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The Pan-European General Principles on Legality of Administration

(compiled by Ulrich Stelkens)

I. Recommendation CM/Rec(2007)7 on good administration

II. Legality of Administration as an Element of CoE's Understandings of the Rule of Law

III. CoE Handbook "The administration and you"

IV. Case Law of the ECtHR

V. Legality and Discretion

VI. Legality and Settlements

I. Recommendation CM/Rec(2007)7 of the Committee of Ministers to member states on good administration

"Article 2 - Principle of Lawfulness.
(1) Public authorities shall act in accordance with the law. They shall not take arbitrary measures, even when exercising their discretion.
(2) They shall comply with domestic law, international law and the general principles of law governing their organisation, functioning and activities.
(3) They shall act in accordance with rules defining their powers and procedures laid down in their governing rules.
(4) [...]."

See on the discussion of this article the meeting report on the 3rd meeting (5-7 April 2006) of the Working Party oft the Project Group on Administrative Law (CJ-DA-GT (2006) 1), para 69 ff.; for the genesis of Recommendation CM/Rec(2007)7 in general click here.

II. Legality of Administration as an Element of CoE's Understanding of the Rule of Law

1. The Council of Europe and rule of law – an overview (CM(2008)170) 21. November 2008 (Report of the Secretary General of the CoE at the request of the Minister's Deputies Rapporteur Group on Legal Cooperation (GR-J)

"B. The principle of legality: principles of lawfulness, legal certainty and equality before the law

43. The principle of legality (sometimes referred to as supremacy of the law) forms a traditional core part of the rule of law concept. The rule of law requires that the state acts on the basis of, and in accordance with, the law. This offers essential legal protection of the individual vis-à-vis the state and its organs and agents. Many ECHR provisions reflect this principle through references to the notion of "law", in most cases in the form of a requirement that interference with human rights must be lawful. [Footnote 13: Articles 2,5,6,7,8,9,10,11, 1 of Protocol No.1, 2 of Protocol No. 4, Protocol No. 7]]
· Principle of lawfulness
44. The notion of law systematically used by the Court is a material or substantive one. [Footnote 14:  With the exception of the right to a tribunal "established by law" (Article 6 § 1) dealt with under A above]. It covers not only statute law but also unwritten law (case-law) and regulations. The Court assesses whether domestic law as a whole has been complied with in the context of interferences with ECHR rights. In the context of deprivation of liberty (Article 5), the Court stresses the importance of the lawfulness of the detention, both procedurally and substantively, requiring scrupulous adherence to the rule of law (Winterwerp, 24.10.1979, § 39). Non-compliance with domestic law leads to a violation of Article 5 (Bozano, 18.12.1986, § 58; Wassink, 27.9.1990, § 27). In some cases, even where the law may have been formally respected, the Court has found a breach of the requirements of lawfulness on the ground that the authorities have attempted to circumvent the applicable legislation (Karagöz, 8.11.2005, § 59; John, 10.5.2007, § 33).
45. The state is not only obliged to respect and apply, in a foreseeable and consistent manner, the laws it has enacted, but also, as a corollary of this duty, to ensure the legal and practical conditions for their implementation (Broniowski, 22.6.2004, § 184).
46. The notion of "law" in the ECHR does not merely refer back to domestic law but also relates to the quality of the law, requiring it to be compatible with the rule of law. In particular, the law must be sufficiently accessible and foreseeable (Sunday Times (No. 1), 26.4.1979, § 49). These requirements have been developed in a rich case-law. Foreseeability means that the law must be foreseeable as to its effects, that is formulated with sufficient precision to enable the individual to regulate his conduct. In this context, a law which confers a discretion to a state authority must indicate the scope of that discretion. It would be contrary to the rule of law for the legal discretion granted to the executive to be expressed in terms of an unfettered power. Consequently, the law must indicate the scope of any such discretion and the manner of its exercise with sufficient clarity, to give the individual adequate protection against arbitrariness. (Malone, 2.8.1984, § 68)."

