial security of judges means that a judge is confident that the remuneration which was determined at the time when he or she started performing his or her duties of office, will not be reduced and in case the cost of living increased, the remuneration will be increased accordingly. If the procedures by which work remuneration is automatically adjusted to the changing costs of living are not included in the Law, another mechanism for ensuring this adjustment should be ensured in the Law. In Latvia the legislator has provided for regulation which ensures the retention of the actual value of the remuneration of judges both in cases of economic recession and economic boom.

The Supreme Court of Canada also pointed to the prohibition to reduce the actual value of remuneration and the necessity to provide for specific procedures for provision thereof by the law. The failure to act by the legislator, i.e., the refraining from increasing the work remuneration of judges in accordance with the actual increase in the costs of living, is in conflict with the financial security of judges and should be regarded as a reduction de facto (see Reference re Remuneration of Judges of the Provincial Court of Prince Edward Island, [1997] 3 S.C.R.3). The Supreme Court of the USA reached a similar conclusion, indicating in its judgment that the Constitution has granted the right to the legislator to prescribe remuneration and relies on the fairness and common sense of the elected representatives of the nation. If a formula is not incorporated in the law, which retains the remuneration of judges at the level prescribed by the legislator in relation to the average remuneration, the legislator shall prescribe the remuneration for judges and clear procedures, by which this remuneration will be increased periodically [see Judgment of the Supreme Court of the USA in the Case United States v. Will 449 U.S. 200 (1980) http://supreme.justia.com/us/449/200/case.html].

The Consultative Council of European Judges has pointed, in Paragraph 1 of the Opinion No 1, towards the necessity to introduce a regulation which would ensure the increase in the work remuneration of judges in accordance with the costs of living (see CCJE Opinion No 1, para 62). The protection of a judge against the reduction in remuneration, observing the purpose thereof - to ensure the independence of judges, should be perceived as protection against any intervention which might result in reduction of the remuneration with which the judge had reckoned justifiably, when choosing the career of a judge. This condition relates to the protection of the base salary of a judge, as well as to additional guarantees which are a component of the remuneration of a judge.

Thus, Article 83 of the Constitution protects the actual value of the remuneration of judges, forcing the retention thereof.

11.3. Not only the amount, but also the stability of the remuneration of a judge has significant importance in ensuring the independence of the judicial power. The UN Human Rights Committee incorporated a requirement in the General Comment No. 32 for States to adopt laws in which clear procedures and objective criteria for the determination of the remuneration for judges are provided for (see International Covenant on Civil and Political Rights, Article 14, General Comment No. 32, para 19). In observing the objectives of financial security, the requirement to prescribe clear procedures and objective criteria means not only a system that is comprehensible and easy to examine, but also stable and sustainable. The Constitutional Court of the Czech Republic indicated that "the remuneration of judges in its widest sense should have a stable, non-deductable value, which the government or the legislator cannot amend and recalculate just because the remuneration of judges appears too high in comparison with the remuneration of those working in other public sectors or the remuneration prescribed for other groups of professions (the Judgment of the Constitutional Court of the Czech Republic of 14 July 2005 in Case Pl. US 34/04).

If the legislator was to be given unlimited right to influence the remuneration of judges according to the political choice thereof, the concept of the independence of the judiciary would lose its meaning because one of the components of the independence of the judiciary and judges is the stability of remuneration.

Thus, financial security is created only by stable system of remuneration.

11.4. It is possible to deteriorate the financial and material circumstances and to reduce the remuneration of judges necessary for judicial operations only in exceptional circumstances by the law and in the short-term - while the financial and economic condition of the State is particularly severe. However, even in particularly severe economic circumstances, neither the financing of courts nor the remuneration of judges may be reduced to the extent where courts are no longer capable to fulfil their constitutional function - to hear a court case. The guarantees for the independence of judges should always be ensured - both during a special situation in the State and after the end thereof. Taking into account the principle of the division of power and the principle of the independence of judges, the discretionary power of the legislator, when deciding upon restrictions in the remuneration of judges, is different than the discretionary power when deciding upon restrictions in other public fields.

Therefore, temporary reduction in the remuneration of judges is permissible, if there are serious and socially justifiable reasons and it is being reduced in conformity with the principles prescribed in the Constitution.

11.5. The legislator develops the legal framework for the remuneration of judges. In any case this regulation is a complex solution, and the objective thereof is to ensure remuneration commensurate to the requirement for the independence of judges, the actual value of which cannot be reduced. In some states a specific salary for judges is included in the law and a mechanism for periodical re-evaluation of the remuneration of judges is provided for. In other countries a system is developed which correlates the work remuneration of judges with the average monthly remuneration of the workforce in the state. Such solution allows to ensure the value of the remuneration of judges to a certain extent, because, upon an increase in the average remuneration, the work remuneration of judges also increases, but, upon a reduction in the average remuneration, the remuneration of judges also reduces proportionately. Such system also exists in Latvia. Section 119.¹, Paragraph one of the Law On Judicial Power determines: "A district (city) court judge shall receive a monthly base salary, which is calculated, applying a coefficient of 4.5, from the average monthly gross remuneration for work for the workforce in the State as published in the official statistical notification of the Central Statistical Bureau of the previous year, and which is rounded to lats." Section 120.¹, Paragraph one of the Law similarly determines: "A judge of a Land Registry Office shall receive a monthly base salary, which is calculated, applying a coefficient of 4.5, from the average monthly gross remuneration for work for the workforce in the State as published in the official statistical notification of the Central Statistical Bureau of the previous year, and which is rounded to lats."

Therefore, the Saeima, upon developing the legal framework for the remuneration of judges in accordance with Article 83 of the Constitution, provided for appropriate procedures which do not allow to reduce the actual value of the remuneration of judges.

The legislator not only develops the legal framework for the remuneration of judges, but also decides on circumstances in which changes should be made in this system, and on the changes themselves. The legislator has the right to develop a new system for remuneration of judges, if it has a legitimate objective, as well as serious reasons and, therefore, reasonable grounds for the development of the new system. The rights of the Saeima to adopt, amend and supplement laws and other regulatory enactments or to find them invalid should be implemented, observing the procedures prescribed by the Constitution and the principles contained in the Constitution. The legislator, with the aid of the laws regulating specific relations, also changing the system for work remuneration for judges or developing it anew, shall not violate the constitutional principles.

As the system for work remuneration of judges in a democratic state has to operate in the long-term, the establishment of a new system during crisis or under the influence of crisis, therefore, temporary situation, when such system is already operating, which conforms to the Constitution and international requirements, does not conform to the principle of the independence of courts and judges. Article 84 of the Constitution guarantees the office of a judge to a judge for life, therefore, constitutionally the right of a judge to receive work remuneration is also prescribed "for life".

In turn, in deciding upon the establishment of a new system during a period when there is no crisis and observing that the process for determination of remuneration of judges should be independent, efficient and impartial, the duty of the legislator would be: 1) to justify the necessity of the new system to such an extent that in case the court had to evaluate the compliance thereof with the Constitution, this justification would provide all the information necessary for the evaluation thereof; 2) to hear the opinion of an independent authority representing the judicial power (if none exists, the judicial power itself), respecting it in accordance with the principle of the division of power; 3) if this opinion is not taken into account or is taken into account partly, to ensure justification for the actions thereof to such an extent that in case the court had to evaluate its compliance with the Constitution, this justification would provide all the information necessary for verification of commensurability; 4) to determine a sufficient transition period so that judges who have chosen their profession for life might re-qualify for an equivalent profession.

Thus, the discretionary power of the legislator in the development of the legal framework for work remuneration of judges is restricted by the Constitution.

II

12. In order to verify whether the Saeima, upon adopting the disputed norms, has observed the principle of the independence of judges contained in Article 83 of the Constitution, the Constitutional Court should verify:

1) whether the disputed norms restrict the financial security of judges;

2) whether the restriction is prescribed by the law;

3) whether the restriction has a legitimate objective; and

4) whether the restriction is commensurate.

13. Observing that the situation in the fields of home affairs and justice is emphasised as an important evaluation criterion for accession of states to the European Union, it was necessary for Latvia, prior to accession to the European Union, to implement consistent and progressive reforms in the judicial system, which also included the issue of work remuneration of judges and judicial employees. On the based of this necessity to perform national reforms of the judicial system, which was required by the programme for integration into the European Union, including to ensure the independence of the judiciary and judges in accordance with that prescribed by the Constitution, a Concept was developed (see http://polskis.mk.gov.lv/LoadAtt/file37887.doc, accessed on 4 December 2009). The solutions included in the Concept were implemented when the Saeima adopted the Law "Amendments to the Law On Judicial Power" in 2003 (see case materials, Vol. 2, p. 17).These amendments determined the procedures for the calculation of the monthly base salaries of judges and judges of Land Registry Offices, included in Sections 119.¹, 119.², 120 and 120.¹ of the Law On Judicial Power.

