1. 1 Competences of the Court of Justice of the European Union: Fishing for more.

2. 2  The liability of an EU Member State for damages sustained by individuals  Developed virtually from scratch by the Court of Justice  The liability of an EU Member State that has failed to fulfill an obligation under the Treaty for a penalty payment  Interpretation of Article 260 TEU

3. 3  Liability of a Member State for damages caused to individuals  Inherent in the system of the Treaty  Cannot be discarded where the breach relates to directly applicable law  Reliance by an individual on the direct effect of provisions before national courts is only a minimum guarantee Ensures that Union law prevails over National law which may not be enough on its own Ensures that Union law prevails over National law which may not be enough on its own

4. 4  Can a Member State be held liable for damages caused to individulas by an infringement of EU law done by a National Legislature? Brasserie du Pecheur SA and Germany Brasserie du Pecheur SA and Germany + The Queen and Secretary of State for The Queen and Secretary of State for Transport ex parte: Factortame Ltd and Transport ex parte: Factortame Ltd and Others Others

5. 5  Facts of the case of Brasserie du Pecheur  Question – “Does the principle of Community law according to which Member States are obliged to pay compensation for damage suffered by an individual as a result of breaches of Community law attributable to those States, also apply where such a breach consists of a failure to adapt a national parliamentary statute to the higher- ranking rules of Community law?”  Facts of the case of Factortame Question – Where a Member State’s legislation lays down conditions relating to the nationality, domicile and residence of the owners and managers of fishing vessels and such conditions have been held by the European Court as infringing the EU Treaty, are those persons entitled as a matter of EU law to compensation by that Member State for losses which they have suffered as a result of all or any of the said infringements of the Treaty? If the question is answered in the affirmative, what considerations, if any, does EU law require the national court to apply in determining claims for damages? Question – Where a Member State’s legislation lays down conditions relating to the nationality, domicile and residence of the owners and managers of fishing vessels and such conditions have been held by the European Court as infringing the EU Treaty, are those persons entitled as a matter of EU law to compensation by that Member State for losses which they have suffered as a result of all or any of the said infringements of the Treaty? If the question is answered in the affirmative, what considerations, if any, does EU law require the national court to apply in determining claims for damages?

6. 6  Therefore, does the principle that Member States are obliged to make good damage caused to individuals by breaches of EU law attributable to the State apply where it is the National Legislature that is responsible for the infringement in question? The Court replied in the affirmative The Court replied in the affirmative The Court also held that: The Court also held that: Three conditions have to be fulfilled: (i) the rule of EU law breached is intended to confer rights on the individual; (ii) it is sufficiently serious; and (iii) there is a direct causal link between the breach by the State and the damage sustained Three conditions have to be fulfilled: (i) the rule of EU law breached is intended to confer rights on the individual; (ii) it is sufficiently serious; and (iii) there is a direct causal link between the breach by the State and the damage sustained Where these three conditions are met it is on the basis of rules of national law on liability that reparation for damage caused must be made Where these three conditions are met it is on the basis of rules of national law on liability that reparation for damage caused must be made The conditions for reparation laid down by national law must not be less favourable or such as to make it impossible or excessively difficult to obtain reparation The conditions for reparation laid down by national law must not be less favourable or such as to make it impossible or excessively difficult to obtain reparation The Court largely relied on established case-law – Francovich and Others The Court largely relied on established case-law – Francovich and Others The decisive test regarding the second condition (that the breach of EU law is sufficiently serious) is whether the member State concerned manifestly and gravely disregarded the limits of its discretion. The decisive test regarding the second condition (that the breach of EU law is sufficiently serious) is whether the member State concerned manifestly and gravely disregarded the limits of its discretion. The obligation to make good cannot be limited to the damage sustained after the delivery of the judgment of the Court finding the infiringement in question The obligation to make good cannot be limited to the damage sustained after the delivery of the judgment of the Court finding the infiringement in question

