C-178/94

2. This time, the Court is asked, in no fewer than 12 questions, not only to rule as to whether the conditions laid down in Fran- Relevant legislation, facts and questions covich have been fulfilled also in the present referred case, but also to make it clear whether those conditions are always sufficient, where there is failure to implement a directive, to estab­ lish an obligation on the part of the Member

* Original language: Italian. 3. According to Article 1, the purpose of the 1 — OJ 1990 L 158, p. 59. directive is 'to approximate the laws, regula­ 2 — Joined Cases C-6/90 and C-9/90 Francovich and Others v Italian Republic [1991] ECR I-5357. tions and administrative provisions of the

I - 4848

DILLENKOFER AND OTHERS v FEDERAL REPUBLIC OF GERMANY

Lastly, to complete the picture, I might use­ fully refer to the case-law on 'advance pay­ 4. The Federal Republic of Germany did not ments', namely the judgments of the Bundes­ comply with the time-limit imposed by the gerichtshof (Federal Court of Justice) of 20 directive. It was only on 24 June 1994 that it March 1986 4and 12 March 1987. 5For our adopted the 'Law implementing Council purposes, those judgments arc relevant Directive of 13 June 1990 on package because they annulled tour organizers' gen­ 3 travel'. That law inserted in the Civil Code eral conditions under which the traveller Paragraph 651k, under which 'the travel could be obliged to pay the entire cost of the organizer must ensure that the package trav­ travel even where he had not yet received his eller obtains a refund of (1) the travel price travel documents. Following those cases, paid if travel services arc not provided as a therefore, purchasers of package travel arc result of the insolvency of the organizer and not obliged to pay more than 10% of the (2) expenses necessarily incurred by the trav­ total cost of the travel before documents are eller in repatriating himself as a result of the issued giving them the right to demand the insolvency of the organizer'. The organizer services due from the various providers may fulfil his obligations by means of insur­ (airline/hotel). ance or a credit institution's promise of

4 — NJW 1986. p. 1613 et seq. 3 — BGBl., p. 1322. 5 — BGHZ 100, p. 157.

I - 4849

OPINION OF MR TESAURO — JOINED CASES C-178/94, C-179/94, C-188/94, C-189/94 AND C-190/94

6. At this point it should be noted that com­ pensation for damage is governed in Ger­ To be more specific, Mr Dillenkofer (Case many by Paragraph 839 of the Bürgerliches C-178/94), Mr Erdmann (Case C-179/94), Gesetzbuch (Civil Code), in conjunction Mr Schulte (Case C-188/94), Ms Heuer with Article 34 of the Grundgesetz (Basic (Case C-189/94), and the Knors (Case Law). The latter provides that 'if a person C-190/94) had booked package travel in the infringes, in the exercise of a public office first half of 1993, paying at the time of book­ entrusted to him, the obligations incumbent ing, either the entire cost of the package upon him as against a third party, liability (Dillenkofer, Schulte, Heuer and Knor), in therefor shall attach in principle to the State order to receive a 3 % discount, or at least or to the body in whose service he is the deposit requested (Erdmann). Some of engaged.' Paragraph 839(1) of the Civil Code them never left, because they themselves can­ provides in contrast that if an official wilfully celled the booking, either on health grounds or negligently commits a breach of official (Dillenkofer) or because of information in duty incumbent upon him as against a third the press about the financial difficulties being party, he is to make good the damage con­ experienced by the operators from whom cerned. If he acted negligently, he is respon­ they had bought their packages (Erdmann sible for damage only where the injured and Heuer). Others were asked to get off the party has no other possibility of obtaining aeroplane before take-off because of the compensation. declared insolvency of the tour organizer (Schulte). The luckiest ones, who actually managed to reach their desired holiday des­ tination, had to their surprise to return at their own expense, even though they had a proper return ticket (the Knors). The applicability of the rules in question depends, therefore, not only on the exercise of a public office and a breach of official duty, but also on the further requirement Arguing that if the directive had been trans­ that the official duty breached should be posed within the prescribed period, that is to 'referrable to the third party' (Drittbezogen- say, by 31 December 1992, they would have heit). That means that the State is responsible been protected against the insolvency of the only for breaches of official duties the exer­ operators from whom they had bought the cise of which is expressly directed at a third

