State liability, 258-260, 267, 263

Question 1

Define state liability.

Give the main treaty articles you need for this, and the main principles.

Answer 1

The principle that individuals may recover compensation from a ms where they have suffered loss through the failure of that ms to fulfil any (Brasserie du Pecheur) of its obligations under community law (Francovich).

4(3) TEU - cooperation needed
19 TEU - the law should be observed
340(2) TFEU - in accordance a with “general principles” - use for institution breach, for when EU should pay remedies.
263 TFEU - any rule of law

Need the general principles of limited competence, subsidiarity, proportionality (5(4)TEU)

Question 2

What is procedural autonomy? Case?

What are the two conditions on using national law remedies?

Answer 2

Procedural autonomy is where ms are autonomous, and are under no duty to establish special remedies (Rewe) no ‘new’ remedies needed. Goes hand in hand with principle of cooperation (Art 4(3)TEU)

2 conditions:
Principle of Equivalence (Rewe)
Rights deriving from EU law must be st the same procedures as rights deriving from national law. So remedies should be made available in the same way.

Principle of Effectiveness
National procedures shouldn’t make it impossible for the claim to be made in practice

Question 3

Which case summarises the position so far?

Answer 3

Unibet 2007

Mentions the procedural rule, equivalence, effectiveness, and the limits to these principles.

Question 4

When will the union pay damages? What must the breach be for the union to pay damages?

Answer 4

When EU law has been breached by the union’s institutions.

The breach must be a “sufficiently flagrant violation” of EU law (Aktien-Zuckerfabrik)

Question 5

What are the criteria for state liability? Case?

Answer 5

Francovich
Depends on the NATURE of the breach
A. Directive must confer rights on individuals
B. Rights must be easily identifiable (clear)
C. Must be a causal link between the state breach and the damage suffered (this means that state liability becomes a remedy of last resort - only if direct effect, indirect effect, and incidental effect are not available will state liability come into play).
D. Breach need not be total but must be sufficiently serious (came from Brasserie du Pecheur and Factortame III)

Francovich - 1st time a state had to pay, so caused a stir. The judgment didn’t give any scope of state liability or any deadlines.
The breach here was automatically assumed to be sufficiently serious (state hadn’t implemented directive)

Question 6

Which two cases expanded on the principle of state liability?

Answer 6

Brasserie du Pecheur (beer purity laws) and Factortame III (merchant shipping act)

Scope of state liability = unlimited
Breach need not be total but must be ‘sufficiently serious’

Factortame III - if there is DISCRETION afforded to the ms then it would be unreasonable to impose state liability on them. Can’t make them pay if have given them a choice.
Doesn’t matter which organ of the state caused the breach.

Question 7

What will happen if a ms fails to implement a directive at all?

Answer 7

It will automatically constitute a sufficiently serious breach (Dillenkofer)
There is no discretion wrt late implementation. Must be implemented in the correct way and on time, otherwise state liable.

Question 8

What are the five factors to be taken into account when assessing if the state manifestly and gravely disregarded the limits in the exercise of its powers?

Answer 8

The discretion afforded to the ms (Francovich)
Clarity and precision of the rule breached (ex p BT)
Whether the breach was intentional or excusable (ex p BT)
Responsibility of away for the breach
The extent to which the ms adopted or retained national laws contrary to community law.

Question 9

Outline what was decided in ex p BT.

Answer 9

Breach wasn’t sufficiently serious since wording of directive was unclear.
U.K. Had done all in their power to interpret directive and put into force, just so happened they did it in an erroneous manner which meant it wasn’t properly implemented.
So have to look at clarity of rule breached, and whether the breach was intentional or excusable. A restrictive approach to state liability is justified in such circs.

Question 10

Which case would you use as the authority for the fact that even courts of last instance may breach EU law?

Answer 10

Koebler.
A court of last instance may be shown to have not made a prelim reference (an obligation) in order to be found liable.

Can then argue that this turns state liability into a de facto appeals process. Makes the EU - ms relationship more vertical, so highlights the dynamic nature of the relationship.

Question 11

Which case would you use as the authority for breach of EU obligation by the executive?

