State Liability Flashcards
San Georgio
The right confirmed by EU law must be exercised by national courts in accordance with conditions laid down by national courts. So this reeks of autonomy with some guidance sort of put in by the court of justice to encourage the MS to have some sort of coherent approach. That guidance was developed in the San Georgio case…saying that these member states didn’t have to create new rights or remedies unless EU law said they had to.
PRINCIPLE OF EQUIVALENCE
It meant that national law shouldn’t discriminate between remedies for rights under national law and EU law. So you couldn’t have various remedies available at the national level and …it would be bad if there were big differences between the remedies for national law and the remedies for EU law. There should be some level of common parity - some level of equivalence between these different remedies.
PRINCIPLE OF EFFECTIVENESS
National procedural law must not make it practically impossible to enforce EU rights. So it would be problem if it was, for example, extremely expensive to take an action to enforce EU rights and it was very cheap, or even free, to enforce national rights. Remedies have to be genuinely available and possible for people to exercise. There shouldn’t be any big obstacles to enforcing the rights of the EU law at the national level.
Francovich case & Bonifaci
Francovich Itself created another three stage test for state liability. How do you figure out whether the state is liable? you follow the three steps:
we should be cautioned that one of these limbs of the test has been tweaked a bit later on.
In order to understand the development you need to go through this first.
1) The provision in a directive, for example, or in a regulation or a treaty, should confer rights on individuals. This seems very sensible because it is hard to argue that you are suffering loss if the directive, regulation or treaty doesn’t confer anything on you to begin with.
2) It should be possible to ascertain the content of these rights from reading the provision itself. So to confer rights, it should be able to clearly identify what the content of those rights are.
3) there has to be a causal link between the breach and the harm suffered.
Mr Fancovich and Bonifaci and ultimately the case was between them and Italy, and Mr F and Mr B were two people within a much broader group of Italian workers who were dismissed from their posts. Their employers became insolvent – there are two employers involved in this. It was a messy situation. There had been national proceedings which had said that Mr F’s group of people should be paid their lost wages – they were dismissed and they had received all their wages. Mr F’s Group of friends had a court order saying that they were owed €6 million. There were loads of people involved. Then Mr. B’s company went bankrupt and it was insolvent, and that also caused a huge mess. They were in a very serious situation. Apparently the sums owed were over 250 million lire. That was a big amount of money that was owed to all of these workers. These workers had been dismissed, and then lost out on pay, and these companies had gone insolvent. These workers were very vulnerable at this point. In the arguments made by Mr F and Mr B, they argued that there was a relevant directive 80/987, and they argued that Italy wasn’t complying with the directive and they should be protected from the result of the insolvency, and they were entitled to money as a result – damages. They were able to point to a tangible thing that they alleged Italy was doing wrong.
Further in the past, there was the ghost of a Commission action against Italy, so a few years before the Commission had taken a legal action against Italy precisely because of its failure to comply properly with this directive, and its failure to transpose it effectively into national law. that commission action had been successful. This is a feature and theme that we will note in various cases doing state liability – in the past of the commission had taken an interest in the EU legal issue and had taken an article 258 action against the state concerned. So this sort of evidence in the background made the protagonists - Mr F and Mr B - a bit more confident that they might be on strong ground here with their case against Italy. So they sued Italy. There is this action in the past and it was successful, and they argued that Italy would still not comply with this directive, and thus leave them in a very vulnerable position, and that they should have damages and compensation because this directive created a very limited right to protection of workers in this situation — in the situation of insolvency of their companies. It was very limited however. But they thought that the case law of the commission against Italy in the past would help their cause.
This case went to the Italian courts and the Italian trial court decided to send a preliminary reference under Article 267 TF EU to the court of justice, basically asking it what to do in this situation. They wanted the answers so that they could apply them in the national case. It was thanks to that preliminary reference that the Court of Justice was able to take the opportunity to create this new remedy of State Liability.
