C-63/01

EVANS

OPINION OF ADVOCATE GENERAL ALBER delivered on 24 October 2002 1

I — Introduction I I — Legal framework

A — Provisions of Community law

1. The present reference for a preliminary ruling submitted by the High Court of Justice of England and Wales, Queen's Bench Division, raises questions concerning Council Directive 72/166/EEC of 24 April the interpretation and application of the 1972 on the approximation of the laws of directives governing compulsory insurance Member States relating to insurance against against civil liability in respect of motor civil liability in respect of the use of motor vehicles. The question in particular arises vehicles, and to the enforcement of the as to whether interest and costs are to be obligation to insure against such liability 2 included in the compensation for injuries ('the First Directive') caused by an untraced vehicle which is provided by a body designated by a Member State for that purpose. Clarifica- tion is also sought as to whether the solution adopted in Great Britain satisfies Community-law requirements as to effec- tive legal protection, whether the body 2. Article 3(1) of the First Directive pro- responsible for compensation can be vides: regarded as having been properly auth- orised within the meaning of the relevant directive, and whether possible shortcom- ings in the transposition of the relevant directive may constitute such a sufficiently serious breach of a Member State's obli- gations as to found a claim for compen- 'Each Member State shall, subject to sation against the defaulting State in Article 4, take all appropriate measures to accordance with principles of Community ensure that civil liability in respect of the law. use of vehicles normally based in its

2. ... 4

Member States may limit or exclude the 3 — OJ 1984 L 8, p. 17. payment of compensation by that body in 4 — Article 1(2) sets out the minimum amounts for compen- the event of damage to property by an sation cover. unidentified vehicle. I - 14452

EVANS

They may also authorise, in the case of for the Environment, Transport and the damage to property caused by an uninsured Regions. 5The agreements have been fre- vehicle, an excess of not more than 500 quently amended or adapted over the ECU for which the victim may be respon- course of the years. Reference should be sible. made at this point to the Motor Insurers' Bureau (Compensation of Victims of Unin- sured Drivers) Agreement 6of 21 December 1988 and to the Motor Insurers' Bureau (Compensation of Victims of Untraced Drivers) Agreement of 22 November 1972, in its 1977 amended version, which is the Furthermore, each Member State shall agreement in issue in the present case. This apply its laws, regulations and adminis- latter agreement will hereinafter be referred trative provisions to the payment of com- to as 'the Agreement on Untraced Drivers' pensation by this body, without prejudice or simply as 'the Agreement'. to any other practice which is more favour- able to the victim.'

6. The 1972 Agreement material to the B — Rules of the Member State present dispute provides essentially as fol- lows:

4. In view of the lack of cover for personal injuries caused by uninsured or untraced drivers, the Motor Insurers' Bureau was established in 1946 in Great Britain by insurers providing compulsory motor — The Agreement is to apply to any case vehicle insurance in agreement with the in which an application is made to the Ministry of Transport. The Motor Insurers' MIB for a payment in respect of the Bureau ('the MIB') is a private-law entity death of or bodily injury to any person whose members are private-law insurance caused by or arising out of the use of a companies offering motor-vehicle insur- motor vehicle on a road in Great ance. Britain where, subject to certain con- ditions which are not relevant to this case, the applicant for the payment is unable to trace any person responsible for the death or injury (clause 1).

— The arbitrator is to decide the appeal on the documents submitted to him, although he may ask the MIB to make any further investigation which he — The applicant is to have a right of considers desirable, and the applicant appeal to an arbitrator against any may submit comments on the findings decision of the MIB (clause 11). of such investigation (clause 17). I - 14454

EVANS

— Each party to the appeal is to bear its claimant on 11 January 1996 that it had own costs (clause 21). The MIB is to decided to set compensation at GBP 50 000. pay the arbitrator's fees, except where The claimant appealed to an arbitrator it appears to the arbitrator that there against that decision in accordance with the were no reasonable grounds for the procedure set out in the Agreement. appeal, in which case he may decide that his fee ought to be paid by the applicant (clause 22).

I - 14455

OPINION OF MR ALBER — CASE C-63/01

12. The claimant applied on 16 September insurance obligation' — as is set out in the 1996 to the Commercial Court for leave to Directive —, that it confers no right on appeal against the arbitration decision. He victims of untraced drivers to bring a claim was g r a n t e d leave to a p p e a l on against the MIB, and that it grants them no 16 December 1996 in regard to the ques- access to judicial bodies. tion whether the arbitrator had jurisdiction to award interest. His appeal was dismissed on 29 July 1997. A further appeal brought by the claimant was dismissed by the Court of Appeal on 30 September 1998. The Court of Appeal stated that what the United Kingdom had done by way of 14. The claimant contends that he has implementation of the Second Directive suffered loss as a result of the defects in 'did not bring into existence any entity or implementation and that those defects relationship which enabled the Directive to constitute a sufficiently grave and manifest be enforced against anybody (save possibly breach of Community law to found a right in the Francovich sense against itself)'. On for him to recover damages from the 18 January 1999 the House of Lords Secretary of State. refused leave for a further appeal.