7. The Landgericht (Regional Court) Bonn, before which the abovementioned cases arc pending, considers therefore that German (2) Is the content of that right sufficiently law affords no basis for upholding the plain­ identified on the basis of that Directive? tiffs' damages claims. Moreover, as it is uncertain whether the State's obligation to pay compensation for damage caused to individuals by failure to transpose the direc­ tive within the prescribed period, as required by the Fmncovich judgment, is also appli­ (3) What arc the minimum requirements cable to the cases pending before it, it has for the "necessary measures" to be taken by the Member States within the meaning of Article 9 of the Directive? 6 — A legislative wrong (legislatives Unrecht) is governed by the same rules as liability of the public authorities (Amlshaf- tung). It is precisely because of this that the amenability to compensation of damage arising out of a legislative wrong, still a highly controversial subject in Germany, is unques­ tionably allowed where individual-case laws (Einzel- fallgesctze) arc involved, or a legislative measure such as a land development plan (Bebauungsplan.) The picture which emerges is not very different from that concerning the dis­ tinction between diritti soggettivi (individual rights) and (4) In particular, did it satisfy Article 9 of interessi legittimi (protected interests), frequently repre­ sented as peculiar to the Italian system. the Directive if the national legislature 7 — In this connection, however, sec Papier, 'Art. 34, Rn 181', in by 31 December 1992 provided the leg­ Maunz-Dürig-Hcrzog-Scholz, CG Kommentar, Munich, 1987, in which it is argued that there would be a failure to islative framework for imposing a legal perform official duties and a correlative right to compensa­ obligation on the travel organizer and/ tion for damage, in the event of a serious omission on the part of the legislature (qualifiziertes Unterlassen). or retailer to take measures for security

I - 4852

DILLENKOFER AND OTHERS v FEDERAL REPUBLIC OF GERMANY

(b) If that objection fails, does the the right to compensation on grounds response to the previous question of breach of Community law is not apply even where the Member State dependent on a finding of fault in gen­ concerned cannot achieve the pro­ eral, or at any rate of wrongful non- tective purpose of the Directive adoption of legislative measures, on the simply by a change in the law (as part of the Member State? for instance with payments in lieu of wages to employees in the event of insolvency), the cooperation of private third parties (travel organiz­ ers, the insurance and credit sector) being essential?

(12) If that conclusion is not correct, could the "advance payment" judgment of the Bundesgerichtshof have been an accept­ able reason justifying or excusing the Federal Republic of Germany for trans­ posing the Directive, as defined in the answers of the Court of Justice to (9) Does liability on the part of a Member Questions 4 and 7, only after expiry of State for an infringement of Commu­ the time-limit specified in Article 9?' nity law presuppose a serious, that is to say a manifest and grave, breach of obli­ gations?

General considerations

(10) Is it a precondition of State liability that a judgment in infringement proceedings 8. In these proceedings the Court is in establishing a breach of Treaty obliga­ essence asked to give a ruling as to whether tions has been delivered before the the State is obliged to compensate individu­ event giving rise to damage? als who have suffered damage as a result of failure to implement a directive.

(b) what are the measures necessary, for the For our purposes, this means that it would purposes of Article 9, to ensure that the be enough to establish whether the purpose directive is properly implemented? (Questions 3, 4, 5, 6 and 7);

8 — For specific observations concerning the Francovich case, as well as the basis and scope of the principle of liability on the part of a Member State which has failed to fulfil obligations and its duty to pay compensation, as laid down in that judgment, I refer to my Opinion in Joined Cases C-46/93 {Brasserie du Pêcheur) and C-48/93 (Factortame (c) is failure to comply with the time-limit HI), also delivered today, in particular points 15 to 22. prescribed by the directive sufficient in 9 — The three conditions in question, set out by the Court in Francovich (paragraph 40), are however quoted here as itself to give rise to compensation for repeated and summarized by the Court in its judgment in individuals who have suffered damage or Case C-91/92 Faccini Dori v Recreb [1994] ECR I-3325, paragraph 27, and in Case C-334/92 Wagner Miret v Fondo must other circumstances be taken into di Garantía Salarial [1993] ECR I-6911, paragraphs 22 consideration? (Questions 8, 9, 10, 11 and 23. 10 — Francovich, cited above, paragraph 41. and 12).

