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Mister Speaker,

Excellency,

Upon receiving for enactment as law Parliamentary Decree No. 150/X, which approves the terms of extra-contractual third party liability of the State and remaining public bodies, I took the decision, in the terms of item b) of article No. 134 and article No. 136 of the Constitution of the Portuguese Republic, not to enact it on the following grounds:

1. The law at issue will substitute the terms of extra-contractual third party liability of the State, approved by Decree-Law No. 48,051, dated November 21 1967, which has been in force for approximately forty years.

2. The new provisions, unanimously approved in Parliament at the end of a lengthy legislative procedure, introduce an authentic change of paradigm in the framework of the State’s extra-contractual liability, which is profoundly modified in the sense that it clearly expands the liability of public bodies, specifically as to the exercise of administrative, jurisdictional, political and legislative functions.

3. It is thus required that such a law should contain clear and transparent juridical measures and, above all, that it should retain rules and principles the scope of which would have been pondered and ripened either conceptually or in regard of its feasibility and all of its consequences, specifically the respective financial issues, considering the current level of the Country’s development in contrast with other European States.

4. In effect, such a sizeable alteration naturally implies a significant increase in State expenditure, impossible to quantify or to estimate, and will certainly have a deep impact in the running of the courts of justice and of the public services in general.

5. As such, for the purpose of providing and adequate defence of the public interest, and without in any way questioning the opportunity of the introduction of a new pattern for the extra-contractual third party liability of the State, I would suggest as very convenient that Members of Parliament should reassess the effects of the measures contained in the proposed legislation.
It should not be forgotten that the responsibility of the State is ultimately borne by the taxpayers and that any actions must go through the courts of law. It seems, however, that several measures foreseen in the proposed legislation are such as to bring about financial consequences which seem devoid of reason in terms of fiscal strain, but could also cause an added load on the judiciary which would probably be totally out of proportion.
As such, and without wishing for an in-depth debate of specific aspects of the proposed law, I believe it is relevant to mention some of the measures included therein, relative to which a reappraisal would be pertinent.

6. Concerning the third party liability for damages deriving from the exercise of administrative functions, the obligatory use of the right of redress (article No. 6) of officers, public servants and agents, in the case of bad faith or gross fault in an act requiring compensation, will imply the systematic launching of investigative procedures to ascertain the eventual bad faith or grade of fault.
Resulting that, whenever the State is demanded due to illicit acts or omissions in the exercise of its administrative duties, the public servant or officer will be involved in a juridical procedure, with all the resulting costs and liabilities. Paragraph 4 of article No. 8 so determines, when providing that the grade of fault will be established when the compensation is determined and that «the respective judicial action will proceed, between the public body and the public servant, in order to assess the latter’s grade of fault, and, as a result of this, of the possible right of redress».
However, the acts at issue could correspond to infringements relating to valuable interests, without the public servant or the officer having, in any way, the possibility of not taking part in the decision, under the penalty of infringing their duty, and without any control over the proportionality between the interests represented by the public servant – the interests of the State – and his financial capability to compensate the prejudiced private parties. Even if it should be proved that there was no bad faith or gross fault, he will have to be obligatorily demanded, bearing the costs of the defence and the uncertainty of the decision. It should be recalled that, in this respect, the interests of the private parties are already duly protected by the equitable response to which the State is obliged.
The acceptance of responsible duties could also become very difficult, should the persons concerned be fully conscious of the risks taken in the case of a contradictory decision, since those persons will necessarily and specifically need to be clarified over this issue; neither should the possibility be excluded that the administrative staff with responsible duties could avoid at all costs taking decisions contrary to the interests of the private parties, thus risking due impartiality and the safeguard of the public interest.

7. The concept of responsibility for the deficient running of public departments, which is characterized through recourse to the notion of «average standard of results» (article No. 7, §4), could imply, at the very limit, that if a department did not attain an «average result», this could be a synonym of «deficient running». The use of a measure of «average results» to assess a graver situation – the deficient running of a department – must be questioned.
The inherent realism in the application of this legislative act would advise, on the other hand, that the definition of the concept of «deficient running of a department» should equally include as a standard the means available to the Public Administration.

