The Rights of Private Parties and Member State Remedies and Procedural Rules—Part I: The Principles of Effectiveness and Non-Discrimination
Abstract and Keywords
Post-Factortame No. 1 has become an important law in the legal concept of effectiveness. Its development, as well as the principle of non-discrimination, is traced in this chapter. Several policy issues that arise from these developments are also elaborated. The debate between scholars goes on to determine the real role of individual rights and effective judicial protection when judges in the European court attempt to settle the differences of the laws of member states. The Court of Justice seems to find difficulty in persuading national courts because the Community provides individual rights that are protected by the same entity.
It of course remains to be seen how the third generation case law will feature in the overall jurisprudential tapestry. It is, in any event, a non-linear generation which builds on foundations of the previous generations. The underlying Leitmotif leading from the first generation to the second and from the second to the third is unquestionably the chameleon principle of effectiveness (effet utile). The degree and intensity with which the Court will choose to pursue the logic of its third generation course will depend to a considerable extent on the mood of the moment.
D Curtin and K Mortelmans, ‘Application and Enforcement of Community Law by the Member States: Actors in Search of a Third Generation Script’ in D Curtin and T Heukels (eds),
Institutional Dynamics of European Integration vol. II, 423 at 453.
The principle of effectiveness, particularly post-Factortame No 1, has generated a vast swathe of case law, all of which has been concerned with determining the acceptable scale of Member State attenuation, via national sanctions and procedural rules, of Community law rights. The evolution of the law post-Factortame No 1 will be dealt with in this chapter by reference to specific remedial areas.This approach has been selected inanattempttoprovidea clear exposition of a complex set of legal developments. In the contextof the principle of effectiveness, important changes have occurred within the fields of national limitation periods (which has included time-limits for instituting proceedings, temporal restrictions on arrears payments of sums due under Community law, and temporal obstacles to the raising of new arguments at later stages in litigation), unjust enrichment, rules of evidence, interim relief, and the Johnston right to judicial review. Further, (p. 111 ) the law applicable to Member States on recovery of sums unlawfully paid aid to individuals will also be canvassed, given that it too has also been subject to evolution. It is also an area in which the commitment of the Court of Justice to ‘individual rights’ might be questioned, given that the application of the effet utile principle has generally resulted in a duty on individuals to repay unlawfully paid sums, even when it has been argued that such repayment infringes their legitimate expectations.1
The section on the effectiveness rule will also illustrate the unequivocal demise of the Butterboats ‘no new national remedies’ principle, and will canvass some of the miscellaneous rules which have been alleged before the Court of Justice to infringe the principle of effectiveness. They include a national rule pertaining to ‘excusable error’, the extent to which interest is payable on sums due but not paid, costs awards, and whether Member States are obliged, due to the acquis on national remedies, to revoke or suspend planning permission projects that should have been assessed for their environmental effects under the EAD, and the duty to provide reasons.
In the process of elaborating these developments, it will be illustrated that there has been a further shift in constitutional authority away from national tribunals, and towards the Court of Justice, with respect to the designation of remedies and procedures serving to correct infraction of Community law. This development, however, has fallen well short of assuming a regular pattern, and has generated considerable confusion regarding the types of national rules which will be declared incompatible with European Court guidelines on remedies and procedures.2 While one commentator has described the ‘current case law’ as consisting of a ‘definite retreat away from the idea of positive harmonization’,3 the uncertainty generated by at least a decade of incursive case law was perhaps the prompt for the same commentator to add the caveat that ‘it would be wrong to overstate the Court's shift in policy’ away from close review of Member State remedies and procedural rules.4
The results of the case law reveal its fundamentally intrusive nature. It is worth noting, for example, that despite the ‘retreat’ from the 1990 Emmott time-limits case that occurred immediately after its elaboration, of 11 leading cases decided in the last five years concerning the compatibility of temporal restrictions under national law with the principle of effectiveness,5 eight have resulted in judgments (p. 112 ) against the application of the national restriction,6 while one of them left a question on this point for the referring court to decide.7 The same pattern is discernable in other fields. National judges appear to remain precluded from relying on national rules on unjust enrichment if to do so would frustrate the enforcement of a Directive,8 while the application of national rules on unjust enrichment is subject to heavy caveats in the context of cases involving recovery of unlawfully levied charges.9 The rules on recovery of sums paid to individuals in breach of Community law continue to be the subject of intimate regulation by Court of Justice case law, particularly, but not exclusively, in the context of state aids.10 The right to an effective judicial remedy has led to close scrutiny of the scope of judicial review available at national level,11 resulting on at least four recent occasions, and three of which occurred in the last three years, in a finding that national judicial review fell short of the Community standard.12 Further, both interim relief,13 and the payment of interest under national law, when violation of individual rights has been established, are also showing signs of more rigorous governance by Court crafted principles.14 These developments, (p. 113 ) combined with the now highly evolved rules on State liability for damages, which will be canvassed in chapter 5, demonstrate that legal uncertainty, generating continuing rafts of references to the Luxembourg court from national tribunals, is destined to be the hallmark of this area of the law. And contrary to what has been asserted elsewhere, ‘incursion’, rather than ‘restraint’, remains the dominant theme. The ‘working partnership between the ECJ and the national courts’,15 that has been so central to the constitutionalization process, appears to continue an upward spiral toward the former, at least in the field of review of national sanctions and procedural rules.16
Two further, and final, developments impacting on Member State remedies will be dealt with in this chapter. The first is the principle of non-discrimination, the second plank of Court of Justice case law or remedies and procedures. It is receiving increasing attention in the case law, and has also, particularly in the last few years, required disapplication of discriminatory national remedial rules.17 Secondly chapter 4 will close with a discussion of some of the key policy issues which have surrounded the expansion of Court of Justice jurisdiction within the realm of Member State remedies and procedures. This will entail, among other themes, examining the role of ‘individual rights’ and ‘effective judicial protection’ as both by-products and facilitators of the Court's attempts to harmonise Member State laws in this field.18
B. National Time-Limits for Bringing Proceedings and other Temporal Restrictions on the Enforcement of Community Law
The autonomy of national courts to apply domestic time-limits in litigation concerning Community law has been subject to significant and complex alteration in Court of Justice rulings. Indeed, considerable damage to legal certainty was generated by the Court's abandonment, in the Emmott case, of its traditional Comet/Rewe deference to national time-limits. However, the cases have gone full circle, and it is now settled that, despite the breadth of the ruling in Emmott, reasonable time-limits for bringing proceedings should be applied to claims based on Community law, so long as there is no infraction of the principle of nondiscrimination, and provided that the Member State Government concerned has not discouraged the applicant from bringing proceedings in good time.19
(p. 114 ) Yet these principles have in turn spawned new and complex developments. What yardsticks will be used to determine if a time-limit is ‘reasonable’?20 In what circumstances will ‘conduct’ of the party against whom enforcement of EC law is sought be considered to have amounted to discouragement?21 And how does this relate to the general principle, also to be detailed in this chapter, which precludes Member States from promulgating measures deliberately designed to diminish the impact of Court of Justice rulings at national level? Further, the case law remains as unpredictably volatile as it was in the early 1990s. For example, relatively recently, the Court of Justice ruled that inadequate transitional arrangements, when a time-limit is reduced, may render a Community law right impossible in practice or excessively difficult to enforce.22
The Emmott principle was never applied to the neighbouring areas of domestic rules restricting in arrears payment of sums unlawfully withheld from individuals in breach of Community law. However, the case law in this ‘sub-field’ has also generated unpredictable results, and exceptions to general rules that the Court of Justice has formulated. These have broadly matched those that have emerged in the context of time-limits for bringing proceedings. They will be examined after a detailed analysis of the Emmott ruling, in order to lay the foundation for detailed examination of post-Emmott developments.
A further, highly checkered, area of the law is found in Court of Justice review of temporal restrictions on the raising of new arguments on appeal. Restrictions of this kind are part of the legal traditions common to the Member States. Yet, the EC principles governing this field are so open-ended, that it will be almost impossible to determine in advance whether the national restriction in question offends the principle of effectiveness. These will be examined in the final part of this section.
1. The Ruling in Emmott and National Time-Limits for Bringing Proceedings
The first important development unfolded in the Emmott case, in which the Court of Justice drastically pared down the entitlement of national judges to apply domestic limitation periods to defeat claims based on Community law, although (p. 115 ) this development was not to last. In July 1989 Mrs Emmott brought an action in the Irish courts claiming retroactive payment of benefits for dependent children under Article 4(1) of Directive 79/7 EEC on the progressive implementation of the principle of equal treatment for men and women in matters of social security.23 Mrs Emmott placed reliance on a 1987 Court of Justice ruling, in which it was confirmed that Article 4(1) precluded the application of national laws which provide different rules for women, than those that are applied to men, in the calculation of social security benefits.24 The main barriers to Mrs Emmott's claim were the decisions in Comet25 and Rewe,26 which affirmed that an interpretative ruling from the Court of Justice confirming the direct effect of a given measure did not, in ordinary circumstances, re-open limitation periods set by national law. It was argued by the Irish Minister for Social Security and the Attorney General, the defendants in Emmott, that a three-month deadline set by Irish law should apply,27 and that time for bringing suit began to run from 23 December 1984. If this contention had been accepted, Mrs Emmott's claim would have failed for delay.28
The Court of Justice commenced the substantive part of its ruling by noting the autonomy of the domestic legal system in each Member State with regard to the procedural conditions for the enforcement of Community law rights, subject to the principles of non-discrimination and effectiveness.29 However, in a passage that added a new dimension to the right to an effective remedy, the Court noted that ‘account must nevertheless be taken of the particular nature of directives’.30 The European Court cited its ruling in the von Colson case in affirming that the ‘choice of form and methods’ discretion of national authorities in implementing Directives, which is contained in Article 249 (Article 189) of the EEC Treaty, is subject to the obligation on Member States to take all measures to ensure that the Directive is fully effective, in accordance with the objective it pursues.31 It was concluded that until the Directive had been implemented in national law, individuals would be uncertain as to the extent of their rights, and that a national limitation period could not begin to run before a Directive was properly transposed.32
(p. 116 ) The Emmott ruling obviously carried huge potential to multiply the consequences flowing from the failure of Member States to properly implement Directives. In effect, it meant that any and all claims brought by applicants pursuant to an unimplemented Directive would be permissible, even if they were brought years after the relevant loss or damage was sustained; the only temporal barrier to arrest such claims would be the date of entry into force of the relevant Directive. Especially in the context of actions for damages, and repayment of charges levied in breach of a Directive, Member States stood to suffer exaggerated consequences for their unlawful conduct if Community law obliged national judges to set aside domestic limitation periods.33
The importance of the change in the law introduced in the Emmott case becomes evident when an examination is made of an argument which was not adopted by the European Court. The Commission principally based its submissions on the comportment of the Irish Minister for Social Welfare, who entered into correspondence with the applicant which could have discouraged her from bringing proceedings in good time.34 The Minister had advised Mrs Emmott that no decision would be made on her application until a ruling had been issued in a pending case which was to address issues similar to those forming the subject matter of Mrs Emmott's claim. The Commission implied that conduct on the part of a national authority that made it difficult for a claimant to satisfy a limitation period may breach the requirement that Community law is not impossible in practice to enforce.35
The Court of Justice could have avoided mutation in the division of authority between itself and the national courts by distinguishing Emmott in the manner suggested by the Commission. However, the Commission's arguments were not even alluded to in the judgment of the European Court. Moreover, the Court of Justice ignored principles formulated in the Comet and Rewe cases, which had ensured that, in ordinary circumstances, limitation periods provided by national law should be applied to claims based on Community law, even if the nature and scope of the rights in issue was only made clear in case law post-dating the entry into force of the relevant Community measure. In effect, the Comet and Rewe rule had hitherto prevented large numbers of claims arising after a ruling from the Court of Justice confirming that national law was incompatible with a directly effective EC measure.36
(p. 117 ) As will be illustrated in the next section, the ‘conduct’ factor on which the Commission invited the Court to base its ruling in Emmott was later adopted as a principle of law in cases concerning both time-limits for bringing proceedings, and temporal restrictions on payments due. Yet, there remains scope for the setting aside of national time-limits for instituting a course of action if they are not ‘reasonable’. This has meant that any alterations to time-limits for bringing proceedings must contain adequate transitional measures to allow individuals affected to fully assert their rights, otherwise they will breach the principle of effectiveness.37
2. National Time-Limits for Bringing Proceedings and the Principle of Effectiveness: Subsequent Developments
A most useful cluster of cases on the Emmott rule, addressing the scope of its application when Member States have failed to adequately implement a Directive, were generated by questions referred from national courts on the interpretation of Council Directive 69/335/EEC of 17 July 1969 concerning indirect taxes on the raising of capital.38 The Fantask case39 was the first of a series of rulings on this topic which shed light on the compatibility of national time-limits for bringing proceedings when individuals seek enforcement of rights derived from Directives.
Fantask and a number of other Danish companies brought an action before a national court, against the Industriministeriet (Erhvervsministeriet) [Danish Ministry of Trade] to recover charges levied under Danish law between 1983 and 1992 concerning registration of new public and private limited companies, and on registration of an increase in their capital. It was argued by Fantask that a basic charge imposed at the point of registration was contrary to Articles 10 and 12 of Directive 69/335,40 and by both Fantask and the other entities bringing suit that a supplementary charge based on the nominal value of the capital involved in the establishment or capital increase of a company (as the case may be), breached these provisions. They argued that in the light, in particular, of the judgment of the Court of Justice in Joined Cases C–71/91 and C–178/91 Ponente Carni and Cispadana Costruzioni v Amministrazione delle Finanze dello Stato,41 that Danish law breached Article 10 of Directive 69/335, which prohibits Member States from levying indirect taxes with the same characteristics as capital duty. It was further argued that the Danish measures could not be justified by Article 12(1)(e) of the Directive, which allowed Member States, notwithstanding other prohibitions laid down in the Directive, to charge ‘duties paid by way of fees or dues’.
(p. 118 ) The Court of Justice in Fantask agreed that both Articles 10 and 12(1)(e) vested individuals with rights that could be relied on in national law. More significant, however, in terms of the broader relationship between Community and national law, were the findings of the Court of Justice concerning Member State remedies and procedural rules. First, it had been argued by the Danish Government that any charges that were levied in breach of the Directive were not repayable due to the notion of ‘excusable error’ in Danish law. The charges were levied over a long period (in the case of the applicants over ten years) without the authorities or the entities concerned being aware that they were unlawful. Second, it was contended that a national time-limit of five years for bringing proceedings, which a number of the applicants had failed to meet, barred their right to recovery. The outcome of the first of these arguments will be dealt with in Part G below. With respect to national limitation periods the Court of Justice recalled that, in the absence of Community rules governing the matter, such claims were to be brought under the substantive and procedural conditions laid down by the national law of the Member States. These conditions in turn, however, had to be no less favourable than those governing similar domestic claims, and nor could they render virtually impossible or excessively difficult the exercise of rights conferred by Community law.42
The Court of Justice held that, in the interests of legal certainty, which protect both the taxpayer and the authority concerned, Member States are allowed to set reasonable time-limits for bringing proceedings, and that such time-limits remain applicable even if a Directive has not been properly implemented by a Member State within the implementation period laid down in the Directive. It was concluded that a five-year time-limit was reasonable, and did not render Community law impossible in practice or excessively difficult to enforce.43 It was also observed that there had been no breach of the principle of non-discrimination, in that the five-year time-limit applied without distinction to actions based on Community law and those based on national law. In addition, the Court of Justice distinguished the Emmott case,44 by observing that the applicant in Emmott was deprived, by virtue of a national time-limit, of any opportunity to rely on individual rights paid down in an unimplemented Directive, which explained why the time-limit in that case had to be set aside.45
(p. 119 ) The interests of legal certainty, I would argue, would have been better served in Fantask by more detailed elaboration by the Court of Justice on why Emmott was distinguishable from Fantask. In this regard, the view of former Advocate General Jacobs is most instructive. The Advocate General observed that the applicant in Emmott had been actively discouraged by government authorities from bringing her claim in good time, and concluded that the ruling stood for the proposition that ‘a Member State cannot rely on a limitation period where it is in default both in failure to implement a directive and in obstructing the exercise of a judicial remedy in reliance upon it, or perhaps where the delay in exercising the remedy is in some other way due to the conduct of the national authorities’.46 However, the Court of Justice made a more open-ended ruling by holding in Fantask that national time-limits are lawful, provided that they do not result in depriving applicants of ‘any opportunity whatever’ to enforce individual rights contained in Directives. Later, however, it adopted exactly this approach.
2.2 Ansaldo Energia, Edis, Spac and Santex
A welcome feature, therefore, of three subsequent cases concerning Directive 69/335 was express reference to conduct of national authorities which might have discouraged the applicant. The rulings of the Court of Justice in Ansaldo Energia, Edis and Spac were all elaborated on 15 September 1998, and all concerned barriers operating under Italian law that prevented the applicants from reclaiming charges levied by the Italian state in breach of Directive 69/335. An argument that was common to all three cases concerned the Emmott ruling, and more particularly the absence of authority in the hands of the Italian Government to rely on failure of the applicants to comply with a three-year national time-limit for bringing proceedings. The Court of Justice, however, in these cases went further than had done did in its ruling in Fantask, and made the following assertion in support of the application of domestic time-limits for bringing of proceedings.
(p. 120 ) Thus the view of former Advocate General Jacobs in Fantask now reflects unequivocally the current state of the law on national time-limits for bringing proceedings. This is confirmed by the Court of Justice in Case C–327/00 Santex SpA v Unità Socio Sanitaria Locale n. 42. di Pavia.48 There, a contracting authority had not notified a tenderer that it had taken an ‘exclusion decision’ which had resulted in the tenderer's elimination from a contract award procedure under public procurement Directives, until after the expiry of the period for its challenge. Further, prior to the expiry of the period, the tenderer had indicated to the contracting authority that it would not take into account economic conditions, namely, the fact that the tenderer had not achieved a certain turnover over the last three financial years, that might lead to its exclusion at the tender admission stage. It was therefore held that the ‘changing conduct of the contracting authority may be considered, in view of a limitation period, to have rendered excessively difficult the exercise by the harmed tenderer of the rights conferred on him by Community law’.49
Moreover, having regard to the documents before the Court and the arguments presented at the hearing, it does not appear that the conduct of the Italian authorities, in conjunction with the existence of the contested time-limit, had the effect, in this case, as it did in Emmott, of depriving the plaintiff company of any opportunity of enforcing its rights before the national courts.47
Santex also sheds some light on the test for determining if a time-limit is ‘reasonable’. The Court of Justice applied, in the context of time-limits for bringing proceedings, the general principle that, in deciding whether the principle of effectiveness has been breached, ‘each case which raises the question whether a national procedural provision renders application of Community law impossible or excessively difficult must be analysed by reference, in particular, to the role of that provision in the procedure, its progress and its special features, viewed as a whole’.50 It was for this reason that the Court examined the ‘particular circumstances of the case’, which entailed close scrutiny of the conduct of the party seeking to rely on the expired time-limit in considering whether effectiveness requirements had been breached.51 In the past, the Court of Justice had been somewhat enigmatic in declaring national time-limits ‘reasonable’ or otherwise. In Fantask itself no explanation was offered for the ‘reasonableness’ of a five-year limitation period.
An equally enigmatic ruling was issued in the Preston case.52 There the Court held that the time-limit for enforcing equal treatment law could not begin to run from the end of each individual (temporary) employment contract, but rather had to commence from the end of the parties' overall employment relationship. It merely observed that legal certainty also required that ‘it be possible to fix precisely the starting point of a limitation period, the fact nevertheless remains (p. 121 ) that, in the case of successive short-term contracts…setting the starting point of the limitation period at the end of each contract renders the exercise of the right conferred by Article 119 of the Treaty excessively difficult.’53 No criteria were set for reaching this conclusion.
2.3 Confining the Emmott Principle to the Enforcement of Directives
Further suggestion has been made for modification of the Emmott rule. Both the opinions of two of the Court's Advocates General, and a limited number of cases from the Court of Justice itself, tended to suggest that the Emmott principle was also grounded on the specific characteristics of Directives. This implied that any principle that Emmott stood for should not be extended to other types of Community rules that can vest individuals with rights, such as Decisions, Regulations, and directly effective Treaty Articles. This might have meant that, with respect to breach of these rules, the old Comet/Rowe rule on time-limits for bringing proceedings would continue to apply. For example, former Advocate General Jacobs, in the Opinion covering Haahr Petroleum, Texaco and GT-Link,54 argued, in the context of breach by a Member State of Article 90 of the EC Treaty, that none of the factors that might render the exercise of rights derived from Directives impossible in practice or excessively difficult had any relevance to claims based on Article 90, given that, as the Court of Justice had noted in the Emmott case itself that its ruling was based on ‘the particular nature of directives’.55 The former Advocate General took the view that ‘there can be no question’ of applicants seeking repayment of charges levied in breach of Article 90 ‘having been unable to ascertain the extent of their rights, since those rights derive from a Treaty provision which dates from 1957, which was unequivocally declared by the Court to be of direct effect in 1966, and which was applied in Denmark—taking precedence over national rules to the contrary—since its accession on 1 January 1973’.56 Similarly, Advocate General van Gerven in Fisscher,57 argued, in the context of breach of Article 141 by a private sector actor, that the Emmott case was not a ‘relevant precedent’58 because it was based on the principle of venire contra factum proprium or nemo auditur. In horizontal situations concerning private parties, the culpability of a national government in failing to respect Community law did not arise, so the ‘classic’ deference to national procedural rules should apply.59
The Court of Justice echoed these views in its rulings in Texaco and Haahr Petroleum. It concluded that one of the factors on which the Emmott case was (p. 122 ) based was the ‘particular nature of Directives’,60 and that since the reimbursement in question was not based on incorrect transposition of a Directive, but ‘rather on the effect of a provision of the Treaty’ then reasonable national limitation periods were not contrary to Community law.61
However, these findings are not consistent with subsequent case law. So much can be distilled from the ruling in Aprile II, in which the paragraph reproduced above concerning the role of misconduct by the state also appeared,62 even though the case concerned a charge levied by the Italian Government in breach of provisions of the EC Treaty banning charges equivalent to customs duties, and not infraction of an EC Directive. Further, the entitlement of an individual to invoke interference by the wrong-doer in order to overcome obstructive national procedural rules was spelled out in the ruling in Case C-326/96 Levez,63 in the context of restrictions on in arrears payments in a horizontal case concerning directly effective Treaty Articles. It would seem therefore that the ‘conduct’ principle is equally applicable to cases concerning breach of EC rules other than Directives.
2.4 Grundig: Inadequate Transitional Measures as a Breach of the Principle of Effectiveness
Yet, the post-Emmott rules can still lead to disapplication of national time-limits for bringing proceedings, even in the absence of discouraging conduct. Indeed, Grundig may have prized open the clasp which the Court of Justice has placed around the Emmott rule. It established that, if reductions on time-limits for bringing proceedings are not accompanied by transitional measures generous enough to allow individuals to take advantage of a previous, but longer, time-limit, the breach of the principle of effet utile will result.
The most curious element of the ruling of the Court of Justice in Grundig, lay in the fact that it concerned the interpretation of the same law that had been reviewed by the Court of Justice in the cases of Aprile II64 and Dilexport.65 Article 29(1) of Law no 248 of 29 December 1990 laying down provisions for compliance with the obligations arising from Italy's membership under the European Communities provided that:
(p. 123 ) Article 91 of the consolidated customs law had provided that applications for reimbursement of taxes unduly paid need be made within five years of date of payment. Both measures were thus an exception to the ten-year limitation period laid down in Article 2946 of the Italian Civil Code.
The five year time-limit laid down in Article 91 of the Consolidated Customs Law…shall be deemed to apply to all claims and actions brought for the refund of sums paid in connection with customs operations. That period [shall be reduced] to three years as from the 90th day after the entry into force of this law.
In Aprile II and Dilexport the Court of Justice had ruled that the three-year time-limit would not infringe Community law, provided that the principles of effectiveness and non-discrimination were respected.66 Thus, there was no objection in principle to the three-year time-limit set by Article 29(1).67 Advocate General Ruiz Jarabo Colomer, in his Opinion of 14 March 2002 in Grundig, expressed the view that the reply is implicit in an extensive body of the judgments of the Court of Justice and therefore could perfectly well have been given using the quicker and more efficient route under Article 104(3) of the Rules of Procedure.68 On the basis of this past case law, the Advocate General concluded as follows:
The heart of the rationale for the reference in Grundig were two concerns of the Italian court seised of the dispute. First, it was of the view that the Court of Justice in Aprile II and Dilexport had misapprehended the operation of Article 29(1) of Law no 248, assuming that it did not apply to charges wrongly paid prior to the entry into force of the three-year period, and with respect to which legal challenge had not been brought. In fact, the Italian Constitutional court had reached the opposite conclusion; ‘it must…apply to actions not yet commenced by that date, even if such actions relate to sums paid prior thereto, and must be calculated from the date when the sums were paid.’70 The national referring court harboured these concerns because the Court of Justice had held as follows:
Community law does not preclude the application of a national provision establishing a transitional period for the entry into force of a new time-limit, shorter than that existing until that time, for persons entitled to reimbursement of sums paid but not due to bring the relevant actions, based on Community law and arising as the result of payments made before that national provision entered into force, provided that the transitional period, by reason of its length and of the other procedural and substantive circumstances of fact and law present in the national legal order, does not make it virtually impossible or excessively difficult to bring the actions in question.69
(p. 124 ) Second, the national referring court was concerned whether the transitional period of 90 days, in which litigants were still entitled to invoke the five-year period, was compatible with Community law. The implication was that this was too brief.72 The judgments in Aprile II and Dilexport, were not centred in this time-limit, but rather the new three-year time-limit.
the provision at issue sets a time-limit which is sufficient to guarantee the effectiveness of the right to reimbursement. It is clear from the written observations and oral arguments presented to the court that the Italian courts, including the Corte suprema di cassazione itself, have interpreted that provision as allowing proceedings to be instituted within the three years following its entry into force. In those circumstances, that provision cannot be regarded as having retroactive effect.71
The Court of Justice in Grundig Italiana reached a conclusion different from that of the Advocate General. The Court restated its classical case law to the effect that it is compatible with Community law for Member States to lay down reasonable time-limits for bringing proceedings ‘in the interests of legal certainty which protects both the taxpayer and the administration concerned’.73 The Court observed that a three-year time-limit reckoned from the date of the contested payment appeared reasonable.74
Nor did the principle of effectiveness present an absolute bar to the retroactive application of a new, and shorter, period;75 however, this was held by the Court of Justice to be subject to the following important caveat:
It can be seen, therefore, that the Court of Justice took a broad contextual approach. It was influenced by the fact that the change in time-limit was retroactive; the fact that litigants would be required to prepare their action in haste; and the length of the change in time-limits, in concluding that the principle of effectiveness had been breached. The court then, rather than leaving the consequences to the national court, supplied the national court with a six-month minimally acceptable period.
…whilst national legislation reducing the period within which repayment of sums collected in breach of Community law may be sought is not incompatible with the principle of effectiveness, this is subject to the condition not only that the new limitation period is reasonable but also that the new legislation includes transitional arrangements allowing an adequate period after the enactment of the legislation for lodging claims for repayment which persons were entitled to submit under the original legislation. Such transitional arrangements are necessary where the immediate application to those claims of a limitation period shorter than that which was previously in force would have the effect of retroactively depriving some individuals of their right to repayment, or of allowing them too short a period for asserting that right (Case C–62/00 Marks & Spencer  ECR I-6325, paragraph 38).
Thus, the transitional period must be sufficient to allow taxpayers who initially thought that the old period for bringing proceedings was available to them a reasonable period of time to assert their right of recovery in the event that, under the new rules, they would already be out of time. In any event, they must not be compelled to prepare their action with the haste imposed by an obligation to act in circumstances of urgency unrelated to the time-limit on which they could initially count.
A transitional period of 90 days prior to the retroactive application of a period of three years for initiating proceedings in place of a ten- or five-year period is clearly insufficient. If an initial period of five years is taken as a reference, 90 days leaves taxpayers whose rights accrued approximately three years earlier in a position of having to act within three months when they had thought that almost another two years were still available.