(b) if the answer to question (a) is yes, from what date and on what basis 3. On the proper interpretation of should such interest be calculated? Article 1(4) of the Second Motor Insur- ance Directive, if the victim's appli- cation for compensation is determined by a body that is not a court, must he have a full right to appeal against that determination to a court, on both the 2. On the proper interpretation of facts and the law, rather than an appeal Article 1(4) of the Second Motor Insur- to an independent arbitrator having the ance Directive, in circumstances where following principal characteristics: the compensating body itself has an obligation to investigate the victim's injury and loss (and to incur the costs thereof, including the cost of medical and other reports):

(i) the victim may appeal to the arbi- trator on both the facts and the (a) must the arrangements concerning law; the provision of compensation by the body include provision for the payment of the costs incurred by a victim in preparing and making his application to that body for com- pensation?

(ii) when giving notice of appeal, the victim may make further represen- (b) if the answer to question (a) is yes, tations and adduce further evi- on what basis are those costs to be dence to the compensating body calculated in a case where that upon which the compensating body has made an offer to the body may alter its award prior to victim in excess of the amount that the appeal;

I - 14457

OPINION OF MR ALBER — CASE C-63/01

(iii) the victim is provided in advance 4. If the answer to questions 1(a) and/or with a copy of all the material to be 2(a) and/or 3 is Yes, has a Member provided to the arbitrator and is State duly authorised a body under given the opportunity to add any Article 1(4) of the Second Motor Insur- material that he wishes in response; ance Directive when an existing body has the task of providing compensation to victims pursuant only to an agree- ment with the relevant authority of the Member State that does not correspond to the Second Motor Insurance Direc- tive in those respects, and:

(c) the Member State considered in national law. Central to the case, it is good faith that the provision of submitted, is the question whether a that agreement gave at least as Member State is under an obligation to good protection to victims as the pay compensation to a private individual requirements of the Second Motor who belongs to the group of persons deriv- Insurance Directive? ing entitlement under the Directive, in the case where the Member State has failed to take such steps as would enable those persons to invoke the Directive against any other party whomsoever. 5. If the answer to any of questions 1(a) or 2(a) or 3 is Yes, and/or if the answer to question 4 is No, does a failure to comply with the Second Motor Insur- ance Directive in that respect constitute 18. For reasons of clarity, however, the a sufficiently serious breach by the questions submitted for preliminary ruling Member State to give rise to liability will be examined according to their given for damages as a matter of Community order. law if it is established that such damage was caused?'

16. The claimant, the United Kingdom 1. Payment of interest and reimbursement Government, which is also representing of costs — the first and second questions the defendant in the main proceedings, the MIB, as intervener in the main proceedings in support of the form of order sought by Submissions of the parties the defendant, and the Commission took part in the procedure before the Court.

19. The arguments relating to the first and second questions are in large measure parallel, and may for that reason be set out together. IV — Analysis

23. The same considerations, he continues, apply equally to the award of costs. This is, moreover, supported by the case-law of the European Court of Human Rights, which has held that the European Convention for the Protection of Human Rights and Fun- 21. Moreover, even if the Second Directive damental Freedoms ('the ECHR') is had not itself required equal treatment for intended to guarantee rights that are prac- victims of untraced drivers, on the one tical and effective. 8 hand, and victims of insured or uninsured drivers, on the other hand, that obligation would in any event follow from the prin- ciple of equal treatment. In the United Kingdom, however, victims of untraced drivers are not treated on an equal footing with victims of drivers who are insured or insufficiently insured. Unlike the latter, and without objective justification, they do not 24. The United Kingdom Government receive damages that include interest and takes the view that the relevant provisions costs and they do not enjoy the same of the two directives demonstrate that their procedural guarantees, including access to purpose is to provide specified minimum the courts. guarantees, but that they do not provide for uniformity in the legislation of Member States. Neither directive contains any provision relating to the financial com- ponents of compensation or provides that the body responsible for paying that com- pensation is required to pay the same amount as the victim of an insured driver 22. Citing the Court's judgment in Mar- would receive before the courts of the shall, 7 in which the Court ruled, with Member State. A difference in treatment

26. The MIB essentially takes the same position as the United Kingdom Govern- ment. The MIB first points out, however, that in English law damages are assessed by the courts at the time of judgment. Section 29. The Commission concludes by examin- 35A of the Supreme Court Act 1981 broke ing whether a Member State's national with common law in giving courts the rules which make no provision for the power, under certain conditions, to award award of interest to victims of untraced interest on claims for damages. That drivers runs counter to the concept of power, however, can be exercised only in 'adequate compensation' which is the court proceedings. objective of the Second Directive. In that regard, it refers, first, to the Court's case- law in favour of awarding interest in the contexts of non-contractual liability of the Community 10 and equal treatment of men and women. 11 Second, the Commission 27. The Commission argues in the first place that neither the First nor the Second 10 — See Case 238/78 Ireks-Arkady [1979] ECR 2955, paragraph 20, and Case C-308/87 Grifoni v EAEC [1994] ECR I-341, paragraph 40. 9 — Case C-66/95 Sutton [1997] ECR I-2163. 11 — See Marshall (cited above in footnote 7), paragraph 31.

I - 14461

OPINION OF MR ALBER — CASE C-63/01

12 — In what follows, I shall refer to untraced vehicles as well as 13 — Emphasis added. to untraced drivers. The differences in terminology are 14 — See Case C-348/98 Mendes Ferreira and Delgado Correia attributable to the fact that the Directives refer to vehicles, Ferreira [2000] ECR I-6711, paragraph 32. See also the whereas the Agreements between the MIB and the order of 14 October 2002 in Case C-158/01 Withers Secretary of State for Transport make reference to drivers. [2002) ECR 1-8301, paragraph 18.

