C-5/94

OPINION OF MR LÉGER — CASE C-5/94

OPINION OF ADVOCATE GENERAL LÉGER delivered on 20 June 1995

Summary

Facts and procedure I - 2557 Question 1 I-2559 I — Can a Member State rely on Article 36 of the Treaty where a harmonizing directive is silent on the matter of procedures for monitoring the measures which it intro­ duces? I-2559 II — Can a Member State rely on Article 36 of the Treaty in order to restrict exports to a Member State which fails to comply within its territory with the requirements of the directive? I - 2561 Question 2 I- 2565 Question 3 I- 2566 I — Effective judicial protection of individuals relying on Community law must entail recognition of a right to compensation I - 2568 II — The Francovich judgment is not only a remedy for imperfect direct effect I - 2573 III — The basis of State liability for breach of Community law I - 2578 IV — The requirements of Community law relating to an action for damages against the State for breach of Community law do not vary according to the State organ liable for the damage I - 2581 V — The diversity prevailing under Article 215 of the Treaty I - 2584 VI — The Article 215 scheme cannot be transposed to State liability for breach of Com­ munity law: the example of the Bourgoin case I - 2587 VII — Defining minimum requirements for enforcing State liability for breach of Commu­ nity law I-2589 A — The cause of the damage: breach of Community law I - 2590 B — Is a judgment declaring a Member State to be in breach of its Community obli­ gations a precondition for bringing an action for damages against it for breach of Community law? I - 2595 C — The damage I - 2596 D — The causal link 1-2598 E —Objection of parallel proceedings I - 2599 VIII — Conclusion I-2601

6. Since it took the view that live animals exported to Spain were suffering, in that State's slaughterhouses, treatment contrary 3. Council Directive 74/577/EEC of to the directive, the United Kingdom Minis­ 18 November 1974 on stunning animals try of Agriculture, Fisheries and Food sys­ before slaughter, 1 which is based on Articles tematically refused to issue licences for 43 and 100 of the EEC Treaty, is intended to exports of live animals for slaughter to Spain remove the disparities between Member from April 1990 to 1 January 1993. States' legislation in the field of animal pro­ tection and provides that: 'For the slaughter of animals belonging to the following spe­ cies: bovine animals, swine, sheep, goats and solipeds, Member States shall ensure that suitable measures are taken to induce death as rapidly as possible after stunning, in accordance with appropriate procedures.' 2 7. It was for this reason that an application The directive does not harmonize the proce­ made on 7 October 1992 by Hedley Lomas dures for monitoring compliance with its (Ireland) Ltd ('Hedley Lomas') for a licence provisions. to export Uve sheep to a Spanish slaughter­ house was turned down.

1 _ OJ 1974 L 316, p. 10. 2 — Article 1. 3 — Boletin Oficial del Estado No 312 of 30 December 1987.

I - 2557

OPINION OF MR LÉGER — CASE C-5/94

8. Since it takes the view that the slaughter­ If the answer to Question 1 is in the nega­ house in question, which had been approved tive, since 1986, complied with the Community directives and that the United Kingdom authorities had no evidence to the contrary, Hedley Lomas has applied to the High Court for judicial review of the implied decision of refusal. It also seeks damages. (2) In the circumstances described in Ques­ tion 1, does Article 36 entitle Member State A to prohibit the export of live sheep to Member State B for slaughter

13. Is the United Kingdom entitled to rely on Article 36 of the Treaty to justify such a Question 1 measure even though a harmonizing direc­ tive based on Article 100 of the Treaty regu­ lates the matter?

11. Two issues will be addressed in turn. First: can a Member State rely on Article 14. Once a harmonizing directive has been 36 of the Treaty where a harmonizing direc­ adopted, Member States can no longer tive is silent about procedures for monitoring impose requirements other than those pro­ the measures which it introduces? (I). Sec­ vided for by the directive, on condition that ond: with regard to a harmonizing directive the harmonization introduced is complete. protecting an interest covered by Article 36 of the Treaty (protection of the health and life of animals), can a Member State rely on Article 36 in order to restrict exports to a Member State which fails to comply within 15. If harmonization is only partial or if the its territory with the requirements of the directive confers on Member States national directive? (II). powers to apply it or introduce measures of control, Articles 36 and 100 of the Treaty can apply at the same time.

I — Can a Member State rely on Article 16. Thus, as the Court ruled in its judgment 36 of the Treaty where a harmonizing direc- 4 in Van Bennekom: tive is silent on the matter of procedures for monitoring the measures which it introduces?

'It is only when Community directives, in pursuance of Article 100 of the Treaty, make

12. It is common ground that the refusal by the United Kingdom authorities to issue 4 — Case 227/82 Van Bennekom [1983] ECR 3883.

5 — Paragraph 35, emphasis added. See also paragraph 35 of the 6 — Council Directive 73/173/EEC of 4 June 1973 on the judgment in Case 5/77 Tedeschi v Denkavit [1977] approximation of Member States' laws, regulations and ECR 1555, paragraph 13 of the judgment in Case 73/84 Den- administrative provisions relating to the classification, pack­ kavit Futtermittel v Land Nordrhein-Westfalen [1985] aging and labelling of dangerous preparations (solvents) (OJ ECR 1013, paragraph 19 of the judgment in Case 1973 L 189, p . 7). C-39/90 Denkavit Futtermittel v Land Baden-Württemberg 7 — Judgment in Case 148/78 Pubblico Ministero v Ratti [1979] [1991] ECR I-3069, and paragraph 25 of the judgment in ECR 1629. Case C-17/93 Van der Veldt [1994] ECR I-3537. See also paragraph 35 of the judgment in Case C-323/93 Société 8 — Council Directive 74/63/EEC of 17 December 1973 on the Civile Agricole du Centre d'Insémination de L· Crespelle v fixing of maximum permitted levels for undesirable sub­ Cooperative d'Élevage et d'Insémination Artificielle du stances and products in feeding-stuffs (OJ 1974 L 38, p . 31). Département de la Mayenne [1994] ECR I-5077. 9 — Cited above in footnote 5.

I - 2560

THE QUEEN v MAFF,EX PARTE HEDLEY LOMAS

II — Can a Member State rely on Artide The issue of a breach was discussed both by 36 of the Treaty in order to restrict exports to the applicant in the main proceedings and 1 a Member State which fails to comply within by the Commission, 1 which, moreover, did its territory with the requirements of the not consider it appropriate to institute directive? Treaty-infringement proceedings against the Kingdom of Spain.

23. It is clear that in this case the United Kingdom is relying on Article 36 — and thus inhibiting the free movement of the animals 27. Nothing is more alien to Community in question — not in order to protect those law than the idea of a measure of retaliation animals against maltreatment in its own ter­ or reciprocity proper to classical public inter­ ritory, to improve their protection there or national law. A Member State paralyses the to take account of a situation particular to its free movement of goods on the ground that national territory. The United Kingdom is the higher interest of the protection of ani­ here taking into account the Community mals has allegedly been violated in another interest and is drawing the consequences of Member State. In other words, the first an alleged breach of the directive's provi­ Member State reacts to an alleged breach of sions by another Member State. Is the the Treaty (animals are allegedly not pro­ United Kingdom entitled to rely on Article tected in Spain) by a separate breach of the 36? Treaty (sheep originating in the United Kingdom are no longer exported to Spain). '... [E] xcept where otherwise expressly pro­ vided, the basic concept of the Treaty requires that the Member States shall not 12 take the law into their own hands.'