8. In the context of the responsibility for damages caused when exercising a juridical function, the law under appreciation includes (article No. 13) a general principle as to the State’s responsibility for judicial errors – a reality which, rigorously, should not be confused with the revoking of a judicial decision by a superior court. Nevertheless, the estimate of responsibility for judicial error is so comprehensive that it could lead to such a confusion, with consequences difficult to foresee at every level, including the safeguard of the principle of independence of the judicial courts, in its measure of freedom of judgement
Equally, in this case, a second line of thought comes to mind, regarding the determination of the «manifest» character of unconstitutionality or illegality of the decision, or of the «gross» appraisal of the factual presuppositions.
It is true that a request for compensation depends upon the prior revoking of the damaging decision in the respective jurisdictional regulation, but then, who is responsible for the decision as to the «manifest» character of the illegality or as to the «gross» error in the assessment of proof? Since the proposed law is silent in this respect, it would appear that such a decision should belong to the court which will judge the action for the award of compensation. Nevertheless, this solution is not exempt from criticism. In effect, the same institutional and legislative logic, which subjects the request for compensation to the revoking of the damaging decision in the respective jurisdictional regulation, compels this same jurisdictional regulation to state if the error committed by the appealed court was manifest or gross, in terms of the law or as to the appraisal of the facts. Otherwise, should it be the case of responsibility for an erroneous decision of a judicial court, it would follow that, after it had been revoked by a Court of Appeal or by the Supreme Court, it would be an administrative court which would finally appraise the seriousness of the error. Should this be the solution for the future, there is the risk of a grievous infringement of the independence of each jurisdictional regulation – which would in the end revert to the very principle of the independence of the juridical function.

9. Doubts also appear as to the clarity of the solution concerning the responsibility of the judicial magistrates and of the Public Prosecutor (article No. 14, §1).
Reasons of juridical security and of the guarantee of the principle of independence and non-liability of the judicial magistrates, would advise that the concepts of gross fault and bad faith be more comprehensive for the purposes of placing an action for the right of redress, similar to regulations in force in other European countries. Constitutional guarantees of independence and non-liability of judicial magistrates compel that these are only answerable for definitive infringements of functional duties and never for eventual errors or incorrectness in the decisions taken.
It would thus be important to clarify, in the preview contained in §2 of article No. 14, that the disciplinary Committees of magistrates will be responsible for the prior investigation of the definitive infringement of functional duties, for the purpose of finding out the grievously faulty or bad faith in their conduct. This precision would avoid the risk of an undue interpretation of the precept, in the sense that the placing of the action of redress by the Committees would automatically condemn the State in the terms of article No. 13, which would affront the referred constitutional guarantees.

10. Within the scope of the liability for acts deriving from political and legislative duties, it is shown that, from an almost total lack of grounds for placing corresponding actions of third party liability against the State, the new law arrives at an innumerable set of hypotheses of liability. This is patently obvious since, apart from the liability for the illegality deriving from the unconstitutionality due to act and omission, there is equally that which derives from the infringement, by act or omission, of the duties enforced by international law, community law and law with reinforced value.

11. It is first of all necessary to highlight a textual and logical cum systematic discrepancy between the heading of Chapter IV, which relates to «political and legislative functions», and the heading of article No. 15, which mentions the «political-legislative» function. Would it have been the wish of the lawmaker to redirect political and legislative activities into distinct functions or to condense them in the same function? This is incorrect wording and could generate juridical uncertainty as to determining the specific object of the liability.
In relation to the extent of the presuppositions generating liability, concerns arise in the solution chosen regarding liability for damages caused, both for acts not conforming to international and community law (article No. 15, §1) and for the omission of the necessary legislative measures to confer feasibility to rulings resulting from international agreements and community rulings which may so require.
These comments arise not only because what it would mean in terms of financial and procedural effects derived from a profound expansion of the liability of public bodies, but also because it would create an unbearable scenario of the State being prey to double liability, answering for the same infringement, internally as well as internationally and to the community.
Neither does it seem acceptable to formalize an institute for extra-contractual third party liability based on the omission of legislative measures required to render feasible legislative acts with reinforced value (article 15, §3).
This juridical institution results in the setting up of an implicit and subliminal system for «disseminated checking of illegality by omission» for the purpose of placing the State under third party liability, which deserves comment, since it:
a) Creates situations of great juridical uncertainty whilst disseminating through the common courts the power to check the lack of complementary legislation to reinforced law, based on uncertain presuppositions and without the existence of sufficient and promptly acting institutions of jurisprudential standardization, and as such instituting a system which would cause diverging court decisions, situations of inequality between private parties and juridical insecurity;
b) Exempts, without reasonable grounds, the intervention of the Constitutional Court, as “judge of legislation”, for the situation of omission of legal rulings that confer feasibility to reinforced laws, when it determines (article No. 15, §5) the same intervention in the parallel situation of prior checking of unconstitutionality by omission (a situation which should be covered by an organic law);
c) Does not determine the requisites generating illegality deriving from the omission of legislative measures which confer feasibility to laws with reinforced value, from which results a wide casuistic margin and uncertainty which depreciates the conforming freedom of the lawmaker. Will the referred omission comprise, for instance, just the non-observance of the delays set in the reinforced laws, with the respective legal complement in view, or will it equally involve other provisions contained in those same laws which, lacking legal disclosure, do not set delays for the purpose?

