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ART 263: ACTION FOR ANNULMENT

Necessary Elements

(1) Bodies amenable to JR/time limit

See art 263(1) for scope

The Council, Commission and ECB: including legislative acts, other than
recommendations/opinions
EP, European Council and EU bodies/offices/agencies: acts intended to produce legal effects
against third parties.

Lisbon Treaty explicitly included EC and EU bodies/offices/agencies, though this is a

codification of prior ECJ jurisprudence which already brought them within scope of JR.

Time limit: laid out in art 263(6) - within 2 months of publication/notification to A, or in absence of
this, within 2 months after it came to As knowledge.
After time limit expires, unchallenged decision becomes definitive.
Only exception is for measures which have such manifest and serious defects they are
regarded as non-existent (BASF v Commission (PVC Cartel), 1992) - HIGHLY exceptional!
Rationale = legal certainty!

(2) Acts subject to review - art 263(1)

Must be LEGALLY BINDING: acts other than recommendations and opinions = regulations,
decisions and directives.

Post-Lisbon, both legislative and non-legislative acts can be binding hence reviewable - look at
substance, not just title/form.

JURISPRUDENCE:

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IBM,
1981:
early
case
Abbreviations:
illustrating
ECJ European Court of justice
this.
any
MSs Member states (of the EU)
EP European Parliament
measure the
CFSP Common Foreign and Security Policy
legal effects
TEU Treaty on EU (Maastricht)
of which are
TFEU Treaty on the Functioning of the EU (Rome)
binding
on,
EEC Treaty Treaty establishing the Economic European
and capable
Community
of
affecting
DE Direct effect
the interests
of,
the
applicant by bringing about a distinct change in his legal position will be reviewable. The form is
immaterial! Here, it was statement of objections in investigation - court said must be final
measures with intention to impact indivs legal position, not intermediate measures (latter has
no legal effect).

On the facts, letter was merely initiation of the competition procedure (preparatory stage),
and did not alter As legal position in itself.

Disputed measure must be final (not preparatory, as is often the case in a multi-stage
procedure), though legal defects in the preparatory measures leading up to the final one
can be relied upon in an action directed against the latter.
France v Commission, 1997: ECJ held that this list is not exhaustive, and other acts which are
sui generis can also be reviewed as long as they have binding force or produce legal effects.
Commission v Council, 1971: ECJ held that Councils proceedings and Resolution had definite
legal effects, hence was subject to review.
Must also be adopted by Union institution/body/agency.
Includes legislative acts, acts of the Council/Commission/ECB.
Acts of the EP which have legal effects on third parties.

Les Verts v EP, 1986: French political party challenged reimbursement decision by EP. EP
not usually one of the institutions against which you would use action for annulment.
Hence, court had to adopt constitutional approach - if we have institution like EP which
creates legal effects for applicants, then such acts will be challengeable before ECJ.
Also includes acts of European Council with legal effects on third parties.
Acts of bodies/offices/agencies of the Union intended to produce legal effects on third parties.

Hence, when ECB became main supervisory bank over many MS banks, acting like
securities commission, decisions could still be challenged!

(3) Applicants standing - art 263(2)-(3)

Privileged applicants:
Art 263(2): action can be brought by MS, EP, Council or the Commission
Automatic, absolute right to bring proceedings. No need to provide any political reasons.
(Comm v Council, 1987)
Can be brought even where decision is addressed to another.
NB: EU law does not oblige MS to bring action for benefit of citizens, but neither does it preclude
national law from containing such an obligation.
EP: prior to Maastricht Treaty, it did not have formal privileged status, and in the Comitology
case, 1988, ECJ rejected EPs argument that it should have unlimited standing.

In the Chernobyl case, 1990, however, ECJ then held that EP could have quasi-privileged
status to protect its own prerogatives.
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Chernobyl reflected in re-drafting of art 173(3) EEC.

Nice Treaty then added EP to the list of privileged applicants.

Quasi-privileged applicants:
Art 263(3): ECB, Court of Auditors and Committee of the Regions only have standing to defend
their own prerogatives.
This category was essentially codification of case law (ECJ developed it saying necessary for
constitutional reasons)

European Council is a body amenable to review, but is not listed as a privileged/quasi-privileged

body under art 263. Even odder because EC has right to bring action for failure to act under art 265.
Bodies/offices/agencies of the Union are also subject to possibility of being defendants, without
being recognised as applicants. But most agencies could be legal persons under art 263(4)!
***Non-privileged applicants - art 263(4)
3 possible scenarios where natural and legal person can bring direct action.

I.

Addressee of decision

II.

Act is of direct and individual concern to A

Rationale: if private company/individual is addressee of Comm decision, can challenge under I.

But how about his competitors, who are also affected directly and individually? This was original
intention. But subsequent development rather revolutionary.
act: pre-Lisbon wording was decisions. Now encompasses all legislative acts and nonlegislative acts, as long as they produce legal effects. Codification of ECJ jurisprudence that
looked to substance not form.
DIRECT CONCERN:

General principle (Les Verts): where EU measure directly affects As legal situation, and
leaves no discretion to the (intermediate) addressees of the measures as to
implementation. Direct causal relationship

International Fruit case, 1971: Reg provided for system of import licences. ECJ held that
national authorities did not enjoy any discretion as to the licences/conditions of granting
licences. The Commissions decision and measure affected and impacted A directly - no
possibility of intervention by national authority.

Piraiki-Patraiki, 1985: national authorities use of discretion is entirely theoretical.

Cf Municipality of Differdange v Commission, 1984: Comm authorised Luxembourg to

grant aid to steel firms on condition of reduction of capacity. ECJ held there was no direct
concern - Comms decision did not identify the affected establishments (steel firms), nor
the factories which would have to be shut down cos of reduction of production.

Left margin of discretion as to implementation and choice of factories to be closed

to national authorities and the businesses!
INDIVIDUAL CONCERN:

The predecessor of art 263(4) was art 230(4) EC: focus on substance rather than form,
so that measure in the form of a Reg could be found to be of direct and indiv concern!

The new article does not encourage this, cos of the formalistic test for legislative
acts. By contending that Court should look to substance of a measure across the
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categories of legal acts, it would render what was a legislative act invalid, should it
be re-classified as a delegated act, because of the lack of adherence to formal
procedures.
BASIC TEST: **Plaumann v Comm, 1963: ECJ held that treaty provisions on standing
must be interpreted broadly. Usually, wouldnt say that Comm decision addressed to
German govt can be challenged by individual. Still, need to prevent actio popularis.

There is individual concern: if

decision affects them by reason of certain attributes which are peculiar to

them, or

by reason of circumstances in which they are differentiated from all others,

hence distinguished them individually just as in the case of the person

addressed.

However, A was importer of clementines, this was commercial activity which

anyone could take up. Hence no indiv concern!

Criticism:

Pragmatically speaking, the test is economically unrealistic - limited number

of firms in industry is determined by supply and demand. Further, it takes
time and resources for potential traders to enter the market (ignores practical
realities that determine number of traders in an open category).

Conceptually speaking, the test imposes too high a threshold, making it

literally impossible for A to succeed. Further, ECJ has held that test for
standing should be judged when application for review is lodged, yet ECJ
also saying that activity could be carried out by anyone at any time - focus
shifts to ill-defined future.

Hence, basically impossible unless challenged decision had retrospective

impact!

Because of element of retroactivity (looking to closed class of applicants), we

exclude potential applicants who could be affected much more in the future.
JURISPRUDENCE: higher degree of individualisation than present in Plaumann is
required:

Toepfer, 1965: applied for import licence before measure enters into force

Piraiki-Patraiki, 1985: pending contracts entered into before measure was adopted.

Comm v Infront, 2008: where measure has specific object of altering rights
acquired by indiv prior to adoption of the measure.
Measures in the form of Regulations/Directives?

True Regs are not open to review (too general - no indiv concern!)

Abstract terminology test (stricter!)

Exemplified in Calpak SpA v Comm, 1980: ECJ has to look beyond form, to
determine if the measure is really a Reg in substance. A Reg will be a true
Reg if it applied to objectively determined situations and produces legal
effects with regard to categories of persons described in a generalised and
abstract manner, hence not be open to review.

Criticism: always possible to draft norms in this way, especially since ECJ
held that knowledge of number/identity of those affected would not preclude
norm from being held to be a true Reg, immune from attack.

Closed category test

According to the above, true Regs are not open to review.

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BUT in Codorniu v Council, 1994, ECJ held that a measure might be a

true Reg according to the abstract terminology test, yet nonetheless be of
indiv concern!

Despite this attempt at liberalisation, the post-Codorniu approach has largely

been pure Plaumann.

Hence, Buralux v Council, 1994: ECJ held mere fact that it was possible to
determine number/identity of those affected did not mean that Reg was of
indiv concern, as long as the measure was abstractly formulated. Indiv
concern to be determined by the Plaumann test.
Delegated acts? Probably quite hard for A to show standing, since delegated acts are
defined as non-legislative acts of general application.
Instances where ECJ has been more liberal in finding standing:

i.

ii.
iii.

Specific right being infringed: Codorniu, 1994: first opening up of the Plaumann
test. Court held if you have a specific right that the rule invalidates (here, trademark
invalidated by regulation), then A might have standing.

Impact not that great...seen more as a once-off decision. Extreme facts Reg completely took away the right. Never successfully argued thereafter,
though quote often.

Cf Cassa Nazionale v EU Council, 1996: court rejected As attempt to

demonstrate such a specific right. High threshold. Requirements unclear.
In the interests of democracy - Les Verts v EP, 1986.
A involved in procedure where procedural regulations laid down private
parties rights of participation, in recognition of their legitimate interest in
outcome. Usually happens in the following 3 subject areas...

a.

Anti-dumping

b.

Anti-dumping regs meant to prevent non-MSs from selling goods too

cheaply within the EU
Anti-dumping duties had to be imposed by Reg (not decisions), hence
if Court held that Reg was not actually a Reg, then arguably Comm
didnt have power to impose the measure.
Plausible applicants:
1) firm initiating complaint about dumping, who felt the duty was too
low;
2) producer subject to anti-dumping duty (Allied Corporation case,
1984 - can have indiv concern insofar as A was identified in the
measure or involved in the preliminary investigation);
3) importer of product against which anti-dumping duty was imposed
(Extramet v Council, 1991: importer had standing, but only cos it was
largest importer, was also end-user, and business activities were
highly dependent on and affected by these imports).

Competition

Regulated by art 101 and 102 TFEU.

Old regime allowed A to make application to Comm, showing evidence
of breach of these articles (under art 3(2) Reg 17)
Metro GmbH v Comm, 1977: decision of Comm was addressed to
another, but adopted cos of complaint submitted by M. ECJ held that
those entitled (under art 3(2)) to make application to Comm should be

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c.

able to institute proceedings to protect their legit interests, if their

request is not fully complied with.
State aid

i.