I - 14462

EVANS

Under the First Directive this task was left determine the characteristics of a compen- exclusively to the Member States. This is sation claim. Article 1(4), final subpara- expressed not only in Article 3(1) of the graph, of the Second Directive also First Directive, but also along the same expressly states, with regard to the body lines in Article 3(2), which provides that providing compensation, that each each Member State must, for example, take Member State must apply its laws, regu- all appropriate measures to ensure that a lations and administrative provisions to the contract of insurance covers any loss or payment of compensation by that body, injury caused in the territory of the other without prejudice to any other practice Member States, in accordance with the which is more favourable to the victim. legal provisions of those States.

34. Beyond these more stringent minimum requirements, however, it must be possible to proceed on the basis that it continues to 36. It is for that reason necessary to address be a matter for the Member States to the question whether the nature of the claim for compensation might possibly indicate whether interest and costs have to 15 — See the third recital in the preamble to the Second be awarded. It is in principle a civil-law Directive. claim to compensation that underlies com- 16 — See the fourth recital in the preamble to, and Article 1(1) pulsory insurance cover in respect of motor of, the Second Directive. 17 — See the fifth recital in the preamble to, and Article 1(2) of, vehicles. The statutorily prescribed duty to the Second Directive. have insurance cover is linked to this 18 —Third Council Directive 90/232/EEC of 14 Mav 1990 on the approximation of the laws of the Member States civil-law claim and serves as the economic relating to insurance against civil liability in respect of the safeguard for a well-founded claim to use of motor vehicles (OJ 1990 L 129, p. 33). 19 — See Article 1 of Directive 90/232. compensation.

I - 14463

OPINION OF MR ALBER — CASE C-63/01

39. This wording indicates that the method of proceeding vis-à-vis the body cannot be considered in isolation from the original 41. Ireks-Arkady 24 concerned the extent in claim for compensation. This argues in principle of entitlement to interest in the favour of treating any derived claims as context of a claim for compensation result- also being claims in civil law. This ing from the Community's non-contractual approach is further reinforced by the fact liability under the second paragraph of that in the present case the legal context is Article 215 of the EEC Treaty. In a judg- one of private law. Thus, the Agreements ment confirming the duty to provide com- between the MIB and the Secretary of State for Transport are private-law agreements and the MIB is an entity established under 20 — Case C-271/91 (cited in footnote 7). private law. For the purposes of further 21 — Marshall (cited in footnote 7), paragraph 30. examination, therefore, we should for the 22 — Marshall (cited in footnote 7), paragraph 6. 23 — Marshall (cited in footnote 7), paragraph 31. moment proceed on the assumption that 24 — Case 238/78 (cited in footnote 10).

I - 14464

EVANS

46. Before applying this principle to the present case, it is first necessary to consider 44. In support, however, of the contention whether the objectives of the directives that interest is in fact not a necessary support this view. component of a claim for compensation, reference was made in the written pro- 28 — Case C-66/95 (cited in footnote 9). 29 — Emphasis added. 25 — See heks-Arkady (cited in footnote 10), paragraph 20 and 30 — Sutton (cited in footnote 9), paragraph 27. paragraph 2 of the operative part. 31 — Sutton (cited in footnote 9), paragraph 33 and the 26 — Case C-308/87 (cited in footnote 10). operative part. 27 — Grifoni (cited in footnote 10), paragraph 40. 32 — See paragraphs 40 to 42 above.

I - 14465

OPINION OF MR ALBER — CASE C-63/01

47. The directives on compulsory insurance provision, limit or exclude payment of cover for motor vehicles lay down mini- compensation by that body in the event of mum standards to protect victims of traffic damage to property. As stated expressly in accidents. The First Directive initially dealt the preamble, 35 Member States are given only with the scope of insurance protection. this possibility in order to counter the This must be considered in the context of 'danger of fraud'. the declared objective of '[liberalising] the rules regarding the movement of persons and motor vehicles travelling between Member States'. 33

33 — See the fifth recital in the preamble to the First Directive. 35 — Sixth recital in the preamble to the Second Directive. 34 — Article 1(4) of the Second Directive. 36 — Article 1(4) of the Second Directive; emphasis added.

I - 14466

EVANS

52. The United Kingdom Government has into the past. 38 Those principles state that submitted that there are objective reasons proceedings to ensure the legal protection for the disparities in the treatment of of rights which individuals derive from victims of insured vehicles, on the one Community law must not be less favour- hand, and those of untraced vehicles, on able than the rules governing similar the other. Against this, one might argue domestic actions and must not render that, even though the procedure for obtain- virtually impossible or excessively difficult ing compensation may in principle be the exercise of rights conferred by Com- different, the scope of compensation still munity law. 39 may not be below that accorded to victims of properly insured vehicles.

38—See, for example, Case 33/76 Rewe [1976] ECR 1989, paragraph 5, and Case 45/76 Comet [1976] ECR 2043, 37 — See, for example, Case C-231/96 Edis [1998] ECR I-4951, paragraphs 12 to 16. paragraph 34; Case C-228/96 Aprile [1998) ECR I-7141, paragraph 18; Case C-120/97 Upjohn [1999] ECR I-223, 39 — See Case C-312/93 Peterbroeck [1995] ECR 1-4599, para- paragraph 32. graph 12 and the case-law there cited.

