Information Note on the Court’s case-law No. 112
October 2008
Guiso-Gallisay v. Italy (just satisfaction) - 58858/00
Judgment 21.10.2008 [Section II]
Article 41
Just satisfaction
Assessment of pecuniary damage for de facto expropriation
[This case was referred to the Grand Chamber on 26 January 2009]
Facts: The applicants were the owners of plots of lands on which the authorities occupied with a view to expropriation and began construction works. Since there had been no formal expropriation and they had not been paid compensation the applicants issued proceedings for damages for the unlawful occupation of their land. In a judgment delivered on 8 December 2005, the European Court held that the interference with the applicants’ right to the peaceful enjoyment of their possessions through the indirect expropriation of their land was incompatible with the principle of legality and that there had accordingly been a violation of Article 1 of Protocol No. 1. It also held that the question of the application of Article 41 (just satisfaction) was not ready for decision.
Law: The applicants had retained victim status as their position had not changed since the date of the principal judgment. As regards the assessment of compensation, the method that had been used hitherto had been to compensate for losses that would not be covered by payment of a sum obtained by adding the market value of the property to the cost of not deriving earnings from the property, by automatically assessing those losses as the gross value of the works carried out by the State plus the value of the land at current prices. However, that method of compensation was not justified and could lead to unequal treatment between applicants, depending on the nature of the public works carried out by the public authorities, which was not necessarily linked to the potential of the land in its original state. It could also result in arbitrariness and in compensation for pecuniary damage playing a punitive or deterrent role vis-à-vis the respondent State rather than a compensatory role for the applicants. In the light of these considerations and of the legislative change in 2007 requiring compensation for the expropriation of land with building rights to reflect the market value of that land except when the expropriation was part of an economic and social reform, a change in the case-law concerning the application of Article 41 in constructive-expropriation cases was justified. In order to assess the loss sustained by the applicants, it was necessary to take into consideration the date on which they had established with legal certainty that they had lost the right of ownership over the property concerned. The total market value of the property fixed on that date by the national courts was then to be adjusted for inflation and increased by the amount of interest due on the date of the judgment’s adoption by the Court. The sum paid to applicants by the authorities of the country concerned was to be deducted from the resulting amount. The construction costs of the building that had been built on the land could no longer be taken into account.
In the instant case, the sum to be awarded for pecuniary damage amounted to EUR 1,803,374 for the three applicants jointly. The Court also awarded them EUR 45,000 for non-pecuniary damage.
© Council of Europe/European Court of Human Rights
This summary by the Registry does not bind the Court.
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