Extent of damage suffered: only one case so far (Extramet) - exceptional!

Provision of state aid is regulated by art 107 to 109 TFEU (prevent

distortion of free mkt competition due to govt assistance)
While there is no directly comparable procedural rights as in (ii) above,
ECJ in COFAZ v Comm, 1986, reasoned by analogy to the Metro and
Timex cases, holding that As played a comparable role, especially cos
art 108(2) permitted undertakings concerned to submit comments to
Comm. Hence undertakings were granted standing, but only if their
market position was significantly affected by the disputed aid!

Extramet: importer of potash suffered from reg that favoured the only union
producer - entire business in danger! Some would say this is anti-dumping
above, but most agree that court showed willingness cos of extreme
manifest impact. More generous in allowing challenge.

Vs restrictive interpretation of Plaumann? Closed class + specific duty imposed by Treaty

on EU institution to take As case into account
Earlier case law seemed to imply either characteristic would suffice...BUT later law
indicates requirements are cumulative

Piraiki-Patraiki, 1985: cotton producers distinguished based on whether they

already had contracts for export of cotton prior to before import ban was imposed closed class in itself sufficient

Cf Sofrimport, 1990; traders with goods already in transit allowed to

challenge import ban on apples, but only if disputed rules required Comm to
take account of special position of goods in transit - closed class in itself not
sufficient

Antillean Rice Mills, 2001: applied Piraiki-Patraiki and held that there was specific
duty here to concerns of litigant into account. But here, if you look closely, there
wasnt exactly a closed class.
Do associations have standing? FEDEROLIO guidelines trade association will have
standing in 3 situations (only):

a.
b.
c.

Where legal provision expressly grants TA series of procedural rights - CCE de

Vital and Others v Comm, 1995
Where trade association represents interests of undertakings entitled to bring
proceedings in their own right, individually Confederation Espanola de
Transporte de Mercancias v Comm, 2000

Where trade association is differentiated because its own interests as an

association are affected, especially its position as negotiator - itself has indiv
standing under Plaumann - Van der Kooy v Comm, 1988
If not, no standing, since non-members could still enter economic activity, even if at
present, all those possibly concerned are your members - Greenpeace v Comm, 1998.

**Reform of test of individual concern?

ECJs approach often criticised as being too restrictive, but ECJ defends it on grounds of
Treaty giving comprehensive mechanism for legal protection, cos of availability of indirect
route under art 267 TFEU.
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Much struggle by private companies to overcome this strict standard - still prefer direct
action rather than prelim ref route, since no need to convince national court; faster and
cheaper.
Most notable criticism is [AG Jacobs] scrutiny in UPA v Council, 2002:

Current shortfalls
indirect route (preliminary ruling) is not sufficient, since A cant control whether ref is made, what
measures are referred, nor what grounds of invalidity of raised = no true right of access.
Hence, there might be denial of justice.
legal certainty militates in favour of a general measure being subject to review ASAP, not only after
implementing measures have been adopted
indirect challenges are subject to procedural disadvantages (eg. Delay, costs)

Critique of proposed solutions

these deficiencies cannot be overcome just by allowing exceptional standing to A who has no way
of triggering reference for prelim ruling under national law - no basis in the Treaty and
would lead to inequality across MSs. Would require EC courts to interpret and apply
national rules!
also insufficient to oblige MSs legal systems to ensure that prelim refs are generally available doesnt address procedural issues, difficulties of monitoring/enforcement, interference
with national procedural autonomy
Proposed solution
hence, only way is to reform the test for indiv concern itself, so that A is deemed individual
concerned where the Community measure has, or is liable to have, a substantial
adverse effect on his interests.
-resolves all the above problems
-removes current anomaly that the more the number of persons affected, the less likely that effective
JR will be available
-replaces increasingly complex and unpredictable rules on standing.

BUT ECJ in UPA then declined to follow AG Jacobs approach. Instead:

Reiterated that Treaty established complete system of legal remedies and

procedures

***it is for MSs to establish system of legal remedies and procedures which ensure
respect for right to effective judicial protection

National courts should interpret and apply national procedural rules on

exercise of rights of action compatibly with allowing challenges to validity of
Community acts

ECJ cannot examine and interpret national law - beyond its jurisdiction

While condition of direct and individual concern must be interpreted in light of

principle of effective judicial protection, cant be too liberal and effectively set aside
the condition which is expressly stated in the Treaties, since this would go beyond
jurisdiction conferred by Treaties.
So today, Plaumann is still good law!
Criticism of ECJs reasoning

ECJ mostly ignored AG Jacobs analysis of the difficulties indivs face in using art
267 (indirect route) - procedural, and its nature as a reference system. Also
substantive - indiv might not be able to challenge illegality of the measure in
national courts without first acting in contravention of it.
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III.

ECJs strategy of getting national courts to interpret national procedural rules

compatibly to allow applicants to challenge EU norms of general application does
not resolve procedural difficulties, nor problems cos of discretionary nature of the
indirect route! Doesnt address issue that A might first have to contravene the rule!
Preliminary rulings will go to ECJ, yet same issues could have been heard by
General Court if admissible as a direct challenge.
ECJs argument based on boundaries of legitimate Treaty interpretation is
unconvincing - Treaty always required indiv concern, but it is ECJs overlyrestrictive interpretation of this that is being criticised. ECJ has filled gaps for other
parts of art 263 where it felt it was warranted - not evident why AG Jacobs
interpretation would transgress bounds of interpretation.
In normative terms, those who have suffered substantial impact should have
access to JR! This aligns with national legal orders.
No reason why there would be increase in number of cases: fact that art 263 is
restrictive forces As to use art 267, over which ECJ has less control. EU Courts
can also influence number of cases brought through the standards of review it
applies.

Regulatory act which does not entail implementing measures, & is of direct concern to A

Introduced by the Lisbon Treaty, to amend the rules on standing following above criticism!
Proponents thought ECJ would give regulatory act wide interpretation, so we could do
away with the problematic individual concern. But ECJ didnt follow expectations instead, looked at textual meaning - said since legislative acts is terminology used
elsewhere, then regulatory act must mean something different!

Hence, definition of this term is super important - determines barriers A must

surpass!

Inuit case, 2011: Gen Court confirmed that regulatory act covers all acts of general
application apart from legislative acts. Legislative acts can only be challenged under first
or second channel!

regulatory act = secondary norms, not primary legislative acts.

Doesnt sit well with Lisbon classification of legal acts: does it mean any legally
binding act (legislative/delegated/implementing), or does it have to take form of
regulation/decision which does not entail implementing measures?

It has been proposed that the narrowest interpretation aligns with the drafters
intent: only delegated acts in the form of regulations/decisions that are of direct
concern and do not entail implementing measures.
but if this is so, it doesnt really address the above problems on standing.

Hence, to alleviate the difficulties, should be interpreted as covering any legislative,

delegated or implementing act which does not entail implementing measures
(hence excluding directives)
remains to be seen if ECJ will adopt this approach

implementing measure

Natural meaning: Regulations and (most) decisions do not require any measure to
be implemented into the national legal order - directly applicable.

But directives do!

True that for Regs, MSs might need to modify laws to comply with/fulfil demands,
but this should not preclude recourse to the liberalised standing rules - would also
cause inconsistency across MSs. Further, this factor depends on national law, not

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the EU regulatory act itself, hence not really accurate to say that the EU act
entailed implementing measures.

**Microban case, 2011: general court found that an act that does not entail
implementing measure must leave no discretion to its addressee - implementation,
if any, must be purely automatic and result only from Community rules (not any
other rules). If theres only one valid legal option, then there is no true discretion.
see new case of Arcelor.

**must be aware of the above discussion when answering problem question!

ART 277: PLEA OF ILLEGALITY

Used where A wishes to challenge, in the course of proceedings initiated for a different reason, the
legality of some other measure. Latter measure being challenged indirectly must be a general act.
Eg. When challenging a decision of direct and indiv concern, A wishes to raise legality of the Reg on
which the decision is based.
See Simmenthal for typical case
Same grounds of annulment as for annulment.
Hence NOT an independent course of action.
Time limit for principal action still applies!
Must have real connection between principal decision being challenged, and the general
measure of which legality is being contested.
Cannot be used in proceedings before national court - only in proceedings brought before ECJ under
some other Treaty provision (incidental + limited effect)
Can only be used to challenge acts of general application (usually Regs/directives made pursuant
to arts 289 or 290 TFEU).
This is a test of substance! Simmenthal case, 1979:
A wanted to use plea of illegality to challenge certain Regs and notices, which formed legal
basis of the contested decision.
ECJ held that art 277 expresses a general principle conferring upon a party to proceedings the
right to challenge validity of previous acts which form the legal basis of the decision which is
being attacked, if party was NOT entitled to bring direction action against those acts.
Hence, has to include acts which, though not being in form of Reg, still produce similar effects
and hence cannot be challenged via direct action (too general) - need a wide interpretation of
the plea of illegality!
Who can use the provision?
Available to private parties, UNLESS it is clear that act could have been challenged directly
under art 263 (where there was indiv + direct concern).
Greater controversy over privileged applicants:

[Bebr]: NO, since privileged applicants can challenge any binding EU act under art 263,
subject to time limit.

[Barav]: YES. Irregularities in general act might appear only after relevant
implementation measures are adopted, hence after the time limit.

ECJ decided that MS can invoke use art 277 even if it did not contest measure within art
263s time limit (hence agreeing with Barav)

Textual analysis: art 277 refers to any party

There may be good reasons why MSs did not challenge act directly within time
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ART 258-260: ENFORCEMENT ACTIONS AGAINST MEMBER STATES

Overview

Basically, where MS has breached Union law. Proceedings can be brought by Comm or other MS,
but NOT individual - indiv claim limited to state liability. Aim is to obtain declaration by ECJ that MS
failed to fulfil Treaty obligations (declaratory judgment!)
Elements:

1.
2.
3.
4.

MS in breach of EU law
Decide if its Comm v MS or MS v MS
If its Comm v MS: i) procedure administrative phase, judicial phase, ii) declaratory judgment, iii)
penalties under art 260 TFEU.

NB: MSs usually reluctant to bring case themselves - try to get Comm to take on issue instead,
to avoid political ramifications.
Key provisions:
Art 17(1) TEU: gives Comm task of ensuring and overseeing application of EU law - monitor MS
compliance.
Art 258 TFEU: general enforcement procedure

Elite diplomatic channel for amicable dispute resolution

Allow indivs to complaint to Comm about breaches of EU law

objective law enforcement tool for Comm

Art 260 TFEU: Comm can request penalty payment if MS fails to comply with previous
judgment under art 258 (increasingly used!)
4 stages to the infringement procedure (administrative, then judicial):

i.

Pre-contentious stage: MS has chance to explain position, and reach agreement with Comm.
Comm will start off negotiations with the MS Permanent Representative

ii.