Where a period often or five years for initiating proceedings is reduced to three years, the minimum transitional period required to ensure that rights conferred by Community law can be effectively exercised and that normally diligent taxpayers can familiarise (p. 125 ) themselves with the new regime and prepare and commence proceedings in circumstances which do not compromise their chances of success can be reasonably assessed at six months.76
Grundig Italiana can be distinguished from Aprile II and Dilexport in that different issues were raised in the order for reference. While all three cases concerned interpretation of the same provision of Italian law, neither Aprile II nor Dilexport featured questions on the adequacy of the transitional 90-day time-limit. When subjected to close scrutiny, it was found to breach the principle of effectiveness.77 It is perhaps more surprising that the question of crafting an appropriate time-limit was not left to the national court, but was rather imposed by the Court of Justice, as part of its ruling on the requirements of effectiveness.
2.5 The Deville Prohibition on the Promulgation by Member States of Measures Specifically Designed to Frustrate Community Law
It is important to recall, however, that the entitlement of Member States to adjust time-limits for bringing proceedings, to protect legal certainty and the taxpayers concerned, is subject to a further caveat, aside from the principles of effectiveness and non- discrimination. As was mentioned in chapter 3, under the Deville principle, Member States are precluded from adopting procedural rules which specifically reduce the possibility of recovery of illegally levied charges subsequent to a judgment from the Court of Justice confirming that a domestic measure was incompatible with Community law.78
The subtlety of the distinction between this principle and those applicable in examining the reasonableness of adjustments to time-limits, is exemplified by the fact that in both Dilexport and Aprile II the Court of Justice considered whether the Italian authorities had altered the limitation period with a view to frustrating Community law rights, but concluded that, given the measures concerned applied (p. 126 ) to all unlawfully levied customs, and a whole range of internal taxes and charges, the legislation at issue could not be regarded as intended to specifically limit the consequences of the findings made by the Court in its judgments.79
More light was later cast on how to determine whether a change to Member State law violated the Deville prohibition. This resulted from the combined effects of Case C-437/97 EKW and Wein & Co80 and Case C-147/01 Weber's Wine World?81 In EKW the Court of Justice held that a duty imposed under Austrian law on alcoholic beverages was incompatible with an EC VAT Directive. One week prior to this, the Land of Vienna made an alteration to the Vienna Tax Code, by providing retroactively,82 in amended Article 185(3) of the Code, that there would be no entitlement to repayment on unlawfully levied taxes where the burden had been passed on to others. The Land of Vienna, and other Lander, had been concerned by an Opinion of Advocate General Saggio of 1 July 1999, in which he had found the taxes impugned incompatible with EC law. Paragraph 185(3) was preceded by much debate, during which time reference was made to the Opinion of the Advocate General, and the disastrous consequences for the finances of the Austrian municipalities which would result if the Court of Justice declared the duty on beverages incompatible with Community law.
When the Court of Justice issued its ruling in EKW, it limited the temporal effects of the judgment, by precluding possibility of repayment for those who had not launched a challenge to the charges prior to the date of the judgment. The claimants, in the case that became Weber's Wine World83 challenged for recovery of the taxes it had paid prior to that date. However the Austrian tax authorities, due to paragraph 185(3), rejected the claim for repayment with respect to duties that had already been passed on.
The Court of Justice concluded that the ‘purpose’ of paragraph 185(3) was to preclude the effects of the EKW judgment, should it, without limiting temporal effects, deem the duty on alcoholic beverages contrary to Community law.84 However, that was not enough to determine whether the paragraph sought ‘specifically to reduce the possibilities of bringing proceedings for repayment of the duty on alcoholic drinks which had been levied but not due’.85 The Court observed that the national referring court had emphasized that the measure in issue did not refer solely to the payment of duties which were levied in breach of EC law, and the Court also noted that the parties, the Austrian and Italian Governments, and (p. 127 ) the Commission had made different submissions on this point. It was therefore concluded that ‘it is not for the Court to resolve a dispute relating exclusively to the interpretation of national law: that task is solely a matter for the national court’.86
Weber's Wine World, and the death of post-Deville decisions in which a Member State has been found in violation of it, illustrates that the threshold for finding new procedural rules in breach of the Deville prohibition is set very high. A ‘purpose’ of precluding the effects of an individual Court of Justice judgment is not enough; a ‘specific’ aim of reducing the possibility of bringing a successful claim is what must be shown. Further, the ruling in Weber shows that this is, in any event, a question that in most circumstances will be best determined by national judges.87
The Deville threshold is therefore more difficult to meet than the Emmott‘conduct’ rule, given that the latter case law has thus far focused on confusing ‘effects’ resulting from the wrong-doers actions, and has fallen short of requiring a specific intention to frustrate Community law rights.88 A search for deliberate or premeditated action of the Deville kind could also place the Court of Justice in an awkward position. Thus, in the Berlusconi case, discussed in chapter 2, neither the Advocate General nor the Court of Justice considered whether an Italian law which had reduced the criminal liability of the Prime Minister, and others, under the Company Law Directives, violated the Deville rule. From one perspective, Berslusconi might have been apprehended as a case concerning conflict between the Arcaro89 prohibition on recourse to aggravation of criminal liability by reference to a Directive, and the Deville rule, given that a change in Italian law had benefited a politician accused of breaching obligations enshrined in an EC Directive. The absence of reference to Deville in Berlsuconi perhaps illustrates that there may be good policy reasons to refrain from investigating whether senior EU law makers have acted with the aim prescribed in Weber's Wine World.
3. Narrowing the Emmott Rule: Restrictions on Retroactive Effect in the Context of Payments Due to Individuals
The Court of Justice never applied its Emmott ruling to the context of temporal restrictions on payments due to individuals. In the ordinary course of events, national limits on the retroactive payment of sums due to individuals will be compatible with Community law.90 However, the same exceptions have been extended to temporal restrictions on repayment of sums due as have been applied (p. 128 ) to national time-limits for bringing proceedings. That is, retroactive limits on sums claimable will breach the principle of effectiveness if (i) they are not reasonable;91 (ii) in the case of new legislation restricting retroactive periods for payment, failure to include transitional arrangements allowing for entitled persons to submit claims under the original time-limit;92 and (iii) the conduct of the wrong-doer has impacted on the time-frame for the operation of in arrears payments.93
However, as will be illustrated by the Maggorian case, the determination of whether a temporal restriction wholly precludes application of EC measures (and is therefore unlawful) or merely narrows rights of access to judicial process in a manner that can be accommodated within European Court guidelines on remedies and procedures, is not entirely straightforward. It appears to require a case-by-case analysis. Thus legal certainty problems are as pervasive in this area of the time-limits case law as they are in others.
Case C–338/91 H Steenhorst-Neerings v Bestuurvan de Bedrijfsvereniging voor Detailhandel en Huisvrouwen94 concerned interpretation of the Social Security Directive. Prior to 1979, a Dutch law concerning incapacity for work entitled men and unmarried women to benefits after their first year of incapacity for work, which would be payable up to the age of 65. In 1979 a new law on equal treatment extended that entitlement to married women, with the exception of married women whose incapacity for work arose before 1 October 1975. By several judgments issued in 1988, the Dutch social security court held that this latter measure constituted discrimination on grounds of sex, given that it excluded married woman from disability benefits under conditions in which they would have been available to men and single women. The Dutch Court held that from 1 January 1980, the date on which the Dutch equal treatment law came into force, married women whose incapacity for work arose before 1 October 1975 were also entitled to disability benefits.
On the strength of these rulings, in May 1988 Mrs Steenhorst-Neerings applied for disability benefits, but a temporal restriction obstructed her claim. Under Article 25(2) of the General Law on Incapacity for Work, Mrs Steenhorst-Neerings was only entitled to payments 12 months in arrears from the date of making her claim, that is from 17 May 1987. In order to evade this problem, Mrs Steenhorst-Neerings invoked the EC Social Security Directive.95 She argued that the Directive also prohibited discrimination on grounds of sex in social security matters, and that she was entitled to receive disability benefits from 23 December 1984, the date of entry into force of the Directive. She further contended that the Emmott (p. 129 ) case precluded the Dutch Government from relying on temporal restrictions that would ordinarily apply under national law.
Advocate General Darmon viewed Mrs Steenhorst-Neerings' case as being entirely analogous with the Emmott decision, and argued that she should receive payments from the date of entry into force of the Social Security Directive. He rejected arguments to the effect that disapplication of national time-limits would vest an individual with a right to lodge claims for pensions many years after any discrimination arose, and did not agree that, in any event, a factor of this kind should be determinative of the Courts decision. Advocate General Darmon asserted that:
Further, the Advocate General noted that the question referred under Article 234 (Article 177) in Emmott was not confined to the application of national limitation periods. He argued that the national referring Court sought guidance on whether national procedural rules in general, and ‘in particular rules relating to time-limits (…) such as to restrict or refuse such compensation’ would be compatible with Community law.97 From this premise he concluded as follows:
such an eventuality could only be the result of prolonged failure by the State to implement the directive in national law, and it would be unfair to require the beneficiary of rights deriving from a Community measure to suffer the consequences of such failure because of the expiry of internal procedural time-limits.96
The Court of Justice, however, rejected these arguments, and formulated a ruling which minimised the consequences flowing from the Emmott case. The Court concluded that the Emmott decision only related to the rights of individuals to bring proceedings before national courts, while the rule under review in Steenhorst merely limited the retroactive effect of claims made.99 The Court of Justice in Steenhorst also appeared to be influenced by the reasoning forwarded by the Commission in the Emmott case. It pointed out that the administrative authorities responsible for dealing with Mrs Emmott's claim had declined to adjudicate on it due to pending proceedings. This was not the case with respect to Mrs Steenhorst's application for disability benefits.100 In deciding that the relevant Dutch measure was compatible with Community law, the Court reasoned as follows:
where a directive creates rights for individuals, they cannot be denied access to those rights and the benefit of the rights cannot be restricted by reason of time-limits for bringing proceedings under domestic law if the directive had not been implemented in national law at the date of an individual's claim.98
…the aim of the rule restricting the retroactive effect of claims for benefits for incapacity for work is quite different from that of a rule imposing mandatory time-limits for bringing (p. 130 ) proceedings. As the Government of the Netherlands and the defendant in the main proceedings explained in their written observations, the first type of rule…serves to ensure sound administration. It also reflects the need to preserve financial balance in a scheme in which claims submitted by insured persons in the course of a year must in principle be covered by the contributions collected during that same year.101
3.2 Johnson No 2
Soon after the ruling in the Steenhorst case, the Court of Justice confirmed that the demand for effective enforcement of Community law would not require national judges to ignore domestic rules restricting past consequences flowing from unlawful conduct. Case C–410/92 Elsie Rita Johnson v Chief Adjudication Officer102 concerned principles of English law which were similar to the Dutch procedural rules that were challenged in Steenhorst. In Case C-31/90 Johnson v Chief Adjudication Officer103 the applicant had successfully challenged the compatibility with Community law of an English measure which automatically extended severe disablement allowances to beneficiaries who had qualified for it under a scheme that had existed up until 1984. Mrs Johnson was granted the allowance in 1981, but it was withdrawn in 1982 when she commenced co-habiting with a male friend. During that time a woman cohabiting with a man was required, in order to qualify for the benefit, to prove not only that she was unfit for work, but also that she was unfit to carry out normal household duties. The household duties test did not apply to men.104 Therefore, men who qualified for severe disability allowances before 1984, but who could not have met the ‘normal household duties’ test enjoyed automatic entitlement to continue to receive the benefit, while persons such as Mrs Johnson were not.
In Johnson No 1 the European Court had concluded that the relevant national measures were incompatible with Article 4 of the Social Security Directive,105 given that they gave rise to discrimination on grounds of sex in a social security scheme. As a result of Johnson No 1, domestic social security authorities granted Mrs Johnson severe disability benefits from 16 August 1986, that is 12 months prior to the making of her application. However, they refused to grant payments in respect of any period preceding that date. The social security authorities argued that s165A of the Social Security Act (1975) limited the period in which she was entitled to recoup the benefit to 12 months prior to the date on which she made her claim.
Mrs Johnson then brought a second action, which was heard by the English Court of Appeal. It referred a question to the Court of Justice concerning the relevance of the Emmott case to Mrs Johnsons circumstances. In Johnson No 2 it was argued before the Court of Justice that the Emmott decision required the (p. 131 ) United Kingdom Government to pay severe disability benefits to Mrs Johnson from 22 December 1984, when the period for transposing the Social Security Directive expired. At the time of the Court of Appeal's Article 234 reference, the Emmott case indicated that this argument had some chance of success. However, after the reference but before the European Court formulated its Johnson No 2 ruling, the Steenhorst judgment was issued. It suggested that Mrs Johnson's claim should fail.
The Court of Justice in Johnston No 2 applied the traditional test for determining the compatibility of national procedural rules with Community measures. It affirmed as follows:
The Court concluded that the wording of s165A(3) of the Social Security Act (1975) showed that the section was ‘of general application’ and that claims based on Community law were ‘not subject to less favourable conditions than those applying to similar domestic actions’.107 Further, in the Court's view, s165A merely limited ‘the period prior to the bringing of a claim in respect of which arrears of benefit are payable’.108 Therefore, the Social Security Act did not make it virtually impossible for an action to be brought. The European Court adopted the distinction mentioned above in Steenhorst between national rules which serve to completely bar proceedings, and those that ‘limit the period prior to the bringing of a claim in respect of which arrears of benefit are payable’.109 Further, the Court again observed that, in the Emmott case, national authorities had refused to adjudicate on the applicant's claim because the Social Security Directive was subject to pending proceedings.110 Finally, the Johnson No 2 court concluded that the rule formulated in Steenhorst was of general application, and that the case could not be read down by reference to its particular facts.111
the right conferred by the direct effect of Article 4(1) of Directive 79/7 to claim benefits for incapacity for work under the same conditions as men must be exercised under the conditions determined by national law, provided that, as the Court has consistently held, those conditions are no less favourable than those relating to similar domestic actions and that they are not framed so as to render virtually impossible the exercise of rights conferred by Community law.106
A distinction therefore emerged between national procedural rules which ‘preclude individuals from relying on Community law’ in their entirety, and those which ‘simply limit’ the period in which payment of benefits to which an individual is entitled can be made.112 While application of the former will (p. 132 ) precipitate an Article 10 breach of the duty on Member States to ensure effective enforcement of Community law, the latter will not.
The results flowing from application of these principles is not always straightforward. This problem is borne out by Case C–246/96 Magorrian and Cunningham v Eastern Health and Social Services Board and the Department of Health and Social Services113 in which United Kingdom legislation imposing a retroactive restriction on pension rights were considered by the Court of Justice to differ fundamentally from the rules impugned in Steenhorst and Johnson No 2.
Prior to their retirement, both applicants in Magorrian had been employed as mental health nurses by a public sector health board in Northern Ireland. Mrs Magorrian ceased working on 18 October 1992 after over 20 years service, while Mrs Cunningham commenced her retirement in April 1994 after an engagement of over 26 years. Both women had begun their careers in full-time employment, and had moved over to part-time nursing when family responsibilities increased. At all times during these periods the applicants had been making contributions to pension schemes that had been contracted out by the State.
Even so, their pension entitlements differed from those extended to employees who had been in constant full-time employment. Neither Mrs Magorrian nor Mrs Cunningham were eligible for certain additional benefits that were extended to members of the scheme who had the status of ‘Mental Health Officer’ (MHO). This was only possible for members engaged in full-time employment, while Mrs Magorrian and Mrs Cunningham worked in MHO capacity for only nine and fifteen years of their respective periods of full-time employment. They were engaged in part-time employment at the point of retirement, which precluded their classification as MHOs, and were thus denied additional benefits. Significantly, eligibility for the additional benefits was not dependent on any extra contribution to the scheme by either the employer or the employee, and no such contribution had been paid by MHOs who were actually awarded the additional benefits. In other words, there was little scope for argument that the applicants' contributions fell short of those made by members who were entitled to the sums in dispute.114
It was concluded by the national referring court that exclusion of part-time psychiatric nurses from MHO status constituted indirect discrimination on grounds of sex, since a considerably smaller proportion of women than men were able to attain it. More problematic, however, were two provisions of Northern Irish law which seemed to curtail the applicants ability to enforce this ruling. Section 2(5) of the Equal Pay Act (Northern Ireland) 1970 restricted payments in respect of failure to comply with equal pay principles to two years before (p. 133 ) the date on which the proceedings were instituted. Further, Regulation 12 of the Occupational Pension Schemes (Equal Access to Membership) Regulations (Northern Ireland) 1976 No 238, amending the Equal Pay Act, provided that, in proceedings concerning access to membership of occupational pension schemes, the right to be admitted to the scheme was to have effect from a date no earlier than two years before the institution of proceedings. These two provisions heavily limited the sums that would otherwise have been payable to Mrs Magorrian and Mrs Cunningham arising from breach by the British Government of the Article 141 (Article 119) prohibition on discrimination on grounds of sex. The national court therefore referred questions to the Court of Justice to assist it to rule on the compatibility of these measures with Community law, and to aid it in isolating the date from which periods of employment must be taken into account for the purposes of calculating additional benefits.
The Court of Justice first ruled that the case at hand was not one concerned with benefits payable under a pension, but the right to join an occupational pension scheme.115 That being so, the temporal limitation laid down in the Barber case, and reflected in Protocol No 2 of the Treaty on European Union (which limited periods of employment which could be counted in equal treatment pensions disputes to employment undertaken after 17 May 1990) was not relevant to the applicants' claim. It was concluded therefore that periods of service undertaken from 8 April 1976, the date on which the Court of Justice held that Article 141 had direct effect,116 were relevant for the purposes of calculating additional benefits. Having reached the conclusion that the dispute at hand was ‘not for the retroactive award of certain additional benefits but for recognition of entitlement to full membership of an occupational scheme through acquisition of MHO status which confers entitlement to the additional benefits’,117 the Court observed that Regulation 12 of the Occupational Pensions Regulations prevented the entire record of service completed by those concerned after 8 April 1976 and until 1990 from being taken into account for the purposes of calculating additional benefits. This distinguished the case at hand from the rules at issue in Steenhorst and Johnson which merely limited the period, prior to the commencement of proceedings, in respect of which backdated benefits could be claimed.118 The Court ruled as follows:
Several observations and criticisms can be made of the Magorrian judgment. Principle among these is the fact that the same result might have been reached via a route more in harmony with pre-existing case law. A principal problem lies in the Court's initial classification of the dispute as a case concerning access to membership of a pension plan, rather than as a dispute involving payment of benefits under an occupational social security scheme. It seems patent from the case report that both Mrs Magorrian and Mrs Cunningham were not denied access to the scheme at any stage, and had been paid-up members for the duration of both their full- and part-time periods of employment. Further, one might question the apparent assumption that, had the action been classified as a ‘payments’ claim rather than a ‘membership’ claim, the Barber protocol would necessarily dictate that only periods of service post-dating 17 May 1990 could be taken into account. The Magorrian case might have been distinguished from the Barber case, and its protocol, in that the applicants were not seeking payment of a full pension in circumstances in which neither they nor the employer had paid the requisite pension contributions in the first place. Rather, they were seeking only the payment of additional benefits, which, moreover, were in no way dependent on the amount of money paid into the scheme by either the employer or the employee. As noted above, full-time MHOs did not need to pay additional sums of money, in order to be eligible for additional benefits. It might have been argued that the real purpose of the Barber protocol was to prevent the financial disruptions that inevitably arise when full pensions are claimed which have not been supported by the payment of regular contributions over long time periods. This was not the case in the Magorrian dispute.
Consequently, unlike the rules at issue in the judgments cited above, which in the interests of legal certainty merely limited the retroactive scope of a claim for certain benefits and did not therefore strike at the very essence of the rights conferred by the Community legal (p. 134 ) order, a rule such as that before the national court in this case is such as to render any action by individuals relying on Community law impossible in practice.
Moreover, the effect of that national rule is to limit in time the direct effect of Article 119 of the Treaty in cases in which no such limitation has been laid down either in the Court's case law or in Protocol No 2 annexed to the Treaty on European Union.119
It is submitted, therefore, that it was open to the Court to distinguish the facts arising in Magorrian from those in Barber on these grounds, rather than by reference to the somewhat artificial device of categorising the dispute as one concerning denial of access to a pension scheme. On this basis the Court could have equally ruled that periods of service dating from 8 April 1976, rather than 17 May 1990, were to be taken into account for the purposes of awarding additional benefits.
Further, if this approach had been taken, the focus of the judgment might have been directed more sharply on the national law which caused most grief to the applicants. It will be recalled that Section 2(5) of the Equal Pay Act placed a two-year temporal restriction on in arrears payments, while Regulation 12 of (p. 135 ) the Occupational Pension Schemes (Equal Access to Membership) Regulations (Northern Ireland) placed a two-year limit on the right be admitted to pension schemes, to be measured from the date of institution of proceedings. The Court of Justice placed the locus of its ruling on the latter of these rules, and made no reference to the former, even though the essence of the applicants' case concerned payments that were, allegedly, unlawfully withheld.
And finally, application of the Steenhorst/Johnson No 2 test to s2(5) of the Equal Pay Act may have led, in any event, to a finding that measures of this kind were incompatible with Community law, even though the (supposedly) similar provisions in issue in Steenhorst and Johnson No 2 were declared compatible. This was so because both the Steenhorst and Johnson cases emphasized that the rule in question reflected ‘the need to preserve financial balance in a scheme in which claims submitted by insured persons in the course of the year must in principle be covered by the contributions collected during the same year’.120 Given that the additional payments in question in Maggorian were not dependent on the payment of contributions, and the monies concerned were limited to ‘top up’ sums rather than payment of an entire pension, it is far less clear whether the ‘financial balance’ of the pension scheme in Magorrian needed the protection of s2(5) of the Equal Pay Act. On the other hand there was no doubt that Mrs Magorrian and Mrs Cunningham had suffered indirect discrimination, and that national rules were rendering their right to equal treatment impossible in practice to enforce. The latter conclusion was in fact reached by the Court of Justice in Magorrian, but in the absence of reference to arguments pertaining to ‘financial balance’.
The Magorrian case therefore failed to shed any further light on the circumstances in which a national law will render Community law impossible in practice or excessively difficult to enforce. It indicated rather that the Court will assess this question on a case-to-case basis.
The ‘conduct’ principle, elaborated in Ansaldo Energia, Edis, Spac and Santex, in the context of time-limits for bringing proceedings, was also applied by the Court of Justice in Levez, but in the context of temporal restrictions on the payment of sums due.
In February 1991 Mrs Levez was recruited as a manager of a betting shop owned by Jennings on a salary of £10,000 per annum. In December 1991 she was appointed a manager of another shop belonging to Jennings, replacing a man who had received an annual salary of £11,400. Her salary, however, was raised to only £10,800, Jennings having falsely declared that this was the salary paid to her male predecessor. Her salary was not raised to £11,400 until April 1992. (p. 136 ) Upon leaving her job in March 1993 Mrs Levez became aware of the pay disparity which had run from February 1991 to April 1992. On 17 September 1993 she brought an action under the United Kingdom Equal Pay Act (1970). However, a decision in her favour from the United Kingdom Industrial Tribunal ordering in arrears payment of her salary was challenged by Jennings on the grounds that the Industrial Tribunal had breached Article 2(5) of the Equal Pay Act. This was so because Article 2(5) restricts in arrears payments of unlawfully withheld salary to two years prior to the date on which proceedings were instituted, and, as a matter of domestic law, the Industrial Tribunal was not empowered to extend that period. This meant that Mrs Levez could only recover six months of the withheld salary, given that she had received ‘equal pay for equal work’ from April 1992. Given that the case concerned Mrs Levez' rights under Article 141 of the EC Treaty, and Council Directive 75/117/EEC of 10 February 1975 on the approximation of the laws of the Member States relating to the application of the principle of equal pay for men and women,121 the Employment Appeals Tribunal referred a series of questions to the Court of Justice concerning her right to a remedy under Community law.
The aspect of the case concerning the conduct of Levez is most illuminating. The Court of Justice reiterated that neither reasonable time-limits for bringing proceedings,122 nor restrictions on in arrears remuneration123 rendered Community law impossible in practice or excessively difficult to enforce, and were not, in and of themselves, open to criticism. However, the Court of Justice added the following important caveat:
The Court concluded that allowing an employer, in the present circumstances, to rely on a rule such as Article 2(5) would breach the principle of effectiveness, and render the application of Community law impossible in practice or excessively difficult, and would ‘facilitate the breach of Community law by an employer whose deceit caused the employee's delay in bringing proceedings for the enforcement of the principle of equal pay’.125 Further, application of Article 2(5) did not appear to (p. 137 ) be reasonably justified by principles such as legal certainty, or the proper conduct of proceedings.126
It is clear…that it was because of…inaccurate—or indeed, deliberately misleading—information provided by the employer that Mrs Levez was in no position to realise that, even after December 1991, she had been the victim of sex discrimination….
Where an employer provides an employee with inaccurate information as to the level of remuneration received by employees of the opposite sex performing like work, the employee so informed has no way of determining whether he is being discriminated against or, if so, to what extent. Consequently, by relying on the rule at issue in that situation, the employer would be able to deprive his employee of the means provided for by the Directive of enforcing the principle of equal pay before the courts….124
3.5 Marks & Spencer
In this ruling, the Court of Justice crafted the ‘adequate transitional periods’ principle, with respect to temporal restrictions on the sums recoverable principle that it later applied in Grundig. It thus represents an important limitation to the Johnson No 2/Steenhorst principle. Further, it confirmed that breach of legitimate expectations was a ground on which the compliance of Member State remedies and procedural rules with Community law could be assessed.127
In Case C–62/00 Marks & Spencer plc v Commissioners of Customs and Excise,128 a United Kingdom legislative enactment restricted repayment of VAT that had been wrongfully paid under Sixth VAT Directive129 to three years before the making of the claim,130 when the period had previously been six years.131 Further, the three-year time-limit was imposed retroactively. On 4 December 1996 it was passed by the House of Commons, but the legislative enactment provided that the change in periods with respect to which VAT was recoverable entered into force from 18 July 1996. Marks & Spencer claimed recovery of unlawfully paid VAT on 31 October 1996.132 Thus, the change in the law impacted severely on the amount of VAT to which Marks & Spencer were entitled under national law.
The Court of Justice reiterated the established principle that right to obtain a refund of charges levied in a Member State in breach of Community law is the consequence and the complement of the right conferred on individuals by Community provisions as interpreted by the Court.133 However, it also ruled that the general rule allowing reasonable time-limits for bringing proceedings was subject to the principles that (i) it must not be intended to specifically limit the consequences of a judgment of the Court to the effect that national legislation is incompatible with Community law,134 and (ii) the time set for the application of the time-limit must be sufficient to ensure that the right to repayment is effective.
The Court then applied this principle to Member State measures restricting periods in which repayment could be made:
Thus, even though the United Kingdom Government had argued that the national legislation in issue was motivated by the legitimate purpose of striking a balance between the individual and collective interest, and of enabling the State to plan income and expenditure without the disruption caused by unforeseen liabilities,136 the Court reached the conclusion that, while such a purpose may justify the fixing of reasonable time-limits, ‘it cannot permit them to be so applied that rights conferred on individuals by Community law are no longer safeguarded’.137 The retroactive effect of the measure in issue was held to result in that consequence.138
Whilst national legislation reducing the period within which repayment of sums collected in breach of Community law may be sought is not incompatible with the principle of (p. 138 ) effectiveness, it is subject to the condition not only that the new limitation period is reasonable but also that the new legislation includes transitional arrangements allowing an adequate period after the enactment of the legislation for lodging the claims for repayment which persons were entitled to submit under the original legislation. Such transitional arrangements are necessary where the immediate application to those claims of a limitation period shorter than that which was previously in force would have the effect of retroactively depriving some individuals of their right to repayment, or of allowing them too short a period for asserting that right.135
Finally, the Court of Justice also found that there had been a breach of legitimate expectations. It was held to preclude national legislation which deprives retroactively a taxable person of a right (to repayment) of taxes levied in breach of the Sixth VAT Directive.139 This is most significant, because the Government of the United Kingdom had argued that, in determining the compatibility of national procedural law with EC law, the only relevant principles were that of effectiveness and non-discrimination.140 The Court simply observed that ‘the principle of the protection of legitimate expectations forms part of the Community legal order and must be observed by the Member States when they exercise the powers conferred on them by the Community directives’,141 before reaching its conclusions on retroactive removal of repayment rights.
