European Commission: The Estonian state is obliged to pay compensation to bus carriers

The law in force in Estonia for 20 years, which obliges bus companies to transport disabled people and preschoolers free of charge and without state compensation, is in conflict with European law.

This position was taken by the European Commission on 20 July, when it assessed the case in the case initiated by Lux Express in Estonia in 2019 regarding the unconstitutionality of the Public Transport Act.

According to Ingmar Roos, Member of the Management Board of Lux Express Estonia AS, this is an important breakthrough in ending the unfair and illegal situation that has lasted for years. "We did not go to court against people with disabilities and preschool children, nor do we dispute the right of the state to offer them more favourable conditions for using public transport. We are arguing against an unfair system designed by the state. Carriers from which the state purchases transport services under public service contracts are reimbursed for the cost of transporting passengers with the right to travel free of charge per kilometre, but carriers operating purely on the ticket revenue are required to serve the same groups of passengers free of charge."

According to Roos, the situation of injustice is further aggravated by the fact that already in 2008 the Ministry of Economic Affairs and Communications, through the Chancellor of Justice, promised bus operators that a special compensation system would soon be established to serve persons with free driving rights. "13 years have passed, but this promise has not been fulfilled so far. However, in the meantime, the government has found that the Estonian state is rich enough to start universal free bus traffic on public county routes," Roos added.

Carri Ginter, an attorney at law of law firm Sorainen, who represented Lux ​​Express in the litigation, is grateful to the judge of the Tallinn Administrative Court, who sent the question to the European Court of Justice. "As far as possible, the state tried to claim that European Union law does not apply here. In the future, the dispute can focus on how much the state has to compensate bus companies," said Ginter.

However, resolving this issue may be complicated by the fact that the state itself does not have data on the number of passengers entitled to free travel prescribed by law. In 2018, a project was initiated on the initiative of bus carriers, but the state abandoned its implementation on the grounds that the project could not be completed before the end of the EU funding period.


Background to the case and the position of the European Commission:

In July 2019, Lux Express Estonia AS filed a lawsuit against the Estonian state to declare unconstitutional the obligation imposed by the Public Transport Act to transport pre-school children and disabled persons free of charge on commercial routes without state compensation. A short time later, three more Estonian bus companies applied to the administrative court with a similar complaint.

In the current court proceedings, the Ministry of Economic Affairs and Communications representing the Estonian state has expressed the view that the obligation imposed on bus carriers by the Public Transport Act to serve pre-school children and disabled persons free of charge without compensation is not a public service obligation.

By contrast, the position submitted by the European Commission to the Court clearly states that the obligation imposed on undertakings engaged in regular passenger transport on a commercial basis to carry certain categories of passengers free of charge, as in this case under § 34 of the Estonian Public Transport Act, constitutes a public service obligation. The European Commission is also of the opinion that § 34 of the Estonian Public Transport Act, which stipulates that the carrier is not compensated for the free transport of passengers, is in conflict with the law of the European Union. In essence, the European Commission is of the opinion that the regulation in force in Estonia since 2000 is illegal.