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ReNEUAL 2.0

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The Pan-European General Principles on Legal Certainty and Protection of Legitimate Expectations in Administrative Matters

(compiled by Ulrich Stelkens)

I. Legal Certainty and Legitimate Expectations Outside the Realm of Administrative Law

II. Legal Certainty and Time Limits for Judicial Review in Administrative Matters (and Indication of Remedies)

III. Protection of Legitimate Expectations of the Beneficiary of Illegal Administrative Decisions and Parties to Illegal Public Contracts

IV. Legal Certainty by Holding the Administration to its Word and Clausula rebus sic stantibus

I. Legal Certainty and Legitimate Expectations Outside the Realm of Administrative Law

Questions of legal certainty and protection of legitimate expectations in administrative matters relate primarily to questions of the 'stability' of single case decisions (unilateral individual administrative acts), public contracts as well as to questions of the consequences of continuous and voluntary tolerance (omission of the administration to act) of (illegal) activities which may serve as a basis for expectations (but not necessarily of legitimate expectations) of an individual.

II. Legal Certainty and Time Limits for Judicial Review in Administrative Matters (and Indication of Remedies)

1. Stability of single case decisions via time limits for judicial review

2. "Compensation" of time limits for judicial review through indication of remedies

1. Stability of single case decisions via time limits for judicial review

Principle B 2 of Recommendation Rec(2004)20 of the Committee of Ministers to member states on judicial review of administrative acts

"Access to judicial review
(a) [...].
(c) National and legal persons should be allowed a reasonably period of time in which to commence judicial review proceedings. (d) [...].

Explanatory memorandum (CM(2004)210-Add) 17 November 2004):

"46. This provision aims to guarantee that parties are allowed a reasonable time for bringing the matter before the courts. If the time-limit is too short, the parties may be unable to lodge an appeal against an administrative act.
47. States are accordingly required to set a reasonable time-limit for challenging the lawfulness or legitimacy of an administrative act before a tribunal, in order to guarantee the applicant effective access to judicial review. National legislation generally specifies the reasonable time. In certain justified circumstances this period may be extended.
48. The Recommendation makes no reference to the concept of taking cognisance of the act, but time naturally begins running from when the natural or legal person is deemed to have cognisance of the acts notification. The Recommendation does not specify any fixed period between the time of formal or implicit notification of the act and the application for judicial review, rather leaving this matter to the states’ discretion."

Click here for further information on the genesis of Recommendation Rec(2004)20

For the reasons of time limits for judicial review:

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); for the genesis of this report click here. 

"Principle of legal certainty
[...].
52. The principle of legal certainty may also justify certain limitations of rights, notably in the form of time-limits for lodging appeals or the use of statutory limitations. However, the ECHR may still be violated in case of particularly strict interpretations or rigid application of time-limits regardless of individual circumstances (Miragall Escolano, 25.1.2000, § 33; Phinikaridou, 20.12.2007, § 51)."

See, furthermore, ECJ, judgement REWE v Landwirtschaftskammer für das Saarland (case C-33/76) 16 December 1976:

"5. The prohibition laid down in Article 13 of the Treaty and that laid down in Article 13 of Regulation n°159/66/EEC have a direct effect and confer on citizens rights which the national courts are required to protect.
Applying the principle of cooperation laid down in Article 5 of the Treaty, it is the national court which are entrusted with ensuring the legal protection which citizens derive from the direct effect of the provisions of Community law.
Accordingly, in the absence of Community rules on the subject, it is for the domestic legal system of each Member State to designate the courts having jurisdiction and to determine the procedural conditions governing actions at law intended to ensure the protection of the rights which citizens have from the direct effect of Community law, it being understood that such conditions cannot be less favourable than those relating to similar actions of a domestic nature.
Where necessary, Articles 100 to 102 and 235 of the Treaty enable appropriate measures to be taken to remedy differences between the provisions laid down by law, regulation or administrative action in Member States if they are likely to distort or harm the functioning of the common market.
In the absence of such measures of harmonization the right conferred by Community law must be exercised before the national courts in accordance with the conditions laid down by national rules.
The position would be different only if the conditions and time-limits made it impossible in practice to exercise the rights which the national courts are obliged to protect.
This is not the case where reasonable periods of limitation of actions are fixed.
The laying down of such time-limits with regard to actions of a fiscal nature is an application of the fundamental principle of legal certainty protection both the tax-payer and the administration concerned."