Thus, the case law allowing, as a general rule, retroactive limits on sums reclaimable, as established in Steenhorst and Johnson No 2, has been as flexible as the law on national time-limits for bringing proceedings. While such limitations are compatible with Community law, in so far they are reasonable, and ensure sound administration and preserve financial balance, they will not be operative if conduct of the wrong-doer has contributed to the imposition of unfavourable temporal restrictions, or if transitional provisions have been insufficient to ensure (p. 139 ) the effective enforcement of rights claimed. Retroactive limits on sums claimable will also have to be disapplied if they breach the principle of effectiveness.
4. Time-Limits and Similar Restrictions on the Raising of Arguments Before Courts
This is an area where the Court of Justice has continued to be interventionist, albeit inconsistently. Even though the policy evidenced in Steenhorst and Johnson No 2 suggested that the Court of Justice was moving toward minimising the circumstances in which it will disrupt national limitation periods, soon after it gave notice that there will be circumstances in which it will review procedural time-limits for the raising of arguments on appeal. The Court will do so if such measures render the application of Community law impossible or excessively difficult. Of the six leading cases on this topic, four have resulted in disapplication of the national restriction.
The Peterbroeck case142 concerned a Belgian law which banned the raising of new arguments in taxation cases if 60 days had lapsed since the submission by a taxing authority of the case file to an appeal court. Although this period had already expired, the applicants in Peterbroeck wished to broaden the grounds of their claim to breach of Article 43 (Article 52) of the EC Treaty, on the basis that a Dutch company, for whom the applicants acted as legal representatives in Belgium, suffered discriminatory treatment at the hands of the Belgian tax authorities when compared with companies ‘resident’ in Belgium. The Belgian Cour d'Appel was of the view that these provisions of national law prevented it from raising, of its own motion, legal arguments that had not been submitted by the parties in good time, including arguments based on Community law. Further, while local law provided three exceptions to this restriction, namely if the matter under dispute was res judicata, or the applicants were prevented from raising arguments at an earlier stage of proceedings due to force majeur, or when the substantive issue under review was the imposition of a tax that was time-barred, these exceptions appeared to be of no relevance to the applicant's circumstances.
However, the Cour d'Appel was aware that these measures severely curtailed its powers to examine whether domestic law complied with Article 43, and that it also hampered its authority to request guidance from the Court of Justice under the Article 234 mechanism on substantive issues.143 In the light of this quandary, the Cour d'Appel in Peterboeck made an Article 234 reference to the Court of (p. 140 ) Justice, and asked whether Community law obliged it to disapply domestic rules which limited its capacity to raise issues of its own motion, when a limited exception to this rule was supplied by national law.144
The Court of Justice commenced its decision by citing the Article 10 duty on Member States to ensure the legal protection which individuals derive from Community law, and restated the traditional principle that national courts retain jurisdiction in relation to procedures and designation of courts having jurisdiction for disputes concerning EC measures, subject to the principles of effectiveness and non-discrimination.145 In addition, the Court recalled that rules of national law which prevented the Article 234 procedure from being followed had to be set aside.146
The Court then provided what has become its standard guidance on how these general rules might be applied in individual disputes. It held as follows:
The Court of Justice concluded that restrictions operating in Belgian law on the raising of new arguments on appeal were, due to their ‘special features’, incompatible with Community law.148 The factors which influenced the Court were as follows. First, the Cour d'Appel was the first judicial body entitled to make a reference under Article 234, since the matter was conducted at first instance by a fiscal authority, which could not be considered a court or tribunal for the purposes of Article 234. The Court seemed to imply that precluding the Cour d'Appel from considering the applicant's arguments would breach the obligation on a Member State to provide access to a judicial remedy when breach of Community law is in issue.149 Second, the 60-day limitation period ran from the time when the Regional Director of Direct Contributions lodged a certified copy of his decision with the Cour d'Appel, and not from the date of the commencement of the deliberations of the Cour d'Appel in the matter. This meant that the time-limit for considering new arguments had expired by the time the Cour d'Appel actually held its hearing. Third, no other national court or tribunal would, in subsequent proceedings, be entitled to consider the issues of their own motion,150 and this state of affairs did ‘not appear to be reasonably justifiable by principles such as the requirement of (p. 141 ) legal certainty or the proper conduct of procedure’.151 The European Court in the Peterbroeck case therefore concluded as follows:
each case which raises the question whether a national procedural rule renders application of Community law impossible or excessively difficult must be analysed by reference to the role of that provision in the procedure, its progress and its special features, viewed as a whole, before the various national instances. In the light of that analysis the basic principles of the domestic judicial system, such as protection of the rights of the defence, the principle of legal certainty and the proper conduct of procedure, must, where appropriate, be taken into consideration.147
Former Advocate General Jacobs, however, did not agree with the findings of the Court. Indeed, the lack of concurrence between the former Advocate General's Opinion and the ruling of the Court of Justice illustrates the delicacy of the distinction between domestic rules which prohibit the application of Community law, and those which merely regulate procedural issues. The former Advocate General's Opinion was founded on the notion that Community law imposed only limited obligations on national judges when it came to assessing the legality of domestic rules on remedies and procedures. He commenced his Opinion by arguing that, provided the parameters laid down by the principles of effectiveness and non-discrimination were respected, then enforcement of a national time-limit for the raising of new arguments would not precipitate a breach of Community law.153
…Community law precludes application of a domestic procedural rule whose effect, in procedural circumstances such as those in question in the main proceedings, is to prevent the national court, seized of a matter falling within its jurisdiction, from considering of its own motion whether a measure of domestic law is compatible with a provision of Community law when the latter provision has not been invoked by the litigant within a certain period.152
With regard to the principle of non-discrimination, the former Advocate General stressed that this concept did not oblige national judges to automatically extend any preferential treatment that might be provided by domestic law to all arguments based on Community rules.154 After due consideration of the exceptions mentioned above that were available in Belgian law (viz, imposition of a tax out of time, res judiciata, and force majeur) former Advocate General Jacobs concluded that they had no application to the facts at hand.155
The former Advocate General also dismissed the notion that the principles of Belgian law under review breached the principle of effectiveness. He distinguished the findings of the Court of Justice in Simmenthal156 and Factortame No 1157 on the basis that these rulings were ‘necessary to ensure that the court seised was not precluded from giving effect to the Community rights claimed in the respective national proceedings’.158 He argued as follows:
Former Advocate General Jacobs also observed that, in actions for annulment brought against Community institutions under Article 230, a two-month time-limit for submission of an argument applied, and that under Article 24 of the Rules of Procedure of the Court of Justice, restrictions were placed on the raising of new arguments before the European Court.160 The former Advocate General asserted, therefore, that ‘it would be anomalous…and would create difficulties in practice, if it were held that national courts must in all circumstances and at any stage in the proceedings be free to raise issues of Community law’.161
…it will be noted that in both cases the effect of Community law was to exclude a national rule which would have made the judicial protection of Community rights by the court seised wholly impossible. Those cases show, therefore, that it must always be possible for (p. 142 ) an individual to bring a claim before a national court and to require the national court to protect his community rights. They do not suggest that it must in all circumstances be open to the national court, as a matter of Community law, to raise of its own motion issues which the parties have failed to raise.159
Finally, former Advocate General Jacobs rejected the notion that the Courts case law on Article 234 was relevant to the claim at hand. The former Advocate General acknowledged that these rulings established that, where a question of Community law was raised before the national court, no rule of national law could preclude the national court from referring a question to the Court of Justice. However, he pointed out that this principle did not address ‘the prior question’ of the circumstances in which a national court can raise an issue of Community law of its own motion.162 The former Advocate General also observed that the Court of Justice, in a 1991 decision, had refrained from adopting a suggestion proffered by Advocate General Darmon to the effect that a national court has a duty to raise of its own motion the existence of a Community rule.163
The above precis of the Peterbroeck case reveals, therefore, that it will sometimes be difficult to predict whether a national procedural rule imposing temporal restrictions will breach the Court's guidelines on remedies and procedures. Indeed, the distinction between rules that ‘wholly frustrate’ a claim and those that are ‘reasonably justifiable by principles such as the requirement of legal certainty or the proper conduct of procedure’164 seems to beg resolution on a case-to-case basis. However, as will be revealed by the discussion to follow, confusion in this area of the law might be further compounded by the development of distinct rules depending on the ‘public’ or ‘private’ nature of a legal dispute. The van Schijndel case suggested that national laws governing the conduct of litigation between private parties are less likely to precipitate a compliance failing with respect to Community rules on remedies and procedures, than the same kind of principles when government authorities are accused of breaching Community obligations. Yet, this assumption was upset subsequently, in other horizontal cases, namely (p. 143 ) Case C–126/97 Eco Swiss China Time Ltd v Benetton International NV165 and in Case C–473/00 Cofidis SA v Jean-Louis Fredout.166
4.2 Van Schijndel
Indications that the Court's policy on national procedural rules might vary by reference to the ‘public’ or ‘private’ nature of litigation appeared in the van Schijndel decision.167 The van Schijndel dispute bore a strong resemblance to the conundrum which was addressed in the Peterbroeck case, in that the Court of Justice was asked to review the compatibility with Community law of a Member State rule which restricted the rights of appeal Judges to raise new arguments of their own motion. However, van Schijndel differed from Peterbroeck in that it concerned an attempt by one private party to enforce Community law against another. It will be recalled that in Peterbroeck the applicants sought to invoke a right grounded in EC law against Belgian Government taxation authorities.
The plaintiff physiotherapists in van Schijndel sought to set aside Dutch laws which provided for compulsory membership in an occupational pension scheme. They argued that these rules were incompatible with principles of Competition law as laid down in Articles 81 and 82 (Articles 85 and 86) of the EC Treaty, along with Articles 10, 86, 43, 48, 49 to 55 (Articles 5, 90 52, 58 and 59 to 66). However, the plaintiffs first raised these issues on appeal before the Hoge Raad (Dutch Supreme Court), and Dutch law precluded the raising of new arguments in pleas of cassation that would entail examination of the facts. New submissions in claims of this kind were to be confined to points of law. Further, even though Article 48 of the Netherlands Code of Civil Procedure obliged Dutch courts to raise points of law, if necessary by their own motion, the competing principle of judicial passivity in civil matters prevented the Hoge Raad from going beyond the ambit of the dispute defined by the parties, or from relying on facts or circumstances other than those on which the claim was based. That being the case, the Hoge Raad referred a series of questions to the Court of Justice under Article 234, which included a request for guidance with respect to the plaintiffs' procedural difficulties.
The Court of Justice first observed that if there were a national law which obliged, or even entitled, national courts to raise issues of their own motion, it would have to be extended to litigation concerning binding Community rules. This was said to arise from the Article 10 duty on national courts ‘to ensure the legal protection which persons derive from the direct effect of provisions of Community law’.168 The Court then moved to considering the specific procedural rule at issue, first (p. 144 ) observing that the matter should be resolved by reference to the principals of effectiveness and non-discrimination, and then noting that rules of national law which prevented the Article 234 procedure from being followed had to be set aside.169 The Court repeated the observation made in the Peterbroeck170 case, to the effect that, in determining whether a national law renders the application of Community law impossible or excessively difficult, analysis would need to be made of the role that provision took in the procedure, its progress and its special features. Further, the Court reiterated that basic principles of domestic law would be taken into consideration, such as protection of the rights of defence, the principle of legal certainty, and the proper conduct of procedure.171
However, in van Schijndel application of this rule of thumb led to a result which was diametrically opposed to the ruling in Peterbroeck.172 With respect to Dutch rules obliging courts in civil procedures to keep to the subject matter of the dispute, and to found its decision only on the facts before it, the Court held as follows:
The passage here quoted seems to indicate that the van Schijndel court may have been influenced by the fact that the litigation at hand concerned a civil suit between private parties. Indeed it could be argued that the court tacitly supported the notion that private parties should enjoy maximum autonomy in the conduct of civil suits. Therefore, the van Schijndel ruling, coupled with the tough line taken by the Court of Justice in Peterbroeck, could be interpreted as implying that the Court of Justice is inclined to subject national remedies and procedures to less rigorous scrutiny when one private party attempts to enforce directly effective Treaty provisions against another.174 However, the Court of Justice has (p. 145 ) not followed this line consistently, as is evidenced by the findings in Eco Swiss, and Cofidis.
That limitation is justified by the principle that, in a civil suit, it is for the parties to take the initiative, the court being able to act of its own motion only in exceptional cases where the public interest requires its intervention. That principle reflects conceptions prevailing in most of the Member States as to the relations between the State and the individual; it safeguards the rights of the defence; and it ensures proper conduct of proceedings by, in particular, protecting them from the delays inherent in examination of new pleas.173
4.3 Eco Swiss
The Court of Justice established in Eco Swiss that limits will be placed on van Schijndel procedural autonomy when a dispute between private parties is being heard, for the first time, by a judicial as opposed to an arbitral body. It was held in Case C–126/97 Eco Swiss China Time Ltd v Benetton International NV175 that, because arbitral tribunals are not empowered to make Article 234 references to the Court of Justice,176 Community law requires that questions on the interpretation of Article 81(1) ‘should be open to examination by national courts when asked to determine the validity of an arbitration award and that it should be possible for those questions to be referred, if necessary, to the Court of Justice for a preliminary ruling’.177 This was so even though breach of Article 81 had not been raised by either party in the arbitral proceedings, and the national court reviewing the award was restricted under domestic law, inter alia, to assessing whether there had been a failure to observe national rules of public policy. It was held that when annulment may be granted, under national law, for breach of public policy, then it must also be available for failure to comply with Article 81(1), given that it is a ‘fundamental provision which is essential for accomplishment of the tasks entrusted to the Community’.178 The Court of Justice upheld, however, the compatibility with Community law of a national provision laying down a three-month time-limit for lodging an application for annulment of an arbitral award, observing that this period was not ‘excessively short compared with those prescribed in the legal systems of other Member States’ and did ‘not render excessively difficult or virtually impossible the exercise of rights conferred by Community law.’179 The Court reached this conclusion even though it meant that the national court, in the event of failure of the parties to comply with the three-month time-limit, would be unable to consider whether a breach of Article 81 had occurred.180
This second finding, however, is difficult to reconcile with the ruling of the Court of Justice in Peterbroeck. It will be recalled that a sixty-day time-limit on the raising of arguments before an appeal court (post-transmission of the file to the court from the tax authorities), precipitated breach of the principle of effectiveness. In Eco Swiss one might have thought that a similar conclusion would have been reached, given that the arbitral tribunal, like the taxation authority in Peterbroeck, was equally bereft of authority to make an Article 234 reference to the Court of Justice. This meant, as it had in Peterbroeck, that the judicial body empowered (p. 146 ) to hear the Eco Swiss appeal was the first tribunal with authority to make an Article 234 reference. Be that as it may, a three-month time-limit for referring the arbitral award to an appeal court was considered in Eco Swiss to be compatible with Community law, irrespective of the findings in the Peterbroeck case.
This ruling established that national limitations on the raising of arguments may have to fall when they conflict with the aims of a Directive. This is a highly significant development, and carries the potential for the wholesale resurrection of the Emmott rule, if the purpose pursued by the Directive demands it. Yet, as will be seen below, it was not followed in the subsequent case of Kappferer concerning recognition and enforcement of foreign judgments, and Regulation 44/2001 in the context of consumer contracts.181
The Cofidis case concerned the interpretation of Council Directive 93/13 on Unfair Terms in Consumer contracts,182 and more specifically an attempt by a consumer to argue, in a dispute in which an undertaking sought the enforcement of a credit agreement with the consumer, that certain financial terms were unfair. However, a term of the Viennese Code de la Consommation provided for a time-limit of two years, with respect to consumer credit transactions, arising from the event which gave rise to the dispute, otherwise it was time barred. Thus, even though the national court was of the view that certain financial terms were unfair, it also felt that the two-year time-limit applied, and that it was thus prevented from annulling them.
The Court of Justice, in Cofdis, first applied its findings in Joined Cases C–240/98 to C–244/98 Océano Grupo Editorial SA v Rocío Muriano Quintero,183 in which it had been established that power of a court, of its own motion, to consider whether a term of a contract was unfair, was necessary in order due to achieve the aim envisaged under the Directive. That power was necessary to ensure that the consumer enjoys effective protection, in view in particular of the real risk that he is unaware of his rights and might encounters difficulties in enforcing them.184 The protection conferred by the Directive thus extended to failure of the consumer to raise the unfairness, either because he is unaware of them, or because he has been deterred because of the cost of the legal proceedings involved.185
The Court then extended on its findings in Océano Grupo, and expressly held that the fixing of a time-limit on the power of a court to set aside unfair terms is liable to impair the effectiveness of the protection intended by the Directive. It was held that to ‘deprive consumers of the benefit of that protection, sellers or suppliers would merely have to wait until the expiry of the time-limit fixed by the national legislature before seeking enforcement of the unfair terms they would (p. 147 ) continue to use in contracts’.186 It would also render application of the protection intended by the Directive excessively difficult.187
But perhaps most significantly, the Court of Justice then, and without explanation, applied further detailed elements of the acquis on Member State remedies and procedural rules, to this fully horizontal case; a private individual was relying on interpretation of the Unfair Terms Directive in an action brought against it by a private legal entity. In meeting the argument that the Court of Justice had, in the past, ‘cleared’ shorter national time-limits for compliance with the principle of effectiveness, the Court cited the Peterbroeck case, which concerned a vertical dispute, in support of the established principle that ‘each case which raises the question whether a national procedural provision renders application of Community law impossible or excessively difficult must be analysed by reference to the role of that provision in the procedure, its progress and its special features, viewed as a whole, before the various national instances’.188 As a consequence of this, each case required assessment on a case-by-case basis.189 The Opinion of Advocate General Tizzano matched that of the ruling of the Court of Justice, and perhaps went slightly further. He was of the view that ‘effective protection of consumers in terms of Article 6 can be guaranteed only if it is accepted that it is possible to plead the unfairness of the term relied upon by the supplier in the action at any time, and thus without any limitation period’.190
Consumer protection is therefore an area in which national time-limits are particularly vulnerable for challenge by reference to the principle of effectiveness, principally due to the aims pursued by the Directive.191 More significantly, this is equally so in the context of both horizontal and vertical situations. It was unfortunate that neither the Court of Justice nor the Advocate General explained how the remedies acquis could be relevant in the context of such actions in which there is a, perhaps increasingly, theoretical prohibition on the horizontal effect of Directives.
As mentioned in chapter 3, Case C–234/04 Rosemarie Kapferer v Schlank &Schick GmbH192 upheld the principle of res judicata, in that it established that an appeal court was not bound to consider whether a national court had jurisdiction over a (p. 148 ) consumer contract, pursuant to the relevant provisions of Regulation 44/2001,193 when a First Instance court had decided that it did, and the point was not raised by either of the parties before the appeal court. The appeal court entertained doubts as to whether jurisdiction should have been assumed at First Instance, but the Court of Justice ruled that issue was closed. Yet, the Court's approach differed from that employed in Peterbroeck and Cofidis; it reverted to a van Schijndel style analysis, even though this case too concerned a vulnerable consumer, and bore a resemblance to the Cofidis case, which was not considered.
In order to ensure both stability of the law and legal relations and the sound administration of justice, it is important that judicial decisions which have become definitive after all rights of appeal have been exhausted or after expiry of the time-limits provided for in that connection can no longer be called into question (Case C–224/01 Köbler  ECR I-10239, paragraph 38)….
By laying down the procedural rules for proceedings designed to ensure protection of the rights which individuals acquire through the direct effect of Community law, Member States must ensure that such rules are not less favourable than those governing similar domestic actions (principle of equivalence) and are not framed in such a way as to render impossible in practice the exercise of rights conferred by Community law (principle of effectiveness) (see, to that effect, Case C–78/98 Preston and Others  ECR I-3201, paragraph 31 and the case law cited). However, compliance with the limits of the power of the Member States in procedural matters has not been called into question in the dispute in the main proceedings as regards appeal proceedings.194
5. Time-Limits: the Law as it Stands?
This section has illustrated that there has been a transformation in the law on Community regulation of national limitation periods, since the days of the ‘hands-off policy’ that was described in chapter 3. This has intensified the consequences flowing from the supremacy rule. In effect, an essential stopper on the retroactive effect of Community law has to some extent been attenuated. Key constitutional cases such as the Denkavit No 1 ruling laid down the obligation to apply Community rules ‘even to legal relationships arising and established before the judgment ruling’, but tempered their impact with the following caveat:
provided that in other respects the conditions enabling an action relating to the application of that rule to be brought before the courts having jurisdiction, are satisfied.195
Thus, there are two ways of ameliorating what might be viewed as retroactive enforcement of EC measures that resulted from a declaration from the Court of Justice that a particular measure vested individuals with rights. First, the Court of Justice itself can limit the temporal effects of a judgment, although it rarely (p. 149 ) does so.196 Second, national procedural rules step in to limit the impact of the Courts judgments. Yet, the complex case law that has been generated by the Courts decision to institute close review of national time-limits has damaged legal certainty, and placed national Judges in an unenviable position when litigants question the compliance of minor procedural principles with Community obligations.
In some circles the Court's move away from the Comet/Rewe ‘non-interventionist’ stance was applauded, on the basis that the ‘sweeping language’ of Simmenthal was an ‘aberration’ until the Court changed its policy on remedies and procedures.197 However, it is submitted that the central drawback of undue emphasis on effectiveness was that it deconstructed a crucial mechanism for rendering retroactive aspects of the supremacy rule more palatable for all concerned. For example, in the case Brasserie du Pêcheur and Factortame III, to be discussed in chapter 5, submissions were made, in the context of State liability in damages, by Member States to the effect that ‘it is very difficult to resolve the question of the attribution of liability to the State where national legislation conflicts with a provision of the EEC Treaty, since fresh questions of interpretation are constantly arising’;198 and the Government of Germany went so far as to assert that ‘there cannot exist any obligation to make good loss and damage prior to delivery of the judgment of the Court’ in which breach of the Treaty was established.199
The real problem with respect to limitation periods is how to construct a fair test for determining the point in time at which individuals should have reasonably become aware of their rights under Community law.200 Once established, an appropriate date from which national limitation periods should run could be ascertained.201 However, in the light of the distinctively broad authority vested in the Court of Justice to interpret Community measures, and its central role in determining if measures have direct effect, isolating this moment is not so easy, especially given that the Court has always insisted that Community measures are to be effectively enforced from their date of entry into force and not from the date on which the Court of Justice hands down an interpretative ruling.202
(p. 150 ) Indeed, it has been argued that the Court may have transformed the requirement to provide ‘direct and immediate’203 protection of Community rights into a call for retroactive enforcement.204 It is submitted, therefore, that the simplest solution lies in allowing national judges to apply standard national limitation periods, an imperative which, as will be shown, has become particularly important in the wake of the emergence of state liability in damages. Further, as this chapter has illustrated, the creation of exception after exception to general rules has vandalized legal certainty, and led to the commitment of large amounts of judicial resources to reviewing the minutiae of procedural rules operating at subordinate levels in the EU polity, a task which is not ordinarily performed by a constitutional court, at least not on the scale that is occurring in Luxembourg.
The development of Court of Justice rulings on time-limits might be summarized as follows. Until 1991, private parties could assume that regular time-limits for bringing proceedings supplied by national law would ordinarily be attached to claims in which the compatibility of national laws with Community measures was questioned. So much was confirmed by the Court of Justice in the rulings in Comet205 and Rewe,206 in which it was held that national time-limits would not be re-opened by a ruling of the Court of Justice confirming that national law breached directly effective EC rules. These cases seemed to imply that, if individuals wished to rely on rights laid down in directly effective EC measures, the time-limit provided by national law would begin to run from the date of breach of the relevant Community instrument.207 This suggested that applicants would need to act with a measure of haste if they wished to take advantage of failure of Member States to align national law with Community obligations.
This principle was disturbed in the Emmott case,208 in which it was held that, in the context of directly effective Directives, national time-limits for bringing proceedings would not begin to run until a Directive had been properly implemented. In effect, therefore, this ruling set aside the fetters supplied by national law which prevented applicants from bringing suit years after unlawful conduct had occurred. Further, the Emmott decision opened up the opportunity for applicants to claim benefits arising from Directives retroactively from their date of entry into force.209
This danger, however, was arrested in Steenhorst210 and Johnson No 2,211 in which the Court of Justice confirmed that the need for effective enforcement of EC rules did not prevent Member States from restricting the past consequences of unlawful conduct. It was held in these cases that Member States were entitled to limit the period in which in arrears payments could be made for benefits arising from a (p. 151 ) directly effective Directive, provided of course that the same restriction applied to analogous claims in domestic law.212 In addition, Steenhorst and Johnson No 2 cast doubt on the foundations of the Emmott principle itself. This was so because, in both decisions, the Court pointed toward the comportment of relevant domestic authorities, which had refused to adjudicate on Mrs Emmott's claim in good time. Yet the legal significance of this behaviour was not elaborated upon, and the law was further confused in the Magorrian case, in which a retroactive cap on the payment of additional benefits in an occupational pension scheme was held to be incompatible with Community law, and was thus distinguishable from the scenario that arose in Steenhorst-Neerings and Johnson.213
Further qualification of the Steenhorst and Johnson No 2 principle occurred in Levez and Marks & Spencer. In the former case, the Court of Justice established that retroactive limits on sums claimable would be inapplicable if the conduct of the wrong-doer contributed to the diminution of such sums, through discouraging the party seeking to enforce individual rights from bringing proceedings earlier. In Marks & Spencer, the Court of Justice held that any changes in national procedural rules, even if not instituted with the specific view of reducing the sums claimable under Community law, would breach the principle of effectiveness if inadequate transitional measures were taken. It was also established that adjusting national procedural rules could breach the legitimate expectations of those adversely affected by them.
Save for the principle of legitimate expectation, this case law has also been applied to the context of temporal limitations on the institution of proceedings. While Emmott was ameliorated by cases such as Fantask, Ansaldo Energia, Edis, Spac, Dilexport and Aprile II in which it was confirmed that the interests of legal certainty, and those of taxpayers concerned, did not preclude Member States from setting reasonable time-limits for bringing proceedings, the ‘conduct’ principle was equally recognized in all these cases. Further, it was actually applied to the benefit of an individual in Santex. Additional doubt, however, was placed on the extent to which post-Emmott case law had restored national procedural autonomy over time-limits in Grundig Italian. Not only was failure to take adequate transitional measures applied to the context of change in the time-limit for bringing proceedings, the Court of Justice effectively replaced the 90-day period operative under national law, with its own view of an adequate time-frame, which was a period of six months.
These principles are all subject to the, more generalized, Deville prohibition on the institution by Member States of adjustment to national procedural rules which are specifically aimed at minimizing the possibility of enforcing rights recognized by Community law, although such adjustments, by their nature, will almost always have a temporal element to them. However, due to the findings of (p. 152 ) the Court of Justice in Weber's Wine World, breach of the Deville prohibition will rarely be found, especially given that the case established that proving a ‘purpose’ to frustrate Community law is not enough. It may not be without significance that the Deville principle was not alluded to in the Courts deliberations in Berlsuconi.
The circumstances in which national time-limits on the raising of arguments before courts will breach the principle of effectiveness has become very difficult to predict. Despite the trend toward non-interference in time-limits which appeared in Steenhorst and Johnson No 2, the Court ruled in Peterbroeck214 that a restriction in Belgian law which prevented appeal Judges from raising points of Community law of their own motion breached the principle of effectiveness, even though the same limitation would have applied to analogous claims grounded in domestic law. Despite contrary advice proffered by former Advocate General Jacobs in the case, the Court of Justice concluded that neither the principle of legal certainty, nor the need for proper conduct of procedure, would justify failure of appeal Judges to explore issues of Community law. Therefore, a Belgian limitation period on the raising of new arguments on appeal was declared to be incompatible with Community law.215
A new stratum of principle emerged in the ruling in van Schijndel216 This decision indicated that less rigorous review of national procedural rules might be instituted by the Court of Justice in claims in which directly effective rights are enforced by one private party against another. In van Schijndel it was intimated that Community law recognized the rights of private parties, in a civil suit, to take the initiative, given that this rule did no injury to the efficient conduct of proceedings, or the rights of the defence. Therefore, it was concluded in van Schijndel that principles of domestic law which prevented Judges from raising points of Community law of their own motion would not, in civil suits, breach Court of Justice guidelines on remedies and procedures.217 However, the compatibility of domestic restrictions on the raising of arguments on appeal was subject to further alteration in Eco Swiss,218 in which it was held that questions of Community law must be ‘open to examination’ by courts reviewing arbitral awards, provided that relevant procedural rules have been complied with. Finally, potential for the wholesale resurrection of Emmott occurred in the ruling in Cofidis, at least when the objectives of a particular Directive requires it. There, in the context of a time-limit for bringing proceedings which precluded a Judge from declaring void a contractual provision for incompatibility with the Unfair Contract Terms Directive, the Court of Justice, with forceful support from the Advocate General, ruled that the time-limit was liable to impair the effectiveness of the protection intended by the Directive. Perhaps even more importantly the Court, and without explanation, applied the effet utile acquis to a fully horizontal situation.