Formal notification: MS gets letter of formal notice from Comm, detailing specific infringement.
Allows MS reasonable period to reply/submit observations.
possible further round of discussions

iii.
iv.

Reasoned opinion: issued by Comm, to which MS must comply within reasonable time.

Referral: Comm refers matter to ECJ (has discretion whether to do so - no automatic transfer of
jurisdiction to ECJ)
ECJ will give a declaratory judgment (whether MS breached law) - might prescribe interim relief
under art 279.
NB: under art 259: MSs can initiate action against another - has to bring matter before Comm first
(but doesnt have to contact the other MS), and Comm will deliver reasoned opinion after both MSs
have chance to make oral and written submission.
but seems like complainant MS can bring case to ECJ even where Comm thinks there has not
been a breach of EU law!
rarely used - political reasons. MSs can also intervene in cases brought by Comm.
In Spain v UK, 2000: Spain brought action against UK on UKs extension of voting rights in EP
elections to Gibraltar residents.
Hungary v Slovak Republic, 2012: Hungarys president wanted to travel to village in Slovak,
where statue of founding saint of Catholic Church of Hungary was to be unveiled. But visit
planned to be on anniversary of Hungary taking over Czech Republic in 1968. Hence Slovak
refused permission to enter. Hungary complained to Comm - Comm issued letter of formal
notice to Slovak, but Comm didnt really want to get involved in political issue.
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Comm in reasoned opinion said it didnt perceive potential violation of EU law. In any
case, said it was justified.

Hungary brought case to ECJ. Slovak argued it was matter for public international law,
cos talking about foreign head of state wanting to gain access for official reasons as head
of state.

ECJ rejected this: scope of EU law is for EU to decide! Hungary does not have to pass
any further admissibility hurdles. But eventually held Heads of States have to request
official permission under public international law - host MS has to be aware and give
consent cos of all the immunities etc.
Over the years, main criticisms such as 1) lack of effectiveness; 2) absence of role for indiv Cs; 3)
elite, unresponsive attitude of the Comm have gradually been addressed!
Relationship to prelim ref procedure
Van Gend en Loos, 1963: said that arts 258 and 267 are complementary. Indiv enforcement is
in addition to enforcement by MS/Commission. Held that the 2 are not mutually exclusive! All
have common aim of ensuring greater adherence to EU law. Comm does not have monopoly
in enforcing EU law - rather, it is a complete system of judicial protection.
Cf Molkerei-Zentrale, 1968: ECJ emphasised the distinction between proceedings brought by
indiv (intended to protect indiv rights in the specific case), and Commission enforcement
proceedings (intended to ensure general and uniform observance of EC law) - different objects,
aims and effects!
Hence, in Comm v UK, 2006: ECJ rejected UKs argument that Comm infringement proceedings
ought to be inadmissible on basis that national judicial proceedings were pending.
Also, in Comm v Germany, 1985: ECJ held that direct effect of Comm provision (indivs ability to
enforce it before national courts) was NO defence to Comm action for failure to implement!

Function and Operation of the Infringement Procedure

Art 258 TFEU: where Comm thinks MS failed to fulfil Treaty obligation, it will deliver reasoned
opinion. If further non-compliance, it will bring matter before ECJ!
Lisbons change: the Treaties: infringement proceedings can now be brought for violations of
obligations under both TEU and TFEU, except CFSP which is still beyond ECJs jurisdiction
(reflects abolition of the pillar structure).

Nature of the procedure: Comm initiates either on its own, or in response to complaint.

Comm has acknowledged that citizens complaints is a significant source, suggesting procedure
contributes to a more participatory Community.
Developed standard complaint form in 1999 to facilitate indiv use

But also emphasised that enforcement procedure NOT primarily meant as means of redress for
indivs, rather it is objective mechanism for ensuring MS compliance - Comms discretion in deciding
whether to initiate proceedings, and bilateral (not trilateral) nature.
Even where there are clear violations, this does not compel Comm to bring enforcement
proceedings! Comm still has a discretion, though in a Communication of 2002, Comm itself said
if theres clear evidence it will start proceedings.

Hence, the indivs role is imprecise and varies.

But since establishment of Ombudsmans office, indivs have complained about Comms procedures,
and Ombudsman held investigation of own initiative in 1996.
Comm stopped practice of failing to inform indiv Cs where case was terminated.
In 2002, Comm published consolidated version of internal procedural rules in a Communication,
allowing Ombudsman to assess Comms performance. Also aided transparency/good admin.
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includes standard form for complaints to be submitted to Comm

Access to documents: complainants/interested parties often complain of difficulty in accessing docs

related to infringement, while Comm uses exception in Reg on access to docs (see previous sups
notes) on inspections, investigations and audits. ECJ generally supports Comm.
Petrie v Comm, 2001: CFI underscored bilateral nature of infringement proceedings
Cf Bavarian Lager II, 2007: CFI held disclosure of docs relating to proceedings closed 6 years
ago would not jeopardise Comms investigations, hence not within exception.
Sweden/API v Comm, 2010: ECJ held there is general presumption that disclosure of pleadings
would undermine protection of those proceedings, but rebuttable! Also, after ECJ has delivered
judgment for art 258 proceedings, docs relating to Comms investigations in context of these
proceedings are NOT within exception, even if art 260 proceedings are still pending (no
presumption of undermining art 260 case)!
Comms discretion? Concerns that the Comm uses discretion to bring proceedings in arbitrary manner, or
unfairly/oppressively. Comm might have political motivations.

Art 258(2): indicates that after it issues reasoned opinion indicating breach, Comm has discretion
whether to refer to ECJ or not [between stages (3) and (4)].

ECJ carries out objective analysis: will only examine if infringement alleged by Comm exists will not look at Comms motives for bringing the action (Comm v UK, 1988). Comm also acts in
general interest, hence does not have to have specific interest!

Here, UK tried to argue that Comm was acting for political reasons. But ECJ affirmed Comm has
full discretion as to why it will pursue a certain breach.

Also generally agreed that Comm has discretion whether/when to issue reasoned opinion.

Discretion as to timing?

Comm v Netherlands, 1991: there are limits to Comms discretion, in respect of length of time
taken to bring proceedings. Excessive delay might be prejudicial (though not on the facts, where
Netherlands argued period of >5 years from time of first letter, to bringing infringement
proceedings, was excessive) - more difficult for MS to refute Comms arguments, hence
infringing the rights of the defence.

Cf Comm v Austria, 2002: ECJ rejected argument that given length of time since events which
were subject of infringement proceedings, proceedings would violate principle of legal certainty
and indivs acquired rights.

As for discretion on timing after issuing of reasoned opinion (above cases are on
commencement of infringement proceedings in the first place):

Comm v Ireland, 1984: though it allowed the Comm action to be admissible, ECJ
reprimanded Comm for the short length of time it allowed Denmark for compliance with
the reasoned opinion.

Comm v Belgium, 1988: proceedings against Belgium deemed inadmissible cos of short
time allowed for responding to letter of formal notice and reasoned opinion. Reasonable
period must be allowed, unless in circumstances of urgency/where MS was fully aware
of Comms views long before procedure started.

Non-privileged parties sometimes try bringing failure to act actions (art 265 TFEU) against Comm,
for Comms failure to initiate infringement proceedings under art 258.

Rejected by ECJ in Star Fruit case, 1987: clear that art 258 does not bind Comm to commence
proceedings - Comm has discretion!

Justification for discretion (and lack of role for indivs)? [Snyder] highlights that the main form of
dispute settlement used by the Comm is negotiation, of which the ability to initiate infringement
proceedings is but one part. Comm also uses litigation as part of long-term strategy, with focus on
establishing basic principles/playing for rules, not just winning each case.
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Self-imposed admin constraints (by the Comm):

1989: decided to bring immediate infringement proceedings against any defaulting MS as soon
as time limit for implementation of directive has passed

1990: routinely issued letters of formal notice whenever MS fail to notify national measures
implementing directives due for implementation

Also codified its own internal procedural rules, in response to pressure from Ombudsman
The reasoned opinion:

FUNCTION: provides procedural protection for MS (natural justice); official means of communication
to MS about substance of complaint, and specifies time limit for compliance.

FORM: no formalism, and is not subject to review (action for annulment) because it does NOT have
binding effect

but MS can contest lack of adequate reasoning by raising matter before ECJ if proceedings reach
the referral stage.

**CONTENT:

Art 296 TFEU: general rule that legal acts must state reasons on which they are based

Art 258: specific requirement of reasoning in relation to opinions issued by Comm

Comm v Italy, 1961: must have coherent statement of the reasons which led the Comm to
believe that MS failed to fulfil an obligation under the Treaty.

But no need to address every argument made by MS at pre-litigation stage, nor indicate
steps to be taken by MS to remedy the breach.

But Comm must respond to MS reply to letter of formal notice

Scope/subject matter of proceedings is delimited by letter of formal notice _ reasoned

opinion. Essence of complaint must be the same throughout!

Comm cannot later amend substantive content of submission, even if both parties want
ECJ to consider other aspects of MS conduct - must start art 258 procedure afresh! But
note that MS is not bound to raise defence during pre-litigation stage - can raise new
matters as defence before ECJ!

But if Comms application to ECJ found inadmissible on grounds that it is based on

objection different from that in reasoned opinion, it will just have to lodge fresh app before
ECJ based on same objections as the reasoned opinion (no need to redo pre-liti!)

***BUT note that if Comms application to ECJ differs from reasoned opinion in a manner
favouring MS - limits what is in the reasoned opinion, it will be accepted! Can also allow
extension of subject matter to events after the reasoned opinion, as long as they are of
the same kind/constitute same conduct, or is used to show general and persistent
pattern/practice (not specific violation)

Confidentiality: can indiv complainants disappointed by Comms failure to bring proceedings against
MS seek access to the reasoned opinion/other relevant docs?

WWF case, 1995: CFI held that MSs entitled to expect confidentiality of Comm, hence court
was not prepared to order disclosure, even if investigation closed some time ago.

Petrie case, 1999: CFI held that need for confidentiality remains even after matter is brought
before ECJ, up until ECJ delivers judgment. Objective of obtaining amicable resolution applies
all the way before judgment is given!

Note that since 2002, Comm has maintained electronically accessible list of decisions on
infringement proceedings. Also occasionally publishes reasoned opinions.

Can MS argue before ECJ that breach has already remedied?

NOT a defence if procedural conditions for bringing art 258 proceedings have been fulfilled, and
period for compliance (laid down by Comm) has expired w/o adequate response. ECJ only looks
to see if MS was in breach at time of expiry of period laid down in RO, not at time of hearing.
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Different from ECJs approach in actions against Union institution for failure to act (art 265)!
Reasons:

1.

Comm has continued interest in bringing action (prevent MSs from undermining
infringement proceedings, and MSs might re-commence same conduct later)

2.

