In HS's Viestikoekeskus trial, the newspaper paid the lawyer's bills, but the Supreme Court decided that they are taxable income for the journalist. Sanoma Media Finland CEO Pia Kalsta says that the employer will continue to cover the corresponding expenses.
Helsinki Sanomat's editor has to pay taxes on the lawyer's fees that the paper has paid in the Viestikoekeskus lawsuit. This is what the Supreme Administrative Court (KHO) decided in its yearbook decision on Monday.
The decision concerned a journalist from Helsingin the district court sentenced in January 2023 for revealing the security secret of the fine.
Another HS journalist was considered guilty of the crime, but was left unsentenced.
Instead, the charges against the journalist's immediate supervisor at the time, who was considered the main culprit, were dismissed because he was not considered to have participated in the disclosure of secrets as a perpetrator or a facilitator of the crime.
The criminal case is currently pending at the Helsinki Court of Appeal.
KHO stated that the consulting and court costs of the lawyer used by the supplier are not the company's costs, even though the company had ordered the services. The preliminary investigation and trial targeted the journalist personally, and that is why, according to KHO, they are the journalist's expenses.
“In this regard, it is not important in the case whether the charge against the applicant is dismissed, whether the applicant remains unsentenced or whether the applicant is sentenced to punishment,” the Supreme Court stated.
The KHO's decision thus means that the court costs of the other two suppliers would also be considered their personal income, so taxes would have to be paid on them.
The newspaper's combined legal expenses totaled around 2.4 million euros. The newspaper used two lawyers in the story.
Since the immediate supervisor's charges were dismissed, the district court ordered the state to compensate the court costs with approximately 243,000 euros. According to the law, the state has to pay reasonable court costs if the charge is dismissed.
The prosecutor demands in the court of appeals that the immediate superior should also be convicted of the act.
Message CEO of Media Finland Pia Kalsta says in the company's internal announcement that the employer will continue to cover the corresponding expenses. Sanoma says that it will also compensate the costs arising from taxes for the journalist.
“This is a very regrettable decision from the point of view of the Finnish media and journalism as a whole, and it has not taken into account the broader effects on freedom of speech. The deterrent effect created by the decision limits the ability of editorial offices and media companies to do ambitious and especially investigative journalism,” says Kalsta.
“We have to make sure that the decision does not affect the work of deliveries and everyday decision-making. We are still carefully familiarizing ourselves with the content of the decision and its practical effects.”
KHO's in this case, legal fees are not equated to expenses directly incurred by the performance of the work, such as work tools or travel expenses.
Although the journalist's duties have included preparing articles to be published in the newspaper, his duties did not include being a defendant in the trial.
“The situation must not be evaluated differently on the basis that, according to the applicant, the tasks of the media and journalists include testing the limits of freedom of speech. In the case, it is also not necessary to give importance to the fact whether the applicant has already thought that his act was unjust from the beginning”, the KHO stated.
Because of this, the lawyer's fees paid by the newspaper must be equated to a salary, so taxes should have been paid on them.
KHO's the five-member assembly was unanimous on the outcome, but it voted on the reasons.
Two members and the speaker of the case did not consider the rule that such expenses were taxable income to be entirely without exception.
The minority pointed out that attention must also be paid to the need to protect the employee from additional costs arising from work.
“Work done for the employer cannot be required to be risk-free”, legal advisors Hannele Ranta-Lassila and Mikko Pikkujämsä emphasized.
Sometimes only a final judgment gives the answer to whether the employee's actions were illegal or not, they continued.
“Going through the criminal process can be justified from the employer's point of view, and it can result in a lot of costs that the employee has had difficulty preparing for in advance. If in situations like this, the employer takes responsibility for the employee's defense expenses, it is not justified to consider bearing the cost responsibility as the employee's wage income,” the minority stated.
In this case, however, it was about slow-paced journalism, where the reporter had time to evaluate his participation in the project and the publication of the information. The information in the supplier's application for preliminary ruling was so scarce that it cannot be concluded that the supplier could reasonably have concluded that it was acting in accordance with the law at the time of the act, the minority decided. That's why they also accepted the end result.
The majority was made up of legal advisors Irma Telivuo, Vesa-Pekka Nuotio and Tero Leskinen.
The Supreme Administrative Court is the highest court, so its decision cannot be appealed. You can take the matter to the European Court of Human Rights if you consider that the decision violates the rights protected in the Human Rights Convention.
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