24. It should first of all be noted that it has not been established that the Kingdom of Spain is in breach of its obligations under the 10 — Point 29 of its observations, in fine. 11 — Point 7.6 of its observations. directive. In any event, no such breach has 12 — Judgment in Joined Cases 90/63 and 91/63 Commission v been demonstrated by the United Kingdom. Luxembourg and Belgium [1964] ECR 625, at 631.

'... a Member State cannot, in any circum­ stances, plead the principle of reciprocity and rely on a possible infringement of the Treaty by another Member State in order to justify its own default. ...' 13 30. The onus was thus on the United King­ dom either to bring an action under Article 170 of the EC Treaty or to submit a com­ plaint to the Commission in order for that institution, as guardian of the Treaties, to try to have the breach brought to an end and, if 28. Let me quote the even clearer formula necessary, consider whether to institute used by the Court in its judgment in Case infringement proceedings. The United King­ 1 232/78 Commission v France: 4 dom would then have been able, in infringe­ ment proceedings brought against Spain, to obtain authorization under Article 186 of the EC Treaty to suspend temporarily the issue of licences for the export of Uve animals to 16 Spain. 'A Member State cannot under any circum­ stances unilaterally adopt, on its own auth­ ority, corrective measures or measures to 15 — Judgment in Case 52/75 Commission v Italy [1976] protect trade designed to prevent any failure ECR 277, paragraph 11. See also the judgment in Case C-38/89 Blanguernon [1990] ECR 1-83. 16 — It would appear that proceedings under Article 170 of the EC Treaty for failure to fulfil Treaty obligations are the only means available to a Member State to get round a refusal by the Commission to institute proceedings under 13 — Judgment in Case 325/82 Commission v Germany [1984] Article 169 of the EC Treaty; the Commission's discretion­ ECR 777, paragraph 11. ary power in this matter and the objection of parallel pro­ 14 — Judgment in Case 232/78 Commission v France [1979] ceedings do not allow a Member State to bring proceedings ECR 2729, paragraph 9. against the Commission for failure to act.

(3) Only the Member State within whose ter­ ritory the protective measure must be

( l ) The principle, referred to by the Court at paragraph 20 of its judgment in 18 — Judgment in Case C-367/89 Richardt and Les Accessoires Scientifiques [1991] ECR I-4621, emphasis added. 19 — See also the judgment in Case 46/76 Bauhuis v NetherUnds [1977] ECR 5, paragraph 12. 17 — Case 8/74 Procureur du Roi v Dassonville [1974] ECR 837, 20 — See, to this effect, the Opinion of Advocate General Van at 860. See ako his Opinion in Joined Cases 3/76, 4/76 and Gerven in Case C-169/89 Van den Burg [1990] ECR I- 6/76 Kramer and Others [1976] ECR 1279, at 1328. 2143, at point 7.

I - 2563

OPINION OF MR LÉGER — CASE C-5/94

adopted is in a position to ensure that the inspections carried out in the interest of the measure is strictly necessary and to check importing State were simply shifted to the that it is being complied with. State of exportation.

21 — See judgment in Richardt and Les Accessoires Scientifiques, 24 — Judgment in Case 89/76 Commission v NetherUnds [1977] cited above. ECR 1355. 22 — Cited above in footnote 19. 25 — Cited above in footnote 20. 23 — Paragraph 46 of the judgment. 26 — OJ 1979 L 103, p . 1.

I - 2564

THE QUEEN v MAFF, EX PARTE HEDLEY LOMAS

does not occur in the territory of the legislat­ Question 2 ing Member State but is found in another Member State, where it may lawfully be hunted under the terms of the directive and under the legislation of that other Member State, and which is neither migratory nor 41. Measures adopted pursuant to Article c endangered within the meaning of the direc­ 36 of the Treaty are ... only justified pro­ tive. vided that [they] are in reasonable propor­ tion to the aim pursued and that the protec­ tion of health cannot be achieved as effectively by measures which restrict intra- 28 Community trade to a lesser extent.' 38. Finally, the United Kingdom relies, unconvincingly, on the judgment in Campus 27 Oil, which deals with a case in which Arti­ cle 36 of the Treaty is relied on by a Member State even though existing Community rules 42. To take the words used by the Court in 29 provide for the measures necessary to guar­ its judgments in Campus Oil and Mire- 30 antee protection of the interests specified in poix, national measures adopted on the that article. The Court accepted that, even if basis of Article 36 of the Treaty are justified there were existing Community rules, a only if they take into account the require- Member State was entitled to rely on Article ments of the free movement of goods as laid 36 in order to adopt appropriate additional down by the Treaty and, in particular, by the measures at national level where public secu­ last sentence of Article 36. rity and minimum supply of petroleum products to that State were in issue.

45. According to the Court's consistent 32 case-law, the onus is on the party relying on Article 36 of the Treaty to demonstrate that there is a threat to the health of animals. 48. I accordingly conclude that Article The United Kingdom has not demonstrated 36 does not entitle Member State A to pro­ that Directive 74/577 was being breached hibit the export of live sheep to Member throughout Spain, thereby justifying a blan­ State B for slaughter, either generally, or ket ban on exports to that country, or even where it has not shown that the slaughter­ that it was being breached occasionally by a house of destination in Member State B is specific, precisely identified slaughterhouse. not complying with the provisions of the directive.

Question 3 46. I see this as proof that Article 36 cannot be relied on by a Member State to protect interests situated within the territory of another Member State. How can it, within territory over which it has no sovereignty (and in which it consequently lacks investi­ 49. Can a trader bring an action against his gative powers), gather the evidence to show State for compensation for the damage which that Article 36 must be applied? he incurs by reason of the refusal — incom­ patible with Community law — to grant an export licence? If so, what are the conditions under which such State liability arises?

47. I wish finally to point out, as the appli­ cant company in the national proceedings 50. To put it another way, is there, in Com­ munity law, a general principle that a State can be liable for the actions of its administra­ 31 — Judgments in Case 261/85 Commission v United Kingdom tive authorities which are contrary to Com­ [1988] ECR 547, paragraph 15; in Case 407/85 Drei Glocken and Kritzinger [1988] ECR 4233, paragraph 14; munity law? and in Case C-304/88 Commission v Belgium [1990] ECR 1-2801, paragraph 14. 32 — Judgments in Case 174/82 Sandoz [1983] ECR 2445, para- graph 22, and in Case 227/82 Van Bennekom, cited above, paragraph 40. 33 — Point 29 of its observations.

VI — The Article 215 scheme cannot be 52. The stir created by that judgment — no transposed to State liability for other decision of the Court has ever gener­ breach of Community law: the ated so much comment — is a measure of example of the Bourgoin case the magnitude of the step forward which the Court is now being asked to take. The ques­ VII — Defining minimum requirements for tion is all the more delicate because it was enforcing State liability for breach submitted to the negotiators of the Maas­ of Community law 35 tricht Treaty without receiving any answer. A — The cause of the damage: Despite the Community legislature's silence, breach of Community law a Member State which infringes Community law ought to incur liability in the same way B — Is a judgment declaring a as the Community may incur liability for Member State to be in breach loss and damage caused by its institutions or of its Community obligations agents in the exercise of their functions. a precondition for bringing an action for damages against it for breach of Community law? 34 — Joined Cases C-6/90 and C-9/90 Francovich and Others v Italy [1991] ECR I-5357. C — The damage 35 — See H. Teske, 'Die Sanktion von Vertragsverstößen im Gemeinschaftsrecht', Europarecht, 3-1992, p. 265, at p. 285; D — The causal link the observations of the German Government, point 4, and the observations of the Netherlands Government, point E — Objection of parallel proceed­ 12 (the observations cited in the context of the third ques­ tion are those submitted in Joined Cases C-46/93 Brasserie ings du Pêcheur v Germany and C-48/93 Factortame and Oth- ers, both at present pending before the Court, to which the parties to the main proceedings have referred). VIII — Conclusion

