On September 8, the European Court decided - the law that has been in force in Estonia for 20 years, which obliges bus companies to transport disabled people and preschoolers for free and without state compensation, is illegal and must be repealed.
This decision should end the dispute that started more than three years ago, where Lux Express went to court against the state and requested that the public transport law be recognized as unconstitutional. In 2020, the Tallinn Administrative Court, which processed the case, made a request to the European Court of Justice and, before making its decision, asked for an assessment of whether, in addition to national law, the obligation to ride for free is also regulated by European Union law. The decision of the European Court passed last week is binding on the Tallinn Administrative Court.
"The state of Estonia tried until the last moment to claim that the law of the European Union does not apply here and that the state has every right to force carriers to drive people on buses for free. The European Court said that the state's obligation to pay compensation has been valid since 1971. Now let us calculate how big the difference between revenues and costs was. In this way, we will find out how expensive the gift was, which the state initially wanted to pay from strangers' pockets," commented Sorainen's partner Carri Ginter, who represents Lux Express and other Estonian bus operators in the dispute.
According to Ingmar Roos, member of the board of Lux Express Estonia AS, it is important to emphasize that they did not go to court against disabled people and preschool children and did not dispute the state's right to offer them more favorable conditions for using public transport. "We also argued against the illegal system created by the state in light of the unfair and recent court decision. Carriers from whom the state buys transport services based on public service contracts are reimbursed for the cost of transporting passengers with the right to travel for free through the price per kilometer, but carriers serving lines operating purely from ticket revenue must serve the same groups of passengers without receiving payment. This harms the competition between ticket-based bus traffic and the service supported by the state budget. All in all, this means that due to the burden imposed by the state against the law, there are fewer bus lines in operation than there would be under the conditions of undistorted competition."
Sorainen's attorney-at-law Kadri Härginen added that now the court is asking the Ministry of Economy and Communications (respondent) what position it will take after publishing the views of the European Court in the preliminary ruling. "Obviously, it is no longer possible to proceed from the assumption that the carrier does not have to be compensated. It would be expedient for the respondent to negotiate with the complainant regarding the calculation and payment of the amount of compensation. The court expects the respondent's position within 15 days from the delivery of the order," added Härginen.
The unfair situation that has existed for years is made grotesque by the fact that already in 2008, the Ministry of Economy and Communications, through the chancellor of justice, promised bus operators that a special compensation system would soon be created to serve persons with the right to travel for free. "14 years have passed, but this promise has not yet been fulfilled. However, in the meantime, the government has decided that the Estonian state is rich enough to start free bus traffic on public county lines," added Roos.
Background to the trial
In July 2019, Lux Express Estonia AS appealed to the court against the Estonian state with a request to declare unconstitutional the obligation imposed by the Public Transport Act to transport pre-school children and disabled persons on commercial lines for free without receiving compensation from the state. Three more Estonian bus companies - MK Autobuss AS, Estonian Lines OÜ and Arilix OÜ - appealed to the administrative court with the same complaint.
In the court proceedings so far, the Ministry of Economy and Communications, representing the country, has expressed the opinion that the obligation imposed on bus operators by the Public Transport Act to serve preschool children and disabled persons free of charge, without receiving compensation, is not in its nature the imposition of a public service obligation.
On September 8, the European Court recognized the state's position as false. The decision can be found here.