Judgment in Joined Cues
The questions from the Bundesgerichtshof (Federal Court of Justice, Case C-46/93) and the High Court of Justice (Case C-48/93), which raise the issue once again of infringements of the Treaty already found in preceding judgments of this Court, consequently afford an opportunity, if not of resolving all the remaining difficulties associated with this complex subject, at least of providing further clarification, in particular about the existence of State liability in cases other than failure to implement a directive and about the
As a result, the Court will have to consider a number of important institutional aspects, in particular the relationship between Community law and the national legal systems. Consequently, this is an area in which the correct operation of the Community legal system as a whole has to be assessed.
Law of
Following the judgment of Case
Apart from the exercise of a public office and a breach of official duty, therefore, the applicability of the rules in question depends on the further requirement that the official duty breached should be A legislative wrong (legislatives Unrecht) is governed by the same rules as liability of the public authorities (Amtshaftung). It is precisely because of this that the amenability to compensation of damage arising out of a legislative wrong — still a very controversial subject in Germany — is unquestionably allowed where individual-case laws (Etnzelfallgesetze) arc involved or a legislative measure such as a land development plan (Bebauungsplan). The picture which emerges docs not differ much from that which is allegedly peculiar to the Italian system — the distinction between diritti soggettivi (individual rights) and intercut legittimi (protected interests).
Secondly, the national court observes that neither in this case can there be State liability on account of an unlawful act of the public authority which is capable of being equated with expropriation, a principle developed by the case-law of the Bundesgerichtshof (Federal Court of Justice). See BGHZ (Reports of Decisions of the Bundesgerichtshof in Civil Matters),
The law in question provided for a new register for all British fishing vessels and hence also for vessels already registered on the former register. In particular, the new registration system, which became compulsory on
The new registration system was challenged in the Divisional Court, which by order of In order to give the full picture, it is recalled that following the claimants' appeal to the House of Lords, that court made a reference to the Court of Justice, by judgment of Case
In the meantime, the Commission brought an action against the United Kingdom under Article 169 on the ground of the alleged incompatibility with Community law of the British statute, but only as regards the nationality aspect. The Commission also applied for interim measures requiring the United Kingdom to suspend the application of the statute, which the Court granted by order of Case Case
As long ago as
The applicants seek damages under various heads, including, in particular, expenses and losses of profits and income incurred from the entry into force of the new legislation ( Although the national court refers solely to
First, damages may be awarded where loss or damage is due to a negligent breach committed in the exercise of administrative or legislative activity (tort of negligence). See, for example, Rowling v Takaro Properties [19881 A. C. 473. The duty of care is confined to typical sets of circum-stances, the upshot being that liability does not attach to every harmful negligent act. However, there are decisions to be found in the less recent case-law in which the duty of care has been identified with the neighbourhood principle, which is essentially equivalent to neminem laedere, since liability may be incurred under that principle for harm done to anyone where it was reasonably foreseeable that the victim might be harmed (see, for example, Donogbue v Stevenson [1932] A. C. 562). See, for example, Lonhro v Tebbit [1992] 4 All ER 280.
Secondly, liability on the part of the public authorities may be claimed in the event of a breach of statutory duty. In such case, however, the actual chances of obtaining damages are considerably reduced in so far as the prevalent view is that the possibility of obtaining administrative remedies designed to ensure that the law is complied with precludes bringing an action for damages. See, for example, Thornton v Kirklees MBC [1979] Q. B. 626. See Garden Cottage Foods v Milk Marketing Board [1984] 1 A. C. 130 HL., in which the House of Lords essentially accepted, albeit in an obiter dictum (the proceedings were concerned with an application for interim measures), the existence of liability in damages to a person who had suffered loss as a result of conduct in breach of Articles 85 and 86 of the Treaty by a private citizen or also by a public authority, but in the event that it acted as a private citizen.
In contrast, where the breach falls solely within the ambit of public law, liability may be claimed only for misfeasance in public office. This is the only tort which does not cover relations between private persons but specifically the public authorities. However, the requirement for intentional unlawful conduct makes the possibility of obtaining damages a remote one, even where the loss or damage arises out of infringements of Community law. Thus, as the Divisional Court points out in the order for reference, in Bourgom ν Munster of Agriculture. Fisheries and Food [1986] 1 Q. B. 716 A. C. Kirklees Metropolitan Borough Council ν Wiches Building Supplies Į1992] 3 W. L. R. 170, in particular at 188.
and are those persons who were owners or managers of such vessels, or directors and/or shareholders in vessel-owning and managing companies, entitled as a matter of Community law to compensation by that Member State for losses which they have suffered as a result of all or any of the above infringements of the EEC Treaty?