For the genesis of this report click here.

2. Venice Commission, Report on the Rule of Law (CDL-AD(2011)003rev9) of 4 April 2009

"(1) Legality (supremacy of the law)
42. The importance of the principle of legality was underlined by Dicey. It first implies that the law must be followed. This requirement applies not only to individuals, but also to authorities, public and private. In so far as legality addresses the actions of public officials, it requires also that they require authorisation to act and that they act within the powers that have been conferred upon them.35 
Legality also implies that no person can be punished except for the breach of a previously enacted or determined law and that the law cannot be violated with impunity. Law should, within the bounds of possibility, be enforced.
43. The term "law", as used in this chapter, refers primarily to national legislation and common law. However, the development of international law as well as the importance given by international organisations to the respect of the rule of law lead to addressing the issue at international level as well: the principle pacta sunt servanda is the way in which international law expresses the principle of legality.36"

Footnote 35: "Jeffrey Jowell, The Rule of Law and its underlying Values, in: Jeffrey Jowell/Dawn Oliver (Eds.), The Changing Constitution [7th edition, Oxford University Press 2011], p. 10"
Footnote 36: "See Bingham [The Rule of Law (2010)], who believes that "The rule of law requires compliance by the state with its obligations in international as well as national law" (chap.10)."

"(2) Legal certainty
44. The principle of legal certainty is essential to the confidence in the judicial system and the rule of law.37 It is also essential to productive business arrangements so as to generate development and economic progress.38 To achieve this confidence, the state must make the text of the law easily accessible. It has also a duty to respect and apply, in a foreseeable and consistent manner, the laws it has enacted. Foreseeability means that the law must where possible be proclaimed in advance of implementation and be foreseeable as to its effects: it has to be formulated with sufficient precision to enable the individual to regulate his or her conduct."

Footnote 37: "The Council of Europe and the Rule of Law - An overview, CM(2008)170 21 November 2008, see para. 51"
Footnote 36: "See R. McCorquodale, in The Rule of Law in International and Comparative Context [British Inst of International and Comparative Law (2010)], chap. 3)"

3. Venice Commission, Rule of Law Checklist (CDL-AD(2016)007) of 18 March 2016

"A. Legality16
1. Supremacy of the Law
Is supremacy of the law recognised?
i. [...].
ii. [...].
iii. [...].
iv. Does the action of the executive branch conform with the Constitution and other laws?17
v. Are regulations adopted without delay when required by legislation?
vi. Is effective judicial review of the conformity of the acts and decisions of the executive branch of government with the law available?

vii. Does such judicial review also apply to the acts and decisions of independent agencies and private actors performing public tasks?

viii. Is effective legal protection of individual human rights vis-à-vis infringements by private actors guaranteed?

44. State action must be in accordance with and authorised by the law. Whereas the necessity for judicial review of the acts and decisions of the executive and other bodies performing public tasks is universally recognised, national practice is very diverse on how to ensure conformity of legislation with the Constitution. While judicial review is an effective means to reach this goal, there may also be other means to guarantee the proper implementation of the Constitution to ensure respect for the Rule of Law, such as a priori review by a specialised committee.18"

Footnote 16: "The principle of legality is explicitly recognised as an aspect of the Rule of Law by the European Court of Justice, see ECJ, C-496/99 P, Commission v. CAS Succhi di Frutta, 29 pril 2004, § 63."
Footnote 17: "This results from the principle of separation of powers, which also limits the discretion of the executive: cf. CM(2008)170, The Council of Europe and the Rule of Law, § 46"
Footnote 18: "The Venice Commission is in principle favourable to full review of constitutionality, but a proper implementation of the Constitution is sufficient: cf. CDL-AD(2008)010, Opinion on the Constitution of Finland, § 115ff. See especially the section on Constitutional Justice (II.E.3)."