In accordance with the Concept and the transition period specified in Paragraph 2 of the Transitional Provisions of the Law of 19 June 2003, it had been planned to gradually approximate the base salary of judges to the salary specified in the Law, i.e., the salary which had been recognised by the legislator as commensurate to the office of a judge. In accordance with it, the monthly base salary of judges in 2003 was disbursed in the amount of 60 per cent, in 2004 - in the amount of 70 per cent, in 2005 - in the amount of 80 per cent and in 2006 - in the amount of 100 per cent. It means that the system for work remuneration of judges prescribed by the Law, which is capable to guarantee the financial security of judges to such an extent that it ensures the independence of judges, should have been introduced completely in 2006.

One cannot agree with that indicated in the answering note of the Saeima that the disputed norms actually meant the extension of the transition period for the introduction of the system for work remuneration of judges specified in the Law On Judicial Power.

Paragraph 7 of the Transitional Provisions (restated on 23 February 2006) determined that the base salary of judges in 2006 shall be calculated, taking into account the average monthly gross remuneration for work for the workforce in comparison with the previous year, in turn, in 2007 and 2008 shall be calculated, taking into account the average monthly gross remuneration for work for the workforce in 2005, but in 2009 - taking into account the average monthly gross remuneration for work for the workforce in 2006.

The disputed Paragraph 7 did not extend the transition period specified in 2003. It changed the procedures for the calculation of the base salary prescribed by the Law, providing that in 2009 the monthly base salary of a judge shall be calculated, taking into account not the average monthly gross remuneration for work for the workforce in 2006, as previously prescribed by the Law, but the average remuneration in 2005. Moreover, it was indicated in the summary of the draft law that "from 2010 disbursement of salaries of judges and judges of Land Registry Offices will be recommenced in the previously planned amount" - taking into account the average monthly gross remuneration for work for the workforce in 2008, i.e., in accordance with the system prescribed by the Law.

Thus, the disputed Paragraph 7, in providing for the calculation of the monthly base salary of judges in 2009 the same as in 2008, reduces the work remuneration prescribed by the Law previously for judges.

Paragraph 17 of the Transitional Provisions concerns the work remuneration of judges of Land Registry Offices. Paragraph 17 introduced in amendments to the Law of 8 November 2008 provided for a transition period up to 2009, however, this transition period was referenced to the introduction of a new coefficient in Section 120.¹ of the Law (the previous coefficient 2.5 was replaced with 3.5). The disputed Paragraph 17 determines that in 2009 the monthly base salary should be calculated the same as in 2008 and extends the transition period up to 2011. This transition period was referenced to the replacement of the coefficient 3.5 specified in Section 120.¹ of the Law with the coefficient 4.5

Therefore, the disputed Paragraph 17 determines a transition period for the introduction of the system for work remuneration of judges of Land Registry Offices specified in the Law, however, the regulation regarding the calculation of the monthly base salary of judges in 2009 the same as in 2008 reduces the work remuneration of judges of Land Registry Offices because it was provided for in the previous wording of the Law that the base salary in 2009 will be calculated according to the average work remuneration in 2006, applying the coefficient 2.5.

Thus, the disputed norms reduce the base salary of judges and, therefore, reduce the financial security of judges.

14. The Constitutional Court has already established that the remuneration of judges may be determined only by the law adopted by the Saeima. The disputed norms were included in the Law On Judicial Power with the Law "Amendments to the Law On Judicial Power" adopted on 14 November 2008, published in the newspaper Latvijas Vēstnesis, on 25 November 2008 and are in force.

Thus, the restriction of the financial security of judges is prescribed by the Law adopted by the legislator.

15. Any restriction of the independence of judges should be justified by circumstances and arguments, as to why it is necessary, i.e., the restriction is prescribed for the sake of important interests - the legitimate objective. The presentation and justification of the legitimate objective of any restriction in the process of the Constitutional Court is primarily the duty of the institution which issued the disputed act, in the specific case - the Saeima. In the answering note the Saeima indicated that the disputed norms were adopted within the scope of measures for prevention of economic recession and were directed towards achieving the objective referred to in Article 116 of the Constitution - the protection of the rights of other persons and public welfare. The disputed norms were only one of the numerous measures which were performed in order to retain the national economy, to balance the State budget, to protect other constitutional values and to ensure vitally important public and State interests.

The Constitutional Court agrees that the prevention of economic recession in the case where the State is in a complicated financial situation, should regarded as action aimed towards the protection of the rights of other persons and public welfare, and may, therefore, be recognised as a legitimate objective.

Thus, the disputed restriction has a legitimate objective.

16. The restriction of the guarantee of independence for judges should be regarded as commensurate, if the legislator has observed the limits of its discretionary power, i.e., upon taking a decision which influences the independence of judges, has taken into account all the principles arising from the Constitution. The Constitutional Court, upon evaluating whether the legislator, with its action, has infringed upon the independence of judges, should evaluate all actual circumstances in each specific situation. The action of the legislator which in one case creates an incommensurate restriction, may be recognised as commensurate and compliant with the requirements of the Constitution in another case, in observing the specific circumstances.

The Constitutional Court, upon evaluating the commensurability of a restriction, should take into account the reason for the restriction, i.e., the legitimate objective and the method by which the restriction was determined, as well as the potential outcome of this restriction. The legislator should be able to prove that it attempted to determine the reduction of the remuneration of judges with maximum fairness, observing all the principles arising from the Constitution. If the legislator has acted in this exact way, it could be regarded that the reduction is constitutional.

17. In order to evaluate the commensurability of the restriction prescribed by the disputed norms, the Constitutional Court will evaluate the system for work remuneration of judges, the objectives, fundamental principles, procedures for implementation thereof and the amendments made to the system.

Upon developing the system for work remuneration of judges, in 2003 the Saeima indicated the following in the annotation to the draft law "Amendments to the Law On Judicial Power": "At present a situation has arisen in the State where the work remuneration of judicial employees does not comply with their work duties to be performed and their responsibility for the results. The low work remuneration of judges is the grounds for the lack of serious competition to the office of a judge, therefore, it is impossible to ensure the attraction of highly qualified lawyers to courts. The low remuneration causes frequent turnover of employees, which has a negative impact on the common judicial work, similarly conditions for corruption are also created. Thus, the direct link between the work remuneration and the possibility of attracting qualified lawyers was indicated, as well as the potential risks which should be reckoned with if work remuneration is inadequate were also indicated.

The Constitutional Court agrees to that indicated by the Ministry of Justice that "remuneration which is commensurate to the profession and competitive is an important condition in ensuring the independence of the judicial power" (case material Vol .2, p. 17).

17.1. The system for work remuneration of judges provides that the monthly base salary of judges is calculated, applying a coefficient to the average monthly gross remuneration for work for the workforce in the State as published in the official statistical notification of the Central Statistical Bureau. Therefore, the system is referenced to the average monthly gross remuneration for work for the workforce in the State. Such system, which is typical in the majority of contemporary democratic states, does not provide that the legislator should determine a special mechanism for re-examination of work remuneration of judges for a case when its true value decreases. The amount of the base salary of judges reflects the tendencies observed in the state in the field of remuneration. During an economic boom when the average salary in the state increases, the work remuneration of judges also increases and, thus, the true value of their remuneration is retained. In turn, in circumstances of an economic recession when the average salary decreases, the work remuneration of judges also decreases within the scope of the system.

Therefore, the system for work remuneration of judges in Latvia has been developed in such a way as to avoid the need for amending it as much as possible.

17.2. In circumstances of an economic recession, the decision of the legislator to reduce the work remuneration of judges concurrently with the remuneration of the rest of the persons employed in the public sector, due to the lack of funds, is understandable and justifiable. However, the system for work remuneration of judges itself already provides for automatic reduction of their remuneration in such situation, and it would be unfair to allow repeated reduction of the work remuneration of judges - either concurrently with the reduction in the work remuneration of the persons employed in other State institutions, or on the grounds of the reduction in the average monthly gross remuneration for work for the workforce in the State. It may be acknowledged that this second reduction takes place with a certain delay in time due to the specific character of the system, however, an increase in salary has the same two-year offset. The procedures for the calculation of remuneration for deputies of the Saeima and ministers include a condition, which eliminates this deficiency, thus ensuring more efficient reaction to changes in the average work remuneration.

The Constitutional Court has no basis to assert that after two years the legislator, upon determining the repeated reduction in the work remuneration of judges, will not perform measures in order to prevent the potential unfavourable consequences. However, it is not possible to determine from the materials available in the case that in the specific case the legislator would had taken into account the fact that the average reduction in work remuneration in the State will cause repeated reduction in the base salary of judges two years later.

