State Liability - Lecture notes Eu law class notes PDF

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STATE LIABILITY: THE FRANCOVICH DOCTRINEWould the non-existence of a national remedy be an absolute barrier to the enforcement of EU law? No → ECJ proclaimed the existence of a European remedy for breaches of EU law; o The Court held that in certain situations the State was liable to compensate lo...

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STATE LIABILITY: THE FRANCOVICH DOCTRINE  Would the non-existence of a national remedy be an absolute barrier to the enforcement of EU law?  No → ECJ proclaimed the existence of a European remedy for breaches of EU law; o The Court held that in certain situations the State was liable to compensate losses caused by its violation of EU law – Francovich v Italy 1. The birth of the Francovich doctrine  8th of January 1990 – the Court received a series of preliminary questions from Italy;  Italy → failed to implement directive designed to protect employees in the event of their employer’s insolvency – it required national legislation guaranteeing the payment of outstanding wages;  The defendant (employed) brought proceedings against the Italian State to cover the unpaid wages → his employer had gone into insolvency;  Italy asked ECJ → whether the State itself would be obliged to cover the losses of employees; o Directive lacked direct effect → it had left the MS a broad discretion with regard to organization, operation and financing of the guarantee institutions; o The persons concerned cannot enforce those rights against the State before the national courts where no implementing measures are adopted within the prescribed period.  ECJ took a qualitative leap in the context of remedies → the right to reparation for such violations was a right founded DIRECTLY on EU law;  The action for State liability was an EU remedy that had to be made available in the national courts;  JUSTIFICATION: o Constitutional → the very nature of the EU Treaties and the general duty under Article 4(3) TEU; o More sophisticated justification added later → Brasserie du Pecheur  Brasserie du Pecheur SA v. Bundesrepublik Deutschland o The principle of State liability was rooted in the constitutional traditions common to the Member States and was equally recognized in the principle of Union liability for breaches of EU law; o Parallel State liability  Union liability for tortious acts of public authorities. 2. The three conditions for State liability  Francovich principle → dependent on the fulfillment of three conditions o The result prescribed by the directive should entail the grant of rights to individuals;

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o It should be possible to identify the content of those rights on the basis of the provisions of the directive; o The existence of a causal link between the breach of the State’s obligation and the loss and damage suffered by the injured persons;  ! DAMAGE. In Francovich → strict liability test o Any breach of an identifiable EU right would give rise to State liability – any loss that was caused by that breach could be claimed by the individual. BUT – the Court subsequently clarified → the Francovich test was to be confined to the specific context of a flagrant non-implementation of a EU Directive → BRASSERIE; Brasserie du Pecheur → more restrictive principle of State liability o State liability was to be confined to sufficiently serious breaches; o New liability test – three conditions.  The rule of law infringed must be intended to confer rights on individuals;  The breach must be sufficiently serious;  Direct causal link – the breach of the obligation resulting on the State  the damage sustained by the injured parties. Justification “sufficiently serious” o MS might enjoy a wide discretion, especially when exercising legislative powers; o Common constitutional tradition → limited liability of the legislature; o Special democratic legitimacy – where legislative functions are concerned, MS must not be hindered by the prospect of actions for damages; o No public liability for breaches of private rights, unless the institution concerned has manifestly and gravely disregarded the limits on the exercise of its powers;  The Court would balance the degree of discretion as well as the clarity of the norm breached. When is a breach sufficiently serious? o National executive fails to correctly apply EU law → where, at the time when it committed the infringement, the MS in question was not called upon to make any legislative choices and had only considerably reduced, or even no, discretion, the mere infringement of EU law may be sufficient to establish the existence of a sufficiently serious breach; o The less discretion → the less limited liability; Two alternatives – violation via legislative  executive branch o Executive failure → the threshold for establishing State liability is much lower than the liability threshold for legislative actions; o Incorrect application of a clear norm by the executive → AUTOMATIC liability; o Incorrect  Non-implementation by legislative→ the second could per se constitute a sufficiently serious breach....