"2. Compliance with the law19
Do public authorities act on the basis of, and in accordance with standing law?20
i. Are the powers of the public authorities defined by law?21.
ii. Is the delineation of powers between different authorities clear?.
iii. Are the procedures that public authorities have to follow established by law?
iv. May public authorities operate without a legal basis? Are such cases duly justified?
v. Do public authorities comply with their positive obligations by ensuring implementation and effective protection of human rights?
In cases where public tasks are delegated to private actors, are equivalent guarantees established by law?22

45. A basic requirement of the Rule of Law is that the powers of the public authorities are defined by law. In so far as legality addresses the actions of public officials, it also requires that they have authorisation to act and that they subsequently act within the limits of the powers that have been conferred upon them, and consequently respect both procedural and substantive law. Equivalent guarantees should be established by law whenever public powers are delegated to private actors especially but not exclusively coercive powers. Furthermore, public authorities must actively safeguard the fundamental rights of individuals vis-à-vis other private actors.23
46. "Law" covers not only constitutions, international law, statutes and regulations, but also, where appropriate, judge-made law,24 such as common-law rules, all of which is of a binding nature. Any law must be accessible and foreseeable.25

Footnote 19: On the hierarchy of norms, see CDL-JU(2013)020, Memorandum Conference on the European standards of Rule of Law and the scope of discretion of powers in the member States of the Council of Europe (Yerevan, Armenia, 3-5 July 2013).
Footnote 20: The reference to « law » for acts and decisions affecting human rights is to be found in a number of provisions of the European Convention on Human Rights, including Article 6.1, 7 and Articles 8.2, 9.2, 10.2 and 11.2 concerning restrictions to fundamental freedoms. See, among many other authorities, ECtHR Amann v. Switzerland, 27798/95, 16 February 2000, § 47ff; Slivenko v. Latvia, 48321/99, 9 October 2003, § 100; X. v. Latvia, 27853/09, 26 November 2013,
§ 58; Kurić and Others v. Slovenia, 26828/06, 12 March 2014, § 341
Footnote 21: Discretionary power is, of course, permissible, but must be controlled. See below II.C.1.
Footnote 22: Cf. below II.A.8..
Footnote 23: For a recent reference to positive obligations of the State to ensure the fundamental rights of individuals vis-à-vis private actors, see ECtHR Bărbulescu v. Romania, 61496/08, 12 January 2016, § 52ff (concerning Article 8 ECHR)..
Footnote 24: Law "comprises statute law as well as case-law", ECtHR Achour v. France, 67335/01, 29 March 2006, § 42; cf
Kononov v. Latvia [GC], 36376/04, 17 May 2010, § 185.

Footnote 25: ECtHR The Sunday Times v. the United Kingdom (No. 1), 6538/74, 26 April 1979, § 46ff. On the conditions of accessibility and foreseeability, see, e.g., ECtHR Kurić and Others v. Slovenia, 26828/06, 26 June 2012, § 341ff; Amann v. Switzerland, 27798/95, 16 February 2000, § 50; Slivenko v. Latvia, 48321/99, 9 October 2003, § 100. The Court of the European Union considers that the principles of legal certainty and legitimate expectations imply that "the effect of Community legislation must be clear and expectable to those who are subject to it": ECJ, 212 to 217/80, Amministrazione delle finanze dello Stato v. SRL Meridionale Industria Salumi and Others, 12 November 1981, § 10; or "that legislation be clear and precise and that its application be foreseeable for all interested parties": CJEU, C-585/13, Europäisch-Iranische Handelsbank AG v. Council of the European Union, 5 March 2015, § 93; cf. ECJ, C-325/91, France v Commission, 16 June 1993, § 26. For more details, see II.B (legal certainty).