I - 14467

OPINION OF MR ALBER — CASE C-63/01

ated regulatory provisions may already vehicles, on the one hand, and damage or exist in some Member States. This, how- injury caused by properly insured vehicles, ever, does not release the legislative auth- on the other. If, in respect of the same orities of the Member States from their damage or injury, a lower amount is in duty to provide the minimum standard for principle payable depending on the person compensation rules required by the Direc- who has caused that damage or injury, that tive. In so far as victims of untraced cannot, when considered against the back- vehicles are in a worse position than ground of the requirements of Community victims of properly insured vehicles, the law, be justified by arguments based on the problem might be one of incorrect trans- domestic legal system. position of the Directive, an issue to which I shall be returning.

59. In this connection, an economic approach is called for in the comparison 40 — See Marshall (cited in footnote 7), paragraph 31. 41 — See paragraphs 41 and 42. of the scope of compensation in respect of 42 — Cited in footnote 10. damage or injury caused by untraced 43 — Cited in footnote 10.

I - 14468

EVANS

62. If this is applied to the present case, (2) The arbitration procedure — third however, a problem will arise if interest is question awarded only by courts but access to courts is rendered unduly difficult. The procedure might then in itself pose a problem in Community-law terms. I shall return to this Submissions of the parties problematic area in what follows.

66. The difference in treatment in pro- cedural terms, the claimant argues, also constitutes an infringement of the principle of equal treatment, which requires that victims of untraced drivers be afforded the same judicial protection in the United Kingdom as is afforded to victims of insured or uninsured drivers. The fact that 64. For the sake of completeness, it should the victim of an untraced driver has no also be pointed out that, in the case of the driver to sue cannot constitute objective payment of compensation under the Agree- justification for discriminatory treatment. ment concerning uninsured drivers interest Moreover, the sole purpose of such dis- and costs may also be brought into the calculation. The fact that it is not the competent insurance company but rather a 4 4 — Case 222/84 Johnston [1986] ECR 1651, paragraphs 18 collective body which is liable for payment and 19. 45 — European Convention for the Protection of Human Rights can therefore not serve as objective justifi- and Fundamental Freedoms, signed in Rome on cation for a different calculation of com- 4 November 1950 ('the ECHR'). pensation under the Agreement in regard to 46 — See the judgment of the European Court of Human Rights ('the Court of Human Rights') of 22 July 1999 in Scarth untraced drivers. v. United Kingdom, no. 33745/96, ECHR 1999.

I - 14469

OPINION OF MR ALBER — CASE C-63/01

criminatory treatment in respect of victims and less costly resolution than court pro- of untraced drivers is to save costs. ceedings.

I - 14470

EVANS

need for further clarification, it takes the which calls for legal protection. The start- view that the criteria developed by the ing point here is Article 1(4) of the Second Court of Human Rights point to some Directive, which should be read in con- shortcomings in the arbitration procedure. junction with the sixth recital in the These shortcomings relate in particular to preamble to that Directive. The material the status of the arbitrator, in regard to his passages are worded as follows: independence, the lack of any hearing and the very limited scope of the right of appeal against the arbitrator's award.

'Each Member State shall set up or auth- orise a body with the task of providing compensation... for damage to property or personal injuries caused by an unidentified Appraisal vehicle or a vehicle for which the insurance obligation... has not been satisfied...

72. By its third question, the High Court is The victim may in any case apply directly seeking to ascertain whether the procedure to the body, which... shall be obliged to to be followed under the Agreement for give him a reasoned reply regarding the obtaining compensation satisfies the payment of any compensation.' requirements of Community law with regard to effective legal protection. Exam- ination in this connection, however, is not confined to the procedure before the MIB, as set out in the Agreement, for setting in motion the arbitration procedure, but also relates to the associated possibility of chall- The sixth recital provides: enging the arbitration award, within cer- tain limits, before ordinary courts, as demonstrated by part V of the third ques- tion in the reference.

76. The Court has already on numerous occasions had the opportunity to set out its views on the principle of effective legal protection as a general legal principle in 78. These fundamental considerations are Community law. It was thus called on in in no way limited to the specific context of Johnston 49 and Coote 50 to address these the Equal Treatment Directive but extend issues against the background of the appli- also to other areas of law, as the general cation of Article 6 of the Directive on equal formulation of the findings shows. In the treatment for men and women with regard context of the fundamental Community to employment. 51 As the Court ruled on law on access to employment, the Court, in Heylens, 54 referred, for example, to the statements of principle made in Johnston. 48 — See the second sentence of Article 1(4). 49 — Case 222/84 (cited in footnote 44). 50 — Case C-185/97 Cooie [1998] ECR I-5199. 51 — Council Directive 76/207/EEC of 9 February 1976 on the 52 —See Johnston (cited in footnote 44), paragraph 18, and implementation of the principle of equal treatment for men Coote (cited in footnote 50), paragraph 21. and women as regards access to employment, vocational 53 —See Johnston (cited in footnote 44), paragraph 19, and training and promotion, and working conditions (OJ 1976 Coote (cited in footnote 50), paragraph 22. L 39, p. 40) ('the Equal Treatment Directive'). 54 — Case 222/86 Heylens [1987] ECR 4097, paragraph 14.

I - 14472

EVANS

79. Reference may be made to Article 6 of Everyone is entitled to a fair and public the ECHR with regard to the substantive hearing within a reasonable time by an requirements of the principle of effective independent and impartial tribunal pre- legal protection. The first sentence of viously established by law....' Article 6(1) provides: 'In the determination of his civil rights and obligations..., every- one is entitled to a fair and public hearing within a reasonable time by an independent and impartial tribunal established by law.'

55 — OJ 2000 C 364, p. 1. 56 — See Peterbroeck (cited in footnote 39), paragraph 12.