7. 7  Can a public-law body of a Member State incur liability for loss and damage caused to individuals as a result of breaches of EU law for which the State or body can be held responsible?  Salomone Haim and Kassenzahnarztliche Vereinigung Nordrhein  Facts of the case Question - “If an official of a legally independent public-law body of a Member State infringes primary Community law when applying national law in the context of an individual decision, can the public-law body be held liable as well as the Member State?” Question - “If an official of a legally independent public-law body of a Member State infringes primary Community law when applying national law in the context of an individual decision, can the public-law body be held liable as well as the Member State?” Reply: A public-law body may be held liable, in addition to the Member State itself, for damages caused to individuals as a result of measures which it took in breach of EU law. Reply: A public-law body may be held liable, in addition to the Member State itself, for damages caused to individuals as a result of measures which it took in breach of EU law.

8. 8  Is the principle according to which Member States are obliged to make good damage caused to individuals by infringements of EU law for which they are responsible also applicable where the alleged infringement stems from a decision of a court adjudicating at last instance and whether, if so, it is for the legal system of each Member State to designate the court competent to adjudicate on the dispute relating to the recovery of the damage?  Gerhard Kobler and Austria  Facts of the case Question – (1) Is the case-law of the Court of Justice to the effect that it is immaterial, as regards State liability for a breach of EU law, which institution of a Member State is responsible for that breach, also applicable where the conduct of an institution purportedly contrary to EU law is a decision of a Supreme Court of a Member State? And (2) If the answer to question (1) is yes, is the case-law of the Court of Justice according to which it is for the legal system of each Member State to determine which court or tribunal has jurisdiction to hear disputes involving individual rights derived from EU law, also applicable where the conduct of an institution purportedly contrary to EU law is a judgment of the Supreme Court of a Member State? Question – (1) Is the case-law of the Court of Justice to the effect that it is immaterial, as regards State liability for a breach of EU law, which institution of a Member State is responsible for that breach, also applicable where the conduct of an institution purportedly contrary to EU law is a decision of a Supreme Court of a Member State? And (2) If the answer to question (1) is yes, is the case-law of the Court of Justice according to which it is for the legal system of each Member State to determine which court or tribunal has jurisdiction to hear disputes involving individual rights derived from EU law, also applicable where the conduct of an institution purportedly contrary to EU law is a judgment of the Supreme Court of a Member State?

9. 9  Reply: The principle that a Member State is liable for damages caused to individuals by an infringement of EU law is also applicable where the infringement stems from a decision of a court adjudicating at last instance; and it is then for the legal system of the Member State to designate the court competent to adjudicate on disputes relating thereto  Regarding the latter the Court held that “it is not for the Court to become involved in resolving questions of jurisdiction to which the classification of certain legal situations based on Community law may give rise in the national judicial system.”  The Court referred to the three conditions governing State liability and to the second one in particular – namely that the breach must be sufficiently serious – and it concluded that since in this case the infringement was not manifest it was not sufficiently serious.

10. 10  Can State liability for judicial errors be curtailed in some way?  Traghetti del Mediterraneo SpA, in liquidation v Italy  Facts of the case Question – “also in the light of the principles set out...in the Kobler judgment, whether national legislation on State liability for judicial errors impedes affirmation of that liability where it precludes liability in relation to the interpretation of provisions of law and assessment of facts and of the evidence adduced in the course of the exercise of judicial functions and (where it) limits State liability solely to cases of intentional fault and serious misconduct on the part of the court?” Question – “also in the light of the principles set out...in the Kobler judgment, whether national legislation on State liability for judicial errors impedes affirmation of that liability where it precludes liability in relation to the interpretation of provisions of law and assessment of facts and of the evidence adduced in the course of the exercise of judicial functions and (where it) limits State liability solely to cases of intentional fault and serious misconduct on the part of the court?” Reply - National legislation cannot exclude State liability in a general Reply - National legislation cannot exclude State liability in a general manner for damages caused to individuals by an infringement manner for damages caused to individuals by an infringement of EU law of EU law - National legislation cannot limit such State liability solely to - National legislation cannot limit such State liability solely to cases of intentional fault and serious misconduct on the cases of intentional fault and serious misconduct on the part of the court (under no circumstances may the part of the court (under no circumstances may the requirements imposed be stricter than that of a manifest requirements imposed be stricter than that of a manifest infringement of the applicable law) infringement of the applicable law) - If State liability were to be excluded by reason of an assessment of - If State liability were to be excluded by reason of an assessment of facts carried out by the Court, an individual would have no facts carried out by the Court, an individual would have no judicial protection if a national court adjudicating at last instance judicial protection if a national court adjudicating at last instance committed a manifest error in its review of such operations committed a manifest error in its review of such operations