55. How can effective judicial protection be 'Direct applicability in such circumstances guaranteed for an individual relying on means that rules of Community law must be Community law when the Member States enjoy 'procedural autonomy' and, in the absence of any harmonization of procedural 36 — Case 26/62 Van Gend en Loos v NederUndse Administratie rules, retain the power to designate the com­ der Belastingen [1963] ECR 1. 37 — Page 13. petent courts and determine the procedural 38 — Judgment in Case 33/76 Rewe v Landwirtschaftskammer rules governing actions for safeguarding the Saarland [1976] ECR 1989, point 5, and judgment in Case 45/76 Comet v Produktschap voor Siergewassen [1976] rights which individuals derive from the ECR 2043, paragraph 12. 39 — Case 106/77 Amministrazione delle Finanze dello Stato v Simmenthal [1978] ECR 629. See also paragraph 5 of the judgment in Case 811/79 Amministrazione delle Finanze dello Stato v Ariete [1980] ECR 2545. 40 — Paragraphs 14 and 16.

I - 2568

THE QUEEN v MAFF ,EX PARTE HEDLEY LOMAS

direct effect of Community law? How can As early as 1981, in its judgment in Rewe- respect for procedural autonomy be recon­ Handelsgesellschaft Nord, the Court ciled with the uniform application of Com­ referred to a 'system of legal protection' munity rules having direct effect? making it possible to ensure the effectiveness of Community law.

It follows at point 5 and paragraph 13 respectively. Within certain very specific areas, procedural law has been harmonized. I from this second principle that '. . . in the case would mention here Council Directive 76/207/EEC of of rights which individuals derive from pro 9 February 1976 on the implementation of the principle of equal treatment for men and women as regards access to visions of Community law, judicial protec employment, vocational training and promotion, and work ing conditions (OJ 1976 L 39, p . 40), Council Regulation tion must in any event come up to an appro (EEC) No 1430/79 of 2 July 1979 on the repayment or priate level and the monitoring of that level remission of import or export duties (OJ 1979 L 175, p . 1), 47 Council Regulation (EEC) No 1697/79 of 24 July 1979 on is a matter for the Court.' the post-clearance recovery of import duties or export duties which have not been required of the person liable for payment on goods entered for a customs procedure involv ing the obligation to pay such duties (OJ 1979 L 197, p . 1), Council Directive 89/665/EEC of 21 December 1989 on the coordination of the laws, regulations and administrative 44 — Case 158/80 Rewe-Handebgesellschaft Nord and Rewe- provisions relating to the application of review procedures Markt Steffen v Hauptzollamt Kiel [1981] ECR 1805, para in the award of public supply and public works contracts graph 44. (OJ 1989 L 395, p. 33) — which provides in particular that 45 — Paragraph 12 of the judgment in Case 130/79 Express Dairy persons adversely affected by a breach have the right to Foods v Intervention Board for Agricultural Produce [1980] bring an action for damages —, Council Directive ECR 1887. See also the judgments in Rewe, cited above, 90/313/EEC of 7 June 1990 on the freedom of access to paragraph 44, and those in Case 14/83 Von Colson and

Toward curement procedures of entities operating in the water, a European Standard', Columbia Journal of Transnational energy, transpon and telecommunications sectors (OJ Law, 1993, Volume 1, 31, p . 377, at p. 387. 1992 L 76, p. 14). 46 — See, inter alia, the judgment in Case 265/78 Ferwerda v 42 — Judgment in Case C-60/92 Otto v Postbank [1993] ECRI- Produktschap voor Vee en Vlees [1980] ECR 617, para 5683, paragraph 14. graph 10. 43 — 'Les incidences du droit communautaire sur l'organisation 47 — G. Tesauro, 'La sanction des infractions au droit commu et l'exercise de la fonction juridictionnelle dans les États nautaire', Reports for the XVth FIDE Conference, Lisbon membres', Mélanges Boulouis, 1991, p . 297. 1992, General Report, p . 423, at p. 455.

62. In its judgment in Zuckerfabrik Süder- 60. Community law applies immediately, 53 dithmarschen, the Court held that Article without any need to await the outcome of 189 of the EEC Treaty did not preclude a domestic actions, even on constitutional 49 national court from suspending enforcement issues. An individual relying on Commu­ of an administrative measure adopted pursu­ nity law must have an effective judicial rem­ ant to a Community regulation the validity edy. The Court has identified in the 'right to 50 of which was being contested before the obtain a judicial determination' a general Court of Justice. Thus, the judicial protec­ principle of law which underlies the consti­ tion of individuals relying on Community tutional traditions common to the Member States and which is laid down in Articles 6 and 13 of the European Convention for the 51 — Paragraph 18 of the judgment in Johnston. 52 — Paragraph 21 of the judgment in Case C-213/89 Factortame and Others [1990] ECR I-2433. Note also the comment of A. P. Tash, op. cit., p. 397: '... the Factortame cases go far 48 — Op. cit., p. 301. further than Von Colson because the Court actually speci- 49 — Judgments in Simmenthal, cited above, and in Case fied the new remedies that the national courts must pro- C-348/89 Menacarte [1991] ECR I-3277. vide.' 50 — See point 3 of the Opinion of Advocate General Darmon in 53 — Joined Cases C-143/88 and C-92/89 Zuckerfabrik Suder- Case 222/84 Johnston [1986] ECR 1651. dithmarschen and Zuckerfabrik Soest [1991] ECR I-415.

I - 2570

THE QUEEN v MAFF, EX PARTE HEDLEY LOMAS

65. With regard to an employer's civil liabil­ ity for breach of the prohibition of discrimi­ nation between men and women on grounds of sex, the Court seeks to ensure that a vic­ tim will have 'real and effective judicial pro­ tection'. Thus, the Court has held that 63 63. Following the same line of reasoning, the Directive 76/207 'does not make liability Court has held that Community law pre­ on the part of the person guilty of discrimi­ cludes the competent authorities of a Mem­ nation conditional in any way on proof of ber State from relying, in proceedings fault or on the absence of any ground dis- brought in its national courts against those authorities by an individual relying on a directive which the Member State in 58 — Judgment in Case C-208/90 Emmott [1991] ECR1-4269. question has not yet properly transposed 59 — Judgment in Case 8/81 Becker [1982] ECR 53; judgment in Case 152/84 Marshall [1986] ECR 723. into its domestic legal system, on national 60 — Judgments in Von Cobon and Kamann, cited above in foot- note 45, Case 80/86 Kolpinghuis Nijmegen [1987] ECR 3969, paragraph 12, Case 157/86 Murphy [1988] ECR 673, and C-106/89 Marleasing [1990] ECR 1-4135, paragraph 8. 54 — See H. G. Schermers, Common Market Law Review 1992, 61 — Judgment in Kolpinghuis Nijmegen, cited in the previous Volume 29, p. 133, at p. 136. footnote, paragraph 15. 55 — Ibid., p. 137. 62 — On this issue, see point 15 of the Opinion of Advocate 56 — Paragraph 33 of the judgment. General Darmon in Case C-177/88 Dekker [1990] ECR I- 3941. 57 — Point 6.6 of the observations of applicants nos 1 to 36 and 38 to 97 in Case C-48/93, cited above in footnote 35. 63 — Cited above in footnote 41.