The Constitutional Court already determined that the financial security of judges includes social guarantees, including the pension of judges (see Paragraph 11.1 of this Judgment). Therefore, the principle of the independence of the judiciary incorporated in Article 83 of the Constitution protects the pension of judges in the same way as other guarantees of financial security for judges. In observing the procedures for the calculation of pensions prescribed by the Law, a judge whose pension amount follows from the reduced work remuneration would be paid a pension calculated in such manner also in case of an economic boom, i.e., his or her social guarantees would be restricted.

Thus, the disputed norms not only create immediate negative consequences, but also influence the financial security of judges in the future.

17.3. The system for work remuneration of judges was developed with the purpose of promoting the development of the career of judges, because different remuneration is provided for judges at different levels of courts. The Ministry of Justice indicated that the system was developed in order to ensure commensurate work remuneration and to guarantee independence in hearing of a court case (see case materials Vol. 2, p. 17).

A judge at any level of the judiciary should be independent. Judges are granted the right to take final decisions regarding the life, freedom, rights, obligations and property of persons (see: UN Fundamental Principles for the Independence of Judicial Power//Latvijas Vēstnesis, 28 September 1995, No. 148). Judges of all levels of courts announce judgment on behalf of the nation of Latvia and the State, the judgment has the force of the law, it is mandatory for all, and it should be treated with the same respect as the law. The judgment of a judge of any level of the judiciary may influence all public interests. The significance of the judgment does not depend on which level of the judiciary it has been made by a judge, therefore, it is in the interests of the society and the State to ensure the independence of all judges. Therefore, the legislator, upon deciding on the commensurability of the work remuneration of judges with the status, load and nature of work of a judge, as well as the requirements specified for and the guarantees of independence of the office, should use the remuneration of a judge of the lowest level of the judiciary as the basis.

17.4. Upon developing the system for work remuneration of judges, the legislator concurrently determined a transition period, providing for gradual, but complete introduction of this system (see Paragraph 13 of this Judgment). Therefore, the legislator created a system for work remuneration of judges, determined the transition period and the procedures by which work remuneration should be calculated in this period, as well as specified accurately the time period when the system prescribed by the Law will commence its operation in full capacity.

It is indicated in the applications that each judge "when choosing employment in the office of a judge or when continuing this work, has undoubtedly planned his or her future - both the responsibility in the performance of duties of the office and the remuneration associated thereto. The long-term reform of the system for work remuneration of judges commenced by the State and the basic principles for remuneration of judges prescribed by the Law for each judge were and still are a significant factor" (case materials, Vol. 1, p. 3).

Thus, the time was prescribed in the Law On Judicial Power from which judges would receive remuneration commensurate to their office and, therefore, judges had justified reasons to rely on it.

17.5. The Ministry of Justice indicates that "the commensurate level of remuneration prescribed by the Law has not been achieved to date" because the transition period specified in the Law has been extended recurrently, taking into account the national economic situation (see case materials, Vol. 2, p. 17). Changes which influenced the calculation of the base salary of judges and, therefore, also the size, were introduced into the Transitional Provisions by amendments of 23 February 2006, 8 November 2007 and by the disputed amendments of 14 November 2008, as well as amendments which were adopted later, i.e., on 12 December 2008 and 1 December 2009.

17.6. With the amendments of 23 February 2006, it was prescribed in Section 119.¹ that the base salary shall be calculated not from the average monthly gross work remuneration of the previous year, but from the monthly gross remuneration for work for the workforce in the State as published in the official statistical notification. As a result of this amendment the work remuneration of judges was actually calculated not according to the average work remuneration of the previous year, but according to the average work remuneration two years ago. The amendments made initially caused such situation that the remuneration of judges was "frozen" for one year.

17.7. The same amendments brought changes to Paragraph 1 of the Transitional Provisions, extending the transitional period initially specified by one year. It was indicated in the annotation to the Law that such transition period complies with the Concept. However, it is indicated in the Concept that the base salary of judges in 2006 was disbursed in the amount of 100 per cent. The representative of the Ministry of Justice, Elita Stivriņa, indicated also during the meeting of the Legal Affairs Committee of the Saeima on 4 June 2003, when discussing the draft law "Amendments to the Law On Judicial Power", that Paragraph 1 of the Transitional Provisions "would no longer work in 2006" (see case material, Vol. 6, p. 8). Therefore, such changes were introduced in the Law which prevented judges from receiving the work remuneration planned in the Law for another year.

The Association of Judges of Latvia officially expressed its opinion on these amendments, indicating to the necessity of ensuring the calculation of the base salaries of judges in accordance with Section 119.¹ of the Law On Judicial Power (see case material, Vol. 2, p. 173).

17.8. Concurrently, amendments were also made to Paragraph 7 of the Transitional Provisions, providing for as follows: "The monthly base salary of a judge, except the judge of a Land Registry Office, shall be calculated in 2007 and 2008, taking into account the average monthly gross remuneration for work for the workforce in 2005, but in 2009 - taking into account the average monthly gross remuneration for work for the workforce in 2006, with the coefficient 4.5 remaining unchanged." Such regulation contained within the Law provided judges with the right to rely on their base salaries being disbursed in full amount from 2010, i.e., in accordance with Section 119.¹ of the Law On Judicial Power. It can be determined from the materials available in the case that this norm was developed on the basis of the objections of the Legal Affairs Office of the Saeima, that the wording of Paragraph 7 of the Transitional Provisions "does not clarify the year from which the monthly base salary of judges will comply with the provisions of Section 119.¹ to full extent" (case material, Vol. 6, pp. 90, 96 and 101).

Changes were introduced with the amendments of 8 November 2007, which influenced the work remuneration of judges of Land Registry Offices. In Section 120.¹ of the Law, the coefficient of 2,5 was replaced with 3.5, and a transition period until 1 January 2009 was provided for, supplementing the Transitional Provisions with Paragraph 17 in the following wording: "The monthly base salary of a judge of the Land Registry Office shall be calculated in accordance with the average monthly gross remuneration for work for the workforce in the State as published in the official statistical notification of the Central Statistical Bureau of the previous year, and which is rounded to lats, applying the coefficient of 2.5." Consequently in 2005 the base salary of a judge of the Land Registry Office should have been calculated from the average work remuneration of 2007, applying the coefficient of 3.5. It was indicated in the annotation of the draft law that, at that time, the "work remuneration of judges of Land Registry Offices is not competitive" and an increase in remuneration is necessary "in order to prevent qualified and experienced judges of Land Registry Offices from transferring to district (city) courts, to free judicial professions or work in private structures which are better remunerated". It was determined in the annotation that: "The existing legal framework determines that the status of judges of Land Registry Offices is comparable to the status specified to the judges of district (city) courts. Therefore, the criteria for the determination of work remuneration of a judge of the Land Registry Office should be compared to the status of a judge of a district (city) court" (case materials, Vol. 6, p. 127). Thus, the legislator found that the application of the coefficient 2.5 in the determination of the remuneration of judges of Land Registry Offices is not an adequate solution, the calculated work remuneration is not competitive and is not commensurate with the office of a judge.

17.9. The Constitutional Court already determined that with the amendments of 14 November 2008 (the disputed norms) the work remuneration was reduced both for judges and judges of Land Registry Offices. Moreover, the transition period for the introduction of the system for work remuneration of judges of Land Registry Offices prescribed by the Law was extended.

Any judge of the Land Registry Office had lawful right to rely on the remuneration prescribed by the Law, as it was prior to the coming into force of the disputed Paragraph 17. This disputed norm caused a reduction in the base salary by 46 per cent in relation to the base salary which had been prescribed in the previous wording of the Law of 2009. Therefore, the coefficient to be applied in the calculation of the base salary of judges of Land Registry Offices in accordance with the disputed Paragraph 17 is 1.89 (not 3.5 as had been previously prescribed by the Law).

Any judge had lawful right to rely on the salary prescribed by the Law, as it was prior to the coming into force of the disputed Paragraph 7. This disputed norm caused a reduction in the base salary by 19 per cent in relation to the base salary which had been prescribed in the previous wording of the Law of 2009. Therefore, the coefficient to be applied in the calculation of the base salary of judges in accordance with the disputed Paragraph 7 is 2.78 (not 4.5 as had been previously prescribed by the Law).

Thus, the legislator, upon adopting the disputed norms, has reduced the base salary prescribed by the Law, which judges were entitled to rely upon.