In these proceedings, the Court has to establish whether, on what terms and with regard to which classes of injury, there exists an obligation for the State to compensate individuals who have suffered loss or damage as a result of the application of national laws conflicting with Community law. For a different case in which the State is claimed to be liable for damage caused by conduct of the administrative authorities contrary to Community law, see pending Case C-5/94 Lomar, Advocate General Leper's Opinion of
Secondly, it will have to be established whether the conditions of liability are those specific to each national legal system — albeit subject to the well-known limits identified in several of the Court's decided cases — or whether, by contrast, it is Community law itself which determines at least the
As for the conditions of liability, I shall say forthwith that the minimum substantive — unlike the procedural — conditions must be common and hence Community conditions. To my mind, this is the only way of avoiding a situation in which the actual possibility of obtaining reparation for a given infringement is not secured equally in the several Member States and in which discrimination consequently arises as between individuals, which a Community based on the rule of law should not tolerate. Accordingly, the second part of my Opinion will deal with the conditions enabling individuals to obtain reparation, that is to say, the Community preconditions for liability, and the limits imposed by Community law on the procedural conditions. In my view, the latter conditions continue — in common with the criteria for determining the quantum of the damages — to be governed by national law.
Lastly, I shall consider the two cases before the Court and reply to the questions which gave rise to these proceedings.
Albeit that principle does not have the same general scope in all the legal systems —suffice it to cite the British system, in which there is a limit in terms of the (restricted) scope of the duty of care, — it none the less remains that, inasmuch as it refers to the idea of wrongful damage, it may be regarded as the starting point for any discussion of liability.
Admittedly, in the case of the public authorities, precisely because of the nature of the activity which they perform and of the consequences which would ensue were there held to be liability and an obligation to compensate generally, the tendency has invariably been to limit the scope of liability in various ways. The extent of that limitation, which may be encapsulated, by way of initial approximation, in the well-known formula according to which the liability in question is Judgment of the French Tribuna! dus Confins of
Manifestly, over time significant changes have taken place with regard to the limitation of the scope of responsibility, varying according to the legal system considered. In particular, the emergence of the
Consequently, in so far as at least the principle of State liability is part of the tradition of all the legal systems, For an essential understanding of the relevant rules in the various Member States, see Schockweiler — Wivecne — Godart:
See sections 43 to 47 below.
It would therefore be at odds with the relevant case-law and with the characteristics of the legal system as a whole, in particular the division of tasks between the Community and the Member States, for Community law to disinterest itself completely of compensation for loss or damage, by leaving it, without any review, to each national system.
I would recall that, as long ago as Case
Although it found that the relevant provisions of the directive were unconditional and sufficiently precise as regards the determination of the persons entitled to the guarantee and the content of the guarantee itself, the Court held that those provisions could not be relied upon directly before the national court in order to seek the benefit provided for them by the directive. In particular, those provisions did not identify the person liable to provide the guarantee, and the State could not be considered liable on the sole ground that it had failed to take transposition measures within the prescribed period.
More specifically, the Court inferred that principle from two fundamental elements of the Community legal order. First, it pointed out that
Secondly, as it had already done in the judgment in Case
Consequently, it is precisely in the light of those objectives that the position of the individual has been used and given its proper importance. The State's financial liability Suggestions to that effect were also to be found in academic writings: Pescatore, For this aspect, see sections 27 to 32 below.
Humblet v Belgium, cited in footnote 25. That case was concerned more specifically with securing the annulment of a measure by the Belgian State and the restitution of sums unduly levied; but the general wording used by the Court —
There is a very clear dictum to this effect that
Judgment in Case
However, the case-law makes it clear that liability has to be made out by the national court Judgment in Russo ν ΑΙΜΑ, cited in the preceding foot-note, paragraph 9. This stance was further emphasized in the judgment in Granaria, where the Court held that
Essentially, in
In particular, it has to be determined whether Community law requires a guarantee in terms of compensation even where provisions having direct effect are infringed or whether the fact that in that event an individual may rely directly on the provision in question and therefore ensure that the right claimed is guaranteed by that means rules out that possibility.
In the final analysis, those governments consider that the right to reparation plays merely a residual protective role, in the sense that it comes to the fore only in regard to provisions which could not otherwise be relied on before the national courts. Essentially, the Court used the
I refer to the judgment in Russo ν AΙΜΑ, which 1 luve already mentioned, relating to a regulation on the common organization of the agricultural markets, and to the judgment in Case
When the subject was specifically tackled in Sec, in particular, paragraphs 33. 35 and 37 of the ludgmcnt.
The State's responsibility for legislative activity (on the part of the legislature proper or of the administrative authorities) constitutes also from that point of view a natural and necessary part of the Community legal system created by the Treaty and by the Member States themselves. I cannot but remind myself that it was the Member States which, completely freely, agreed the contractual rules underlying the system as a whole; and the Member States are still the decisive protagonists in the process for the formulation of Community measures. Consequently, to hold that liability exists for failure to fulfil obligations is tantamount simply to increasing the effectiveness of the system and does not involve any activity supplementing — let alone supplanting — the legislature.
