In case decision number 8278-20-INA, dated June 18, 2020, the Constitutional Court (hereinafter the “TC”) declared the inapplicability of the first part of the first paragraph of Article 20 of the General Law of Urbanism and Construction (hereinafter the “LGUC”), which provides: “Article 20. Any infringement to the provisions of this law, its general ordinance and the instruments of territorial planning that are applied in the respective communes, will be sanctioned with a fine, to the benefit of the municipality, of not less than 0.5% and not more than 20% of the budget of the work, referred to in article 126 of the present law”.

The requirement of inapplicability was presented by Metlife Chile Seguros de Vida S.A., on the occasion of the application of a fine against it, in application of article 20 of the LGUC, amounting to Ch$573,929,196, decreed by the First Local Police Court of Florida, currently pending review before the Court of Appeals of Santiago, on appeal presented by Metlife.

Metlife based its request on the fact that the application of the first paragraph of article 20 of the LGUC was a violation of the constitutional guarantees of the administered party before the state’s punitive power, leaving the law to the judge’s discretion to set the fine, without determined criteria, in violation of the principle of legality; constituting, in addition, a sanction that violates the principle of proportionality, violating in the case of articles 1, 5, 6, 7, and 19 N°s 2, 3 and 26 of the Political Constitution.

In this regard, the Constitutional Court considered that the fine applied by the First Local Police Court of Florida, in the amount of $573,929,196, was contrary to the principle of proportionality set forth in the Constitution. Thus, the TC considered that the sanction lacked foundation since there was too broad a criterion in the first paragraph of Article 20 of the LGUC when determining the amount of the fine (between 0.5 and 20% of the budget of the work), the judge not providing sufficient justification and reasons that led him to award the punishment in the amount of $573. 929,196.- Furthermore, the TC pointed out that the unmotivated execution of the law (first paragraph of article 20 of the LGUC) found direct and immediate cause in the deficient redaction of the same law.

In case you require additional information on this matter, you may contact Sven Herlin (sherlin@jdf.cl) and/or JulioTrucco (jtrucco@jdf.cl)