Guiso-Gallisay v. Italy (just satisfaction) [GC]

Information Note on the Court’s case-law No. 125

December 2009

Guiso-Gallisay v. Italy (just satisfaction) [GC] - 58858/00

Judgment 22.12.2009 [GC]

Article 41

Just satisfaction

Assessment of pecuniary damage for constructive expropriation

Facts – The applicants were owners of plots of land which were occupied by the public authorities with a view to their expropriation; construction work was then carried out on the land. In the absence of formal expropriation and compensation, the applicants brought proceedings for damages.

In a judgment of 8 December 2005 a Chamber of the Court held that the interference in the applicants’ right to the peaceful enjoyment of their possessions as a result of the constructive expropriation of their land had not been compatible with the principle of lawfulness and that, accordingly, there had been a violation of Article 1 of Protocol No. 1. In its Chamber judgment of 20 October 2008 (see Information Note no. 112), the Court examined the question of just satisfaction and departed from its previous case-law concerning the application of Article 41 in cases of constructive expropriation. It awarded compensation in respect of the pecuniary and non-pecuniary damage sustained by the applicants.

Law – Article 41: The Grand Chamber upheld the Chamber’s departure from the case-law with regard to the application of Article 41 in cases of constructive expropriation. The criterion previously used* had consisted in compensating for the losses sustained that would not be covered by the payment of an amount corresponding to the market value and loss of enjoyment of the disputed assets, by automatically calculating those losses up to the gross value of the work carried out by the State and adding the current value of the land. The Court considered it appropriate to adopt a new approach, regard being had to the possible disparities in the treatment of applicants depending on the nature of the public works undertaken by the authorities, which was not necessarily related to the land’s original potential; the concern to avoid room for arbitrariness; the refusal to assign a punitive or dissuasive role to compensation vis-à-vis the respondent State, rather than a compensatory role vis-à-vis the applicant; and, finally, the developments in the domestic case-law, which provided that the expropriation compensation for building land was to correspond to the latter’s market value, and the fact that the domestic courts had taken account of the Court’s case-law in the sphere of the right of property. The new principles laid down in the instant judgment could be applied by the domestic courts in the disputes which were currently pending before them and in future cases. In this context and for those reasons, the Court decided to reject the applicants’ claims in so far as they were based on the value of the land on the date of the Court’s judgment and, in assessing the pecuniary damage, to have no further regard to the construction costs of the buildings erected by the State on the land. In assessing the damage sustained by the applicants, the date on which they had learned with legal certainty that they had lost their right of ownership of the property was to be taken into consideration. The total market value of the property as determined on that date by the domestic courts was then to be readjusted for inflation and the statutory interest payable on the date of the adoption of the Court’s judgment. The amount paid to the applicant by the national authorities would then be deducted from the sum thus obtained. In addition, the Court considered that, in order to evaluate the market value of the land, it was appropriate to refer to the court judgment finding that the applicants had lost ownership of part of their land in 1982 and of another part in 1983. Once the amount awarded at national level was deducted, and the difference with the market value of the land in 1983 thus obtained, that amount would have to be converted to current value to offset the effects of inflation. Moreover, interest would have to be paid so as to compensate, at least in part, the long period that had elapsed since the dispossession of the land. That interest should take the form of simple statutory interest applied to the capital progressively adjusted. Accordingly, the Court awarded the applicants EUR 2,100,000 in respect of pecuniary damage. As to the damage occasioned by the unavailability of the land during the period from the beginning of the lawful occupation (1977) until the date of loss of ownership (1983), the amount already paid to the applicants at national level as compensation for occupation was to be deducted.

The Court awarded the three applicants EUR 45,000 jointly for the loss of opportunities arising from the impugned expropriation. Finally, the feelings of powerlessness and frustration arising from the unlawful dispossession of their property had caused the applicants considerable non-pecuniary damage and the Court awarded each of the applicants EUR 15,000 under that head.

* See Papamichalopoulos and Others v. Greece (Article 50), no. 14556/89, 31 October 1995, and Scordino v. Italy (no. 1) [GC], no. 36813/97, §§ 250-254, 29 March 2006.

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This summary by the Registry does not bind the Court.

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