ECJ should be able to rule on legality of short breaches - might not be less serious than
longer breaches (though not if effects of infringement ended before expiry of period)

3.

Judgment can establish MS liability (eg. For indivs action for redress before nat courts)

Necessary Elements
Must have failure of member state to fulfil a Treaty obligation
1) Positive act vs omission = both can constitute failure by MS to fulfil Treaty obligation!
Examples of positive acts:

Comm v UK, 1994: enactment of legislation expressly contravening EU law. UK had enacted
legislation that if you want to fly UK flag on ship, ship must be British-owned - direct
contravention of free movement of services/freedom of establishment provisions.

Comm v Greece, 2009: includes administrative acts/practices. Rejected MS argument that govt
didnt have direct influence on admin practices - insufficient justification for continued breach of
Eu law
Examples of omissions:

Failure of MS to implement Directives correctly (partial or complete).

Comm v France (Strawberries), 1997: where nat authorities stood by without doing anything to
prevent sustained illegal action by private parties. Failure to stop destructive protests against
imports was was so glaring that France had overstepped limits of discretion (even though MSs
usually have wide discretion as to organisation of police systems).
2) What is a member state? (usually not the govt itself which is acting in breach of EU law)

Comm v Belgium, 1970: just cos institution responsible is constitutionally independent is NOT a
justification. MS responsible regardless of which agency of the State is responsible.
Also liable for acts/omissions of constitutionally independent public authorities (Comm v Ireland,
1982). Here entity received govt funding.
And for constituent state within federation (Comm v Greece, 1988)
And even private companies if govt exercises considerable influence over them (Comm v
Germany, 2002)

Although it is nat govt who will appear before ECJ, the defendant is the State - legislature/judiciary
are organs of the state, and their acts may trigger enforcement proceedings.

But can enforcement action be brought against national courts? Huge discussion in Kobler, 2003:
Contro cos in democratic society, govt not meant to have influence over judiciary (and
legislative). Rather, Parlt should be controlling govt, with judiciary being entirely independent.
Here, focus on question of representation, not liability.
ECJ in this case said that if MS sup ct made mistake in application of EU law, it did so as a rep
of the State, hence can bring enforcement action against judiciarys action!

Types of Breaches of EU Law

Art 258 only contains a very general description of MS violation: can include actions/omissions, and failure to
implement any rule/standard which is an effective part of EU law.

A.

Breach of the obligation of sincere cooperation under art 4(3) TEU

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Comm v Netherlands, 1982: Comm alleged that MS failed to supply info on its compliance, as
required by the Directive, and due to this failure, it was entitled to presume that MS failed to implement
the necessary national measures. But in application to ECJ, breach identified was failure to implement.
ECJ rejected Comms argument - it is Comms responsibility to prove that MS did not fulfil
obligation, and Comm cannot rely on presumption in doing so.
Held that all MSs have obligation under art 4(3) TEU to facilitate achievement of Comms tasks
(including Comms duty to monitor compliance with the Treaty).
Though in Comm v Greece, 1988: ECJ held that once Comm has produced sufficient evidence,
MS cannot simply deny allegations, but has to contest it in a substantive way. Also, in Comm v
Ireland, 1999: established that Comm doesnt have to show harmful effects of the nat legislation

Where MS fails to respond at pre-litigation stage, it will be hard for Comm to ascertain if there is
breach. Hence, Comm will usually initiate separate enforcement proceedings on basis of breach of the
obligation of cooperation.

CONTENT: not just positive obligation on MS not to violate EU law, but also to prevent others (eg.
Citizens) from frustrating provisions of the treaty.
Comm v France, 1997 - strawberries case
Comm v Greece, 1989: obligation will be breached if MS fails to penalise those who infringe EU
law in same way as those who infringe nat law - effectively, proportionately and dissuasively.
B. Inadequate implementation of EU law

Comm v France, 1974: French legislature failed to repeal nat provision on racial make-up of ship
crew, claiming verbal directions given to naval authorities sufficed to comply with EC law. ECJ rejected!

For directives: not directly applicable = always incumbent on MS to implement them fully.
Fact that they might have vertical/indirect DE does not reduce obligation on MS.
Mere admin practices will not suffice because they 1) can be altered at will by administration; 2)
lack sufficient publicity.

Comm v Germany, 1985: German govt argued that general objection to admin practices
were inapplicable here, as the admin practice couldnt be changed arbitrarily, on the facts,
and had been given sufficient publicity. ECJ agreed!

Held that implementation of directive does not necessarily require legislative action, as
long as the 2 criterion are fulfilled.
Also possible that ECJ might hold indirect effect of directive would require national court to
construe relevant national law in light of wording and purpose of the Directive, so as to give
effect to its aim - (proceedings by Comm against UK, relating to Product Liability Directive)

If national legislation has been subject to differing judicial interpretation, this is not clear enough for
compliance with EU law!
C. Breaches which interfere with EU external relations

Where MS conduct allegedly

1.
2.

Violates international agreement binding on EU, or

Otherwise violates obligation of sincere cooperation by jeopardising EU objectives in external
relations field.

Open Skies case, 2002: Comm brought proceedings against MSs for having entered
bilateral negotiations with US on air transport agreements

Comm v Sweden, 2010: ECJ held Sweden was in breach, by unilaterally proposing to list
particular substance under Stockholm Convention before EU had time to propose its
position, in area of shared competence.

D. Systemic and persistent breaches or general practices

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Where each breach itself is relatively minor, but is part of a pattern of inadequate implementation
and compliance in practice.

Possible for disputed act to be an administrative act, but higher threshold to find breach here.
Practice has to be consistent and general
MS breach must be shown by sufficiently documented and detailed proof of the alleged
practice - different kind of proof compared to alleged breach by national legislation.
Comm v Ireland, 2005: ECJ held that general admin practice can be deduced from selected
number of indiv infringements, allowing finding of general and persistent breach against MS.
Once Comm has shown sufficient evidence of indiv complaints/act, to show persistent and
repeated practice of breach, it is for MS to challenge the evidence in detail.
E. Action by the courts of a MS

Failure by MS judiciary to comply with EU law has NEVER been basis of art 258 judgment politically sensitive! But ECJ holds that MSs are responsible for (in)action by constitutionally
independent organs of the state, and might incur liable in damages.

NB: in 2004, Comm issued reasoned opinion against Sweden on basis of its Sup Cts failure to make
prelim ref to ECJ, and absence of any national law/reg for prelim ref procedure. But resolved prior to
judgment by ECJ!

Defences by MSs
A.

B.

C.

Force majeure
Usually rejected by ECJ! MS is responsible for breach, regardless of which agency of the State
caused the failure to fulfil obligations
Even fact that institution is constitutionally independent is not a defence (Comm v Belgium,
1970)
Comm v Belgium, 1970: ECJ rejected dissolution of Parlt as a defence - normally have
significant amount of time for implementation anyway, longer than itll take to dissolve Parlt.
MS cannot argue that national provisions/circumstances/practices justify failure - Comm v Italy, 1984
In a rare case of Comm v Italy, 1970, ECJ agreed force majeure could be pleaded where a bomb
attack presented insurmountable difficulties (but not on the facts!)
Lack of intentional wrongdoing by MS
ECJ has rejected such arguments, holding that admissibility of art 258 action is based on objective
test, whether MS failed to fulfil obligation. No need to look for subjective intent/deliberateness.
EU measure on which infringement proceedings are based is illegal
Comm v Greece, 1988: MS contested lawfulness of Comms initial decision, after action brought
against it for failing to amend national legislation.
**ECJ held that system of remedies under the Treaty distinguishes between (i) remedies under
art 258/259 (declaration that MS failed to fulfil obligations), and (ii) art 263/265 (JR of measures
adopted by EC institutions). Hence, in absence of express provision of Treaty, MS cant plead
unlawfulness of decision under (ii) as defence to action under (i).
Once time limit for art 263 expired, MS cannot call into question validity of EU measure! Only
possible defence will be absolute impossibility of implementation.
If MS had objected to decision, it had opportunity to bring direct action for annulment under art 263.
But plea of illegality might be defence where Union measure was so gravely flawed it was legally
non-existent, or if it was a regulation (as opposed to decision addressed to MS) and illegality was
not apparent to MS until Comm brought enforcement proceedings.
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D.

Other MSs also in breach

NO! Not a defence. Community law differs from traditional forms and principles of international law less of a role for reciprocity to play.
Commission v Luxembourg and Belgium, 1964: Treaty establishes new legal order - not limited to
creating reciprocal obligations. Hence, MSs not to take law into their own hands - no need to resort to
self-enforcement/counter-measures, since we have Union courts to ensure compliance.

E. Internal difficulties/economic problems

Lack of funds to implement certain legislation is NEVER accepted as justification!

govt should have anticipated cost and voiced concerns during drafting stage.

Comm v UK, 1979: no matter how great the practical difficulties of implementation are, MS still
bound by obligations!
F. MS does not apply conflicting national law in practice

Comm v France (French Merchant Seamen), 1974: NOT good enough! Must actively change law/do
something to ensure that all parties within territory are aware the conflicting law no longer applies.

Consequences of Art 258 Rulings; Pecuniary Penalty Under Art 260

Art 258 consequences

Prior to introduction of art 260, one weakness of the infringement proceedings was that ECJ could
only make a finding of violation against defaulting MS.
Cannot order adoption of any specific measures, or otherwise dictate consequences of its
judgment in the enforcement proceedings.
But note that ECJ might exceptionally, limit temporal effects of measures, for legal certainty, as
allowed in Comm v Finland, 2009 (but not on the facts in this case)
Art 260: the pecuniary penalty

Amended by the Lisbon treaty

Before Lisbon, Comm would have to go through procedure (informal latter, letter of formal
notice, reasoned opinion etc) again to get ECJ to impose fine.
But now, where there is non-compliance, Comm will just issue formal letter of notice - no need to
submit another reasoned opinion again (art 260(2)).
Further, if it concerns non-implementation of directive, there is no need even for the formal
notice! (Art 260(3))

Aim: give teeth to infringement procedure, incentivising MS compliance with ECJ rulings.

Nature: more formally legal, and less diplomatic than art 258! Further sharpened by Lisbons
changes.

The old version of art 260, prior to the Lisbon amendment, only provided for Comm to bring MS
before ECJ again for second declaratory ruling. Changes

i)
ii)

Comm no longer obliged to issue reasoned opinion first - faster, more efficient!

