#17340 - State Liability - GDL EU Law

The Principle of Procedural Autonomy

• Rewe [1976]

  • Was asked whether a trader had a right under EU law to require a national court to compel his third party competitor to comply with EU obligations.

  • Court held that the Treaty “was not intended to create new remedies in the national courts to ensure the observance of Community law other than those already laid down by nationallaw.”

  • When it comes to procedures, member states are autonomous when it comes to any claims. There is no EU law duty on a member state to introduce special remedies for an EU law claim.

• Unibet [2007]

  • The Principle of Cooperation

    • Under Art.4 it is for the Member States to ensure judicial protection of an individual’s rights under Community law. Therefore national law cannot undermine right to effective judicial protection.

  • The Principle of Equivalence:

    • The remedy that exists for the domestic law claim should be equivalent to the one that exists for the EU law claim.

  • The Principle of Effectiveness

    • The remedy that exists for an EU law claim should not make it impossible or excessively difficult in practice for a claim to be made.

  • E.g. Factortame [1990]: a court which in those circumstances would grant interim relief, if it were not for a rule of national law, is obliged to set aside that rule.

In the treaties there is nothing about the principle of state liability for a violation of EU law.

• But Art 340 (2) declares union’s liability for a breach by and of its institutions or servants of EU law.

• AZS v Council [1971]

  • Held that the union may have to pay an individual if it violated EU law

  • But this is not necessarily the case every time the Union violated EU law – has to be a sufficient flagrant violation of a superior rule for protecting the individual.

  • An action for damages can therefore be regarded as an independent, autonomous cause of action.

Francovich [1991]

• This introduces the principle of state liability

• F was working in Italy when her employer declared bankruptcy. There was a directive, which Italy had failed to implement, which required that employers set a fund that would benefit employees in case of insolvency.

  • Indirect effect could not apply as no national law in the first place.

• Bought action in damages against Italian government for failing to comply with art. 288 duty.

• Held: the full effectiveness of Community rules would be impaired if individuals could not obtain redress when State infringed individual rights.

• Three conditions for SL:

  • 1) The EU measure violated should confer a right on the individual

  • 2) The right must be clearly identifiable on the basis of the EU measure in question.

  • 3) There must be a direct causal link between the violation and the loss in question suffered.

• Outstanding questions:

  • The scope of the principle

    • This was later defined to be unlimited Brasserie du Pecheur and Factortame (No.3) [1996] – Joint Cases

  • The definition of a state

    • Applies to judiciary. In Köbler [2003] the decision of court of last instance was held to be a breach (an employment application was refused contrary to EU law – no breach found in the end)

Brasserie du Pecheur and Factortame (No.3) [1996] – Joint Cases

• Brasserie – Germany was preventing the importation of beer from French breweries.

• Factortame – Spanish fisherman case above.

• This added to the three conditions above:

  • 1) EU measure was intended to confer rights.

  • 2) There must be a causal link between the breach and the damage

  • 3) The breach must be sufficiently serious

• Sufficiently serious:

  • The violation will be sufficiently serious if the limits of the discretion have been exceeded in a manifest manner. i.e. the state organ had a choice, there was a number of options, but they clearly wen for that option that violated EU law.

  • NB sufficiently serious not mentioned in Factortame as that was to do with non-implementation of a measure for which there is no discretion granted by the EU

• Several (common sense) factors can be taken into account here

  • The clarity and precision of the rule breached

  • The measure of discretion left by that rule to the national or Community authorities

  • Whether the infringement and the damage caused was intentional or involuntary

  • The fact that the position taken by a Community institution may have contributed towards the omission, and

  • How other MSs have dealt with the same subject matter.

Dillenkofer [1996] - Late transposition of package holidays directive cornering refunds in case of provider insolvency.

• Failure to implement a directive is automatically a sufficiently serious breach.

Bergaderm [2000]: “the decisive test for finding that a breach of [EU] law is sufficiently serious is whether the Member State or the [EU] institution concerned manifestly and gravely disregarded the limits of its discretion.”

Kobler – failure of a court to implement a directive is also a sufficiently serious breach.

EU Liability vs State Liability

• It would be...