Pl. US 3/02
                               


The  statutorily provided minimum amount of a fine must be  set
so  that it permits, at least to a certain degree, taking  into
account the property and personal situation of the offender, in
this  case so that imposing a fine, even if only in the minimum
amount, will not have a liquidatory effect on the offender,  or
will not mean that business activity will lose its purpose  for
a considerable period (several years). If this principle is not
observed, there is such interference in the property rights  of
an  individual which, in view of its intensity, is a  violation
of  Art.  11  para. 1 of the Charter of Fundamental Rights  and
Freedoms  and Art. 1 of the Protocol to the Convention  on  the
Protection    of   Fundamental   Rights   and   Freedoms.    It
simultaneously causes violation of Art. 1 of the Charter, as it
causes fundamental inequality of persons in the social sphere.


The Plenum of the Constitutional Court decided in the matter of
a  petition from the Regional Court in Hradec Kralove to  annul
part  of § 106 para. 3 of Act no. 50/1976 Coll., on Zoning  and
the  Building  Code  (the Building Act), as  amended  by  later
regulations, as follows:
   The  words  "from CZK 500,000" in § 106 para. 3 of  Act  no.
50/1976  Coll., on Zoning and the Building Code  (the  Building
Act),  as amended by of Act no. 83/1998 Coll., are annulled  as
of  the  day  this finding is promulgated in the Collection  of
Laws.


                           REASONING

I.
On 22 January 2002 the Constitutional Court received a petition
from a Panel of the Regional Court in Hradec Kralove (30 Ca) of
14  January  2002  to annul § 106 para. 3 of  Act  no.  50/1976
Coll.,  on  Zoning  and the Construction Act (the  Construction
Act), as amended by later regulations (the "Construction Act"),
in  the  part "from CZK 500,000." Under Art. 95 para. 2 of  the
Constitution  of  the  Czech Republic  (the  "Constitution")  a
general court shall do so if it concludes that a statute  which
is  to  be  used in resolving a matter is inconsistent  with  a
constitutional act. The petition, signed by the Chairman of the
Panel, JUDr. K. K., states that by decision of the City Hall of
Pardubice  of  24  June  1999, file no.  OSU  P/147/99/Pd,  and
decision  of the District Office of Pardubice of 16 July  2001,
file  no.  RRR/3330/41/99/Pu, H. B. was given  a  fine  of  CZK
500,000 because, as a natural person conducting business  under
special  regulations, she engaged in unlawful conduct specified
in  §  106  para. 3 let. c) of the Construction  Act  when,  in
conflict with the relevant final approval permit, she used  two
rooms  in  the basement of the family house no. 181 in  Pavlova
St. in Pardubice as the operating premises of a hair salon. She
filed  an  administrative complaint with the Regional Court  in
Hradec  Králové  under  part five, chapter  two  of  the  Civil
Procedure Code.
   The  introduction to the petition emphasizes that Ms. H.  B.
used  these  premises  only  for  purposes  of  her  individual
exercise of the trade of hairdressing, which is also documented
by  a  statement from the hygiene inspector of 16  March  1999,
file   no.  1446-218/99-707,  according  to  which  these  were
"operating premises" with only one job. Although the rooms  had
been  approved  as  a laundry, drying room, and  cellar,  their
technical construction arrangement had been, since construction
was  completed,  fully  adequate for conducting  the  trade  in
question,  because,  as the H. B. stated in proceedings  before
the  court, the water access pipe had been extended by about  1
meter; but no other construction changes had been made. Insofar
as  §  106  para. 3 let. c) of the Construction  Act  expressly
charges  the appropriate body to impose a fine from CZK 500,000
to CZK 1 million to a legal entity or natural person conducting
business under special regulations who uses a building  without
a  final approval permit, or inconsistently with it, or  allows
another party to do so, it is evident that the Building  Office
may  not  impose a fine lower than CZK 500,000, and  thus  take
into account the extent of violation of the public interest  in
using  a  building in accordance with a final approval  permit,
which  can vary widely. In the court's opinion, in a number  of
cases  where a change does not require any construction changes
or  special equipment, the extent to which the public  interest
is  violated  is  minimal. Therefore, the  court  contests  the
setting  of a fine level without regard to the type of unlawful
conduct,  its  consequences, or the material  benefits  to  the
offender. It simultaneously points out the fact that the amount
of  the  fine  makes  it impossible to take  into  account  the
offender's  economic level, or whether he is at all capable  of
paying such a fine. In this case, for example, Ms. H. B.  would
have  to  work for 14 years to pay the fine imposed. Thus,  the
fine  is  imposed  on her in a liquidatory  manner,  where  the
administrative  body could basically deprive  her  of  all  her
property, including the building in which she does business.