2. "Compensation" of time limits for judicial review through indication of remedies

Principle V of Resolution (77)31 on the protection of the individual in relation to the acts of administrative authorities:

"Indication of remedies
 Where an administrative act which is given in written form adversely affects the rights, liberties or interests of the person concerned, it indicates the normal remedies against it, as well as the time-limits for their utilization."

Explanatory memorandum, para. 32 ff. (p. 19 of the Final Activity Report of the CDCJ on Protection of the individual in relation to the acts of administrative authorities (CM(77)173-add2)

See also the the 'pilot study' preceding this resolution: CoE (ed.), Protection of the individual in relation to acts of administrative authorities (1975), pp. 23 ff.; for the genesis of Resolution (77)31 in general click here.

See furthermore the analysis of Principle V of Resolution (77)31 by M. Morisot, 'La Résolution N° 77 (31) du Conseil de l’Europe sur la protection de l’individu au regard des actes de l’administration' in Conseil d’État (ed.), Études et documents N° 30 (1978 – 1979) (1979), pp. 43 – 54 (p. 53).

However, the ECtHR does not derive a right to an indication of remedies from the ECHR:

ECtHR, decision Société Guerin Automobiles v. the 15 Member States of the European Union (51717/99):

"La Cour rappelle que les règles relatives aux délais à respecter pour recourir visent à assurer une bonne administration de la justice. Cela étant, la réglementation en question, ou l’application qui en est faite, ne devrait pas empêcher le justiciable d’utiliser une voie de recours disponible. Par ailleurs, il échet, dans chaque cas, d’apprécier, à la lumière des particularités de la procédure dont il s’agit et en fonction du but et de l’objet de l’article 6 § 1, la forme de publicité du « jugement » prévue par le droit interne de l’Etat en cause (arrêt Axen c. Allemagne du 8 décembre 1983, série A n° 72, p. 14, § 31).
Dans la présente affaire, la requérante entend en réalité voir tirer des articles 6 et 13 de la Convention le droit à être informé par des mentions figurant sur tout acte attaquable, tant des délais que de la computation des délais et que des voies et juridictions de recours disponibles.
La Cour relève d’emblée que ces articles ne couvrent pas de telles garanties. Telle que la jurisprudence les a interprétés, ainsi qu’il est rappelé ci-dessus, les Etats contractants disposent d’« une certaine marge d’appréciation » pour réglementer ces matières ; pareille réglementation vise « à assurer une bonne administration de la justice et le respect, en particulier, du principe de sécurité juridique ». Les garanties des articles 6 et 13 visent à empêcher que cette « réglementation ou l’application qui en est faite n’empêche le justiciable de se prévaloir d’une voie de recours disponible » (arrêt Miragall Escolano et autres c. Espagne du 25 janvier 2000, § 33 et s.).
Or tel n’est pas ici le grief de la requérante, laquelle ne stigmatise pas la réglementation existante ou son application mais entend obtenir des garanties supplémentaires à celles existantes dans le cadre de cette réglementation.
Cette observation suffit à faire regarder la requête comme étant, en tout état de cause, irrecevable. Elle dispense la Cour de la nécessité d’examiner la question de sa compatibilité ratione personae avec la Convention, question qui ne manquerait pas, autrement, de se poser puisque la requête est dirigée, non contre l’Union européenne (laquelle n’est pas partie à la Convention), mais contre les 15 Etats contractants, qui sont en même temps membres de l’Union européenne."