In sum, what is contemplated is the same as that contemplated by the — now consolidated — case-law which established direct effect, in the sense that provisions of the Treaty and secondary legislation may be relied upon by individuals directly before national courts, provided of course that they are sufficiently clear and precise and unconditional.
This applies, not only on the substantive, but also on the procedural, level. Suffice it to mention what the Court itself has held: Case
So much so that direct effect has been from the outset, and continues to be, what is termed vertical, almost, as it were, in order to reinforce the idea that, rather than an intrinsic quality of the provision, it is a remedy for preventing the States from taking advantage of a failure to fulfil their obligations. It is also significant that the Court's assessment of directives has been progressively refined and broadened. For example, the class of public agencies against which directives can be relied on has widened (see the judgments in Case
Judgment in Case
Holding that there is an obligation to make reparation where a directive cannot be relied on directly before the national court, either because of the absence of direct effect of all the provisions needed to secure the benefit of the right which it confers on the individual or because of the absence of
Consequently, the concept remains the same: in order to implement a provision putting the State under an obligation, the individual's legal position is used, on the one hand, in terms of its
In the sense that
It is undeniable that this is a fundamental value of any legal system, whether Community or national. It is also undeniable that respecting that value may require guaranteeing individuals, where necessary, the right to compensation for loss or damage sustained by reason of the legislative action or inaction of the public authorities, irrespective of whether or not the individual has other means, in addition to a remedy in damages, of asserting an infringement of the legal position bestowed on him by Community law.
In this sense, the argument that it is not possible to
Nor should it be overlooked that, as far as provisions having direct effect are concerned, the Court has consistently held that they See, inter alia, the judgments in Case Judgment in Simmenthal, cited in the preceding footnote, paragraph 16.
In the final analysis, reinstating its financial content is something less, a minimum remedy compared with full substantive reinstatement, which remains the optimum means of protection. Annulment of an unlawful measure or setting aside a law which is inconsistent with a superior parameter of legality is necessary in a State governed by the rule of law. At times, however, this is not enough and it may be necessary, in order to render the protection real and effective, to bring back into balance also the financial content of the right which has been impaired and hence to ensure that the damage is made good. Consequently, reinstating financial balance in respect of the right which has been infringed is not something different or something more, even less something novel. Neither does it constitute something
To sum up, the principle of the State's financial liability must be applied as a remedy which is both alternative and additional to substantive protection; consequently, it must be applied in the event of infringements both of provisions without direct effect, in the sense of provisions which may not be directly relied on before the national courts, and of provisions which may be so relied on.
I would point out in this connection that
However, as the national courts have shown in their respective orders for reference, they are debarred from awarding damages by their national law, precisely because the infringements at issue of Community law are attributable to the legislature, either because it failed to amend a national law so as to bring it into conformity with Community law (Case C-46/93
That view, which took root above all in legal systems in which the law was not reviewed in the light of some higher parameter, should take on a different complexion where there is a higher norm which can be used to verify and, in an appropriate case, deny the legality of the legislature's activity. Yet, also in those legal systems in which there is not only a clear, formal hierarchy as between constitutional rules and legislative rules, but also a mechanism of For instance, in Germany such a possibility is not ruled out
And that is not all. It is well known that, in most legal systems, compensation is awarded in certain cases for the diminution of assets sustained by individuals on account of a perfectly lawful activity of the legislature, in that it was brought into being without any infringement of any
In fact, international law contemplates only State liability viewed in the round, that is to say, as a whole: consequently, there is no difference depending on whether the infringement which gave rise to the damage is attributable to the legislature, the judiciary or the executive. Moreover, the same approach can be seen in the Court's case-law on Article 169: the infringement of a Community obligation is imputed to the State in any event, regardless of the entity which was actually responsible for fulfilling the obligation (sec, for example, the judgments in Case
Judgment No 8 of
However, it does not seem possible to me to ignore the specific, peculiar features of the Community legal order. That system is based, as far as is relevant for present purposes, on a contractual foundation. The Treaty, in common also with other agreements establishing international organizations, contains a series of obligations on Member States with regard to the achievement of the aims set out therein, which have been freely subscribed to, and to the operation of an institutional structure whose powers are very largely, but not wholly, predefined. However, the peculiar, ultimate aim of the contractual basis in the case of the Community is integration and more specifically The reference is 10 the preamble lo the EC Treaty.