18. The Constitutional Court already determined that a temporary reduction in the remuneration of judges is permissible, if there are serious, socially permissible reasons and the remuneration is reduced, observing the principles reinforced in the Constitution. The Saeima indicates that the disputed norms are an "exceptional measure with a fixed term" (see case materials, Vol. 1, p. 96). In accordance with the disputed regulation, judges would receive the full work remuneration prescribed by the Law in 2010, but judges of Land Registry Offices - in 2011, i.e., the Law determined that the base salary of judges in 2010 will be calculated on the basis of the average monthly gross remuneration for work for the workforce in the State in 2008, in turn, the base salary of judges of Land Registry Offices will be calculated in 2011 on the basis of the average monthly gross remuneration for work for the workforce in the State in 2009.

Therefore, it can be determined that the disputed norms provided for a terminated reduction in the work remuneration of judges.

19. The reduction in work remuneration of judges, in accordance with the answering note of the Saeima, is one of numerous measures which were performed in order to balance the State budget.

The severe economic conditions forces the State to review and reduce the financing for all persons employed in the public sector regardless of which branch of power they belong to, how the budget of the institution is formed or in which field it operates. It would be inadmissible to reduce the financing of only one branch of power - only the financing of courts or only the salary of judges; similarly it would be inadmissible to leave the financing of one branch of power unchanged in opposition to other branches and institutions of State power. Such approach would not comply with the principle of equity and equality.

Also in circumstances of an economic recession, the financing may only be reduced in accordance with the constitutional principles and constitutional procedures, i.e., respecting the fundamental principles and freedoms, in particular the principle of constitutional equality.

The Prime Minister Ivars Godmanis, when addressing the meeting of the Saeima on 11 December 2009, indicated that "absolute solidarity" should be observed in the reduction of salaries. The legislator had to find such solution in order to concurrently ensure solidarity, not violate the fundamental rights, and observe all constitutional principles.

Upon deciding on an equal and joint reduction in work remuneration, not only the amount of remuneration of a specific person, but also the volume of work, the different functions, the requirements and restrictions of the office of the representatives of all branches of power - judges, legislative power and executive power, as well as independent institutions should be taken into account, moreover, a possibility to refuse the fulfilment of any function or a possibility to reduce the number of positions should also be considered. Solidarity has not been observed in the reduction of the salary, if it relates to absolutely all persons employed in the public sector, but the amount of reduction has not been evaluated and justified individually for each group of persons employed in the public sector.

The disputed norms determined the work remuneration of judges in 2009 at the level of 2007, and not 2008, therefore, actually the salary was reduced.

However, at the beginning of 2008 the base salary of the deputies of the Saeima was recalculated, i.e., increased, but at the end of 2008, in accordance with the Law of 11 December 2008 "Amendments to the Rules of Order of the Saeima", one part of the remuneration of the deputies of the Saeima, formed by the base salary, the supplements to the remuneration of the deputies of the Saeima, remuneration for work in the committees of the Saeima and representation money, was left unchanged, i.e., "frozen".

The monthly salary of the members of the Cabinet was also recalculated in 2008 when the Law On the Structure of the Cabinet of 15 May 2008 came into force, and, in accordance with this Law, the monthly salary remained unchanged from 1 July 2008 to 31 March 2009. With the amendments of 31 December 2008 to the Law On the Structure of the Cabinet, the monthly salary was "frozen" up to 1 March 2010.

It can be determined from the materials available in the case that the average monthly base salary of the head of the legal department of a ministry in the first six months of 2009 was 6.4 per cent higher than the average base salary in 2008, in turn, the monthly base salary of the State Secretaries of ministries had increased by 3.4 per cent. The monthly base salary of State Secretaries in individual ministries was increased even in April 2009, for example, by 35 per cent in the Ministry of Finance and by 30 per cent in the Ministry of Health (see case materials, Vol. 5, pp. 140-156).

The Saeima, upon trying to prove the observance of the principle of solidarity, indicated that the disputed norms brought reduction not only in the remuneration of judges, but the remuneration of other officials and employees of State and local government institutions was reduced because the Law On Remuneration of Officials and Employees of State and Local Government Authorities in 2009, adopted on 12 December 2008, restricted the expenditure of all State and local government institutions for the remuneration of officials (employees) (see case materials, Vol. 5, p. 160). The Constitutional Court indicates that this Law and the prohibitions included therein, including the reduction in the financing intended for disbursement of remuneration by at least 15 per cent of the total financing initially approved for an institution for this purpose, is also applicable to courts and judges.

The Saeima indicated in its answering note that, on the basis of the Law "Amendments to the Law On the State Budget for 2009", adopted on 16 June 2009, the expenditure for remuneration of the persons employed in the public sector was reduced in July. Similarly, an indication is made to the amendments to the Law made in June, which reduced the remuneration of the deputies of the Saeima (a reduction of 20 per cent was determined for part of the remuneration, but it was not applied to compensations) and the salaries of ministers by 20 per cent. The Constitutional Court cannot agree to such explanation of solidarity and the application thereof to the reduction in the remuneration of judges at the end of 2008 because the reduction in relation to the legislative power and the executive power was performed in June 2009 (see case materials, Vol. 5, pp. 160, 161), i.e., at the time when the work remuneration of judges was reduced again (amendments to the Law On Judicial Power of 16 June 2009).

The Constitutional Court has initiated several cases On the compliance of the second sentence of Paragraph 7 and the second sentence of Paragraph 20 of the Transitional Provisions of the Law On Judicial Power (restated on 16 June 2009) with Articles 1, 8 and 107 of the Constitution of the Republic of Latvia. The norms which provide for the remuneration of judges, "frozen" in 2009 (at the level of 2007), to be specified in the amount of 85 per cent, are disputed in these cases. Therefore, the Constitutional Court will examine the compliance of the percentage reduction in the base salaries of judges performed in June 2009 in the subsequent cases.

The Saeima indicates that, upon adopting the disputed norms, it has not acted unfairly towards separate groups of the society, but it also does not provide any assertions or evidence about the actual way the attitude towards different groups of society was evaluated (see case materials, Vol. 1, p. 97). Similarly, the Saeima does not indicate which rights of which groups of the society were weighed up or how it happened. In the answering note, the Saeima made reference to the judgment of the Constitutional Court of Canada, in which it is mentioned that the reduction of the remuneration of judges is regarded as legal, if, firstly it is performed concurrently with the reduction of the remuneration of all persons employed in the public sector, and, secondly, the judges, even with the reduced remuneration, continue to enjoy sufficient economic independence and, thirdly, the remuneration is not reduced below such minimum level which would be incompatible with the office of a judge (see case materials, Vol. 1, p. 98). The Saeima did not provide any information which would attest to it having evaluated the situation and circumstances in order to make at least one of the referred to conclusions. It is also not possible to determine it from the materials available in the case.

Thus, the determination of the reduction in the remuneration of judges with the disputed norms means that the principle of solidarity was not observed.

20. Even if the reduction in the work remuneration of judges was part of general economic measures, which would involve reduction in remuneration for absolutely all persons employed in the public sector, such reduction might be regarded as rational (reasonable) and, therefore, also justifiable (fair) only if other requirements were also implemented, which restrict the discretionary power of the legislator.

The Saeima incorrectly indicated in its answering note that the matter on the determination of remuneration of judges is incorporated in the field of social rights where the legislator has wide discretionary power. The remuneration of a judge is one of the guarantees of his or her independence. The legislator, upon determining the work remuneration of judges, enjoys a certain level of discretionary power, however, as the Constitutional Court already indicated, the discretionary power of the legislator in this field has strict restrictions.

Documents developed by international institutions also point towards the necessity to determine commensurate work remuneration for a judge. It is indicated in Recommendation No. R (94) 12 of the Committee of Ministers of the Council of Europe that the remuneration should be prescribed by Law and commensurate with the dignity of profession, honour and burden of responsibilities [see: Recommendation No. R (94) 12, Principle III, 1.b]. In turn, Opinion No. 1 of the Consultative Council of European Judges determines: an adequate level of remuneration is necessary in order to ensure that judges may work freely and be shielded from pressures aimed at influencing their decisions and more generally their behaviour (see CCJE Opinion No 1, para. 61).

Upon developing the system for work remuneration of judges, the legislator decided that the base salary should be calculated, taking into account the average monthly gross remuneration for work for the workforce in the State, applying the coefficient of 4.5. The legislator acknowledged that such system should be regarded as commensurate to the office of a judge, i.e., firstly, it is sufficiently competitive in order to attract capable and competent lawyers to the office of a judge. Secondly, the remuneration is sufficient so that, taking into account the significance and impact of the decisions taken by judges, the prohibition of the combination of offices specified in the Law, as well as the workload of judges, judges could enjoy adequate economic independence.