"7. Duty to implement the law
What measures are taken to ensure that public authorities effectively implement the law?
i. Are obstacles to the implementation of the law analysed before and after its adoption?
ii. Are there effective remedies against non-implementation of legislation?

iii. Does the law provide for clear and specific sanctions for non-obedience of the law?38

iv. Is there a solid and coherent system of law enforcement by public authorities to enforce these sanctions?

v. Are these sanctions consistently applied?

53. Although full enforcement of the law is rarely possible, a fundamental requirement of the Rule of Law is that the law must be respected. This means in particular that State bodies must effectively implement laws. The very essence of the Rule of Law would be called in question if law appeared only in the books but were not duly applied and enforced.39 The duty to implement the law is threefold, since it implies obedience to the law by individuals, the duty reasonably to enforce the law by the State and the duty of public officials to act within the limits of their conferred powers.
54. Obstacles to the effective implementation of the law can occur not only due to the illegal or negligent action of authorities, but also because the quality of legislation makes it difficult to implement. Therefore, assessing whether the law is implementable in practice before adopting it, as well as checking a posteriori whether it may be and is effectively applied is very important. This means that ex ante and ex post legislative evaluation has to be performed when addressing the issue of the Rule of Law.

55. Proper implementation of legislation may also be obstructed by the absence of sufficient sanctions (lex imperfecta), as well as by an insufficient or selective enforcement of the relevant sanctions."

Footnote 38: "On the need for effective and dissuasive sanctions, see e.g. CDL-AD(2014)019, § 89; CDL-AD(2013)021, § 70.
Footnote 39: The need for ensuring proper implementation of the legislation is often underlined by the Venice Commission: see e.g. CDL-AD(2014)003, § 11: "the key challenge for the conduct of genuinely democratic elections remains the exercise of political will by all stakeholders, to uphold the letter and the spirit of the law, and to implement it fully and effectively"; CDL-AD(2014)001, § 85.

III. CoE Handbook "The administration and you"

CoE (ed.), The administration and you, 1st edition (1996/1997), pp. 16 ff.:

"16. The principle of lawfulness requires not only that the administrative authorities shall not break the law, but also that all their decisions have a basis in law and that their content complies with the law. Furthermore, it requires that compliance by the administrative authorities with these requirements may be effectively enforced. Implicitly, the principle of lawfulness also means that the law as to the functions and powers of the administrative authorities should be validly enacted and sufficiently clear and specific.
17. The principle of lawfulness also requires that unlawful administrative acts must, in principle, be withdrawn. However, other principles which protect individuals’ rights vis-à-vis the administrative authorities may take precedence over that rule [...]."

CoE (ed.), The administration and you, 2nd edition (2018), pp. 9 ff.

"The content of decisions taken by public authorities and the manner in which they are taken must have a basis in law. Where a public authority acts outside or beyond its powers (ultra vires), then that action will be unlawful. So that the public may understand the nature and extent of a public authority’s powers, these powers should be clear, precise and published widely. [...].
Relevant sources of law for the purposes of this principle will depend on the legal system of each state but will normally refer to a state’s constitution, statute law and secondary legislation. Also relevant are decisions and orders of its domestic courts and/or general principles of law. Administrative guidelines may also be a source of law to the extent that they can be invoked by domestic courts. Customary and conventional rules of international law will also be relevant in jurisdictions where they have the force of law. The European Convention on Human Rights is a key source of law for member states of the Council of Europe."

IV. Case Law of the ECtHR

ECtHR, judgment Iatridis v. Greece (31107/96) 25 March 1999:

"58. The Court reiterates that the first and most important requirement of Article 1 of Protocol No. 1 is that any interference by a public authority with the peaceful enjoyment of possessions should be lawful: the second sentence of the first paragraph authorises a deprivation of possessions only "subject to the conditions provided for by law" and the second paragraph recognises that the States have the right to control the use of property by enforcing "laws". Moreover, the rule of law, one of the fundamental principles of a democratic society, is inherent in all the Articles of the Convention [...] and entails a duty on the part of the State or other public authority to comply with judicial orders or decisions against it [...]. It follows that the issue of whether a fair balance has been struck between the demands of the general interest of the community and the requirements of the protection of the individual’s fundamental rights [...] becomes relevant only once it has been established that the interference in question satisfied the requirement of lawfulness and was not arbitrary."