See, in particular, the judgments in Case 26/62 Van Gend 6 ¿ooi. cited in footnote 35, and in Case
Next, in any event the problem of the liability of the State Judgment in Case 103/88
The French It is scarcely necessary to point out that, in relation to legislative activity of the administrative authorities, the term faute is used by academic writers and by French administrative case-law (where the concept was evolved) to denote maladministration and hence, even though this may seem odd, does not require fault. Indeed, the rule often referred to is that Judgment of
This is testified to, in particular, by cases such as Case Case
In
See the judgment in Case
Accordingly, for example, whereas in Judgment in Case Judgment in Case
Faced with a large variety of solutions in the Member States' legal systems, the Community legislature acted, not only with regard to aspects relating to substantive, hence real, protection, but also by providing for a system — which was certainly novel to a good many national systems — of damages to compensate for the injury caused by unlawfulness of contract award procedures in the event of the absence or insufficiency of real protection. That provision introduced a significant innovation into many Member States' legal systems. For instance, in the Italian system, which, even though it was among those affording the greatest protection and, in any event, one of the few in which it was possible, following the annulment of the unlawful administrative measure, even to have the ensuing contractual situation set aside, provision for compensation for infringement of situations which had traditionally been classed as interessi legittimi (protected interests) and not as diritti soggettivi (individual rights) constitutes nothing less than a cultural revolution (see judgment No 2667 of the Corte di Cassazione of
For a somewhat different approach, see Advocate General Jacobs' Opinion of
Where Community provisions are infringed by Member States, the result which should be attained, as far as is relevant for present purposes, for the proper operation of the Community legal system as a whole is that of ensuring, assuming that specific preconditions are satisfied, that the same legal situation is restored, at least in terms of its financial implications, as would have obtained if the Member State had not failed to fulfil the obligation imposed upon it by Community law.
In the absence of specific Community provisions governing the area, the problem lies in defining the conditions determining State liability and in actually being able to ascertain when they are present. In addition, careful consideration should be given to the practicality of the possible solutions.
Such a solution, as I mentioned at the beginning, would however have considerable drawbacks, the first among them being that it would not ensure the result sought by Community law through an affirmation of the principle of liability, that is to say, full, effective protection of the rights claimed by individuals under the Community provision which is assumed to have been infringed. That this is a real risk is shown by the very questions referred by the national courts, which arose precisely because the applicable national law did not allow any compensation to be granted in the cases before them. Again, in any event, it is only too obvious that a mere reference to national law would be in danger of endorsing a discriminatory system, in so far as for a given infringement Community citizens would receive different protection, some none at all.
This, moreover, was the solution adopted by the Court in
However, this must not be taken as meaning that the presence of those conditions is sufficient for the purposes of compensation with respect to any infringement of Community law whatsoever. As the Court itself explained,
In other words, it is true that, in the case of infringements of Treaty provisions having direct effect, the conditions set out in
The substantive preconditions for liability are more or less the same everywhere: actual damage, a causal link between the damage and conduct on the part of the perpetrator of the damage, and the fact that the conduct was unlawful. In contrast, the differences — which in some cases are important in so far as they affect, for example, even the nature of the individual interests protected Suffice it to recall the particularities (but see footnote 5) of the Italian system as regards the lack of a remedy in damages for breaches of interessi legittimi (protected interests). For the
To that end, I consider that I should dwell initially on the conditions which the Court considers sufficient in cases of failure to implement a directive in order to give rise to a right on the part of individuals to compensation.
However, the three conditions in question, which the Court identified in Francovich (paragraph 40), are set out here verbatim in the form in which they were stressed and summarized by the Court in Faccini Dori ν Recreb, cited in footnote 37, paragraph 27.
A first question needs to be asked: are those conditions necessary and sufficient also in a case where the loss or damage was caused by infringement of a Treaty provision having direct effect?
The second condition, which at first blush seems merely to specify the first, emphasizes the need for the right resulting from the directive to have a precise content, that is to say, its subject-matter must be capable of determination, with the result that this condition should again be regarded, in principle, as being satisfied by Treaty provisions with direct effect. For this aspect, see sections 75 and 76 below. In Francovich, I recall, this was the amount owing to the employees following the employer's insolvency; in Dillenkojer and Others it is sums paid by purchasers of package holidays for trips never made.
To that end, it is worth examining the reasons which prompted the Court to confine itself to those conditions and not also to specify, for instance, the criteria for holding that the relevant infringement of Community law involves unlawful conduct such as to cause the State to incur liability. In
Accordingly, in those circumstances, since the Court had first found that the directive could not be relied on directly by individuals before the national courts, it merely indicated that, for the purposes of the obligation to make reparation of the Member State in breach of its obligations, it must be possible to identify a precise, exact right on the part of the individuals.
It shows, among other things, that failure to implement a directive constitutes a conscious breach, consequently a deliberate one and for that very reason one involving fault, Temple Lang:
In the sense that strict liability is involved in which fault plays no part, see, for example, Caranta:
In the final analysis, the fact that the criteria required by Community law in order for the State to incur liability are not clearly defined in
It does not seem to me that this was the result intended by the Court or by Community law. Moreover, it would not actually be reasonable, given that, as I have already mentioned, in all the legal traditions liability for legislative activity on the part of the public authorities is limited in various ways. What is more, the Court's own case-law on the non-contractual liability of the Community institutions on account of their legislative activities takes a different line.