charging such liability.' 64 From this the 69. An action for damages against the State Court has concluded that '... any breach of for breach of Community law constitutes the the prohibition of discrimination must, in indispensable adjunct to the principle laid itself, be sufficient to make the employer lia­ down in the Simmenthal judgment, cited 65 ble ...'. above, that domestic legislation that is con­ trary to Community law is inapplicable. To make good the consequences of the applica­ tion of that legislation in the past is to annul the effects of that application and, ultimately, to render that legislation inapplicable in the 66. Finally, in its judgment in Marshall II 66 past, or to draw the consequences of such — to which I shall return — the Court laid inapplicability for the past. down the minimum criteria for preventing the right to compensation recognized by a Community directive from being made sub­ ject to restrictions such as would render the principle of the obligation to pay compensa­ 70. Just as individuals are protected by the tion completely ineffective. fact that the courts or the administration may disapply legislation, so they must also be protected by reparation of the damage which they have incurred through applica­ tion of legislation which ought to have remained a dead letter. 67. It is within that trend in the case-law, 67 marking out 'real and effective' judicial protection, that the right of an individual relying on Community law to bring an action for damages against a State which has acted in breach of that law must be set. 71. The Court accepted some time ago that '... a judgment by the Court under Articles 169 and 171 of the Treaty may be of substan­ tive interest as establishing the basis of a responsibility that a Member State can incur as a result of its default, as regards other Member States, the Community or private 68. Just as it requires national legislation 68 parties', making proceedings to establish which is contrary to Community law to be default admissible even if the defendant disapplied, so too the principle of the pri­ Member State has, between the time of the macy of Community law requires that an reasoned opinion and the institution of the individual should be able to obtain compen­ sation for the damage caused by the applica­ tion of such legislation in the past. 68 — Judgment in Case 39/72 Commission v Italy [1973] ECR 101, point 11, emphasis added. See also the judgments in Case 309/84 Commission v Italy [1986] ECR 599, para- graph 18, Case 103/84 Commission v Italy [1986] 64 — Paragraph 22 of the judgment in Dekker, cited above in ECR 1759, Case 154/85 Commission v Italy [1987] footnote 62. ECR 2717, Case 240/86 Commission v Greece [1988] ECR 1835, Case C-287/87 Commission v Greece [1990] 65 — Ibid., paragraph 25. ECR I-125, Case C-249/88 Commission v Belgium [1991] 66 — Case C-271/91 Marshall [1993] ECR I-4367. ECR I-1275, and in Case C-361/88 Commission v Germany 67 — Ibid., paragraph 24. [1991] ECR I-2567, paragraph 31.

II — The Francovich judgment is not only a 73 73. As early as its judgment in Humblet, remedy for imperfect direct effect the Court derived from Article 86 of the ECSC Treaty, which is analogous to Article 5 of the EC Treaty, the obligation '... to rescind the measure in question and to make reparation for any unlawful consequences which may have ensued.' 75. The Court has held many times that 'the right of [individuals] to rely on the directly applicable provisions of [the Treaty] before national courts is only a minimum guarantee 74. It was precisely upon these two bases — and is not sufficient in itself to ensure the full 74 Article 5 of the Treaty and the obligation and complete implementation of the Trea­ 78 ty.' The Francovich judgment illustrates this point. 69 — It will be noted that by referring to the Community the Court appears to accept that the Community may be able to bring proceedings in liability against a State which has infringed the Treaty. 75 — Cited above in footnote 52, paragraph 32. 70 — Case 60/75 Russo v AIMA [1976] ECR 45. .76 — Paragraph 41 of the Francovich judgment. 71 — Point 9. See also the judgment in Case 179/84 Bozzetti [1985] ECR 2301, paragraph 17: '... it is for the legal system 77 — On this point, see A. Barav, Omnipotent courts', in of each Member State to determine which court has juris- Mélanges Schermers, 1994, Volume 2, p. 265, at p. 288. diction to hear disputes involving individual rights derived 78 — Judgment in Case C-120/88 Commission v Italy [1991] from Community law, but at the same time the Member ECR 1-621, paragraph 10. See also the judgments in Case States are responsible for ensuring that those rights are 168/85 Commission v Italy [1986] ECR 2945, paragraph 11, effectively protected in each case.' Case C-119/89 Commission v Spain [1991] ECR 1-641, paragraph 9, and Case C-159/89 Commission v Greece 72 — OJ, English Special Edition 1967, p. 33. [1991] ECR 1-691, paragraph 10. See also point 44 of the 73 — Case 6/60 Humblet v Belgium [1960] ECR 559, at 569. Opinion of Advocate General Van Gerven in Case 74 — Paragraph 36 of the Francovich judgment. C-128/92 Banks [1994] ECR 1-1209.

78. So, making the State liable specifically where there is a failure to transpose a direc­ tive is not only an effective sanction or a means of exerting pressure or of providing an inducement to transpose: it allows the person for whom the directive intended the right concerned indirectly to take immediate 77. An action for damages against the State benefit from that right despite the failure to thus appears to be a remedy for imperfect transpose. The effective assertion of rights direct effect. In holding that an individual has given to individuals by a directive is no a right to compensation, the Court is in longer totally dependent on transposition. effect conferring direct effect on the provi­ sions at issue in so far as the individual may rely on their non-transposition in order to 79 obtain compensation. The party entitled has no action for performance vis-à-vis the person against whom the right created by the 79. Without transposition, an individual has directive could be asserted because that per­ no other means of asserting his rights under son is indeterminate. As the victim of loss, a directive than to plead that his national law the party entitled has an action in damages be interpreted in a manner consistent with it against the State which is founded on the 81 — in so far as this is possible — whereas, failure to transpose. So, an action in damages in the Member States in which it has been makes up for the absence of transposition transposed, the directive, by virtue of the and the absence of direct effect. As pointed 80 national transposing measure, constitutes a out by Wivenes, 'by making the failure by directly effective measure which can be relied the State to adopt national measures trans­ on directly by individuals. In its judgment in posing the directive into the act causing the 82 Faccini Dori, the Court pointed out that harm suffered by the person on whom the the possibility of bringing an action in dam­ Community legal order intended to confer ages provided by the Francovich judgment applied precisely where 'the result prescribed by the directive cannot be achieved by way 79 — On this point, see W. Van Gerven, "Non-contractual Liabil- ity of Member States, Community Institutions and Individ- uals for Breaches of Community Law with a View to a Common Law for Europe', Maastricht Journal, 1, 1994, p. 6, at p. 21. 81 — See the judgments in Marleasing and Dekker, cited above in 80 — Luxembourg Report for the XVth FIDE Conference, Lis- footnotes 60 and 62. bon 1992, 'La sanction des infractions au droit communau- 82 — Judgment in Case C-91/92 Faccini Dori v Recreb [1994] taire', p. 277, at p. 296. ECR I-3325.

83. Yet must we deduce from this that the principle of liability applies only to breaches of provisions which are not directly applica­ ble, this then being the only way of achiev­ ing the result aimed at by the directive which a Member State refuses to transpose, thereby serving as an adjunct to the Court's case-law on the direct applicability of provisions of 80. This analysis demonstrates how 'the Community law, as the Federal Republic of 86 87 principles of direct and indirect effects were Germany, Ireland and the Kingdom of 88 simply expedients designed to secure the the Netherlands argue in their written enforcement of Community law precisely observations? Is there no 'need' for a right to because States had failed to fulfil their obli­ reparation in relation to directly applicable 84 gations' and how the Francovich judgment provisions, as the German Government falls into that line of authorities ensuring argues? effective application of directives so that, where these create rights for individuals, they can identify and rely on those rights.

