Introduction

In its decision of 4 March 2014 (Grande Stevens and Others v. Italy)[i] the European Court of Human Rights had the chance to clarify some controversial issues regarding the application of the “ne bis in idem” principle embodied in Article 4 of Protocol No. 7 of the European Convention on Human Rights.

The case concerned an appeal against the administrative penalty imposed on the applicants by Consob, the Italian Companies and Stock Exchange Commission, and the concurrent criminal proceedings to which the applicants were subject after having been accused of market manipulation in the context of a financial operation involving the car manufacturer FIAT.

According to the Court, the criminal proceedings against the applicants concerned offences involving facts which were identical to those for which the applicants had been finally considered liable by Consob. More importantly the Court ruled that the administrative penalties imposed by Consob may be considered, for the purposes of the European Convention on Human Rights, as criminal sanctions. The Court ruled that beginning a criminal proceeding for an abusive behaviour that has already been subject to Consob’s penalties constituted “bis in idem”, as no legal action can be instituted twice for the same cause of action.

The ruling of the Court[ii] enhances compliance with the “ne bis in idem” principle within each Member State by extending its scope of action to include also sanctions that are essentially criminal in nature even though they are formally classified as non-criminal in domestic law. In doing so, the Court referred to its own established case-law which sets out the criteria to be considered in determining whether or not there was a criminal charge.

Ne Bis in Idem” and Double Jeopardy

The “ne bis in idem” principle, also known as double jeopardy in common law jurisdictions, has the purpose to prevent a person from being tried or punished twice for the same offence. It may operate both externally (i.e., in an international context, when a person has been finally convicted or acquitted by a court in another State), and internally (i.e., in a domestic context).

This principle is fully recognized and internationally protected[iii] and is embodied in the constitutions and/or in the domestic legislation of many countries; as for Italy, it is recognized at an internal level in the Code of Criminal Procedure.[iv]

The External Ne Bis in Idem

At an international/external level, the “ne bis in idem” principle indicates the prohibition to expose an individual to trial a second time for the same conduct in two different States.

Although this is a very controversial matter, affected by the lack of harmonization among the various national criminal laws, external “ne bis in idem” has been fully recognized by the Charter of Fundamental Rights of the European Union, which expands the scope of application of the principle to the entire territorial area of the European Union.[v] After the Treaty of Lisbon,[vi] this Charter has become directly and immediately applicable in each Member State, and, consequently, most jurisdictions now consider also the external “ne bis in idem” principle as mandatory and as a right that cannot be waived by any means by the States.[vii]

The lack of certainty as to the application of the international “ne bis in idem” is evidenced in the Schengen Agreement.[viii] After stating that a final judgment of acquittal or conviction delivered by the authority of a Member State produces a preclusive effect similar to that which a judgment issued by a national court can produce[ix] — recognizing therefore that the external “ne bis in idem” applies between States — it subsequently lists specific instances[x] in which States are allowed to opt out of this provision and therefore are not bound by the effectiveness of the principle of “ne bis in idem”.

The Internal Ne Bis in Idem

The European Convention on Human Rights[xi] and the International Covenant on Civil and Political Rights[xii] are two examples of treaties containing solely an explicit reference to criminal proceedings pending under the jurisdiction of the “same State”. This means that a State will not consider the trial of a person for a particular criminal offence in another State as a bar on prosecuting the person for the same offence in that State. Therefore the application of the “ne bis in idem” is limited to a national level, being confined to the jurisdiction of the same State.

The preclusion applies only after the person has been finally acquitted or convicted in accordance with the law and criminal procedure of the State concerned. This means that there must have been a final decision. The assessment on when a decision can be considered final depends on the criminal procedure rules of each State, particularly whether the law provides for prosecutorial appeals of final judgments or whether it allows retrials. Once the accused has exhausted his appeal options, “ne bis in idem” starts to apply simply after his acquittal or conviction — in jurisdictions where the prosecutor has no right to appeal — or when all appeals have been exhausted or when the time limit for appeals has expired — in jurisdictions where the prosecutor may appeal an acquittal on an error of law or fact and where a retrial can be ordered.

Case law of both the European Court of Human Rights[xiii] and the Italian Supreme Court[xiv] can be taken into consideration to further clarify the meaning of “final judgment”, preclusive of a new trial or a new conviction. Any decision by a criminal judge of one of the Member States that has acquired the power of final decision (res judicata), regardless of its nomen juris has to be included in the principle’s scope of action. Therefore, any judgment that can be considered equivalent to a final judgment in any way is comprised.

Numerous leading decisions of the European Court of Justice[xv] have designed the limits of European “ne bis in idem” establishing that this principle also applies to procedures for discharge of the criminal action (i.e., following plea bargain on an agreement with the Public Prosecutor) by which the Public Prosecutor of a Member State closes, without a judge’s intervention or the involvement of a court, a criminal proceeding after the accused has fulfilled certain obligations (i.e., paid a sum of money determined by the Public Prosecutor).