I - 14473

OPINION OF MR ALBER — CASE C-63/01

pensation. These minimum conditions are the examination of the nature of the claim, satisfied inasmuch as an injured person for the purpose of drawing any conclusions may, under the Agreement, directly have as to the right to interest, 60 the civil-law recourse to the MIB, 57 which must exam- context of the claim for compensation was ine the application 58 and make a deter- considered. On this basis, one ought here to mination. 5 9 The United Kingdom Govern- be able to proceed on the basis of a claim in ment takes the view that no more extensive civil law. However, even if the claim is, for procedural requirements can be derived whatever reason, a claim for compensation from the Directive. under public law, this could not provide justification if the person injured remains deprived of legal protection in its enforce- ment. Moreover, no comparable restriction on civil-law claims can be inferred from Article 47 of the Fundamental Rights Charter either. It is thus sufficient if what 84. As already indicated above, the Direc- is in issue is a right 'guaranteed by the law tive also gives an injured person a sub- of the Union'. A claim for compensation stantive right, vindication of which by the under Article 1(4) of the Second Directive courts also follows from Community law. must unquestionably be treated as being It is thus necessary to examine whether the such a right. factors pointing to effective legal protection are present. Article 6 of the ECHR, already incorporated into Community law, and Article 47 of the Fundamental Rights Charter, which cover in large measure the same substantive ground, may serve as a 86. A feature common to Article 6 of the guideline for this purpose. ECHR and Article 47 of the Fundamental Rights Charter is that legal protection must be guaranteed by an independent and impartial court or tribunal established by law and also operating publicly in accord- ance with fair procedure.

administrative appeal proceedings. Neither jurisdiction, adversarial procedure and the the complete independence nor the impar- application of legal rules. 62 tiality of the body providing compensation can be assumed. The MIB takes a decision which — in so far as the victim accepts it — it must allow to be enforced against itself and which places it under obligations. However, the introduction of the right of 90. If we proceed on the basis that the objection under the Agreement, which, as arbitration procedure is laid down in the already pointed out, 61 is of a private-law Agreement between the MIB and the Sec- nature, cannot be classified as 'established retary of State for Transport, the establish- by law'. ment of a tribunal on a statutory basis is already questionable. On the other hand, a tribunal need not necessarily be linked to the judicial organisation of the Member State concerned. 63 However, if the arbi- trator operates within the framework of the Arbitration Acts, 64 that might argue in favour of the tribunal having a legal basis. 88. This would, however, have no negative implications if an avenue of legal redress against such a decision were available. In this it is necessary to agree with the United Kingdom Government that the possibilities of legal protection must be considered from 91. Under the Agreement between the MIB an overall perspective. As a first step, the and the Secretary of State for Transport, an focus must therefore be turned to the arbitrator is appointed for arbitration pro- arbitration procedure, but consideration ceedings on an ad hoc basis. It is therefore must not merely stop there. extremely problematic to consider this as a 'permanent body' unless one is to treat the existence of lists of potential arbitrators among the Queen's Counsel as a permanent body, recourse to the lists or invocation of the tribunal alone being dependent on practical requirements. 89. First of all, the question arises as to whether the arbitration procedure provided for in the Agreement is a judicial pro- cedure. On the basis of the Court's case- law regarding the definition of the con- stituent factors that identify a court or 92. In contrast, the further characteristic of tribunal for the purposes of Article 177 of mandatory jurisdiction is satisfied — the EC Treaty (now Article 234 EC), five assuming that jurisdiction is accepted as identifying criteria may be mentioned. These are establishment on a statutory 62 — See Case 246/80 Broekmeulen [1981] ECR 2311. basis as a permanent body, mandatory 63 — See, for example, with regard to the judicial nature of the Conseil des Avocats, Case 138/80 Borker [1980] ECR 1975. 64 — See in this context paragraphs 111 and 114 of the reference 61 — See paragraph 39 above. for a preliminary ruling.

95. With regard, finally, to the fifth cri- 93. On the other hand, it seems extremely terion, 'the application of legal rules', this doubtful whether arbitration proceedings will be satisfied if the tribunal decides in can be described as adversarial. Both accordance with law and statute but not if parties — the MIB and the person it reaches its decisions on the basis of injured — can, it is true, set out their fairness. For a final decision on whether respective views in the knowledge of the this fifth criterion is satisfied, it will be other's submissions. In the course of the necessary to address this question again at a present proceedings before the Court, it later stage. The decision on costs in the became clear that the claimant was accused arbitration decision against the claimant, of dishonest conduct when he brought his on the grounds of his alleged dishonesty — appeal and that he had no opportunity to see in this regard clause 22 of the Agree- refute that allegation. This amounts to a ment, cited in paragraph 6 above — with- procedural defect which is problematic in out the claimant having had any oppor- several respects. tunity to address that issue, suggests that considerations of fairness may be made to form the basis of the decision.

with Article 47 of the Fundamental Rights 99. The arbitration procedure under the Charter, one must, it seems, proceed, Agreement must for those reasons be according to the submissions of the parties brought into question in several respects. to the present proceedings, on the basis that the Queen's Counsel featuring on the lists described provide every guarantee as to their independence. That notwithstanding, the question still arises as to whether, in 100. In its judgment in Nordsee, 68 the view of their procedural situation and their Court has already once been called on to proximity to the MIB, they also provide the set out its views on the judicial nature of a same guarantee as to their impartiality. The private arbitration tribunal in regard to arbitrator can require from the MIB any Article 177 of the EC Treaty (now more extensive investigation which is con- Article 234 EC). The Court ruled in that

arbitrator. 70 98. Before the arbitrator, moreover, there is no public hearing within the meaning of Article 6 of the ECHR in conjunction with Article 47 of the Fundamental Rights 101. If one considers the arbitration pro- Charter inasmuch as the arbitrator acts on ceedings in the present case against this the basis of the documents before him (see background, it will be noticed that the clause 17, cited in paragraph 6). The public authorities, in the form of the procedural cooperation between the arbi- Secretary of State for Transport, were fully trator and the MIB cannot be regarded as involved in the decision to choose the constituting a public hearing. The victim is avenue of arbitration proceedings.