Comm can directly seek pecuniary penalty where MS failed to notify measures transposing EU
directive (penalty not just limited to non-compliance with art 258 ECJ ruling!)
Amount - Comm will specify recommended amount; ECJ has discretion but cannot exceed this
amount specified! Comm will propose amount, based on seriousness of infringement, duration,
and MS ability to pay.
current debate: MSs think Comm has to choose either lump sum or daily amount, but ECJ says
can have adoption of both - had both in Comm v France, 2005.
daily amount would seem more appropriate for a continuous breach.
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Comm v Italy, 2011: Italy wrongly made subsidies to many businesses - Italy said would take too
long to get back the illegal subsidies. ECJ agreed to reduce lump sum, but still imposed daily
amount as well to incentives Italy to do so asap.
Note that if MS doesnt pay fine, will again be art 260 breach - might lead to further fine.
No formal method for collection, but usually assumed that Comm can withhold payments due to MS
from other EU law funds.
Limits: Comm cant seek injunction/order of specific action from ECJ. ECJ has no jurisdiction either
to require MS to comply with judgment for pecuniary penalty within specified time period!
What if MS then complied with Comms reasoned opinion before judgment, but NOT before expiry of
period laid down in reasoned opinion?
Initially, seemed like ECJ would not impose penalty.
BUT with introduction of lump sum payments (in addition to periodic payments), ECJ has
clarified that it will be appropriate to impose a lump sum payment (but not periodic penalty).
Comms vs ECJs interpretation of the penalty:
Before ECJ developed jurisprudence, Comm published guidelines + memorandum proposing
calculation method in mid-1990s: amount reflects aim of sanction (effective compliance with EU
law ASAP), hence most appropriate means is a periodic penalty - penalties should be deterrent
not symbolic (basically opposing lump sum).
Proposed daily penalty based on: 1) seriousness of infringement; 2) duration; 3) need to ensure
deterrence purpose is fulfilled.
But ECJ, since its first ruling on the pecuniary penalty in Comm v Greece, 2000, has
emphasised that it is not bound by Comms advice (but agrees in substance with much of it)
It was in 2004 that ECJ clearly diverged from Comms approach: in Comm v France, it imposed
lump sum penalty for longstanding violation, alongside the periodic penalty, though Comm had
not recommended this.

ECJ held that penalty provisions objective was to induce defaulting MS to comply, hence
ensuring that EC law is applied.

Purpose of periodic penalty: induces MS to terminate breach ASAP; purpose of lump

sum: based on assessment of effects of MS failure on public and private interests.
Different purposes! Hence possible to have both penalties imposed at the same time,
especially where breach has continued for a long time and is inclined to persist.
fact that Comm hadnt proposed lump sum penalty is not an obstacle!

Rejected argument that MS rights of defence affected by it being unable to argue against
lump sum, since art 260 procedure is enforcing earlier art 258 judgment.
Following this seminal case, Comm amended its guidelines - acknowledged desirability of lump
sum payment where MS has delayed compliance reasonably. Adopted ECJ approach.
ECJ has rejected Comms suggestion of automatic imposition of lump sum if MS hasnt yet
complied by date set in reasoned opinion - whether to impose lump sum is at ECJs discretion,
considering all relevant circumstances (case-by-case)

Interim measures (art 278/279)

Can be sought in any case before the ECJ.

Useful for Comm to seek simultaneously, when proceedings under art 258 are ongoing.
If breach found under art 258 proceedings, ECJs ruling does not have effect on impugned
national rule.
Art 278 TFEU: actions before ECJ generally do not have suspensory effect.
Art 279 TFEU: permits ECj to prescribe any necessary interim measures.

Requirements (in ECJs Rules of Procedure):

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i.

Circumstances giving rise to urgency: measures must be so as to prevent alleged injury, where
serious and irreparable harm to Cs interests are threatened.

ii.

Factual + legal grounds establishing prima facie justification for measures sought

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ART 267: PRELIMINARY RULINGS

Basics of the Preliminary Reference System

Historical introduction: rare for international org to enter into direct correspondence with MSs. At
that time, EC law was thought to be specialised area - hence need to refer questions of interpretation
to specialised courts. So started off with horizontal relationship - but now, moving to be one of vertical
hierarchy
Simmental, 1976: emphasis that r/s is one of cooperation (horizontal) not hierarchy - ECJ not
empowered to investigate facts/look at grounds and purpose for request. However, in this case,
ECJ said where question of EU law is decided, it is automatically applicable to all MSs - not just
to the MS which requested for it.
Significance:
Became vehicle through which important Union law concepts were developed (eg. Supremacy
in Costa v ENEL, direct effect in Van Gend en Loos).
Also means of indirect review of acts of EU institutions (Comm v Jego Quere, 2004).
Necessary to ensure uniform application of EU law (International Chemical Corporation v
Amminstrazione delle Finanze, 1981). ECJ enjoys advantages over nat courts in ensuring
uniform application:

Panoramic view of Union/institutions

Detailed knowledge of Treaties/subordinate legislation

Familiarity with the functioning of the Common market

Can receive submissions from other Union institutions/MSs can intervene

Can better address comparisons between language versions of text, being multi-nat
court.
What questions can be referred? Two types

1.

Questions on the interpretation of the Treaty (art 267(1)(a))

Wider. ECJ has given many seminal judgments on DE and supremacy under this

2.

Questions relating to validity and interpretation of EU actions (art 267(1)(b)) - eg. Where C
argues that EU Reg gives rise to rights directly enforceable in nat courts.

For interpretation, ref can be made to clarify even non-legally-binding provisions (even for
non-binding acts) - Grimaldi case, 1989. Hence, open approach

But for validity, only includes all EU acts having binding effect, excluding Treaties (Les
Verts: treaties are constitutional charter of Union, and ECJ does not have jurisdiction over
Treaty validity). Also excluding ECJs case law (Wunsche, 1986: must use proper review
procedure to challenge previous ECJ judgements, cannot use prelim ref procedure)

Also includes issues of invalidity of EU law. This is issue for ECJ, not nat court, to decide.

Courts (distinction between 2 types)

court/tribunal?
Corbiau v Administration des Contributions, 1993: whether body is court/tribunal is question of
EU law! Here, ECJ held that tax administration is not court within sense of art 267.
Almelo, 1994: to be court/tribunal, body must:

Be established by law

Have permanent existence

Exercise binding jurisdiction

Be bound by rules of adversary procedure: Cartesio case, 2008: though art 267 does not
require proceedings to be inter partes, ref can only be made if there is case pending
before nat court, leading to decision of a judicial nature.

cant make prelim ref for what is essentially an administrative decision that doesnt resolve legal
dispute!
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Apply rule of law

Be independent.
Further requirements in other cases:

Broekmeulen v Huisarts Registration Commissie, 1981: must exercise official authority

(general medical council was final appeal body, despite being private association. So
yes!). If under MS legal system, task of implementing EU provisions is left to
professional body acting under degree of govt supervision, and that body, in
conjunction with the public authorities, creates appeal procedures potentially
affecting EC rights, then it is essential that ECJ can rule on issues of
interpretation/validity arising out of such proceedings.

Borker, 1980: must have judicial role

Norse, 1982: must be closely linked to organisation of legal remedies through nat courts private arbitration tribunal usually isnt, unless it is endorsed by public authority (eg. Under
Swedish labour law). But note in Almelo, 1994: body hearing appeals against arbitration
award = court/tribunal)

Perfumes Christian Dior, 1997: can be court common to >1 MS - Benelux court on trade
marks. But must be from a MS.
Arbitration context? Depends on the nature of the arbitration; not sufficient just that body gives
judgment according to law, and award is binding between parties. Must have closer link
between arbitration procedure and the ordinary court system!

Which courts or tribunals can refer? (art 267(2)) - discretion!

Discretion to refer where Union law qn is raised in case pending before any national court
(Zabala Erasun v INEM, 1995)
Rheinmuhlen, 1974: national courts have the widest discretion - not restricted by EU law , in
the spirt of cooperation
recall AG Jacobs criticism - said prelim ref not real alternative to direct challenges cos of nat
courts wide discretion.
Pigs Marketing Board v Redmond, 1978: nat court has discretion to refer if it considers that a
decision on the question is necessary to enable it to give judgement
but Leclerc, 1995; it is nat court, having knowledge of the facts, which is in best position to decide
on necessity of prelim ruling to give judgment. Hence, if nat court refers, Court will in principle
be bound to give judgment.
But note nat courts discretion only extends to whether or not to make prelim ref, not to
composition of question - ECJ can request more info to decide which questions to answer
Which courts or tribunals must refer? (art 267(3)) - obligation!
Rationale for imposing this duty is to prevent body of national case law that is not in accordance
with EU law from being established!
2 interpretations:

1.
The abstract theory: only bodies whose decisions are never subject to review
MSs would want this - dont want to be subject to too many mandatory prelim refs
2.

The concrete theory: depends on whether the bodys decision is subject to appeal in the
type of case in question.
ECJs jurisprudence seems to support the concrete theory.

Costa v Enel, 1964: although magistrates decisions were capable of being appealed in
some instances, there was no right of appeal in the particular case - allowed prelim ref!

Lyckeskog case, 2000: just cos appellate court decision was subject to prior declaration of
admissibility before it could be appealed to the Sup Ct did NOT mean that the appellate
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courts decisions came within art 267(3) - procedural impediment to appeal did NOT
make it a final court. It is Sup Ct is the final court under obligation.
hence, question is whether there is any possible legal remedy, regardless of
practicability/subjection to restrictions.
What if lower national court makes prelim ref, which is reversed on appeal by higher court?
Cartesio case, 2008: ECJ supported ability of lower courts to refer to ECJ, even in face of
opposition from higher court. It is up to the referring court alone (and not the appeal court) to
assess relevance and necessity of prelim ref. For clarity and legal certainty, ECJ will abide by
decision to make prelim ref, which will have full effect as long as it hasnt been
revoked/amended by the referring court.
Facts: about registration of company under Hungarian law (before lowest courts) - ECJ held that
review of what was essentially administrative act is still inter-party procedure, between company
which wanted the registration, and lower court seeking to deny it.
Can national courts be limited by national procedural rules as to whether they may raise
matter of EU law of their own volition? (where not raised by indiv complainant) Note that some MSs
courts are reluctant to make prelim refs - Germany, Poland, Czech. Especially for constitutional courts,
they seem themselves as outside ordinary judiciary structure. No such prob in UK where HOL has
been willing to make prelim refs.
Peterbroeck case, 1995: ECJ held such Belgian procedural rule was contrary to EU law!
Couldnt be justified by legal certainty/proper conduct of procedure
Cf Van Schijndel, 1995: ECJ held there is no obligation on nat courts to abandon passive role
they have under domestic procedural rules.
But Asturcom, 2009: clarified that ECJ can impose duty to raise point of EU law, if court has
discretion to raise such point in analogous domestic situations (different from Van Schijndel,
where nat court was not allowed to step beyond passivity at all)

Existence of a Question
1. Where Union courts have already resolved the issue (Acte eclaire)
National law in breach of EU law/prior ECJ rulings

Where ECJ has already ruled on the matter!

Da Costa case, 1973: facts and questions asked were materially identical to those in Van Gend en
Loos
ECJ held that while art 267(3) imposes obligation on national courts/tribunals of last instance,
an interpretation already given by ECJ (in a prior prelim ruling) may deprive the obligation of its
purpose, and thus empty it of its substance.

especially so if question raised is materially identical to one already raised previously.