Answer 11

Hedley Lomas

There is no discretion!
Case about slaughter-house conditions. Can’t just decide to not implement a directive, doesn’t matter if others states are in breach, it is not acceptable for a state to ever breach! Was sufficiently serious.

Question 12

Who criticises state liability as a residual remedy? On what grounds?

Answer 12

M Dougan
Says it is a second best, so could have perverse effect of lowering the effectiveness of national protection since state liability is there as a cure for inadequate domestic remedies.

Question 13

Why is the threshold for state liability high?

Answer 13

Because you need a judgment from the ms’ own national court.

Question 14

Which directive has widened the scope for state liability?

Answer 14

2014 directive
Hope = make drafting of directives more precise
Covers environ, consumers, personal data, financial services and investors = all suitable areas for collective redress.

Question 15

Outline 258-260

Answer 15

258 - enforcement mechanism. Com can bring action against a ms for breach

259 - ms can bring action against another ms

260 - requires a ms to comply with court’s judgment.

Com = guardian of the treaties

Question 16

Outline the process for a 258 action. Case?

Answer 16

Com v Italy
Admin phase (identify subject matter of violation)
Judicial phase (give deadline by which state should remedy reach BEFORE going to the European court)

Com has complete discretion over whether or not to bring an action. No timeline, no duty, but they do need to give a coherent statement of reasons.

Question 17

What is the other com v Italy case about?

Answer 17

If a ms adopts nat law so broad that it can be interpreted to breach EU law then it will be in violation

Question 18

Spanish Strawberries. Go.

Answer 18

French govt didn’t prevent blockades.

Ms under a duty to prevent the breach of a directive. Omission made them liable here.
France’s defence = stopping blockades would be v political. Court rejected, said ramifications are irrelevant.

Question 19

Sentence on 258

Answer 19

258 is objective in nature ( com v Italy), and has a broad scope (com v Belgium). There is complete discretion for the com over whether or not to bring an action - the scope of direct action is unlimited.
Com generally reluctant to bring 258 actions

Have to see 258 as not sufficient in its own, it is part of a wider scheme: direct effect, state liability - wider picture.

Multiplicity of incomplete systems which work together to make a whole.

Question 20

What was added at Lisbon to give 260 teeth?

Answer 20

260(3) - financial santons if ms doesn’t comply with a ruling by the court.

Question 21

Which art for prelim references?

Main case?

Answer 21

267
Simmenthal - can’t go back on an interpretation once it has been made.
Courts must ‘set aside’ national law that doesn’t comply. But 267 doesn’t allow the CJEU to decide the case, the nat court must apply the law to the facts.

Ultimate aim = uniformity of judgement of EU law

Question 22

When can the court offer an actual interpretation of national law?

Answer 22

Only if national law has borrowed terms and wording from EU law
Leur-Bloem

Question 23

What is the scope of 267?

Answer 23

Not unlimited.
Nat court still has discretion over whether or not to refer. Only when there is no judicial remedy does the court HAVE to refer.

Question 24

What is a court or tribunal for the purposes of reference-making? 4 cases.

Answer 24

Categories set out in Dorsch: (EPAJ)
Established by law
Permanent, independent (SYFAIT)
Applies rule of law, procedure interpartes
Jurisdiction is compulsory.

E.g. Medical body (Broekmuelen) yes
Cf.
Arbitrator with power to adjudicate contract (Nordsee) no, couldn’t make 267 ref

Question 25

Which level of court may ask for a reference? Case?

Answer 25

Any
Widest discretion principle
Rheinmuehlen
As wide as the Rhein.

BUT there must be a genuine dispute (Foglia) for them to make such a reference.
Foglia was the Italian court questioning French tax law - they can’t do this!
Foglia No2 - court still refused to answer since ref wasn’t genuine. Italian court was trying to get the CJEU to make the ruling for them!

Also Meilicke (German academic testing his theory) not genuine.

Question 26

When are courts under a duty to refer? 267(3)

Answer 26

When no national law remedy.

Idea: to prevent bad law from becoming national law (Hoffman de la Roche)

Question 27

When don’t the courts have to refer (where otherwise would be obliged to)?