(p. 153 ) One commentator has reached the following conclusion with regard to the Courts case law on national time-limits:
With respect, this assertion simply does not stack up with the direction that the case law has taken. Reference has already been made to the preponderance of success, as opposed to failure, of challenges to national time-limits over the last five years.220 Further, cases such as Italiana Grundig illustrate that the Court can still be minded to make deep incursions into national procedural law, and even in the face of vigorous opposition from an Advocate General, and go so far as to replace the national time-limit with its own view of an appropriate period. The only ‘firm pattern’ that can be discerned in the case law is the propensity for checkered results to emerge soon after the establishment of general principle. Ansaldo Energia, Edis and Spac, established the ‘conduct’ principle, while Santex and Levez, illustrate the ease with which obstructive conduct can be illustrated; the ‘reasonable’ time-limits principle was the product of the Fantask case, but Grundig and Marks & Spencer introduced special rules with respect to transitional limitation periods; Steenhorst-Neerings and Johnson established that retroactive limits on payments due would generally be compatible with EC law, while in Magorrian it was held that this will not be the case with respect to national rules striking at the heart of the right claimed; as explained above, van Schijndel at first appeared to attenuate Peterbroeck with respect to temporal limitations on the raising of new arguments, at least in the context of horizontal cases, Cofidis called this into question, and later Kapferer appeared to reinstate it; and finally, the Deville case provided one of the foundations for the rule that Member States are precluded from passing national rules, including rules on time-limits, that are deliberately designed to frustrate individuals seeking to enforce Community rights, while Weber's Wine World illustrated that the threshold for proving this is very high.
After the period of confusion generated by Emmott and its subsequent fall from judicial grace, it seems that Community intervention in the time-limits applied to the exercise of Treaty rights before the domestic courts is once again characterised by firm pattern of negative harmonization: a presumption of national autonomy, into which the Court is prepared to make only limited incursions.219
The case law has created vast problems in terms of legal certainty. What type of conduct will be serious enough to amount to discouragement?221 What further sub-elements of time-limits, aside from transitional rules, will be susceptible for review against the principle of effectiveness? Further, there is no discernable pattern to Court of Justice rulings on whether it, or the national court, should either take the decision on whether effectiveness has been breached, or rule on this question and the consequences to follow. Has this not contributed to the danger of increased (p. 154 ) numbers of cases resulting from the Court's finding that each case has to be decided by reference to its own context, and with respect to its own factual circumstances? For example, the Court of Justice, with the support of the Advocate General, has recently held that a Member State authority will only be allowed to rely on a 60-day time-limit, set by national law, for challenging an implied refusal to provide information on the environment if the implied refusal is accompanied by reasons.222
But perhaps the most disturbing feature of the case law lies in the apparent failure of the Court to be cognizant of the constitutional foundations underpinning the EC polity, and the important function that national time-limits have taken in ameliorating the early decision of the Court of Justice to declare EC measures directly effective from their date of entry into force, and not from the date of a Court judgment that a particular measure has direct effect. Tampering with the important demarcation boundary between national and Community law, in which remedies are primarily left to national courts, upsets the delicate balance between national and Community law with respect to interpretation and application.
Finally, questions concerning time-limits have funneled into two other areas of the remedial case law, namely recovery of unlawfully paid state aids (and Community subsidies to individuals), and state liability in damages. The former has developed rules of its own distinct from the Emmott cadre of case law, while the latter is governed by the general rules here discussed. Unlawful Member State aids and Community subsidies will be addressed in Part F below, and damages liability and time-limits in chapter 5.
C. Unjust Enrichment
In chapter 3 it was pointed out that, in early Court of Justice case law, it was expressly held that the principle of effet utile did not oblige national judges to set aside domestic principles that prevented unjust enrichment of litigants alleging Member State breach of Community obligations. If loss suffered as a result of unlawful levy of charges, for example, had been passed on to consumers or others, the Court held that Member States were not bound to reimburse the sums claimed.223
This rule has also been adjusted in subsequent Court of Justice decisions, and here too diminution of legal certainty has been a by-product of deeper incursion into national law. One Advocate General has written in favour of simple abandonment of ‘unjust enrichment’ as a ground on which Member States may (p. 155 ) justify failure to repay unlawfully levied charges,224 (and advocated a shift of emphasis toward preventing Member States from unjustly enriching themselves by retaining them).225 The response of the Court of Justice has been more nuanced and complex, but nonetheless familiar: national rules precluding unjust enrichment of traders will not necessarily offend the principle of effectiveness, but there will be some circumstances in which it will. Further, enforcement of Directives sit in their own category, when it comes to the applicability of national unjust enrichment rules. Unlike the initial confinement of the Emmott conduct principle to Directives, which occurred in Texaco and Haahr Petroleum, but which was not subsequently followed, discrete rules appear to survive with respect to unjust enrichment and enforcement of Directives. The case law has broadly evolved in the following manner.
1. Cotter and McDermott
In Cotter and McDermott226 the Court of Justice prevented Member States from invoking unjust enrichment with respect to an inadequately implemented Directive vesting individuals with rights. Under a legislative scheme provided under Irish law, married men automatically received increases in benefits in respect of spouses and children deemed to be dependent, while married women were required to prove dependency of family members before additional payments would be made.227 The Court of Justice had no difficulty in declaring these rules to be in breach of Article 4(1) of the Social Security Directive, given that the Directive provided for equal treatment between men and women in ‘the calculation of benefits including increases due in respect of a spouse and for dependants’.228 The Irish Government, however, argued that to extend the same rights to married women would, in some circumstances, result in double payments being made, in particular where spouses of the women affected also received social security benefits during the period in question. The Government contended that payment of benefits for dependants in these circumstances ‘would be manifestly absurd and would infringe the prohibition on unjust enrichment laid down by national law’.229
The Court issued a very brief response to this argument, and held that ‘reliance on [unjust enrichment] would enable the national authorities to use their own unlawful conduct as a ground for depriving Article 4(1) of the directive of its full effect’.230 The same was held with respect to a transitional provision of national law providing for compensatory payments for married men who lost payments (p. 156 ) pertaining to dependent spouses.231 It was held that if these measures were not extended to women, breach of Article 4(1) of the Directive would arise. The European Court was of the view that the principle of unjust enrichment could not affect claims made pursuant to illegal conduct of this kind.232
2. Restricting Cotter and McDermott to Vertical Cases?
It was argued at an early stage in the development of the case law that the prohibition on reliance on unjust enrichment expressed in Cotter only applies to vertical disputes against the State. However, subsequent, albeit more generalized, developments appear to have established that this is not the case.
For example, Advocate General Van Gerven in his Opinion in the Fisscher case addressed the issue of whether or not national rules prohibiting unjust enrichment would affect Mrs Fisscher's claim to a pension under Article 141 of the Treaty. In addition to challenging the limitation period set by national law, Mrs Fisscher argued that she was not obliged to pay contributions to the scheme retroactively in order to be eligible for a pension. This was so because the fundamental right to receive equal pay meant that women in her position must be entitled to receive a pension retroactively without investing in a fund. The United Kingdom challenged this contention on the basis that awarding Mrs Fisscher a pension, in the absence of making retroactive contributions to a scheme, would lead to her unjust enrichment.233
The Court of Justice proffered no opinion on the unjust enrichment point. It was held that exempting Mrs Fisscher from contributing to a fund retroactively would vest her with ‘more favourable treatment, particularly in financial terms', than she would have had if she had been duly accepted as a member’.234 Advocate General Van Gerven, however, reiterated the view that‘…Community law does not prevent a national court from ensuring in accordance with domestic law that protection of rights guaranteed by Community law does not lead to unjust enrichment of the person concerned’.235 He argued that aspects of the decisions in Cotter and McDermott pertaining to unjust enrichment only applied to vertical relations between individuals and the State. Given that Fisscher concerned the enforcement of Article 141 by one private party against another, he contended that the rules enunciated in Cotter and McDermott and Emmott were of no relevance.236
(p. 157 ) It seems, therefore, that Advocate General Van Gerven was in favour of splitting the operation of Court of Justice rulings on sanctions and procedures by reference to the public or private nature of the party against whom their enforcement is sought. In relation to both national limitation periods and unjust enrichment, the Advocate General suggested that benefits which individuals might derive from disapplication of national rules on remedies and procedures should be confined to actions against the State.237
However, subsequent developments have not supported this view. Cases like Cofidis, Coote and Sapod Audic are examples, discussed in chapter 2, in which the Courts acquis on effective remedies have been attached to fully horizontal cases. There would seem, therefore, to be no reason why the Cotter and McDermott prohibition on recourse to unjust enrichment principles to frustrate the purpose envisaged by a Directive should not be extended to all cases in which horizontal effects result from the enforcement of a Directive, and indeed all other EC legal instruments.
3. Unjust Enrichment and Recovery of Sums Due to Individuals
However, it is well established that the Cotter and McDermott prohibition does not apply to the context of recovery from Member States of unlawfully levied charges. The leading authority in this field remains the Comateb case, although it has been affirmed in subsequent decisions.238 It confirmed that national rules prohibiting unjust enrichment of traders will not offend the principle of effectiveness in the context of repayment of charges levied in breach of Community law, provided that the national judge can be satisfied that the whole of the charge has in fact been passed on to purchasers or others. Parts of the loss that have not been passed on must, however, be recoverable.
In Comateb a French law bound traders to pass on certain dock duties that were ultimately held to be a charge having equivalent effect to a customs duty in breach of Article 28 (Article 30) of the Treaty. The relevant customs authority invoked a national law which forbade reimbursement of the charges when they had been passed on to the purchaser,239 and this wholly frustrated the applicants' quest for reimbursement.
(p. 158 ) The Court of Justice observed that while, in principle, Member States were bound to repay charges levied in breach of Community law,240 it upheld, without reference to Cotter and McDermott the ‘established’ principle that repayment is not required when such charges have actually been passed on to others.241 The Court developed the case law further by adding that, if the final consumer were able to obtain reimbursement from the trader, the trader must in turn be able to obtain reimbursement from the State. If, however, the consumer could obtain reimbursement from the State, then the question of reimbursement to the trader would not arise.242 Moreover, the Court cautioned that ‘it cannot be generally assumed that the charge is actually passed on in every case’.243 This was a question of fact to be assessed by the national judge in the light of the evidence.244 Nor, the Court held, could there be a presumption of passing on in the case of either indirect taxes or a legislative obligation to incorporate the charge into the cost price of the product concerned.245 Accordingly, a Member State could resist repayment to a trader ‘only where it is established that the charge has been borne in its entirety by someone other than the trader and that reimbursement of the latter would constitute unjust enrichment’.246 It followed that if the burden of the charge had been passed on only in part, it was for the national authorities to repay the part that had not been passed on.247 The Court of Justice held subsequent to Comateb that the entitlement of the Member State concerned to retain the charge in whole or in part must be interpreted restrictively, ‘taking account in particular of the fact that passing on a charge to the consumer does not necessarily neutralize the economic effects of the tax on the taxable person’.248 What is required is an ‘economic analysis in which all the relevant circumstances are taken into account’.249
In addition, if the trader had suffered damage as a result of passing on (due to an increase, for example, in the product price, and a concomitant decrease in sales) then unjust enrichment might not necessarily result from repayment of the charge.250 The Court concluded in Comateb by holding that traders were not to be prevented from invoking Court of Justice principles on Member State liability in damages for breach of Community law irrespective of whether the charge has been passed on.251 This forms part of the emergence of State liability as a separate and distinct remedy. This will be explored further in chapter 5.
The Court of Justice held in Comateb that, with respect to each individual transaction affected by the unlawful charge,252 the national judge was required (p. 159 ) to make a detailed study in order to establish whether, in all the circumstances, the relevant charge had been passed on, and whether reimbursement would result in the unjust enrichment of the trader concerned. Advocate General Tesauro, however, approached the problem differently, making a plea for the development of a ‘simpler’ solution, particularly from the perspective of the trader.253 He invited the Court of Justice to ‘rule explicitly’ that passing on the charge to the purchaser of the goods in no way affects the right of an individual to repayment.254 This, he argued, would cause less uncertainty for traders, would ‘better reflect economic reality’,255 and was in conformity with the curtailment of Member States' rights to rely on unjust enrichment which already traversed Court of Justice case law.256
A principle closely related to the Comateb rule is the prohibition on national rules which place the onus on the trader of proving that a charge has not been passed on.257 This means that national courts must be entitled to take account of evidence submitted to it by the trader, and is not permitted to rely exclusively on the documents supplied by the competent authorities of the Member State concerned, in deciding whether a charge has been passed on in whole or in part. Otherwise, it would be impossible in practice or excessively difficult to secure the reimbursement of unlawfully levied charges.258 If there is no express statutory presumption in favour of the Member State, it will be for the national court to decide whether the practices of the tax authority have the effect of establishing an (unlawful) presumption of unjust enrichment.259
Unjust enrichment is thus another area in which Court of Justice case law carries great potential to disrupt Member State procedural autonomy. Given the unenviable position in which Member State courts are placed, in assessing national rules in this field, it is respectfully submitted that the ‘simpler’ solution preferred by Advocate General Tesauro, which entailed precluding national judges (p. 160 ) from applying domestic rules on unjust enrichment, was a better solution. In the alternative, unless application of Member State rules prohibiting unjust enrichment of traders posed a serious threat to the functioning of the internal market, it may have been better to have left the boundary between Community and Member State regulation undisturbed.
Further, special rules on unjust enrichment have joined several other areas of the remedial landscape which have been adjusted within the specific context of recovery of unlawfully levied state aids. This ‘sector’ of the remedial case law will be considered in the next section in Part 2.260
D. Recovery by Member States of Sums Unlawfully Paid to Individuals
Community law sometimes requires Member States to secure the recovery of sums it has paid to individuals in breach of Community law.261 This can occur principally, but by no means exclusively,262 when (i) an individual is erroneously paid a subsidy under Community law, and (ii) when a Member State pays an individual an unlawful state aid in breach of the prohibition contained in Article 86 and 87 (ex Articles 90 and 91) of the EC Treaty. Community law has also regulated the remedies and procedural rules operative at national level in these types of cases. However, there are some distinguishing elements of this aspect of the remedial acquis. The Court of Justice is not concerned with the effective enforcement of ‘individual rights’, but with the effective implementation of EC law, even though detriment results for individuals from whom recovery was affected. Second, in both types of cases, regard must be had to the Community interest in securing the enforcement of Community law. So, for example, the Court of Justice held in Case C-366/95 Steff-Houlberg, a subsidies case that:
As will be seen from the discussion below, the application of these guidelines has led to divergent results in the two different types of recovery cases. In the area of subsidies, the Court of Justice has, in many respects, been less interventionist than it has in the context of its generalized case law on Member State remedies and procedural rules. This has meant that traders in the subsidies cases have been entitled to rely on national rules that serve to block any duty to repay wrongly paid-out Community subsidies. Consequently, traders seeking to resist repayment of unlawful subsidies are, broadly speaking, in a better position than traders seeking repayment due to them of charges levied against them by Member States in breach of EC law. On the other hand, traders seeking to resist recovery of state aids paid to them unlawfully are in a less advantageous position than both of these groups. This is so because the Court of Justice has cast onerous obligations on Member States to recover unlawfully paid state aids. The difference between these three different types of cases will be illustrated by the discussion that follows.
It follows from the case-law of the Court that, in the absence of provisions of Community law, disputes concerning the recovery of amounts unduly paid under Community law must be decided by national courts pursuant to their own national law subject to the limits imposed by Community law inasmuch as the rules and procedures laid down by national law must not have the effect of making it virtually impossible or excessively difficult to implement Community rules and national legislation must be applied in a manner which is not discriminatory compared to procedures for deciding similar national disputes (see, in particular, Deutsche Milchkontor, paragraph 19, and, as regards national procedural law, Case C–312/93 Peterbroeck  ECR I-4599, paragraph 12, and Joined Cases (p. 161 ) C–430/93 and C–431/93 Van Schijndel and Van Veen  ECR I-4705, paragraph 17). Although national law requires the various interests in question, namely, on the one hand, the public interest in the revocation of an unlawful administrative measure and, on the other, the protection of the legitimate expectation of the person to whom it is addressed, to be weighed against one another before the measure is revoked, the interests of the Community must be taken fully into account (Deutsche Milchkontor, paragraph 32).263
1. Erroneous Payment of Subsidies
1.1 Unjust Enrichment
The general entitlement of recipients of unlawful subsidies to avoid repayment if their enrichment has been passed on has been extended, as a general principle, to this field of the law. However, the details of Comateb unjust enrichment rules have not been grafted on, by the Court of Justice, to the entitlement of individuals to argue that they would suffer ‘loss of enrichment’ if they were obliged to repay monies erroneously awarded to them under a Community Regulation. As a result, it may well be easier to resist recovery in subsidies cases, than secure it in cases concerning repayment from a Member State of unlawfully levied charges.
In Case C–298/96 Oelmühle Hamburg AG, Jb Schmidt Söhne GmbH and Co. KG v Bundesanstalt für Landwirtschaft und Ernährung264 the Federal Office of Agriculture and Food in Germany sought repayment of a subsidy for the production of colza that had been unduly paid to two oil mills under Regulation 136/66 on the establishment of a common organization of the market in oils and (p. 162 ) fats.265 The oil mills argued inter alia that part of the enrichment it had received had been lost, because it had passed on the pecuniary advantage it had received through payment of the subsidy to its suppliers. This was so because it had duly paid the target price for colza set by Community law. Further, any right of action it may have had against the suppliers was ‘virtually worthless’, because the time-limits for bringing proceedings had expired, and the suppliers were insolvent.266 Given that German law recognized ‘loss of enrichment’ as a ground for waiving the obligation to revoke decisions unlawfully conferring benefits,267 the oil mills argued that they were not bound to repay aid unlawfully awarded subsidier under the terms of the Regulation.
The Court of Justice reiterated the principles laid down in Deutsche Milchkontor,268 referred to in chapter 3, and asserted that, in the absence of provisions of Community law, disputes concerning recovery of amounts unduly paid were to be decided by reference to national law subject to the principles of effectiveness and non-discrimination, and the proviso that, if national law requires the various interests in question to be weighed against one another, then full account must be taken of ‘the interests of the Community’.269 The Court observed that in Deutsche Milchkontor270 it had been expressly held that Community law did not preclude domestic legislation from taking account of criteria such as ‘loss of the unjust enrichment’,271 but issued the following, more specific, guidance to the national judge.
(p. 163 ) In the context then, of unlawfully paid subsidies, the Court of Justice appears to put weight on different imperatives (with respect to unjust enrichment) than those laid down in Comateb. With regard to the former, the Court has obliged national judges to investigate the possibility of recovery from suppliers before allowing a trader to rely on ‘loss of enrichment’, and bound the trader to a good faith duty. Once these elements are met, there will be no duty to repay unlawful subsidies.
Should the national court decide that the oil mills acted in good faith, it would not be contrary to Community law to take into consideration the plea of loss of unjust enrichment. Since that principle also forms part of the Community legal system, it cannot be considered contrary to Community law for domestic legislation to apply that principle in a field such as that of recovery of unduly paid Community subsidies….
…it must be stated that one of the requirements to be satisfied in order to plead lost enrichment is that the national court should have established in the specific circumstances the trader has no possibility of recourse against his suppliers.
The information provided by the national court shows that the general rule applying in domestic law is for unduly paid subsidies to be recovered and that the plea of lost enrichment is accepted, purely by way of exception, where compensation by third parties is not possible. In those circumstances, the mere presumption that the financial situation of the producer is generally deplorable…is not sufficient to establish that recovery is practically impossible in the sense contemplated in the Deutsche Milchkontor case law.272
With regard to the Comateb scenario of recovery of unlawfully levied charges, more complicated instructions have been issued, which are perhaps less favourable to the trader pleading unjust enrichment. As explained above,273 it involves detailed investigation of whether a charge has in fact been passed on, in whole or in part, and whether the existence of the charge caused collateral loss such as a drop in sales. If, as a result of this investigation, it is discovered that only part of the loss was passed on, then the Member State concerned must compensate that sum.
1.2 Time-Limits for Bringing Proceedings
Further, the Court of Justice has shown greater deference to national time-limits for bringing proceedings in the subsidies cases than in the recovery cases. As illustrated above, expiry of reasonable time-limits for bringing proceedings can bar recovery of sums unlawfully paid, provided the wrong-doer has done nothing to discourage institution of proceedings in good time.274
However, in the context of subsidies, the Court of Justice has ruled that the expiry of national time-limits for effecting recovery will work in the traders' favour. In Case C–366/95 Landbrugsministeriet-EF-Direktoratet v Steff-Houlberg Export I/S (and Others),275 the prohibition on the application of national principles rendering it impossible in practice or excessively difficult to implement Community rules, and compliance with the principle of non-discrimination,276 did not preclude the Member State concerned from failing to recoup an EC subsidy because a national time-limit had passed. Under Danish law, authorities maintained a discretion not to seek recovery, due for the period of time that had elapsed since the aid was granted. It concluded that Community law did not prohibit account being taken of grounds of equity of this kind, provided that the conditions laid down in Deutsche Milchkontor were taken into account,277 and the trader has acted in good faith. Neither ‘equity’ or ‘good faith’ have been relevant in the cases concerning recovery of unlawfully levied charges.
Further, subject to the observance of good faith on the part of the trader, Community law was held not to preclude rules respecting traders' legitimate (p. 164 ) expectations.278 This is, of course, subject to the national court taking into account the Community's interest in seeking recovery.279 As will be shown by the discussion to follow, the ruling illustrates that there is broader scope for the protection of legitimate expectation in unlawful subsidy cases than there is in unlawful state aids cases. It is only relatively recently that protection of legitimate expectations has crept into the ‘recovery’ cases. As explained above, the Court of Justice ruled in Marks & Spencer280 that retroactive limits on sums recoverable will be incompatible with Community law if they breach the legitimate expectations of the trader concerned.
No reference was made in Steff-Houlberg to whether the time-limit was reasonable, or whether the conduct of the trader in any way frustrated the national agency from seeking recovery in a timeous fashion. Thus, the only common thread in the case law determining the compliance with Community law of time-limits with respect to bringing proceedings in the context of subsidy cases, as opposed to the general rules governing this field, lies in the fact that both require consideration of the principles of effectiveness and non-discrimination, while further and more particular rules are relevant in the subsidies domain.
1.3 The Burden of Proof and Interest
There are two further areas in which subsidies cases are yet to attract the application of general rules elaborated by the Court of Justice with respect to Member State remedies and procedural rules. First, the Court is yet to remove the authority of national law to determine the burden of proof when subsidies are recovered, although this remains subject to review against the principles of effectiveness and non-discrimination.281 Second, national law is yet to be influenced by Court of Justice case law on the payment of interest discussed below in Part G. Member States are free to decide whether or not to charge interest on unlawfully paid subsidies, subject to the compliance with the principle of equivalence.282
Given then, these significant differences, it is difficult accept the assertion that ‘[c]learly, the Court's approach to the repayment or recovery of wrongly granted Community subsidies is closely aligned to the current period of general case law concerning national remedies and procedural rules for the enforcement by individuals of their subjective Treaty rights’283 It might rather be more accurately viewed as an exceptional area, in which the general rules are supplemented by important counterbalancing principles and factors.284
(p. 165 ) 2. Recovery of Unlawfully Paid State Aids
The specific rules on actions seeking to compel recovery of unlawfully paid state aids differ significantly from those applicable to recovery of unlawfully paid subsidies; it is more difficult for individuals to resist recovery by reference to national procedural rules, than it is to recover unlawful subsidies. The tougher line taken by the Court of Justice in the context of state aids is explicable by the fact that full recovery of state aids is necessary to overcome the distortion of competition necessarily resulting from such payments; the same urgency does not arise in the context of agricultural markets subject to extensive Community regulation that is sanctioned by the EC Treaty.285
Actions recovering unlawfully paid state aids can end up before the national courts, either because (i) an undertaking has been adversely affected by the payment of aid to another, and has sought to enforce, before the national courts, the directly effective procedural requirements of Article 88(3)286 or (ii) a Member State has commenced a recovery action because of a definitive decision of the Commission establishing the illegality of the sums paid. In both cases, the actions for recovery are governed by the procedural laws of the Member State concerned.287 Where a Member State is ordered to recover unlawfully paid state aid, it is obliged under Article 249 to take all measures necessary to ensure the implementation of the Commission's decision.288 If a national court finds breach of Article 88(3) procedural requirements, it must in principle allow an application for its repayment.289 Thus, while recovery actions in the field of state aids is subject to regulation by reference to the principles of effectiveness and non-discrimination, the Community's interests in recovery of the aid is key among the factors which a national court is bound to apply. Any ‘individual rights’ of the recipient of the aid are secondary to these imperatives. Due to the obligations imposed by Article 249, the sole defence available to Member States for failing to secure repayment arises when repayment was ‘absolutely impossible’.290
(p. 166 ) 2.1 Loss of Enrichment
Thus, in Case C–24/95 Land Rheinland-Pfalz v Alcan Deutschland,291 an obligation was cast on the German Government to recover unlawful aid, despite arguments forwarded by the defendant, and that were recognized under German law, to the effect that the donees had irreversibly disposed of any advantage, and were thus exempt from an obligation to repay it. In other words, an attempt was made to rely on the ‘loss of enrichment’ principle of C–298/96 Oelmühle Hamburg AG. The Court ruled as follows:
It is interesting to note that in a subsequent recovery case, the Comateb ruling was cited in support of the duty on Member State governments to secure full recovery of aid unlawfully paid to individuals.293 However, none of the principles elaborated in the judgment were referred to.
Moreover, as the Advocate General emphasised in point 38 of his Opinion, an undertaking which incurs losses after the grant of aid may nevertheless obtain ongoing benefits from its temporary survival in terms of, for instance, retention of its place on the market, reputation and goodwill.292
2.2 National Time-Limits
The distinction between the rules that apply in the two types of case is not limited to the issue of enrichment. The Court of Justice further ruled in Alcan that application of the principles of effectiveness and non-discrimination, coupled with the taking of due account of the Community interest,294 meant that, when national authorities were late in complying with a decision requiring repayment of unlawfully levied State aid, the lapse of a national time-limit for instituting recovery could not be invoked to preclude recovery. Otherwise ‘recovery of unduly paid sums would be rendered practically impossible and the Community provisions concerning State aid deprived of all effectiveness’.295 Pursuant to Article 15 of Regulation 659/1999,296 the Commission has a ten-year period in which to recover unlawful State aids. Only the expiry of this time-limit will allow Member States to remain inactive.
There is equally little scope for the traders to rely on legitimate expectations.297 Only in exceptional circumstances, possibly entailing contribution by the (p. 167 ) Commission to the misapprehension of the legality of the aid paid, will traders be entitled to rely on legitimate expectations.298 Thus, the special procedures which operate under Community State aids law, in which the Commission are authorized to make final and binding decisions on the legality of granted aid, place it in a distinct category from recovery of subsidies, particularly, although not exclusively, in the context of legitimate expectations.