ECtHR, judgment Leela Förderkreis e.V. and Others v. Germany (58911/00) 6 November 2008:

"85. The remaining applicant associations maintained that the Governments information campaign had had no legal basis. They considered that the principle of proportionality did not set sufficiently clear limits to the exercise of the Governments discretionary power where interferences with the freedom of religion derived directly from other constitutional rights.
. The Court reiterates its settled case-law that the expression "prescribed by law" requires firstly that the impugned measure should have a basis in domestic law. It also refers to the quality of the law in question, requiring that it be accessible to the persons concerned and formulated with sufficient precision to enable them – if need be, with appropriate advice – to foresee, to a degree that is reasonable in the circumstances, the consequences which a given action may entail and to regulate their conduct [...].
. Further, as regards the words "in accordance with the law" and "prescribed by law" which appear in Articles 8 to 11 of the Convention, the Court observes that it has always understood the term "law" in its "substantive" sense, not its "formal" one [...]"Law" must be understood to include both statutory law and judge-made "law" (see, among other authorities, The Sunday Times v. the United Kingdom (no. 1), judgment of 26 April 1979, Series A no. 30, p. 30, § 47, and Casado Coca v. Spain, judgment of 24 February 1994, Series A no. 285-A, p. 18, § 43). In sum, the "law" is the provision in force as the competent courts have interpreted it.
. The Court further reiterates that the scope of the notion of foreseeability depends to a considerable degree on the content of the instrument in question, the field it is designed to cover and the number and status of those to whom it is addressed. It must also be borne in mind that, however clearly drafted a legal provision may be, its application involves an inevitable element of judicial interpretation, since there will always be a need for clarification of doubtful points and for adaptation to particular circumstances. A margin of doubt in relation to borderline facts does not by itself make a legal provision unforeseeable in its application. Nor does the mere fact that such a provision is capable of more than one construction mean that it fails to meet the requirement of "foreseeability" for the purposes of the Convention. The role of adjudication vested in the courts is precisely to dissipate such interpretational doubts as remain, taking into account the changes in everyday practice [...].
. The Court notes that in its decision of 26 June 2002 the Federal Constitutional Court found that the legal basis of the interference under consideration was provided by the Basic Law. The duty of imparting information on subjects of public concern was one of the governmental tasks directly assigned by the Basic Law to the Government. The Court accepts that it can prove difficult to frame law with a high precision on matters such as providing information, where the relevant factors are in constant evolution in line with developments in society and in the means of communication, and tight regulation may not be appropriate. In these circumstances, the Court considers that the Governments information-imparting role did not require further legislative concretisation.".

ECtHR (GC), judgment Vavřička and Others v. Czech Republic (49317/07) 8 April 2021:

"266.  The Court reiterates that an impugned interference must have some basis in domestic law, which law must be adequately accessible and be formulated with sufficient precision to enable those to whom it applies to regulate their conduct and, if need be with appropriate advice, to foresee, to a degree that is reasonable in the circumstances, the consequences which a given action may entail (see, for example, Dubská and Krejzová v. the Czech Republic [GC], nos. 28859/11 and 28473/12, § 167, 15 November 2016, with a further reference).
267.  The Court notes that the vaccination duty has its specific basis in section 46(1) and (4) of the PHP Act, applied in conjunction with the Ministerial Decree issued by the Ministry in the exercise of the power conferred on it to this end by sections 46(6) and 80(1) of the PHP Act [...]. The consequences of non-compliance with the duty stem, for Mr Vavřička, from the application of section 29(1)(f) and (2) of the MO Act [...] and, for the child applicants, from the application of section 34(5) of the Education Act, in conjunction with section 50 of the PHP Act [...]. The accessibility and foreseeability of those provisions have not been disputed by the applicants.
268.  Rather, the applicants’ specific challenge to the lawfulness of the impugned interference rests primarily on their contention, made in reliance on the provisions of Article 4 of the Charter of Fundamental Rights and Freedoms [...], that in the given context the term "law" should be understood as referring exclusively to an Act of Parliament, this being how the notion of "law" (zákon) is commonly understood at the national level. They take issue with the fact that the Czech vaccination scheme is based on a combination of primary and secondary legislation.
269.  The Court reiterates that the term "law" as it appears in the phrases "in accordance with the law" and "prescribed by law" in Articles 8 to 11 of the Convention, is to be understood in its "substantive" sense, not its "formal" one. It thus includes, inter alia, "written law", not limited to primary legislation but including also legal acts and instruments of lesser rank. In sum, the "law" is the provision in force as the competent courts have interpreted it (see, for example, Sanoma Uitgevers B.V. v. the Netherlands [GC], no. 38224/03, § 83, 14 September 2010, with a further reference).
270.  Moreover, the Court observes that the constitutionality of the legislative arrangement in question was examined in extenso and upheld by both the SAC and the Constitutional Court [...].
271.  The Court is therefore satisfied that the interference in question was in accordance with the law within the meaning of the second paragraph of Article 8 of the Convention."

ECtHR (GC), judgement Broniowski v. Poland (31443/96) 22 June 2004:

"184. The rule of law underlying the Convention and the principle of lawfulness in Article 1 of Protocol No. 1 require States not only to respect and apply, in a foreseeable and consistent manner, the laws they have enacted, but also, as a corollary of this duty, to ensure the legal and practical conditions for their implementation […]. In the context of the present case, it was incumbent on the Polish authorities to remove the existing incompatibility between the letter of the law and the State-operated practice which hindered the effective exercise of the applicant's right of property. Those principles also required the Polish State to fulfil in good time, in an appropriate and consistent manner, the legislative promises it had made in respect of the settlement of the Bug River claims. This was a matter of important public and general interest […]. As rightly pointed out by the Polish Constitutional Court […], the imperative of maintaining citizens' legitimate confidence in the State and the law made by it, inherent in the rule of law, required the authorities to eliminate the dysfunctional provisions from the legal system and to rectify the extra-legal practices.
185. In the present case, as ascertained by the Polish courts and confirmed by the Court's analysis of the respondent State's conduct, the authorities, by imposing successive limitations on the exercise of the applicant's right to credit, and by applying the practices that made it unenforceable and unusable in practice, rendered that right illusory and destroyed its very essence. […]."

ECtHR, judgment Beian v. Romania (30658/05) 6 December 2007:

"33. However, where States decide to enact legislation to compensate victims of past injustices, it must be implemented with reasonable clarity and coherence in order to avoid, in so far as possible, legal uncertainty and ambiguity for the legal persons concerned. In that context, it should be stressed that uncertainty – be it legislative, administrative or judicial – is an important factor to be taken into account in assessing the States conduct [...].
In the instant case the Court notes that, under the terms of Law no. 309-2002, the only persons who qualified for the compensatory measures were conscripts who had performed forced labour in the units coming under the authority of the Labour Department. In a series of judgments delivered after the judgment of 2 December 2003, and on the basis of the principle of nondiscrimination, the HCCJ extended the scope of Law no. 309-2002 to include all conscripts who had performed forced labour during their military service, irrespective of the hierarchical structure to which their military unit belonged.
However, in another series of judgments delivered over the same period the court developed a line of case-law to the opposite effect, dismissing appeals, as in the applicants case, from former conscripts who had performed forced labour outside the framework of the Labour Department.
In the absence of a mechanism for ensuring consistency in its caselaw, the highest domestic court delivered diametrically opposed judgments, sometimes on the same day, concerning the scope of Law no. 3092002 (see, for instance, the judgments of 11 January and 1 and 28 March 2005).
Admittedly, divergences in case-law are an inherent consequence of any judicial system which is based on a network of trial and appeal courts with authority over the area of their territorial jurisdiction. However, the role of a supreme court is precisely to resolve such conflicts [...].
In the instant case it is clear that the HCCJ was the source of the profound and lasting divergences complained of by the applicant.
 The practice which developed within the countrys highest judicial authority is in itself contrary to the principle of legal certainty, a principle which is implicit in all the Articles of the Convention and constitutes one of the basic elements of the rule of law [...]. Instead of fulfilling its task of establishing the interpretation to be followed, the HCCJ itself became a source of legal uncertainty, thereby undermining public confidence in the judicial system [...].
The Court therefore concludes that this lack of certainty with regard to the case-law had the effect of depriving the applicant of any possibility of obtaining the benefits provided for by Law no. 309-2002, while other persons in a similar situation were awarded those benefits.
Accordingly, there has been a violation of Article 6 § 1 of the Convention."