Answer 27

Where there is an existing precedent (Da Costa)

Acte Clare (CILFIT)
Where clear already, so don’t need to refer
3 reqs CLC:
Compare language versions
Legal terminology - different meanings in different countries
Context - put provision in context

Reason for these exceptions: more power to national courts. Speeds things up. Trust. Cooperation between Union and MSs.

Question 28

What are the criticisms of Acte Clare?

Answer 28

CILFIT
Criticisms:
Vague, onerous (Danish academic Rassmussen said this), easy to abuse. Not really going to read and compare in every language version!

Question 29

What is the process to use for when a ms wants to challenge the validity of an EU measure?

Answer 29

Have to apply for a 267 reference.
Court has 2 options (Fotofrost):
Declare measure valid
Ask for a reference

Exception: interim relief (Zuckerfabrik)
V narrow exception
Only where serious doubts about its validity, irreparable damage suffered by the applicant, make a ref if can’t change the decision once made, take the wide interest of the EU into account.

Question 30

What is the effect of a 267 reference?

Answer 30

Gauweiler 2014
Binding on the court wrt the interpretation.
Court must apply this interpretation to the facts of the case.

This case was Germany making a reference to sign international treaty to prevent eurozone collapsing.
EU not in a political vacuum - said it was ok since wanted to prevent crisis! So heavy political context to this decision, shows that CJEU are aware of the binding nature of 267 refs, so will bend to accomodare the pressures faced by MSs where nec.

Question 31

Which art for action for annulment?

Answer 31

Art 263

Start with art 19 - institutions to ensure EU law applied correctly.
Para 2 added at Lisbon - MSs to provide remedies to ensure protection of EU law. MSs to decide on the punishment due to procedural autonomy (Rewe).

263
1 what
2 grounds
3 who
4-5 when

Question 32

What may be challenged under art 263?

Answer 32

Acts - any measure intended to have legal effect (art 288)

Question 33

Who may challenge under 263?

Answer 33

Privileged
Ms or European Parliament (Chernobyl 1990)
No limit on what they may challenge

Semi-privileged
Court of auditors or ECB
can only challenge when in relation to them (the idea is to stop union’s institutions skipping over them when a decision is made relating to them)

Non-privileged
Individuals
There are procedural and substantive limits on what they may challenge

Question 34

What may non-privileged applicants challenge under 263?

Answer 34

Originally only decisions, but ‘acts’ was added in at Lisbon, so widens the scope of what they can challenge.

So they can challenge:
1. acts addressed to them
2. Acts of direct, individual concern
Individual concern - they need peculiar attributes or circs to differentiate them from others (Plaumann)
Direct concern - if NO DISCRETION over how the decision should apply to them (Les Verts). If there is discretion, then not individually concerned.
3. Regulatory Act
Introduced at Lisbon.
A regulatory act is any measure which is not st further implementing measures (Inuit case)
Any measure not pursuant to legislative procedures.

Strict view of concern since don’t want individuals to be able to challenge everything.

Question 35

What are the criticisms of Plaumann?

What line has the court taken wrt acts of direct and individual concern? Two cases to contrast.

Answer 35

Criticisms: vague, extremely narrow, hard to establish
The case was about clementine importers, so hard to see if someone was individually concerned since demand and supply ebbs and flows - so hard to see the possibility of continuing individual concern.

Court has taken a strict approach
(Piraiki-Pitraiki)
This was a challenge to a 3-month-limiting measure.
The individuals in this case were individually concerned since they were a closed group of applicants, and the decision interfered with their existing contracts (they wanted to produce more than the three month quota). They were concerned as they would have to change their contract to comply with the measure (the 3 month limit). So measure was overturned.

Court took a broader view in Cordoniu SA
Court takes a broader view in cases of:
State aid
Anti-dumping
Competition law
(Since there are areas of a quasi-judicial nature involved, so court takes a more relaxed approach in relation to standing to challenge them)
This was the case about sparkling wine (they wanted to limit the term ‘cremant’ to 2 producers) so court took a broader approach so they could challenge it since they had been using the term for a long time.

Question 36

What was Les Verts about?