There are two further ways in which the Court of Justice has attenuated the authority of national courts to apply national principles relating to remedies with respect to State aids. First, it has precluded all Member State measures which purport to justify, retroactively, un-notified State aids.299 This contrasts with the complex rules elaborated in Part B above which permits Member States to impose retroactive limits on the recovery of sums paid by individuals in breach of Community law, subject inter alia, to the provision of adequate transitional arrangements and respect for the legitimate expectations of the individuals concerned. Second, it has borrowed from established principles on the right to effective judicial protection300 (discussed below in Part G) in supplying a broad interpretation of individuals having an ‘interest’ in the enforcement of the prohibition on implementation of un-notified State aids in Article 88(3). It extends to those who have paid a tax in breach of its requirements; the individual concerned need not additionally show that they have been affected by a distortion of competition resulting from the payment of aid.301 The adoption of a generous view of who can sue to enforce EC State aids rules complements, rather than conflicts with, the Community interest.
The Court of Justice has also borrowed from its general principles on interim relief in obliging national authorities to refrain, pending the determination of the legality of aid, from making payments.302 This has been based on the direct effect of Article 88(3). Traders can also petition the Court of First Instance seeking interim suspension of final Commission decisions that State aids are unlawful.303 Finally, pursuant to Article 14(2) of Regulation 659/1999,304 sums recovered are to include lost interest.
Therefore, case law on Member State remedies and procedural rules and State aids has an odd relationship with the general remedial principles that have been elaborated by the Court of Justice. On the one hand, in the context of time-limits for bringing proceedings, prevention of unjust enrichment of traders, and national measures designed to place retroactive limits on recovery, distinct principles of law (p. 168 ) have emerged that apply only in the context of State aids. However, the right of access to a court, and the right to interim relief, have been elaborated by reference to general principles.305
The case law on recovery of subsidies and unlawful State aids has special features. Member State courts are not precluded from applying national rules on loss of enrichment to excuse Member States from recovering subsidies, but in the context of State aids, this is absolutely prohibited. Indeed, given that the Comateb rules on repayment do not apply to subsidies cases, recipients of unlawful subsidies appear to be in a better position than traders seeking recovery of charges levied by Member States in breach of EC law.
Expiry of a national time-limit can equally excuse a Member State from recovering subsidies, but it cannot with respect to State aids. It is only if recovery of State aids is ‘absolutely impossible’ that Member States can avoid their Article 249 duties. There is more scope for respect for a trader's legitimate expectations in subsidies cases than State aids cases, the Court of Justice having given Member State tribunals greater latitude with respect to legitimate expectations in subsidies cases than in the State aids rulings. This contrasts interestingly with respect to the time-limit rules, and legitimate expectations, in disputes concerning repayment to a trader of charges levied in breach of EC law. In this context, expiry of reasonable limitation periods will ordinarily bar recovery, although, since Marks & Spencer, the legitimate expectation of traders must be respected when a time-limit is altered.
While the subsidies cases are yet to address the question of retroactive limits on the recovery of subsidies, it is established that these are completely impermissible in the context of State aids. This position differs from that applicable with respect to recovery of charges levied in breach of EC law. Retroactive limitations are permitted, albeit subject to detailed caveats. However, like the cases concerning recovery from Member States of unlawfully levied charges, the State aid principles provide generously for the availability of interim relief. This is yet to be considered in the context of subsidies disputes.
Finally, the onus of proof and interest are two fields in which the subsidies case law has developed distinct principles. Thus far, onus of proof has been left to national law, as has the question of whether interest should be paid with respect to sums unlawfully paid. Pursuant to Article 14(2) of Regulation 659/1999, interest forms an essential component of recovered State aids.
The above described case law appears to be predicated on policy imperatives which differ in the three different sectors. The rights of traders receiving unlawful (p. 169 ) State aids are most severely restricted, because of the distortion of competition that results from Member State breach of Community State aids rules. The same does not result from payment of Community subsidies to support the agricultural sector. Further, the policy source of the broad range of rights individuals enjoy in recovering charges unlawfully levied by Member States lies in the damage to the internal market that such charges cause. Although the case law has never said so specifically, the ‘Community interest’ lies in allowing traders generous recovery rights from Member States that have behaved unlawfully.
Thus, there appears to be an established pattern of more intense respect for individual rights when they accord with the Community interest, than when they conflict with it. This is exemplified by the case law on recovery of State aids, in which individuals enjoy few rights, especially when compared with traders seeking recovery from the State of unlawfully levied charges. The field of subsidies sits somewhere between these groups, with recipients of unlawful subsidies reaping the benefit of policy considerations which tolerates the operation of Member State rules precluding recovery.
E. Interim Relief
It will be recalled from the discussion in chapter 3 that the European Court held in Factortame No 1 that, subject to regular restrictions imposed by Community law, domestic rules on the issue of interim orders will continue to apply in disputes in which the compatibility of national law with Community measures is questioned. In support of preserving Member State authority to determine the circumstances in which interim orders will be made, one commentator argued, soon after Factortame No 1 was released, that any attempt on the part of the Court of Justice to develop substantive laws in this area would amount to an unwarranted interference in the jurisdiction of the national courts.306 However, a contrary opinion contended that the disparate availability of interim orders among the Member States should have prompted the court to design uniform principles to be applied across the Community.307
In any event, rulings of the Court of Justice that post-date Factortame No 1 suggest that the Court of Justice has moved toward the adoption of a Community standard. In the Zuckerfabrik and Atlanta Fruchthandelsgesellschaft cases, which concerned the authority of national judges to issue interim orders when the (p. 170 ) validity of Community law is questioned, the Court of Justice made the following assertion:
The Court thus appears to be merging the rules which national judges are bound to apply when called on to order interim relief, irrespective of whether an applicant is alleging that parent Community measures are invalid, or questioning the compatibility of Member State laws with Community rules. In the context of the issue of interim orders in invalidity claims, the Court of Justice has designed very detailed rules. Yet, they differ markedly from the principles prescribed by the House of Lords in Factortame No 1 for the grant of interim relief when national authorities fail to comply with Community rules.
The interim legal protection which Community law ensures for individuals before national courts must remain the same, irrespective of whether they contest the compatibility of national legal provisions with Community law or the validity of secondary Community law, in view of the fact that the dispute in both cases is based on Community law itself308
When deciding whether or not to suspend a national measure which is based on an allegedly invalid Community rule,309 or indeed when the same type of order is requested,310 the Court of Justice requires national judges to apply the conditions imposed by the union judicature when interim relief is sought before the President of the Court of Justice under Articles 242 and 243 (Articles 185 and 186).311 These rules will be examined in detail in chapter 6. The general rules, however, in the context of validity reference from the national courts, oblige national judges to:
(i) Examine whether there are serious doubts as to the validity of the Community Act, and refer questions to the Court of Justice on this issue, unless it is already before the Court.
(ii) Respect any decisions of the Court of Justice or the Court of First Instance on the lawfulness of the measure, or any successful application for interim relief instituted at Community level.312
(iii) Determine whether there is a situation of urgency, in that interim relief is necessary to avoid serious and irreparable damage to the party seeking relief.
(iv) Take due account of the Community interest when assessing the applicant's claim. Would the Community interest be deprived of all effectiveness if not immediately implemented?
It seems likely that problems will arise if these principles are applied to claims based on the compatibility of national laws with Community measures. For example, the House of Lords in Factortame No 2 made no reference to any imperative connected with the protection of the ‘Community interest’ in deciding whether or not to issue an interim order. On the contrary, their Lordships seemed to be motivated by the need to ensure that English measures were disapplied in limited circumstances only.315 The House of Lords emphasized that only pressing considerations should prompt English judges to disapply what was, on the face of it, ‘the law of the land’.316 Their Lordships made no allusion to the need for effective enforcement of EC rules when determining whether an interim order should be issued. If this imperative were relevant, however, it seems patent that private parties would have a better chance of obtaining interim relief, on the assumption that it is in the Community interest to secure the continued enforcement of EC rules pending a definitive ruling on the compatibility of national law with the relevant Community measure. In other words, this is another example of concordance (p. 172 ) between individual and Community interest, leading to better results for the former.
Uncertainty in the law is further exacerbated by the fact that the Court of Justice is yet to restate the Zuckerfabrik principle on the need for rules on interim relief to be ‘the same’ whether the action concerns validity or interpretation, in the context of an interpretation case. Indeed, in two interpretation cases that post-date Zuckerfabrik, the Court simply referred to the basic Factortame No 1 case law, affirming that national courts ‘must be in a position to grant interim relief’.317 The judgments made no mention of the principles under which such orders should be issued. Therefore, it is not yet clear whether the grant of interim relief, when Member State breach of EC obligations is in issue, should be governed by Community rules, or norms promulgated at the domestic level. However, the Court of Justice has at the very least cleared the way for the development of a uniform European standard.318
Finally, it is now settled that the duty to ensure the availability of interim relief is incumbent on national courts only, and cannot be invoked by individuals in order to prevent national administrative authorities from breaching EC rules. The opposite might have been indicated by Case 103/88 Fratelli Costanzo v Comune di Milano319 in which it was held that the doctrine of direct effect applied to administrative authorities, who were therefore bound to apply Directives vesting individuals with rights, even in the face of conflicting national measures. However, recently the Court of Justice ruled in Case C–319/69 Brinkmann Tubakfabriken GmbH v Skatteministeriet that Community law does not require Member State administrative authorities to suspend decisions made in alleged breach of directly effective Directives, pending the decision of an appeal body.320
(p. 173 ) F. The Johnston Right to Effective Judicial Review
Surprisingly, in elaborating legal principles governing this field, the Court of Justice is yet to make detailed reference to the case law of the European Court of Human Rights in Strasbourg on issues relating to access to courts and the adequacy of judicial remedies.321 Indeed, as is exemplified by the seminal passages in Case 222/84 Johnston v RUC,322 the Court of Justice refers, in an almost interchangeable fashion, to the requirement of ‘judicial control’,323 a general obligation to ensure the introduction into Member State law of measures enabling individuals to ‘pursue their claim by judicial process’, and the right to ‘obtain an effective remedy before a competent court’. However, such issues are dealt with as discrete questions in Strasbourg. Yet the Luxembourg court has, thus far, refrained from decoupled the elements of Johnston in rulings that post-date it.
1. The Strasbourg Principles
For example, under the Strasbourg system, the right of ‘access’ to a Court is governed by Article 6(1), and precludes the Member States from imposing limitations that impair the ‘very essence’ of the right; restrictions must pursue a legitimate aim and comply with the principle of proportionality.324 Article 6(1) also prohibits Member States from maintaining procedural rules at levels of incoherency so that they fail to afford an ‘effective right of access’, to courts.325 Further, issues appertaining to the fairness of a hearing, such as the need for them to be ‘public’,326 ‘impartial’327 and, for rules of evidence to guarantee ‘equality of arms’ between the parties,328 are themselves governed by individual bodies of case law.
(p. 174 ) The right to an ‘effective remedy’ is largely regulated by an entirely separate provision, namely Article 13 of the ECHR.329 While it does not bind States parties to supply remedies of a judicial nature to enforce Convention rights,330 if judicial means are chosen, they must ensure ‘appropriate relief’ and ‘adequate redress’ for the alleged violations of the ECHR.331 This means that the depth or scale of judicial review applicable under national law can be subject to scrutiny. It has been held, for example, in the context of protection of the Article 8 right to privacy, that judicial review for ‘irrationality’ provided insufficient scrutiny to ensure protection of that right.332 It has also been held that remedies must be ‘effective’ both in practice and in law.333
2. The Luxembourg Principles
It is unfortunate that Court of Justice case law in this field has been characterized by less rigour than that which has been elaborated by Strasbourg. First, it has caused significant fissures between Strasbourg and Luxembourg legal principles.334 Thus, the Strasbourg jurisprudence requires those affected by, and wishing to argue, breach of a right to a fair and public hearing, to prove that their claim relates to a ‘civil right’ or ‘obligation’, or a ‘criminal charge’. Yet the Court of Justice in Luxembourg has never applied this as a threshold test for the application of the right of access to an effective judicial remedy; the EC right thus appears to extend to all forms of administrative decision making. What Community law requires is ‘effective judicial scrutiny of the decisions of national authorities taken pursuant to the applicable provision of Community law’.335 This is additionally evidenced by the fact that there is no reference to criminal charges or civil rights or obligations in Article 47 of the EU Charter.336 Further, under EU law, the right to a remedy includes an entitlement to a ‘judicial’ remedy, and is not confined to an administrative remedy.337 Article 13 ECHR, however, can be satisfied by the availability of adequate non-judicial remedies.
(p. 175 ) Second, the content, then, of the right to an effective judicial remedy lacks certainty under EU law, in comparison with the Strasbourg jurisprudence. While it is clear that, as a general rule, it is for the legal system of each Member State to determine which court or tribunal has jurisdiction to hear disputes involving individual rights, the channels chosen must ensure effective protection of those rights.338 The contours of the case law that has emerged might be described as follows.
It is now established that the scale of judicial review that Member State courts are required to supply is influenced directly by the degree of discretion Member States enjoy in their implementation of the EC measure in question. The greater the discretion, the less rigorous judicial review will be required, and vice versa.
Thus, Johnston v RUC339 concerned a national measure that precluded the exercise of a fundamental right in the Community legal order, namely, right of access to a court. This is a legal principle with respect to which the Member States have very limited discretion. However, as was exemplified by the later Upjohn case,340 with respect to exercise of delegated authorities by Member State agencies governing the pharmaceuticals industry, national courts have more restricted review powers. Thus, the Court of Justice rejected the argument that United Kingdom courts must have full powers to undertake fact and merit review of a decision to deregister a drug by a United Kingdom authority; the fact that the refusal was made within the context of a Directive that regulated the process provided no support for a contrary conclusion.341 Even though Article 12 of the Directive required the Member States to ensure that decisions suspending or revoking marketing authorizations were open to challenge by way of legal proceedings, it left to the Member States the task of organizing their own systems of judicial review.342 While the Court of Justice accepted the direct effect of Articles 11 and 21 of the Directive 65/65343 (those provisions laid down the criteria for the revocation of marketing authorizations),344 the consequences flowing from this were that designation of courts and procedural rules to enforce these rights were matters for the Member States, subject to the principles of effectiveness and non-discrimination.345 The Court was of the view that it did ‘not appear that the only appropriate means of preventing exercise of rights conferred by Community law from being rendered virtually impossible or excessively difficult would be a procedure of judicial review (p. 176 ) of national decisions’346 that empowered the national court to make their own assessment of the facts, and more particularly of scientific evidence relied in the support of revocation of marketing licences.347
The Court of Justice drew a parallel between the role of national courts and that of the Union judicature injudicial review proceedings. It observed as follows:
A caveat on this deference to the authority of national law was indicated, in that Member State courts must be in a position ‘effectively to apply the relevant principles and rules of Community law when reviewing its legality’.349 Further, the Court accepted that, in the event of new material coming to light after the adoption of a decision revoking marketing authorization, the rights of the person concerned would only be adequately protected if they were able to make a fresh application to administrative authorities for the issue of a licence.350 Thus, the Directive did not require the Member States to establish judicial review procedures which empowered courts to make their own assessment of the facts.351
where a Community authority is called upon, in the performance of its duties, to make complex assessments, it enjoys a wide measure of discretion, the exercise of which is subject to a limited judicial review in the course of which the Community judicature may not substitute its assessment of the facts for the assessment made by the authority concerned. Thus, in such cases, the Community judicature must restrict itself to examining the accuracy of the findings of fact and law made by the authority concerned and to verify, in particular, that the action taken by the authority is not vitiated by a manifest error or misuse of powers and that it did not clearly exceed the bounds of its discretion.
Consequently, Community law does not require the Member States to establish a procedure for judicial review of national decisions revoking marketing authorisations, taken pursuant to Directive 65/65 and in the exercise of complex assessments, with a more extensive review than that carried out by the Court in similar cases.348
In Case C–63/01 Samuel Sidney Evans v The Secretary of State for the Environment, Transport and the Regions352 the Court of Justice again upheld a national judicial review scheme, contrary to the Opinion of the Advocate General,353 under which UK law provided no avenue for a full appeal to a court, even though rights arising under a Directive were in issue. This question arose in the context of national rules implementing a Directive's obligation on Member States to establish compensation schemes for uninsured or inadequately insured drivers, and in which fact review occurred only before an arbitrator reviewing the original (p. 177 ) compensation decision. Beyond that UK courts were limited to considering error of law or serious irregularity affecting the arbitration.
The Court of Justice held that, in determining whether the judicial review provided by UK law was adequate, it would be influenced by (i) the aim pursued by the Directive,354 which, in the case at hand, was to provide a simple mechanism for compensating victims, and (ii) the role of the provisions in the procedure, its progress and its special features viewed as a whole, before the various national instances. Thus, account had to be taken of the basic principles of the domestic legal system, such as the protection of the rights of the defence, the principle of legal certainty, and the proper conduct of procedure.355 As a result of this analysis, it was concluded that exclusion of fact review by a judicial body did not render it impossible in practice or excessively difficult to exercise the right to compensation conferred on victims of damage or injury caused by unidentified or insufficiently insured vehicles.356
The Advocate General, after undertaking a closer examination of the component elements of the requirement of ‘effective legal protection’, and indeed the national review scheme itself,357 concluded that the requirement of effective legal protection had been breached.358 Further, the Advocate General expressly distinguished the situation before him from that which appeared in Upjohn, because that case entailed the carrying out of ‘complex assessments in the medico-pharmacological field’ which called for a ‘certain discretionary scope’.359
2.3 Distilling the Appropriate Approach
In the light of these cases, and others considered by the Court of Justice, the approach employed in assessing the scale or depth of judicial review available at national level might be summarized as follows. The Court of Justice will study the relevant national scheme of review, in order to determine, in the light of the level of discretion enjoyed by the Member State agency concerned, whether the judicial review available complies with the requirement of effective protection. Thus, in Schneider it was held that a national legal system which provided three levels of review for violation of the (low-discretion) fundamental right to equal treatment ‘undeniably’ satisfied the requirement of adequate and effective judicial protection.360 On the other hand, confining the review of (p. 178 ) a decision to withdraw an invitation to tender to whether the decision was arbitrary was held, in Hospital Ingenieure, to be insufficient, perhaps, implicitly, because of the low levels of discretion afforded by the Directive concerned. The Court of Justice reached this conclusion partly because the Directive in issue361 aimed at strengthening remedies.362 Similarly, in Connect Austria, limiting judicial review to ‘cases where the applicant claims to have been injured by the infringement of a constitutionally guaranteed right or by the application of an unlawful regulation, an unconstitutional statute or an unlawful international treaty’ was held not to be a ‘suitable mechanism’ for parties to appeal decisions of national regulatory authorities in the telecommunications sector.363 Further, it was established in Stadt Halle that an individual Directive can secure specific aims, such as ensuring the availability of rapid judicial remedies, and confirmed that decisions not to initiate a public procurement procedure at all must be judicially reviewable.364
2.4 Relationship with State Liability
However, in a further raft of cases concerning the interpretation of Directives on public procurement,365 the Court of Justice has held back from ruling that national bodies established for the review of decisions made in alleged breach of an EC Directive concerning public supply and public works contracts366 were bound also to rule on the interpretation of a Directive on public service contracts,367 when provision for the latter had not been made under national law. In such circumstances, the remedy for aggrieved persons lay in the State liability rules.
The Court has reached this conclusion, even though the services Directive provides that the ‘Member States shall take the measures necessary to ensure that, as regards contract award procedures…decisions taken by the contracting authorities may be reviewed effectively and, in particular, as rapidly as (p. 179 ) possible…on the grounds that such decisions have infringed community law in the field of public procurement or national rules implementing that law’.368 The Court of Justice ruled that the services Directive did not indicate which national bodies were to be the competent bodies to perform review duties,369 and recalled the autonomy of the Member States to determine which court or tribunal has jurisdiction to hear disputes involving individual rights derived from Community law, provided those rights are effectively protected.370 The Court reminded the national referring Courts of their duty to interpret national law with Community law, in so far as it was possible to do so,371 and concluded that, if the relevant national law could not be interpreted in conformity with the relevant national Directive, the persons concerned could, using the appropriate domestic procedures, claim compensation for damage caused by failure to transpose the Directive in good time.372 The Opinion of Advocate General Fennelly in one of these cases is most instructive. He explained why principles elaborated in Factortame No 1373 did not bind judicial authorities empowered, under national law, to review the public supply and public works Directive, to also take jurisdiction with respect to the public services Directives. He argued as follows:
The present case is quite different, in my view, from the situation in a case such as Factortame and Others, which was mentioned by the Bundesvergabeamt in its order for reference. In that case, the Court required the national court to set aside a national rule precluding, in certain circumstances, the grant of interim relief, which was deemed essential for Community-law rights to have full force and effect. However, it was clear that the national court, the House of Lords, had jurisdiction over the subject-matter of the dispute and was properly seised of it. I do not accept the applicant's argument that, as a matter of Community law, all national courts and tribunals have jurisdiction to apply all directly effective provisions of Community law in the absence of a domestic-law provision expressly excluding such jurisdiction. As Advocate General Tesauro said (p. 180 ) in his Opinion in Dorsch Consult, 'this would encroach on the domain of the national legislator'.374
Yet, in Case C–185/97 Coote v Granada Hospitality,375 which was considered in chapter 2 with respect to the remedies that attach to Directives, the Court of Justice made no reference to state liability principle in broadly interpreting the duty on national courts to supply remedies that are effective and dissuasive of breach. In that case the applicant brought a claim before the United Kingdom Industrial Tribunal, alleging that she was being victimized by Granada, her former employer, in that the company had refused to provide her with references. This in turn had impaired her ability to find new employment. Previous to this Mrs Coote had brought a claim for sex discrimination against Granada, alleging that she had been dismissed from her post due to pregnancy. The claim was settled out of court, and the employment relationship was terminated by mutual consent.
The difficulty with Mrs Coote's victimization action lay in the fact that the United Kingdom Sex Discrimination Act (1975) only prohibited retaliatory measures from an employer whose prejudicial effects appeared during the employment relationship. The Industrial Tribunal rules in favour of Granada, stating that it reached that decision with some regret, since it left Mrs Coote without a remedy. The Employment Appeal Tribunal, to which the case was appealed, entertained reservations on the compatibility of the relevant provisions of the Sex Discrimination Act376 with the Equal Treatment Directive, and referred questions to the Court of Justice to clarify the issue.
The Court of Justice first reiterated the prohibition on the horizontal enforcement of Directives, and that such measures cannot be relied upon against a private sector employer.377 It recalled, however, the duty on national judges to interpret national laws, and in particular legislative measures like the Sex Discrimination Act which were specifically introduced to implement a Directive, and concluded that the questions had been put by the Employment Appeal Tribunal ‘for the purposes of interpreting national provisions transposing the Directive’.378
Primary attention, however, was focussed on Article 6 of the Equal Treatment Directive, in its capacity as a general principle of law common to the Member States, and as enshrined in Article 6 of the European Convention of Human Rights.379 It was held that Member States were bound to ensure ‘effective judicial control’380 to ensure compliance with the principle of equal treatment between men and women, and that Article 6 was ‘an essential factor for attaining the (p. 181 ) fundamental objective of equal treatment for men and women, which…is one of the fundamental human rights whose observance the Court has a duty to ensure’.381 The Court reached the following conclusion:
The Court of Justice rejected arguments to the effect that Article 7 of the Equal Treatment Directive precluded a finding in favour of the applicant, given that it only required Member States to take the necessary measures to protect employees against dismissal as a reaction against legal proceedings to enforce the Directive. It concluded that, in all the circumstances, it could not be inferred that it had been the intention of the legislature to limit the protection afforded to workers exercising their right to equal treatment to a prohibition on dismissal.383
The principle of effective judicial control laid down in Article 6 of the Directive would be deprived of an essential part of its effectiveness if the protection which it provides did not cover measures which, as in the main proceedings in this case, an employer might take as a reaction to legal proceedings brought by an employee with the aim of enforcing compliance with the principle of equal treatment. Fear of such measures, where no legal remedy is available against them, might deter workers who considered themselves the victims of discrimination from pursuing their claims by judicial process, and would consequently be liable seriously to jeopardise implementation of the aim pursued by the Directive.382
Some difficulties arise, however, when Coote is compared with the raft of cases, mentioned above, on the right to an effective remedy to enforce EC public procurement law. It will be recalled that the Court of Justice has held, on a number of occasions, that a national tribunal is not obliged to expand its jurisdiction of its own volition in order to comply with the requirement to supply an effective remedy laid down in public procurement Directives. Emphasis was rather laid on the Court's case law on State liability in damages as the applicants' appropriate remedy, an avenue of redress which did not rate a mention in the Coote case. Would not a state liability action against the UK Government have been an adequate remedy in her case? The answer may lie in the fact that in Coote, there seemed to be reasonable grounds for assuming that there was some scope for construing the Sex Discrimination Act in conformity with the Equal Treatment Directive, while the cases concerning public procurement concerned the situation of ‘vacuum’, in that there seemed to be no measure of national law in existence that was open to an interpretation that complied with the relevant Directive.384
(p. 182 ) G. Other National ‘Obstructions’ and the Principle of Effectiveness
Several other areas of national law have been subject to scrutiny by the Court of Justice for compliance with the principle of effectiveness. The consistency with effet utile of national rules on costs governing Article 234 references were held in Case C–472/99 Clean Car Auto Service Gmbh v Austria385 to be a matter for the national court as it ‘alone has direct knowledge of the procedural rules governing actions in domestic law’.386 Similarly, in Case C–228/98 Dounias v Minister for Economic Affairs387 it was left to the national court to decide whether a law which precluded imported goods from being placed on the market until a customs investigation had been carried out breached the principles of effectiveness and non-discrimination.
With regard to Member State remedies for the enforcement of the Environmental Assessment Directive, the division of authority between the national courts and the Court of Justice is unclear. While it has held in Case C–201/02 The Queen on the Application of Delena Wells v Secretary of State for Transport, Local Government and the Regions388 that, due to Article 10 EC ‘the competent authorities are obliged to take, within the sphere of their competence, all general or particular measures for remedying the failure to carry out an assessment on the environmental effects of a problem’,389 the application of the principles of effectiveness and non-discrimination led to no clear-cut answers. It was concluded that:
This enigmatic response rather suggests that, if those affected by a failure to undertake an environmental assessment insist that it be carried out, then national law must be interpreted in such a way as to accommodate this request.
it is for the national court to determine whether it is possible under domestic law for a consent already granted to be revoked or suspended in order to subject the project in question to an assessment for its environmental effects, in accordance with the requirements of Directive 85/337, or alternatively, if the individual so agrees, whether it is possible for the latter to claim compensation for the harm suffered.390
An example of a national rule which did not survive scrutiny be reference to the principle of effectiveness, and which was not referred back for consideration by the national court was the notion of ‘excusable error’ considered in Fantask.391 As noted above, it was concluded in Fantask that, while the Danish Government was entitled to invoke the applicants failure to comply with reasonable time-limits (p. 183 ) for bringing proceedings in order to justify refusal to reimburse charges levied in breach of Directive 69/335 concerning indirect taxes on the raising of capital,392 it could not resort to the domestic notion of ‘excusable error’ in order to justify the same. The Danish Government had argued that the charges were levied over a long period of time (in this case nine years), without either the authorities concerned or the taxpayer being aware they were unlawful. Under Danish law, this long time lag rendered the error ‘excusable’. The Court of Justice ruled, however, that, in the circumstances, application of the principle would render recovery excessively difficult, and would ‘have the effect of encouraging infringements of Community law which have been committed over a long period’.393
In principle, the issue of whether interest is claimable for sums awarded for breach of EC law vesting individuals with rights is an ancillary question for decision by the national courts, subject to the principles of effectiveness and non-discrimination.394 Yet, the results emerging from the case law have been considerably more complex.