V. Legality and Discretion

For the pan-European general principles on discretion and their relationship to the pan-European general principles on legality click here.

VI. Legality and Settlements

Recommendation Rec (2001)9 of the Committee of Ministers to member states on alternatives to litigation between administrative authorities and private parties

Negotiated settlements

  • should be either generally permitted or permitted in certain types of cases deemed appropriate, in particular those concerning individual administrative acts, contracts, civil liability, and generally speaking, claims relating to a sum of money (Appendix, principle I 2)
  • should guarantee fair proceedings allowing in particular for the respect of the rights of the parties and the principle of equality (Appendix, principle I 3 c);
  • should not unless otherwise provided by law be used by administrative authorities to disregard their obligations (Appendix, principle III 3 i)

Explanatory memorandum (drafted by the European Committee on Legal Co-operation (CDCJ) - CM(2001)121 Addendum I) 3 August 2001):

"101. [Negotiated settlement] is the contract whereby the parties in a dispute put an end to it amicably. A negotiated settlement is often, but not exclusively, the upshot of negotiation between the parties or of a conciliation or mediation procedure, and serves equally as a means of preventing and of resolving administrative disputes.
102. Its essential feature is that it is a contract concluded by the parties and binding upon them. In this respect it has something in common with arbitration, to the extent that it entails the agreement of the parties. Unlike arbitration, however, this agreement does not open the procedure but terminates it and concerns the substantive issues.
103. Likewise, as with arbitration, a negotiated settlement is binding on the parties that conclude it.
104. Although it is their frequent outcome, negotiated settlement is not intrinsically linked with conciliation and mediation procedures, and the fact that these do not necessarily end in a negotiated settlement, even if they succeed, is not the only reason; rather, negotiated settlements can be reached by the parties without a mediation or conciliation procedure having been conducted beforehand.
105. It was agreed that negotiated settlement was a useful method in administrative matters and noted that it was not sufficiently used in the member states.
106. In the paragraph on negotiated settlement, the appendix lays down some guidelines for administrative action in the matter: public officials authorised to make compromises must be assigned the proper powers for that purpose, however, they cannot make a negotiated settlement to disregard one of their duties, and inter alia, to override a public policy obligation.
107. The question of whether it should be specified in the appendix that an administrative authority may not promise to pay a sum of money it does not owe was discussed. Common law countries have the institution of ex gratia payments, which means that the Ombudsman can persuade the administration to pay, of its own accord, a sum of money it does not owe by way of compensation for a wrong. But in other countries administrative case-law systematically declares that negotiated settlements in which an administrative authority has agreed to pay a sum of money are null and void and that there is no principle whereby the administrative authority's liability can be established. The wording used in the appendix thus allows national legislation to provide for such a restriction on the administration's powers of reaching a negotiated settlement, without making this compulsory."

Click here for further information on the genesis of Recommendation Rec (2001)9.