   The  Regional  Court further states that this administrative
penalty is also not comparable to punishments imposed under the
Criminal  Code,  under which one can, moreover, choose  between
several  punishments. In view of the fact that natural  persons
are  exposed to a risk of the kind of punishment which, by  its
nature  and degree of gravity falls, in terms of the Convention
on the Protection of Human Rights and Fundamental Freedoms (the
"Convention"), into the "criminal area," Art. 6 para. 1 of  the
Convention,  under  which everyone has the right  to  have  his
matter  tried  fairly, should be applied to this  matter.  This
requirement  was  not  met, with regard to  the  current  legal
framework,  as  the  specific individual circumstances  of  the
matter were not taken into account. In view of these facts  the
Regional  Court proposed annulling the provision cited  in  the
heading.

II.
The  Constitutional  Court found that  the  submitted  petition
meets  all legal procedural requirements, and therefore nothing
prevents  it from reviewing and deciding the substance  of  the
matter. Therefore, under § 69 of Act no. 182/1993 Coll., on the
Constitutional  Court, as amended by later  regulations,  ("Act
no.  182/1993  Coll.")  it  called  upon  the  parties  to  the
proceedings  –  the chamber of Deputies and the Senate  of  the
Parliament of the Czech Republic, to submit position statements
on the petition.
   The  Chamber  of  Deputies of the Parliament  of  the  Czech
Republic, through its Chairman, in its position statement of 14
February 2002 stated that § 106 para. 3 of the Construction Act
was  amended  by  Act  no. 83/1998 Coll. The  bill,  which  was
submitted  by  the government of the CR, was discussed  by  the
Chamber of Deputies in the second election period as Chamber of
Deputies  document no. 261. As the background report  indicates
concerning § 105 and § 106 of the Construction Act, the aim  of
the  legal framework was to be a substantial increase in fines;
this  step  had been supported in comment proceedings  by  some
cities   which   have   experience  with   "non-compliance   in
construction." During discussion in the Chamber of Deputies the
proposed framework was not changed. According to the Chamber of
Deputies, when discussing the amendment it took as its starting
point the premise that the act in question was consistent  with
the  Constitution, the constitutional order, and  international
agreements. In conclusion, the Chamber of Deputies  points  out
that  the proposed judgment should read "from CZK 500,000,"  so
that the text of the Act would be correct legislatively and  in
formulation even after part if it was annulled.
   The Senate of the Parliament of the Czech Republic gave  its
position  statement regarding the petition  from  the  Regional
Court  in  Hradec Kralove through its Chairman on  19  February
2002,  and  expressed doubts whether in this case the procedure
described in the filing really violated Art. 6 para. 1  of  the
Convention.  The  unlawful  conduct  in  this  case   must   be
considered an administrative infraction, which is penalized  by
a  fine  in  the  range  specified  and  which  is  imposed  in
administrative  proceedings led by the relevant  administrative
body.  In this case it is evident that the administrative  body
took into account the individual circumstances of the case,  as
it  imposed  the  lowest possible fine.  The  Construction  Act
considers  the  use  of a building without the  final  approval
permit  or  inconsistently with it to be serious  violation  of
construction  compliance and therefore  classifies  it  in  the
group with the highest penalty rates. The Senate further points
to  the  fact  that  if the Constitutional  Court  granted  the
petition, then deleting the lower limit of penalties in  §  106
para.  3  of  the  Construction Act would violate  the  overall
system and introduce obvious inequality with paragraph 2 of the
same  section, where the lower limit of fines for  the  factual
elements specified would be maintained. Likewise, with offenses
by citizens contained in § 105 of the Construction Act there is
a  system  of differentiating the amount of fines by setting  a
lower  limit for them. The Senate further states that the cited
amendment  of  the Construction Act, the aim of  which  was  to
tighten compliance in the construction and use of buildings, in
the   interests   of  this  aim  the  room  for  administrative
discretion was narrowed, although it was not entirely removed.
