Remedies Flashcards
I - Remedies in the National Courts
Article 19(1) TEU + Art 47 Charter
Issue highlights tension between:
Article 19(1) TEU (MSs shall provide remedies sufficient to ensure effective legal protection…) and Article 47 Charter (right to an effective remedy before national courts) are both confirmation of the CJEU’s approach.
The issue highlights a tension between:
- Need to secure effective legal protection
- Impossibility of constructing a comprehensive pan-European machinery of redress (because would be impracticable and touch on sensitive questions (types of interests to protect, time limits, types of loss that can be compensated…) that are addressed differently across Member States)
A – Statement of the Principle of (conditional) national procedural autonomy
Case 33/76 Rewe-Zentralfinanz [1976] ECR 1989
- facts?
- do prohibitions have direct effect?
- re cooperation?
- in the absence of EU rules on the subject the domestic legal systems must: (2 things)
- subject to2 qualifications:
- are reasonable time limits okay?
- how does the second condition push for the development of an EU system of remedies?
Note that in both cases the CJEU decided that on the facts the national procedural rules are reasonable.
- Facts: A trader claimed a refund for charges unlawfully levied by German authorities. German authorities argued that the limitation period had passed and the trader couldn’t have claimed if the measure had breached an equivalent domestic law.
- CJEU ([5]): the prohibitions have direct effect, and applying the principle of cooperation (Article 4(3) TEU), national courts are entrusted with ensuring the legal protection which citizens derive from the direct effect of EU provisions. Thus, in the absence of EU rules on the subject, it is for domestic legal systems to:
o Designate the courts having jurisdiction
o Determine the procedural conditions governing actions - Provided that:
o conditions cannot be less favourable than those relating to similar actions of a domestic nature
o conditions cannot make it impossible in practice to exercise the rights which the national courts are obliged to protect - Reasonable time limits are OK, and with regards to actions of a fiscal nature is an application of the fundamental principle of legal certainty.
The second condition (impossible in practice…) pushes for the development of an EU system of remedies even where it is not available in domestic cases → sets a minimum standard of protection and provides some harmonization of domestic remedies and procedures.
A – Statement of the Principle of (conditional) national procedural autonomy
→ Case 45/76 Comet [1976] ECR 2043
- CJEU: in the absence of relevant EU rules, it is for the national legal order of MSs to designate the rules and procedures governing the protection of DEtive rights conferred on individuals by EU law, subject to two provisos that the rule is no less favourable than those governing the same right of action domestically, and it should not be impossible in practice to exercise these EU rights
are the cases that are normally taken as the basic starting point in asserting a conditional principle of national procedural autonomy in cases involving the vindication of EU law rights.
EXAM MATERIAL
The language in Rewe is negative (must not make it impossible…), but recently, the language shifted towards a positive formulation – some argue that this is the CJEU changing in approach, but Jeremias doesn’t think so because in cases like i-21 because the CJEU just puts it in brackets, showing that it’s the same thing.
The CJEU maintained this position even after Lisbon (Art 19(1) and Art 47 Charter) – ex. C-583/11P Inuit v Commission.
B – Specific Applications of the Principle
are there many relevant EU rules?
negligible political will?
governing remedies in niche areas?
What is the principle of non-discrimination basically?
- to whom does assessment of similarity of purpose/cause belong?
who decides whether a domestic measure is equivalent to EU law + based on what?
(authority?)
But the “relevant EU rules” are few – negligible political will at national level and EU measures governing remedies are in very niche areas (access to environmental justice, competition law, public contracting…).
The principle of equivalence = essentially a rule of non-discrimination (no distinction between breaches of EU and national law), with the assessment of similarity of purpose/cause of action belonging typically with national courts in the context of preliminary references.
- Whether a domestic measure is equivalent to an EU measure = for national courts, taking into account the purpose and essential characteristics of each law (Palmisani v INPS, Levez v Jennings)
B – Specific Applications of the Principle
The principle of effectiveness has been developed by the CJEU
- what is the effect? examples cases of this development?
- will granting a litigant the same protection available domestically suffice?
- what is the role of Art 47?
- how much control does CJEU have re remedies?
- how much control does CJEU have re procedure?
The principle of effectiveness has been developed by the CJEU to create a (not wholly consistent) hardening of control over national autonomy (Simmenthal, Factortame, Francovich), meaning that simply granting the litigant the same protection available domestically may not be adequate – domestic procedures may need to be upgraded if they fall below the EU-mandated standard of “effectiveness”.
Such cases are increasingly decided through the prism of Article 47 Charter, and are applied differently depending on the type of alleged infringement:
- Remedies (very little control)
o Measures that cap compensation at very low levels are illegal (Marshall)
o Measures that provide nominal compensation without regard to damage sustained are illegal (von Colson)
o Measures that exclude compensation for certain types of damage (ex. economic loss) are illegal (Brasserie du Pêcheur) - Procedures (more extensive control)
o Not allowed to screen off certain sectors (ex. military) from JR
o Must ensure that any professional, regulatory or administrative body that takes decisions affecting EU rights be subject to JR
o Reasons for decisions must be accessible
o Must afford parties standing wherever directly effective rights have been infringed - Time limits (must be reasonable, but CJEU’s idea of reasonableness grants considerable leeway for national systems)
o Sixty days for civil proceedings is not too short (Asturcom Telecomunicaciones)
o Fifteen days for asylum seekers to appeal an administrative decision refusing asylum was not too short (Samba Diouf) (‼!)
o Control of when the time limit begins (whether the applicant was in a position to ascertain their rights from the moment where the limitation period begins):
♣ Example – for workers employed on a series of short-term contracts, must begin at the end of the relationship not each individual contract. - Due diligence requirements (requirement to use all legal remedies available before claiming for loss unless this would be excessively difficult)
o Example – under German law there was a requirement of good faith that only allowed employees sue for loss if they had first approached the employer: CJEU said this was unreasonable because employees are weaker parties
Limitation period cases particular:
Limitation period cases particularly – they are obviously detrimental to the effective protection of rights but are valuable in promoting legal certainty + efficient administration of justice which should prevail? where does the “effective” protection of EU law rights yield to other concerns such as legal certainty?
National procedural law becomes subject to the influence of EU law despite the absence of any legislative content to the EU’s role.
1 – National Time Limits
→ Case C-255/00 Grundig Italiana [2002] ECR I – 8003;
- Facts: illegal consumption tax → C claimed repayment of the tax. National time limit to bring actions for repayment was reduced from 5-10 years to 3 years, with a 90 day transition period.
- AG: says the same thing as the CJEU, but says that he can’t judge whether the 90 day transition period is too short or not because it requires knowledge of the national legal order.
o CONTRAST: CJEU which says that the period is too short. - CJEU: [36] Given that the detailed rules governing the recovery of national taxes levied though not due are a matter for the national legislature, the question whether such rules may apply retroactively is equally a question of national law, provided that any such retroactive application does not contravene the principle of effectiveness.