III. Protection of Legitimate Expectations of the Beneficiary of Illegal Administrative Decisions and Parties to Illegal Public Contracts

1. CoE Handbook "The administration and you"

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

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

4. Case law of the ECtHR 

1. CoE Handbook "The administration and you"

In CoE (ed.), The administration and you (1st edition 1996/1997), para. 57 ff. (p. 31 f.), general principles of the revocation of administrative acts are outlined. Interestingly these remarks are neither based on a pertinent Recommendation of the Commitee of ministers of the CoE nor or on case law of the ECtHR (which, at the time did not exist) but seemingly only on the "national reports" in Appendix 2 (pp. 178 – 182).

Conversely, the 2nd edition of the handbook refers to the newer case law of the ECtHR: CoE (ed.), The administration and you (2nd edition 2018), p. 16 ff.

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

"B. Legal certainty
[...]
5. Legitimate expectations
Is respect for the principle of legitimate expectations ensured?
61. The principle of legitimate expectations is part of the general principle of legal certainty in European Union law, derived from national laws. It also expresses the idea that public authorities should not only abide by the law but also by their promises and raised expectations. According to the legitimate expectation doctrine, those who act in good faith on the basis of law as it is, should not be frustrated in their legitimate expectations. However, new situations may justify legislative changes going frustrating legitimate expectations in exceptional cases. This doctrine applies not only to legislation but also to individual decisions by public authorities.45 "

Footnote 45: "For example, individuals who have been encouraged to adopt a behaviour by Community measures may legitimately expect not to be subject, upon the expiry of this undertaking, to restrictions which specifically affect them precisely because they availed themselves of the possibilities offered by the Community provisions: ECJ, 120/86, Mulder v. Minister van Landbouw en Visserij, 28 April 1988, § 21ff. In the case-law of the European Court of Human Rights, the doctrine of legitimate expectations essentially applies to the protection of property as guaranteed by Article 1 of the First Additional Protocol to the European Convention on Human Rights: see e.g. ECtHR Anhaeuser-Busch Inc. v. Portugal [GC], 73049/01, 11 January 2007, § 65; Gratzinger and Gratzingerova v. the Czech Republic [GC] (dec.), 39794/98, 10 July 2002, § 68ff; National & Provincial Building Society, Leeds Permanent Building Society and Yorkshire Building Society v. the United Kingdom, 21319/93, 21449/93, 21675/93, 21319/93, 21449/93 and 21675/93, 23 October 1997, § 62ff.

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

"Article 6 - Principle of legal certainty
(1) Public authorities shall act in accordance with the principle of legal certainty.
(2) They may not take any retroactive measures except in legally justified circumstances.
(3) They shall not interfere with vested rights and final legal situations except where it is imperatively necessary in the public interest.
(4) It may be necessary in certain cases, in particular where new obligations are imposed, to provide for transitional provisions or to allow a reasonable time for the entry into force of these obligations."

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 106 ff.; for the genesis of Recommendation CM/Rec(2007)7 in general click here

"Article 21 - Changes to individual administrative decisions
 Public authorities can amend or withdraw individual administrative decisions in the public interest if necessary, but, in doing so, they should have regard to the rights and interests of private persons."

See also the discussion of this article the meeting report on the 4th meeting (10-12 July 2006) of the Working Party oft the Project Group on Administrative Law (CJ-DA-GT (2006) 3), para 19 ff.; for the genesis of Recommendation CM/Rec(2007)7 in general click here

4. Case law of the ECtHR

a) Case law with regard to individual unilateral administrative decisions

b) Case law with regard to administrative contracts

a) Case law with regard to individual unilateral administrative decisions

ECtHR judgment Moskal v. Poland (10373/05) 15 September 2009:

"67. The Court observes that in the instant case the Government did not justify the measure in question by the need to make savings in the interests of the social security fund [...]. The State aimed primarily at achieving concordance between the factual situation of beneficiaries and their compliance with the statutory requirements for this type of pension.
68. In the instant case, a property right was generated by the favourable evaluation of the applicant’s dossier attached to the application for a pension, which was lodged in good faith, and by the Social Security Board’s recognition of the right [...]. Before being invalidated the decision of 29 August 2001 had undoubtedly produced effects for the applicant and her family [...].
69. It must also be stressed that the delay with which the authorities reviewed the applicant’s dossier was relatively long. The 2001 decision was left in force for ten months before the authorities became aware of their error. On the other hand, as soon as the error was discovered the decision to discontinue the payment of the benefit was issued relatively quickly and with immediate effect [...].
70. In the Court’s opinion, the fact that the State did not ask the applicant to return the pension which had been unduly paid [...] did not mitigate sufficiently the consequences for the applicant flowing from the interference in her case.
71. Even though the applicant had an opportunity to challenge the Social Security Board’s decision of 25 June 2002 in judicial review proceedings, her right to the pension was determined by the courts only two years later and during that time she was not in receipt of any welfare benefit [...].
72. As stated above, in the context of property rights, particular importance must be attached to the principle of good governance. It is desirable that public authorities act with the utmost scrupulousness, in particular when dealing with matters of vital importance to individuals, such as welfare benefits and other property rights. In the instant case, the Court considers that having discovered their mistake the authorities failed in their duty to act in good time and in an appropriate and consistent manner.
73. The Court, being mindful of the importance of social justice, considers that, as a general principle, public authorities should not be prevented from correcting their mistakes, even those resulting from their own negligence. Holding otherwise would be contrary to the doctrine of unjust enrichment. It would also be unfair to other individuals contributing to the social security fund, in particular those denied a benefit because they failed to meet the statutory requirements. Lastly, it would amount to sanctioning an inappropriate allocation of scarce public resources, which in itself would be contrary to the public interest.
Notwithstanding these important considerations, the Court must, nonetheless, observe that the above general principle cannot prevail in a situation where the individual concerned is required to bear an excessive burden as a result of a measure divesting him or her of a benefit.
If a mistake has been caused by the authorities themselves, without any fault of a third party, a different proportionality approach must be taken in determining whether the burden borne by an applicant was excessive.
74. In this connection it should be observed that as a result of the impugned measure, the applicant was faced, practically from one day to the next, with the total loss of her early-retirement pension, which constituted her sole source of income. Moreover, the Court is aware of the potential risk that, in view of her age and the economic reality in the country, particularly in the undeveloped Podkarpacki region, the applicant might have considerable difficulty in securing new employment.
75. In addition, the Court notes that, despite the fact that under the applicable law the applicant qualified for another type of pre-retirement benefit from the State as soon as she lost her entitlement to the "EWK" pension, her right to the new benefit was not recognised until the decision of 25 October 2005, which finally brought an end to proceedings which had lasted three years. The amount of the applicant’s pre-retirement benefit is approximately 50 % lower that her "EWK" pension [...]. Even though the decision to grant the benefit was backdated, the benefit due for the period between 25 October 2002 and 31 July 2004 was paid without any interest [...]. The mistake of the authorities left the applicant with 50% of her expected income, and it was only after proceedings lasting three years that she was able to obtain the new benefit.
Lastly, the fact that the applicant retained her full right to receive, as of 2015, an ordinary old-age pension from the pension fund is immaterial since this would have been the case even if she had continued to receive her "EWK" pension.
76. In view of the above considerations, the Court finds that a fair balance has not been struck between the demands of the general interest of the public and the requirements of the protection of the individual’s fundamental rights and that the burden placed on the applicant was excessive.
It follows that there has been a violation of Article 1 of Protocol No. 1 to the Convention."