   The Constitutional Court also requested a position statement
from the Ministry for Regional Development. This state body, in
a  letter  dated  28  February  2002,  file  no.  2502/2002-51,
disagreed with the Regional Court's petition. For one thing, it
believes that the Construction Office has the discretion,  when
setting  the amount of a fine, to weigh the extent of violation
of  the public interest of the gravity of the violation of  the
Act, or related consequences. In its opinion, Art. 6 para. 1 of
the  Convention does not apply to this case at all, because  in
its  opinion, one can not evaluate whether the specified  lower
limit  for  penalties  is  "just" or "unjust"  in  relation  to
unlawful  conduct.  This  is because  §  106  para.  3  of  the
Construction Act could be inconsistent with Art. 6 para.  1  of
the Convention, if it prevented review of the justification  of
such  "criminal  accusation" by an independent court.  However,
review  of the matter in full jurisdiction is not prevented  by
the  contested  provision,  but by the  currently  valid  legal
framework of the administrative court system. For the foregoing
reasons, the Constitutional Court should not grant the petition
of the Regional Court in Hradec Kralove.
   The Constitutional Court, for purposes of information, asked
the  Ministry  for data about the number and amounts  of  fines
imposed  under  the  Construction  Act,  divided  according  to
individual   factual  elements.  The  Ministry   for   Regional
Development  stated that it does not monitor this data  in  the
aggregate,  and sent at least data from the City  Hall  of  the
capital city of Prague, as an appeals body for 26, or (as of  1
July 2002) for 22 city districts. These indicate that in 2001 a
total  of  67 offenses and 34 administrative infractions  under
the  Construction Act were reviewed in appeals proceedings,  12
of  which  were  violations  of the  contested  provision.  The
Constitutional  Court was also sent similar  data  about  fines
imposed  in  the city of Liberec, according to  which  in  2001
legal  entities  and natural persons conducting business  under
special regulations were given a fine with legal effect  in  15
cases,  none  of  which  were  imposed  for  an  administrative
infraction under the contested provision, and in 10 cases fines
were given to natural persons for offenses.
   The  Constitutional Court, in order to determine the  income
levels  of  legal  entities  and natural  persons-entrepreneurs
during  the  period of one year, asked the Ministry of  Finance
for  assistance. The Ministry stated in its document, that  out
of the total of 221,237 legal entities which filed tax returns,
in 2000 the number of entities with total annual income (see  §
20  para.  2 of Act no. 563/1991 Coll., on Accounting,  in  the
version valid until 31 December 2001) up to CZK 50 thousand was
43,619 entities, up to 100 thousand a total of 50,090 entities,
up  to  500  thousand a total of 75,636 entities and  up  to  1
million  a  total of 91,539 entities; out of a total number  of
964,723  natural persons-entrepreneurs in that  same  year  the
number  with income up to CZK 50 thousand was 185,368  persons,
up  to  CZK 100 thousand a total of 304,753 persons, up to  CZK
250 thousand a total of 519,757 persons, up to CZK 500 thousand
a  total of 670,814 persons and up to CZK 1 million a total  of
793,187 persons (the intervals begin at CZK 0).

III.
The Constitutional Court first, in accordance with § 68 para. 2
of  Act no. 182/1993 Coll., reviewed whether the statute  whose
provisions  the  petitioner claims to be  unconstitutional  was
passed   and  issued  within  the  bounds  of  Constitutionally
specified  jurisdiction  and  in a constitutionally  prescribed
manner.  In  that regard, the stenographic record of  the  20th
session  of  the Chamber of Deputies of the Parliament  of  the
Czech  Republic, held on 13 February 1998, and  resolution  no.
256  of  13 February 1998 indicate that the Chamber of Deputies
approved the bill (Chamber of Deputies document no. 261)  by  a
majority of 151 votes in favor and none against (out of a total
number  of 171 deputies present). From the stenographic  record
of the 2nd session of the Senate of the Parliament of the Czech
Republic,  held  on  18  March 1998, the  Constitutional  Court
further  determined that the Senate also approved the bill,  by
resolution no. 23 of 18 March 1998, by a majority of  55  votes
(out  of  a total number of 70 senators present), with 7  votes
against.  It  is evident from the foregoing that  the  Act  was
passed  and issued in a constitutionally prescribed manner  and
within  the  bounds of Constitutionally specified jurisdiction,
and  that  quorums specified in Art. 39 para. 1 and  2  of  the
Constitution were observed.