- [37] In that regard, whilst national legislation reducing the period within which repayment of sums collected in breach of Community law may be sought is not incompatible with the principle of effectiveness, this is subject to the condition not only that the new limitation period is reasonable but also that the new legislation includes transitional arrangements allowing an adequate period after the enactment of the legislation for lodging claims for repayment which persons were entitled to submit under the original legislation. Such transitional arrangements are necessary where the immediate application to those claims of a limitation period shorter than that which was previously in force would have the effect of retroactively depriving some individuals of their right to repayment, or of allowing them too short a period for asserting that right…
We see a trade-off here in the judgment – it is really just a matter of proportionality. It shows that the CJEU is not trying to push effectiveness at all costs.
→ Case C-326/96 Levez [1998] ECR I-7835 (equal pay case which turned on the applicability of a national limitation period)
- Facts: The applicant, a woman, discovered after leaving her job withthe respondent that she had been paid less than her male predecessor even though the work they had both done was the same. The respondent had deliberately misled the applicant about the level of her predecessor’s pay and, by the time she found out about the disparity, she was prevented by a national limitation period from claiming arrears of pay for the first seven months during which she had held the post. The Employment Appeal Tribunal asked the Court of Justice whether the Union law right to equal pay precluded the application of the national limitation period.
- CJEU: The period laid down was not in itself objectionable, but to allow an employer to rely on it in circumstances such as these would be “manifestly incompatible with the principle of effectiveness … [as it] make[s] it virtually impossible or excessively difficult to obtain arrears of remuneration in respect of sex discrimination. It is plain that the ultimate effect of this rule would be to facilitate the breach of [Union] law by an employer whose deceit caused the employee’s delay in bringing proceedings for enforcement of the principle of equal pay.”
- British Government argued that:
o a claim based on the UK Equal Pay Act rather than directly on the Treaty would have been subject to the same time-limit
o the applicant could have brought proceedings in the county court, where the limit would not have applied - CJEU accepted that, in circumstances such as these, Member States did not have to “extend their most favourable rules to all actions brought … in the field of employment law”. What the national court had to do was “consider both the purpose and the essential characteristics of allegedly similar domestic actions”.
o The Equal Pay Act was not the right comparator because “one and the same form of action is involved”. Since the Act gave effect to the Union law principle that men and women should receive equal pay for equal work, it could not “provide an appropriate ground of comparison against which to measure compliance with the principle of equivalence”.
o As for proceedings in the county court, the existence of an alternative remedy made no difference if it was “likely to entail procedural rules or other conditions which are less favourable” than those applicable to claims brought before employment tribunals under domestic employment law. It was for the national court to determine whether that was so, though the Court noted that proceedings in the county court might prove more protracted and expensive.
2 – Interim Protection
For problem questions, cite Zuckerfabrik for the conditions, not Factortame because Zuckerfabrik sets out all the details.
→ Case C-213/89 Factortame (No. 1) [1990] ECR 1-2433 (against a NATIONAL act potentially in breach of EU law)
- [21] … the full effectiveness of Community law would be just as much impaired if a rule of national law could prevent a court seized of a dispute governed by Community law from granting interim relief in order to ensure the full effectiveness of the judgment to be given on the existence of the rights claimed under Community law. It follows that 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.
Key principle = there needs to be a principle of interim relief (big deal in the UK because until Factortame there was no possibility of granting interim relief against the Crown – and in terms of purely domestic law, there is still no interim relief against the Crown).
- NB the CJEU also talks about equivalence – that the UK knows injunctions generally.
→ Cases 143/88 & 92/89 Zuckerfabrik Suderdithmarschen [1991] ECR I-415 (against a potentialy invalid EU ACT)
- Facts: there was a national law based on an EU provision. C argued that the EU provision was invalid, and the national law was therefore also invalid. Asked for interim relief, arguing that for the preliminary reference procedure to work, the national court must be able to grant interim relief suspending application of a NATIONAL measure based on an EU measure whose validity is doubted.
- CJEU ([23-33]):
- [A Union] right would be compromised if, pending delivery of a judgment of the Court, which alone has jurisdiction to declare that a Community regulation is invalid…, individuals were not in a position, where certain conditions are satisfied, to obtain a decision granting suspension of enforcement which would make it possible for the effects of the disputed regulation to be rendered for the time being inoperative as regards them.
- For conditions for granting interim relief (and suspend enforcement of a national measure based on an EU regulation whose validity is in doubt):
o Serious doubts regarding the validity of a measure (which manifests itself by the national court sending a preliminary reference – only the possibility of a finding of invalidity (a matter reserved for the CJEU) can justify it)
o Relief maintains the character of interim measure (the national court must send a preliminary reference and can only grant until such time as the preliminary reference judgment is handed down) - As to other conditions, the rules of procedure are determined by national courts, but uniform application of EU law is a fundamental requirement of the EU legal order, so that suspension of enforcement of national measures based on EU regulations, “whilst it is governed by national procedural law, must in all MSs be subject, at the very least to uniform conditions as to the granting of such relief”. These are the same conditions under which the CJEU may itself grant interim measures in case of an Article 173 action:
o Urgency (threat of serious and irreparable damage to applicant which could not be made good if the EU measure is subsequently declared invalid)
♣ the damage must be liable to materialize before the CJEU has been able to rule on the validity of the EU measure
♣ in principle (and depending on the circumstances) purely financial damage is insufficient, but it is for the national court to examine the circumstances particular to the case before it.
o The national court is under an obligation to ensure that full effect is given to EU law, and therefore, must take due account of Union interest (i.e. that such regulations should not be set aside without proper guarantees)
♣ National court must examine whether the Community measure in question would be deprived of all effectiveness if not immediately implemented.
♣ If suspension of enforcement is liable to involve a financial risk for the Community, the national court must also be in a position to require the applicant to provide adequate guarantees, such as the deposit of money or other security.
→ Case C-465/93 Atlanta [1995] ECR I-3761 (against a potentially invalid EU ACT)
- … interim relief, with respect to a national administrative measure adopted in implementation of a Community regulation, can be granted by a national court only if:
o (1) that court entertains serious doubts as to the validity of the Community act and, if the validity of the contested act is not already in issue before the Court of Justice, itself refers the question to the Court of Justice
o (2) there is urgency, in that the interim relief is necessary to avoid serious and irreparable damage being caused to the party seeking the relief
o (3) the court takes due account of the Community interest and
o (4) in its assessment of all those conditions, it respects any decisions of the Court of Justice or the Court of First Instance ruling on the lawfulness of the regulation or on an application for interim measures seeking similar interim relief at Community level.
→ Case C-432/05 Unibet v. Justitiekanslern [2007] ECR I-2271
- Principle of effective judicial protection requires that national courts must be in a position to grant interim relief in order to ensure the full effectiveness of the judgment to be given on the existence of the rights claimed under Community law, provided that such relief is necessary (a matter for the national court) for this purpose.
- For national law whose validity is challenged:
o Governed by conditions established in national law, subject to the principles of equivalence and effectiveness. - For national law adopted under EU law whose validity is challenged:
Governed by the conditions in Zuckerfabrik
3 – Setting aside a defence in national law?
→ Case C-453/99 Courage Ltd. v. Crehan [2001] ECR I-6297 (no blanket ban for breach of competition law)
- CJEU: The full effectiveness of Article 85 of the Treaty and, in particular, the practical effect of the prohibition laid down in Article 85(1) would be put at risk if it were not open to any individual to claim damages for loss caused to him by a contract or by conduct liable to restrict or distort competition.