The public nature of the proceedings does not 68 — Case 102/81 Nordsee [1982] ECR 1095. therefore appear to be adequately guaran- 69 — Nordsee (cited in footnote 68), paragraph 11. teed. 70 — Nordsee (cited in footnote 68), paragraph 12.

102. In the light of all of the doubts just Examination of an appeal submitted as to outlined as to the establishment and pro- whether the arbitration decision is cedure of the arbitration tribunal, the obviously wrong and whether it would, in crucial question is therefore what form all the circumstances, be just and proper to the further legal protection of the injured obtain a judicial decision would have a party might take. further restrictive effect. Access to the ordinary courts is rendered considerably more difficult for a person injured by an untraced vehicle. This is extremely prob- lematic in the light of the requirements of 103. As point v of the third question effective legal protection. referred suggests, and as is confirmed by the parties' concordant submissions in this regard, a victim can appeal to the ordinary courts against the arbitration decision. However, there is no unrestricted appeal procedure, access to the courts and the scope of review being subject to several 106. If one takes account of the fact that limiting conditions. this stage of the proceedings actually con- cerns first-instance proceedings before an ordinary court, this will not meet the requirements of effective legal protection. It must be possible for the injured person to 104. As outlined by the High Court, the secure, at least before one court, full situation is as follows. The arbitration judicial protection with regard to issues of decision may be challenged on grounds of fact and law. serious irregularities adversely affecting it or on issues of law, which include that as to whether a specific finding of the arbitrator was supported by evidence or whether, on the basis of the available evidence, an arbitrator could not reasonably have reached a particular conclusion. An appeal 107. A comparison of this avenue of legal on questions of law requires judicial leave, redress with the legal protection guaranteed which will be granted only if the arbitration to victims of insured or uninsured drivers of decision is obviously wrong and it appears traced vehicles — for whom the ordinary just and proper in the circumstances to avenues of legal redress remain open — have the matter judicially determined. shows that the legal protection available for victims of untraced drivers remains far behind the latter. While the possibilities of legal protection for both groups of persons need not, from the perspective of Commu- 105. These restrictive conditions governing nity law, be absolutely identical, the legal access to the courts have features of a pure protection must none the less be quali- review as to legal issues or plausibility. tatively equivalent. In the context of the Judicial review and the granting of leave to present case, this means that a guarantee of appeal are matters frequently reserved to recourse to the ordinary courts must be the higher courts in appeal proceedings. provided.

109. In justification of the existing rules, the United Kingdom Government and the MIB have pointed out that these injury cases are disposed of under those rules in what is generally a more rapid and cost- effective manner. (3) Correct implementation of the Direc- tive — fourth question

110. The event giving rise to injury, which Submissions of the parties resulted in the present proceedings, occurred on 25 December 1991. Almost five years later, on 27 August 1996, the arbitrator issued her decision. Up to that point there had not yet been any mention of bringing the matter before an ordinary 113. The claimant argues that the Second court. Directive has not been correctly imple- mented where the Member State fails to impose on the authorised body an obli- 71 — Case C-120/97 (cited in footnote 37). 72 — Upjohn (cited in footnote 37), paragraph 33. gation to provide compensation to victims 73 — Upjohn (cited in footnote 37), paragraph 40. of untraced drivers to the same degree as

I - 14479

OPINION OF MR ALBER — CASE C-63/01

117. By its fourth question, the High Court is seeking to ascertain whether the United 115. In its written observations, the Com- Kingdom has complied with its obligation mission expresses its opinion that the MIB under Article 1(4) of the Second Directive is an authorised body within the meaning to authorise a body with responsibility for of Article 1(4) of the Second Directive, as it providing compensation in respect of dam- has been entrusted by the authorities of the age or injuries caused by an untraced or Member State with the role provided for in uninsured motor vehicle. In issue is whether the Second Directive and not only has the capacity, but is also obliged, to compensate victims. Victims can also apply directly to 74 —Judgment of the House of Lotds of 1 March 2001 [20011 UKHL 9. that body, which must provide them with a 75 — See paragraph 12 above.

I - 14480

EVANS

there is such compliance in the case where, transposition of the Second Directive. In pursuant to an agreement with the com- view of the fact that — as the parties to the petent authority, a pre-existing body is present proceedings have confirmed unani- required to assume responsibility for such mously — the MIB has always in practice damage or injuries but victims have no consistently satisfied its obligations under directly enforceable claim in law against the two Agreements dealing with uninsured that body. The High Court also asks and untraced drivers, there were also no whether the determinant factor in answer- grounds for doubts as to whether the ing that question is the fact that the Second Directive had been correctly trans- Member State considered in good faith posed. that that agreement provided protection for victims that was at least as effective as that provided by the Second Directive.