   After substantive discussion of the petition and weighing of
all the circumstances the Constitutional Court decided that the
contested provision of the Act must be annulled.
  To begin with, the Constitutional Court needs to note that in
this  case  what  is contested is not, as it  usually  is,  the
behavioral  rule  itself,  which is the  obligation  to  use  a
building only in accordance with the final approval permit, but
only  the constitutionality of the means (penalties) which  the
legislature chose for ensuring such behavior on the part of the
parties at whom the legal norm is aimed. Nevertheless, here too
we  will  evaluate the constitutional conformity  of  the  norm
providing  the  legal obligation, although it  is  a  secondary
obligation.  The  Constitutional Court is fully  aware  of  the
weight  of the arguments found in the position statements  from
the parties to the proceedings, in particular the Senate of the
Parliament  of  the  Czech Republic, and perhaps  also  in  the
position statement of the Ministry for Regional Development, in
whose jurisdiction the issue falls; the principal point in them
is  that  the  given unlawful conduct, i.e. use of  a  building
without  the final approval permit or inconsistently  with  it,
shows,  in  terms  of the public interest, considerable  social
danger, in particular in view of the general failure to observe
relevant    construction   regulations    (construction    non-
compliance).   In   view  of  this  the  legal   framework   of
administrative penalties, in this case fines, was to have  been
set up in a manner proportionate to the situation, not only  by
raising  the upper limit of penalties, but also by setting  the
lower limit. By incorporating a minimal penalty amount into the
statute,  the  legislature is basically pursuing  a  legitimate
aim,  because this permits distinguishing the gravity or danger
of  various types of unlawful conduct far more clearly than was
possible   by  setting  only  an  upper  limit.  A   subsidiary
consequence  of  this  step is that this limits  the  room  for
administrative discretion by the relevant state  bodies,  which
has  positive  consequences in, for example, the fact  that  it
unifies to a certain extent the level of punishments imposed or
limits  the  room  for  arbitrary or  corrupt  conduct  by  the
administrative  offices, which can be  prima  facie  a  certain
means  of protection from discrimination; only the other  hand,
however,  it equalizes the gravity of various unlawful conduct,
to  a  greater  or lesser degree, which leads to  limiting  the
ability  of  the administrative body to take into  account  the
specific  circumstances of the case, the person of the offender
and his economic level, as the Regional Court in Hradec Králové
states in its petition.
   First  of all, the Constitutional Court is forced  to  fully
agree  with  the opinion that Art. 6 para. 1 of the  Convention
can  not  apply to this case, due to the nature of the  matter.
The  subject of regulation by the provision in question is  the
guarantee  of  fair,  smooth and public  proceedings.  In  this
regard  if  one  speaks of the right to a fair  trial,  or  the
content of that right, this means the equality of "weapons"  of
the  parties  to  judicial proceedings,  a  right  to  personal
participation  and  an  oral hearing, and  the  right  to  have
certain  rules observed in the area of obtaining and evaluating
evidence,  etc.  However, the issue here is not evaluating  the
constitutional  conformity  of  procedural  regulations,   i.e.
whether certain procedural rules meet the cited principles, but
evaluating  a  substantive law regulation which is  in  no  way
related  to  procedure as such. In other words, the content  of
the  given  constitutionally guaranteed right can  not  be  the
right  of  the  individual toward the legislative  power  to  a
"fair" regulation of a particular legal relationship, and  thus
also  not  a  "fair"  fine amount. Thus, a fair  fine  must  be
understood – in terms of this constitutionally guaranteed right
–  to  mean  a  fine  imposed in accordance with  the  law,  in
proceedings which observe the principles of a fair trial.
  In view of the fact that the Constitutional Court is bound by
the  proposed  judgment in the petition, but not by  the  legal
classification  contained in it, it further considered  whether
the contested provision violated dictates of constitutional law
or  international  agreements other than those  raised  in  the
petition.