11. 11  Non-Compliance – What sort of penalty payment can be imposed by the Court?  Commission of the European Communities v France  Facts of the case Request of the Commission – In a second action brought by the Commission before the Court of Justice against France, the Commission requested the Court to declare that, by failing to take the necessary measures to comply with the 1991 judgment (the judgment on the first action brought by the Commission against France), France had failed to fulfill its obligations under the Treaty and consequently to order France to pay to the Commission a penalty payment in the sum of Euro 316,500 for each day of delay in implementing the measures necessary to comply with the judgment. Request of the Commission – In a second action brought by the Commission before the Court of Justice against France, the Commission requested the Court to declare that, by failing to take the necessary measures to comply with the 1991 judgment (the judgment on the first action brought by the Commission against France), France had failed to fulfill its obligations under the Treaty and consequently to order France to pay to the Commission a penalty payment in the sum of Euro 316,500 for each day of delay in implementing the measures necessary to comply with the judgment. Judgment – The Court found that until the date on which the Court examined the facts which were presented to it, France had not taken all the necessary measures to comply with the 1991 judgment and was accordingly failing to fulfill its obligations under the EU Treaty. Judgment – The Court found that until the date on which the Court examined the facts which were presented to it, France had not taken all the necessary measures to comply with the 1991 judgment and was accordingly failing to fulfill its obligations under the EU Treaty.

12. 12  The penalty payment imposed The Commission had requested the imposition of a daily penalty payment but the Court considered whether it could impose a lump sum penalty in addition; The Commission had requested the imposition of a daily penalty payment but the Court considered whether it could impose a lump sum penalty in addition; The use of “or” in Article 228(2) TEC (now Article 260(2) TEU) may linguistically have an alternative or a cumulative sense; The use of “or” in Article 228(2) TEC (now Article 260(2) TEU) may linguistically have an alternative or a cumulative sense; The Court concluded that “or” must be understood as used in a cumulative sense since recourse to both penalties would be appropriate where the breach of obligations both has continued for a long period and is inclined to persist. The Court concluded that “or” must be understood as used in a cumulative sense since recourse to both penalties would be appropriate where the breach of obligations both has continued for a long period and is inclined to persist. The Court consequently imposed a penalty payment of almost 58million Euro for every six month period France remained in default (being the 316,500 Euro requested by the Commission multiplied by 182.5, that is, by six months) The Court consequently imposed a penalty payment of almost 58million Euro for every six month period France remained in default (being the 316,500 Euro requested by the Commission multiplied by 182.5, that is, by six months) The Court also imposed a lump sum penalty of 20million Euro. The Court also imposed a lump sum penalty of 20million Euro.

13. 13 The Court of Justice has spared no effort to spell out clearly and unequivocally the extent of a Member State’s liability for damages caused to individuals, whatever the State organ or body concerned; and to determine the penalty payment that a Member State may be made to incur for non-compliance with EU law. It has not shied away from doing so even where it had before it cases that were particularly sensitive and where the whole State machinery had been put in place to protect interests that were purely national at the expense of rights sanctioned by European Union law.

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