The Senate of the Supreme Court of Latvia has identified a legislative gap in the compensation framework in a case involving a COBALT client. The case concerned a situation where the owner of frozen funds was not notified that the criminal proceedings had been terminated, even though the six-month period for claiming compensation ran from that date.
In this case, more than EUR 2.4 million of the client’s funds were frozen between May 2022 and December 2024. The criminal proceedings were terminated on 27 February 2025, but the client was not notified. He only learned of the termination in September 2025 after submitting a request for information.
The client then applied to the Prosecutor General’s Office for compensation for damage caused in the criminal proceedings. The Prosecutor General’s Office declined to consider the application, stating that the six-month time limit had expired. The Administrative District Court also refused to admit the client’s application, finding that the time limit was substantive in nature and could not be restored.
COBALT appealed the decision to the Senate on the client’s behalf, arguing that a person should not lose the opportunity to claim compensation where they had no genuine opportunity to learn in time that the criminal proceedings had been terminated.
The Senate found that Section 20 of the Compensation Law, as applicable in this case, did not address such a situation. This was inconsistent with the purpose of the law and the right to appropriate compensation guaranteed by Article 92 of the Constitution of the Republic of Latvia. The Senate also noted that requiring a person to make regular enquiries about the progress of criminal proceedings would not be an effective solution and would place them in an unequal position compared with persons who are notified of the termination.
The Senate concluded that, in such circumstances, the time limit for claiming compensation runs from the point at which the person could objectively have become aware of the relevant circumstances. In this case, that was when the client contacted the authority conducting the proceedings and received confirmation that the criminal proceedings had been terminated. The Senate set aside the Administrative District Court’s decision and remitted the matter for reconsideration.
“This case confirms that it is not enough for a right to be formally established in law – a person must also have a genuine and practical opportunity to exercise it. Where the time limit for claiming compensation is linked to the termination of criminal proceedings, a person affected by that decision should be informed of it, rather than expected to make regular enquiries about whether the proceedings may have been terminated. The Senate’s decision reinforces the principle that the right to compensation must not only be provided for in law, but also be capable of effective exercise in practice,” explains Gabriela Šantare, Senior Associate at COBALT and the client’s representative.
Importantly, this issue has since been addressed at legislative level. Since 1 June 2026, the law provides that an application for compensation must be submitted within six months of receiving notification of the circumstances giving rise to the right to compensation.
The client was represented in the proceedings by the COBALT’s Head of the Administrative and Criminal Litigation Practice Group Gabriela Šantare, and the team also included Junior Associate Marisa Aktumane.
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