Still, art 267 always allows nat court to make prelim ref if it considers it desirable (formal terms),
but if A does not raise some new factor/argument, ECJ will be strongly inclined to just restate
substance of the earlier case.

Costa initiated what is, in effect, a system of precedent. Developed in subsequent cases!

applies even if ECJ answered question in different procedure (eg. Art 263)

CILFIT case, 1982: Court of Cassation (Italy) made prelim ref on whether obligation to refer under art
267(3) was unconditional, or whether it was premised on existence of reasonable interpretative doubt.
ECJ highlighted that the prelim ref system was not a means of appeal/redress for parties.
National courts/tribunals, even under art 267(3), still have same discretion to decide whether
prelim ref is necessary for them to give judgment - hence will not have to make ref if the
interpretation of EC law is not relevant.

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Similarly, where previous ECJ decisions have already dealt with the point of law in question,
irrespective of the nature of proceedings and fact that qns at issue are not strictly identical, then
the obligation will be emptied of its substance too! (quoting Costa)
Hence, ECJ rulings became precedent for national courts, subject to qualification that national court
can still make prelim ref if it wishes to!

Validity of EU legislation/act and prior ECJ rulings

Above cases are where MS action allegedly violates the Treaty - issues of interpretation, but ECJ is
even more forceful where it is the impact of its previous decisions on validity of EU legislation which is
in issue!

International Chemical Corporation case, 1981: Council Reg designed to reduce skimmed-milk
stocks, and P received aid but failed to buy skimmed-milk, hence Ps security forfeited by national
agency. Earlier ECJ case decided that the Reg was invalid cos of disproportionately high price, hence
P argued that security could not be forfeited - would be ensuring compliance with an invalid obligation.
ECJ held that main purpose of art 267 is to ensure uniform application of EC law.
Legal certainty requires that the ECJ having declared an EC act void, national court cannot
continue to apply the act !
Erga omnes effect: while ECJs declaration of validity of the EC act is addressed only to the
national court which brought the matter before the ECJ, it is sufficient reason for other national
courts to regard the EC act as void! Multilateral effect, so that initial ECJ judgment has
precedential impact on all national courts.

but this doesnt deprive nat courts of power to refer under art 267 still.

Firma Foto-Frost case, 1987: nat courts cannot find that EU norm is invalid! Main purpose of art 267
is to ensure uniform application of EC law, and this will be jeopardised by divergences between MS
courts as to validity of EC act (affects legal certainty and the very unity of the Community legal order).
Art 267 gives ECJ exclusive jurisdiction to declare EC act void, hence power to declare invalidity
is also reserved to ECJ!
Further, ECJ is in best position to decide on validity of Community acts

Allows participation of EC institutions whose acts are challenged

Can require MS/institutions who are not participating in proceedings to supply all info
necessary
But nat court can reject arguments against validity, concluding that Community measure is valid!

ECJ rulings and legal certainty

It remains for national courts to determine the validity of national law. Also for national courts to apply
ECJs interpretation of compatibility of national law with EU law, within domestic system.

General principle is that ECJ ruling will be applied to legal relationships even before the ruling was
given, but after the EC measure came into force.
Kuhne case, 2004: in a separate decision, subsequent to Cs first action, ECJ made clear that
Dutch authorities reclassification of product was erroneous. Hence C then sought
reimbursement of refunds they ought to have received.

ECJ held that EC law does not require admin bodies to be obliged to reopen admin
decisions that have become final.

But on the facts, where

1.

National (Dutch) law conferred on admin body competence to reopen the final
decision, subject to certain conditions
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2.

Decision became final only cos of judgment of nat court against whose decision
there is no judicial remedy

3.

Decision was based on interpretation of EC law, which in light of subsequent ECJ

decision, was incorrect, and where interpretation adopted without prelim ref

4.
5.

C complained to admin body immediately after becoming aware of the judgment in

(3)
The admin body will be under an obligation to review the decision.

2. Where there is no doubt as to the validity of an EU measure (acte clair)

Where nat court feels that answer to the issue is so clear that prelim ref not required!
Different from the above cases, as the acte clair doctrine may apply even where there is no prior
ECJ decision on the point!
CILFIT case, 1982: ECJ held that correct application of EC law may be so obvious as to leave no
scope for any reasonable doubt as to how to answer the question.
Qualifications:
Nat court must be convinced that answer is equally obvious to other MS courts, and the ECJ.
Must bear in mind the characteristics of EC law:

1)
2)
3)
4)

Interpreting EC provision involves comparison of the different language versions

EC law uses autonomous terminology
Provisions of EC law must be placed in context and interpreted in light of provisions of EC
law as a whole!

Hence emphasising that acte clair is an exceptional situation.

[Mancini & Keeling]: approved of [Rasmussen]s analysis that the judgment was based on
strategy of give and take - ECJ recognised it couldnt force nat courts to accept its jurisdiction,
hence granted them power to do lawfully what they could do unlawfully anyway, but subjecting it
to stringent conditions. Hence hoped to induce willing participation in the Treatys mechanism
for judicial cooperation. Seeing case as dialogue between MS courts and ECJ.
[Arnull] thought that only the requirement of comparing diff language versions had teeth, and
even so, was less onerous than it seemed. Hence also saw it as legitimising failure to refer.
But AG Jacobs argued that national courts shouldnt have to consider all language versions.
Note threshold might be quite high - also, risk of coming to such a conclusion rests on the MS courts
- if MS assumes its an acte clair but interpretation wasnt actually that clear, might have state liability.

Approach/Attitude of the ECJ

(i)in deciding whether to accept the reference

Initial liberal approach

ECJ read reference so as to preserve ability to pass judgment, wherever possible. Didnt want to
discourage litigants from having recourse to EC law, and sought to develop doctrines like direct
effect/supremacy. Also wanted to encourage national judges to employ this novel machinery.

Hence, prepared to correct incorrectly framed references.

Costa v ENEL, 1964: held that it had power to extract questions really pertaining to Treaty
interpretation, from a question imperfectly formulated by the national court.
Schwarze case, 1965: France argued that qns asked were concerned with validity of Community
acts, not interpretation of the Treaty, hence should be challenged under art 263!

ECJ held that regardless, art 267 expressly gives ECJ power to rule on validity of EU act.

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Form is not crucial, and focusing too much on it will prolong art 267 procedure, in a
manner incompatible with its true nature. Also inappropriate for this system of judicial
cooperation, where nat court and ECJ must work together for uniform application.
Also often rejected objections to reference based on reasons for making it, or facts on which it was
based - held that these matters are within nat courts domain, emphasising the separation of
functions under art 267 (Costa).
Simmenthal, 1976: stressed the distinct separation of functions, such that ECJ did not have
jurisdiction to consider facts of case/criticise reasons for reference

ECJ starts asserting authority over cases being referred

**Foglia v Novello, 1980: ECJ held that parties had appeared to collaborate artificially, to seek
annulment of the relevant national tax provisions, by inserting contractual clause to induce Italian court
to make preliminary reference.
ECJs duty under art 267 is to supply national courts with info on interpretation of EC law,
necessary to allow latter to settle genuine disputes
To allow such an artificial case to come under art 267 would jeopardise the whole system of
legal remedies available to individuals: should use action for annulment instead!
But Italian judge undaunted by ECJs refusal, and made prelim ref again, asking if ECJs first
decision was consistent with principle that it is for nat court to determine facts and need for a
reference. In Foglia (No. 2), 1981

ECJ held that art 267 is based on cooperation, entailing division of duties.

For ECJ to carry out its task, nat court must explain, where it is unclear, why it considers
reply necessary to enable it to give judgment.

Art 267 does NOT require ECJ to give advisory opinions on general/hypothetical
questions. Hence, ECJ does not have jurisdiction to give views on problems of EC
law which do not answer to an objective requirement in the resolution of a dispute.

ECJ must be able to check whether it has jurisdiction, like all other courts. Hence can examine,
where necessary, the conditions in which the case was referred.

Hence subtly held that ECJ will be ultimate decider of own jurisdiction! Vertical hierarchy!
[Bebr] argued against the ruling! ECJ had always viewed art 267 as establishing co-operative
r/s, rather than hierarchical superiority. French govt here didnt even contest ECJs jurisdiction,
but ECJ did so of its own motion. Assumption that P did not entertain action seriously is
questionable too!
But [Wyatt] was in favour of it - if prelim refs are not subject to preliminary objections as to
admissibility, then it will be the nat courts acting as guardians of ECJs judicial functions, when it
should really be the ECJ instead. Thought that ECJs reasoning was convincing, in
distinguishing judicial function from delivery of advisory opinions, since only the former
characterises the organ as a court.

After Foglia, principle was left dormant for awhile. But from 1990s, ECJ started to employ it in

i.

Hypothetical cases

Rationale: avoid wastage of judicial resources. Also, might be unclear who the
appropriate parties are, and relevant arguments may not be raised.

But fine line between hypothetical cases and test cases.

test cases aid in legal certainty, allowing people to plan lives with knowledge of legal implications
of choices they make! See Foglia itself!

Wienand Meilicke case, 1992: M wanted ECJ to answer many questions on contributions
in kind, having written articles on issue. ECJ reiterated not for court to give advisory
opinion in hypothetical case, much less for court to prove academic opinion right/wrong
where theres no real underlying case.
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ii.

iii.
iv.

Cf Leclerc-Siplec, 1995, and Bosman, 1995: even though these cases on free movement
of goods/workers seemed hypothetical (no real dispute), court was still generous in
answering prelim refs.

Where qn raised is not relevant to resolution of the dispute

Meilicke, 1992: ECJ declined to give ruling, holding that it had not been shown that issue
posed in prelim ref was actually at stake in main action

Corsica Ferries, 1994: ECJ reiterated it has no jurisdiction to rule on qns that have no
relation to the facts/subject matter of the main action

Salonia case, 1981: prelim ref can be rejected only if it is quite obvious that
interpretation/validity bears no relation to actual nature of case/subject matter of
main action - high threshold?

But more demanding in...Dias case, 1992: ECJ accepted that nat courts are prima facie in
best position to decide on need for reference, hence in principle, ECJ bound to give ruling
when asked. But this is subject to qualifications!

Nat court must have regard to the ECJs function of assisting in administration of
justice in MS (not delivering advisory opinions on general/hypothetical qns)

Hence, nat court should first establish facts of case and settle questions relating
purely to national law. Also explain reasons why it considers prelim ref necessary.

Only with the above info, can ECJ be in position to ascertain if interpretation
of EC law sought is related to nature/subject-matter of proceedings.

If manifestly irrelevant, ECJ will not proceed to judgment!