It was indicated in the annotation to the draft law that "remuneration commensurate to the amount and nature of the work of judges and judges of Land Registry Offices will not be ensured in 2009 ". In turn, the Saeima indicated in its answering note, without any evaluation or justification, that "currently the work remuneration set for judges in the State is commensurate to the nature of work to be done, the skills required for the performance of the office and restrictions, as well as is balanced with the work remuneration and status of other officials of the judicial system, as well as work remuneration in the State at large" (case materials, Vol. 1., p. 95).

21. In order to ascertain whether the work remuneration of judges is commensurate to the responsibility and burden of the office, the restrictions arising from the office and the rank of the office in the constitutional legal order, the Constitutional Court will verify whether the Saeima, which asserts that the work remuneration of judges is commensurate to the office of a judge, has evaluated, firstly, the restrictions of the combination of offices and, secondly, the increase in the workload and, thirdly, the ability of the work remuneration to attract qualified lawyers.

21.1. Public trust in the independence of the judicial power would be undermined if judges were so poorly remunerated that there could arise any doubts regarding their being susceptible to political pressure through economic manipulation. Also the Supreme Court of Canada indicated: if remuneration is too low, there is always a risk, even if only theoretical, that representatives of the judicial power might adjudicate matters in a certain way, in order to achieve the legislator prescribing them a greater remuneration, or to receive gifts or other benefits from the parties involved in the case (see the Judgment of the Supreme Court of Canada of 18 September 1997 Reference re Remuneration of Judges of the Provincial Court of Prince Edward Island, [1997] 3 S.C.R.3 and the Judgment of 14 February 2002 in Case Mackin v. New Brunswick (Minister of Finance); Rice v. New Brunswick [2002] 1 S.C.R. 405, 2002 SCC 13).

Judges also have a very limited possibility to combine offices. Consequently, in parallel to the work of a judge, the judge cannot engage in entrepreneurial activities or another paid employment, except that prescribed by the Law. In essence, the work remuneration of a judge contains also a singular compensation for the restriction to combine offices (see Paragraph 33 of the Judgment of the Constitutional Court of the Republic of Slovenia of 11 December 2009 in Case No.U-I-159/08-18). Judges have limited opportunities to earn additional income. Judges and the judicial power as one of the branches of power are specified the prohibition to combine offices due to the special legal status. The purpose of this prohibition is to ensure the independence of the judiciary, which is a prerequisite for proper administration of justice. In evaluating the commensurability of the remuneration of judges from this aspect, it should be indicated that the officials working in the State administration are not prescribed as strict restrictions in relation to the combination of offices and have the right to receive remuneration in other workplaces.

Therefore, the restrictions prescribed for judges in relation to the combination of offices and other paid employment impose the State an obligation to determine sufficient remuneration and social guarantees to them, which comply with the status of a judge.

21.2. The Constitutional Court acknowledges that the possibilities for judges to combine offices are also affected by their workload. It can be determined from the materials available in the case that the workload of judges grew incessantly during the last years. For example, the number of cases received in the Court of First Instance in 2008, in comparison with 2007, increased by 17 817 cases, or 40 per cent. The average number of cases received and reviewed per month (workload) by a judge in 2008, in comparison with 2007, increased by 20 per cent, but in courts of the Riga City - by 52 per cent. A particularly rapid increase in the number of civil matters was observed in 2008 and 2009. As indicated by the Ministry of Justice, in 2009 the number of civil matters received by the district (city) court increased by almost 100 per cent in comparison with the previous year. Similarly, the Ministry of Justice indicated that, regardless of the notable increase in the workload, the legislator has left the amount of the base salary unchanged, which may potentially have social consequences, as well as extend the time period for review of a case. In turn, the excessively long time periods for review of cases may be the grounds for complaints of inhabitants to the European Court of Human Rights and, therefore, inevitably cause material losses to the State.

Although the work productivity is not directly dependent on the work remuneration, the workload, however, should be taken into account, when determining the number of judges and work remuneration.

Moreover, an additional burden is placed on judges because of courts having restricted opportunities in relation to the provision of the funds and human resources necessary for appropriate performance of the work of courts. The Saeima also pointed in its answering note towards the low remuneration of judicial employees (see case materials, Vol. 5, p. 161). Qualified personnel is necessary for efficient organisation of the work of judges, moreover, institutional or administrative sufficiency of courts is directly dependent on both the finances and the possibilities of courts to resolve the matters related to the use of resources (both financial and human resources).

The problems in ensuring the functions of hearing court cases in the State may be caused by the insignificant interest in the office of a judge, i.e., poor competition and long-term vacant offices of a judge. The current situation attests that this risk is real. The Ministry of Justice indicated that "there are cases when competitions for the positions of judges have to be announced repeatedly, as there are no applicants or no applicants are put forward due to the non-compliance with the minimum level of abilities and professional skills specified in regulatory enactments". For example, in 2008 there were no applicants in four of 71 competitions announced, but none of the applicants were put forward in 13 competitions (see case materials, Vol. 2, pp. 18, 19).

The other problem is that judges may leave their work in the court in order to work in another judicial profession, which would give them the opportunity of living a respectable life commensurate with their knowledge and qualifications. It was indicated in the annotation to the draft law that: "The regulation contained in the draft law might encourage a judge to take a decision regarding discontinuation of the career of a judge in favour of another, better remunerated job. Therefore, problems might arise in ensuring efficient implementation of the functions of the court, as a result of which the time periods for review of cases would be extended.

21.3. Only such comparison of the base salary of a judge with other salaries may be used for the evaluation of the commensurability of work remuneration of judges, which is regarded as justifiable.

The average base salary of a judge in the states of the European Union, at the beginning of the career, is 3.3 times higher than the salary of a court judge of the same level in Latvia, in turn, the highest remuneration exceeds the remuneration of a judge of Latvia by 12.4 times [see European judicial systems, Edition 2008 (data 2006):, Efficiency and quality of justice, Council of Europe, September 2008, p. 185, 186]. The legislator cannot be blamed for the determination of insufficient base salary for judges, simply because it is excessively low in comparison with the base salaries of judges in other states of the European Union. However, such difference in remuneration should encourage the legislator to evaluate the reasons thereof and the potential risks related thereto.

21.4. The principle of the division of power does not determine special arithmetic proportions between the levels of remuneration in different branches of power, or between the levels of remuneration for persons appointed to supposedly comparable offices. Taking into account various complicated factors characterising the office, it is always controversial to compare offices in different branches of power. They are often completely different jobs, which have a different extent of responsibility. The nature of the work, the level of the rank of the office, the authorisation related to the functions to be performed and the length of service in office also differ to the same great extent. Due to these and other similar reasons it is not justifiable to compare offices and request that officials belonging to one branch of power should earn the same as officials belonging to a different branch of power (see the Judgment of the Constitutional Tribunal of the Republic of Poland of 18 February 2004 in Case No. 12/03 http://www.trybunal.gov.pl/eng/summaries/documents/K_12_03_GB.pdf). Several constitutional courts (for example, in Estonia, Canada and Poland), upon resolving the matters related to the remuneration of judges, have indicated that the equalisation of remuneration in different branches of power should not be set out as a goal.

The Constitutional Court of Lithuania indicated that "in some states the remuneration of judges is higherd than the remuneration of the Prime Minister - and it does not surprise anyone" (see the Judgment of the Constitutional Court of the Republic of Lithuania of 6 December 1995 in Case No. 3/95 http://www.lrkt.lt/dokumentai/1995/n5a1206a.htm). In turn, the Constitutional Court of Slovenia compared the work remuneration of a court judge of the lowest level with the work remuneration of a minister and a member of the Parliament (see Paragraph 33 of the Judgment of the Constitutional Court of the Republic of Slovenia of 11 December 2009 in Case No. U-I-159/08-18).

The Constitutional Court already indicated that the determination of the base salary is within the competence of the legislator and, to a certain extent, it is a political decision. However, political decisions are also restricted by the Constitution. If the principle of equality ensures that, for example, in circumstances of an economic recession, by legally justifying such necessity, remuneration may be reduced for everyone, such interpretation of the principle of equality is not, however, acceptable, which results in the determination of an equal level of remuneration in relation to all branches of power. In the European Charter on the Statute of Judges the preference was given to the provision that the level of remuneration of judges should be fixed so as to shield them from pressures, and it is not specified that the level of remuneration should be co-ordinated with the remuneration of the highest officials of the legislative power or the executive power, as such comparison is not possible (see European Charter on the Statute of Judges, para.6.1).

21.5. In order to attract the most competent and knowing specialists to the office of a judge, judges should receive adequate work remuneration in comparison with the work remuneration for other highly qualified lawyers.