Brasserie and Factortame III
The Francovich version was: There must be a conferral of rights, it must be possible to ascertain the content of the rights, and there must be a causal link between the breach and the damages suffered by the applicant.
So, ‘ ascertaining the content of the rights’ changed to “an assessment to the seriousness of the breach.”
The factual situation in the Brasserie case was all about beer. It wasn’t really about fishing like the other case. It was a French company that wanted to export beer to Germany. Germany was very proud of their tradition of beer and they had beer purity laws in national law. This law regulated the ingredients and composition of the beer that was sold, and beer sold in Germany had to meet a certain standard. Brasserie wanted to export its beer from France to Germany so that it could sell it to the German market, and this wasn’t possible because it apparently failed this beer purity test set by German national law. Because the EU is very much about reducing these barriers to trade, this caught the Commission’s attention. So again, as in the Francovich litigation, the Brasserie and Factortame III case involved a prior Article 258 infringement case — COMMISSION v GERMANY. so the commission had already taken a successful infringement case against Germany – it was a public enforcement case. Saying that this beer purity law violated free movement rights. It was prejudicing the French company, and various other companies, in this situation from exporting their beer to Germany and selling it. what Germany was doing was basically going against the principles of the internal market. So on the back of this successful commission action against Germany, Brasserie took another legal action in the German courts for damages against the German state for continuing to… not just for the fact that there had been this breach, but for a whole series of years through the 1980s that this breach was continuing… so it specifically was looking for losses for that time period — 1981 through to 1987. Brasserie was looking at all the sales they could’ve made but didn’t have the chance to make because it was blocked from entering the German beer market.
Now, in Factortame III, remember the saga about Spanish fishermen who were discriminated against by the Merchant Shipping Act 1988 because they weren’t able to fish, or have their boats and fish, in British waters because the UK had taken a very protectionist and ultimately a very discriminatory stance in this situation by not letting people from other countries have their ships in these waters.
The Spanish fishermen linked to the Factortame II case that we are so familiar with, decided after Factortame II that they would look for damages, saying that they had suffered losses when the Merchant Shipping Act was enforce. For seven months they couldn’t fish while the act was in force. There was a court of Justice ruling saying the UK was wrong and a subsequent House of Lords ruling agreeing that the UK was wrong, setting up all this about primacy of EU law that had to be respected. So the Spanish fishermen decided to take their action for the damages they suffered while the merchant shipping act was in force.
So the Brasserie litigation was in the German courts and the Factortame III litigation was in the British courts, and both of these separate cases looking for damages in these two very different situations both reached the court of justice of the European Union through the preliminary reference procedures. The national courts decided to send questions about those two cases quite separately to the court of justice. The court of justice has quite an efficient administrative team who noticed some similarities in these cases, in these factual situations, even though one concerned beer and the other one concerned Spanish fisherman… The thing that both of them shared in common was that they were both looking for damages against the state – they were both wanting to hold the state liable for the losses that they had suffered in the two very different violations, or alleged violations, of EU law.
Therefore the court of justice joined the cases together for efficiency reasons. They were heard together and the judgment was a joint judgment delivered for both of those cases together. It is the second really big case due to state liability that we will be covering.
Ex Parte BT 1996
this situation is about incorrect implementation of a directive. So here the argument was that the UK had mis-implemented a public procurement directive and in doing so, because when you have a directive you have loads of discretion of what you do with the content about transposing it into national law, the state had a lot of discretion on how it did that. When this case went to a preliminary reference to the court of justice, the Court of Justice applied the latest state liability test which was the Brasserie test and decided that the UK was not liable because it wasn’t a sufficiently serious breach. The UK hadn’t manifestly and gravely disregarded the limits of its discretion.