- Indeed, the existence of such a right strengthens the working of the Community competition rules and discourages agreements or practices, which are frequently covert, which are liable to restrict or distort competition. From that point of view, actions for damages before the national courts can make a significant contribution to the maintenance of effective competition in the Community.
- There should not therefore be any absolute bar to such an action being brought by a party to a contract which would be held to violate the competition rules.
4 – Legal Aid
→ Case C-279/09 DEB v. Germany, [2010] ECR I-3849 (nuanced ruling on whether effectiveness requires legal aid)
Facts
- Facts: a German company sued German Government for late transposition of a Directive which prevented it from bidding for access to the German gas network, causing it foregone profits. To bring an action, it was asked to make an advance on court costs of 274,000 euros, and was refused legal aid because it wasn’t offered to companies and there was insufficient public interest in the litigation. Claimed violation of principle of effective judicial protection.
4 – Legal Aid
→ Case C-279/09 DEB v. Germany, [2010] ECR I-3849 (nuanced ruling on whether effectiveness requires legal ai
AG Mengozzi:
- “fixing of high procedural costs in conjunction with highly restrictive conditions for the grant of legal aid might be considered likely to result in impairment of the right of access to a court, a fortiori where the payment is required…before the proceedings are conducted”.
- Considered ECtHR caselaw on Article 6, and laws of France, Luxembourg (commercial companies were ineligible for legal aid), Italy (legal aid could only be granted to “poor citizens”) and Denmark (commercial companies could receive legal aid but only in very exceptional circumstances). Found that there was no truly common principle amongst the MSs on which the EU could build.
- Concluded that it was for national court to assess whether the amount of charge was appropriate, and there was no need to assess the issue of legal aid separately.
o [In contrast, the CJEU addressed the question of legal aid squarely]
4 – Legal Aid
→ Case C-279/09 DEB v. Germany, [2010] ECR I-3849 (nuanced ruling on whether effectiveness requires legal ai
CJEU:
- Article 47 Charter must be interpreted as meaning that it is not impossible for legal persons to rely on the principle that aid granted may cover (inter alia) dispensation from advance payment, assistance of lawyer. It is for national courts to assess whether national rules for granting legal aid:
o constitute a limitation on the right of access to the courts that undermines the very core of that right.
o pursue a legitimate aim
o are proportionate - It must take into account:
o Subject matter of the litigation
o Reasonable prospect of success?
o Importance of what is at stake for applicant
o Complexity of applicable law and procedure
o Applicant’s capacity to represent himself effectively - Can also take into account for proportionality:
o amount of costs in respect of which advances must be made
o whether it is an insurmountable obstacle to access to courts - For legal persons, may take into account their situation:
o Form of legal person
o Profit or non-profit making?
o Financial capacity of shareholders and partners
o Their ability to obtain the sums necessary for proceedings
4 – Legal Aid
→ Case C-279/09 DEB v. Germany, [2010] ECR I-3849 (nuanced ruling on whether effectiveness requires legal ai
Commentary:
So again – legal persons must be allowed to benefit from legal aid, BUT it is for national courts to assess whether the national rules undermine the core of the right, pursue a legitimate aim, or are proportionate…
In problem questions – always make sure to say that it’s for national courts to determine. But say tentatively what I think would be proportionate etc.
Case has implications as to which litigation may be privileged and which will not:
- CJEU required MSs to hold out the possibility of legal aid to companies → controversial because in many jurisdictions individuals don’t even get that
- Only a few of the factors that courts must take into account relate to whether the litigant would otherwise be able to bring the case
4 – Legal Aid
→ Case C-279/09 DEB v. Germany, [2010] ECR I-3849 (nuanced ruling on whether effectiveness requires legal aid
→ NOTE P. Oliver (2011) 48 CMLRev 2023
- ruling significant in 3 respects:
- good judgment?
- 4 cases where EU requires particular remedies:
apart from these, is there a pan-European system of remedies?
- The ruling is significant in three respects:
o Decided (directly) on the question of legal aid to the principle of effectiveness for the first time
o Illustrates the trend in CJEU caselaw to bring fundamental rights (esp. Charter) to the forefront
o Sheds light as to the extent to which commercial companies enjoy fundamental rights under EU law - It is a measured judgment (ex. holding that you can’t exclude legal persons altogether but recognizing that legal persons are perhaps less deserving of legal aid than natural persons) that is to be “highly commended”
There are four cases where EU law requires PARTICULAR REMEDIES to be provided in national courts:
1) Francovich liability
2) Repayment of charges or taxes levied in breach of directly effective EU law (San Giorgio)
3) Damages and repayment of breaches of EU competition law (Courage v Crehan)
→ (2) and (3) arose out of the idea that a party should not be enriched as a result of illegal behaviour, and that to allow this would be to deny the other party’s directly effective rights
4) Interim relief where a national court wishes to make a preliminary reference to the CJEU
→ to ensure effective operation of the preliminary reference procedure
However, apart from these for (limited) circumstances, there is no pan-European system of remedies.
5 – Res Judicata
→ Case C-392/04 & C-422/04 i-21 Germany and Arcor v. Germany [2006] ECR I-8559;
- [51] In accordance with the principle of legal certainty, Community law does not require that administrative bodies be placed under an obligation, in principle, to reopen an administrative decision which has become final upon expiry of the reasonable time-limits for legal remedies or by exhaustion of those remedies… Compliance with that principle prevents administrative acts which produce legal effects from being called into question indefinitely…
- [52] The Court has, however, acknowledged that there could be a limit to this principle in certain cases. …. the administrative body responsible for the adoption of an administrative decision is, in accordance with the principle of cooperation arising from Article 10 EC, under an obligation to review and possibly to reopen that decision if four conditions are fulfilled.
o First, the administrative body must, under national law, have the power to reopen that decision.
o Secondly, the administrative decision in question must have become final as a result of a judgment of a national court ruling at final instance.
o Thirdly, that judgment must, in the light of a decision given by the Court subsequent to it, be based on a misinterpretation of Community law which was adopted without a question being referred to the Court for a preliminary ruling in the circumstances set out in the third paragraph of Article 234 EC.
o Fourthly, the person concerned must have complained to the administrative body immediately after becoming aware of that decision of the Court.
5 – Res Judicata
C-119/05 Lucchini [2007] ECR I-6199 (duty to recover State aid in spite of res judicata);
Facts
- Facts: Italian officials agreed to grant C state aid, but the Commission judged it to be illegal with regards to EU law. Subsequently, upon an application by C, an Italian court (without reference to EU law and solely on the basis of national law) found the aid to be lawful and ordered the officials to pay it, which they did, and the decision of the Italian court acquired res judicata under Italian law (Article 2909 Civil Code). The Commission then ordered the officials to recover the state aid, and C filed a claim before national courts to say that the official cannot recover state aid paid out pursuant to a decision that has acquired the force of res judicata.