84. Where the Community provision has direct effect, would the individual already have judicial protection, or remedies, such that an action for damages would be unnec­ essary? If the provisions of the directive had 85 81. In its judgment in Emmott, the Court been directly effective, is it not true that had held that a Member State may not, by Mr Francovich would have had an action for relying on national limitation periods, thwart performance as a party entitled to enforce an the full effect of a directive which it has not obligation against the Italian State, thereby transposed in good time. making any action for damages needless?

86. If the principle of State liability applies in respect of a right having no direct effect conferred by a directive, it applies a fortiori 88. An individual who brings an action for in respect of a subjective right conferred by damages against a State on the ground that 90 provisions which do have direct effect. there has been a breach of a directly effective This is so true that, well before judgment provision of Community law can, by defini­ was delivered in Francovich, national courts tion, show that rights were granted for his had found against their own Member States benefit and that their content is identifiable. for breaches of directly effective provisions He thereby satisfies the first two conditions of Community law. Consider the case of the for establishing liability, as set out in the French State found guilty of a faute de ser- Francovich judgment. 94 An action for dam­ vice by allowing abnormal delays in the ages is a corollary of direct effect itself. completion of customs inspections carried out in conditions contrary to Article 30 of 91 the Treaty.

95 89. Indeed, in its judgment in Foster, the Court had already held that an individual 87. Furthermore, it is widely accepted that could claim damages from a Member State an individual or undertaking may bring an for its breach of a directly effective provision action for damages against another individual of a directive. or undertaking for breach of a rule of Com­ munity law having direct horizontal effect. In the judgment of the House of Lords in Garden Cottage Food Limited v Milk Mar- 92 keting Board, it was held that a breach of Article 86 of the EEC Treaty could be

of Community law to make reparation, the law includes an action for damages against Court has cited judgments which apply the the Community institutions under Article principle that national courts must ensure 215 of the EC Treaty. I cannot see why such the effective protection of directly applicable an action for damages could be denied to an rights which individuals derive from Com­ individual seeking to rely on Community munity law (with the exception of the judg­ law just because the damage was caused by a 96 ment in Factortame I, cited above). Member State. Barav has made this point with regard to the Community: 'A system of judicial remedies would be incomplete if it did not include an action for compensation for the harm occasioned by administrative 98 action'. In a Community founded on the principle of indirect administration by the 91. In its judgment in Zuckerfabrik Süder- Member States, in which the spheres of com­ dithmarschen, cited above, the Court held petence of the Member States and the Com­ that a national decision based on a Commu­ munity are so closely interlocked that it is nity regulation, the validity of which was sometimes difficult to determine who should contested before the Court, ought to be be held accountable for damage, 99can the capable of being suspended temporarily Member States be exonerated from all liabil­ where its immediate enforcement would ity? The reply to this question is even clearer cause irreparable damage or damage repara­ when one looks at the cases in which the ble only with difficulty. Community and a Member State have jointly caused the damage and in which the Court considered it possible for an action for dam­ ages to be brought before national courts 10 against the Member State concerned. 0

(b) The basis of State liability for legislative action in domestic Uw bears no relation to State liability for breach of Community Uw

Ill — The basis of State liability for breach of Community law

I - 2578

THE QUEEN v MAFF, EX PARTE HEDLEY LOMAS

97. As the Court held in its judgment in 99. In contrast, the principle of State Lability HNL, the principles which, in the legal for legislative action is accepted in other systems of the Member States, govern the Member States, although strict conditions liability of public authorities for damage must always be fulfilled before it can be 112 caused to individuals by legislative measures enforced. This is the case in Spain, 1 114 115 Vary considerably from one Member State France, 13Greece, Denmark, Portu­ 106 116 117 to another'. gal and the Netherlands.

98. In a number of Member States the State cannot be hable for its legislative action. This 100. From this I conclude that, as far as is the case in Italy, the Federal Republic of State liability for legislative action is con­ 107 108 Germany, Belgium and, apparently, in cerned, there are no general principles which 109 11 Ireland and Luxembourg. 0This is also are truly common to the Member States. The the rule applied by the courts in the United principles established by the Court in rela­ 1 Kingdom, 11at least where Community law tion to Article 215 of the Treaty have, in fact, is not in issue. been those laid down by the systems of domestic law most protective of individuals suffering damage through legislative action.

I - 2579

OPINION OF MR LÉGER — CASE C-5/94

102. The first type of liability is necessarily effective reparation of the damage which has founded on illegality: breach of a higher- resulted from it.' ranking rule of law and therefore of the prin­ ciple of primacy.

106. Refuge can no longer be taken behind 103. Under that principle, directly effective the supremacy or unchallengeability of legis­ provisions of Community law '... not only lation: it may give rise to an action for dam­ by their entry into force render automati­ ages if it is not in conformity with Commu­ cally inapplicable any conflicting provision nity law with which each Member State, of current national law but ... also preclude upon joining the Community, undertakes to the valid adoption of new national legislative comply — and to ensure that it is complied measures to the extent to which they would with. By ratifying the original Treaties, the be incompatible with Community provi­ Member States limited their freedom of 1 action in the field of Community law. This sions'. 18 explains why the bringing of an action for damages against the State for the legislature's failure to act is perfectly permissible where the State's liability is based on a breach of Community law, as Francovich shows, whereas this is hardly conceivable in domes­ 120 tic law. 104. Respect for primacy requires not only that legislation contrary to Community law should be disapplied. It requires also that damage resulting from its application in the past should be made good.

108. So, State liability is not based here on 111. After all, the liability of the State under the exceptional nature of the damage suffered domestic law for its legislative action and the by the aggrieved person (as is the case in State legislature's liability for breaches of some national legal systems) but on failure to Community law have radically different respect the primacy of Community law over foundations and it is not certain that Mem­ conflicting national provisions. ber States are entitled to make the right to reparation, in the event of breach of Com­ munity law by the State, subject to the gen­ eral restrictions imposed by domestic law on the State's activity. Even though they are not without common features, there is, in my 109. The principle of primacy must be view, a certain illogicality in bringing State observed by all the organs, authorities and liability for breach of Community law into courts of the Member States. line with the liability provided for in Article 215 of the Treaty, which is itself based on the restrictive liability of the State for its legisla­ tive action, provided for under domestic law.

I-2581

OPINION OF MR LÉGER — CASE C-5/94

113. One cannot help drawing a comparison comply with the requirements of Commu­ with the Court's case-law on Article 169 of nity law. If a Member State only had to let the EC Treaty. A failure to fulfil obligations an act be passed by the national Parliament is serious whichever State agency is responsi­ in order to avoid an action in damages, lay­ ble for it, '... even in the case of a constitu­ ing down a Community standard for gov­ 123 126 tionally independent institution.' erning such actions would be futile.

123 — Paragraph 15 of the judgment in Case 77/69 Commission v Belgium [1970] ECR 237. See also paragraph 14 of the judgment in Case 52/75 Commission v Italy [1976] 126 — As early as 1960, the Court held in its judgment in Humb- ECR 277. let, cited above, that '... if the Court rules in a judgment 124 — State liability incurred by reason of judgments of national that a legislative or administrative measure adopted by the courts contrary to Community law is certain to pose authorities of a Member State is contrary to Community many difficult constitutional questions. See E. Szyszczak, law, that Member State is obliged, by virtue of Article 'European Community Law: New Remedies, New Direc- 86 of the ECSC Treaty, to rescind the measure in question tions?', (1992) MLR, No 55, p. 690, at p. 696. and to make reparation for any unlawful consequences 125 — Paragraph 26 of the judgment in Zuckerfabrik Süderdith- which may have ensued' (citation from p. 569, emphasis marschen, cited above. added).