That shows that the court of justice when trying to ascertain if there is a sufficiently serious breach would look around at the whole context of the case and look at various different factors before coming to a conclusion as to whether or not there is a sufficiently serious breach and whether the state is liable.
they took notice of the fact that part of the directive was a vague and the wording could’ve been better. It should be drafted in a clear way. They noted and appreciated the fact that the UK had done its best to implement the directive despite the dodgy drafting of the provisions. And the approach that the UK had taken indicates… it wasn’t wildly wrong or manifestly contrary to the wording of the directive. They just misinterpreted what they were supposed to do. There was no relevant case law on the issue, so there was nothing from the court of justice to guide the UK in its decision-making. And, this is also bringing in the public enforcement and the relevance of public enforcement — the court of justice noted the commission hadn’t chased the UK for the way it had implemented the directive. So the presence or absence of Commission action under Article 258 is a very salient and relevant factor here when the Court of Justice is trying to look at a situation and identify how serious the breach was.
R v Maff, ex parte Hedley Lomas 1996
This is also sort of testing the waters to see if decisions of an administrative authority can incur state liability if the administrative authority misbehaves in relation to EU law.
It was a licensing case – it was to do with licenses and exporting animals. In this situation the UK didn’t want live sheep to be exported to Spain on these big trucks with cages traveling across the continent. They didn’t want these trucks to go to Spain, and they wouldn’t give licenses to people who wanted to do this activity because they were concerned about animal welfare – specifically, because it had to be an EU point and they couldn’t just shrug their shoulders and say they loved animals… - they had to justify this restriction because it was a restriction to trade. They had to point to something relevant to EU law. The UK argued that Spanish slaughterhouses that these animals would be heading to were not fully complying with EU law. EU law had a directive that required animals to be killed in a slightly more humane way than would otherwise be the case. The UK wasn’t happy with the way that Spain is failing to stun animals before they were killed.
An exporter who suffered losses because he wasn’t able to get a license from the UK wasn’t able to send truckloads of sheep to be killed in Spain because of the UK’s policy on this. He decided to take legal action because of the ban and the UK’s failure to give the license.
The UK did lose this case. The state was found liable for the activities of the administrative authority that refused to give the licenses to exporters. The Court of Justice said, yes, UK you are supposed to give exporters like this damages because they weren’t able to get licenses from you to do the job they wanted to do. They wanted to send the truckloads of sheep to Spain.
Now, this type of scenario was mentioned when we talked about public enforcement. You can’t just point to another member state and say that they are not fully respecting EU law, so you are also not going to respect EU law. In this case because Spain is not respecting and EU law directive, UK was not giving licenses which restricted trade. this argument never works with the court of justice. Each member state has their own relationship in the framework of EU law. The UK has to comply. Spain should comply. If Spain is in complying then the pressures of public enforcement and private enforcement should persuade Spain to comply with EU law. It is not a good idea for the UK to argue that it can violate EU law because Spain is allegedly failing its obligations in a slightly different context.
To come to another slightly different scenario – decisions of the judiciary. can they be brought within the framework of state liability? The answer is yes. But in very specific situations. This is another instance where there is a further tweaked to the three stage test for liability in a situation that only refers to courts. Courts have slightly special treatment when it comes to state liability.
Kobler [2003] ECR I-10239
This case was all about a professor from Austria who wanted to claim some kind of length entitlement – some sort of benefit – which was to do with his length of service. If you were professor for a certain number of years you were entitled to a certain length of service increment … A certain benefit linked to the amount of service that you have done. This was coupled with a sort of bonus for university professors for staying in the system for x amount of years.
So if you stay in the system, were loyal to your country, and did all of its service, you would get some sort of reward for it.
The AustrianCourt appeared to do things slightly incorrectly. So the Austrian professor took the case to court and wanted a preliminary reference to be sent to the court of justice because the way that the Austrian authorities were doing this were, in the professor’s view, incorrect. This process prejudiced people who’d gone to work in other various countries and spent part of their career in Austria. So you could have somebody who was a professor for 25 years in a combination of different countries – Austria, Germany, France – and yet they would not get the same pay and bonuses and stuff as professors who had stuck with Austria and spent all of their career in the same place. This is a bit discriminatory, and undermined this idea moving around and establishing yourself in different countries while doing this job.
