The principle of (state) liability for breach of EU law

Emilie Schou
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Mind Map on The principle of (state) liability for breach of EU law, created by Emilie Schou on 05/15/2014.

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Emilie Schou
Created by Emilie Schou over 5 years ago
State Liability
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The principle of (state) liability for breach of EU law
1 Origins of the principle
1.1 Francovich: state liability inherent in Treaty, indicating that an action for compensation against state for breach of EU law must be available + required provision by national courts of a damages remedy for breach of EU measure which lacked DE
1.1.1 3 basic conditions established for breaches involving a state's non-implementation of a D
1.1.1.1 Conferral upon individual of specific rights
1.1.1.2 Content of which must be identifiable under D
1.1.1.3 Causal link between state's breach and damage to individual
2 Clarifying and extending the principle
2.1 Brasserie du Pêcheur and Factortame: Entitlement to compensation applies to all breaches of EU law that cause damage, not just non-implementation of directives + state liability not limited to situations where there is no direct effect + need to reformulate the test to take into account this wider scope
2.1.1 3 conditions
2.1.1.1 EU rule infringed must entail a grant of rights to individuals
2.1.1.2 The breach must be sufficiently serious
2.1.1.2.1 Dillenkofer: total failure of implementation of a directive is automatically a sufficiently serious breach
2.1.1.3 Causation between breach of the MS obligation and the damage suffered by the individual
2.2 Köbler: principle of SL applies even to violations of EU law by national courts of final appeal.
2.3 Traghetti del Mediterraneo: ECJ condemned italian legislation which sought substantially to restrict SL for damage caused by last instance court
2.4 Courage: ECJ emphasised fundamental nature of prohibition of anti-competitive agreements in art 101, breach of which would render any such agreement void. National law must provide an action for damages against a private party for breach of the Treaty competition law rules. BUT extent to which it extends beyond competition to other Treaty provisions remains uncertain.
3 The conditions for SL
3.1 Brasserie/Factortame: established 3 conditions (cf above) + existence of prior ECJ ruling finding infringement not necessary to establish sufficiently serious breach
3.1.1 Sufficient seriousness: would not to take into account legal disputes over fisheries policy, fact that C had made its attitude known in good time to UK, assessment as to state of certainty of EU law by interim proceedings
3.1.2 Causation of damage: for national courts to decide although later, clear guidance given
3.1.3 Standard of liability: did not respond directly on meaning of 'fault'
3.2 Köbler: state liability in cases of judicial breach => governed by same conditions and same standard of liability as any other state violation of EU law
3.2.1 although normally for national courts to appyl law to facts of case, ECJ had enough info to give guidance on whether conditions were fulfilled
3.3 Traghetti del Mediterraneo: sought to limit SL solely to cases of intentional fault and serious misconduct by national court. ECJ rejected this => under no circumstances than that of a manifest infringement of the applicable law as set out in Köbler may such criteria impose stricter requirements
3.4 British Telecom: ECJ agreed that UK had mis-implemented D but did not amount to 'sufficiently serious breach' => provision was not clear and precise to begin with, UK's interpretation made in good faith, no guidance available from past ruling of ECJ or C
3.5 Denkavit: incorrect implementation of taxation D where almost all MS had adopted same interpretation oD
3.6 Robins and Others v Secretary of State: where EU leaves a lot of discretion to MS, SL will depend on finding of manifest and grave disregard for limits of that discretion
3.7 Dillenkofer: failure to implement D => ECJ ruled that non-transposition of D within prescribed time of itself amounted to sufficiently serious breach
3.8 Lomas: refusal of UK to grant export licences to sheep from Spain => sufficiently serious breach given lack of discretion left to states under D + lack of proper justification
4 SL and the national remedial framework
4.1 Action for compensation provided within framework of domestic legal system with varying procedural rules
4.2 Effectiveness principle: Brasserie/Factortame outcome would make it difficult to obtain reparation. 'Reparation for loss or damages to individuals as result of breach of Community law must be commensurate with loss or damage sustained'
4.2.1 Bonifaci and Berto v IPNS: Compatibility of national provisions restricting availability of compensation for state's prior breach of EU law. ECJ found that various provisions of national legis limiting period from which wages could be claimed to be too restrictive >< effectiveness
4.3 Equivalence principle
4.3.1 Palmisani: left it to national court to decide whether 1-year limit set by Italian legis for a claim for compensation for failure to implement D was in compliance with equivalence. ECJ still suggested principle might have been violated.
4.3.2 Transportes Urbanos: requirement of exhaustion of domestic remedies before bringing a claim in damages of breach of EU law considered by ECJ to violate equivalence principle since it did not apply to claims in damages for breach of domestic Constitution
5 SL as a residual remedy?
5.1 What advantages to choose EU-mandated action for compensation instead of another existing national remedy to enforce EU law?
5.2 Société Comateb and Sutton: where national remedy is unsatisfactory due to the existence of legitimate national procedural restriction, action against the state preferable where it does not violate this national rule
5.3 Stockholm Lindöpark: ECJ rejected argument that availability of a Francovich-style action for damages should be precluded by fact that separate action under national law could be based on DE of EU law.
5.4 Wells: ECJ left it to national court to decided what remedy would be appropriate
5.5 Prechal (judge on ECJ): SL for breach of EU law is 'a sort of residual remedy... a second rank alternative' to the direct and indirect effect of EU rights and their enforcement at national level. EU law may even require litigants to rely first on direct and indirect effect of EC right before seeking state compensation. SL as a kind of 'safety net' where other devices fail.
5.6 Dougan: ECJ tends to use SL as a cure for inadequate domestic remedies. Does ECJ's tendency to present SL as panacea where national remedies fail have effect of lowering effectiveness of national protection?

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