I - 2582

THE QUEEN v MAFF,EX PARTE HEDLEY LOMAS

imposing liability on the State, qua legislator, of Community law. Legislation incompatible for breaches of Community law. with Community law must be set aside not only by the national court but also by the administrative authorities.

119. In its judgment of 28 February 1992 in Société Rothmans International France and 127 Société Arizona Tobacco Products, the 122. Rather than considering the liability of French Conseil d'État avoided finding a the legislature — and the restrictive condi­ principle that the State could be liable in its tions for its enforcement —, the Conseil legislative capacity for failure to transpose a d'État approached the question of liability directive. It derived State liability from a by holding the State liable in its administra­ fault committed by the administrative tive capacity for a fault giving rise to repara­ authorities in the application of domestic tion where, having a degree of discretionary legislation found to be contrary to Commu­ power, it takes decisions or adopts measures nity law. incompatible with Community law.

124. The mere fact that Article 256 of the French General Tax Code, in its version 121. In other words, it was the act of the prior to 1 January 1979, was incompatible administration, and not the Law itself, which was held to be the cause of the damage, thus enabling the Conseil d'État to hold the State liable for the acts of its administrative 128 — Droitfiscal,1992, No 1665, p. 1420. 129 — On this point, see the observation of Government Com­ authorities which must, in the exercise of missioner Bernault in his submissions in Dangeville: 'The their regulatory power, respect the primacy attitude of the State qua legislator, by its failure to act, the attitude of the State qua administrator, which refused to apply the directive ... the attitude, finally, of the State as tax collector, which dismissed reliance on the directive as ineffective, appear to me to constitute a single act consti­ tuted by non-transposition of the directive ...', Droit fiscal, 127 — See footnote 104 above. 1992, No 1665, p. 1420, at p. 1431.

I - 2583

OPINION OF MR LÉGER — CASE C-5/94

with the Sixth Directive and insurance trans­ law are identical in any event: it sees only actions were consequently not exempted one liable party (the State), just as, in pro­ from VAT, as they ought to have been, was ceedings for failure to fulfil Treaty obliga­ sufficient to render the State liable. tions, it sees only one defendant (the State).

126. From this I draw the conclusion that any distinction between State liability for 129. The entire area of non-contractual lia­ breach of Community law attributable to bility of the Community is marked by diver- legislative action and State liability for sity: the application of Article 215 of the breach of Community law attributable to Treaty is subject to extremely disparate con­ administrative action or action by some 131 ditions. In its judgment in Richez-Parise, other State body would be alien to Commu­ the Court accepted that the mere supply of nity law. The requirements of Community

131 — Judgment in Joined Cases 19/69, 20/69, 25/69 and 130 — Judgment of the Conseil d'État of 11 January 1838 in 30/69 Richez-Parise and Others v Commission [1970] Duchâtelet, Recueil Lebon, p. 7. ECR 325, paragraph 38.

I - 2584

THE QUEEN v MAFF, EX PARTE HEDLEY LOMAS

which means in effect that the institution in question is allowed 'a certain margin of 138 error'.

139 133. Academic literature generally sees 130. This diversity must be borne in mind this as an application of the German when one comes to examine the liability of 'Schutznormtbeorie' based in particular on the Community in respect of legislative acts, Paragraph 34 of the German Basic Law. An which is only one of its aspects.

136 — Case 5/71 Zuckerfabrik Schöppenstedt v Council [1971] 132 — Judgment in Case C-370/89 SGEEM and Etroy v EIB ECR 975. [1993] ECR I-2583. 137 — Judgment in Joined Cases C-104/89 and C-37/90 Mulder 133 — Judgment in Case 145/83 Adams v Commission [1985] and Others v Council and Commission [1992] ECR I- ECR 3539, paragraph 44. 3061, paragraph 12. See most recently the judgment of the 134 — Judgment in Joined Cases 116/77 and 124/77 Amylum and Court of First Instance in Case T-472/93 Campo Ebro Tunnel Refineries v Council and Commission [1979] Industrial and Others v Council [1995] ECR II-421, para­ ECR 3497, paragraph 19. However, see the judgment in graphs 41 to 43. Case C-220/91 v Commission v Stahlwerke Peine- 138 — Point 15 of the Opinion of Advocate General Van Gerven Salzgitter [1993] ECR I-2393, paragraph 51. in Mulder, cited in the previous footnote. 135 — Paragraph 13 of the Amylum judgment. 139 — See W. Van Gerven, op. cit. footnote 79, p . 27.

I - 2585

OPINION OF MR LÉGER — CASE C-5/94

individual who has suffered damage can case demonstrates, the Court's case-law is obtain reparation only if he specifically extremely strict, even though, in that case, belongs to the group which the superior rule the Community was held to be liable. of law infringed was designed to protect.

141 — Judgment in Case C-152/88 Sofrimport v Commission [1990] ECR I-2477. 140 — Point 39 of the first Opinion delivered by Advocate Gen­ 142 — Contentieux communautaire, 1977, p. 336. eral Darmon in Case C-55/90 Cato v Commission [1992] 143 — Case C-282/90 Vreugdenhil v Commission [1992] ECR I- ECR I-2533. 1937, point 51 of the Opinion.

I - 2586

THE QUEEN v MAFF, EX PARTE HEDLEY LOMAS

VI — The Article 215 scheme cannot be for damages in private law for the State's transposed to State liability for breach of breach of Community law if it had commit­ Community law: the example of the Bour- ted a misfeasance in public office. A majority goin case of the appeal judges took the view that breach by a minister of a directly effective Treaty provision was a breach of public law which could lead only to judicial review and did not create any entitlement to damages. The executive decision was in effect regarded as being equivalent to delegated legisla­ 146 tion.

I - 2587

OPINION OF MR LÉGER — CASE C-5/94

141. Consequently, requirements such as judgment in the Zuckerfabrik Süderdithmar- those imposed by the United Kingdom schen case, which I cited above, in which the courts strike me as being contrary to the Court transposed the conditions governing principle of effectiveness as laid down in application of Article 185 of the EEC Treaty paragraph 43 of the Francovich judgment. to the suspension of implementation of a They make it Virtually impossible or exces­ national measure adopted pursuant to Com­ sively difficult to obtain reparation'. munity legislation the validity of which was being contested before the Court. We know that this approach has, in some cases, made it more difficult to order suspension of imple­ 152 mentation in domestic law. 142. The objection that it would be 'incon­ ceivable' for the Court to declare such liabil­ ity rules — based on Article 215 of the Treaty — to be contrary to the principle of effectiveness, when the Court itself applies 151 them to the Community, appears to me to be refutable.

I-2588

THE QUEEN v MAFF ,EX PARTE HEDLEY LOMAS

individual or undertaking is not subject to 148. In this regard, the Francovich judgment restrictive enforcement conditions, analo­ takes an important step forward: the require­ gous to those of Article 215. In Dekker, ment of a minimum standard of protection the employer's fault lay in the very breach of for individuals seeking to recover a fiscal the Community law rule, that is to say, in charge that is contrary to Community law the discriminatory act. has not presented many difficulties. In this area, national rules do not vary greatly. This is not so where State liability is in issue. Here, the national rules do diverge greatly. While it is easy to see why the State in its legislative capacity should be held liable only under very strict conditions, it is surprising to find that the conditions for enforcing State liability for the action of the State's administrative authorities are extremely VII — Defining minimum requirements for stringent in a number of Member States. enforcing State liability for breach of Com- munity law

I - 2589

OPINION OF MR LÉGER — CASE C-5/94

Community law regarding the protection of implement a directive is a concrete, readily individuals in the matter of State liability'. identifiable, formal violation of Community law for which no justification is permitted. There is therefore no reason to say that, if a State is liable at all for non-implementation of a directive, it should be liable only when the other requirements for the non­ contractual liability of the Community are 151. What are the conditions governing non­ also fulfilled', 163 the failure to transpose contractual liability for breach of Commu­ being described as '... a simple failure to fulfil nity law? Besides considering the three usual a precise non-discretionary commitment conditions for an action in damages — cause, clearly imposed by Article 189 of the EEC damage and causal link — I shall consider Treaty.' 164

the question whether a judgment establishing a breach of Community obligations is a pre­ condition for such liability and the question of the objection of parallel proceedings.