That point of view does not seem completely baseless, bearing in mind, first, that the second paragraph of Article 215 refers, for the purposes of the reparation of damage caused by Community institutions in the performance of their duties, to the general principles common to the laws of the Member States and, secondly, that consequently that case-law could and should constitute, regard being had to the absence of uniform rules in this field, a useful frame of reference for common rules on State liability.
Nevertheless, I consider it worth preceding my consideration of each of the general conditions for liability by a few observations designed to assess whether, and to what extent, an infringement of Community law attributable to the State is comparable to an infringement on the part of the Community institutions, and whether, in the final analysis, the criteria set forth in the relevant case-law may or may not constitute a useful frame of reference, at least given similar situations.
Sec, for example, the judgment in Case
However, the case-law has identified — in particular with regard to the unlawfulness of the conduct imputable to the institutions — conditions which are so restrictive as to make it extremely difficult actually to obtain damages against a Community institution. Indeed, to dare the number of awards of damages made against Community institutions comes to just eight.
Judgment in Joined Cases
The application of that approach, however, in a good few cases has made for perplexity.
See, for example, the judgment in Joined Cases
Unquestionably, it would be more correct to apply different rules on liability depending on whether the activity in question was more particularly legislative or in the nature of executive activity, given that, in principle, the discretion available to the Community institutions differs significantly in the two cases. See Advocate General Biancarelli's Opinion in Case This issue was recently raised and discussed before the Court of First Instance in an anti-dumping case in which the applicant argued that the question of Community liability should be assessed differently depending on whether the infringement imputed to the institution was attributable to a breach of the rules inherent in the assessment of complex economic facts or, as in that case, to a breach of procedural rules binding on the institutions. The Court, however, disagreed, confining itself to the lapidary statement that antidumping measures constitute legislative action involving choices of economic policy (judgment of To this effect, see also Advocate General Darmon's Opinion in Case
Tins was the issue raised, inter alia, in Bourgom before the Court of Appeal, Civil Division, Common Market Lau Reports [1986] OB 716, considered in Simon-Barav,
To this effect, sec, for example, Cartabia:
From that point of view, it does not seem to me either that it can be validly argued that to transpose to national actions in tort the conditions attaching to actions brought under Article 215 would potentially constitute a step back from the situation existing in some legal systems. From the point of view of the requirements of the protection of the rights conferred on individuals by the Community legal system, it is not acceptable for the judicial protection achievable at Community level to be based on more restrictive and, in the final analysis, less liberal conditions than those obtaining in at least some Member States. See, in this connection, the proceedings of the 1992 FIDE Congress: PIDE,
In particular, by way of a first approximation, I take the view that it is absolutely reasonable that State liability — let us be quite clear about this, irrespective of whether or not the provision
Conversely, Member States should be more readily held liable, as in the case of the Community institutions, wherever the infringement is not coupled with the exercise of a broad discretion.
In a Community governed by the rule of law, in which it is the aim that the acts and conduct of all participants in the system should be amenable to judicial review without privileges for anyone, the requirement for effective protection of the rights claimed by individuals under Community law may not vary — given equal situations — depending on whether a Member State or the Community caused the loss or damage.
To take įust a few systems, suffice u ίο mention illecito in Italian law, the French faute, the German Verschulden and the English concepts of breach of a duly of care or misfca-Sitnce in public office.
As regards legislative activity of the public authorities, a first attempt has been made by the Council of Europe in a recommendation, Principle I of which states as follows: Recommendation R (84)
But, as I have already said, under the case-law in question it is as if all Community legislative measures involved choices of economic policy.
Sec, in particular, the judgments in HNI. v Council and Commission, cited in footnote 66, paragraph 4, and in Joined Cases
Whilst it is true therefore that the prejudicial measure must at least be unlawful in order for non-contractual liability to be incurred, there is the immediate addition of two conditions on which liability for damage caused by measures involving a choice of economic policy depends: the provision infringed must be
Consequently, for the purposes of holding that there is an obligation in damages on the Member State in breach, the emphasis has been placed, on the one hand, on the same criteria formulated by the case-law on Article 215 — hence essentially on the concept of a manifest and serious breach — and, on the other, on fault as the element necessary to
As I have mentioned, in the relevant case-law that criterion is defined in the following terms: Grands Moulins de Paris ν Council and Commission, cited in footnote 64, paragraph 8. See, in addition, the judgment in Case
In my view, when it comes to Treaty provisions with direct effect, which is what we are concerned with here, some additional specification is needed. In particular, it must be made clear that the fact that such provisions are occasionally or often designed to protect other —
In this connection, I shall say forthwith that I do not consider it appropriate to propose the same solution also for State liability for infringements of Community law. If it is true that the Member States' obligation in damages is imposed in order to guarantee individuals effective protection of rights claimed under Community provisions, it follows it would not be easy to identify reasons justifying limiting that obligation to the breach of a particular class of rule, albeit one fundamental to the Community system.