First, different rules apply with respect to payment of interest in State liability cases in which compensation is sought against Member State governments for breach of individual rights, than those which apply to cases of sums due as a result of violation of EC rules vesting individuals with rights. The former of these will be considered in chapter 5. Second, whether interest in payable on sums unlawfully held by a Member State may also be considered by reference to the nature of the right protected under the individual Directive that has been breached. This can mean that payment of interest will not be viewed as ‘essential’. Third, the discretion in the hands of the Member States will be fettered, due to the principle of effectiveness, when the payment of interest forms the ‘very objective’ of the claim. In such circumstances, payment of interest will be viewed as ‘essential’ to the correction of a violation of the right concerned.395
The second of these issues was considered in Case C-66/95 Sutton.396 The Court of Justice held that interest was not a necessary component of the sum payable to the applicant, even though it was held that she had been denied social security benefits in violation of Directive 79/7 on the progressive implementation of the principle of equal treatment for men and women in matters of social security.397 It had been established by the time of the Sutton ruling that interest was an essential element of the compensation payable under State liability rules. (p. 184 ) However, neither the Court of Justice nor Advocate General Léger, viewed Mrs Sutton's claim as analogous to an action for compensation. They drew a distinction between the award of interest in cases involving ‘reparation for loss and damage sustained as a result of discriminatory dismissal’398 and ‘the right to receive interest on amounts payable by way of social security benefits’.399 The amounts paid in the latter type of claim were considered to be outside the parameters of Marshall No 2, a key damages case (to be considered in chapter 5) because that judgment concerned inter alia award of interest on amounts payable by way of reparation due to discriminatory dismissal.400 In contrast, social security benefits were paid by competent government bodies, which were obliged to consider whether the conditions laid down in relevant legislation were fulfilled.401 The Court of Justice, with the support of the Advocate General, therefore reached the following conclusion:
…although Article 6 of Directive 79/7 requires the Member States to adopt the measures necessary to enable all persons who consider themselves to have been wronged by discrimination prohibited under the directive in the context of the award of social security benefits to establish the unlawfulness of such discrimination and to obtain the benefits to which they would have been entitled in the absence of discrimination, the payment of interest on arrears of benefits cannot be regarded as an essential component of the right so defined’.402
In the final part of the judgment, however, some relief was afforded to the applicants. While the Court of Justice fell short of ruling that those suing on behalf of Mrs Sutton were entitled to damages under Community law principles of State liability,403 it did not exclude them from the entitlement to pursue their claim for interest on this basis. The Court recalled the conditions laid down by Community law under which Member States are obliged to pay reparation for unlawful conduct404 and reminded the High Court that ‘national law on liability provides the framework within which the State must make reparation for the consequences of the loss and damage caused’,405 subject to the principles of effectiveness and non-discrimination.406 It was therefore concluded that it was for the national court to assess whether Mrs Sutton was entitled to reparation, and to determine the amount of any such reparation.407
(p. 185 ) The third of the above exceptions to interest as ‘ancillary’ was addressed in Case C–397/98 and C–410/98 Metallgesellschaft and Others v Commissioners of Inland Revenue.408 There, the Court of Justice held that a principle of national law that required payment of advanced corporation tax, on the payment of dividends, when the parent of a subsidiary was not resident in the United Kingdom, while exempting UK resident parents from such advanced corporation tax, breached the Article 43 right to freedom of establishment. In these circumstances, the claim for interest covering the cost of the loss of the use of the sums was not ancillary, but was the ‘very objective’ sought by bringing the action. Thus reimbursement was ‘essential’ in restoring the equal treatment guaranteed by Article 43,409 which the claimants were entitled to due to the obligations contained in Article 43.410 In Sutton, the Court observed, payment of interest could not have been regarded as ‘essential’ under the Directive on equal treatment in matters of social security.411
Finally, as noted in chapter 3, the San Giorgio case also established that rules of evidence lie in the exclusive domain of the national courts, subject to the requirements that they do not render rights derived from Community law impossible in practice or excessively difficult to enforce, and subject to compliance with the principle of non-discrimination.412 This has been held subsequently not to preclude the application of a rule of national law that allows for expert witnesses to be called in exceptional circumstances only.413 On the other hand, an individual Directive is able to reverse the onus of proof that would otherwise be operative under national law, thereby minimizing the scope of Member State discretion.414
Principles governing national rules of evidence also feed into the principle of ‘equality of arms’ which has been expressly recognized under EC law. Thus, the Court of Justice in the case of Joachim Steffensen415 relied, uncharacteristically, on Strasbourg case law on the principle of equality of arms, in deciding that it was for the national court to decide whether both sides have had a real opportunity to comment on technical evidence in the circumstances at hand.
Finally, the duty to give reasons is also intimately bound up with the right to effective judicial review for, without reasons, the prospects of judicially reviewing a decision become diminished considerably. However, the Court of Justice has interpreted restrictively the scope of the duty to give reasons with respect to Member State measures which affect individual rights conferred by Community law. It was held in Norbrook416 that neither general principles of Community (p. 186 ) law, nor Article 40 of Directive 81/851 on the approximation of the laws of the Member States relating to veterinary medicinal products,417 bound the United Kingdom authorities to provide reasons with respect to a request by them for further information, prior to the grant of marketing authorization, from a trader concerning a substance falling within the regulatory mechanism laid down by the Directive. The obligation to state reasons was confined to decisions actually withholding marketing authorization, and had no operation with respect to a mere request to give reasons.418
H. The Principle of Non-Discrimination
Although there are far fewer cases in which applicants have contested the compatibility of national sanctions and procedural rules with the principle of equivalence, the parameters of this obligation are attracting increasing attention in the case law. This is unsurprising, given that the concept is intimately bound up with effet utile. As former Advocate General Jacobs has observed, it is important not to undermine ‘the uniform effectiveness of Community law’.419
A clear exposition of the content of the rule appeared in the Levez case,420 which, in addition to reviewing temporal restrictions on the Article 141 principle of equal pay for equal work between men and women against the principle of effectiveness, assessed certain other rules for compliance with the principle of nondiscrimination. More particularly, the United Kingdom Government contended that Mrs Levez could have brought an action in the County Court, and claimed full compensation on the basis of the deceit of her employer which had prevented her from bringing a claim under the Sex Discrimination Act. If she had done so, it was argued that the restriction contained in Article 2(5) of the Sex Discrimination Act of two years in arrears payment of wages would have been inapplicable. This generated doubts at to whether recourse to this remedy might entail procedural rules or other conditions which were less favourable to Mrs Levez, when compared with other domestic actions that might be regarded as similar.
As a foundation rule, the Court of Justice held as follows:
(p. 187 ) This principle in turn generates further issues. Most importantly, what yardsticks will be employed in order to isolate and define domestic actions which are appropriate comparators with rights derived from Community law?
principle of equivalence requires that the rule at issue to be applied without distinction, whether the infringement alleged is of Community law or national law, where the purpose and cause of action are similar.421
The Court of Justice has consistently held that application of the principle of equivalence is a matter for national courts,422 but it has also, intermittently, maintained authority to provide the national court with guidance on the meaning of the principle. This is designed to assist the national court in undertaking its assessment,423 but can be expressed in terms sufficiently imperative to leave the national judge with little choice.424 In Levez the Court reiterated the established principle that Member States were not obliged to extend their most favourable rules to individual rights derived from Community law,425 and applied mutatis mutandis, principles laid down in the van Schijndel case,426 by ruling that ‘the national court must take into account the role played by that provision in the procedure as a whole, as well as the operation of any special features of that procedure before the different national courts’.427 The Court of Justice rejected somewhat spurious arguments of the United Kingdom Government to the effect that the temporal restriction laid down in Article 2(5) applied equally to sex discrimination claims of a purely domestic nature, as to claims based on Article 141. This, it was argued, ensured compliance with the principle of nondiscrimination. The Court observed that the Act constituted the actual means by which the United Kingdom discharged its obligations under Article 141, so that it could not provide an appropriate ground for comparison against which to measure compliance with the principle of effectiveness.428
Other national measures proposed as adequate comparators were rules linked to breach of contract of employment, discrimination in pay connected with race, unlawful deductions from wages and sex discrimination in matters other than pay. The Court of Justice observed that, if the national court were to decide that one of these actions were similar to a claim concerning the Sex Discrimination Act brought before the County Court, then it would fall to the national court to decide whether it was ‘governed by procedural rules or other requirements which are less favourable’.429 Factors that the national court needed to take account of in making this assessment were whether Mrs Levez would incur additional costs (p. 188 ) and delay (especially when an action before the Industrial Tribunal is simpler and in principle less costly), and the fact that the temporal restriction contained in Article 2(5) applied only to claims for equal pay on grounds of sex, whereas claims based on similar rights under domestic law are not limited by the operation of such a rule.430
In the discrete area of national time-limits for bringing proceedings, and the obligation of national courts to observe the principle of non-discrimination, a clear trend has emerged towards conservation of the relevant domestic rule. This first appeared in the Palmisani case (discussed above with respect to time-limits for brining proceedings and damages claims), and has been continued in the context of attempts by traders to recover unlawfully levied charges. For example, it has been held that a time-limit of three years for recovery of charges levied in breach of Council Directive 69/335 concerning indirect taxes on the raising of capital, was not precluded by Community law when a longer limitation period was available with respect to actions between private parties,431 and when a ten-year time-limit in the relevant national Civil Code generally applied with respect to sums paid but not due. This was so because the three-year time-limit was applicable to all unlawful registration charges levied by the relevant Member State, certain indirect taxes, and taxes that had been declared unconstitutional;432 in other words the ‘exceptions’ to the ‘general’ ten-year time-limit were not confined to actions based on Community law.433 Similar conclusions have been reached in the context of attempts to recover charges levied in breach of the Community prohibition on the levying of internal taxes,434 and the ban on charges equivalent to customs duties.435
The Court has also had occasion to rule on whether Community law precludes payment of interest, with respect to unlawfully levied charges, calculated by methods which are less favourable than those applicable under the ordinary rules governing actions for recovery of sums paid but not due.436 The Court recalled that, in the absence of Community rules, it was for national authorities to settle ancillary questions relating to reimbursement of invalid Community measures, such as payment of interest and the date from which it is to be calculated.437 (p. 189 ) Methods of payment of interest which were less favourable than those applicable to actions between private individuals for repayment of sums paid but not due were considered to be compatible with Community law, provided that no distinction was drawn between actions based on national law and those based on Community law.438 However, in Joined Cases C–216/99 ad C–222/99 Riccardo Prisco Srl v Amministazione delle Finanze dello Stato,439 it was held that the rules relating to calculation of interest laid down under national law related ‘specifically to the administrative charges for registration which had been held contrary to Community law by the Court of Justice’.440 Further, while the final judgment was left for the national court to ascertain, they were held by the Court of Justice to be less favourable than ‘the rules applicable to repayment of other tax debts, including repayment of other administrative charges of the same kind’.441
Imposition of fixed ceilings on the sums recoverable for breach of Community law fell foul of the principle of equivalence in Draehmpaehl case.442 The plaintiff sought reparation for damage allegedly suffered as a result of discrimination on grounds of sex in breach of Articles 2 and 3 of the Equal Treatment Directive.443 The dispute concerned discrimination in the context of making an appointment. Mr Draehmpaehl had made an unsuccessful application for a position that was advertised by the defendant, Urania Immobilienservice ohG, in the following terms:
Mr Draehmpaehl was of the view that, due the refusal of Urania to engage him, he had suffered discrimination on grounds of sex in access to employment. He therefore brought proceedings before the Arbeitsgericht (Labour Court) Hamburg, where it was indeed held that the substance of his claim had been made out. The Arbeitsgericht had no difficulty in reaching the conclusion that the advertisement posted by the defendant was not gender neutral, as it was clearly addressed to women. However, the case became more complicated when it came to the quantum of damages payable to Mr Draehmpaehl. While German law correctly reflected Articles 2 and 3 of the Equal Treatment Directive by preventing employers from discriminating against workers on grounds of sex,444 there was (p. 190 ) some doubt as to whether domestic rules on the payment of compensation met standards required under Community law.
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Among the problems confronted by Mr Draehmpaehl was a ceiling on the quantum of damages he could recover which was allegedly discriminatory. Under Paragraph 611a(2) of the German Civil Code, an individual applicant who had suffered discrimination on grounds of sex at the hands of an employer was only entitled to a maximum of three months' lost earnings by way of compensation.445 In addition, German law imposed further limitations when several applicants had been discriminated against on grounds of their sex. Paragraph 61b(2) of the Arbeitsgerichtsgesetz (Law on the Organization of Labour) provided inter alia that, when a number of persons had been discriminated against in the establishment of the employment relationship, the aggregate amount of the award of compensation was to be limited, on application of the employer, to six months' earnings. This provision also carried the potential to influence the claim, as another male candidate had brought parallel proceedings against Urania on grounds that were similar to those raised by Mr Draehmpaehl.
Most important, for present purposes, was the fact that neither of the ceilings here described applied to other provisions of German civil and labour law. This therefore indicated that the principle of non-discrimination in Community law might have been breached, in that a right to reparation for infraction of the Equal Treatment Directive was being offered on grounds that were less favourable than those provided for infringements of domestic law of a similar nature.
As a consequence of these difficulties, and others, the Arbeitsgericht referred a series of questions to the Court of Justice under Article 234 of the EC Treaty. With respect to the ceilings set by domestic law on the quantum of damages payable, the Court of Justice continued its unsympathetic attitude to this issue, affirming the requirement that compensation must have ‘a real deterrent effect on the employer and must in any event be adequate in relation to the damage sustained’.446 Such a ceiling would be compatible with Community law only if it were confined to circumstances in which the applicant, in any event, would not have obtained the position. However the ceilings also stumbled when scrutinized against the principle of non-discrimination. It was held that both ceilings reflected a breach of the duty on Member States to ensure that ‘infringements of Community law are penalized under conditions, both procedural and substantive, which are analogous to those applicable in infringements of domestic law of a similar nature (p. 191 ) and importance’.447 The Court reached this decision because, as noted above, restrictions of this kind were not laid down with respect to provisions of domestic civil and labour law of a similar nature.448
It is interesting to note the absence of guidelines such as the van Schijndel principles, (which were adapted to the principle of equivalence in Levez) in the Courts ruling in Draehmpaehl. Rather than express an ‘in principle’ deference to the assessment of the relevant national court, the Court of Justice felt able, on the basis of the facts before it, to determine whether breach of the principle of equivalence had taken place. The reason for the divergent approaches in the two cases is not discernable from either judgment.
Finally, the intersection between the principle of equivalence and the prohibition under EC law on discrimination on grounds of nationality were illustrated in Shingara and Radiom.449 The Court of Justice was called on to interpret Article 8 of Directive 64/221 on rights of residence of EC nationals moving to other Member States.450
It provides as follows:
Here, the Court of Justice confirmed that Article 8 was limited to conferring on Community nationals all remedies available in a Member State in respect of acts of the administration, within the framework of the judicial system and the division of jurisdiction between the judicial bodies in the State in question.451 This meant that, where national law provided no specific procedures for the persons governed by the Directives as regards entry, refusal to issue or renew a residence permit, or decisions of expulsion general rules would suffice. The obligation imposed by Article 8 is fulfilled if nationals of other Member States have the same avenues open to them as those generally available with respect to acts of the administration in the (p. 192 ) relevant Member State.452 It was held that the situation of nationals concerning the right of entry was in ‘no way comparable’ to the position of nationals of the host Member State confronted with a similar problem.453 In the case of nationals, the Member State concerned enjoyed no margin of discretion, given that right of entry was a consequence of the status of the national.454 That being so, the availability of different, more favourable, remedies to national of the relevant Member State in the context of right of entry, need not be extended, by the grace of Article 8, to nationals of other Member States.455
the person concerned shall have the same legal remedies in respect of any decision concerning entry, or refusing the issue or renewal of a residence permit, or ordering expulsion from the territory, as are available to nationals of the State concerned in respect of acts of the administration.
However, once discrimination occurs within the context in which there are direct domestic comparators, then breach of the principle of equivalence will result in the event of difference of treatment. This was established in Case C–34/02 Sante Pasquini v INPS.456 There it was held that overpayment of a pension supplement by the Italian authorities, which had arisen from the fact that an Italian worker, Mr Pasquini, had taken paid employment in France and Luxembourg, and had thus received pension payments from those Member States (in addition to Italy) could only be sought in the context of procedural rules that are no less favourable than those governing purely internal situations, and in compliance with the principle of effectiveness.457 The reach of the principle of equivalence extended beyond provisions of national law on limitations of actions and recovery of sums paid though not due, but also to ‘all procedural rules governing the treatment of comparable situations, whether administrative or judicial’.458
This meant, in the case at hand, that national laws making it possible to take into account the ‘good faith’ of a pensioner in determining recovery of overpayments, had to be applied in an equivalent manner to former migrant workers, and non-migrant worker like,459 although it was left to the national court to establish whether Mr Pasquini's situation was comparable to that of an Italian pensioner.460 Further, proper checks on over-payment had to be undertaken by the Italian authorities on equal terms, whether over-payment concerned former migrant workers or non-migrant workers.461 If this had occurred, it was held, then the sums recoverable would have dated back to only one year.462 Thus, the Court concluded that the principle of equivalence prevented the Italian state from recovering sums going beyond this period.463 The principle of equivalence, the Court concluded, was ‘simply the expression of the principle of equal treatment’.464
Private parties are, therefore, beginning to enjoy a measure of success in improving remedies ordinarily applicable under national law by invoking the principle of equivalence. A most interesting feature of this case law lies in the fact that while, in principle, application of the test has been vested in Member State (p. 193 ) courts and tribunals, more often than not the Court of Justice has reached its own conclusions, which have disposed of the problems at hand. Significant incursion, therefore, into Member State autonomy in the field of sanctions and procedural rules is also occurring through increased resort by private parties to the principle of equivalence.
I. Conclusion and Policy Discussion
It is therefore submitted that there remains little scope for arguing that, as a general rule, Community law respects national autonomy over Member State remedies and procedural rules. All of the major fields examined in this chapter, namely Member State time-limits, unjust enrichment, recovery of sums paid unlawfully to individuals, interim relief and the right of access to effective judicial review, are prone to further evolution, especially given the number of exceptions to general rules that have been developed. The case law is so open-ended, and so vulnerable to reinterpretation, that there is potentially no end to the types of domestic rules that might be vulnerable to challenge for breach of the principle of effet utile. Uncertainty in the law has also been exacerbated by the introduction of general principles of law, such as the protection of legitimate expectations and proportionality, as a basis on which national remedial provisions and procedural rules can be challenged. This is destined for further development in the case law.
From the perspective of policy, the European Court of Justice has been dealing with a series of pressing tensions. First, it is attempting to at least partially harmonize judicial remedies and procedural rules that are available in the legal systems of the Member States, in order to avert a perceived threat to the uniform application of Community law. It has been said that the ‘deplorable’ tendency to ignore European Court rulings calls for the development of effective parallel remedies to guarantee respect for, and execution of, Community obligations.465 This concern is at least partially borne out by evidence which appeared in various Commission reports in the early 1990s on the Monitoring and Application of Community Law, which indeed reveal compliance problems.466 For example, prior to the Francovich case the Italian state had a very poor record for transposing Directives, but there is some evidence that this has improved after the case law was elaborated.467
(p. 194 ) A strategy deployed by the Court of Justice to engender both uniformity in procedures and sanctions, and the overall effectiveness of Community rules, has entailed pruning the autonomy of national judges to apply domestic sanctions when breach of Community measures is in issue.468 From one perspective the Court's approach makes very good sense. For example, the disparate availability of damages against Member State governments would clearly distort the incentive of national authorities to comply with Community law, and indeed there would be a certain naivety in granting the Member States carte blanche to determine the circumstances in which they should pay damages for breach of EC obligations. Indeed, it has been said that Member States could ‘easily’ escape liability to compensate loss if they were able to rely on local laws excluding liability for legislative acts.469 Moreover, broad liability for non-implementation of Directives surely furnishes Member States with a potent impetus for compliance, which is a particularly pressing imperative given that Directives are one of the softest Community law-making instruments.
However, these considerations must be carefully balanced against the need to guard against ‘unnecessary incursions into the procedural autonomy of the Member States’.470 For example, it has been argued that attempts to impose Article 242 and 243 conditions pertaining to interim relief in the context of Member State breach of EC rules are inappropriate. This argument is grounded in the notion that testing national rules governing the issue of interim orders against the principles of effectiveness and non-discrimination is sufficient to ensure that the interests of the Community are safeguarded, and that the Court of Justice need not formulate additional principles to achieve this end.471
Further, inordinate incursion by the Court of Justice in the field of sanctions and procedures carries the potential to disrupt jurisdictional relations with the Member States. Indeed, a judge of the German Bundesfinanzhof has objected to the European Court's decisions to lay down detailed rules on interim relief that appeared in the Zuckerfabrik decision; the complaint being that national legal territory had been infringed.472 Similarly, as will be shown in chapter 5, various Member State Governments in Brasserie du Pêcheur and Factortame III protested the jurisdiction of the Court of Justice to design rules concerning State liability in damages. The German Government, for example, submitted that ‘judge-made law’ in the Community must be restricted to ‘legitimate closure of loopholes’, and that elaboration of rules pertaining to compensation payments fell outside (p. 195 ) these parameters.473 In the light of these objections, the following caution might therefore be poignant:
However, as long ago as 1984 other commentators were arguing that there was ‘a pressing need’ for Community legislation to harmonize domestic sanctions. It was said that the ‘absence of Community rules undermines the authority, integrity, and uniformity of Community law’, and obstructed ‘the realisation of Community objects’.475 It was observed, for example, that limitation periods in the Member States can range between one month in Germany, two months in France, five years in Denmark, six years in the United Kingdom, and ten years in Italy.476 Academic opinion is split between the two camps here described. That is, those who are concerned by the disunity which arises when Community rights are ‘filtered through’ fifteen different procedural systems,477 and commentators who emphasize that it would be preferable to respect autonomous powers of the national courts.478 The rationale behind the latter view is that Member States must be left ‘room for manoeuvre’479 in a system which is ‘complex, novel and lacking in legitimacy’.480
In the past the European Court was always careful to present itself as primus inter pares and to maintain a zone of autonomy of national jurisdiction even at the price of non-uniformity of application of Community law. If the new line of cases represents a nuanced departure from that earlier ethos, the prize may be increased effectiveness, but the cost may be a potential tension in the critical relationship between European and national courts'.474
Whichever of these views is accepted, the development in the case law canvassed in this chapter indicates that the Court of Justice is likely to continue to develop principles to improve Member State sanctions, and to discourage the application of obstructive procedural conditions. Further, despite reference from both the (p. 196 ) Court of Justice,481 and at least one Advocate General,482 on the dearth of activity of EC political institutions in harmonizing remedies and procedures, there is little sign of improvement on the ‘silence’ of EC legislative bodies in this field. The Council has passed measures designating remedies in a relatively small number of discrete policy areas, and on an ad hoc basis.483 They include a raft of Directives promulgated in the field of public procurement, some of which, as has been shown, have already been subject to interpretation by the Court of Justice.484 In addition to providing for effective judicial review of decisions affecting operators in the sector concerned, they provide, inter alia, for the award of interim relief, and damages.485 Further, in the province of customs law, the Community Customs Code elaborates detailed rules on repayment of charges levied unlawfully under the common customs regime.486 To these legislative initiatives, one might add Council Resolution of 29 June 1995 on the effective uniform application of Community law and on the penalties applicable for breaches of Community law in the internal market.487
As for Treaty revisions designed to ameliorate enforcement difficulties, these have been confined to two initiatives. The Article 171 damages facility allows the Court of Justice to award damages, in prescribed circumstances, in the event of failure of a Member State to comply with a ruling against it. Further, the Declaration on the Implementation of Community Law annexed to the Maastricht Treaty endorsed the principle of non-discrimination, by affirming that national autonomy in enforcing Community norms was subject to the proviso that ‘measures taken by different member states should result in Community law being applied with the same effectiveness and rigour as in the application of their national law’.488 The Treaty of Amsterdam was equally devoid of concern over enforcement difficulties. As mentioned in chapter 2, it restricted the facility of national courts to make Article 234 references with respect to Part IV measures concerning visa, asylum and immigration, to national courts against whose decision there is no judicial remedy. It also further fragmented the judicial architecture by vesting Member States with a discretion to introduce a reference mechanism with respect to the new inter-governmental pillar on Police and Judicial Cooperation (p. 197 ) in Criminal Matters.489 As discussed in chapter 2, these innovations, rather than ameliorating difficulties concerning Member State remedies and procedural rules, may themselves have eroded the Johnston right to effective channels for judicial review.490
Somewhat surprisingly, the Constitutional Treaty contained no provision seeking to codify the case law of the Court of Justice on Member State remedies and procedural rules, or otherwise seek to ‘tidy’ this area of the law. The only provision relating to remedies was Article 28(1), paragraph 2. It simply provided that Member States shall provide rights of appeal sufficient to ensure effective legal protection in the field of Union law.
It is further submitted that the formulation of minimalist rulings by the Court of Justice provides no long-term answer to problems concerning the ‘acceptability’ of the case law. Despite attempts by commentators to rationalize the rulings, and suggest general principles or distinct categories to engender predictability, thus far this has been done with only limited success.491 Other analyses, such as attempting to rationalize the Court's approach by reference to the substantive ‘sector’ in which a remedial principle falls, have proven to be equally fruitless in bringing coherence to a confusing and volatile area of case law.492 Detailed analysis illustrates that the Court's approach is reactive and ad hoc, and shows, with the exceptions of State aid and subsidies, no direct evidence of elaboration by reference to the subject area in which a challenged remedial rule has fallen.
One former Advocate General, Van Gerven, has observed that the Court of Justice should look to placing limits on the type of Member remedies and procedural rules that can be subject to review; he has observed that ‘the distinction between substantive and procedural rules cannot be defined precisely and may vary from one legal system to another’.493 He has therefore suggested that a dividing line be drawn between essential or ‘constitutive’ rules, and non-essential or ‘non-constitutive’ conditions, with only the former beingsubject to harmonisation (p. 198 ) through Court of Justice case law.494 The case law of the Court of Justice unfortunately reflects considerably less rigour than the formula he has prescribed.
Damage to legal certainty results when Member State jurisdiction over remedies procedures is dealt with on a case-to-case basis, and proliferation of more litigation is all but guaranteed. Further, the development of the law will be retarded when judicial deliberations are restricted to what is required to resolve the dispute at hand. For example, as will be shown in chapter 5, the open question of the liability of private individuals to pay compensation for breach of directly effective Community rules could have been resolved in the Banks case, but the Court limited its observations to ruling that the relevant measures of the ECSC Treaty lacked direct effect.495 Therefore, consideration might be given to adopting an approach suggested by Advocate General Reischl in the Simmenthal decision. He noted that ‘…the questions raised [in the case at hand] are of such a fundamental importance and are so very likely to be raised again in other proceedings that for these reasons there is no justification for not determining them now once and for all’.496
Perhaps this tendency to avoid reference to difficult issues may have been motivated by a desire not to rock the constitutional boat. It may also represent judicial cognizance of a sentiment emerging in political quarters that ‘well established national arrangements and the organization and working of Member States' legal systems’ should be respected.497 However, the ironic end result of failing to deal with remedies problems head on may be the disparate interpretation of rules created by the Court as part of a package to harmonize the enforcement of Community law in the Member States. If responses issued by the Court are not entirely clear, then in all likelihood they will be subjected to divergent interpretation within the national courts. Calls for more coherency from the Court of Justice were being made even when the ‘effectiveness’ debate was principally focussed on damages liability of Member States for breach of directly effective Community laws.498 Such comments can only take on greater relevance in the light of contemporary developments in the case law.
A further ground for criticizing the Court's initiatives on remedies and procedures, and one that is central to the present study, concerns their relationship with the scheme in place for challenging the legality of Community measures. It could be argued that elevation of the substantive content of Member State remedies and related rules to the jurisdiction of the Court of Justice should not have occurred in the absence of substantial preparatory adjustment to case law concerning judicial review of EC rules.
(p. 199 ) The extent to which this has occurred will be discussed in chapters 6, 7 and 8. The quandary facing the Court of Justice on this issue was as follows. The objective of instituting closer Court of Justice review over Member State remedies and procedures was twofold. First, as has already been mentioned, it aimed to correct distortions in the functioning of the common market that arose from divergence in Member State rules on remedies and procedures. Second, it sought to overcome poor records of enforcement of Community law by stepping up deterrence against breach of unimplemented EC measures. This latter goal implied that any Community crafted sanctions, or moves to displace domestic procedural rules, should provide a higher grade of protection than would otherwise apply under national law.