12. With respect to the judging of unconstitutional and illegal acts, consideration should be given, at least in a transitional stage, to a more precautionary and prudent system, in the terms of which the liability for the exercise of legislative functions would be limited to the cases where there is a previous declaration by the Constitutional Court of unconstitutionality with general obligatory enforcement. Such precautionary reasons would derive specifically from:
- the need to avoid uncertain and unequal situations derived from diverging court decisions, which could affect the Constitutional Court itself when performing definitive checks, querying the pertinence of the attributed compensations based on regulations that, having been judged as unconstitutional or illegal, would later on not be so considered due to jurisprudence of the same Court;
- the possibility of avoiding that the State is considered liable, even if, when the private parties are prejudiced by unconstitutional legislation, in the terms of §4 of article No. 282 of the Constitution, the Constitutional Court decides to temporarily restrict the effects of its decision, for reasons of juridical security, fairness and public interest, by safeguarding the past effects of the same legislation which it judged as unconstitutional.

It should be added that it is difficult to understand why the proposed law demands a manifest character for the unconstitutionality which affects judicial decisions and does not prescribe similar grounds for legislative acts. It would probably be more prudent to restrict liability to legislation that is manifestly unconstitutional or illegal.
Finally, the type of relevant unconstitutionality resulting in liability for the public bodies is not qualified (article No. 15, §4), deferring to whoever applies the law the power of creative innovation of the law that is vested in the legislator. Such an option could generate situations of inequality, as well as uncertainty as to the result of the procedure, when, for instance, in some cases emphasis will solely be placed upon the material unconstitutionality as grounds for liability, and, in other cases, the remaining types of unconstitutionality could be appreciated for the same purpose.

13. It would seem preferable that damages liable to compensation be limited to infringement of rights, freedom and guarantees, such as established under article No. 22 of the Constitution, instead of enhancing the expansion of liability to affect other rights, an option which is susceptible to give rise to unforeseeable engagements and financial costs to the State.

14. Finally, from a global point of view, and not considering details of juridical technicalities, the main reason underlying my request for the reappraisal of this law is based upon the following point: the present regime of the State extra-contractual liability demands from Members of Parliament a supplementary effort to concentrate on its effects. To start with, as to the effects on the plan for the soundness and balance of the State’s finances, this deriving mainly from the pattern chosen by the law for the regime of liability due to the exercise of legislative duties. Next, with respect to the consequences which will arise as to the efficiency of the judiciary system, at a time when this is undergoing a complete reformation procedure to enable its catering to other demands. Finally, with respect to the running and modernization of the Public Administration, that could be seriously affected by a regime which, wishing to encourage skill and sense of responsibility will end up by promoting paralysis and «non-decision».
I believe, in short, that there should be a reassessment of the essential presupposition on which the law is based, in the terms of which the State would assume a «providential» function for social damages and risks through an excessive expansion of the presuppositions of liability of the public bodies, with specific relevance to the exercise of legislative functions, a point which would certainly contribute, whilst manifestly prejudicing the national interest, to an inequitable relationship between the political powers and the civil society.

In view of the above, and in the terms and for the purposes of the provisions of articles No. 134, item b), and No. 136, §1, of the Constitution of the Republic, I decided not to enact as law Decree No. 150/X issued by Parliament, requesting, on the basis of the above grounds, a reappraisal of the referred Decree.

With highest regard,

The President of the Republic

Aníbal Cavaco Silva