The Constitutional Tribunal of Poland indicated that the salary of a judge should be equal to the salary received by practising professional lawyers - advocates, legal advisors, notaries (see the Judgment of the Constitutional Tribunal of the Republic of Poland of 4 October 2000 in Case No. 9/00 http://www.trybunal.gov.pl/OTK/otk_odp.asp?sygnatura=P%208/00)-. It is understandable that the aim of the comparison of such potential remuneration is to attract highly qualified lawyers to the office of a judge, however, it would not be correct to compare the remuneration of judges with the income received by representatives of free legal professions who are financially independent in their professional activities. It should be noted that financial independence means not only an opportunity to earn much more, but also certain risks and additional expenditure (investments in the place of practice, pension). Therefore, the Constitutional Court agrees with the Saeima that it would not be justifiable to compare the remuneration of a judge with, for example, the remuneration of a sworn advocate. In addition to the work remuneration prescribed by the Law, judges are also ensured with social guarantees and appropriate working conditions.

However, the assertion of the Saeima that "upon evaluating the remuneration of judges, the remuneration of judicial employees should also be taken into account" is not acceptable. Undoubtedly, the remuneration of judicial employees should comply with the duties of their office and the qualification necessary. Moreover, the Saeima itself indicated in a letter that the salaries of judicial employees are "already low" (see case materials, Vol. 5, p. 163). However, there are no grounds to assert that the remuneration of judges should, therefore, be reduced, i.e., equalised to the remuneration of judicial employees, just because the remuneration of judicial employees is low (see case materials, Vol. 5, p. 161).

Similarly, the comparison with the work remuneration of a prosecutor is not correct because the legislator itself, upon determining the base salary in the Office of the Prosecutor Law, has provided for the principle of proportionality in the work remuneration of prosecutors and judges.

21.6. Similarly, it is not possible to evaluate objectively the commensurability of the remuneration of judges, using the individual material needs of a judge as a criterion. In order to determine whether the level of the remuneration of judges is adequate, it should be evaluated in conjunction with the general tendencies and proportion of the level of remuneration in the public sector.

The Saeima asserts that "a reasonable commensurability for the determination of remuneration for judges and the persons working in the legal profession in the public administration has been ensured for work of equal value" (case materials, Vol. 5, p. 161). Information regarding the remuneration of the representatives of other branches of State power working in the legal profession, the managers of independent institutions and the highest civil servants - the State Secretaries of ministries - was requested within the scope of the case.

The Constitutional Court determines that since 2007 the base salary of judges is considerably lower than the average base salary of the managers of legal departments of ministries, in turn, the base salary of State Secretaries of ministries is twice the amount of the base salary of a judge. The average base salary of the managers of independent institutions exceeded the base salary of a judge in 2007 by 3.6 times, in 2008 - by 4.3 times, in turn, the base salary of members of the board of independent institutions exceeded the base salary of judges in 2007 by 2.6 times and in 2008 - by 3.6 times. Moreover, until 2009 officials of State administration received bonuses in addition to the base salary, therefore, the average total remuneration of the highest officials of State administration in 2007 and 2008 exceeded the remuneration of judges even three times (the remuneration of State Secretaries of individual ministries in 2007 and 2008 was 5.5 times higher than the remuneration of a judge and even 10 times higher than the remuneration of judges of Land Registry Offices).

The average increase in the base salary in State administration in 2007 (68-88 per cent) and other independent institutions (25 per cent) considerably exceeded the increase in the base salary of judges (16 per cent). Moreover, in 2008 when the base salary of judges was already "frozen", the base salary of the highest civil servants of State administration increased by 17-19 per cent, but the base salary of the managers of other independent institutions - by 20 per cent.

By treating any profession and office with respect, by not doubting the impact and significance of the decisions taken, but concurrently taking into account the significance of a fair and independent court in the protection of the rights and freedoms of a person and the provision of lawfulness, as well as the duties, responsibility, restrictions and requirements for competences of judges, such difference between the remuneration of judges and the representatives of other branches of power cannot be acknowledged as reasonable and commensurate.

22. The Ministry of Justice indicated that the commensurate level of remuneration prescribed by the Law has not been achieved to date because the transition period has been extended recurrently, taking into account the "national economic situation" (see case materials, Vol. 2, p. 17). The assertion that the remuneration of judges had also been "frozen" due to the national economic situation in previous years is not justified because the materials acquired during the preparation of the case attest to the opposite. The Saeima indicated in its answering note that economic development significantly deteriorated in 2008 and the first information regarding the reduction in the gross domestic product was provided by the Central Statistical Bureau of Latvia on 7 November 2008 (see case materials, Vol. 5, p. 159). Similarly, it is attested by the rapid increase in the average work remuneration of the persons employed in the public sector, including the increase in work remuneration of ministers, deputies of the Saeima and officials of independent institutions performed in 2008. The Prime Minister I.Godmanis, upon addressing the deputies of the Saeima at the meeting of the Saeima on 11 December 2008, indicated that in 2007 the increase in remuneration had reached as much as 30 per cent and currently we "simply can no longer afford the same increase in remuneration as we allowed in previous years" (see the transcript of the meeting of the Saeima of 11 December 2008 http://www.saeima.lv/steno/Saeima9/081211/st081211.htm, accessed on 26 December 2009. The work remuneration of judges was reduced at the same time when the monthly base salary of many persons employed in the public sector was increased considerably.

Thus, the Saeima, upon deciding on the reduction in the remuneration of judges, has neither evaluated the balance thereof with the changes in the remuneration of officials in other branches of State power, nor taken into account the restrictions of the combination of offices specified for judges or the potential consequences and risks arising therefrom.

23. The Constitutional Court already indicated that the financial security of judges is guaranteed only by stable work remuneration (see Paragraph 11.3 of this Judgment). Until the initiation of these proceedings, the changes in the Transitional Provisions of the Law On Judicial Power, which affected the calculation of the base salary of judges, were introduced with amendments of 23 February 2006, 8 November 2007 and the disputed amendments of 14 November 2008. It was determined in the judgment that the changes made with amendments of 2006 and 2007 to the Law were not related to an exceptional situation or any particular circumstances. The amendments to the Law adopted in 2006 and 2007 are not evaluated within the scope of this case, however, the Constitutional Court indicates that they have affected not only the stability of the system for work remuneration of judges, but together with the disputed norms affect the amount of the current base salary of judges and, therefore, the commensurability to the status of a judge.

One cannot agree with the assertion of the Ministry of Justice that in relation to the procedures for the calculation of remuneration of judges "the requirement for the compliance of the legal norm with the system and present evaluations have priority significance in relation to the principle of legal stability and strict consideration of previous practice, if the existing practice is no longer acceptable" (case materials, Vol. 2, p. 17). The Constitutional Court already determined that the system for work remuneration of judges is flexible and adapts to the general economic situation of the State, therefore, the necessity to derogate from this system may arise only in special exceptional circumstances. In such case temporary derogation, which complies with the Constitution, from the principles for the determination of the base salary contained in the Law and, therefore, from the prohibition to reduce the general remuneration of judges does not undermine the stability of the system for work remuneration. In turn, such changes to normative regulations, which affect the stability of the work remuneration of judges without justification, do not comply with the requirements for the financial security of judges.

Thus, the existing legal framework for determination of work remuneration for judges, which has been affected by the recurrent amendments to the Law, including the disputed norms, is not considered stable.

24. The principle of the division of power prohibits the executive power from deciding matters which directly affect the operations of the judicial power and the functioning of the courts, i.e., matters regarding financing, the number of judges, the personnel required, the competence requirements and remuneration thereof, and other matters. For this very reason the legislator has to give the opportunity for the judicial power or an independent institution representing the judicial power to express the opinion thereof on matters which affect judicial operations, but the resolution of which is within the competence of the legislator. The legislator has the right not to agree with the opinion of the judicial power, however, the legislator has to listen to it and treat it with respect and true understanding.

In order to ascertain whether the legislator, upon adopting the disputed norms, has observed the independence of the branches of power contained within the principle of the division of State power, the Constitutional Court will evaluate the procedures for adoption of these norms.

24.1. The disputed norms are included in the draft law "Amendments to the Law On Judicial Power" which was developed by the Ministry of Justice, "fulfilling Section 1, Paragraph 9 of the Minutes No. 62 of the Cabinet meeting of 4 September 2008 during which the ministries, taking into account the amount of the expenditure supported in Paragraph 3 of the respective Section, were instructed to evaluate and, if necessary, prepare amendments to regulatory enactments". As indicated in the letter of the Ministry of Justice, "the draft law and the annotation thereof had to be developed within one week, as the draft law had been put forward at the Cabinet meeting concurrently with other draft laws of the 2009 budget package (case materials, Vol. 2, p. 15). It is indicated in the annotation to the draft law that "upon changing the procedures for the calculation of the monthly base salary prescribed by the Law referred to, the principle of the independence of the judicial power and judges, which is prescribed by Article 83 of the Constitution of the Republic of Latvia and in the Law On Judicial Power, is indirectly affected, as well as the principle of legitimate expectations is also violated. Therefore, negative consequences are possible in relation to the further development of the judicial system, including difficulties in filling the vacancies of the offices of judges and judges of Land Registry Offices".

