Roma locuta, causa finita? Not for me.

For the last time – at least for a long time;) – will be on my blog about running out of allocations. 13 November 2018. The Constitutional Tribunal, deciding a constitutional complaint that I had the pleasure to prepare after several years of its filing, did not find that the provisions of the Implementation Act violate the Constitution of the Republic of Poland to the extent to which this Act provides for leaving a protest without consideration in a situation where the allocation is exhausted during the appeal procedure.

The Constitutional Tribunal stated that the limitation of the right to appeal provided for in the Implementation Act is expressed in the Act, and in addition is necessary and proportional. While the first sentence is difficult to argue with and the constitutional complaint did not do so either, the remaining arguments of the Constitutional Tribunal, I regret to say, are of a typically demagogic nature indicating additionally the ignorance of the EU procedures of spending EU funds.

Restriction of competition participants’ rights to appeal proportional?
Namely, the Constitutional Tribunal decided that the restriction of appeal procedures is necessary and indispensable to protect other constitutional values in the form of public order and protection of rights of other persons. Referring to the first of these categories, the Constitutional Tribunal stated that the elimination of the necessity to reconsider, on the merits, a groundless – in view of the exhaustion of the allocation – appeal, had to be considered as a solution useful for the realisation of the goal assumed by the legislator, related to one of the values enumerated in Article 31 para. 3 of the Constitution.
As far as the second premise is concerned, the Constitutional Tribunal stated that while assessing the fulfilment of the postulate of the necessity to protect the rights of other entities, one cannot disregard the fact that funds for co-financing must be obtained, used and settled within the period whose length results from the European law and cannot be extended by the decision of the national legislator. However, the applicant claimed the right 'to have the merits of the case examined twice’, which the contested provision made impossible by the condition of lack of funds (exhaustion of the allocation) contained therein. If the allocation was exhausted during the first proceeding, it was all the more reason to expect a lack of funds during the subsequent proceeding, which was a continuation of efforts within the same pool. It must be unequivocally stated that, in the absence of funds, the realisation of the applicant’s expectations would require the annulment of the decisions awarding funds to other persons who participated in good faith in the competition and could already, in accordance with the programme’s provisions, have used the money received. This is because the legislator – on the one hand – decided that 'The appeal procedure […] does not stop the conclusion of agreements with applicants whose projects have been qualified for co-financing’ (Article 30f of the APA)’, and on the other hand – did not provide for the obligation to create a financial reserve for projects which, as a result of the reassessment, meet the eligibility criteria for co-financing.

In several previous posts, I have expressed my concern that the TK would be bought by this demagogic argument that the only way to ensure the protection of applicants would be to terminate contracts with other entities and, as the TK’s argumentation shows, this is indeed what has unfortunately happened. The TK, despite the fact that I have also repeatedly emphasised this in the constitutional complaint, in raising its argumentation states that the appeal procedure must be limited because the interests of other entities must not suffer. This argumentation is, in my view, unacceptable – the applicant did not want the contracts with other parties to be terminated at all, but only that a contract should also be signed with her since she had drawn up a project which was nevertheless correct. What is important in all of this is the fact that the impossibility of signing the contract is determined by a circumstance which is entirely the responsibility of the granting authority, i.e. the error of the experts assessing the application. In such a situation, I still maintain the position that the entity itself, which is obliged to provide additional funds for financing the competition, should atone for this mistake.
Putting in this situation the generally understood principle of public order, which in this case was not at all concretised by the TK, is unfortunately, in my opinion, an attempt to defend at all costs the economic interests of the State Treasury, which in fact would not suffer any significant damage if the constitutional complaint was taken into account. Significantly, in the entire case, none of the institutions, including the Constitutional Tribunal itself, even bothered to provide very general statistics or calculations showing the actual scale of the consequences of the judgment – and it is only in my view that backing up the appeal to public policy with such calculations would make sense (by, for example, showing that upholding the constitutional complaint would lead to significant damage to the state budget). Meanwhile, this argument, unsupported by such calculations, has a purely demagogic character.
Finally, I do not see any sensible arguments supporting the idea that the State Treasury should avoid responsibility for its own mistakes – unless such a fundamental argument is the overriding need of the TK to protect the public purse, which does not require any discussion or justification.
Once again, I maintain the task that the claim that public funds (because funds for projects co-financed from the EU are not only so-called „EU funds”) end once, is false. Secondly, however, even if a given pool has actually run out, this situation puts the blame on the organiser of the competition, and it is the organiser who should ultimately find funds for everyone, including those who successfully passed the appeal procedure.