Also said enabling MS to give judgement should be interpreted broadly - whole

procedure leading up to judgement of MS court. Otherwise, procedural qns would
be deemed inadmissible.
Where qn is not articulated clearly enough

ECJ will tease out real qn if reference was imperfectly formulated, but will NOT alter
substance of the qn!

Where facts are insufficiently clear

Similar to (iii) - facts too unclear for ECJ to apply relevant legal rules (ECJ does not
respond in a merely abstract manner).

Wienand Meilicke case, 1992: nat courts obligation to provide info is particularly impt for
areas where there are complex legal and factual situations (eg. Competition).

Sliding scale idea - whether sufficient info provided will depend on circumstances.

Must be enough for ECJ to assess situation and admissibility, and relevance of qn.

Portugal Telecom, 2012: it is for ECJ, not intervening MS, to decide whether information is
adequate/relevant.

Information provided serves not just to enable ECJ to give useful answers, but also to
enable MS govts/other interested parties to submit observations!

Some critics think this strictness goes against notion of a horizontal r/s between ECJ and
nat courts - should be left to letter to determine if qn is relevant. Otherwise, hierarchical!
this ground has been most often employed by ECJ to reject prelim refs.

NB: ECJ can decide on admissibility of each qn posed.

v.

Where reference is not about matter of union law over which ECJ has jurisdiction

Tombesi, 1997: if question referred is only about national law, ECJ will decline jurisdiction.

Emphasised that ECJ cannot decide on validity of domestic law under art 267 (can
only decide on validity of Union law!

But can still supply nat court with interpretation of Union law so as to enable nat
court to determine issue of compatibility of national law.
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Recall supremacy; Union law does NOT automatically invalidate contradictory nat law.
Rather, takes precedence of application - and priority of application is qn for nat court.

Eg. In Van Gend en Loos, Dutch govt raised objection to ECj jurisdiction under art 267,
saying it was pure qn of domestic law.
ECJ has incorporated this jurisprudence in its Information Note on References from National
Courts for a Preliminary Ruling (2009).
Info in statement of reasons required from nat court:

1.
2.
3.
4.
5.

Statement setting out subject matter and essential facts

Relevant national law
As accurate an identification of relevant EU provisions as possible
Applicable national provisions

Summary of parties arguments.

NB: courts more likely to accept references by nat courts, under art 267, compared to the strictness
of the standing requirements under err t263. This is cos talking about expert dialogue here (courts!)

(ii)towards interpretation vs application

Art 267 gives ECJ power to interpret, but not to apply Treaty provisions to facts of the particular
case! Distinction between interpretation and application characterises division of authority between
ECJ and nat courts.
But dividing line not always clear. The more detailed the interpretation provided by the ECJ, the
closer it goes to application. Also common for ECJ to give guidance on application in that case.
ECJ usually not deterred by arguments that it should decline to give ruling cos question posed was
seeking application.
Cristini v SNCF, 1975: ECJ denied it had power to determine actual case, but actually did that in
reality. Responded to question by stating that concept of a social advantage included the
disputed rail fare reduction for large French families.
Marleasing, 1990 also shows ECJ giving nat court a very specific answer, simply requiring
Spanish court to execute ECJs ruling.
ECJ might want to provide answer - going into application - when it wants to retain control over
development of the law in that area (eg. Damages liability of MSs).
[Tridimas] notes 3 distinct approaches of the ECJ:

1.

Outcome cases: where ECJ gives such a specific answer that nat court has no margin for
manoeuvre; basically providing solution to the dispute.
advantages: avoids further delays and costs
disadvantages: but brings ECJ close to application. Encourages over-centralisation, detracting
from fundamental function of promoting uniform application - harder to extract principles, and
reduces precedential value

2.
3.

Guidance cases: guidelines as to how to resolve dispute

Deference cases: where it answers question in such general terms as to defer to nat court
disadvantages: risk that nat courts will hesitate to make references, hence detracting from uniform
interpretation.
advantages: nat courts best equipped to apply EU law in specific contexts, and gives nat courts
stake in shaping EC legal order.

REFORM of PRELIM REF PROCEDURE?

1) Limiting national courts empowered to make prelim reference

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Both papers came down strongly against general limiting of preliminary rulings to final national courts
(against whose there is no judicial remedy in national law)

Unsurprising! Common for cases raising impt points of EU law to come from lower level national
courts, and such a limit would result in cases being fought to the top just for a reference. Lower courts
also safeguard against overly conservative/cautious final courts.

Lower courts ability to refer emphasises that indiv can rely on EU rights with DE at any point,
2) Filtering mechanism based on novelty/complexity/importance of the qn

Proposal to allow ECJ to concentrate on the fundamental, sufficiently important questions.

Advocated by the Due Report.

2 problems:

1.
2.

Nat courts might refrain from referring qns due to risk of rejection;
EU system is a referral, not appellate system, where nat court has not decided the case - case
would then have to be decided on assumption that EU law point remained unproven (if prelim ref
rejected)

3) Having the national court propose an answer to the question

Supported by both papers! Incorporated in guidance given to national courts.

But limits: nat courts are mostly non-EU law specialists. Also changing task of nat courts - would
need to have detailed arguments of EU law issues before them so that nat judge has sufficient
material.
4) **Towards an appellate system

Proposes that MS courts first give judgment, and it would then be open to any party to request prelim
reference, giving ECJ opportunity of assessing whether it needed to give its own ruling on
interpretation of EC law that was arrived at originally by MS court.

Strongly opposed by Due Report: debases the entire system of co-operation. Courts paper pointed
out that judicial co-operation would be transformed into a hierarchical system - for parties, not nat
courts, to decide whether to require prelim ref.

Difficulties: lower nat courts unlikely to have expertise to decide on points of EU law; unlikely to
relieve ECJ caseload; overruling Foto-Frost by requiring nat court to adjudicate on validity of EU
norms? Also unclear if losing party can request/require prelim ref.
5) Creation of decentralised judicial bodies

Brings legal redress physically closer to citizens, who at present have to travel to Luxembourg. Also
eases ECJs burden.

But both papers concerned whether this would jeopardise uniformity of EU law.
6) General court to have jurisdiction to give preliminary rulings

Before the Nice Treaty, only ECJ could here prelim rulings. NB: CFI (now the General Court) could
hear actions for annulment)

Courts paper: cautiously supported possibility of conferring jurisdiction to hear prelim rulings on the
General Court. Due Report opposed it, except in niche areas!

Nice Treatys changes: gave CFI some power over prelim rulings.

Lisbon Treaty: empowers Gen Court to hear prelim rulings in specific areas laid down by Statute of
the Court of Justice, but to refer fundamental cases back to ECJ. (art 62 of the Statute)

not used yet!

difficult to decide on areas, especially cos there is no necessary correlation between subject
matter area and importance of point of EU law - might be better to just give Gen Court jurisdiction over
all prelim refs, but subject to referral of big cases to ECJ.
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Advantages: some cases raise issue that would be heard by Gen Court in direct action under art
263, but where non-privileged applicants couldnt satisfy standing criteria. Further, many art 267 cases
are not concerned with principle, but detailed interpretation of particular provisions, which dont need
resolution by the ECJ.

ART 340(2): NON-CONTRACTUAL LIABILITY OF THE EU

General

Main TFEU provisions

Art 268 ECJ has jurisdiction in disputes on compensation for damage
Art 340(2) liability for non-contractual liability of the Community will be in accordance with
general principles common from MS laws, covering damage caused by its institutions or
servants in the performance of their duties.
Lutticke, 1971: independent form of action, unconnected with other actions! Self-standing.
Legislative acts? Apply to all citizens in the same way - rare to give damages. Further, most MSs
restrict legislative injury to rare cases (special injury) - some even exclude it constitutionally.
Time limit: 5 years, from event giving rise to liability.
De Franceschi, 1982: runs only from moment when damage becomes known;
Adams, 1985: does not run until injured party becomes aware of event giving rise to his claim.
Conditions for liability - seem to be slightly more restrictive than those for state liability, but recent
case law points towards convergence of standards.

Components...
1A) DISCRETIONARY ACTS OF THE EU
General test

***Schoppenstedt v Council, 1971:

Abolished the earlier rule in Plaumann v Comm, 1973, that annulment was a necessary
precondition to an art 340 action. Good! Otherwise art 340 would be of little use, given the
restrictive rules on standing under the action for annulment.
Hence, action for damages came to be an independent and autonomous cause of action.
Depends on whether there is a sufficiently flagrant violation of a superior rule of law for the
protection of the individual (not on annulment).

Crucial factor is the degree of discretion possessed by the institution, in relation to the challenged
measure. Whether measure is general/individual is not decisive! Test can apply to individualised acts
entailing significant element of discretion, and also legislative acts involving discretionary choice.

Discretionary acts will be subject to more stringent tests. But for non-discretionary acts, mere
infringement of EU law may suffice for liability.
Note that pre-Lisbon, categorisation of an act as legislative was based on substance.
Post-Lisbon: definition of legislative acts is purely formal (legislative procedure)

Elements
superior rule of law comprises 3 types of norms:

1.
2.
3.

Treaty provisions. Eg. Ban of discrimination in art 40(2) TFEU

CNTA case, 1975: Reg 189/72 abolished monetary compensatory amounts for certain
products, for which applicant had entered into contracts already - claimed it made

Where a Reg is in breach of a hierarchically superior Reg.

General principles of law.

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contracts on assumption that the Reg would apply, hence suffered loss. Also claimed
abolition by Reg 189/72 was infringement of basic Reg 974/71 (superior Reg).

ECJ allowed that Comm had wide discretion, and could consider market conditions too.
But found that here, trader could legitimately expect that no unforeseeable alteration
would occur to the effect of causing him inevitable loss. In the absence of an overriding
matter of public interest, where Comm abolished with immediate effect and failed to give
warning, without adopting transitional measures, it would be liable!
Flagrant violation/serious breach

Initially, ECJ construed this restrictively.

Amylum v Council and Comm, 1979: applicant had to show that: 1) effects of breach were serious
(quantum of loss); and 2) breach was arbitrary (hard to show!)

Recently, less restrictive interpretation taken.

Brasserie du Pecheur v Germany, 1996: ECJ stated that test for state liability in damages should
be same as that for Union liability under art 340(2).

Leading case is now Bergadem v Commission, 2000: ECJ reaffirmed Brasserie du

Pecheur, and explicitly drew on factors mentioned in that case.

Conditions for State liability cannot differ from those for Community liability in like
circumstances, in the absence of proper justification. Level of protection available
to the indiv cannot vary depending on the authority responsible (Brasserie de
Pecheur)

For State liability, ECJs jurisprudence lays down the following criteria:

1.
2.
3.

Rule of law infringed must be intended to confer rights on indivs

Breach must be sufficiently serious

Direct causal link between breach and injury sustained.

Test for the 2nd condition of sufficiently breach is whether the MS/Community
institution manifestly and gravely disregarded the limits on its discretion.