In Section V of the annotation, in which information regarding the liabilities arising from international agreements should be indicated, as well as "conformity assessment" should be provided, the note "not applicable" is included. In accordance with Paragraph 4 of the Cabinet Instruction No. 20 of 18 December 2007, Procedures for the Completion of Annotations of Draft Regulatory Enactments, in force at the time of the development of the draft law, the entry "not applicable" should be made in those matters of the annotation which are not affected by the draft regulatory enactment. The instruction referred to determines that conformity with the case law of the European Court of Human Rights should be evaluated. As it was indicated in the annotation to the draft law that the amendments made to the Law affect the independence of the judicial power and judges, the case law of the European Court of Human Rights in relation to the requirement contained in Section 6 of the Convention to ensure the right to an independent court should have been evaluated in Section V of the annotation.

The Supreme Court has also categorically objected to the draft law because "the amendments will significantly affect the principle of the independence of the judicial power and judges, which is specified in Section 83 of the Constitution of the Republic of Latvia. The principle of the independence of the judicial power and judges does not allow a situation where the representatives of the judicial power have to "barter" for funds, which are necessary for the provision of the functions of the judiciary prescribed by the Law. Such situation not only threatens the principle of the independence of the judicial power, but also the right of every person ensured in the Constitution and in international documents to an independent and fair court, and in addition it may cause doubts about the impartiality of court judgments (case materials, Vol. 1, p. 84).In his letter of 30 September 2008, the Minister for Justice Gaidis Bērziņš indicated the following to the Prime Minister: "Upon changing the procedures for the calculation of the monthly base salary prescribed by the Law, the principle of the independence of the judicial power and judges is indirectly affected" (case materials, Vol. 1, p. 86). In turn, during the Cabinet meeting of 7 October 2008, the Minister for Justice submitted his differing opinion on the draft law, indicating the threat to the principle of the independence of judges. The Minister also drew attention to the case law of constitutional courts of other states and warned that such step might be considered internationally as an attempt to influence the independence of the judicial power, not typical of democratic states (see case materials, Vol. 1, pp.57 and 91).

Regardless of all that referred to, the Cabinet did not rectify the deficiencies referred to in the annotation and did not evaluate the objections expressed.

24.2. At the Saeima meeting of 16 October 2008, during which it was decided to hand over the draft law to the committees, the deputy S. Āboltiņa requested not to support the draft law and indicated: "Judges and judicial employees are the only ones whose increase in remuneration is prescribed by the law [..]. Therefore, today we are preparing to support amendments which may be easily revoked by way of the Constitutional Court" (transcript of the Saeima meeting of 16 October 2008, http://titania.saeima.lv/LIVS/SaeimaLIVS.nsf/0/314baab01ee91aeec22574e90030c1ff/$FILE/LP0902_0.htm, accessed on 26 December 2009).

At the Saeima meeting of 30 October 2008, the draft law was acknowledged as urgent and was adopted at its first reading without debates (see transcript of the Saeima meeting of 30 October 2008 http://titania.saeima.lv/LIVS/SaeimaLIVS.nsf/0/B249E1AF4F1AB4CFC22574F90049798A?OpenDocument, accessed on 2 December 2009).

In order to find that the reduction in remuneration is justifiable, an important objective is not sufficient. The objective should be commensurate with the means used for the achievement thereof, i.e., the legislator should prove that the means selected are commensurate.

The Saeima indicates in its answering note that "prior to adoption of the draft law in its final reading, the possible alternatives were thoroughly examined" (see case materials, Vol. 1, p. 96). I.e., the Saeima indicates to the proposal of the Legal Affairs Office of the Saeima about the opportunity for judges and judges of Land Registry Offices to receive compensation for losses, if such have been caused by the draft law (see case materials, Vol. 5, pp. 161-162).

It can be determined from the case materials that the Legal Affairs Office of the Saeima, in its opinion on the draft law, drew the attention of the committee to several conditions to be evaluated, namely, the necessity to evaluate the compliance of the amendments to the principle of the independence of judges, which is incorporated in Article 83 of the Constitution, and the principle of legitimate expectations, which arises from Article 1 of the Constitution. Similarly, the Legal Affairs Office indicated that a considerate transition to the new regulation and compensation for the losses caused should be provided for (see case materials, Vol. 6, pp.192-195).

These proposals were not supported and on 14 November 2008 the draft law was adopted at its second reading without debates (see transcript of the Saeima meeting of 14 November 2008 http://titania.saeima.lv/LIVS/SaeimaLIVS.nsf/0/B249E1AF4F1AB4CFC22574F90049798A?OpenDocument, accessed on 26 December 2009).

Although the Saeima itself acknowledges that "it would not help to reach the legitimate objective to sufficient extent", an attestation that not only alternative solutions were evaluated, but also the compliance of the amendments with Article 83 of the Constitution and the principle of legitimate expectations, which arises from Article 1 of the Constitution cannot be acquired from the materials of the case (see case materials, Vol. 1, p. 96).

Therefore, the legislator, upon adopting the disputed norms, has not evaluated the alternative solutions with sufficient thoroughness, in order to determine whether less restricting means exist.

24.3. The Saeima indicated in its answering note that "Latvia has taken international loans, for the receipt and utilisation of which several provisions were put forward, including provisions related to reduction of remuneration" (case materials, Vol. 1, p. 193). Upon specifying this argument more precisely, the Saeima indicated that the procedures for the receipt and utilisation of international loan are regulated by certain regulations which are "contained within the Memorandum of Understanding between the European Community and the Republic of Latvia, in Paragraph 2 of which the amount of remuneration and the reduction in the number of employees in State and local government institutions is provided for" (case materials, Vol. 5, p. 168).

The disputed norms were adopted on 14 November 2008, but the Memorandum of Understanding between the European Community and the Republic of Latvia was signed on 28 January 2009. Therefore, it is not correct for the Saeima to refer to the requirements put forward in this memorandum.

The Constitutional Court already indicated that international lenders determine the main objectives of the State within the scope of their competence, however, the choice of the most suitable and appropriate means for achievement of these objectives is left to the State itself. Information has not been provided to the Constitutional Court which would attest that the international lenders had put forward the adoption of the disputed norms as a prerequisite for granting of the loan (see Paragraph 30.1 of the Judgment of the Constitutional Court of 21 December 2009 in Case No. 20019-43-01). Moreover, the international liabilities undertaken by the Cabinet cannot serve as an argument for restriction of the independence of judges prescribed by Article 83 of the Constitution.

24.4. It can be determined from the case materials that the Legal Affairs Committee of the Saeima has received many letters from the courts of Latvia in relation to the draft law. During the meeting of the Legal Affairs Committee on 29 October 2008, the member of the committee Vineta Muižniece indicated: "The courts have sent letters with substantial argumentation and explicit disagreement, however, we are concurrently politicians who are responsible for the situation in the State and, therefore, we have to take a decision about the progression of the project" (case materials, Vol. 7, p. 35).

During the Saeima meeting of 30 October 2008, the deputy S. Āboltiņa indicated in relation to the budget approval and the remuneration of judges that "no one, except the Minister for Justice, has tried to harmonise or reach some kind of compromise with the judges". The Saeima also did not deny that, upon deciding on the disputed amendments, the opinion of the judicial power was not heard. The Saeima indicated directly in its answering note that "such consultations would have been meaningless", moreover, the matter had been very urgent (see case materials, Vol. 1, p. 96).

The duty to hear the opinion of institutions representing the judicial power arises from the principles of the division of power and the independence of judges. The argument about the urgency and immediacy of the matter cannot justify the violation of these principles. Moreover, it can be determined from the materials available in the case that the representatives of the judicial power expressed their opinion. In turn, the Saeima has not submitted materials which would attest to it having evaluated the opinion expressed and the arguments indicated by judges.

Therefore, upon adopting the disputed norms, the legislator has not observed the principle of the division of power.

25. A number of non-compliances has been determined in this judgment, which influence the financial security of judges and, therefore, the independence of judges. The changes made and the violations determined cannot be regarded as reasonable and acceptable, upon evaluating the existing circumstances. The other guarantees for the independence of the judicial power, which, undoubtedly, are also very important, do not compensate the incommensurate restriction of the financial security of judges.

As the principle of the independence of judges has been violated, incommensurably restricting the financial security of judges, the disputed norms do not comply with Article 83 of the Constitution.