   The preamble of the Constitution indicates the intent of the
citizens of the Czech Republic to take as their starting  point
the  principles of a state governed by the rule of law. Art.  1
of  the Constitution expressly identifies the Czech Republic as
a  democratic  state governed by the rule of  law,  founded  on
respect for the rights and freedoms of the human being and  the
citizen.  Respect for the rights and freedoms of the individual
is  undoubtedly precisely one of those principles  of  a  state
governed  by the rule of law that are intended by the  Preamble
of the Constitution, from which one can derive one of the basic
rules  of  the  functioning of state power,  the  principle  of
proportionality (commensurateness) and the ban on abuse of  the
law,  as  the  Constitutional Court concluded in  a  number  of
findings.   This  principle  arises  from  the   premise   that
interference in fundamental rights or freedoms can occur,  even
though  their constitutional framework does not expect, in  the
event  that  they  are in mutual conflict or in  conflict  with
another constitutionally guaranteed value which is not  of  the
nature of a fundamental right or freedom (a public good )  (cf.
Constitutional Court finding of 9 October 1996, file no. Pl. US
15/96;  published  in The Constitutional  Court  of  the  Czech
Republic, Collection of Decisions, C.H. Beck, vol. 6, no.  99).
However, in these cases it is always necessary to evaluate  the
purpose  (aim) of such interference in relation  to  the  means
used,  and  the  measure  for  this  evaluation  is  the  cited
principle  of proportionality (in the wider sense),  which  can
also be called a ban on excessive interference with rights  and
freedoms. This general principle contains three principles,  or
criteria, for evaluating the admissibility of interference. The
first  of  these is the principle of capability of meeting  the
purpose (or suitability), under which the relevant measure must
be  capable  of  achieving  the  intended  aim,  which  is  the
protection of another fundamental right or public good. Next is
the principle of necessity, under which it is permitted to use,
out  of  several  possible  ones, only  the  means  which  most
preserve  the  affected fundamental rights  and  freedoms.  The
third  principle  is the principle of proportionality  (in  the
narrower  sense)  under which detriment in a fundamental  right
may  not  be disproportionate in relation to the intended  aim,
i.e. measures restricting fundamental human rights and freedoms
may  not, in the event of conflict between a fundamental  right
or   freedom  with  the  public  interest,  by  their  negative
consequences  exceed the positive elements represented  by  the
public  interest  in  these measures (cf. Constitutional  Court
finding of 13May 1997, file no. Pl. US 25/97; published in  The
Constitutional  Court  of  the Czech  Republic,  Collection  of
Decisions, C.H. Beck, vol. 11, no. 53). This point takes  as  a
starting  point the weighing of empirical, systemic, contextual
and value-based arguments (se Constitutional Court finding of 9
October 1996, file no. Pl. US 15/96; published as cited  above;
under  this finding an empirical argument can be understood  to
be  the factual gravity of the event which is connected to  the
protection of a certain fundamental right; a systemic  argument
means  weighing the purpose and classification of the  affected
fundamental  right  or  freedom in the  system  of  fundamental
rights and freedoms. A contextual argument can be understood as
other negative effects of limiting one fundamental right  as  a
result  of  giving priority to another; a value-based  argument
means  evaluating  the  positives  of  conflicting  fundamental
rights in view of the accepted hierarchy of values.).
   In  accordance  with  the  abovementioned  conclusions,  the
Constitutional  Court reviewed, above all,  whether  the  cited
interference   in  the  legal  sphere  of  an  individual   can
simultaneously  be considered interference in  constitutionally
guaranteed rights and freedoms, and it concluded that a fine  –
under   certain   circumstances  –  can  be,  first   of   all,
interference in a fundamental right under Art. 11  para.  1  of
the  Charter. Fines, as constitutionally admissible takings  of
property  –  in contrast to taxes and fees – are not  expressly
mentioned  in Art. 11 of the Charter; of course, the  situation
is  somewhat  different in the case of protection  of  property
rights  under Art. 1 of the Protocol to the Convention for  the
Protection  of  Human  Rights  and  Fundamental  Freedoms  (the
"Protocol"),  under  which  states  may  pass  laws  that  they
consider necessary in order to regulate the use of property  in
accordance with the general interest and ensure the payment  of
taxes  and  other  fees  or fines. One can  conclude  from  the
foregoing that fines, just like taxes and fees, fall  into  the
sphere of legal regulation of Art. 11 of the Charter, or.  Art.