Furthermore, “ne bis in idem” also applies to all decisions — issued by individuals with the authority to administer national criminal justice — which can be considered as “final judgments” and which affect the unlawful conduct with which the accused is charged, even if they are not issued by a judge or in a form other than a judgment.

The Case of Grande Stevens and Others v. Italy

The applicants were two Italian companies, Exor S.p.A. (the majority shareholder of Fiat S.p.A.) and Giovanni Agnelli & C. S.a.s., their chairman, the authorized representative of Giovanni Agnelli, and the Agnelli group’s lawyer.

In 2005 Consob[xvi] asked Exor and Giovanni Agnelli to issue a press release providing information concerning any initiative taken in view of the expiry of a 2002 loan, of any new fact concerning Fiat and of any information that could explain the fluctuation of Fiat shares on the market.

The applicants issued a press release indicating that no initiatives had been examined or instituted in relation to the expiry of the financing contract, although negotiations with one bank were at an advanced stage. Soon thereafter, the bank finalized an agreement amending the 2002 contract with Exor, thus enabling the Italian company to preserve its initial holding in Fiat.

Pursuant to the Italian Financial Act,[xvii] Consob accused the applicants of the offence of “disseminating information (...) capable of providing false or misleading information concerning financial instruments”.[xviii] In February 2007, Consob then imposed administrative sanctions on the applicants. The fines imposed by Consob — and partly reduced by the Turin Court of Appeal — became final in June 2009. Ultimately, the fines imposed on Giovanni Agnelli, Exor and one of the individuals amounted to € 600,000, € 1,000,000 and € 1,200,000, while the other individuals involved were banned from administering, managing and controlling companies listed on the Italian stock exchange for periods ranging from two to four months.

Under the Italian Financial Act, the applicants’ conduct triggered ill pending.

The applicants recurred to the Court complaining, among other things, that the criminal proceeding brought against them was based on the same events for which they had already been sanctioned with an administrative penalty by Consob.

An important issue that the European Court had to analyze, in order to decide if there had been a violation of Article 4 of Protocol No. 7, concerned the reservation that the Italian Government made with regard to the application of Articles 2 to 4 of Protocol No. 7.[xix] In this declaration, Italy stated that these articles applied only to offences classified as “criminal” by the Italian law, which was not the case of the offences proscribed by Consob. The general principle, embodied in Article 4 of Protocol No. 7 of the European Convention on Human Rights,[xx] is that since the “ne bis in idem” scope of action covers only trials and convictions of a person in criminal proceedings, it does not prevent him/her from being made subject, for the same act, to action of a different character (for example, civil proceedings, disciplinary action in the case of an official).[xxi]

The Court noted, however, that the reservation in question did not respect the parameters prescribed by the Convention,[xxii] because it did not contain a “brief statement of the law concerned”. The reservation was considered of a general nature and was accordingly considered invalid, since it did not refer to, nor mention, those specific provisions of the domestic legal order which exclude offences or procedures from the scope of Article 4 Protocol No. 7.

Having established that the reservation was invalid, to determine whether there had been an actual breach of the “ne bis in idem” principle, the Court had to decide on another critical point regarding the scope of action of Article 4 Protocol No. 7, i.e., it had to ascertain whether the procedure before Consob concerned the “determination of a criminal charge”.

The Court stated that in order to determine whether it was a matter of criminal charge or not, three criteria had to be taken into consideration: (i) the legal qualification of the matter within the system of the relevant State; (ii) the nature of the matter itself; (iii) the nature and the severity of sanctions.[xxiii]The Court also pointed out that these three criteria are alternative and not cumulative, but they could be cumulated when the analysis of each criterion is not enough to conduct to a certain statement on the application of the “ne bis in idem” principle.

The conclusion of the Court was that although the sanction was described as “administrative” in Italian law, the severity of the fines imposed by Consob on the applicants meant that they were criminal in nature. There were indeed grounds for considering that the procedure before Consob concerned a “criminal charge” and that consequently Article 4 of Protocol No. 7 was applicable.

As a result, the applicants ought to have been considered as having already been convicted by a final judgment under the scope of Article 4 Protocol No. 7. The criminal proceedings which had been brought and maintained against them in the meantime clearly concerned the same conduct, by the same persons and on the same date:

In the Court’s opinion (...) the new proceedings concerning a second “offence” originated in identical events to those which had been the subject-matter of the first and final conviction, which in itself amounted to a violation of Article 4 of Protocol No. 7. It followed therefore that Italy was to ensure that the new criminal proceedings brought against the applicants in violation of this provision, and which were still pending, against Mr. Gabetti and Mr. Grande Stevens, were closed as rapidly as possible and without adverse consequences for the applicants.[xxiv]

Conclusions

The “ne bis in idem” principle is a well-established principle in most countries; however, at the same time, as we have analyzed throughout this article, it also creates several issues which national and international courts are trying to resolve.

In its 4th of March decision, the European Court of Human Rights held that a State cannot use national/internal classifications of sanctions to avoid application of this principle in its jurisdiction. In other words, States cannot arbitrarily classify sanctions as administrative rather than criminal to leave them out of the scope of action of the “ne bis in idem” principle.