I - 4854

DILLENKOFER AND OTHERS vFEDERAL REPUBLIC OF GERMANY

11— Article 2(4) of the directive defines 'consumer' as 'the per­ son who takes or agrees to take the package ("the principal contractor"), or any other person on whose behalf the prin­ 12. In my view, it is undeniable that the pur­ cipal contractor agrees to purchase the package ("the other beneficiaries") or any person to whom the principal con­ pose of Article 7 of the directive aims at pro­ tractor or any of the other beneficiaries transfers the pack­ tecting purchasers of package travel against age ("the transferee")'.

the risks caused by the insolvency of the 12 — See, in particular, the first three recitals, which emphasize the importance of harmonizing the relevant national laws in organizers from whom they purchased the order to eliminate obstacles to the freedom to provide ser­ vices and distortions of competition amongst operators travel in question. established in different Member States.

I - 4855

OPINION OF MR TESAURO — JOINED CASES C-178/94, C-179/94, C-188/94, C-189/94 AND C-190/94

On this point I shall merely note, first, that need be, to make it possible to refund money the statement of reasons on which the direc­ paid over or the cost of repatriation. In tive is based repeatedly stresses the aim of short, it does not seem to me that there can 13 protecting consumers, and, secondly, that possibly be any serious doubt about this the fact that the rules laid down in the direc­ irrefutable fact: the objective of the provision tive are intended to safeguard other interests at issue is precisely to protect the financial as well, in this case freedom to provide ser­ interests of consumers against the risks vices in the sector in question, does not of involved in the insolvency of the operator itself preclude their being rules adopted for from whom they bought the package travel the protection of individuals. concerned.

I-4856

DILLENKOFER AND OTHERS v FEDERAL REPUBLIC OF GERMAN

the cost of which could be borne by the went on to state that 'the right of a State to numerous undertakings in the insurance sec­ choose among several possible means of tor or jointly by a consortium of travel orga­ achieving the result required by a directive nizers and/or retailers. Financial securities, does not preclude the possibility for indi­ moreover, may in their turn take on different viduals of enforcing before the national forms, for example a fund, reserves, deposits, courts rights whose content can be deter­ or cover provided by the undertaking's capi­ mined sufficiently precisely on the basis of tal. 1 the provisions of the directive alone.' 4

I - 4857

OPINION OF MR TESAURO — JOINED CASES C-178/94, C-179/94, C-I88/94, C-189/94 AND C-190/94

provided and thus, in the final analysis, to (Question 3); whether it was sufficient for the identity of the person liable to provide the Member State merely to provide a legis­ the security, whereas the content of the secu­ lative framework for imposing an obligation rity is in itself clear, precise and unambigu­ on the organizer and/or retailer to take mea­ ous. sures for security within the meaning of Article 7 (Question 4); whether the directive can be regarded as properly transposed if a Member State allows the travel organizer to require a deposit of 10% of the total travel price, up to a maximum of DM 500 (Ques­ tion 5); whether the Federal Republic of Germany could omit to transpose Article 7 In short, the relevant provisions of the direc­ of the directive, taking into account the tive are sufficiently precise and unconditional national case-law on advance payments both as regards identification of the persons referred to above, or whether it must on the intended to benefit by the security and as contrary be held that there is no security regards the actual content of the security. within the meaning of Article 7 even if trav­ Accordingly, Article 7 of the directive con­ ellers are in possession of documents evi­ fers a right appertaining to individuals on dencing claims against the various providers consumers (purchasers of package travel), of services (Question 7), and finally whether whose subject-matter is easily identified, the directive requires the Member States to since quite simply it is the right to reim­ act to protect purchasers of package bursement of sums already paid over and the travel even against their own carelessness right to be repatriated in the event of the (Question 6). insolvency of the organizer and/or retailer of the package travel concerned.

suffered by the plaintiffs would have precision and clarity required (...) in order to occurred even if Article 7 of the directive satisfy the requirement of legal certainty'. had been correctly implemented in time (Questions 4 and 5), a hypothesis which can, in the light of the interpretation of that pro­ vision which I have already provided, be ruled out straight away; and, secondly, whether the plaintiffs' conduct could be called negligent, taking account of the national case-law on advance payments (Questions 6 and 7). The implication would be, in the first of those hypotheses, that there It follows, for our purposes, that in order to was no causal link between the failure to implement Article 7 properly the Member transpose the directive and the damage com­ States were required to take all suitable mea­ plained of, and in the second, that damages sures no later than 31 December 1992 in could not be awarded, regard being had to order to ensure that purchasers of package the plaintiffs' own negligence. travel arc refunded sums paid over or repa­ triated where the organizer and/or the retailer of such travel fails in his obligations on account of insolvency.