1   of   the   Protocol  and  represent  basically  permissible
interference with the property rights of an individual,  which,
of course, is true on the presumption that the principles of  a
state  governed  by the rule of law, as cited above  (see  also
Art.  4  para. 4 of the Charter) are respected. We must add  to
this  that  a  fine  can  be  considered  interference  with  a
constitutional   law  dimension  if  it  interferes   with   an
individual's    property   relationships   with    considerable
intensity.  The Constitutional Court will consider this  factor
in   connection  with  the  application  of  the  principle  of
proportionality (see below).
   In this regard, the Constitutional Court would like to point
to  the fact that Art. 1 of the Protocol is discussed similarly
in:  Frowein,  J.,  Peukert,  W.:  Europäische  Menschenrechts-
konvention,  EMRK-Kommentar, 2nd edition, E. P.  Engel  Verlag,
Kehl,  1996, p. 824 et seq.; according to these authors  it  is
the  right  of  every  state to impose  financial  punishments,
which,  however, does not mean that the dictate  of  respecting
property in the area of financial fines can no be applied here;
on  the  contrary, one can review whether they were imposed  in
conflict  with the principle of the ban on abuse of rights,  or
proportionality. Concerning taxes, which, together  with  fines
are   one   variation   of  cases  (see  above),   the   German
constitutional Court, in a number of cases, expressly described
these  as  violation  of property rights (Eigentumsverletzung);
see  Isensee, J., Kirchhof, P.: Handbuch des Staatsrecht,  Band
VI, C.F.Müller, Heidelberg, 1989, p. 1072.
    After  determining  that  in  this  case  there  could   be
interference  with  constitutionally  guaranteed   rights   and
freedoms,  the Constitutional Court reviewed whether the  given
interference can be considered interference in accordance  with
the  principle  of  proportionality.  As  already  stated,  the
purpose of the legal framework at issue was to limit violations
of construction regulations. At first we must note that setting
progressive  levels  of  penalization,  which  increasing   the
minimum amount of fines can also be considered to do, can, to a
certain  extent, be an instrument which is capable of achieving
this  intended and also legitimate aim, as the risk of possible
strict  punishment reduces the "economic advantage" of unlawful
conduct.  For  that reason, the Constitutional Court  does  not
rule  out the possibility that the cited interference could  be
capable  of  meeting its aim. Of course, as  far  as  the  next
criterion  goes, the principle of necessity, the Constitutional
Court  can not but state that this interference does not  fully
correspond to this principle. One must realize that the general
failure to respect a particular legal framework on the part  of
individuals may be caused (apart from cases of completely  non-
functional  regulation)  by  inadequate  penalties,  where  the
unlawful  conduct is "worth it" even with the risk of penalties
being  imposed,  and/or  by  insufficient  activity  by  public
authorities which have jurisdiction to supervise the observance
of  rights and imposition of penalties. In the first case,  the
need  to  increase punishments is evident (here,  specifically,
the  levels  of  fines); in the second it is up to  the  state,
specifically the executive power, to implement measures so that
the   relevant  body  will  fulfill  its  functions.   If   the
legislature  concluded  that the  current  level  of  fines  is
inadequate,  it is fully within its jurisdiction  to  implement
appropriate  measures. On the other hand, one must  distinguish
between  the  upper and lower levels of fines. If  the  maximum
level  is  insufficient,  that can mean  –  regardless  of  how
administrative  bodies  are working – that  a  right  basically
becomes  unenforceable. In contrast,  no  minimum  or  a  "low"
minimum  level of fine can not by itself in any way cause  that
situation, unless it is joined by ineffective exercise of state
administration,   both   in   prevention   and    penalization.
Specifically concerning the issue of penalization, as  part  of
improving  the  functioning of state  administration,  e.g.  by
increasing   supervision  activities,   or   passing   internal
instructions  on imposing fines, it is possible to  achieve  at
least  the same results as can be achieved by raising the lower
limit of a fine.