It would still be necessary to specify which provisions also warrant protection in damages on the ground of their scope and in order to secure their effectiveness: is the prohibition of discrimination on grounds of residence, which is indubitably fundamental for the purposes of ensuring effective freedom to supply services, as fundamental as or less fundamental than the prohibition of discrimination on grounds of nationality?
In the final analysis, I consider it sufficient, from the point of view of the aspect considered so far, that the provision infringed should confer on the individual a right whose content is capable of determination and precise. It is hardly necessary to add that the same should be true of liability on the part of the Community institutions.
It seems to me that, in order to identify the limits of the possibilities for translating unlawfulness into liability, the discretion factor can and must be the decisive element, irrespective of the rank of the provision infringed (Treaty or secondary legislation, at any rate a provision which takes precedence over national law) and of the measure (legislative or executive) which infringes it. The greater or lesser degree of discretion available to the State coincides, moreover, — at least in most cases — with the greater or lesser degree of clarity and precision of the obligation to which it is subject. In fact, it is quite possible to conceive of obligations which are not at all clear — or better, which are imprecisely demarcated—, even in cases where the States' discretion is small or unimportant. The upshot is that in such cases the limits set to the action of the States are not clearly defined for
Furthermore, it is worth pointing out that, for present purposes, it is not decisive in itself whether or not the States have a wide discretion in a given sector, but rather what is decisive is the breadth of the margin of discretion available to them in regard to the individual provision which confers a right on individuals. I would observe, for example, reiterating what I have already mentioned, that, although Article 30 of the Treaty is certainly not associated with the exercise of a broad discretion on the part of the Member States, it must nevertheless be considered that the limits which it imposes on action by the Member States arc not always clear and precise, as clearly emerges, moreover, front the way in which the case-law has evolved. By contrast, the discretion available to the Member States, for instance, under Article 129a of the Treaty (consumer protection), could not in any event be regarded as capable of resulting in the application of more restrictive conditions for liability if, for example, a national provision excluded citizens of other Member States from the benefit of the national provisions.
So, in all those sectors and with regard to all those provisions which do not give Member States a significant margin of discretion, in the sense described above, there must be held to be liability and an obligation in damages simply on account of the infringement of a Community provision which confers on individuals a right which is precise and whose subject-matter is determinable; no other factors may be taken into account.
Judgment in Case
Sec, for a remark to similar effect but regarding the obligation to make a reference pursuant to the third paragraph of Article 177 of the Treaty, the judgment in Joined Cases
As far as the last-mentioned aspect is concerned, it is scarcely necessary to show that, unlike some Member States have argued in these proceedings, there is no reason for malting an action for damages dependent upon the Court's having made a prior declaration that the State in question has failed to fulfil its obligations. In this connection, regard must be had to the Commission's discretion in deciding whether or not to initiate infringement proceedings, which would reduce, without any review, the ability of individuals to obtain compensation. Moreover, as the Court itself has held Judgment in Joined Cases
Sec, for a statement of that concept, the judgment in Joined Cases
Consequently, in such cases the individual continues to have the possibility of relying on the substantive protection of the legal position which may be conferred upon him by the provision in question. Of course, in the event that the Member State does not remedy reasonably quickly the infringement which has been found in the meantime, the injured party may indeed bring an action for damages.
I would next observe that, from the same perspective, as regards the timely, but incorrect, implementation of a provision of a directive, State liability will exist only where the application of the provision by the Member State in question is manifestly wrong. For a more exact appraisal of this aspect, see the Opinion in Case
Seeking fault in the subjective sense — and,
One exception is certainly the Spanish system, in which liability for legislative measures is strict (see Articles 9(3) and 106(2) of the Constitution and Article 139(1) of the Law of
See, for instance, Paillet:
Cassazione Civile, Sezioni Unite, judgment No 5361 of
In other words, fault, which is at least presumed every time an unlawful legislative act is brought into being, either in view of the unquestionably voluntary nature of measures adopted by the public authorities or on account of infringement of the principles of legality which those authorities are bound to observe, has ended up by losing every subjective connotation. This is also the case in Belgium, Luxembourg, Greece, Portugal and Denmark.