Consequently, I consider that those ques­ tions call for an answer only in so far as it is relevant to the question of the causal link.

The answer to the national court's fourth Article 7 of the directive is to protect con­ question must therefore be that the Member sumers against all risks arising from the States were required to adopt, by 31 Decem­ insolvency of the travel organizer and/or the ber 1992, all measures necessary to ensure retailer. This means that legislation allowing that the chosen system of guarantees was travellers to be required to make an advance actually implemented. payment equal to 10% of the total package cost, but no greater than DM 500, before a security document is issued, is consistent with Article 7 only in so far as reimburse­ ment of the deposit in question as well is guaranteed in the event of the insolvency of the travel organizer and/or retailer. 23. The fifth question concerns the way in which the directive was then actually trans­ posed into national law by the abovemen- tioned Law of 24 June 1994. Clearly, since that law was adopted after the time-limit prescribed by the directive and after the damage for which the applicants seek com­ pensation occurred, it is irrelevant in these proceedings. As is apparent from the order for reference, however, the national court is uncertain whether the national implementing legislation is satisfactory, precisely because if it is correct, then it follows that consumers 24. The Bundesgerichtshof's case-law on are legitimately bound to bear at least the advance payments, which is the subject of risks connected with the 10% deposit. As a Question 7, must be assessed from the same further result, in some of the cases pending perspective for the present purposes. The before it, it would have to be found that Landgericht asks the Court whether, having there was no causal link between the failure regard to that case-law, the Federal Republic to transpose the directive and the damage of Germany could have refrained altogether 16 complained of. from implementing Article 7 of the directive.

only on grounds of legal certainty. Fur­ level of protection for travellers, so that thermore, by virtue of that case-law, con­ Member States are not obliged to adopt mea­ sumers are in any case obliged to bear a sures of that kind. This is borne out by series of risks; I refer not only to the fact Article 8 of the directive, which permits already pointed out that consumers are not Member States to adopt or retain more strin­ guaranteed the refund of deposits paid, but gent provisions in order to protect the con­ also and above all, to the fact that the full sumer. consumer protection guaranteed by Article 7 might be jeopardized if consumers were obliged to make use of documents evidenc­ ing claims against third parties, who would then in their turn be exposed to the risk of 18 insolvency. 26. In that regard, it should be borne in mind that the Court has recognized, in rela­ tion to the non-contractual liability of the Community institutions, that there exists 'a general principle common to the legal sys­ tems of the Member States to the effect that 25. Lastly, and still in relation to the mea­ the injured party must show reasonable dili­ sures necessary to ensure that the directive is gence in limiting the extent of his loss or risk correctly implemented, it remains to be con­ having to bear the damage himself'. 19The sidered whether the Member States were also injured party is therefore required to act dili­ required to adopt measures to protect con­ gently, a duty which consists in taking steps sumers against their own negligence. This to avoid damage or, at any rate, reduce its question is related to the preceding one from 2 scale. 0 the point of view of the causal link.

I-4861

OPINION OF MR TESAURO — JOINED CASES C-17S/94, C-179/94, C-188/94, C-189/94 AND C-190/94

be held to be negligent merely because he (Question 11) and, if not, whether the has not taken advantage of the opportunity national case-law on advance payments can not to pay more than 10% of the total travel justify failure to transpose the directive cost before being issued with documents evi­ within the prescribed period, thus ruling out dencing claims against the various providers conduct involving fault, or in any event, a of services, in accordance with the case-law serious breach (Question 12). on advance payments. As pointed out above, that case-law cannot be regarded as consti­ tuting sufficient transposition of Article 7 of the directive, with the result that 'failure to comply' with it does not justify a reduction in the amount of compensation or an out­ right refusal of compensation. In short, the point is to determine whether, for the purposes of the obligation to pay damages imposed on a Member State in breach, any infringement of Community law whatsoever is enough — in the present case failure to transpose a directive within the prescribed period — or whether something more is needed. (c) Unlawful conduct on the part of the State (questions 8, 9, 10, 11 and 12)