ECtHR, judgement Beinarovič and Others v Lithuania (70520/10, 21920/10, 41876/11) 12 June 2018:

"138. The Court reiterates that any interference with property must, in addition to being lawful and having a legitimate aim, also satisfy the requirement of proportionality. A fair balance must be struck between the demands of the general interest of the community and the requirements of the protection of the individual’s fundamental rights, the search for such a fair balance being inherent in the whole of the Convention. The requisite balance will not be struck where the person concerned bears an individual and excessive burden [...].
139. The Court has on many occasions emphasised the particular importance of the principle of "good governance". It requires that where an issue in the general interest is at stake, in particular when the matter affects fundamental human rights such as those involving property, the public authorities must act in good time and in an appropriate and above all consistent manner [...].
140. The good governance principle should not, as a general rule, prevent the authorities from correcting occasional mistakes, even those resulting from their own negligence. However, the need to correct an old "wrong" should not disproportionately interfere with a new right which has been acquired by an individual relying on the legitimacy of the public authority’s action in good faith. In other words, State authorities which fail to put in place or adhere to their own procedures should not be allowed to profit from their wrongdoing or to escape their obligations. The risk of any mistake made by the State authority must be borne by the State itself and the errors must not be remedied at the expense of the individuals concerned. In the context of revoking ownership of a property transferred erroneously, the good governance principle may not only impose on the authorities an obligation to act promptly in correcting their mistake, but may also necessitate the payment of adequate compensation or another type of appropriate reparation to its former bona fide holder (see Lelas v. Croatia, no. 55555/08, § 74, 20 May 2010; Maksymenko and Gerasymenko v. Ukraine, no. 49317/07, § 64, 16 May 2013; and Bogdel v. Lithuania, no. 41248/06, § 66, 26 November 2013)."

ECtHR, judgement Romeva v North Macedonia (32141/10) 12 December 2019:

"66. The Court must next examine whether the interference with the peaceful enjoyment of possessions struck a fair balance between the demands of the general interest of the public and the requirements of the protection of the individual’s fundamental rights, or whether it imposed a disproportionate and excessive burden on the applicant [...].
67. The Court notes that prior to the internal audit, the Fund’s records showed that the applicant had been employed during the period 1963-1967. It was only after the internal audit in the case of the applicant that irregularities appeared, in so far as the applicant’s employment booklet was found to be missing from the records, necessitating a request to the applicant’s former employer for data to confirm the accuracy of the Fund’s records, which were incomplete. In the absence of any information from that employer that the applicant had indeed been employed between 1963 and 1967, the Fund concluded that the data regarding her employment for the above-mentioned period had been erroneously entered in its records.
68. In this connection, the Court notes that it has already found that there is nothing to suggest that the applicant was responsible for the incorrect assessment by the Fund of her pension request [...]. On the contrary, it was the Fund’s lack of diligence in properly gathering and maintaining the relevant data in respect of the applicant and in processing her initial claim for a pension that led to the erroneous decision, which the Fund later sought to correct at the applicant’s expense [...]. The Government’s argument that the applicant had supplied the Fund with erroneous information regarding her past employment should therefore be dismissed [...].
69. Further to this point, the Court observes that the applicant’s claim that she had worked for various employers through "youth groups" between 1963 and 1967 was not contested by the Government.
70. Being mindful of the importance of social justice, the Court would reiterate in this regard that, as a general principle, public authorities should not be prevented from correcting their mistakes – even those resulting from their own negligence. Holding otherwise would be contrary to the doctrine of unjust enrichment. It would also be unfair to other individuals contributing to social security funds – in particular those denied a benefit because they failed to meet the statutory requirements. Lastly, it would amount to sanctioning an inappropriate allocation of scarce public resources, which in itself would be contrary to the public interest [...].
71. Notwithstanding those important considerations, the Court nonetheless notes that the aforementioned general principle cannot prevail in a situation where the individual concerned is required to bear an excessive burden as a result of a measure divesting him or her of a benefit [...]. If a mistake has been caused by the authorities themselves, without any fault on the part of a third party, a different proportionality approach must be taken in determining whether the burden borne by an applicant was excessive.
72. In assessing compliance with Article 1 of Protocol No. 1, the Court must carry out an overall examination of the various interests in issue (see Perdigão, cited above, § 68), bearing in mind that the Convention is intended to safeguard rights that are "practical and effective" [...]. It must look behind appearances and investigate the realities of the situation complained of[...]. That assessment may involve the conduct of the parties, including the means employed by the State and their implementation. In that context, it should be stressed that uncertainty – be it legislative, administrative or arising from practices applied by the authorities – is a factor to be taken into account in assessing the State’s conduct. Indeed, where an issue in the general interest is at stake, it is incumbent on the public authorities to act in good time, in an appropriate and consistent manner [...].
73. In this regard the Court attaches particular importance to the fact that the revocation of the decision to grant a pension to the applicant was not based upon any new evidence but only upon a reassessment of the same evidence which was at the basis of the administrative decision, which became final as it had not been contested before the courts. In the Court’s view such a reassessment of evidence ex proprio motu ‒ outside the system of extraordinary remedies for quashing final administrative decisions ‒ brings into question legal certainty in the area of social security.
74. In addition, the Court notes that the case at hand does not concern a suspension of the applicant’s pension, but the complete loss of her pension entitlements ([...]. The fact that she obtained a new pension entitlement as of 3 November 2009 on the basis of a subsequent legislative change is of no relevance in respect of the deprivation itself [...].
75. The Court observes that prior to obtaining a pension the applicant had been dependent on the State’s social benefits scheme and had been in receipt of unemployment benefit [...]. Owing to the applicant’s specific circumstances, the retirement pension had constituted her sole source of income for a period of over nine years. For more than two years of that period, being deprived of her pension, she had had no income whatsoever [...].
76. Moreover, the Court surmises that the civil claim against the applicant and the enforcement proceedings aimed at claiming the reimbursement of the pension benefits paid to her [...] are capable of further aggravating her already difficult financial situation [...].
77. Given the circumstances described above, it must be observed that ‑ as a result of the impugned measure ‒ the applicant was faced, practically from one day to the next, with the total loss of her retirement pension, which constituted her sole source of income [...].
78. In view of the above considerations, the Court finds that a fair balance has not been struck between the demands of the general interest of the public and the requirements of the protection of the individual’s fundamental rights and that the burden placed on the applicant was excessive.
79. It follows that there has been a violation of Article 1 of Protocol No. 1 to the Convention."

ECtHR, judgement Eka Mikeladze and Others v. Georgia (29385/11, 19372/12, 29533/13, and 73699/13) 25 November 2021:

49.  The principle of “good governance” requires that where an issue in the general interest is at stake, in particular when the matter affects fundamental human rights such as those involving property, it is incumbent on the public authorities to act in good time, in an appropriate manner and with the utmost consistency [...]. The principle of good governance should not, as a general rule, prevent the authorities from correcting occasional mistakes, even those resulting from their own negligence. However, the need to correct an old “wrong” should not disproportionately interfere with a new right which has been acquired by an individual relying on the legitimacy of the public authority’s action in good faith [...]. In other words, State authorities which fail to put in place or adhere to their own procedures should not be allowed to profit from their wrongdoing or to escape their obligations [...]. The risk of any mistake made by the State authority must be borne by the State itself and the errors must not be remedied at the expense of the individuals concerned [...].
50.  In the context of the revocation of a property right granted erroneously, the principle of good governance may not only impose on the authorities an obligation to act promptly in correcting their mistake [...], but may also necessitate the payment of adequate compensation or another type of appropriate reparation to the former bona fide holder of the property [...].