But where MS/institution only had considerably reduced/no discretion, mere

infringement of EC law may suffice to establish a sufficiently serious breach!

General/indiv nature of measure is not decisive.

**possibility of large number of claimants will NOT preclude art 340(2) action!

Importance of DISCRETION: the broader and more complex the discretion, the more
difficult it will be for the claimant to show the serious breach.
Arcelor, 2004: CFI emphasised breadth of ECs discretionary power when exercising environmental
powers. Hence rejected claim for damages.
**My Travel Group v Comm, 2008: CFI held that mere fact of annulment of Comm decision did not
amount to finding of a sufficiently serious breach! Annulment could be due to mere errors
of assessment = did not suffice to show manifest and grave breach.
protection of the individual Bergadem, 2000: must be intended to confer rights on indivs.

Should liability under art 340 be limited?

Yes! Many big cases arise under Common Agricultural Policy, where EU has to make difficult
discretionary choices of a legislative measure, balancing the conflicting variables in art 39
TFEU.
Finding of illegality has a lower threshold, should not suffice as basis for damages!
Otherwise, decision-makers vulnerable to potentially wide liability. ECJ shouldnt second-guess
the Council and Comm as to policy balancing.
Hence, Brasserie and Bergadems nuanced approach is welcomed:

Mere fact that general aim pursued is legit will not shield EU from liability, if it can be
shown that there was sufficiently serious breach in manner of attaining it.
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**where loss is caused by sufficiently serious illegal action, A should not have to prove that
loss itself was particularly serious. Economies of litigation will prevent floodgates.

1B) NON-DISCRETIONARY ACTS OF THE EU

Traditional approach: suffices to show illegality, causation and damage.
More recently, while the non-discretionary/discretionary distinction persists, it continues within the
framework of the sufficiently serious breach test (Bergadem).
Hence, where there is discretion, A must prove the 3 conditions (intended to confer rights +
sufficiently serious + causal link)
Where there is NO discretion, mere infringement of EU law may suffice (for the illegality stage)
Fact that contested measure is in the form of a decision, hence in principle capable of being subject
of action for annulment, does not suffice to preclude it being legislative in character (hence institution
having wider discretion). Art 340 is independent from art 263! - Antillean Rice Mills v Comm, 1999.
Meaning of illegality
Mere proof of an error will not mean success in damages action! Court can construe illegality as
it wishes, hence can construe it narrowly to exclude certain errors. Uses this to avoid imposing
strict liability on the EU.
Richez-Parise and Others v Comm, 1970: ECJ construed illegality so as to exclude a mere
incorrect interpretation of a Reg. But on the facts, EU still rendered liable for organs failure to
rectify information once it knew of mistake.
Fresh Marine 1998: CFI held that mere infringement of EC law would suffice here, given that
there was no room for discretion. However, defined illegality as lack of ordinary care and
diligence by the Comm, and took account of As contributory negligence.

2) OFFICIAL ACTS OF UNION SERVANTS

Not every act by a servant will be an act in the performance of his/her duties.
**Sayag v Leduc, 1969: S was engineer employed by Euratom, instructed to bring L (private firms
rep) to visit some installations. Drove there in his own car, got into accident. S argued that he was
driving car in performance of his duties, hence action shouldve been brought against the Community.
Art 340 refers to damage by institutions and Communitys servants together - indication that EC
is liable only for those acts of its servants which, by virtue of an internal and direct
relationship, are the necessary extension of tasks entrusted to the institutions.
Hence, S use of private car for transport does not fall within art 340, unless circumstances are
so exceptional that without S using private means of transport, Community would have been
unable to carry out tasks entrusted to i.
Hence, narrowly construed! More limited than in most MSs.
If rejected, action can then be brought against servant in his personal capacity, before national
courts (governed by national law!)
Protocol on the Privileges and Immunities of the EU: provides that servants will have immunity
from suit in national courts in relation to acts performed by them in their official capacity
(different phrasing from art 340(2))
ECJ has held that servants personal immunity and EUs liability are 2 separate issue. But
Schermers and Swaak think that EU liability should be the broader category, including, but not
being limited to acts which would lead to servants immunity under the Protocol.

3) CAN DAMAGES BE CLAIMED AGAINST A VALID LEGISLATIVE ACT?

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Valid EU acts may still lead to individual loss. But largely rejected by ECJ!
[Bronkhorst]: private individuals affected by CAP may easily suffer financial injury where
Community measures favour competing producers.
[Craig]: often, it is a matter of conscious legislative policy to benefit one section of the
population, at the expense of another. Hard to distinguish between deleterious effects which are
aim/necessary correlative of the legislation (hence shouldnt be compensated), and that which is
an incidental effect in a serious manner, against which there is no legislative objection to
compensation for loss (hence should be compensated).

NB: French and German national law recognise principle of recovery of loss due to lawful
governmental action.

Jurisprudence:
**Dorsch Consult v Council, 1998: EC, acting on UNSC Res, had passed Reg banning trade
with Iraq, and Iraqs retaliatory freezing of assets caused A (company doing business in Iraq) to
suffer losses. Sought compensation, though EC was acting lawfully.

ECJ held it will be necessary to show real damage, and a causal link.

Even if this is proved, IF there is to be liability, damage must:

1.
2.

Constitute a still subsisting injury,

3.
4.

Exceed the economic risks inherent in operating in the sector (special damage),

Affect a particular group of economic operators in a disproportionate manner

(unusual damage), and

Without the relevant legislative measure being justified by a general economic

interest.

Note the ECJ is not saying that it recognises a principle of recovery of losses caused by
lawful activity - the above is framed conditionally!
FIAMM, 2006: emphasised the above again! ECJ reiterated that no such principle for recovery
for losses stemming from lawful activity exists in EC law yet, and even if it does, it would be
subject to the above stringent conditions. Further, noted the lack of consensus within MSs.

4) CAUSATION AND DAMAGE

Causation

[Toth]: difficult to establish causation in practice, especially in the economic and commercial field,
where there are often multiple causal factors (objective + subjective, simultaneously/successively)
producing both direct and indirect effects. but for test is not applicable here! To suffice, causality must
be direct, immediate and exclusive: only where damage arises directly from EC institutions conduct,
and does not depend on intervention of other causes.

Dumortier Freres v Council, 1979: Council Regs provided for refunds for maize starch, but not maize
groats and meal. Differential treatment was in breach of arts 39/40 TFEU (hence unlawful), and ECJ
found manifest and grave breach. Question if there was causation.
ECJ held NO! Even if it were assumed that abolition of refunds exacerbated difficulties
encountered by applicants, difficulties were not sufficiently direct consequence of Councils
unlawful conduct (in making Regs)

Chain of causation: A must also show that chain was not broken by MS/applicant.
Where loss arises from MS independent/autonomous act, EU will NOT be liable. Chain of
causation will be broken. (Societe pour LExportation des Sucres v Comm, 1978)
But if MS unlawful act above was made possible because of illegal failure of Comm to
exercise supervisory powers, this failure by Comm will be deemed the cause of damage.
Indivs negligence/contributory negligence will suffice to defeat claim/reduce damages.
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Where indiv ought to have foreseen possibility of loss-causing events, damages can be
diminished or lost!

Damages

General objective: place victim in situation which would have been if the wrong had not been
committed. Losses must be certain, specific, proven and quantifiable to be recoverable
(Kampffmeyer, 1976)
Certain: but still possible to recover imminent damage foreseeable with sufficient certainty even
if the damage cannot yet be precisely assessed - pursue action ASAP to prevent even greater
damage - Kampffmeyer, 1976.
Specific: affects applicants interests in a special and individual way.
Proven: onus of proof is on injured party, to show injury was actually sustained.
Quantifiable: recoverable types of damages include:

1.
2.

Material loss stricto sensu - reduction in assets

Loss of profits (increase in those assets which would have happened had harmful act not
taken place): in principle, ECJ willing to give damages for this, as recognised in
Kampffmeyer. But in CNTA, 1974, it was held that lost profits are not recoverable if claim
is based on legit expectations, since that principle only protects against material losses
suffered by unexpected change in legal position, not profits which would have been made.

3.

-hypothetical nature of the exercise often entails certain degree of approximation.

Exceptionally, ECJ will award for non-material damages.
In Mulder, 1992: ECJ applied principle of duty to mitigate loss.
Quellmehl and Gritz, 1978: ECJ accepted in principle, that damages should NOT be recoverable if
loss has been passed on to consumers.
[Toth] (justly) criticised this - whether firm passes on costs depends on many variables. Also,
wrong in principle to require consumers, not EC institutions at fault, to bear losses.

Joint liability of EU and MSs

Procedural issues

Non-contractual liability of the Union cannot be decided by nat courts! Art 268 confers jurisdiction to
do so on ECJ, and art 274 implies that this is exclusive jurisdiction.
Substantive: instances where joint liability may arise

i.

Where Union took inadequate steps to prevent breach of Union law by national authorities
Lutticke v Comm, 1971: ECJ appeared to accept, in principle, that such an action was possible.
But considerable obstacles: doubtful whether Comm is under duty to bring art 258 enforcement
action against MS in breach of EU law!
But where Comm adopted a more formal measure, approving of illegal national action, it is
easier to establish liability!

Kampffmeyer v Comm, 1967: German govt had suspended certain zero-levy import
licences, as it was permitted to do only if there was threat of serious disturbance to the
market. Comm authorised and confirmed this!

ECJ held that Community, and not just German govt, can be held liable, where it
wrongfully authorises measure to be taken by a national body

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But where there are 2 actions brought (one against Germany before a German
court, the other against Community before ECJ), must avoid insufficient/excessive
compensation for the same damage! Hence, nat court should decide first.

Highlighted duty of mitigation.

[Oliver] criticised procedural aspects: requiring As to start with German courts implies an
assumption that German authorities were primarily liable, and Union bears only a residual
liability.

ii.

Where MS applied unlawful Union legislation

General rule: it is national intervention boards, not the Comm, which are responsible for the
application of the CAP. Action normally has to be commenced in the nat courts!
Haegeman v Comm, 1972: H (company) alleged loss suffered cos of charge imposed by
Council reg on import of wine, but levied by Belgian authorities.

ECJ held that such disputes have to be resolved by national authorities and following
practices laid down by the law of MSs. Issues of interpretation/validity of EU law which
arise can be brought before ECJ by prelim ref.

Question of ECs possible liability is linked to that of legality of levying the charge, with the
latter coming under the jurisdiction of national courts.
Haegeman decision can be criticised as levies went to Eu funds - sums were imposed by EU
and MSs merely collected money on its behalf.
But possible to proceed against EU directly if:

1.
2.
3.

Comm sends telex which is interpreted as instruction to national agency to act in

particular manner (no discretion in implementation left to national agency)
If no action could have been brought against any national authority, hence no remedy in
national courts!
Where substance of claim is that EU itself committed a tortious wrong against A (as in
Dietz v Comm, 1977)

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