Answer 36

An individual will be directly concerned where there is no discretion afforded over how to implement the measure

Question 37

Can associations challenge measures?

Answer 37

Yes (Fedorolio)
So can challenge through association if can’t get individual concern yourself. But the association needs to be concerned itself by granting a series of association rights.

Don’t look at the size, look at if open or closed. Needs to be OPEN so people can join in the future, so direct concern will continue to affect the group, so they can challenge it.
Look at if it affects the negotiating power of the association - this is how associations get concern. If the measure stops its ability to NEGOTIATE on its members behalf, then it will be concerned.

Question 38

If challenge via 263 how would the court deem the measure illegal?

Answer 38

By making a 267 reference! Foto-frost

Question 39

Who criticised the strict approach to standing? What were the criticisms?

Answer 39

AG Jacobs in UPA
Thinks the approach should be liberalised.
Access to justice, enforcement of EU law
If no nat remedies then left without a remedy (if can’t get standing) so could be a violation of art 19 (obligation to give remedies)
Liberalisation would shift the emphasis from questions of admissibility (procedure) to Qs off substance.
Says limits are paradoxical when consider 258-260 procedures available

Question 40

Were AG Jacobs’ criticisms in UPA taken on board?

Answer 40

No, the court ignored the,
So it entrenched the strict approach to standing view
It is for nat courts to det remedies and procedures which ensure rights to judicial protection. Court said that challenging indirectly through a nat court is the same as challenging directly,mans that it’s not their fault if national procedural rules are deficient (so individuals can’t challenge indirectly)
Court said that if an individual was left without a remedy then the MSs were always free to change the treaties.

Reason: 263 is one of a range of measures to bring about JR

Question 41

National courts are coming more like EU courts? In which case was this said and why?

Answer 41

Trinity Mirror case
Becoming more like EU law courts, esp IP tribunals. Highly skilled judges debating EU law.

The worry with this would be if bad precedents are set - could be dangerous as makes national law.

Question 42

Three recent annulment actions?

Answer 42

Poland v Com and Parl (menthol cigarettes prohibition)
Pillbox 38 (ecigs)
Philip Morris v SARL (implementation of directive's measures called into question)

Last two were 263 applications - made 267 references in nat courts. V sec of state for health.

All three lost. Directive upheld.

Question 43

Which case was about method cigarettes? What happened?

Answer 43

263 action
Poland v Commision and Parliament

Complete blanket ban on menthol cigarettes being challenged. Will create black market.
Court rejected. Said will smooth functioning in the internal market - it guards against divergences in rules between MSs and doesn’t infringe on the principle of subsidiarity.

Question 44

Which case was a 267 case about the new regulations in ecigarettes?

Answer 44

Pillbox 38
Measures require leaflets and a cap on nicotine content
Court said hasn’t infringed principle of subsidiarity or equal treatment.
Not prohibiting sales, just regulating them.
Acting in a precautionary manner because of the health risks of ecigarettes
BUT the medical evidence is conflicted on this!!

Question 45

Which case was about the implementing measures taken to implement the new tobacco directive?

Answer 45

Philip Morris v SARL
claim for JR against sec of state for health to prevent the implementation of the directive. 263 action.
Foto-Frost: 2 options: declare valid, or ask for a reference.
They asked for a ref

Challenged on basis of art 114 competence
AG said many qs were inadmissible. Many of the qs were hypothetical since directive hadn’t been implemented yet, many qs challenging the fact that MSs can adopt measure more stringent than the ones laid down in the directive. Hypothetical qs are inadmissible.

The court said the directive was valid and compliant with art 114, competence and subsidiarity principles.
Grounds: health
Directive will remove obstacles to trade, so will improve the functioning of the market.
Said it is better for the union to do this than the MSs themselves (since each ms has differing views, so better to have uniform policy)
DISAGREE
paternalistic and issues involving medical studies/evidence in ecigarettes.
This is an indirect method to constrict the demand of tobacco. This should be left to the fiscal and/or social policy of the ms.
Taxing tobacco takes the form of an indirect and regressive tax. So it will reduce the amount of income the states receive from this revenue source. While this is good on the grounds of health, the unproven and controversial means by which it is achieved is questionable.