ECtHR, judgement Văleanu and Others v Romania (59012/17 and 29 others) 8 November 2022:

"247. In examining whether a fair balance was struck between the public interest and that of the applicants, the Court reiterates in particular the importance of the principle of "good governance". The "good governance" principle should not, as a general rule, prevent the authorities from correcting occasional mistakes, even those resulting from their own negligence. On the other hand, State authorities which fail to put in place or adhere to their own procedures should not be allowed to profit from their wrongdoing or escape their obligations. The risk of any mistake made by the State authority must be borne by the State itself and any errors must not be remedied at the expense of the individuals concerned. In the context of the revocation of a title which has been granted erroneously, the "good governance" principle may not only impose on the authorities an obligation to act promptly in correcting their mistake, but may also necessitate the payment of adequate compensation or another type of appropriate reparation to its former good-faith holder [...]."

b) Case law with regard to administrative contracts

ECtHR, judgement Stretch v. UK (44277/98) 26 June 2003:

"38. By subsequently declaring administrative contracts, which grant proprietary rights within the meaning of Article 1 of Protocol No. 1 to the ECHR to the individual (for example, the ones assigning State’s land to the individual), unlawful and not providing an adequate compensation thereof, the State risks of placing a disproportionate burden at the "ordinary citizens", who were unaware of such errors committed by public authorities."

Similar case law of the ECtHR with regard to administrative contracts:

IV. Legal Certainty by Holding the Administration to its Word and Clausula rebus sic stantibus

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

2. Case law of the ECtHR

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

"(2) Legal certainty
44. [...]
48. Legal certainty also means that undertakings or promises held out by the state to individuals should in general be honoured (the notion of the ‘legitimate expectation’)."

2. Case law of the ECtHR

ECtHR, judgement Stran Greek Refineries and Stratis Adreadis v Greece (13427/87) 9 December 1994:

"72. The Court does not doubt that it was necessary for the democratic Greek State to terminate a contract which it considered to be prejudicial to its economic interests. Indeed according to the case-law of international courts and of arbitration tribunals any State has a sovereign power to amend or even terminate a contract concluded with private individuals, provided it pays compensation (Shufeldt arbitration award of 24 July 1930, Reports of International Arbitral Awards, League of Nations, vol. II, p. 1095). This both reflects recognition that the superior interests of the State take precedence over contractual obligations and takes account of the need to preserve a fair balance in a contractual relationship. However, the unilateral termination of a contract does not take effect in relation to certain essential clauses of the contract, such as the arbitration clause. To alter the machinery set up by enacting an authoritative amendment to such a clause would make it possible for one of the parties to evade jurisdiction in a dispute in respect of which specific provision was made for arbitration (Losinger decision of 11 October 1935, Permanent Court of International Justice, Series C no. 78, p. 110, and arbitral awards in Lena Goldfields Company Ltd v. Soviet Government, Annual Digest and Reports of Public International Law Cases, vol. 5 (1929-1930) (case no. 258), and Texaco Overseas Petroleum Company and California Asiatic Oil Company v. Government of the Arab Republic of Libya, preliminary decision of 27 November 1975, International Law Reports, vol. 53, 1979, p. 393).
73. In this connection, the Court notes that the Greek legal system recognises the principle that arbitration clauses are autonomous (see paragraph 18 above) and that the Athens Court of First Instance (see paragraph 16 above), the Athens Court of Appeal (see paragraph 18 above) and, it would appear, the judge-rapporteur of the Court of Cassation (see paragraph 19 above) applied this principle in the present case. Moreover the two courts found that the applicants’ claims originating before the termination of the contract were not invalidated thereby.
The State was therefore under a duty to pay the applicants the sums awarded against it at the conclusion of the arbitration procedure, a procedure for which it had itself opted and the validity of which had been accepted until the day of the hearing in the Court of Cassation.
74. By choosing to intervene at that stage of the proceedings in the Court of Cassation by a law which invoked the termination of the contract in question in order to declare void the arbitration clause and to annul the arbitration award of 27 February 1984, the legislature upset, to the detriment of the applicants, the balance that must be struck between the protection of the right of property and the requirements of public interest.
75. There has accordingly been a violation of Article 1 of Protocol No. 1 (P1-1).