154. Member States certainly do not have a choice between transposing or not transpos­ ing. In the case of Francovich, however, Member States had a '... broad discretion A — The cause of the damage: breach of with regard to the organization, operation Community law and financing of the guarantee institu­ 165 tions', which is borne out by the Court's declining to find that the provisions of 166 Directive 80/987/EEC relating to the identity of the person liable to provide the 167 guarantee had direct effect. 152. In the Francovich judgment there is no mention of the word 'fault' or the word 'risk'. What is meant by the term 'breach of Community law' which it uses?

Wagner Miret judgment ), the Court did include that of nullifying the unlawful conse­ not find any serious fault or any grave and quences of a breach of Community law, manifest breach of a superior rule of law. either directly or, failing that, by ensuring effective reparation of all resulting damage;... consequently, the fact that a taxpayer who contends that he has been taxed under legis­ lation incompatible with the objectives of a Community directive has unsuccessfully requested the tax courts to set the charge aside, those courts having refused to accept that such incompatibility could be success­ 156. Bound to transpose, a Member State is fully relied on, cannot by itself preclude the under an obligation to achieve a certain person concerned from being entitled, on the result: the mere fact of not achieving it is suf­ basis of obligations deriving from the Treaty, ficient for the State to incur liability. ... to seek reparation for the loss and damage which he has suffered by reason of the fail­ ure to transpose the objectives of the direc­ tive into national law.'

I - 2591

OPINION OF MR LÉGER — CASE C-5/94

172 — On this point, see paragraph 18 of the judgment in Joined 174 — Point 7 of the order for reference. It would appear that the Cases 106/87 to 120/87 Asteris and Others v Greece [1988] British Meat and Livestock Commission had received ECR 5515. assurances that the slaughterhouse in question was 173 — Judgment in Case 95/77 Commission v NetherUnds [1978] approved and was operating in accordance with the Com­ ECR 863, paragraph 13. munity directive.

I - 2592

THE QUEEN v MAFF, EX PARTE HEDLEY LOMAS

such retaliatory measures would be contrary conditions governing his entitlement to 175 176 to Community law. unemployment benefit. In that case, the State was held liable, although a question concerning the interpretation of the provi­ 177 sion of Regulation (EEC) No 1408/71 which had to be applied was subsequently submitted to the Court of Justice by a differ­ ent court. 165. Similarly, I consider that where a Mem­ ber State, in a field clearly within the scope of the Treaty, enacts a law expressly impos­ ing a condition of nationality for establish­ ment within its territory without being able 168. Assessing whether such a wrongful act to put forward any justification based on or omission has been committed will also Community law, that State incurs liability depend on the discretion and leeway which which must be easily enforceable. the State has in the area regulated.

169. This, in my view, is the main lesson to 166. Community law would not preclude be drawn from the Francovich judgment: the application of domestic rules or judge-made nature of the wrongful act or omission law allowing the State to be held liable on required in order for the State to incur liabil- the ground of negligent action (faute simple), ity depends on the nature of the Community the important point being simply that the obligation incumbent on it and on the nature 178 action in damages against the State for of the breach committed. If the Member breach of Community law should be subject State commits a breach of Community law to the same conditions as a similar action in in an area in which it has no discretion, it domestic law. must incur liability more readily than where it acts in an area in which it has a broad dis­ cretion.

must vary according to the extent of the dis­ Court of Justice on non-contractual liability, cretion enjoyed by the executive authority. demonstrates. I am suggesting the opposite. As in the matter of State liability for breach of Community law, the conditions for enforcing liability against the Community for its legislative activity should, as far as the question of fault is concerned, vary more according to the extent of the Community 171. In a matter concerning the liability of legislature's discretion. Academic writers the French State for maladministration by its have long been advocating such a change in 179 justice department, the Cour de Cassation the conditions governing application of Arti­ found that the issue of a circular on 10 Octo­ cle 215: 'It is not normal that the same liabil­ ber 1980 by the Ministry of Justice requiring ity rules should be applied to basic regula­ the Public Prosecutor's Office to institute tions of the Council and regulations adopted criminal proceedings against companies by the Commission pursuant to Council del­ which had been advertising imported alco­ egation. If the Council does not deserve to holic drinks contrary to Articles L 17 and be placed in the situation of a democratically L 18 of the Code on Retail Outlets for Alco­ elected legislature, the same applies a fortiori holic Drinks constituted a fante lourde suffi­ 182 to the Commission.' cient to render the State liable since the Court of Justice had declared the French rules on the advertising of alcoholic drinks to be discriminatory and contrary to Article 18 30 of the Treaty. 0

176. The principle of effectiveness has a pre­ cise consequence here: the Member State concerned may not make the raising of the issue of its liability subject to prior delivery of B — Is a judgment declaring a Member State a judgment declaring it to be in breach of its to be in breach of its Community obligations Community obligations. There are several a precondition for bringing an action for reasons for this. Such a requirement would: damages against it for breach of Community law?

— make it difficult to bring an action in damages, since an individual has only very limited and uncertain access to the 174. An action, governed by national law, procedure for obtaining such a judgment for reparation of damage suffered by reason and has no influence over its outcome; of State action will be compatible with Com­ munity law only if it guarantees effective protection of the interests of the individual relying on Community law.

— not take account of the broad authority of preliminary rulings given on questions 185 of invalidity or interpretation (a judg­ ment given on 12 November 1985 by the Tribunal Administratif de Pau in the case 186 175. It follows that such an action must, first of Steinhauser ordered the French of all, satisfy the principles of non­ State to make good the damage caused by discrimination and effectiveness which have the application of national measures been laid down by the Court in relation to incompatible with Community law after proceedings for recovering undue payments a preliminary ruling on a question of or in relation to interim measures, and which interpretation had declared them to be so were reiterated in the Francovich judg­ incompatible); 184 ment. An action in damages against the

— prevent quick reparation of the damage, in breach of its obligations. Some national since reparation would be suspended courts which have already found their State until delivery of judgment in proceedings liable for breach of Community law have to establish the State's breach of its Com­ first made a point of establishing the State's munity obligations and prevent repara­ failure to fulfil its Community obligations tion of damage which arose prior to that which enables them to establish a breach of judgment; Community law. It is not clear whether they have made this a condition of State liability. In short, prior delivery of a judgment declar­ ing a State to be in breach of its obligations is not a necessary condition for an action in — overlook the fact that there is nothing to damages against that State. It may be a prevent a national court from declaring a sufficient condition. When domestic proce­ decision or measure of domestic law to be dural rules come to be applied, the fact that contrary to Community law (only the such a judgment has been given may be of Court of Justice may assess the validity some importance: what I mainly have in of Community measures); mind here is the determination of the date from which limitation periods begin to run. Furthermore, delivery of such a judgment should make it easier to establish State liabil­ ity. This is how I see the Court's case-law to — fail to take account of the judgment in 187 the effect that Article 169 proceedings are Waterkeyn, in which the Court held still admissible even where the breach of that '... Rights for the benefit of individ­ obligations is remedied after the period set uals flow from the actual provisions of by the Commission in its reasoned opinion Community law having direct effect 189 has expired. After all, the State will have in the Member States' internal legal 188 had the time to reconsider its position during order ...' and not from any judgment the pre-litigation procedure. This is not so declaring a Member State to be in breach where the Court gives judgment pursuant to of its Community obligations. 190 a reference for a preliminary ruling.