   Thus, if such a measure is not necessary, and in view of the
fact that it is not impossible for a fine to be interference in
constitutionally  guaranteed rights and freedoms,  specifically
in  property  rights, the Constitutional Court had  to  further
consider  whether  there was really such interference  in  this
specific  case.  Evaluation of this question  is  very  closely
related  to the principle of proportionality, because,  as  the
Constitutional Court indicated above, not every imposition of a
fine is interference with fundamental rights and freedoms, only
such  as  interferes  with  property rights  with  considerable
intensity,  and it is precisely the degree of detriment  caused
by  this interference which is one of the factors for the cited
principle of proportionality.
   First,  it  is necessary to point out that the legislature's
setting  a  lower  limit  for fines limits  the  administrative
discretion of the relevant body, which, of course, can  mean  a
barrier to taking into account not only the factual gravity  of
particular unlawful conduct, but also the economic situation of
the  responsible  person  or entity.  This  can  result,  in  a
particular  case  or group of cases, in a fine  –  even  though
imposed on the minimum level – appearing extremely "unfair." In
view  of the relativity of this concept, one must look  at  the
matter from the viewpoint of constitutionally guaranteed rights
and  freedoms,  and  from that viewpoint  it  is  essential  to
specify rules which the legislature must observe in setting the
lower level of fines. The basic criterion that must be used, in
the  Constitutional  Court's  opinion,  is  the  criterion   of
substance,  under  which not every taking of  property  on  the
basis  of  fines,  or fees and taxes, creates  interference  in
property rights, but only such taking as fundamentally  changes
the  property relationships of the affected person  or  entity,
i.e.  so  that  it  changes  his entire  property  position  by
"ruining" the very basis of the property. Specifically, in  the
case  of  fines  imposed on legal entities and natural  persons
conducting  business under special regulations, one must  start
with  the premise that interference in property as a result  of
which the property base for further business activity would  be
"destroyed"  is  ruled  out.  In  other  words,  fines   of   a
liquidatory  nature are impermissible. It must be  pointed  out
that a fine of a "liquidatory" amount represents basically  the
"toughest"  case  of  interference in  property  relationships,
which  can  also lead to violation of Art. 26 para.  1  of  the
Charter;  we do not rule out applying the conclusion about  the
considerable intensity of interference in property rights  also
to  such  cases in which the fine so exceeds possible  revenues
that business activity basically becomes "pointless" (i.e.  for
a  considerable period of time aimed only at paying the imposed
fine).  With natural persons as entrepreneurs – in view of  the
fact  that  their  private property and property  intended  for
conducting  business are not separated (in terms of accounting)
–  in  such cases there is a danger of serious effects not only
on  the  offender's person, but also on other  members  of  his
household.  In view of the fact that more than 19%  of  natural
persons, and 19% of legal entities had a total annual income of
up  to CZK 50 thousand and virtually 70% of natural persons and
more  than  34% of legal entities had income of up to  CZK  500
thousand, it is undoubted that a fine imposed in the amount  of
CZK  500  thousand can, not only in the case evaluated  by  the
Regional  Court  in Hradec Kralove, but in a  whole  series  of
cases,  really have be of a liquidatory nature (around  19%  of
all  companies  have an annual income lower than  1/10  of  the
lowest  level of fine). Therefore, we can state – in accordance
with  the  abovementioned  starting points  –  that  the  cited
setting  of the lower level of a fine is sufficiently intensive
interference in an individual's property relationships that  it
is also interference with property rights.
   As  already stated above, the interference in question  does
not  correspond to the principle (criterion) of necessity,  and
so  a further test based on the principle of proportionality in
the   narrower  sense  is  not  necessary.  Nevertheless,   the
Constitutional  Court  also  considered  this   question,   and
concluded that this measure is disproportionate to the intended
aim, which is protection of the public interest. One must begin
with  the fact that the detriment to a fundamental right  which
can be connected with this interference is considerable, as the
interference threatens the very economic existence of  a  large
number  of  entities  or  persons, and protection  of  property
rights  in  the  system of fundamental rights and  freedoms  is
surely  among  the  most  important  rights.  Even  though  the
Constitutional  Court does not cast doubt on the  existence  of
the cited negative effect (i.e. failure to observe construction
regulations) in general, on the other hand, for one  thing  the
data  from the Ministry for Regional Development do not testify
to  considerable violation of construction regulations, and for
another the Constitutional Court does not believe that unlawful
conduct,  especially  in cases such as were  described  by  the
Regional   Court   in   Hradec  Kralove,  would   represent   a
sufficiently  serious society-wide problem, in light  of  which
such   fundamental  interference  in  fundamental  rights   and
freedoms   would   be   justified.  In  this   situation,   the
Constitutional  Court  can  not  in  principle  agree  with  an
approach which is basically founded only on progressive  levels
of penalization of individuals by the state. For example, as V.