I - 4862

DILLENKOFER AND OTHERS v FEDERAL REPUBLIC OF GERMANY

to whether the omission on the part of the too short, does not alter the terms of the State was unlawful: the result sought by the problem. In that regard, I shall merely point directive, — in respect of which the State had out that, as the Court has held, 'if the period no margin of discretion, at any rate, not in allowed for the implementation of a directive relation to the period within which the proves to be too short the only means of directive had to be implemented — was not action compatible with Community law attained. This does not mean that the Court available to the Member State concerned took a view on the question whether or not a consists in taking the appropriate initiatives manifest and serious breach was required. It within the Community in order to obtain is significant in this regard that different, the necessary extension of the period by the even opposite, responses are to be encoun­ 23 competent Community institution'. tered in academic writings: according to some commentators, the Court intended only to target serious infringements involv­ 2 ing fault; 1 others, in contrast, take the view that it appears from Francovich that any infringement of Community law gives rise to liability and an obligation to make repara­ The fact that other Member States did not 22 tion. In any case, there can be no doubt as transpose the directive within the period pre­ 24 to the result arrived at by the Court with scribed either is likewise irrelevant, as is regard to the case under consideration: State the alleged lack of cooperation on the part of liability and the obligation to pay damages the sectors of the economy concerned. It is arise whenever the infringement consists of a the Member State which is obliged to trans­ failure to transpose a directive within the pose the directive within the prescribed prescribed period. period, even if the State concerned chooses to consult other persons or traders in the sector or is required to do so by the direc­ tive. It follows that the State may not in any event plead 'circumstances existing in its internal legal system in order to justify a fail­ ure to comply with the obligations and time- 25 limits under Community directives'.

are satisfied, infringement consisting of a 32. As regards the questions at issue, there­ failure to transpose a directive is in any case fore, I shall merely outline the following such as to give rise to liability on the part of summary: the State in breach and therefore to an obli­ gation to pay compensation to individuals who have suffered damage, without there being any need to undertake further inquir­ ies. — failure to transpose a directive within the period prescribed thereunder constitutes a manifest and serious breach (Question 9 ); 26

31. This makes it unnecessary to consider the other questions referred by the national — a finding of manifest and serious breach court. It appears to start from the assump­ does not depend on a prior judgment tion that the failure to transpose the directive having been given under Article 169 at issue does not constitute a manifest and against the Member State in breach serious breach of the State's obligations and (Question 10); 27

is not, therefore, a breach capable of giving rise to liability and an obligation to pay compensation. From the same perspective, it adds that if there has to be conduct involving fault on the part of the State in breach in order for there to be an obligation to pay — fault, as a subjective component of compensation, it remains to be ascertained unlawful conduct, is without relevance whether the national case-law on advance payments may be deemed to rule out the for the purposes of establishing liability existence of such conduct. on the part of the Member State in 28 breach (Question 11);

(3) Article 7 of Directive 90/314/EEC must be interpreted as meaning that it does not preclude a Member State from authorizing travel organizers to require consumers to make an advance payment of 10% of the total cost of the travel even before documents evidencing claims are issued, provided that in the event of insolvency reimbursement of that advance payment is likewise guaranteed; inasmuch as the national case-law on 'advance payments' leaves consumers to bear both that risk and the risk ensuing from the potential insolvency to which third parties against whom consumers may assert documents evidencing claims are exposed, it does not constitute proper transposition of Article 7 of the directive.

(4) Directive 90/314/EEC does not require Member States to take measures to protect consumers against their own negligence.

I - 4865

OPINION OF MR TESAURO - JOINED CASES C-178/94, C-179/94, C-188/94, C-189/94 AND C-190/94

(5) Where the other conditions are satisfied, failure to transpose a directive within the period prescribed is of itself sufficient to give rise to an obligation to pay compensation on the part of the State in breach, which may not therefore jus­ tify any delay in transposition by claiming either that the period prescribed proved too short or that transposition required interested third parties to be consulted.

(6) Failure to transpose a directive constitutes a manifest and serious breach of the obligations imposed on Member States by Community law; it is not necessary for this purpose that judgment should have been given against the State under Article 169 before the harmful event occurred.