The Constitutional Court unblocked the collection of legal fees for lawyers from government authorities in judicial cases

The activity of WinnerLex Law Firm includes a significant portion of resolving administrative disputes with government authorities and local self-government bodies. These include tax disputes, such as challenging tax notification decisions, customs disputes, such as challenging decisions on unjustified increases in customs value of goods, and disputes with local authorities regarding the illegality of their actions and decisions, including land relations. In some cases, commercial or civil disputes may also arise, where a government authority or local self-government body is a party.

Current procedural legislation gives the party in whose favor a court decision has been made the right to claim reimbursement from the losing party for expenses incurred in paying for legal services, including from government authorities, for the shortcomings in the work of which the state budget must effectively pay, according to part 1 of Article 25 of the Budget Code of Ukraine. This article provides that the Treasury of Ukraine performs non-disputable withdrawals from the state and local budgets based on a court decision.

WinnerLex Law Firm always builds transparent financial relations with clients and submits all documents to the court to confirm the expenses incurred by the client for legal assistance, which is why in all won cases, the courts award compensation for such legal expenses from the losing party.

Once the court decision comes into force, the legal costs for the lawyer’s services are reimbursed to the client based on a relevant application to the State Treasury Service. As practice shows, winning a dispute and receiving financial compensation for legal expenses from a government authority is truly double satisfaction.

However, in April 2020, the Law “On Amendments to the Law of Ukraine ‘On the State Budget of Ukraine for 2020′” came into force, and its final provisions suspended the action of part 1 of Article 25 of the Budget Code of Ukraine until January 1, 2021, which effectively blocked the collection of legal fees from government authorities and the execution of other court decisions at the expense of the state budget.

This blocking of the enforcement of court decisions at the expense of the state budget was challenged by the Supreme Court to the Constitutional Court of Ukraine, which on August 28, 2020, ruled that paragraph 9 of Section II “Final Provisions” of the Law of Ukraine “On Amendments to the Law of Ukraine ‘On the State Budget of Ukraine for 2020′” of April 13, 2020, No. 553-IX was unconstitutional.

In its decision, the Constitutional Court noted that the principle of the separation of powers (Article 6 of the Constitution of Ukraine) is clearly violated when the legislative body temporarily suspends the enforcement of final court decisions.

Thus, ensuring the enforcement of final court decisions is a positive obligation of the state. However, the contested provision of Law No. 553 made it impossible for the State Treasury Service of Ukraine to carry out non-disputable withdrawals from the state and local budgets based on court decisions until January 1, 2021, which limits an individual’s constitutional right to judicial protection.

Therefore, the Constitutional Court defended the principle of the mandatory enforcement of court decisions, which some lawmakers had attempted to exempt the state from, while also preserving the real possibility of reimbursement from the state budget for legal assistance costs.

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