Kanpp states (in: Teorie práva, Praha, 1995, C.H.Beck, p. 36  a
37), "centuries old experience shows, in particular in criminal
law,   first   that   violation  of  law  does   not   decrease
proportionately  with the increase of penalties,  and  further,
that  penalties (in particular strict penalties)  lead  to  the
creation  of  the  cited deregulators, or  anti-legal  systems,
which find ways to avoid the threatened penalty."
  The Constitutional Court can not but state that a fine may be
compatible  with  Art. 11 of the Charter  and  Art.  1  of  the
Protocol if it permits – at least to a certain degree –  taking
into  account  the offender's property situation (cf.  Peukert,
above,  p. 826). In addition, however, it is necessary to  take
into account the second dimension of the adjudicated situation.
Imposing  a fine in the range specified means that entities  or
persons whose economic situations are completely different will
be  penalized by basically the same level of fine, and thus the
effects  of the fine imposed will also be completely different;
whereas  for certain parties the maximum fine can be negligible
in  relation  to  their business, for others  even  the  lowest
possible fine can mean liquidation, as is demonstrated  by  the
abovementioned  data. Under Art. 1 of the  Charter  people  are
free and equal in dignity and in rights. In this case, although
the  contested  provisions treats all persons equally,  from  a
formal   viewpoint,  nevertheless  it  fundamentally   prevents
distinguishing their property situations. Certainly  not  every
factual  inequality establishes interference  with  fundamental
rights and freedoms; as the Constitutional Court stated in  its
finding of 7 June 1995, file no. Pl. US 4/95 (published in  the
Constitutional  Court  of  the Czech  Republic,  Collection  of
Decisions,  C.H. Beck, vol. 3, no. 29), "inequality  in  social
relationships,  if  it is to affect fundamental  human  rights,
must  reach  an intensity which, in a particular regard,  casts
doubt upon the very substance of equality. This usually happens
if  violation  of  equality is also connected to  violation  of
another fundamental right, e.g. the right to own property under
Art.  11 of the Charter, one of the political rights under Art.
17 et seq. of the Charter, and so on." In view of the fact that
here  too  there is basically a situation of social inequality,
it   must  be  considered  whether  there  is  interference  of
considerable  intensity, because every  setting  of  the  lower
limit  of  fines  can represent a certain inequality,  but  not
every  one  means  inequality in a  constitutional  law  sense.
However,  as  far  as  intensity  and  proportionality  of  the
interference  in  question  are concerned,  the  Constitutional
Court  has  already  considered them,  and  the  abovementioned
conclusions apply here as well, even if the matter is evaluated
from a different viewpoint.
   In  view  of  the  cited reasons, the  Constitutional  Court
believes that the contested provision is incompatible with  the
principles of a state governed by the rule of law under Art.  1
of the Constitution and is inconsistent with Art. 1 and Art. 11
para.  1  of the Charter and Art. 1 of the Protocol. Therefore,
the Constitutional Court had no choice but to annul it under  §
70  para. 1 of Act no. 182/1993 Coll. The Constitutional  Court
recognizes  that  annulling the provision in question  may,  as
indicated  by  the Senate of the CR in its position  statement,
disrupt the systemic connections and create inequality  with  §
106  para. 2 of the Construction Act, where the lower limit  of
fines  remains, but the Constitutional Court is not  authorized
to  annul  the cited provision, as it is bound by the  proposed
judgment in the petition (with the exception of corrections  of
a  technical  nature, as happened in this case). However,  this
does  not  prevent  the legislature from evaluating  the  cited
provision in view of this finding and taking appropriate  steps
to amend it.

Notice:  Decisions  of  the Constitutional  Court  can  not  be
appealed.

Brno, 13 August 2002