ECtHR, judgement Lelas v Croatia (55555/08) 20 May 2010

"74. The Court considers that an individual acting in good faith is, in principle, entitled to rely on statements made by state or public officials who appear to have the requisite authority to do so, and that internal rules and procedures were complied with, unless it clearly follows from publicly accessible documents (including primary or subordinate legislation), or an individual was otherwise aware, or should have been aware, that a certain official lacked the authority to legally bind the State. It should not be incumbent on an individual to ensure that the state authorities are adhering to their own internal rules and procedures inaccessible to the public and which are primarily designed to ensure accountability and efficiency within a state authority. A State whose authorities failed to observe their own internal rules and procedures should not be allowed to profit from their wrongdoing and escape their obligations. In other words, the risk of any mistake made by state authorities must be borne by the State and the errors must not be remedied at the expense of the individual concerned, especially where no other conflicting private interest is at stake [....].
75. The Court accepts that sometimes the authority of a particular official to legally bind the State may be inferred from the nature of his or her office and requires no explicit rule or provision. In view of that possibility, in their observations on the admissibility and merits of the application of 3 April 2009 the Government, instead of relying, explicitly or by reference, on some domestic legal provision on which the above-mentioned finding of the Šibenik County Court could be based, simply argued that the court's finding had been inferred from the internal organisation of the Ministry of Defence [....]. The Court will accordingly examine whether that finding was foreseeable for the applicant in the circumstances of the case [....].
76. In this connection the Court first reiterates that the principle of lawfulness also presupposes that the applicable provisions of domestic law are sufficiently accessible, precise and foreseeable in their application. An individual must be able – 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 [....]. The principle of lawfulness also requires the Court to verify whether the way in which the domestic law is interpreted and applied by the domestic courts produces consequences that are consistent with the principles of the Convention [....].
77. In this connection the Court notes that the domestic courts established beyond doubt that the applicant had been repeatedly informed by his commanding officer that his claims for daily allowances for demining work were not in dispute and that they would be paid once funds had been allocated in the budget for that purpose [....]. For the Court the question to be answered is not whether it was plausible, as the Šibenik County Court found, that only the head of the Central Finance Department of the Ministry of Defence was authorised to acknowledge the debt. Rather, the question is whether, in the absence of a clear legal provision or a publicly available document that would support that finding, it was equally plausible for the applicant – who, under the rules of the military hierarchy, could have addressed his request only to his immediate superior – to assume that the information repeatedly communicated to him by his commanding officer came from a person or persons within the Ministry who had the authority to acknowledge the debt. In this respect the Court notes that the applicant was aware that his commanding officer had made enquiries of his own superiors and that the information eventually conveyed to him came, through the commander of the 3rd Operational Zone, from the General Staff of the Croatian Armed Forces. In the Court's view, in the absence of a clear legal provision or publicly accessible documents as to who was authorised to acknowledge the debt on behalf of the Ministry of Defence, it was quite natural for the applicant to believe that the General Staff of the Croatian Armed Forces was an authority of sufficient rank whose statements could be binding on the Ministry.
78. Therefore, having regard to the Šibenik County Court's failure to indicate a legal provision that could be construed as the basis for its finding that the debt could have been acknowledged only by the head of the Central Finance Department of the Ministry of Defence, the Court finds the impugned interference was incompatible with the principle of lawfulness and therefore contravened Article 1 of Protocol No. 1 to the Convention [...] because the manner in which that court interpreted and applied the relevant domestic law, in particular section 387 of the Obligations Act, was not foreseeable for the applicant, who could reasonably have expected that his commanding officer's statements to the effect that his claims were not in dispute and that payment was to follow once funds had been allocated, constituted acknowledgement of the debt capable of interrupting the running of the statutory limitation period [...]. Accordingly, the applicant could reasonably have expected that the statutory limitation period had not expired. This finding that the interference was not in accordance with the law makes it unnecessary to examine 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.
79. There has therefore been a violation of Article 1 of Protocol No. 1 to the Convention."