119. According to the documents on the case-file, a consultation process was initi- 121. However, the fact that there must still ated by the United Kingdom Government, be a problem regarding transposition of the following adoption of the Second Directive Second Directive is evidenced not only by on 30 December 1983, into the issue of the present case but also by the House of whether separate implementing measures Lords judgment of 1 March 2001 in White were required to transpose the Directive. v White, 76 which has been mentioned on This examination concluded that the exist- several occasions in these proceedings and ing protection for victims was fully which concerned the parallel agreement adequate and that more extensive trans- concerning uninsured drivers. The House position measures were therefore not of Lords ruled that it was not in a position, required in that regard. This appraisal was apparently shared by the Commission, as it raised no objections in regard to 76 — Cited in footnote 74.

I - 14481

OPINION OF MR ALBER — CASE C-63/01

'It follows from that provision that the implementation of a directive does not 122. The Court of Appeal judgment, by necessarily require legislative action in each which an appeal brought by the claimant Member State. In particular, the existence was dismissed at a procedural stage preced- of general principles of constitutional or ing the present proceedings, is also instruc- administrative law may render implemen- tive in the present context. The Court of tation by specific legislation superfluous, Appeal held that what the United Kingdom provided however that those principles had done by way of implementation of the guarantee that the national authorities will Directive did not bring into existence 'any in fact apply the directive fully and that, entity or relationship' which enabled the where the directive is intended to create Directive to be enforced against anybody rights for individuals, the legal position (save possibly in the Francovich sense arising from those principles is sufficiently against the United Kingdom itself). 79 precise and clear and the persons concerned are made fully aware of their rights and, where appropriate, afforded the possibility of relying on them before the national courts. That last condition is of particular importance where the directive in question is intended to accord rights to nationals of 123. The claimant accordingly takes the other Member States because those view in the present proceedings that the nationals are not normally aware of such principles.' 80

77 — Case C-106/89 Marleasing [1990] ECR 1-4135. 78 — The MIB-Agreement was entered into with the specific 80 —Case 29/84 Commission v Germany [1985] ECR 1661, intention of giving effect to the Directive.' paragraph 23. See also, along the same lines, Case C-96/95 79 — See in this connection Joined Cases C-6/90 and C-9/90 Commission v Germany [1997] ECR 1-1653, paragraph francovich and Others [1991] ECR I-J357.

126. In regard to the requirement of legal certainty, the Court has held: 'Accordingly, the provisions of a directive must be 128. As has already been indicated in the implemented with unquestionable binding discussion of the third question, the pur- force and with the specificity, precision and pose of the Second Directive is to enable clarity required in order to satisfy the persons injured by uninsured or untraced requirement of legal certainty, under motor vehicles to bring a claim against a which, in the case of a directive intended body in the Member State concerned. In so to confer rights on individuals, persons far as Article 249 EC leaves it to national concerned must be enabled to ascertain the bodies to choose the form and the means full extent of their rights'. 83 The Court has for achieving the Directive's binding objec- used similar terms to reiterate this view in tive, an agreement between a public auth- subsequent judgments. 84 ority and a private-law entity forming the basis of the rights of victims is not per se objectionable. Those rights must, however, be identifiable and pursuable with the requisite clarity and certainty.

130. Thus, as the relationship between an 133. As the British courts find that they are injured person and the MIB has been unable, in view of the structure of the legal described by all parties, injured persons relations, to proceed in such a manner, it have in fact no claim against the MIB. becomes clear that the Second Directive True, the MIB does not appear to refuse was not implemented in national law in the compensation despite the absence of any United Kingdom with the requisite preci- contractual relationship in law with the sion and clarity. The requirements of legal injured person in view of the fact that it is certainty have therefore not been satisfied. obligated to provide compensation on foot of the Agreement with the Secretary of State for Transport. However, should the injured person consider that he is adversely affected, he must, if necessary, institute judicial proceedings against the Secretary of State to force the latter to insist on compliance with the Agreement. 134. The High Court, finally, also wished to know whether, for the purpose of answering the question, any significance attaches to the fact that the Member State believed in good faith that the Directive 131. This approach is fraught with so had been correctly transposed. Determining many imponderables that it fails to satisfy whether a directive has been transposed in the requirements of legal certainty outlined a Member State's national law is in prin- above. This finding is reinforced by the ciple a matter of objective examination. problems associated with legal protection The good faith, or bad faith, of a Member discussed in connection with the third State is an irrelevant factor in a deter- question. mination as to whether the requirements posited by Community law have or have not been adequately met by transposition. In view, however, of any potential claim for compensation, this question may well assume significance. 132. The situation, however, becomes totally unacceptable against the back- ground of the attitude of the national courts of the Member States. It would have been at least necessary for the national courts to carry out, at any rate with regard to the substantive rights of injured persons within the meaning of the Marleasing case- 135. The answer to the fourth question law, an interpretation of the legal positions must therefore be that there is no proper resulting from the Agreements between the implementation of the Second Directive in MIB and the Secretary of State for Trans- a Member State's national law so long as port in the light of the Second Directive, an injured person does not have an enforce- particularly in view of the fact that the able claim against the body on which the House of Lords proceeded on the basis that authorities of the Member State have con- the 1988 Agreement concerning uninsured ferred responsibility for compensating vic- drivers had been concluded with the inten- tims of untraced (or uninsured) motor tion of giving effect to the Second Directive. vehicles. I - 14484