Problems arose with respect to the second of these objectives. If Community law were to bind Member States to a high standard of liability through the new rules on sanctions and procedures, it would seem inevitable that comparisons would be drawn with the system in place for reviewing the conduct of Community institutions. Indeed, the Danish Government argued in submissions in Brasserie du Pêcheur and Factortame III that ‘it would not be reasonable if Member States could incur more extensive liability than that incurred by Community institutions’;499 or, as one commentator observed ‘nous ne pouvons pas demander aux Etats plus que la Communauté n'accepte d'assumer’.500 However, the scheme in place for reviewing the conduct of Community institutions has been widely criticized for supplying inadequate levels of judicial control.501 In particular, the substantive test for damages liability which operates under Article 288(2) has been judged to be ‘unsatisfactory, unduly stringent and affording insufficient protection for the right to effective judicial relief’.502 It would seem, unlikely, therefore, that grafting standards such as these into Member State law would serve to discourage government authorities from breaching Community obligations. Yet, as will be shown in chapters 5 and 8, there is growing cross-fertilization in the norms applicable in damages claims against Community institutions and Member States. Whether this has improved judicial protection for individuals remains open to debate.
(p. 200 ) Similar cross-fertilization has occurred in the context of interim relief. In the Zuckerfabrik503 and Atlanta Fruchthandelsgesellschaft504 cases, one of the considerations which national courts were ordered to take into account was the ‘Community interest’ in ensuring that the relevant EC measure was enforced,505 an imperative that had not been alluded to by the House of Lords in Factortame No 1.506 It would seem that respecting the Community interest would encourage national judges to award interim relief when the compatibility of national laws with Community measures is in issue. In cases of this kind, the cause of effective enforcement of EC rules clearly tips the scale in favour of disapplication of impugned domestic measures. This is so because, when Member States breach Community law, the interests of the Community and those of the individual are at one; both are served by the temporary disapplication of national laws that allegedly breach directly effective EC measures.
The position, however, will be somewhat different when an applicant is contesting the validity of a Community measure. In this scenario, the interests of the Community and the individual are not at one, with the former seeking interim suspension of a rule promulgated by the latter. Here the requirement on Member State Judges to take account of the interests of the Community clearly acts as a barrier to the award of an interim order, creating the potential for a marked double standard with respect to standards of judicial protection.507
Thus, a final issue which warrants special emphasis concerns the ‘material justification’ for the Court's rulings on sanctions and procedures, such that the premises that the Court has used are ‘valid, correct or acceptable…by the decision maker and the legal audience’ to whom they are addressed.508 It was pointed out in the introduction to this study that the concept of ‘individual’ rights, and the need for effective enforcement of Community rules, pursuant to Article 10 of the EC Treaty, were central elements of the Court's original package for persuading relevant actors of the merit in adopting a (legally) federal constitutional design. Further, in the context of Directives, recourse was made to an estoppel argument, which prevented Member States from taking advantage of their own failure to meet Article 249 implementation duties.509 However, these concepts have been equally important to the evolution of ‘third generation’ rules on sanctions and procedures.510
For the most part, the deepening of the reach of Community law into the legal systems of the Member States has been justified by reference to traditional (p. 201 ) lines of reasoning. In Emmott, for example, the Court referred both to the need for guarantees that Community law is ‘fully effective’ and the requirement that individuals are able to ascertain and enforce the ‘full extent’ of their rights.511 In Factortame No 1 the Court made reference to the Article 10 duty of national courts ‘to ensure the legal protection which persons derive from the direct effect of Community law’,512 and the imperative that EC rules have ‘full force and effect’.513 In Cotter and McDermott the estoppel argument, and the obligation on Member States to ensure that Directives have ‘full effect’ were proffered to support the finding that national rules pertaining to unjust enrichment were incompatible with Community law.514 In Peterbroeck the Court of Justice opened its deliberations with a reference to the Article 10 duty on Member States ‘to ensure the legal protection which individuals derive from the direct effect of Community law’.515 Finally, the language employed by Advocate General Tesauro in Brasserie du Pêcheur and Factortame III,516 to be discussed in chapter 5, was ‘[r]edolent of the language of rights’,517 a charge which, it is submitted, could be equally levelled against the Court in that case. It was held in Brasserie du Pêcheur and Factortame III that ‘the principles inherent in the Community legal order which form the basis of State liability’ were ‘the full effectiveness of Community rules and the effective protection of the rights which they confer’ and ‘the obligation to cooperate imposed on Member States by Article 5 of the Treaty’.518 More recently the Court of Justice in Coote placed heavy emphasis on the need for ‘effective judicial control’ over the objective of equal treatment between men and women, ‘one of the fundamental human rights whose observance the Court has a duty to ensure’.519 It seems, therefore, that inconsistencies and uncertainties in the concept of ‘individual rights’ has created confusion in the domain of Member State sanctions and procedural rules of the kind, described in chapter 2, that has arisen with respect to national enforcement of EC instruments.520
Therefore, the Court's move toward intensifying the impact of EC rules in national law in the domain of sanctions has rested on two axes. First, it has been sponsored by the imperative, as distilled from Article 10 of the Treaty, that Community rules are effectively enforced. Second, new rules on remedies and procedures have also been predicated on the notion of a Community that vests ‘individuals’ with rights, which the national courts have a duty to (p. 202 ) protect. Interestingly, however, in cases such as Deutsche Milchkontor,521 Oelmühle Hamburg,522 Steff Houlberg Export523 and Alcan Deutschland,524 which were concerned with the duty on Member States to recover sums unlawfully paid to individuals, there was no reference to the rights of the latter. Rather, emphasis was laid on the fact that administrative and procedural laws were not to render recovery virtually impossible, the application of national legislation in a non-discriminatory manner when compared with disputes of a purely domestic nature, and the need for national judges to take account of the interests of the Community. Indeed, the one feature of the case law that may have imported a measure of predictability lies in isolating the ‘Community interest’; if it accords with that of ‘the individual’ then the likelihood that a national remedial rule will be disapplied is at its highest. Does this provide further evidence, along with problems attached to challenging the legality of Community measures, that the Court's real concern lies in the effective enforcement of Community rules, and that the imperative of the ‘individual's right’ to an ‘effective judicial remedy’ is less likely to trump competing concerns when it is not at one with the interests of the Community?
It has already been suggested, in the context of rules concerning Member State liability in damages, that the Court of Justice might have supplied insufficient ‘material justification’, in the sense described above, to back up its initiatives. It is said that Member State liability in damages, as formulated in Brasserie du Pêcheur and Factortame III, rests on weak theoretical underpinnings,525 given that the notion of the ‘individual’ in European Community law is ill defined, and perhaps misleading. The crux of this criticism is as follows:
For the purposes of the present study, only two observations will be made. First, it is submitted that it is increasingly difficult for the Court of Justice to persuade domestic courts, and other relevant actors, that the Community necessarily vests individuals with rights, which Member States have a duty to protect. In the past such thinking has been called in aid to justify punishment of recalcitrant conduct by Member States. However, in the modern Community, regulatory measures are passed which cover a broad range of activities, many of which prescribe detrimental limits on the conduct of private individuals. Further, it was demonstrated in chapter 2 that ‘individuals’ are increasingly required (p. 203 ) to respect obligations enshrined in Directives, the most commonly used EC legislative instrument. It is submitted, therefore, that in future, the cause of effective enforcement of Community law, including new principles on remedies and procedures, might indeed require stronger theoretical underpinnings than the notion of a Community vesting ‘individuals’ with rights which Member States are obliged to respect.
At the outset, we should dismiss the vision of a squad of citizen policeman engaged in law enforcement…an overwhelming majority of actions against the Community are brought by corporations and the litigation typically involves licences and other economic interests. Their dominant position in litigation raises questions as to what sort of rights EC law really protects….526
Second, the Court's continued reliance on this concept attracts attention to the standards of protection which individuals enjoy when the legality of Community norms is in issue. The Court of Justice and the Court of First Instance are confronted with increasing pressure to ensure that any high level of judicial protection afforded to individuals, in the context of remedies and procedures, is not confined to litigation involving Member State infringement of Community norms. There would seem to be no reason in either law or logic to deny individuals access to the same types of sanctions when they challenge Community legislative measure under Articles 230, 234 validity review, and 288(2). The extent to which the case law of the Court of Justice and the Court of First Instance reflects this sentiment will be examined in chapters 6, 7 and 8.
(1) See eg Case C–24/95 Land Rheinland-Pflaz v Alcan Deutschland  ECR I-1591. Outside of the field of state aids, breach of legitimate expectations has been relied on successfully by private sector actors, see eg Case C–336/00 Republic of Austria v Martin Huber (recovery of subsidies)  ECR I-7699; Case C–62/00 Marks & Spencer plc v Commissioners of Customs and Excise (recovery of unlawfully paid VAT)  ECR I-6325.
(2) See eg R Crauford Smith, ‘Remedies for Breach of EC Law in National Courts: Legal Variation and Selection’ in P Craig and G de Burca (eds), The Evolution of EULaw (1999).
(3) M Dougan, National Remedies Before the Court of Justice (2004) 232.
(5) Joined Cases C–240/98 to C–244/98 Océano Grupo Editorial SA v Rocio Murciano Qunitero  ECR I-4941; Case C–88/99 Roquette Frères SA v Direction des Services Fiscaux du Pas-de-Calais  ECR I-10465; Case C–78/98 Preston  ECR I-3201; Case C–481/99 Heininger and Heininger v Bayerishce Hypo-und Vereinsbank AG  ECR I-9945; Case C–62/00 Marks & Spencer plc v Commissioners of Customs and Excise  ECR I-6325; Joined Cases C–216/99 and C–222/99 Riccardo Prisco Srl v Amministrazione delle Finanze dello Stato  ECR I-6761; Case C–255/00 Grundig Italiana SpA v Ministero delle Finanze  ECR I-8003; Case C–473/00 Cofidis SA v Jean-Louis Fredout  ECR I-10875; Case C–327/00 Santex SpA v Unità Socio Sanitaria Locale n. 42 di Pavia  ECR I-1877; Case C–125/01 Peter Pflücke v Bundesanstaltfür Arbeit  ECR I-9375; Case C–234/04 Rosemarie Kapferer v Schlank & Schick GmbH judgment of 16 March 2006; Opinion of AG Tizzano of 10 November 2005.
(6) Joined Cases C–240/98 to C–244/98 Océano Grupo Editorial SA v Rocio Murciano Qunitero  ECR I-4941; Case C–78/98 Preston  ECR I-3201; Case C–62/00 Marks & Spencer plc v Commissioners of Customs and Excise  ECR I-6325; Case C–255/00 Grundig Italiana SpA v Ministero delle Finanze  ECR I-8003; Case C–473/00 Cofidis SA v Jean-Louis Fredout  ECR I-10875; Case C–327/00 Santex SpA v Unità Socio Sanitaria Locale n. 42 di Pavia  ECR I-9375. Joined Cases C–216/99 and C–222/99 Riccardo Prisco Srl v Amminstrazione delle Finanze dello Stato  ECR 1–6761; Case C–481/99 Heininger and Heininger v Bayerische Hypo- und Vereinsbank AG  ECR 1–9945.
(7) Case C–125/01 Plücke v Bundesanstalt für Arbeit ECR I-9375, paras 37 to 39.
(8) Case C–377/89 Cotter and McDermott v Minister for Welfare and Attorney General  ECR I-1155.
(9) See the principles established in Joined Cases C–192/95 to C–218/95 Comateb  ECR I-165.
(10) See below Part D, and the authorities discussed therein.
(11) See below cases discussed in Part E.
(12) See in particular Case C–92/00 Hospital Ingenieure Krankenhaustechnik Planungs-GmbH,  ECR I-5553; Case C–462/99 Connect Austria judgment of 22 May 2003, ECR I-5197; Case C–26/03 Stadt Halle  ECR I-1; Case C–185/97 Coote v Granada Hospitality  ECR I-5199. Compare, however, Case C–380/01 Gustav Schneider v Budesminister für Justiz  ECR I-1389; Case C–13/01 Salafero Srl v Prefetto di Genova  ECR I-8679; Case C–63/-01 Samuel Sidney Evans v Secretary of State for the Environment, Transport and Regions  ECR I-14447; Case C–120/97 Upjohn v Licensing Authority Established by the Medicines Act 1968  ECR I-223, where national standards of judicial scrutiny were subject to rigorous review, and found compliant with Community law.
(13) See further Part E below.
(14) See in particular Case C–397/98 and C-410/98 Metallgesellschaft and Others v Commissioners of Inland Revenue  ECR I-1727; Case C–222/99 Riccardo Prisco Srl v Amministrazione delle Finanze dello Stato  ECR I-6761.
(15) A Stone Sweet, The Judicial Construction of Europe (2004) 20.
(16) See recently M Accetto and S Zleptnig, ‘The Principle of Effectiveness: Rethinking Its Role in Community Law’ (2005) 11 European Public Law 375.
(18) For a recent analysis see T Eilmansberger, ‘The Relationship Between Rights and Remedies in EC Law: In Search of the Missing Link’ (2004) 41 CMLRev 1199.
(19) Case C–188/95 Fantask A/S and Others v Industriministeriet (Erhverv-Sministeriet)  ECR 6783 (hereafter referred to as Fantask); Case C–90/94 Haahr Petroleum Ltd v Åbenrå Harn and Others  ECR I-4085; Joined Cases C–114/95 and C–115/95 Texaco A/S v Middelfart Havn and Others  ECR I-4267; Case C–231/96 Edis v Minestero delle Finanze (hereafter referred to as Edis)  ECR I-4951. Ministero delle Finanze v Spac SpA (hereafter referred to as Spac)  ECR I-4997; Joined Cases C–279/96, C–280/96 and C–281/96 Ansaldo Energia SpA. v Amministrazione delle Finanze dello Stato (hereafter referred to as Ansaldo Energia)  ECR I-5025. Joined cases C–10/97 to C–22/97 Ministero delle Finanze v IN.CO.GE. '90 Srl  ECR I-6307; Case C–228/96 Aprile Srl, in liquidation v Amministrazione delle Finanze dello Stato (hereafter referred to as Aprile II)  ECR I-7141. Case C–326/96 BS Levez v THJennings (Harlow Pools) Ltd (hereafter referred to as Levez)  ECR I-7835.
(23) OJ  L6/24 (hereafter referred to as the Social Security Directive).
(24) Case 286/85 Norah McDermott and Ann Cotter v Minister for Social Welfare and the Attorney General  ECR 1453.
(25) Case 45/76 Comet v Produktschap voor Siergewassen  ECR 2043.
(26) Case 33/76 Rewe v Landwirtschafskammer Saarland  ECR 1989.
(27) Order 84, Rule 21(1) of the Rules of the Superior Courts 1986 (Ireland).
(28) Case C–208/90 Theresa Emmott v Minister for Social Welfare and Attorney General  ECR I-4269, see in particular at 4278–4282, Report of the Hearing.
(32) ibid at 4299. Cf AG Warner in Comet and Rewe (n 25 and 26 above, 2004), ‘Indeed, the logical result of the plaintiffs' argument would be that no limitation period at all was applicable to their right of action. This would be inconsistent with the common traditions of the legal systems of the Member States.’
(33) See J Temple-Lang, ‘New Legal Effects Resulting from the Failure of States to Fulfil Obligation Under European Community Law: the Francovich Judgment’ (1991–1993) 16 Fordham International Law Journal 1, 44; D Curtin, ‘State Liability under Community Law: a New Remedy for Private Parties’ (1992) 21 ILJ 74 at 80.
(36) See generally P Oliver, ‘Le droit communautaire et les voies de recours naturals’ (1992) 28 CDE 348 at 362–363 and 367–369. The Emmott case was applied by a United Kingdom Employment Appeal Tribunal in Cannon v Barnsley Metropolitan Borough Council  IRLR 474. For a commentary see C Barnard (1993) 22 Industrial Law Journal 50; cf Biggs v Somerset County  IRLR 203 (English Court of Appeal).
(37) Case C–255/00 Grundig Italiana SpA v Ministero delle Finanze  ECR I-8003.
(38) OJ English Sp Ed  (II)/12, as most recently amended by Council Directive 85/303/EEC of 10 June 1985 (OJ  L156/23).
(39) Case C–188/95 Fantask  ECR I-6783.
(40) OJ English Sp Ed  (II)/12.
(41)  ECR I-1915.
(45) n 28 above, para 51. The cases cited by the Court of Justice in support of this holding were Case C–410/92 Elsie Rita Johnson v Chief Adjudication Officer  ECRI-5483 (hereafter Johnson No 2); Case C–338/91-Steenhorst-Neerings v Bestuurvan de Bedrijfsvereniging voor Detailhandel en Huisrouwen  ECR I-5475 (hereafter Steenhorst-Neerings); Case C–90/94 Haahr Petroleum v Åbenrå Harn  ECR I-4085 (hereafter Haahr Petroleum); Joined Cases C–114 and 115/95 Texaco Middelfart Havn  ECR I-4267 (hereafter Texaco). The same principle was subsequently applied by the Court of Justice, and with respect to the same Directive, in Case C–88/99 Roquette Frères SA v Direction des Services Fiscuax du Pas-de-Calais  ECRI-10465, para 34; see similarly, and concerning the same Directive, Joined Cases C–216/99 and C–222/99 Riccardo Prisco Srl v Amministrazione delle Finanze dello Stato  ECR I-6761, para 69.
(46) At para 87 of the Opinion. See also the Opinion of former AG Jacobs in Case C–2/94 Denkavit Internationaal and Others v Kramer van Koophandel en Fabrieken voor Midden-Gelderland and Others  ECRI-2827. Similarly, former AG Jacobs argued more broadly in his Opinion in Haahr Petroleum (n 28 above) that the Court in Emmott ‘was concerned to ensure that an individual seeking to exercise rights deriving from Community law could not be defeated by national time-limits applicable before he was able to ascertain the full extent of those rights’. At para 161 of the Opinion.
(47) Edis (n 19 above, para 48); Ansaldo Energia (n 19 above, para 22); Spac (n 19 above, para 31). For another case in which national time-limits appeared to be compatible with Community law see Case C–62/93 BP Supergas Anonimos Etairia Geniki Emporiki-Viomichaniki kai Antiprossopeion Emp v Greek State  ECR 1883. However, no reference was made to the Emmott principle in the Court's deliberations.
(51) ibid at para 57. See similarly AG Alber of 7 February 2001 at paras 103 to 113; cf Case C–125/01 Peter Pflücke v Bundesanstaldt für Arbeit  ECR I-9375, para 37–39, in which the Court of Justice expressed reservations as to whether a two-month time-limit for claiming of unpaid salary complied with the principle of effectiveness, but did refer to the guidelines here elaborated. The question was left by the Court of Justice for the decision of the national court.
(52) Case C-78/98  ECR I-3201.
(54) Case C-249/95  ECR 4449.
(57) Case C–128/93 Fisscher  ECR I-4583.
(64) Case C–228/96  ECR I-7141.
(65) Case C–343/96 Dilexport  ECR I-579.
(68) Case 255/100 Grundig Italia  ECR 1–8003, para 2.
(69) Opinion of 14 March 2002 at para 32.
(77) Dougan (n 3 above, 288) reads Aprile II and Dilexport as establishing the principle that, where a Member State revises the limitation periods applicable to a certain category of claim in the light of a ruling from the Court of Justice, the imperative of effective judicial protection imposes one further condition: new time-limits should not be unduly retrospective in scope (citing, as authority for this principle Case C–216 and 222/99 Prisco  ECR I-6761). At 288–289 he discusses the contribution of Marks & Spencer and Grundig Italiana to the development of the law.
(80)  ECRI-1157
(81)  ECRI-11365
(82) Case 437/97 EKW  ECR 1157. For a clear explanation see paras 11 to 15 of the Opinion of AG Saggio of 20 March 2003. Article I of amending law 9/2000 introduced the changes here described, while Article II of the Amending law stated: ‘Article I is applicable also to tax liabilities which arose before the promulgation of this Law.’
(83) Case C–147/01  ECR I-11365
(89) Case C–168/95 Arcaro  ECRI-4705.
(90) Steenhorst  ECR I-5475; Johnson No 2  ECR I-5483.
(91) Case C-62/00 Marks & Spencer plc v Commissioners of Customs and Excise  ECRI-6325, para 38.
(94)  ECR I-5475 (hereafter referred to as Steenhorst).
(95) Directive 79/7 OJ  L6/24.
(102)  ECR I-5483 (Johnson No 2).
(103)  ECR I-3723 (hereafter referred to as Johnson No 1).
(104) Section 36(2) of the Social Security Act (1975), as then in force.
(112) See also in this regard AG Gulmann in Johnson No 2 (n 102 above, 5499). These views were endorsed by the Court at 5510–5511. See also former AG Jacobs in Case C–312/93 SCSPeterbroeck Van Campenhout and Cie v Belgian State  ECR I-4599 (hereafter referred to as Peterbroeck), para 43 of the Opinion. Both Johnson No 2 and Steenhorst were affirmed in Case C–394/93 Gabriel Alonso-Pérez v Bundesanstalt für Arbeit  ECR I-4101.
(113)  ECR I-7153 (hereafter referred to as Magorrian).
(115) ibid at para 30. See Case C–57/93 Vroege v NCIV Instituut voor Volkshuisvesting BV and Stichting Pensioenfonds NCIV  ECR I-4541 (hereafter referred to as Vroege); Case C–128/93 Fisscher v Voorhuis Hengelo BV and Stichting Bedrijfspensioenfonds voor de Detailhandel (hereafter referred to as Fisscher)  ECR I-4583; Case 170/84 Bilka-Kaufhaus v Wever von Hartz  ECR 1607; Case C–435/93 Dietz  ECR I-5223.
(116) Case 43/75 Defrenne v Sabena  ECR 455.
(121) OJ  L45/19 (hereafter referred to as the Equal Pay Directive).
(127) See ch 2.
(128)  ECR I-6325.
(129) OJ  L145/1.
(130) Finance Act 1997, section 47(1), amending section 80(4) of the Value Added Tax Act 1994.
(131) Section 24(4) and (5) of the Finance Act 1989, which was repealed and replaced by section 80 of the Value Added Tax Act 1994.
(132) Following the judgment in Case C–288/94 Argos Distributors  ECR I-5311.
(133) n 128 above, para 30, citing Case 309/85 Barra  ECR 355, para 7; Case C–62/93 BP Supergas  ECR I-1833, para 40; Case C–343/96 Dilexport  ECR I-579, para 23, and Joined Cases C–397/98 and C–410/98 Metallgesellschaft and Others  ECR I-1727, para 84.
(139) ibid at para 46. Note the Opinion of AG Geelhoed of 24 January 2002 reflected the findings made by the Court, save for the fact that the AG saw this as a Deville style case in which a Member State had adjusted procedural rules with a view to obstructing the enforcement of Community law rights. See in particular paras 59 to 63. The AG reached the same conclusion as the Court on the question of legitimate expectations at para 64 to 72.
(142) Case C–312/93 Peterbroeck, Van Campenhout & Cie SCS v Belgian State  ECR I-4599.
(156) Case 106/77 Amministrazione delle Finanze dello Stato v Simmenthal s.p.a.  ECR 1205.
(157) Case C–213/89 Factortame No 1  ECR I-2433.
(165)  ECR I-3055.
(166)  ECR I-10875.
(167) Joined Cases C–430 and 431/93  ECR I-4705. SPrechal, ‘Community Law in National Courts: the lessons from Van Schijndel’ (1998) 35 CMLRev 681.
(168) ibid at 4736. The same conclusion was reached, in the context of review of Directive 85/337 on the assessment of the effects of certain public and private projects on the environment OJ  L175/40 in Case C–72/95 Annemersbedrijf P. K. Kraaijeveld and Others v Ledeputereede Staten van Zuid-Holland  ECR I-5403.
(174) Former AG Jacobs in van Schijndel (n 167 above) followed the line taken in his ruling in Peterbroeck and argued that the relevant Dutch law should be allowed to stand. In van Schijndel, he elaborated on the consequences flowing from the principles of the primacy of Community law, and the effectiveness of Community law, and observed at 4716–4717 that the ‘assumption underlying the system established by the Treaties…is that the need for effectiveness and proper judicial protection can normally be satisfied by national remedies…therefore it is only exceptionally that the Court will need to intervene to ensure that effect is given to Community law.’ An interesting observation appeared in the AG's van Schijndel deliberations that had not figured in his Peterbroeck Opinion. It concerned the principles of subsidiarity and proportionality. The AG argued at 4715 that both of these rules would be breached if national procedural rules always had to yield to the primacy of Community law.
(175) Case 126/97  ECR I-3055 (hereafter referred to as Eco Swiss).
(176) Case 102/81 Nordsee v Reederei Mond  ECR 1095.
(181) OJ  L12/1.
(182) OJ  L95/29.
(183)  ECRI-4941.
(191) For a discussion of remedies in the sector of consumer protection see Dougan (n 3 above, 221–225). See also Case C–481/99 Heininger and Heininger v Bayerische Hypo-und Vereinsbank AG  ECR I-9945. Unfortunately, in concluding that a 12-month time-limit for bringing proceedings was inapplicable in the context of EC consumer law, neither the Court of Justice nor the AG entered into any detailed analysis of Court of Justice case law on time-limits for bringing proceedings.
(192) Judgment of 16 March 2006, Opinion of AG Tizzano of 10 November 2005.
(197) PR Dubinsky, ‘The Essential Function of Federal Court: The European Union and the United States Compared’ (1994) 42 American Journal of Comparative Law 295, 330.
(198) Submission of the Danish and United Kingdom Governments and the Commission in Joined Cases C–46 and C–48/93 Brasserie du Pêcheur and Factortame III  ECR I-1029, para 56, Report of the Hearing.
(200) eg former AG Jacobs in Case C–7/93 Algemeen Burgerlijk Pensioenfonds v GA Beune  ECR I-4471, para 57 ‘…the essential question is whether the Dutch Government should have assumed, before the Barber judgment, that the ABPW pension was covered by Article 119 of the Treaty.’
(203) Case 13/68 Salgiol  ECR 453, 463; Case 179/84 Bozzetti v Invernizzi  ECR 3201.
(204) T Koopmans, ‘Retroactivity Reconsidered’ (1980) 39 Cambridge Law Journal 287 at 290 et seq.
(222) Case C–186/04 Pierre Housieaux, judgment of 21 April 2005, AG Opinion of 27 January 2005.
(223) eg Case 826/79 Admministrazione delle Finanze dello Stato v Mireco  ECR 2559.
(224) AG Tesauro in Joined cases C–192/95 to C–218/95 Comateb and Others v Director Général des Douanes et Droits Indirects  ECRI-165, 177 (hereafter referred to as Comateb).
(227) See the Social Welfare (Consolidation) Act (1981).
(231) See the Social Welfare (Preservation of Rights) No 2 Regulations 1986 (Statutory Instruments No 422 of 1986).
(234) ibid at 4598. See also in this regard Delixport (n 65 above, paras 47–53) where it was held with respect to a charge levied in breach of an EC Treaty Article, that while in principle Community law did not prevent a national legal system from disallowing repayment of charges levied but not due on the basis of unjust enrichment, it was for the administration to show (and not the trader) by any form of evidence generally accepted by national law, that the charge had been passed on.
(238) Comateb (n 224 above); affirmed eg in Case C–441/98 and C–442/98 Kapniki Mikhailidis AE v Idrima Kinonikon (IKA)  ECR I-7145; Weber's Wine World (n 81 above); Case C–88/99 Roquette Frères  ECR I-10465; Joined Cases C–441/98 and C–442/98 Michailidis  ECR I-7145, para 34; see further M Dougan, ‘Cutting Your Losses and the Enforcement Deficit: A Community Right to the Recovery of Unlawfully Levied Charges’ in A Dashwood and A Ward (eds), Cambridge Yearbook of European Legal Studies 1 (1998) 233; K Magliveras, ‘Unjust Enrichment and Restitution in Community Law’ (1997) 6 Irish Journal of European Law; A Biondi and L Johnson, ‘The Right to Recovery of Charges Levied in Breach of Community Law: No Small Matter’ (1998) 4 European Public Law 313.
(239) Article 352a of the French Customs Code.
(242) ibid at para 24. See also in this regard eg Case C–242/95 GT link A/S v De Danske Statsbaner (DSB)  ECRI-4449 (hereafter referred to as GTLink), para 68. On the right to repayment of unlawfully levied charges see Dougan (n 3 above); A Biondi and L Johnson ‘The Right to Recovery of Charges Levied in Breach of Community Law: No Small Matter’ (1998) 4 European Public Law 313.