5 – Res Judicata
C-119/05 Lucchini [2007] ECR I-6199 (duty to recover State aid in spite of res judicata);
CJEU:
- the effect of applying [Article 2090] in the present case would be to frustrate the application of Community law in so far as it would make it impossible to recover State aid that was granted in breach of Community law’
- It is in the sole jurisdiction of the Commission to declare whether state aid is lawful or not. That rule applies within the national legal order as a result of the principle of the primacy of Community law.
- Therefore, ‘Community law precludes the application of a provision of national law, such as Article 2909 of the Italian Civil Code, which seeks to lay down the principle ofres judicatain so far as the application of that provision prevents the recovery of State aid granted in breach of Community law which has been found to be incompatible with the common market in a decision of the Commission which has become final.’
For some reason, primacy is used in this case, even though there is no apparently conflicting national provision. Nevertheless, one can say that something comparable to a direct collision is at stake, since the national court pretended to have a power which is exclusively reserved for the Commission: the competence to assess the compatibility of aid with the common market.
5 – Res Judicata
Why did CJEU not apply the principle of autonomy in Lucchini?
Later, in Olimpiclub, the CJEU held that the reason that it did not apply the principle of national procedural autonomy and the accompanying principles of equivalence and effectiveness in the case of Lucchini, was because it ‘concerned a highly specific situation, in which the matters at issue were principles governing the division of powers between the member states and the Community in the area of State aid, the Commission of the European Communities having exclusive competence to assess the compatibility with the common market of a national State aid measure’.
5 – Res Judicata
→ Case C-2/08 Fallimento Olimiclub Srl [2009] ECR I-7501;
- what would effect of res judicata have in this case?
- what would the possible justification be and is it convincing here?
- [29] Not only does the interpretation in question prevent a judicial decision that has acquired the force of res judicata from being called into question, even if that decision entails a breach of Community law; it also prevents any finding on a fundamental issue common to other cases, contained in a judicial decision which has acquired the force of res judicata, from being called into question in the context of judicial scrutiny of another decision taken by the relevant tax authority in respect of the same taxpayer or taxable person, but relating to a different tax year.
- [30] Accordingly, if the principle of res judicata were to be applied in that manner, the effect would be that, if ever the judicial decision that had become final were based on an interpretation of the Community rules concerning abusive practice in the field of VAT which was at odds with Community law, those rules would continue to be misapplied for each new tax year, without it being possible to rectify the interpretation.
- [31] In those circumstances, it must be held that such extensive obstacles to the effective application of the Community rules on VAT cannot reasonably be regarded as justified in the interests of legal certainty and must therefore be considered to be contrary to the principle of effectiveness.
5 – Res Judicata
→ *Case C-168/05 Mostaza Claro v. Centro Móvil Milenium [2006] ECR I-10421;
- Facts: a consumer had failed to argue that an arbitration clause was unfair during the course of the arbitration and raised the matter only in subsequent proceedings contesting the arbitration finding (too late as a matter of Spanish law).
- CJEU: a national court dealing with an action for annulment of an arbitration award must determine whether the arbitration agreement is void where that agreement contains an unfair term even though the consumer has not pleaded that invalidity in the course of the arbitration proceedings, but only in that of the action for annulment.
- The CJEU recognized that review of arbitration awards should be limited in scope, and that annulment should be possible only in exceptional circumstances. However, this had to compete with the aim of the Directive (consumer protection), and in this case the CJEU prioritized the latter concern.
o The system of protection introduced by the Directive is based on the idea that the consumer is in a weak position vis-à-vis the seller or supplier.
o Such an imbalance between the consumer and the seller or supplier may only be corrected by positive action unconnected with the actual parties to the contract → power of the court to determine, of its own motion, whether a term is unfair is necessary for ensuring that the consumer enjoys effective protection (in view in particular of the real risk that he is unaware of his rights or encounters difficulties in enforcing them) even if she doesn’t know the term is unfair.
o The result sought by Article 6 of the Directive which requires the Member States to ensure that consumers are not bound by unfair terms, could not be achieved if the court seised of an action for annulment of an arbitration award was unable to determine whether that award was void solely because the consumer did not plead the invalidity of the arbitration agreement in the course of the arbitration proceedings.
o The German Government submit that, if the national court were allowed to determine whether an arbitration agreement is void where the consumer did not raise such an objection during the arbitration proceedings, this would seriously undermine the effectiveness of arbitration awards.
o However, the importance of consumer protection has in particular led the Community legislature to lay down, in Article 6(1) of the Directive. This is a mandatory provision which, taking into account the weaker position of one of the parties to the contract, aims to replace the formal balance which the latter establishes between the rights and obligations of the parties with an effective balance which re-establishes equality between them.
5 – Res Judicata
→ *Case C-168/05 Mostaza Claro v. Centro Móvil Milenium [2006] ECR I-10421;
Commentary
Normally, you’re only allowed to appeal on points that were already raised in the trial (and that the judge got wrong). If you forget something, you shouldn’t be able to raise it again subsequently.
But there is context specificity – contract of adhesion in the consumer context, inequality in bargaining power… But it is not unlimited – in Asturcom the consumer didn’t even bother discussing the point and here is the limit.
6 – Raising issues of EU law ex officio
→ *Case C-168/05 Mostaza Claro v. Centro Móvil Milenium [2006] ECR I-10421;
- Facts: a consumer had failed to argue that an arbitration clause was unfair during the course of the arbitration and raised the matter only in subsequent proceedings contesting the arbitration finding (too late as a matter of Spanish law).
- CJEU:
o [27] … the national court’s power to determine of its own motion whether a term is unfair constitutes a means both of achieving the result sought by Article 6 of the Directive, namely preventing an individual consumer from being bound by an unfair term, and of contributing to achieving the aim of Article 7, since if the court undertakes such an examination, that may act as a deterrent and contribute to preventing unfair terms in contracts concluded between consumers and sellers or suppliers…
o [28] That power of the national court has been regarded as necessary for ensuring that the consumer enjoys effective protection, in view in particular of the real risk that he is unaware of his rights or encounters difficulties in enforcing them…
o [38] The nature and importance of the public interest underlying the protection which the Directive confers on consumers justify, moreover, the national court being required to assess of its own motion whether a contractual term is unfair, compensating in this way for the imbalance which exists between the consumer and the seller or supplier.
7 – Creating new remedies
→ Case C-432/05 Unibet v. Justitiekanslern [2007] ECR I-2271 (must be able to bring actions to court themselves)
- Facts: Swedish authorities obtained injunctions and initiated criminal proceedings against parties providing advertising space to Unibet (because Unibet’s actions contravened Swedish law). Because they didn’t bring actions against Unibet itself, Unibet had no possibility of raising a self-standing action for a declaration that a Swedish law is illegal for violation of Article 56 TFEU. Unibet did, however, have a right to (1) sue the authorities for damages and ask for an exception to its restrictions, and (2) challenge a refusal to grant an exception to a Swedish court. Are these remedies sufficient?
- CJEU ([41]): principle of effective judicial protection is a general principle derived from the constitutional traditions of MSs, but the Treaty was not intended to create new remedies in national courts to ensure the observance of EU law other than those already laid down by national law, EXCEPT if no legal remedy existed which made it possible to ensure, even indirectly, respect for an individual’s right under EU law.
- In principle, it is for national law to determine an individual’s standing and legal interest, but EU law requires that national legislation not undermine the right to effective judicial protection.