137. The United Kingdom Government argues that the alleged breaches in regard Appraisal to interest and costs raise a number of questions. Even if the Court should not wish to go along with its argument, the breach of Community law is not suffi- ciently serious for the United Kingdom to incur liability for damages. Similarly, it was 140. By its fifth question, the High Court is reasonable for the United Kingdom to seeking to determine whether the defects in assume that the procedures in place satis- implementing the Second Directive consti-

I - 14485

OPINION OF MR ALBER — CASE C-63/01

I - 14486

EVANS

144. The conditions governing a right to du Pêcheur, 93 the first issue facing the reparation depend in this regard 'on the Court was to determine whether a claim nature of the breach of Community law seeking to establish State liability could giving rise to the loss and damage'. 90 also arise through a breach of primary law by the national legislature. 94 The Court in principle answered that question affirm- atively. 9 5 That case also provided the Court with its first opportunity to rule that 145. Where there has been a breach of the the breach must be sufficiently serious. third paragraph of Article 189 of the EEC Treaty (now the third paragraph of Article 249 EC), which was the basis on which the Court proceeded in Francovich, three prior conditions must be satisfied before there can be a right to reparation:

I - 14487

OPINION OF MR ALBER — CASE C-63/01

measures or practices contrary to Commu- may be sufficient to establish the existence nity law.' 97 of a sufficiently serious breach where 'at the time when it committed the infringe- ment, the Member State in question was not called upon to make any legislative choices and had only considerably reduced, or even no, discretion'. 101

148. Responding to the question whether fault is a constituent factor in a claim seeking to establish liability, the Court stated that this is not required as such but 151. In Dillenkofer and Others, 102 a case that 'certain objective and subjective fac- in which, as in Francovich, there had been a tors connected with the concept of fault failure to adopt measures for the trans- under a national legal system may well be position of a directive within the prescribed relevant for the purpose of determining period, for which reason the claimant whether or not a given breach of Commu- considers that these judgments have a nity law is serious'. 98 bearing on the present case, the Court explained that 'the condition that there should be a sufficiently serious breach, although not expressly mentioned in Fran- covich, was nevertheless evident from the circumstances of that case'. 103

149. In its judgment in British Telecom- munications," the Court also applied the comparatively narrower conditions laid down in Brasserie du Pêcheur to a case involving the inadequate transposition of a 152. To that extent it must be regarded as directive as the event giving rise to damage. settled that a sufficiently serious breach is a prerequisite in every case of a potential claim for damages against a Member State.

absence of any, discretion in its judgment in 155. There was clearly no further need for Hedley Lomas, the Court stated as follows the establishment of a body within the in Dillenkofer and Others: 'So where, as in meaning of Article 1(4) of the Second Francovich, a Member State fails, in breach Directive. That Directive does, however, of the third paragraph of Article 189 of the confer on an individual victim a right to Treaty, to take any of the measures necess- compensation against that body, as has ary to achieve the result prescribed by a already been set out above. 107 In order to directive within the period it lays down, found and enforce a claim it is not suffi- that Member State manifestly and gravely cient that a potential victim can somehow disregards the limits on its discretion.' 104 or other bring the matter before the body. The Directive is precise and clear in regard to this position in law. As the Agreements concluded between the MIB and the Sec- retary of State for Transport do not confer a legal position with those attributes on a victim, the national legislature ought to have taken appropriate measures. Action on its part was necessary to establish a judicially enforceable claim in favour of the victim at least up to the limits of the 154. In order to reply to the fifth question, insurance obligation. Whether this ought to it is thus necessary to determine whether have been achieved by legislation or by a the breaches of Community law indicated substantive adjustment of the Agreement is constitute, whether individually or in their a decision ultimately falling within the totality, a sufficiently serious breach. On discretion of the Member State. To that the basis of the Francovich and Dillenkofer extent the Directive confers a degree of judgments, one might, along with the organisational discretion on the Member claimant, take the view that the inactivity State. That notwithstanding, the Member on the United Kingdom's part amounts to a State ought to have laid down in manda- manifest and grave disregard by that tory terms, with regard to both substantive Member State of the limits placed on the and procedural law, the obligation as to exercise of its discretion. 105 Regard being results deriving from the Directive in regard had, however, to the fact that the Member to the victim's legal position. State was able to have recourse to an existing infrastructure which at least in part was expressly in accordance with the Directive, this view of the matter does appear to be unsatisfactory. The question 156. As there was already a functioning thus arises as to the extent to which the infrastructure in place, the problem initially legislature of the Member State was obliged remained concealed, and this was also the to take steps to achieve the purpose pre- reason why the Commission took no steps scribed by the Directive. 106 to challenge the lack of action on the part of the United Kingdom in regard to the Directive. Those facts do not, however, 104 — Dillenkofer and Others (cited in footnote 92), paragraph 26; emphasis added. mean that that inactivity did not amount to 105 — Dillenkofer and Others (cited in footnote 92), paragraph 26. 106 — Dillenkofer and Others (cited in footnote 92), paragraphs 26 and 47. 107 — See paragraph 74 et seq.

I - 14490

EVANS

(2) In the circumstances outlined in the third question, a victim must, on grounds of effective legal protection, have the right to appeal to an ordinary court on questions of fact and law.

(3) Regard being had to the rights of victims, the Second Directive has not been transposed in the national law of the Member State with the precision and clarity necessary to satisfy the requirement of legal certainty.

(4) By virtue of the fact that it has failed to ensure that persons injured by untraced vehicles have an enforceable claim, at least up to the limits of the insurance obligation, against the body defined in Article 1(4) of the Second Directive, the United Kingdom has committed a sufficiently serious breach of Community law.

I - 14491