I do not really understand why there is such a need to protect the public purse from mistakes, especially since the CT has not even bothered to assess the scale of the phenomenon and its impact on the state of public funds. Since the legislator itself points out that in such a situation the applicants may claim damages, it would probably be even better to simply allocate public funds to these additional projects. Better because it would allow the implementation of these projects.
The position of the CT has another weakness – it leads to open toleration of mistakes, which can sometimes be made in a „systemic” way by the institutions – since once we have accepted that the interests of those who have already signed the contracts should be protected at all costs – the further sense of maintaining the appeal procedure becomes questionable at all.

Roma locuta causa finita?
To all this it is worth adding one thing. The Constitutional Tribunal refers in an extremely vague manner to EU regulations that would supposedly prescribe such a procedure as the one adopted in the Implementation Act. Nothing could be further from the truth – the assumption that the project selection procedure specified in the Implementation Act is in any way enforced by EU regulations, and in particular that it is the European Union which orders us to spend funds as quickly as possible, is simply a misrepresentation. Moreover, in the justification of the Constitutional Court’s judgment, it is in vain to find any reference to specific provisions of EU acts. Instead, there appears a general thesis, based solely on the adopted provisions of the Implementation Act, that the regime of disposal of EU funds even forces the legislator to simplify the procedure; without this, it would be practically impossible to utilise the so-called EU funds.

This type of general statement really does not fit at all with the dignity of the constitutional court, and it testifies to the unreflective „buying” of the argumentation of the national legislator that the spending of funds in a fast manner is forced upon us by the European Union, which is not true and which I and many other representatives of the literature have been repeating for many years.

I’ll be back:)
This brings us to the crux of the issue and the provocative title of this post. I do not agree with the position of the CT and I would like to clearly articulate this at this point. At the same time, there is no longer any possibility on domestic grounds to argue against this ruling. This does not mean, however, that as far as the provisions that are flawed in my opinion are concerned, one should lay down one’s arms. Since the constitutional court itself refers to unspecified principles of EU law as justification for limiting the rights of participants in the review procedure, it is then worth asking the EU court as well about the issue of exhaustion of allocations and the understanding of the relevant EU rules.

Therefore, at the earliest opportunity, and I hope that such an opportunity will arise soon, I will be requesting the national court in a dispute to ask the CJEU for a preliminary question. Interestingly, the CJEU has already had a few occasions to comment on the meaning of the EU rules on the disbursement of EU funds by referring, inter alia, to the wording of the Charter of Fundamental Rights. The provisions of the Charter, which are fully applicable to the evaluation of projects financed from EU funds, formulate certain obligations for the national authorities carrying out the evaluation of projects, manifested in the generally formulated right to good administration, as well as the right to an effective remedy.

I would therefore dare to argue that such an interpretation of the provisions of the Implementation Act, which allows for the refusal to finance the project of a participant in a competition due to the lack of funds in the allocation for a measure or priority, while at the same time allowing agreements to be signed in the meantime with applicants who have received the same or lower number of points, violates at the same time the standards of conduct of the institutions indicated in Article 125(3)(a)(1)-(3) of Regulation 1303/2013.
In this context, the view of the CJEU (ECLI:EU:C:2014:2229) according to which: „Regulation No 1083/2006, read in conjunction with Article 47 of the Charter, must be interpreted as precluding a provision of the Programme Guide adopted by the Monitoring Committee in the context of an operational programme concluded between two Member States and intended to promote European territorial cooperation, in so far as that provision does not provide that a decision of that Monitoring Committee rejecting an application for funding is subject to an action before the courts of the Member State.” in my view, can also be applied to the situation of procedural unfairness as adopted in the Implementation Act. Significantly, nowhere in Regulation 1303/2013 does the lack of allocation justify the refusal to grant projects, which means that the national legislator, by already introducing provisions authorising institutions to leave protests unprocessed due to the exhaustion of allocations in measures – came out ahead in this respect, so to speak.

So the game is not over yet – at least not for me:) We will see if the opportunity arises to pick up the gauntlet once again and do something about the flawed provisions of the Implementation Act.