- In this case, there exist various indirect legal remedies for the purpose of Unibet disputing the compatibility of national legislation, which constitute remedies that enables Unibet to ensure effective protection of the rights conferred by EU law. However, this would not be sufficient if Unibet was forced to be subject to administrative or criminal proceedings and to pay penalties as the sole form of legal remedy for disputing compatibility of national provisions.
This means that the principle is not merely concerned with the possibility of securing presence in court (because possibility as a consequence of prosecution is insufficient) but requires right holders to have a possibility to bring matters before the court themselves.
7 – Creating new remedies
→ NOTE A. Arnull, ‘The Principle of Effective Judicial Protection in EU law: an Unruly Horse?’ (2011) 36 ELRev 51;
Examines the relationship between principle of effective judicial protection and national procedural autonomy (particularly as regards to the availability of alternative national remedies. and the duty of national courts to raise points of EU law of their own motion).
- In Unibet, the CJEU held that national courts had “to interpret the procedural rules governing actions brought before them … in such a way as to enable those rules, wherever possible, to be implemented in such a manner as to contribute to the attainment of the objective … of ensuring effective judicial protection of an individual’s rights under [Union] law.” → national procedural autonomy was but an aspect of the broader principle of effective judicial protection, which imposes on national courts a DCI reminiscent of that in Marleasing.
- The principle in Unibet (that EU law doesn’t impose the creation of a new remedy unless there is no remedy) led to difficult cases concerning the availability of alternative remedies under national law (Levez, Impact)
So, is it even rational to talk about procedural autonomy?
C – Is there such thing as procedural autonomy?
→ Bobek, ‘Why There is no Principle of Procedural Autonomy of the Member States’ in B. de Witte and H. Micklitz (eds), The European Court of Justice and Autonomy of the Member States (Intersentia, 2011)
- Dougan’s 3 periods in CJEU’s case law
- Bobek’s opinion?
- Spilling into new areas?
- evaluation of effectiveness and equivalence
- criticism of equivalence
- is it possible to compare without interpreting national regimes?
- what if no comparator exists?
- what must CJEU have to compare?
- does ‘effectiveness’ have any limit? How does its interpretation affect its scope?
- Is effectiveness measured according to the protection to the particular litigant or as a whole?
- author’s opinion re national procedural autonomy?
- what could change to favour MS’s competence?
- Dougan identifies three periods in the CJEU’s caselaw: deference → assertive → retreat to the limited negative approximation. However, IAO there has been no retreat, but the CJEU’s caselaw has become increasingly progressive:
o It is spilling over into new areas and questions (ex. duty to reopen final decisions incompatible with EU law, to raise EU law issues of own motion…) - The test of equivalence and effectiveness internally contradicts itself and is almost impossible to conduct: the Court is really using a “sort of I-know-it-when-I-see-it effectiveness test” (that is more akin to a balancing or proportionality test)
o Equivalence is “just a façade”, but it is a helpful façade because it maintains an impression of keeping the division of work provided in the Treaties, and allows the CJEU’s judgments to be universally relevant.
♣ In truth, it is impossible to compare without interpreting national regimes, and impossible to interpret without identifying the relevant suitable comparator.
♣ Sometimes no relevant comparator exists (ex. where the area is entirely harmonized in EU law, ex. Virginie Pontin v T-Comalux SA – concerning time limit for bringing an action for annulment by a pregnant worker, an area completely harmonized by an EU directive)
♣ To compare, the court must have a very detailed knowledge of the relevant national law, which the CJEU normally does not.
o Effectiveness is not a legal principle so has no internal limits (impossible means impossible, but once we extend it to “excessively difficult” then there is no longer any internal limits…)
♣ Is effectiveness measured according to the protection to the particular litigant or as a whole? - There is a misunderstanding based on a part of the doctrine maintaining that there is “procedural autonomy”, when IAO there is no such thing as procedural autonomy.
o If autonomy means that there are areas where MSs are free from any EU law constraints, uncontrolled by the CJEU, then there is none because (1) in the constitutional set up there is no domaine réservé of the MSs and (2) the dual requirement of equivalence and effectiveness is omnipresent.
o But we can’t define it in a “softer” sense (like the primary shaping of the procedures is in the hands of the MSs) because names are not just convenience labels but also symbols. - From time to time, the Court is criticised for not safeguarding the “procedural autonomy” of the Member States. As the rules of the game now stand, however, there really is not anything it could safeguard. If anything were to change in order to favour the Member States´ competence, then it is the rules of the game themselves.
C – Is there such thing as procedural autonomy?
→ M. Ross, ‘Effectiveness in the European legal order(s): beyond supremacy to constitutional proportionality?’ (2006) 31 ELRev 476;
Discusses the CJEU’s caselaw dealing with the principle of effectiveness, both in (1) patrolling borders between EU law and other legal norms and (2) setting standards for national courts in meeting EU obligations. The principle has multi-layered roles and is the driver of constitutional evolution.
- “effectiveness is an institutional mantra operative at both national and European levels in order to secure the replication of the latter style of reasoning in the former” → it can act as a principle to limit a presumption of national procedural autonomy.
- But it can have wider applications: in shaping, mediating and controlling borders between competing or conflicting European legal orders (thus it is multi-functional and double-edged (in that it can also modify or recast EU obligations, not merely enlarge the penetration of EU intervention)).
o [Then considers cases on incidental effect, fundamental principles…]
- Effectiveness can determine both thepoint at whichEC law intervenes and theextent of remedial actionrequired from the national court → it is amore sophisticated and tailored mechanism for the exploration of the dynamics between national and European law than the blunt exhortation of supremacy: while the latter prescribes an outcome for conflicts between national and EU law, the former pursues reviewability of national provisions that constitute obstacles to enjoyment of Treaty protection.
- Thus use of effectiveness is evidence of an increasingly porous and fluid approach to line drawing between different legal orders. It can serve multiple functions:
o Interpretive tool for national courts
o Instrument of review for assessing acceptable diversity in securing compliance with Treaty goals
II - Actions for damages in cases of breach of EU law
→ D. Leczykiewicz, ‘Effectiveness of EU Law before National Courts’, ch. 9 in Arnull & Chalmers (eds.), The Oxford Handbook of European Union Law (OUP, 2015)
- Liability in damages is a universal enforcement mechanism, which in principle could attach to any form of irregular behavior.
- Faccini Dori made it clear that Community law did not possess a perfect system of enforcement:
o Direct effect = requirement of sufficient precision and unconditionality + Marshall restriction in horizontal cases. Thus DCI, and also Francovich liability. - The relaxation of the Francovich conditions in Brasserie des pêcheurs (especially the requirement of serious breach where MSs have discretion) largely disabled the remedy as a method of improving compliance and protecting individual rights (Tridimas). On the other hand:
o Hedly Lomas: where the Community enacted a Directive harmonizing national measures necessary to achieve the objective which previously could justify a derogation from a free movement provision, the mere infringement of Community law was sufficient to establish a sufficiently serious breach.
o Dillenkofer: mere non-implementation of the Directive was sufficient to constitute serious breach. - Two further major developments:
o Extension into violations of EU law by private parties (Courage) – though IAO the Courage remedy should be seen as independent from Francovich because:
♣ the Court in Courage didn’t rely on Francovich but rather returned to the argument from the creation of the EU’s own legal order (discussing the special importance of Art 101 TFEU and its horizontal effect).