(255) ibid. It is slightly unhelpful that, in cases concerning unjust enrichment issued post-Comateb, the Court of Justice has refrained from expressly advising the national court of all of the principles that need to be applied in determining whether a charge has in fact been passed on, and whether the person concerned would be unjustly enriched by repayment. For example, in Dilexport (n 22 above, para 47) the Court of Justice ruled as follows:
…Community law does not prevent a national legal system from disallowing repayment of charges which have been levied but were not due where to do so would entail unjust enrichment of the recipients. There is nothing in Community law, therefore, to prevent courts from taking account, under their national law, of the fact that charges levied but not due have been incorporated in the price of goods and thus passed on to the purchasers. Therefore, national legislative provisions which prevent reimbursement of taxes, duties and charges levied in breach of Community law cannot be regarded as contrary to Community law in principle, where it is established that the person required to pay such charges has actually passed them on to other persons…San Giorgio…Comateb…Just'.
(258) Joined Cases C–441/98 and C–442/98 Kapniki Mikhailidis AE v Idrima Kinonikon Asphaliseon (IKA)  ECR I-7145, paras 37–41.
(261) See generally H-J Priess, ‘Recovery of Illegal State Aid: An Overview of Recent Developments in the Case Law’ (1996) 33 CMLRev 69.
(262) See in particular case C–336/00 Republic of Austria v Martin Huber  ECR I-7699 on recovery of sums paid erroneously under the EAGGF.
(263)  ECR I-266, para 15 (my emphasis). Note, however, in Huber (n 262 above) which was not a subsidies case, the Court supplied general principles to be applied to all unlawful payments cases; these were comprised off the principles of effectiveness, non-discrimination, legitimate expectations, and proportionality, paras 55–58.
(264)  ECR I-4767 (hereafter referred to as Oelmühle Hamburg).
(265) OJ, English Sp Ed [1965–1966] 221.
(268) Joined cases 205 to 215/82, Deutsche Milchkontor GmbH and Others v Federal Republic of Germany  ECR I-2633.
(274) See above Part B.
(278) See more specifically Case C–336/00 Republic of Austria v Martin Huber  ECR I-07699, para 59.
(284) On the principles pursuant to which Member States must refrain from post-clearance recovery of import duties (which encompasses good faith, error on the part of the customs authorities, and compliance with the rules in force on the part of the trader) see Case C–30/00 William Hinton and Sons L da v Fazenda Publica  ECRI-7511.
(285) Dougan (n 3 above, 354–355), citing Oelmühle Hamburg (n 264 above, paras 36–37), the Opinion of the AG at paras 46–51, and AG Cosmas at paras 57–58 in his Opinion in Case C–83/98P France v Ladbroke Racing and Commission  ECR I-3271.
(286) Case C–39/94 SFEI  ECR I-3547.
(287) eg Case 120/73 Lorenz  ECR 1471; eg Case 94/98 Commission v Germany  ECR 175.
(288) eg Case C-404/00 Commission v Spain  ECR I-6695.
(289) Case C–39/94 SFEI  ECR I-3547; Dougan (n 3 above, 342–343). This includes sums related to the method of financing that aid, See Cases C–261–62/01 Van Calster  ECR I-12249, para 49; Case C–71/04 Administración del Estado v Xunta de Galicia, judgment of 21 July 2005, para 49.
(290) eg Case 52/84 Commission v Belgium  ECR 89; Case C–6/97 Italy v Commission  ECR I-2981; Case C-404/97 Commission v Portugal  ECR I-4897; Case C–310/99 Italy v Commission  ECR I-2289. See Dougan (n 3 above, 342).
(291)  ECRI-1591 (hereafter referred to as Alcan Deutschland). See prior to this Case C–5/89 Commission v Germany  ECR I-3437.
(292) ibid at para 52. Compare, however, Case C–39/94 Syndicat Français de l'Express International and Others v La Poste and Others  ECR I-3547. Note that Member States are entitled to ‘set-off’ agricultural subsidies with debts owed by the beneficiary to the State, provided that the principles of effectiveness and non-discrimination are not breached. See Case C–132/95 Bent Jensen v Landbrugsministeriet  ECR I-2975.
(296) OJ  L83/1.
(300) eg Joined Cases C–87/90 to C–89/90 Verholen and Others  ECR I-3757, para 24, and Case C–13/01 Safalero  ECR I-8679, para 50.
(301) Case C–174/02, Streekgewest Westelijk Noord-Brabant v Staatssecretaris van Financiën, judgment of 15 January 2005, para 19.
(304) OJ L83/1.
(305) See generally Regulation 659/1999 OJ  L83/1.
(306) P Oliver, ‘Interim Measures: Some Recent Developments’ (1992) 29 CMLRev 7 at 17 and at 360.
(307) AG Toth, ‘The Concepts of Damages and Causality as Elements of Non-Contractual Liability’ in T Heukels and A McDonnell at 587. R v Secretary of State for Transport Ex p. Factortame Ltd No 1  2 AC 85; HL.
(308) Joined cases C–143/88 and C–92/89 Zuckerfabrik Süderdithmarschen AG v Hauptzollamt Itzehoe  ECR I-415, para 20; Case C-465/93 Atlanta Fruchthandelsgesellschaft mbH and Others v Bundesamt für Ernährungund Forstwirtschaft  ECR I-3799, 3789; cf the Opinion of AG Sharpston of 30 November 2006 in Case C–432/05 Unibet, paras 90–96 (national rules on interim relief apply).
(314) Atlanta Fruchthandelsgesellschaft ibid at 3792. Note that the Court of Justice has declined an argument that, in applications before national courts for interim relief with respect to an invalid Community measure, the institution concerned must, as a matter of Community law, be entitled to make its views known. Case C–334/95 Krüger v Hauptzollamt Hamburg Jonas  ECR I-4517. See also the Opinion of AG Cosmas in Case C–183/95 Affish v Rijksdienst Keurin Vee ne Vlees  ECR I-4315.
(315) ch 3 above. cf W Van Gerven, ‘Bridging the Gap Between Community and National Courts: Towards a Principle of Homogeneity in the Field of Legal Remedies’ (1995) 32 CMLRev 679 at 688 who emphasizes the similarity of the tests deployed by the House of Lords and the European Court for the issue of interim orders. For a detailed discussion of the relationship between Factortame No 1 and Zuckerfabrik see? Papadias, ‘Interim Protection Under Community Law Before the National Courts. The Right to a Judge with Jurisdiction to Grant Interim Relief’ (1994) 2 LIEI 153.
(316) R v Secretary of State for Transport Ex parte Factortame Ltd No 2  1 All ER 70;  1 AC 603; HL at 102 per Lord Bridge.
(317) Case C–1/99 Kofisia Italia Srl v Ministero delle Finanze  ECR I-207, para 48; see also Case C–226/99 Siples Srl v Ministero delle Finanze  ECR I-277, para 19. See further Dougan above n 3 at 324–325, who disputes whether the Zuckerfarbik criteria will necessarily apply to the context of interim relief and Member State misconduct.
(318) Note, however, that national courts will not be obliged to order interim relief if the applicants proper remedy lay not against a Member State authority but against a Community institution on the basis of the action for failure to act. Case C–68/95 T. Port GmbH v Bundesenstalt für Landwirtschaft und Ernährung  ECR I-6065. For a case commentary see A Albors-Llorens (1998) 35 CMLRev 227.
(319)  ECR 1839 (hereafter referred to as Costanzo). For a discussion of the constitutional significance of this case see B de Witte, ‘Direct Effect, Supremacy and the Nature of the Legal Order’ in P Craig and G de Búrca (eds), The Evolution of EU Law (1999) 177. See more recently, Case C-76/97 Walter Tögel v Niederösterrreichische Gebietskrankenkasse  ECR I-5357 (hereafter referred to as Tögel), para 51. ‘It should be recalled here that it is settled case-law that unconditional and sufficiently precise provisions of a directive may be relied on before a national court by the persons concerned against any public authority required to apply laws, regulations or administrative provisions of national law which are not in conformity with that directive, even if that directive has not yet been transposed into the domestic legal order of the State in question.’
(320) Case C–319/96 Brinkmann Tabakfabriken GmbH v Skatteministeriet  ECR I-5285 (hereafter referred to as Brinkmann), para 32. See also the Opinion of the AG of 22 January 1998, para 34. Indeed, the point is made more firmly by former AG Jacobs, who took the view that ‘the fact that the authority refused to suspend its decision has no bearing on Denmark's liability in damages in the present case. The contrary view would be liable to paralyse administrative decision making since administrative authorities would be unable to implement their decisions in other than the clearest cases without exposing themselves to potentially substantial damages claims’. The Court, however, seemed to have been swayed by the fact that the Directive in issue in Brinkmann ‘was open to a number of perfectly tenable explanations’, which may leave some room for argument that a duty to suspend unlawful national measures will apply with respect to patent violation of Community law. cf, however, Case C–453/00 Kühne and Heitz NV v Produktschap voor Pluimvee en Eiren, judgment of 13 January 2004, particularly at paras 26 and 27, where it was held that in some circumstances administrative authorities will be obliged to reconsider decisions when a subsequent ruling of the Court of Justice establishes that it was wrong.
(321) For an exception to this, albeit in the discrete area of rules of evidence and fairness, see Case C–276/01 Steffensen  ECR I-3735.
(322)  ECR 1651.
(325) Geouffre de la Pradelle v France, judgment of 24 November 1992, Series A judgments and decisions, vol. 253 (1993) para 35.
(327) De Cubber v Belgium  7 EHRR 236.
(332) Peck v United Kingdom  36 EHRR 41; Hatton v United Kingdom  37 EHRR 28.
(333) eg Metropolitan Church of Bessaruba and Others v Moldova  35 EHRR 13.
(334) For a recent and detailed discussion see S Douglas-Scott, ‘A Tale of Two Courts: Luxembourg, Strasbourg, and the Growing European Human Rights Acquis’ (2006) 43 CMLRev 269.
(335) Case C–327/02 Panayatova, judgment of 16 November 2004, para 27.
(337) Case C–424/99 Commission v Austria  ECR I-9285. But compare UpJohn discussed below. Further, those entitled to effective judicial protection under the terms of EC legislation will generally be interpreted broadly. See eg Case C-459/99 MRAX v Belgium  ECR I-6591, paras 101–102.
(338) eg Case C–54/96 Dorsch Consult v Bundesbaugesellschaft Berlin  ECR I-4961; Case C–76/97 Tögel  ECR I-5357; Case C–258/97 HI  ECR I-1405, para 22.
(340) Case 31/03 Pharmacia Italia SpA, formerly Pharmacia & Upjohn SpA  ECR I-10001.
(341) On the approximation of provisions laid down by law, regulation or administrative action relating to proprietary medicinal products OJ  L22/369.
(343) OJ  L22/369.
(350) ibid at para 40. See also Case C–453/00 Kühne and Heitz NV v Produktschap voor Pluimvee Eiren  ECRI-837; cf Joined Cases C–392/04 and C–422/04 1–21 Germany GmbH, judgment of 19 September 2006.
(352)  ECR I-14447.
(353) Opinion of AG Alber of 24 October 2002.
(359) ibid at para 108. See also Case C–65/95 and C–111/95 Shingara and Abbas Radiom  ECR I-3343, in which the AG and the Court of Justice reached different conclusions, and employed different approaches, in deciding whether there had been breach of the right of access to a court.
(360) Case C–380/01 Gustav Schneider v Budesminister für Justiz  ECR I-1389, para 28; for an example of another positive appraisal after examination of the national legal system see eg Case C–13/01 Salafero Srl v Prefetto di Genova  ECR I-8679.
(361) Directive 89/665 OJ  L395/33.
(362) In Case C–92/00, Hospital Ingenieure Krankenhaustechnik Planungs-GmbH (HI) and Stadt Wien  ECR I-5553, para 61. See also paras 59 to 64.
(363) Case C-462/99 Connect Austria v Telekom-Control-Kommission  ECRI-05197, para 37, interpreting Article 5a(3) of Directive 90/387 on the establishment of the internal market for telecommunications services through the implementation of open network provision OJ  L192/1.
(364) Case C–26/03 Stadt Halle  ECR I-1, which interpreted Dir 89/665 on review procedures for the award of public contracts OJ  L395/33, paras 36 to 37.
(365) Directive 92/50 relating to the co-ordination of procedures for the award of public service contracts, OJ  L209/1 (hereafter referred to as Directive 92/50); Directive 92/13/EEC co-ordinating the laws, regulations and administrative provisions relating to the application of Community rules on the procurement procedures of entities operating in the water, energy, transport and telecommunications sectors, OJ  L76/14 (hereafter referred to as Directive 92/13); Directive 89/665 on the co-ordination of the laws, regulations and administrative provisions relating to the application of review procedures to the award of public supply and public works contracts, OJ  L395/33 (hereafter referred to as Directive 89/665).
(366) Directive 89/665 OJ  L395/33.
(367) Directive 92/50 OJ  L209/1.
(371) Dorsch Consult (n 338 above, para 43); Tögel (n 319 above, para 25); Hospital Ingenieure (n 362 above, para 25). The Court cited, in all cases, Case C–106/89 Marleasing  ECR I-4135, para 8; Case C–334/92 Wagner Miret  ECR I-6911, para 20; Case C–91/92 Faccini Dori v Recreb Srl  ECR I-3325, para 26 (hereafter referred to as Dori).
(372) Dorsch Consult (n 338 above, para 45). Tögel (n 319 above, para 27); Hospital Ingenieure (n 362 above, para 27). The Court of Justice cited, in all rulings, Joined Cases C–178/94, C–179/94, C–188/94, C–189/94 and C–190/94 Dillenkofer and Others  ECR I-4845 (hereafter referred to as Dillenkofer). Cf, however, the result in Case C–462/99 Connect Austria  ECR I-5197, which, in the context of EC telecommunications law, required the disapplication of a national rule which precluded a court from exercising judicial review. Discussed by Dougan (n 3 above, pp11–12).
(373) R v Secretary of State for Transport Ex parte Factortame Ltd No 1  2 AC 85.
(375)  ECR I-5199 (hereafter referred to as Coote). See also the Opinion of the AG of 2 April 1998.
(376) Namely, Part II.
(385)  ECR I-9687.
(386) Case C-472/99 Clean Car Auto-Service GmbH v Austria  ECR I-9687, para 31.
(387)  ECR I-577.
(388)  ECR I-723.
(394) Case C–397/98 and C–410/98 Metallgesellschaft and Others v Commissioners of Inland Revenue  ECRI-1727, para 86, citing Case 26/74 Roquette Frères v Commission  ECR 677, paras 11 and 12 and Case 130/79 Express Dairy Foods  ECR 1887, paras 16 and 17, both of which were validity cases. The significance of this will be explored in chapter 7. See also Ansaldo Energia (n 19 above) and Riccardo Prisco (n 14 above). Note, that in the latter case national rule pertaining to the calculation of interest was held to violate the principle of non-discrimination. See further chapter 5 below.
(396)  ECRI-2163.
(403) See in particular Joined Cases C–6 and 9/90 Francovich and Bonifaci v Italy  ECR I-5357; Joined Cases C-46 and 48/93 Brasserie du Pêcheur and Factortame III  ECR I-1029; Case C–392/93 British Telecom  ECRI-1631; Case C–5/94 Hedley Lomas  ECRI-2533; Joined Cases C–178/94, C–179/94, C–188/94 and C–190/94 Dillenkofer  ECR I-4845.
(404) The rule of law infringed must be intended to confer rights on individuals, the breach must be sufficiently serious, and there must be a direct causal link between the breach of the obligation resting on the State and the damage sustained by the injured party (n 396 above, para 32).
(408)  ECRI-1727; see also Case C–470/04 N v Inspecteur van de Belastingdienst Oost/Kantoor Almedo, judgment of 7 September 2006.
(412) For application of the principle outside of the context of unlawfully levied charges see eg Case C–224/02 Pusa  ECR I-5763 para 44.
(413) Case C–228/98 Dounias v Minister for Economic Affairs  ECR I-577, paras 68–72. cf, however, AG Darmon in Case C–236/92 Comitato di Coordinamento per la Difesa della Cava and Others v Regione Lombardia and Others  ECR I-483 at 493–494.
(414) Case C–196/02 Vasiliki Nikoloudi v Organismos Tilepikinonion Ellados AE  ECR I-1789.
(415) Case C–276/01 Steffensen  ECR I-3735.
(416)  ECR I-1531.
(417) OJ  L317/1.
(419) Opinion of former AG Jacobs in Case C–173/02 Spain v Commission  ECR I-9735, para 39, cited in M Accetto and S Zleptnig, ‘The Principle of Effectiveness: Rethinking its Role in Community Law’ (2005) 11 European Public Law 375 at 392.
(421) ibid at para 41 (my emphasis). See also, in the context of unlawfully levied charges Spac (n 19 above, para 20); Edis (n 19 above); Aprile (n 19 above, para 20); Dilexport (n 79 above, para 27).
(422) Case 26/95 Palmisani  ECR I-4025 at para 39; Levez (n 19 above, paras 39 and 43); Dilexport (n 79 above, para 22); Case C–228/98 Dounias v Minister for Economic Affairs  ECR I-577, paras 59 and 60; Case C–147/01 Weber's Wine World v Abgabenberufungskommission Wien  ECR I-11365, para 108.
(424) See eg Joined Cases C–216/99 and C–222/99 Riccardo Prisco Srl v Amministrazione delle Finanze dello Stato  ECR I-6761, para 78; AG Stix-Hackl, in her Opinion of 31 January 2002, made a detailed analysis of the relevant national laws and concluded at paras 137–146 that the principle of equivalence had been breached.
(431) Spac (n 19 above, para 21). Edis (n 19 above, para37); IN.CO.GE.'90 Srl (n 19 above, para 27). For application of the same principle, in the context of attempts to recover charges levied in breach of Article 90, see Delixport (n 79 above, para 28).
(433) Edis (n 19 above, para 21); Dilexport (n 79 above, para 28); Similar conclusions have been reached in the context of charges levied in breach of customs duties, when a special time-limit of five years, and then three years, was introduced for recovery, instead of a ten-year limitation period for recovery of sums paid but not due. See Aprile II (n 19 above, paras 21–22).
(437) ibid para 28. The Court cited Case 130/79 Express Dairy Foods v Internvention Board for Agricultural Produce  ECR 1887, paras 16 and 17; Case 26/74 Roquette Frères v Commission  ECR 677, paras 11 and 12.
(439)  ECR I-6761.
(442)  ECR I-2195.
(443) Directive 76/207 OJ  L39/40.
(444) Paragraph 611a(1) of the Bürgerliches Gesetzbuch (hereafter referred to as the German Civil Code). The only exception provided under Paragraph 611a(1) concerns agreements or measures pertaining to an activity which, owing to its specific nature, can only be performed by workers of a particular sex. See also Paragraph 611b of the German Civil Code which provides that an employer may not offer a job only to workers of a particular sex, subject to the exception contained in Paragraph 611a(1).
(445) Paragraph 611a(2) of the German Civil Code. Under the same provision a months' earnings was to be what the applicant would have been entitled to earn, in cash and in kind, by working normal hours in the month in which an employment relationship should have been established.
(448) ibid at paras 28 and 41. AG Léger agreed, and on grounds similiar to those forwarded by the Court, that, as a general rule, fixed cielings of the kind in issue failed to meet the requrements of Article 6 of the Directive. See in particular paras 41–50, 54, 55, and 56–58; the main difference being that the AG placed substantial reliance on Marshall No 2 Case C-271/91  ECR I-4367 (a decision which was not alluded to by the Court) and did not agree that quantum of compensation might be varied by reference to whether or not the candidate would have obtained the position, but for discriminatory conduct. Further, at paras 51–53 the AG expressly rejected arguments proferred by the German Government to the effect that the principle of full reparation as laid down in Marshall No 2 was confined to discriminatory dismissal, and could not be transposed to the present case of discriminatory selection in the recruitment process. The Court of Justice did not address this issue.
(449)  ECR I-3343.
(456)  ECR I-6515 Opinion of AG Alber of 6 March 2003.
(465) R Bebr, Case Commentary on Francovich (1992) 29 CMLRev 557, 582.
(466) Steiner, Enforcing EC Law (1995) ch 5, p6. See eg the Commissions Seventh Report on the Monitoring and Application of Community Law, OJ  C/232/1 as providing evidence of a crisis in the effective enforcement of Community law; the Commission's Tenth Report on the Monitoring and Application of Community Law, OJ  C233/207.
(467) C Harlow, ‘Francovich and the Problem of the Disobedient State’ (1996) 2 European Law Journal 199, Annex v of the Commission's Tenth Annual Report ibid as proof of Italian Government improvement in implementing Directives.
(468) Delicostopoulos, ‘Towards European Procedural Primacy in National Legal Systems’ (2003) 9 ELJ 599.
(470) Peterbroeck (n 142 above, para 39). See also AG Gulmann in Case C–2/92 The Queen v Ministry for Agriculture, Fisheries and Food ex parte Dennis Clifford Bostock  ECR I-955, 972 (hereafter referred to as Bostock).
(471) P Oliver, ‘Le droit communautaire et les voies de recours naturals’ (1992) 28 CDE 360 and in ‘Interim Measures: Some Recent Developments’ (1992) 29 CMLRev 7 at 9–10.
(473) Joined Cases C-46 and 48/93  ECR I-1029 at para 32 of the Report of the Hearing.
(474) JHH Weiler, ‘Journey to an Unknown Destination: A Retrospective and Prospective of the European Court of Justice in the Arena of Political Integration’ (1993) 31 JCMS 417 at 443.
(475) J Bridge, ‘Procedural Aspects of the Enforcement of European Community Law through the Legal Systems of the Member States’ (1984) 9 ELRev 28, 41.
(477) Tash, ‘Remedies for European Community Law Claims in Member State Courts: Toward a European Standard’ (1993–1994) 31 Columbia Journal of Transnational Law 377, 382. See also eg J Steiner (n 62 below chapter 5), D Curtin, ‘The Province of Government: Delimiting Direct Effect of Directives in the Common Law Context’ (1990) 15 ELRev 195, J Temple-Lang, ‘Community Constitutional Law: Article 5 EEC Treaty’ (1990) 27 CMLRev 645. The Court of Justice itself lamented the absence of harmonized rules in remedies in Comet and Rewe (n 25 and 26 above) and Case 130/79 Express Dairy Foods Limited v Intervention Board for Agricultural Produce  ECR 1887. See also N Deards, ‘Curiouser and Curiouser’? The development of Member State Liability in the Court of Justice' (1997) 3 European Public Law 117 who favours uniform rules on Member State liability in damages.
(478) F Snyder, ‘The Effectiveness of European Community Law: Institutions, Processes, Tools and Techniques’ (1993) 56 MLR 19; J Weiler, ‘The Community System: The Dual Character of Supranationalism’ (1981) 1 YBEL 227 at 443.
(482) AG Léger in Hedley Lomas  ECR II-1095 at para 52.
(483) For a summary see Dougan (n 3 above, p15). He provides the following examples: limitation periods for bringing claims are prescribed under Directive 85/374 on the approximation of laws, regulations and administrative provisions of the Member States concerning liability for defective products OJ  L210/29; Directive 2004/35 on environmental liability with regard to the prevention and remedying of environmental damage OJ  L143/56; issues of evidence and burden of proof are addressed in Regulation 1/2003 on the modernization of competition law enforcement OJ  L1/1; while questions of standing before national courts are addressed in Directive 98/27 on injunctions for the protection of consumer interests OJ  L166/51.
(484) eg Directive 89/665 OJ  L395/33; Directive 92/13 OJ  L76/14.
(486) Reg 2913/92 OJ  L302/1. See in particular Articles 235–246.
(487) OJ  C188/1.
(488) Office of Official Publications, Luxembourg, 1993.
(489) See discussion in chapter 2. See eg J de Zwaan, ‘Opting Out and Opting In: Problems and Practical Arrangements Under the Schenghen Agreement’ in A Dashwood and A Ward (eds) Cambridge Yearbook of European Legal Studies 1 (1999) 107; K Hailbronner, ‘European Immigration and Asylum under the Amsterdam Treaty’ (1998) 35 CMLRev 1047.
(490) A Ward, ‘The Limits of Effective Judicial Review and Uniform Application of Community Law: a look post-Amsterdam’ in C Kilpatrick, T Novitz and P Skidmore (eds), The Future of Remedies in Europe (2000).
(491) See eg R Craufurd Smith, ‘Remedies for Breach: The Community, the State and Damages Liability’ (1990) 113 LQR 709, who attempts to draw a distinction between Court of Justice review of national procedural laws and substantive rules on sanctions.
(492) cf C Kilpatrick, ‘Turning Remedies Around: a Sectoral Analysis of the Court of Justice’ in G de Burca and JHH Weiler (eds), The European Court of Justice (2001); M Dougan, ‘Cutting Your Losses in the Enforcement Deficit: A Community Right to the Recovery of Unlawfully Levied Charges’ in A Dashwood and A Ward (eds), Cambridge Yearbook of European Legal Studies 1 (1998) 276, particularly at 390–395. At p390 he writes of the sectoral analysis, as ‘a critical conceptual tool by which to analyse the Court of Justice's volatile case law on national remedies and procedural rules’.
(493) W Van Gerven, ‘Bridging the Unbrdigeable: Community and Natioanal Torts Law After Francovich and Brasserie’ (1996) 45 ICLQ 507 at 693–694.
(496) Case 243/78 Simmenthal SpA v Commission of the European Communities  ECR 593.
(497) See conclusions of the Edinburgh European Council EC Bulletin 12 (1992) at para I.19.
(498) See eg N Green and A Barav, ‘Damages in National Courts for Breach of Community Law’ (1986) 6 YBEL 118–119.
(499) Report of the Hearing, Brasserie du Pêcheur and Factortame III  ECRI-1029 at para 30.
(500) See R Kover, Les recours des individus devant les instances nationales en cas de violation du droit européen (1978) 294. Cited by A Barav, ‘Damages in the Domestic Courts for Breach of Community Law by National Public Authorities’ in HG Schermers and P Mead (eds), Non-Contractual Liability of the European Communities (1988) 165. The stringency of the Article 288(2) test was a key factor in the refusal of the English Court of Appeal in the Bourgoin case to award damages for breach of Article 30  3 ALLER 585. See in particular the judgment of Parker LJ. N Green and A Barav, ‘Damages in the National Courts for Breach of Community Law’ (1986) 6 YBEL (1986) 55 at 117 assert that ‘the diametrically opposed judgments of Parker and Oliver LJJ both rest on a correct analysis of Community law’.
(501) See eg F Fines, Responsabilité Extracontroractuelle de la Communauté Economique Européenne (1990).
(502) AG Léger in Hedley Lomas  ECR II-1095 at para 65 of the AG's Opinion (italics in original).
(504)  ECR I-3799.
(506) R v Secretary of State for Transport Ex parte Factortame Ltd No 1  2 AC 85; HL.
(507) On perceived problems in this regard with respect to nullity see A Arnull, ‘The action for annulment; a case of double standards?’ in Lord Slynn of Hadley, Liber Amicorum vol. 1 (2000) 177.
(508) J Bengoetxea, The Legal Reasoning of the European Court of Justice (1993) 181.
(510) D Curtin and T Heukels (eds), Institutional Dynamics of European Integration Liber Amicorum Henry G Schermers (1994).
(512) Case C–213/89  ECR I-2433, 2473.
(514)  ECR I-1155 at 1186.
(517) C Harlow ‘Coditication of EC Administrative Procedures? Fitting the Foot to the Shoe or the Shoe to the Foot’ (1996) 2 ELJ 3, 17. See eg paras 13, 14, 16, 17, 28, and 31 of the AG's Opinion.
(518) Joined Cases C-46 and 48/93 Brasserie du Pêcheur and Factortame III  ECR I-1029, para 39. For other references to individual rights see also paras 20–23, 51, 52, 54, 72, 90, 95. See also Francovich (n 403 above, paras 31 to 36).
(519)  ECR I-5199 at para 23.
(520) For an attempt to bring coherency to the concept of ‘individual rights’ in national remedies, through import of ‘[L]egal bonds in the form of an obligation between parties’ see T Eilmansbeger, ‘The Relationship Between Rights and Remedies in EC Law; in search of the missing link’ (2004) 41 CMLRev (2004) 1199, 1241.
(522) Case C–298/96, Oelmühle Hamburg AG, Jb. Schmidt Söhne GmbH & Co. KG v Bundesanstalt für Landwirtschaft und Ernährung  ECR I-3467.
(523)  ECR I-2661.
(524)  ECR I-1591.