183. The damage may consist in loss of profit or even in 'lost opportunity', but it must be certain. Damage based on '... facts of an essentially speculative nature' cannot be 195 compensated.

180. This strict approach is also taken in Community law on non-contractual liability.

184. What amount of compensation can an aggrieved person claim?

181. For example, in its judgment in Mulder the Court held that '... in so far as it failed completely ... to take account of the specific 185. It is clear from the Court's judgment in situation of a clearly defined group of econ­ Marshall II, 196 cited above, that a Member omic agents ... the Community legislature State may not impose a limit on the amount manifestly and gravely disregarded the limits of compensation payable to a person suffer­ of its discretionary power, thereby commit­ ing sex discrimination where secondary ting a sufficiently serious breach of a supe­ Community law, as interpreted by the 192 rior rule of law.' Court, provides for full compensation.

191 — Consider the concept of 'Sonderopfer' in German law 193 — Joined Cases 64/76 and 113/76, 167/78 and 239/78, 27/79, (judgments of the Bundesgerichtshof of 10 June 1953, 28/79 and 45/79 Dumortier Frères and Others v Council BGHZ 6, p. 270, and of 25 April 1960, BGHZ 32, p. 208) [1979] ECR 3091. and the concept of 'abnormal and special' damage referred to in the judgment of the French Conseil d'État in Société 194 — Paragraph 11. anonyme des produits Laitiers 'La Fleurette', cited above in 195 — Judgment in Kampffmeyer and Others v Commission, footnote 113. cited above in footnote 100, at p. 266. 192 — Cited above in footnote 137, paragraph 16. 196 — Paragraph 34.

the Court held, in its judgment in that case, that:

188. It poses a difficult problem on which the Court's case-law on Article 215 of the 'Accordingly, the damage alleged has not Treaty sheds some light. Is the plaintiff's been caused by the conduct of the Coun­ 201 negligence a ground for exonerating the cil.' Community from liability or for limiting its liability?

199 — Case 169/73 Compagnie Continentale France v Council [1975] ECR117. 200 — At page 151, emphasis added. See abo point 38 of the 197 — Point 4 of the Opinion. Opinion of Advocate General Van Gerven in Mulder, 198 — Paragraph 34 of the judgment in Mulder, cited above in cited above in footnote 137. footnote 137. 201 — Paragraphs 28 and 32.

I - 2598

THE QUEEN v MAFF,EX PARTE HEDLEY LOMAS

So, the aggrieved person's action failed, not person's negligence or inaction is penal­ because he had contributed to the damage ized by limitation: his right of action is but because he had failed to take the steps time-barred. So long as he acts within the needed to prevent or mitigate it. limitation period, his right must hold good. The bringing of an action for dam­ ages within the limitation period must be regarded as 'reasonable diligence';

194. Where the aggrieved person has, by 198. It is apparent from the Court's decision intention or through negligence, not put a in Krohn that an objection of parallel pro­ stop to the damage by using existing legal ceedings can only be exceptional. An action remedies, may he still successfully maintain for damages will be inadmissible in the an action against the State? Is an action for extremely specific circumstances where it '... damages subsidiary to proceedings for stop­ is brought for the payment of an amount ping the harmful effects of the act or meas­ precisely equal to the duty which the appli­ ure? cant was required to pay under an individual decision, so that the application seeks in fact the withdrawal of that individual 208 decision.'

195. This would appear to be the position under the ordinary liability rules applicable 205 in the Federal Republic of Germany and 206 Denmark.

199. Once the contested measure is general and impersonal in nature, an objection of parallel proceedings can no longer be raised.

196. Let us first look at the theory of the exhaustion of rights in the case of direct actions before the Court of Justice.

200. As to the link between proceedings brought before national courts and an action for damages brought before the Court of 197. Compared with the other types of Justice, the action before this Court will be action which may be brought directly before inadmissible only if the individual concerned the Court of Justice, an action for damages is could obtain full reparation before the 209 a virtually independent form of action, with national courts. one exception, the scope of which must be clearly defined.

201. Whether a Member State, faced with an to incur liability where it is alleged to have action for damages, may plead parallel pro­ acted in breach of Community law. ceedings is purely a question of domestic law which the Court of Justice may not answer. Community law does not preclude domestic law from requiring other means of legal redress to be exhausted before an action for damages may be brought except in so far as 204. In a judgment it delivered on 25 June this principle makes it impossible or virtually 2 1992 in Kirklees MBC v Wickes, 11a Sunday impossible to bring an action for damages. trading case, the House of Lords apparently Finally, in my view, there is no Community did not exclude the possibility of liability on law principle which requires the objection of the part of the legislature: in view of the gen­ parallel proceedings to be imposed on the eral terms in which paragraphs 33 to 37 of Member States. No legal basis is to be found the Francovich judgment are couched, '... it is in Community law for establishing a hierar­ in my opinion right that in the present case chy among domestic legal remedies. your Lordships should proceed on the basis that if ... the court should hold that section 47 of the Shops Act 1950 is invalid as being in conflict with Article 30 of the Treaty, the United Kingdom may be obliged to make good damage caused to individuals by the breach of Article 30 for which it is responsi­ VIII — Conclusion ble.' 212

21 202. In its judgment in Factortame II, 0 the 205. That eventuality ought necessarily to House of Lords described the adoption of affect the liability of the State for breach of the 1972 European Communities Act as 'the Community law in the present case. voluntary acceptance by Parliament of the limits imposed on its legislative sovereignty by the principle of the primacy of Commu­ nity law.'

209. The Court will be well aware of the importance of the step which it is being 207. Furthermore, to limit the administra­ urged to take here: 'This sort of decentral­ tion's liability to such situations would make ized enforcement in the national courts, cou­ such liability exceptional. The comparison pled with a European standard of remedia­ with the rules governing recovery of undue tion, has all the force of an invisible hand. It will support and advance the integration of Europe regardless of the uncertainties of 216 213 — Paragraph 37 of the judgment in Case 222/82 Apple and European politics.' Pear Development Council v Lewis and Others [1983] ECR 4083. 214 — See, on this point, point 44 of the Opinion of Advocate General Van Gerven in Banks, cited above in footnote 78. See also the dissenting judgment of Oliver LJ in the Bourgoin case, cited above, particularly at paragraphs 215 — Paragraph 43. 55 and 65. 216 — A. P. Tash, op. cit. footnote 45, p. 401.

I - 2602

THE QUEEN v MAFF, EX PARTE HEDLEY LOMAS

210. I accordingly propose that the Court rule as follows:

(1) (a) A Member State may rely on Article 36 of the EC Treaty where a directive introducing incomplete harmonization is silent on the matter of proce­ dures for monitoring the measures which it introduces.

(b) A Member State may not rely on Article 36 of the Treaty in order to restrict exports of live animals to another Member State which is not com­ plying on its territory with the requirements of Council Directive 74/577/EEC of 18 November 1974 on stunning of animals before slaugh­ ter.