♣ The national court was asked to take into account the economic and legal context of the parties’ situation, in particular their respective bargaining powers.
♣ No statement in the judgment supports the conclusion that the Court was introducing a general principle of private party liability for breach of EU law comparable to Member State liability under Francovich.
o Possibility of Member State liability for a judicial breach of Union law (incorrect application or failure to apply EU law, a failure to interpret national law consistently with EU law, a failure to set aside conflicting national provisions, a failure to provide effective remedies to those whose EU rights were violated, or a failure to refer a preliminary ruling question to the CJEU): Kobler.
♣ Though bound to be rare due to the imprecise nature of the CJEU’s caselaw (absence of a “settled” caselaw will always result in a breach if failure to send preliminary reference, but the resulting incorrect application of EU law would then rarely be sufficiently serious for Francovich liability)
II - Actions for damages in cases of breach of EU law
→ * Cases C-6 & 9/90 Francovich [1991] ECR I-5357;
- Facts:
A group of employees brought proceedings against Italy for its failure to implement a Directive guaranteeing a minimum level of protection in the event of the employer’s insolvency. The remedies sought included the recovery of unpaid wages or, in the alternative, compensation.
II - Actions for damages in cases of breach of EU law
→ * Cases C-6 & 9/90 Francovich [1991] ECR I-5357;
CJEU:
- can’t enforce against Italy despite it being a vertical case, because Italy simply didn’t implement EU law (didn’t set up the insolvency fund – “shocking failure” on the part of Italian government (AG)), so no recovery of wages → question of the state’s liability in damages: the issues had to be considered ‘in the light of the general system of the Treaty and its fundamental principles’.
- Fondements:
o Fondement 1 – effet utile, inherent in the system of the treaty
♣ National courts must ensure that provisions of EU law take full effect and must protect the rights which they confer on individuals.
♣ ‘The full effectiveness of Community rules would be impaired and the protection of the rights which they grant would be weakened if individuals were unable to obtain redress when their rights are infringed by a breach of Community law for which a Member State can be held responsible.’
♣ This is especially true if the full effectiveness of EU rules is subject to prior action on the part of the State and where, consequently, in the absence of such action individuals cannot enforce before national courts rights conferred by EU law.
♣ Therefore, the principle that a MS is liable for loss and damage caused to individuals as a breach of EU law is “inherent in the system of the Treaty”.
o Fondement 2 – Article 4(3) TEU
♣ Under this Article MSs must take all appropriate measures to ensure fulfilment of their obligations under EU law, including the obligation to nullify the unlawful consequences of a breach of EU law.
o Fondement 3 – Article 342:
the EU is required to make good losses, so Member States should do so as well.
- For conditions, the CJEU didn’t refer to Italy’s rules on compensation, but set out conditions in the judgment:
o the granting of rights to individuals
o the possibility of identifying the content of those rights on the basis of the provisions of the Directive
o the existence of causal link between the state’s failure to implement and the loss or damage suffered
However, while national courts cannot use additional conditions of liability, they were permitted to use national rules of liability concerning:
- the designation of competent courts, detailed procedural rules ([42])
o Ex. length of limitation period (C-261/95 Rosalba Palmisani v Istituto nazionale della previdenza sociale (INPS))
- and arguably concerning the remaining substantive issues, such as the level of compensation and the sufficiency of the causal connection.
o Ex. Case C-140/97 Walter Rechberger, Renate Greindl, Hermann Hofmeister and others v Republik Österreich
o However, national courts could not interpret the condition of a direct causal link in such a way as to make it virtually impossible or excessively difficult to obtain compensation for the damage suffered (para 36). (Case C-94/10 Danfoss A/S and Sauer-Danfoss ApS v Skatteministeriet)
II - Actions for damages in cases of breach of EU law
→ * Cases C-6 & 9/90 Francovich [1991] ECR I-5357;
EXAM POINT
Later on, the Italian court decided that Francovich wasn’t a worker so couldn’t get any compensation.
The CJEU, in horizontal situations, often says that no HDE of Directives is fine because the person can sue the State for damages. Though it is true that the two remedies aren’t the same thing, but still, the CJEU isn’t just saying all or nothing – there are subtleties involved
II - Actions for damages in cases of breach of EU law
→ * Cases C-6 & 9/90 Francovich [1991] ECR I-5357;
why was this case seminal?
The case was seminal because at the time most MSs did not have a system of governmental liability for equivalent breaches of national law.
There was concern that it would lead to resistance from national administrations, but a study found this to be unfounded (MP Granger) in that all MSs adopted the principle (principally through adapting tort law) and national courts have awarded substantial damages:
- Example – Spanish Supreme Court in Canal Satelite Digital v State Attorney (award of 26.4 million euros for failure to comply with EU broadcasting law
Exceptions are notably concerning legislative liability (i.e. Parliament passed a law contradicting EU law), where there was widespread evasion on the part of many national courts:
Even in flagrant cases of non-transposition of EC law by the national legislator, many courts were uncomfortable with the idea that “the Kingcoulddo wrong”, and found ways around such an admission.
II - Actions for damages in cases of breach of EU law
→ * Cases C-6 & 9/90 Francovich [1991] ECR I-5357;
NB connection with direct effect:
- CJEU, Faccini Dori: “If the result prescribed by the directive cannot be achieved by way of interpretation, it should also be borne in mind that, in terms of the judgment in Joined Cases C-6/90 and C-9/90 Francovich and Others v Italy [1991] ECR 1-5357, paragraph 39, Community law requires the Member States to make good damage caused to individuals through failure to transpose a directive…”
II - Actions for damages in cases of breach of EU law
→ Case C-48/93 Factortame (No. 3)/Brasserie de Pêcheur [1996] ECR I-1029 (conditions of liability)
Facts:
o Brasserie du Pêcheur – A French firm that was forced to discontinue exports by virtue of a German law later found to be illegal for violation of free movement law, sued in damages for loss of profits between the time of discontinuation and time of finding of illegality. o Factortame (no. 3) – A British law imposing requirements on those wishing to fish in its waters had been declared illegal for violation of freedom of establishment. Spanish fishermen claimed for loss suffered as a result of illegal exclusion from British waters.