So this case went to the Austrian supreme administrative courts which made a preliminary reference on this issue – sending questions about the professor’s situation, and the court of justice decided to… instead of deciding the case, the court decided to send a letter back to the Austrian supreme administrative court saying “thank you for your preliminary reference. Have you read this case, because this case helps you decide your case, and you will be able to do very efficiently and you won’t need to wait a year for us to make our decision, and it will save you a lot of delay.”
So the Austrian Supreme Administrative Court said thank you very much, and that they would read this case, and sort out their national proceedings. So the Austrian court read the case but they misunderstood it and misapplied it in the professor’s litigation. This had made the professor very angry because he had gone to all this trouble, and ultimately one of the top courts in Austria had misunderstood EU law and miss understood what the Court of Justice had said and applied it to his situation, and there seemed to be no other route of appeal.
A second round of litigation started, and this time the Austrian professor argued “hey, Court of Justice, is it possible to render the Austrian supreme Court liable because it misunderstood EU law when you sent it that letter that time a few years ago?”
So the main question there was “can national courts be… can they act in a way that can trigger state liability?” Yes or no? All the cases we have looked at to this point have been about the actions of Parliament and administrative authorities that have rendered the state liable. It hasn’t been anything to do with the activities of courts. But this is what made Kobler distinct and different. the professor in the second round of litigation was pointing to the alleged failure of the Austrian supreme administrative court and saying that he had suffered because that court had misinterpreted EU law and applied it in his case.
The Court of Justice thought that this was quite serious and quite sensitive. They wondered how they would deal with this situation in a principled manner.
First of all, the court decided, yes, they will reinforce this principle of state liability by saying that yes it can cover courts of last instance. That means it can cover courts, the highest courts in the judiciary, the types of courts that are caught by Article 267 paragraph three TF EU. That means that the types of courts that must make preliminary references to the court of justice. The top courts in the judiciary are caught by this, not every other one.
However, it is said to tweak the Brasserie conditions for these highest national courts. Be mindful that courts should be independent, mindful that they have very smart judges that usually do a fantastic job… The court of justice said that “a sufficiently serious breach” was too low as a threshold.
For the highest national courts the threshold should be that they have committed a manifest infringement of EU law.
Traghetti Case
an Italian judgment that happened three years later. It reaffirmed this line of case law – this approach to the highest national courts, and reinforced how hard it is to convince the court of justice that a highest national court can be held liable for its activities.
This really echoes what we were discussing in relation to public enforcement – this idea that the commission in public enforcement can be quite reticent to go after the highest national courts for their alleged failings in EU law. In state liability as well, the highest national courts also have a sort of similar protection – it is only an extremely strong argument that will succeed because infringement has to be proven.
Cooper v Attorney General 2010
It about the Vestibule?? Shopping Centre in Strafford. this is about Mr. Cooper who decided to challenge various decisions of the Court of Appeal which he argued didn’t respect EU environmental law. You know when there’s going to be a big shopping development such as a big building, or station, or shopping center… Before you can get planning permission for this development to go ahead, there are all sorts of factors and boxes that have to be ticked and considered, and one of them is the environmental impact of the development in that area.
she’s now telling a story about an airport in Ireland and a motorway that was about to be constructed. There was a bank of trees, or a tree, where the fairies were supposed to go. This is near Shannon Airport in Ireland.
Anyways, in the situation, Mr. Cooper was with many people arguing about the environmental impact of building on the West Hill shopping mall for environmental reasons. You have to have a very thorough environmental check before something goes ahead, and he was arguing that the Court of Appeal in a series of cases was violating EU law and was failing to correct bad precedents in the UK as well.
The Court of Appeal, trying to identify whether the state should be liable for what the court had done, the Court of Appeal said errors of law were made in earlier Court of Appeal decisions. However they did not constitute a manifest infringement of EU law