26. In accordance with the case law of the Constitutional Court in a case when the disputed legal norms are recognised as non-compliant with any of the norms of the Constitution, the Court no longer evaluates the compliance of these norms with other norms of the Constitution.

27. In adjudicating a matter, the Constitutional Court is bound by the limits of the claim, i.e., it has to examine the compliance of the disputed norms with the highest legal norms in force, taking into account the argumentation of the Applicants and the motives and considerations reflected in the applications. In this case the Applicants have disputed the second sentence of Paragraph 7 and Paragraph 17 of the Transitional Provisions of the Amendments to the Law On Judicial Power restated on 14 November 2008. As already indicated in this Judgment, during the preparation and adjudication of this case, the disputed norms have been amended further with the "Amendments to the Law On Judicial Power" of 12 December 2008, the "Amendments to the Law On Judicial Power" of 16 June 2009 and the "Amendments to the Law On Judicial Power" of 1 December 2009. The amendments to the Law adopted in June and December of 2009, inter alia, provide for the "freezing" of the base salary of judges to be applicable also in 2010 and 2011, and also to judges of Land Registry Offices - in 2012. I.e., the disputed second sentence of Paragraph 7 in its current wording determines that "in 2007, 2008, 2009, 2010 and 2011 the monthly base salary of a judge, except the monthly base salary of a judge of Land Registry Offices, shall be calculated taking into account the average monthly gross remuneration for work for the workforce in 2005, with the coefficient of 4.5 remaining unchanged". In turn, the disputed Paragraph 17 provides that the monthly base salary of the judge of a Land Registry Office shall be calculated "in 2010 and 2011 - taking into account the average monthly gross remuneration in 2006, applying the coefficient of 2.9; in 2012 - in accordance with the average monthly gross remuneration for work for the workforce in the State as published in the official statistical notification of the Central Statistical Bureau of the previous year, and which is rounded to lats, applying the coefficient of 3.5".

As the principle of "freezing" operates equally in relation to 2009, as well as 2010, 2011 and 2012, the new wording of the disputed norms, insofar as it extends the period of "freezing" of the base salary, in essence will maintain the situation specified for judges in the disputed norms for several more years.

Therefore, in observing the principle of procedural economy, the Constitutional Court has grounds to extend the claim and to relate the conclusions thereof to Paragraphs 7 and 17 of the Transitional Provisions, insofar as they determine the procedures for the calculation of remuneration of judges in 2010, 2011 and 2012 in the same way as the disputed norms.

28. The Constitutional Court already concluded that the disputed norms provided for a terminated reduction in the work remuneration of judges (see Paragraph 18 of this Judgment). In determining that the principle of "freezing" is also applied to 2010 and 2011, and for judges of Land Registry Offices - also to 2012, it may be concluded that the time period for reduction of work remuneration for judges has been extended considerably. Essentially, the "freezing" of salaries is prescribed from 2007 to 2011 while it is calculated from the average work remuneration of 2005.

However, taking into account that in 2009, 2010 and 2011 several restrictions associated with remuneration have also been prescribed for representatives of the other branches of State power, the Constitutional Court may agree with the assertion that the reduction in work remuneration up to 2012 can be regarded as having a fixed term. The legislator has determined that judges will receive full work remuneration from 2012, and judges of Land Registry Offices - from 2013.

Therefore, the legislator has provided for a terminated reduction in the work remuneration of judges and has clearly determined the end of the term for reduction in work remuneration in the Law.

29. In accordance with Section 31, Clause 11 of the Constitutional Court Law, in case the Constitutional Court adjudicates that a legal norm does not comply with the norm of a higher legal force, it should determine the time with which the respective norm is repealed. In this case the Applicants have requested that the disputed norms are recognised repealed from the date of the coming into force thereof, i.e., 9 December 2008. Therefore, the Constitutional Court should evaluate from which time the disputed norms should be recognised as invalid.

Section 32, Paragraph three of the Constitutional Court Law determines that a legal norm (act) that the Constitutional Court has declared as non-compliant with the norm of a higher legal force, shall be regarded as not in force from the day of publication of the Constitutional Court judgment, if the Constitutional Court has not determined otherwise. Therefore, the legislator has granted the Constitutional Court the discretionary power to decide from which time the disputed norm which is recognised as non-compliant with the norm of a higher legal force is repealed. In order to recognise the disputed norm as invalid not from the date of the publication of the judgment, but from another date, the Constitutional Court should justify its opinion.

In determining the date from which the disputed norms regarding the reduction in work remuneration for judges are repealed, the Constitutional Court should, as far as possible, ensure that no harm is done to the interests of these persons, i.e., any illegally withheld work remuneration should be repaid. Although the deputies of the Saeima are informed regarding the potential consequences, i.e., the deputy S. Āboltiņa indicated that the saving made by reducing the remuneration of judges is "imaginary" because "it will have to be repaid" (transcripts of the Saeima meetings of 16 October 2008 and 30 October 2008)¸ the Constitutional Court should, however, evaluate the specific circumstances because a situation, which does not comply with the Constitution even more than such situation in which the consequences of the disputed norms might continue for some time, is inadmissible. Moreover, disbursement of the base salary of judges in full amount and the reimbursement of the entire undisbursed amount may significantly threaten the stability of the State basic budget and, therefore, the welfare of the whole society, including the Applicants themselves. It is recognised in the case law of the Constitutional Court that: even if any norms are recognised as non-compliant with the Constitution, immediate increase in the funds to be disbursed to persons, without providing for the opportunity of performing well-considered measures for ensuring payments, could significantly affect the payments anticipated for other persons, hinder the performance of functions of institutions and, thus, hinder the fulfilment of the State functions at large (see Paragraph 12 of the Judgment of the Constitutional Court of 4 January 2007 in Case No. 2006-13-0103).

By revoking the disputed norms, the base salary of judges would be determinable in accordance with Sections 119.¹ and 120.¹ of the Law On Judicial Power, insofar as the base salary is not restricted by amendments to the Law, which provide for the percentage reduction in the work remuneration of judges. Observing that determined in this Judgment, that the base salary of judges, which is disbursed in accordance with the disputed norms, is calculated by multiplying the average work remuneration by the coefficient 2.78, but for judges of Land Registry Offices - the coefficient 1.89, not 4.5 or 3.5 as was previously prescribed by the Law, it may be concluded that the base salary of judges, if it were to be disbursed in full amount, i.e. in accordance with the provisions of the system for work remuneration of judges, would increase by almost two times.

Immediate execution of the Judgment could unfavourably affect the State budget. Revocation of the disputed norms from the day of the coming into force thereof, i.e., 1 January 2009, would create even more unfavourable consequences. Therefore, the Constitutional Court should determine the most appropriate time from which the disputed norms will be repealed.

30. Section 31, Clause 12 of the Constitutional Court Law, in essence, provides for similar rights which are granted to constitutional courts of other states in relation to the provision of the execution of their judgments, i.e., authorisation for the constitutional court itself to determine the legal consequences of its judgment. Moreover, the Law does not only provide authorisation to the Constitutional Court but also imposes responsibility that the judgments thereof should ensure legal stability, clarity and peace in social reality (see Paragraph 35.1 of the Judgment of the Constitutional Court of 21 December 2009 in Case No. 2009-43-01).

The Constitutional Court has already concluded that it should ensure as far as possible that the situation which could arise from the time when the disputed norms become invalid, an infringement of the fundamental rights guaranteed to the Applicants and other persons by the Constitution, as well as significant damage to the interests of the State or the society are not caused (see Paragraph 35.1 of the Judgment of the Constitutional Court of 16 December 2005 in Case No. 2005-12-0102 and Paragraph 35.1 of the Judgment of the Constitutional Court of 21 December 2009 in Case No. 2009-43-01).

If the Constitutional Court did not determine the matters related to the execution of this Judgment, i.e., did not determine the date when the disputed norms are repealed, a situation would arise which could threaten the stability of the State budget.

Verdict

On the basis of Sections 30 and 32 of the Constitutional Court Law, the Constitutional Court

decided:

1. To find the second sentence of Paragraph 7 of the Transitional Provisions of the Law On Judicial Power, restated on 14 November 2008, 16 June 2009 and 1 December 2009, as non-compliant with Article 83 of the Constitution of the Republic of Latvia and invalid from 1 January 2011.

2. To find the Paragraph 17 of the Transitional Provisions of the Law On Judicial Power, restated on 14 November 2008, 16 June 2009 and 1 December 2009, as non-compliant with Article 83 of the Constitution of the Republic of Latvia and invalid from 1 January 2011.

This judgment is final and not subject to appeal.

This judgment shall come into force on the date of its proclamation.

Chief Justice G.Kūtris

 

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