II - Actions for damages in cases of breach of EU law
→ Case C-48/93 Factortame (No. 3)/Brasserie de Pêcheur [1996] ECR I-1029 (conditions of liability)
- CJEU:
- The right to reparation was ‘the necessary corollary of the direct effect of the Community provision whose breach caused the damage sustained’. Creation of the Francovich remedy was legitimate as an ‘interpretation of the Treaty’.
o Just as in the process of creating the ‘general principles of law’, also here the Court was invoking the fact that its jurisdiction covered the duty to ensure that law was observed, and the ‘generally accepted methods of interpretation’ permitted the Court to refer to ‘general principles common to the legal systems of the Member States’.
o It found evidence to the effect that liability in damages of public institutions was indeed common to the laws of the Member States in Article 340 TFEU, which mentioned the laws of the Member States as the basis for the non-contractual liability of the Community for damage caused by its institutions. - To determine the conditions of liability, must take into account:
o Principles inherent in the EU legal order (effectiveness, effective protection of rights conferred by EU law, Art 4(3) TEU)
o CJEU’s caselaw on non-contractual liability on the part of the EU, which draws on the general principles of the EU, and other areas of EU law (in the absence of written rules) - The principle of state liability was held to apply to ‘any case in which a Member State breaches Community law, whatever be the organ of the State whose act or omission was responsible for the breach’, including the national legislature.
o The negative effect of linking Francovich liability with Art 340 TFEU was the pressure to unify the conditions of liability applying to Community institutions and to Member States → Because the Community had immunity from liability unless its institutions manifestly and gravely disregarded the limits on the exercise of its powers, the Court introduced a similar requirement with respect to claims brought by individuals against the states. - State liability cannot (without particular justification) differ from those governing EU liability in like circumstances. The protection of the rights which individuals derive from Community law cannot vary depending on whether a national authority or a Community authority is responsible for the damage.
o In Community liability, the CJEU has regard to the wide discretion available to legislative institutions because exercise of the legislative function must not be hindered by the prospect of actions for damages, whenever the general interest of the EU requires measures that may adversely affect individual interests
o The Community is only liable where the institution has gravely and manifestly disregarded the limits on the exercise of its powers. - Where the MS is left with autonomy, it should be liable only where their breach was ‘sufficiently serious’:
o [t]he factors which the competent court may take into consideration include 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, whether any error of law was excusable or inexcusable, the fact that the position taken by a Community institution may have contributed towards the omission, and the adoption or retention of national measures or practices contrary to Community law.
♣ If breach persisted despite a judgment finding the infringement to be established, or preliminary ruling or settled caselaw of the CJEU on the matter clearly establish that the conduct is an infringement = sufficiently serious.
♣ These are the minimum conditions of the right to reparation. The state could incur liability under less strict conditions on the basis of national law, but no more onerous conditions were allowed.
Example – English courts cannot therefore use the conditions of the tort of misfeasance in public office to impose liability on the Government (especially the condition of fault)
- In this case: both cases are concerned with areas of wide discretion
- What items of loss are recoverable?
o In principle, compensation should be commensurate with the loss or damage sustained.
o However, the claimant would not obtain full compensation if some losses they incurred could have been avoided if they had acted diligently, or if they had availed themselves in time of all the legal remedies available.
o Lost profits are recoverable but national rules were to regulate precisely which heads of damage should be compensated, what was required as a matter of proof, and how damages were to be calculated.
II - Actions for damages in cases of breach of EU law
→ Case C-48/93 Factortame (No. 3)/Brasserie de Pêcheur [1996] ECR I-1029 (conditions of liability)
EXAM POINT
EXAM POINT
The German government argued that Parliament (democratically elected) passed a law – why should the Court be allowed to say that the State now has to pay damages?? [This point wasn’t present in Francovich because in that case it was an executive, governmental failure, not Parliament deliberately passing a law on a point.]
From a domestic perspective, the distinction is HUGE constitutionally. From a PIL perspective, it does NOT MATTER AT ALL because the government has a duty to implement EU law etc.
II - Actions for damages in cases of breach of EU law
→ Case C-48/93 Factortame (No. 3)/Brasserie de Pêcheur [1996] ECR I-1029 (conditions of liability)
Commentary
Therefore, the three conditions are:
1) Rule is intended to confer rights on the individual litigants
2) Breach is sufficiently serious:
a. If no discretion → simple breach is sufficiently serious
b. If discretion → manifestly and gravely disregarded the limits of discretion
But in cases where provisions are capable of bearing the meaning understood by the MS (ex parte British Telecommunications) or caselaw is unsettled or extremely recent (Brasserie du Pêcheur), there will be no liability. This means that State liability is a back stop measure focused on sanctioning egregious or highly neglectful behavior rather than securing redress for litigants.
This raises the question of whether it should be for the CJEU to attach punitive measures to the Treaties, not to secure individual protection, but national compliance with EU law.
3) Direct causal link between breach and loss: for national courts to establish that the illegal behavior led to loss.
According to Weatherill (Values) Factortame No 3 can be treated as an exercise of applied comparative law, for each element is a familiar aspect of typical national systems governing the award of compensation in the event of loss. [MI ummmmmm… No… It’s really not…]
What is striking is the CJEU’s concoction of these rules from a Treaty background completely barren to any indication that EU law shall dictate to national courts that they shall be competent to award damages for breach of EU law (nor its governing criteria).
II - Actions for damages in cases of breach of EU law
→ Case C-392/93 R v. HM Treasury, ex parte British Telecom [1996] ECR I-1631;
- CJEU held that the UK could not be liable under Francovich because the relevant provision of the Directive in question was imprecisely worded and therefore could reasonably bear the meaning accorded to it by the UK government, especially in the light of the fact that no guidance was available in the case law of the Court on how the provision should be interpreted
II - Actions for damages in cases of breach of EU law
*Case C-224/01 Köbler [2003] ECR I-10239;
Facts
Issue
- Under Austrian law professors were entitled to a length-of-service increment after 15 years’ service in an Austrian university. Kobler applied for it, arguing that he completed the requisite time in other Member States, and not taking them into account would constitute unjustified indirect discrimination. The Austrian Administrative Court originally referred, but then a few months later withdrew the reference on grounds that the matter had, in the interim, been settled in Kobler’s favor by the CJEU. Kobler’s claim was nevertheless dismissed because the increment was held not to be salary but loyalty-bonus.
- Issue: whether the Austrian Supreme Court’s failure to make a preliminary reference could trigger Francovich liability.
II - Actions for damages in cases of breach of EU law
- Case C-224/01 Köbler [2003] ECR I-10239;
- AG Léger:
preliminary
- Under Austrian law, rules on liability of the State are governed by the Constitution, which (1) excludes liability of the highest Austrian court, and (2) gives the court of first instance in civil and commercial matters jurisdiction to hear damages claims.
- [15] Since the preliminary question concerns solely the question of Supreme Courts, I will only consider SCs and not ordinary courts.