Whilst, therefore, it is indeed true that liability is still fault-based in most national legal systems, it is also true that the existence of fault is determined, subject to some exceptions, In the English system, the administrative authorities' liability for legislative activity seems still to be based (and solidly based) on fault as the subjective element of the conduct in question. Thus, an error on the part of the Minister in interpreting the extent of the powers conferred on him may not in itself be regarded as constituting fault (see, for example, Rowling v Takaro Properties [1988] 2 W. L. R., 418 et seq.): likewise, fault, and with it liability, is precluded where the authority in question sought legal advice on the field in which it was called on to act (see Dunlop v Woollabra Municipal Council [1981] 2 W. L. R., 693). Given in addition that damages may not be awarded in the tort of negligence for pure economic loss, it follows that only, or almost only, the unlawful adoption of measures characterized by wrongful intent, namely the tort of misfeasance in public office, constitutes an unlawful act capable of giving rise to liability. Such a trend can be seen also in the Netherlands and Ger-many, where fault is equaled to conduct in breach of the duties of normal care. In this context, German commentators themselves now refer to the
After some initial wavering, even in the Court's case-law fault is of importance only as a synonym of unlawful conduct.
On the other hand, even if it were to be sought to base such liability on fault, it seems to me, at least as a first approximation, that it could not, for present purposes, not be linked to the provision allegedly infringed or simply identified with its content.
Conversely, if the
I would therefore reiterate my conviction, as described earlier, that the conduct of the State in breach of Community law must be assessed in the light of objective factors for the purposes of the obligation to make reparation.
In my view, those conditions should be regarded as irrelevant for present purposes, even though they have often been applied in the Court's case-law on non-contractual liability. See in particular, the judgments in HNL ν Councii and Commission, cited in footnote 66, paragraph 7, Joined Cases
See, for example, the judgment of the Conseil d'État of
It would indeed be excessive to require of individuals injured by unlawful acts that the damage sustained by them should be abnormal and special, with the result that they would be left to bear, not only consequences of a modest scale, but also those common to a class of individuals which was not of limited size. I consider therefore that the idea of exempting liability for minor loss or damage in this case would be a bad one.
On top of this, State liability does not seem to be able to be confined to cases in which there are specifically determined persons, or groups of persons, and precluded where the legislative act concerns a broad class of persons. Whilst it is true that it could be justifiably argued that public-interest requirements militate in favour of ruling out compensation for damage affecting large classes of persons, See Advocate General Capotorti's Opinion in Joined Cases
Moreover, when in the judgment in Judgment of See on this subject Simon,
This conclusion is also borne out by the Council of Europe's recommendation of
Indeed, it would appear from the judgment in Mulder and Others, cited in footnote 77, that the Court has already revised, albeit impliedly, its case-law on this point.
Obviously, it will be for the national court to establish whether this condition is fulfilled. For present purposes, however, I am minded to make a few observations with regard to a break in the chain of causation from two points of view. First, it is worth examining whether it is possible to consider that under Community law the causal chain may be broken by contributory causes or by negligent conduct on the part of the injured party; secondly, this matter raises, albeit under various guises, the question of the ancillary nature of a damages claim in relation to other national judicial remedies.
Judgment in Mulder and Others, cited in footnote 77, paragraph 33.
Consequently, the injured party is under a duty to act diligently, a duty which consists in taking steps so as to avoid the damage or, at any rate, to reduce its scale. Por an application of that principle in the case-law on Article 215, see, inter aha, the judgment in Joined Cases
It appears from the wording of that principle that a break in the chain of causation may depend on conduct exhibiting fault on the part of the injured party and that such conduct, in turn, might also consist in his not having made use of the legal remedies available to him.
In other words, the question arises as to whether or not failure to use in time remedies challenging the contested measure precludes the possibility of claiming that the State
This is, for example, the solution adopted in the French system.
This is the solution in force, for example, in the Italian and British systems.
This intermediary solution is employed in the German system under the third subparagraph of Paragraph 839 of the Civil Code.
As we know, after initially taking the view that the action for damages was ancillary, I refer to the judgment in Case Judgment in Joined Cases
That this is the Sec cite judgment in Case See, for instance, the ludgments in Case
In the final analysis, the fact that actions for non-contractual liability are autonomous favours private individuals, to whom substantive judicial remedies are normally not available, but not also persons who can effectively invoke such remedies.
Moreover, the idea that the action for damages is ancillary in the case of loss or damage caused by infringements of Community law seems — at least at first sight — to have already received the Court's seal of approval. In Judgment cited in footnote 37, paragraph 23.
The interpolation Thus, for example, in Italy an ad hoc measure was adopted by Legislative Decree No 80 of
In truth, this is no new formula in the Court's case-law, having in fact usually been associated with the Member States' autonomy in procedural matters, an autonomy which, even in that sector, is not however without limits.
