A law in Estonia has required for decades that bus companies operating on commercial routes provide free trips to pre-schoolers and individuals with disabilities. This free travel generates no revenue for the operator and the state does not compensate it in any way.

The European Court of Justice has ruled that the state must compensate the operator for revenue loss.

Garri Ginter, a partner at the law firm Sorainen, said that private companies' money and resources cannot be shifted around arbitrarily without compensation.

"In Estonia, taxes are used for this purpose, not the system of burdens," added Ginter. Since 2016, such "burdens" have cost LuxExpress, the Baltic region's largest international express routes coach operator, more than €2.2 million in ticket sales.

"We are willing to engage in dialogue and cooperation with the state in order to find a solution that is convenient for preschool children and people with disabilities, while also ensuring that the state has a clear understanding of the number of passengers who benefit from this concession and that bus and coach operators are compensated fairly for this service," Ingmar Roos, the business manager of Lux Express Estonia, said.

This dispute has lasted for years between the state and bus companies. They have been unable to agree on whether and how to compensate for the financial loss incurred by providing free bus rides to certain groups of people.

Head of the Roads and Railways Department of the Ministry of Economic Affairs and Communications Ain Tatter said that the EU court's decision provides legal clarity to the protracted issue.

"The ministry has argued for years that this provision should be modified since it may violate EU legislation, but the national legislature has the last say: they believed that amending this provision was improper. In fact, the issue's complexity is clear from the fact that, when LuxExpress filed an appeal, our court acknowledged the possibility of conflicting interpretations and opted to consult the EU Court of Justice," Tatter said.

Tatter said that the administrative court allowed for a judicial compromise on the claims and the European Court of Justice provided guidelines on how to calculate the amount of compensation for bus companies.

The parties now hope to reach an agreement on the compensation methodology by the end of November.

Both Ginter and Roos emphasized that the case was not brought against disabled individuals or pre-schoolers, nor did it dispute the state's right to provide them with more favorable conditions for using public transportation.

"The EU Court of Justice explicitly informed us that the state had the authority to impose such requirements on bus companies, which we did not dispute. In the second appeal, we contended that this should be done for free, so to speak, and that, in the context of the Estonian state, there is currently no means for compensating these travels," Ginter said.

Tatter also said that the EU did not revoke Estonia's legal obligation to provide free public transportation to certain groups of people.

"The state, on the other hand, will have to pay compensation. Carriers are not required to pay out of their own pockets -- they are also entitled to compensation and we are now negotiating the basis for calculating this compensation until the new legislation comes in full force," Tatter said.

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