II - Actions for damages in cases of breach of EU law
- Case C-224/01 Köbler [2003] ECR I-10239;
- AG Léger: - On whether Francovich liability is available for judicial breaches:
o Austria argued that excluding liability is justified by:
♣ Legal certainty
♣ Absence of parallel liability of the EU for acts or omissions of the CJEU
o France argued that:
♣ Res judicata should prevail over the right to redress
♣ System of remedies in MSs, and preliminary ruling, are sufficient safeguards for individuals
♣ In the alternative, State liability for judicial breaches should be subject to special rules that are particularly restrictive and radically different from rules governing other State liability
o UK government argue that such liability can only be envisaged restrictively because:
♣ Reputation and independence of the judiciary
♣ Nature of the relationship between the CJEU and national courts
♣ Impartiality (unless the court makes a preliminary reference, in which case the CJEU becomes a court of final appeal)
o German and Netherlands government argue that liability is possible, but conditions of liability is a matter governed by existing national law and not EU law
o Commission argued that the principle of State liability for any type of public authority stems from the Treaty and the CJEU’s settled caselaw
o AG Léger’s answer: YES given the
♣ (1) broad scope the CJEU gave to State liability, and
• Francovich – despite the “particularly pathological” situation, the CJEU expressed itself in very general terms and didn’t confine principle to any particular organ → reasoning is transposable to judicial breaches
o “Where there is no possibility of an appeal against a decision of a supreme court, an action for damages alone serves - in the final analysis - to ensure that the right infringed is restored and, finally, to ensure that the effective judicial protection of the rights which individuals derive from Community law is of an appropriate level” [38]
o “reinstating [the] financial content [of the individual’s right] is something less, a minimum remedy compared with full substantive reinstatement, which remains the optimum means of protection” [39]
• Brasserie du pêcheur – the CJEU said “whatever organ of the State”. This is for uniform application of EU law – the obligation to make good damage cannot depend on domestic rules as to the division of powers between constitutional authorities.
o In international law, State liability for international commitments will be viewed as a single entity, with the unlawful activity attributed to the State. So too in the ECtHR and so too now in Brasserie – impliedly, but necessarily, extended that principle to judicial acts (in any event Supreme Courts).
♣ (2) decisive role of national courts in implementing EU law, and
- Direct effect and primacy constitute instructions to the national courts ([53]), whose function is a dual obligation: interpretation (Marleasing) and disapply national law contrary to EU law (Simmenthal), the latter of which is a major obligation, comparable to an obligation to achieve a certain result.
- “although the national court, like any organ of a Member State, is required to apply Community law, its mission is all the more crucial because, faced with the final stage of the rule’s execution, it is the guarantor of compliance with that rule” [59]. Thus, the national judge is no longer necessarily, as Montesquieu was able to say in earlier times, the mouthpiece of the law – it is incumbent upon the court to assess the relationship between its domestic law with EU law.
- The CJEU’s caselaw has played a large role in developing the function of the courts, in reinforcing their authority within the State at the expense, in certain national legal systems, of constitutional developments.
- But national courts aren’t left by themselves – they are assisted by the CJEU through preliminary references.
- Liability makes it possible to overcome the limits of the obligation of interpretation in conformity with Community law and of the legal scope of directives ([64])
Where a lower court has held that the Supreme Court has violated EU law, and that case gets appealed, and the Supreme Court says it hasn’t violated EU law, then who is the final arbiter???? The CJEU cannot be because it is not in its jurisdiction to decide facts!!!!!!!
Something more akin to the Civil Law “rupture d’égalité devant les charges publiques” is more appropriate to such circumstances, because if the force of res judicata is not to be set aside, so that the judgment deemed to be illegal still (in the case of common law systems) is binding precedent, then a system of “no-fault liability” is much more appropriate. We recognize that the Supreme Court didn’t apply EU law, but we say that there are good reasons for doing so, and that the public interest requires it. But it isn’t fair that the claimant in this case is bearing all the burdens of the public interest, so we compensate them with damages.
♣ (3) the state of the domestic law of MSs on State liability for acts or omissions of the judiciary
• all the Member States accept the principle of State liability for judicial acts (especially for breach of fundamental rights), and only the UK and Netherlands clearly limit scope of liability to deprivations of liberty and procedural rights (not content of the judgment). Only Austria and Sweden limit liability to decisions of ordinary (≠Supreme) courts.
o MI but fundamental rights = economic rights??
• Thus a comparative study shows that the principle of State liability for judicial breach of legal rules is generally acknowledged by MSs → it is a PGDUE
II - Actions for damages in cases of breach of EU law
*Case C-224/01 Köbler [2003] ECR I-10239;
o AG Léger in rejecting the objections:
♣ Independence of the judiciary – has not prevented MSs from creating liability under domestic law, and is not threatened because the personal liability of judges is not engaged
♣ No parallel rules governing EU liability – the two sets of rules need not develop in strict parallel, and the EU cannot be rendered liable on account of CJEU’s decisions because it is the supreme court in the Community legal order.
But then what is the supreme court of the national legal orders when it comes to matters of EU law??
♣ Res judicata – it is only applicable where the threefold identity (subject matter/legal basis/parties) is satisfied, whereas here the parties aren’t the same.
♣ Guarantees of the national courts’ impartiality – this question didn’t prevent MSs from establishing a system of State liability, and it’s not for the CJEU to determine which courts have jurisdiction in the matter, since that is within the sphere of MS autonomy. It would be “excessive” to infer that such a situation would lead the CJEU becoming a final court of appeal – it is not a question of making a reference for a preliminary ruling automatic, but rather of pointing out that such a reference is possible
II - Actions for damages in cases of breach of EU law
*Case C-224/01 Köbler [2003] ECR I-10239;
o AG Léger On conditions for liability:
o If it were up to national law to determine, then there would be considerable drawbacks for coherence in the effective protection of rights derived from EU law. Therefore, there are minimum EU conditions.
o As regards the second condition, there was a distinction between where the MS has no discretion and where it has broad distinction – it may be asked whether this distinction is still relevant (because recent cases apply the same criteria in both cases). Thus, it is not necessary to determine whether courts have wide discretion – the decisive factor is whether the error of law was excusable or inexcusable, depending on the clarity and precision of the legal rule, or the existence and state of CJEU’s caselaw.
♣ Example 1 – if SC gives a decision contrary to EU provisions whose meaning and scope are clear = liable.
♣ Example 2 – if SC gives decision that manifestly infringes the CJEU’s caselaw as it stands on the day of judgment = liable.
♣ Example 3 – if SC gives decision contrary to a judgment of the CJEU delivered after the national decision, when the national decision was consistent with the CJEU’s caselaw as it stood at that date, a fortiori where there was every reason to believe that the CJEU’s caselaw was stable = not liable.
• MI but here has the national court really committed any breach???????
♣ State liability cannot be prima facie precluded in the case of a supreme court’s manifest disregard for its obligation to make a reference for a preliminary ruling where, for example, there is no case-law of the Court on the point of law at issue at the time when the national court gives its decision (though here direct causal link might be difficult to prove especially in the case of material damage (≠loss of chance to have case heard) – because then would have to prove that if the SC referred, it would have upheld C’s claim, whereas it would be excessive to require a national court in a damages claim to refer a question in order to know the response which it might have given if it had in fact been seized of such a question ([152])
o Should not pay particular attention to whether the breach was intentional or involuntary.
II - Actions for damages in cases of breach of EU law
*Case C-224/01 Köbler [2003] ECR I-10239;
o AG Léger On this case
o difficult to accept that the Verwaltungsgerichtshof made an excusable error:
♣ Ruling that the condition (which was indirectly discriminatory) was justified by the wish to reward an employee’s loyalty to his employer
♣ Not conducting a proportionality check (difficult to see how it might be proportionate – it goes “without any doubt” beyond what is necessary to achieve the objective)
♣ Not maintaining the question referred, even if it meant supplementing it in order to obtain some clarification on the scope of [the case decided in the interim]. Applying CILFIT, it is difficult to see that the application of EU law (even if correct) was so obvious as to leave no scope for any reasonable doubt… and was equally clear to courts of other MSs and CJEU [173]
o Thus inexcusable.