See in particular the judgment in Case
Consequently, also with regard to reparation of damage, Community law confines the Member States' freedom to laying down procedural and substantive rules on the On this point, see, for example, to cite just one of the authorities, Barav,
At least two consequences flow from that principle: first, judicial protection, in the case of rights claimed by individuals under Community law, must in any event attain a degree of adequacy; secondly, checking that that level has been attained is a matter for the Court. This emerges, for example, from the judgment in Case
First, it is all too obvious that reparation of damage may not be merely symbolic, but must correspond to the damage suffered. This requirement, which is linked to the very See the judgment in Mulder and Others, cited in footnote 77, in which the Court expressly held that In this connection, it is worth calling to mind judgment No 17 of the Permanent Court of International Justice of
Judgment in Von Colson and Kamann, cited in footnote 36, paragraph 23.
Further, in Judgment in Case
In the final analysis, what is important for Community law is that compensation must be real and effective and hence that the situation which would have obtained if the infringement had not taken place should be restored, at least in terms of its financial content.
Moreover, the conditions suggested in regard to the characteristics of a
I consider that the imperative reasons of legal certainty referred to by the German Government are already sufficiently protected by the fact that the right to compensation may be made subject to the condition — if it is already laid down for similar domestic claims — that the injured party should have taken every step available to him in order to avoid the damage or at least reduce its scale. Apart from this, only the limitation and prescription periods laid down by national law, as in the case of actions for damages based on national law, may determine the time within which individuals may rely on the right to reparation for the damage sustained.
in order to secure real, effective protection of rights claimed by individuals under Community law, that law requires that reparation be guaranteed to individuals for the loss or damage sustained by them as a result of infringements of Community law attributable to the State; it is completely irrelevant that the infringement in question is attributable to the legislature, as a result of which the restrictive conditions imposed by the national legal system for cases of unlawful action or inaction on the part of the legislature are not applicable; in order for the right to reparation to arise it is sufficient that the provision assumedly infringed is precise in all respects and unambiguous, which will be the case, for example, where a Member State fails to fulfil a precise obligation to achieve a result or where it fails to take account of established case-law; the criteria relating to the quantification of the damage continue to be governed by national law, provided that they are not less favourable than those applying to similar domestic claims and are not such as to make it excessively difficult or virtually impossible to obtain full compensation for the loss or damage arising as a result of the infringement in question; the obligation to make reparation arises at the time when the event which gave rise to the damage occurred in the case of a manifest and serious breach as defined above; otherwise it will not arise until there has been a determination by the national court or the Community Court, in the latter case by means of a preliminary ruling or a judgment given pursuant to Article 169.
Having regard to my observations so far, it is only too clear that, in order to decide the case pending before it, the national court has to establish whether the obligation conferred on the States by Article 30 — whose content, as I have already mentioned, can certainly not be regarded as precise and determinable in every respect — had already been clarified by the relevant case-law at the time when the damage occurred with respect to facts such as those of the case pending before it. In other words, it has to be ascertained whether it was clear already in late 1981 that a law such as the BiStG embodied an unjustified obstacle to activities of traders in the sector and was hence incompatible with Community law.
Judgment of
Case
However, it also transpires from the order for reference that the beer produced by the appellant contained additives, whereas the German law in question laid down an absolute prohibition on marketing beer containing additives in Germany. Whilst it is true that by the judgment of For example, in the judgment of
It appears from the documents in the case that it does not seem that the appellant has taken any such steps. Admittedly, as the appellant showed in these proceedings, it stopped exporting because of failure to renew the distribution contract with its (German) sole importer, which meant that it was substantively impossible for it to challenge any measure. Consequently, it is manifestly for the national court to ascertain whether the appellant was actually precluded from being able in any way to rely on Article 30 directly before the national courts.
In other words, it is a question of establishing whether the infringement of provisions conferring clear, precise rights on individuals, such as the right not to be discriminated against on grounds of nationality, is such, despite the discretion available to the Member States in adopting measures relating to the common fisheries policy, as to cause the State to incur liability. In this respect, I consider that a few observations will suffice.
What is more, the Court's case-law on the right of establishment is consistent in holding that national measures involving discrimination on grounds of nationality are incompatible with national law; likewise, the Court has held incompatible with Community law the very residence condition imposed on fishing vessels' crews. Judgment in Case
Finally, I would observe that, as the Court is well aware, the applicants in the main proceedings have done everything possible in order to avert the damage which eventually occurred. They took steps to that end even before the national provisions subsequently declared incompatible with Community law entered into force, by seeking and obtaining an interlocutory injunction suspending the application of the provisions at issue, the injunction which was set aside by the Court of Appeal and subsequently confirmed by the House of Lords following this Court's judgment of
However, the applicants also claim exemplary damages, as provided for by national law for unconstitutional conduct on the part of the administrative authorities, and this warrants separate consideration. Suffice it to observe in this connection that, in accordance with the principle that the conditions imposed by national rules in order to protect legal situations created by Community law may not be less favourable than those applying to similar domestic claims, a Member State is bound to grant that type of damages to the individuals concerned where the preconditions laid down by the relevant national rules are satisfied; this is so, therefore, even where the head of damages in question is completely unknown to the legal systems of the other Member States.