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BAN ON HEALTH INSURERS’ DIVIDENDS AND EXPROPRIATION METHODS FOR HIGHWAYS RULED UNCONSTITUTIONAL

Constitutional Court makes two major rulings

SLOVAKIA’S Constitutional Court has given the country two major rulings in a single day. Slovakia’s guardian of the constitution and overseer of laws enacted by parliament ruled in one of its decisions released on January 26 that legislation that prohibited private health insurers from paying dividends to their shareholders or autonomously deciding what to do with their profits violates Slovakia’s constitution.

SLOVAKIA’S Constitutional Court has given the country two major rulings in a single day. Slovakia’s guardian of the constitution and overseer of laws enacted by parliament ruled in one of its decisions released on January 26 that legislation that prohibited private health insurers from paying dividends to their shareholders or autonomously deciding what to do with their profits violates Slovakia’s constitution.

In the second case the Constitutional Court ruled that an amendment to Slovakia’s highway construction legislation which permitted the state to begin building highways on privately-owned land before the land expropriation process was completed is also unconstitutional.

While the government of Iveta Radičová welcomed the decisions of the court, the leader of opposition Smer party, Robert Fico, whose past government adopted both pieces of legislation, was somewhat reserved, saying that he “would not slam the court” for its decisions.

“We respect each and every decision of the Constitutional Court,” Fico told a press conference on January 26 while calling on the current government to change both laws in a way that “achieves faster highway construction” as well as preventing what he called “health insurers taking away people’s money”.

Finance Minister Ivan Mikloš reacted to the rulings by saying that when the legislation was being pursued by Fico’s government the opposition, as well as professionals, had warned that the legislation parliament was about to pass might significantly damage the citizens of Slovakia as well as the country itself.

“It [the ruling] clearly shows that steps by the previous government were irresponsible in this area,” Mikloš said, as quoted by SITA newswire.

The Constitutional Court ruled that the health insurance legislation fundamentally restricted the property rights of health insurers’ shareholders. The court ruled that the government intervened into the insurers’ right to do business in health insurance by depriving them of the right to make autonomous decisions over the use of their profit and that the restriction was not in accord with the constitution.

Fico’s government decided in 2007 that providing mandatory health insurance in Slovakia should not be a profit-making business and amended the law on health insurance to prohibit private health insurers from paying dividends to their shareholders, requiring them instead to channel any profits back into the health-care system. The law became effective in January 2008. The private health insurers operating in Slovakia objected that the legislation was hostile to investments made by their major shareholders and two of the insurers subsequently presented their arguments before international courts.

In 2008, a group of 49 members of the Slovak parliament also requested the Constitutional Court to review the law, arguing that the amendment contradicted the constitution as well as international laws.

The European Commission started reviewing the legislation in 2009 to determine if Slovakia had breached EU legislation and sent a letter of formal notice to the country to begin that process.

Regarding the legislation commonly called the expropriation law, the Constitutional Court ruled that neither the state nor any other body can start building highways on property that is not fully owned by them.

The Constitutional Court ruled that the amendment made it possible that rightful owners, de facto, could not use their property while also putting inappropriate pressure on all owners along proposed highways as well as violating citizens’ right to undisturbed use of their private property. Now Slovakia’s parliament must decide whether to remove or change the problematic provisions of the law. If parliament takes no action the challenged provisions will become invalid, the SITA newswire reported.

In January 2008, a group of opposition MPs asked the Constitutional Court to review the expropriation law and requested a preliminary injunction to halt the use of the law for one-off extraordinary measures to acquire land to initiate state highway and dual-carriageway projects. The court denied the preliminary injunction but agreed to review the constitutionality of the amendment.

The opposition MPs at that time said that permitting the state to build highways on private land without having clear ownership title was an unacceptable violation of private property rights. Interior Minister Daniel Lipšic, at that time a deputy for the Christian Democratic Movement (KDH), called the law an unconstitutional, flagrant violation of ownership rights, one of the most basic human rights.

The Fico government had passed the amendment to Slovakia’s highway legislation in 2007. The amendment changed the deadline for completing the expropriation process from before construction starts, as it was under the original law, to when the final inspection of the construction is underway. The original law permitted this method only in exceptional cases. The change in the law was estimated to have affected about 80,000 property owners with land on or adjacent to the planned highways, according to media reports.

Former transport minister Ľubomír Vážny argued at the time the legislation was adopted that without making the change several additional years would be required to negotiate with property owners before construction could begin in the government’s ambitious highway building plan.

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