Preliminary Rulings and MS Liability

Enforcing EU Law

The requirements that EU law has formulated with respect to procedures and remedies for enforcing EU law in the member states. The general rule is set out below, taken from the case of Impact and Rewe-Zentralfinaz [1976]:

1.      If the EU has its own procedural rules (of legislative or judicial origin), they take precedence over national rules (“the federal choice pre-empts local choice”)

2.      If there are no EU rules on the matter, it is the national procedural responsibility to enforce EU law following the general national rules and procedures

3.      The two qualifications to this are:

a.       Requirement of equivalence

b.      Requirement of effectiveness

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State Liability

This principle first appeared in Francovich where the court stated that “the principle of state liability for harm caused to individuals by breaches of community law for which the state can be held responsible is inherent in the system of the treaty”. The current test, articulated in Factortame:

Community law confers a right to reparation where three conditions are met: the rule of law infringed must be intended to confer rights on individuals, the breach must be sufficiently serious; and there must be a direct causal link between the breach of the obligation resting on the state and the damage sustained by the injured parties”

This can be broken down to show five conditions in the test:

1.       A wrong (an act or an omission violating EU law)

a.       Of a legal provision which was intended to confer rights on individuals

b.      The wrong was sufficient serious

2.       Damage

3.       Causal link between the wrong and the damage

Liability for breaches of EU law is not limited to member states. The Union may also incur non-contractual liability. 

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Preliminary References

The parties in the case bring their action between national courts, and it is the court which approaches the CJEU. This is how it differs from JR. From the view of the CJEU this is a non-contentious procedure, where the parties in the main action have no right of initiative and are merely invited to be heard.

The court see this as ultimate manifestation of the relationship of cooperation between national courts and the CJEU.

The essential function of Article 267 is to ensure that EU law is applied uniformly by national courts. This objective extends both to situations where a national court is confronted with the application of EU law and to those where it is faced with disputes as to the validity of EU acts. 

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Purpose of Preliminary References

          Guarantee uniformity of interpretation and application of EU law – art 267, states the CJEU will have the jurisdiction to give preliminary rulings, on the interpretation of the treaties and the validity & interpretation of acts of the institutions, bodies, offices or agencies of the EU.

          The Court provides a ‘Union interpretation’ of measures, which then applies throughout the EU.

          Provide guidance to national court on application of EU law in circumstances when EU law and national law are in prima facie conflict

          Protect the ‘constitutional qualities’ of EU law e.g. supremacy, direct effect, state liability, citizenship

          Enable a ‘judicial dialogue’ between the ECJ and national courts

          For these purposes national courts can also be considered as EU courts in the sense that they have to apply EU law

          Not a process of appeal from the national court to the ECJ

          A preliminary ruling is not at behest of parties

          ECJ does not decide the substantive dispute before the national court case itself; merely rules on a point of interpretation; final decision taken by national court.

          If a national court fails to make a reference, then there is a potential action for state liability if EU law is applied incorrectly

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The Principle of Acte Clair

A French administrative law principle. It is said to be more efficient (reducing cost and time), making national courts more EU law focus and helps establish principles. If it was in greater use, then we would also be able to apply EU law at the lower levels, however a lot of lower level judges struggle to accurately apply EU law. Thus if national courts apply EU law incorrectly, there is state liability and the EU itself could be in breach of its own obligations.

There are both advantages and disadvantages to the EU encouraging Acte Clair. However the one overriding factor is that ultimately whatever is adopted, the obligation is to ensure the principle of supremacy, and anything that is done must be to help maintain this principle. This is a difficult judgement to make, when nationals courts are under pressure for resources and time, which make references to the CJEU rather unattractive.

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Case 283/81 CILFIT [1982] ECR 3415

In an earlier case, Joined Cases 28-30/62 Da Costa [1963] ECR 31 a Dutch court referred a question very similar to the question in Van Gend en Loos – the ECJ still gave a reference even though they had already just had one.

But in the later case of CILFIT the ECJ adopts a principle of acte clair ( –  a principle derived from French law stating that there was no need for Courts to make references where previous ECJ decisions covered the point. This signifies that preliminary rulings have an effect erga omnes. This case does not in any way rewrite article 267; the judges were mindful that there needed to be a control on the use of Acte Clair to ensure consistency. They said if the “law must be settled and clear”, but this isn’t particularly useful as it is hard to define, then a reference is not needed if answered by a previous decision. The court anchors its reasoning by reference to the facts. Erga Omnes is the principle of international obligations, the MS in the context of the treaties and the impact on the EU if the MS did not correctly apply EU law or judgements could lead to the EU being in breach of international law obligations. For example in front of the WTO if a MS applies trade law incorrectly.

This is covered also in Case 66/80 ICC [1981] ECR 1191 where the ECJ states that where it has declared a Community act void then national courts can rely on that ruling without further references. In CILFIT the ECJ said there was no need for a preliminary ruling where the question was clear and free from doubt.

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Factors Influencing the Discretion to Refer

Bulmer v Bollinger [1974] 2 CMLR 113  - Denning’s six guidelines:

1.      Inconvenience caused by delay in getting a ruling from ECJ;

2.      Need to avoid overload on the ECJ;

3.      Difficulty of framing the question clearly;

4.      Difficulty and importance of the provision in question;

5.      Expense involved;

6.      What do the parties to the case desire?

 R v International Stock Exchange of the UK and the Republic of Ireland, ex p Else and ors [1993] 1 ALL ER 420 CA - Denning’s principles reformulated:

Sir Thomas Bingham, MR: ‘I understand the correct approach in principle of a national court (other than a final court of appeal) to be quite clear: if the facts have been found and the Community law issue is critical to the court’s final decision, the appropriate course is ordinarily to refer the issue to the Court of Justice unless the national court can with complete confidence resolve the issue itself.  In considering whether it can with complete confidence resolve the issue itself the national court must be fully mindful of the differences between national and Community legislation, of the pitfalls which face a national court venturing into that may be an unfamiliar field, of the need for uniform interpretation throughout the Community and of the great advantages enjoyed by the Court of Justice in construing Community instruments.  If the national court has any real doubt it should ordinarily refer’.

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B. Beutler, State Liability Article

This [Kobler] judgment inevitably led to a wide variety of reactions. Some writers “fully agree” with the outcome55 or declare that it is “both balanced and tenable,”56 proffering various reasons for their evaluation. Wegener, for example, maintains that by its restrictive interpretation the ECJ preserved the Rechtsfrieden (peace under the law) as well as the cooperative relationship between national and Community courts.57 Breuer argues that a different result could have been perceived as a wrong signal and thereby opened the floodgates to litigation.58  Taking the opposite view, Wattel chides the Court for soliciting “an a valanche of (attempts at) claims, going back who knows how many years, in fifteen Member States whose judiciaries were already not bored…Zuckerman contends that in light of the Köbler judgment “the ‘full’ protection of Community rights depends not on their content but on how far the national court is perceived by the ECJ to have blundered, in the sense of having made an obvious mistake.                                                                                                                                                                                                                                                        As is well known, the non-contractual liability of Community organs is governed by Article 288(2) EC which provides that “the Community shall, in accordance with the general principles common to the laws of the Member States, make good any damage caused by its institutions or by its servants in the performance of their duties.” Decisions based on this provision date back further than Francovich and Brasserie.                                                                                                                                                                                                           In Brasserie as a case dealing with Member State liability, the ECJ drew a parallel to Community liability decisions by referring to the so-called Schöppenstedt test144 which is worded as follows:  “Where legislative action involving measures of economic policy is concerned, the Community does not incur noncontractual liability for damage suffered by individuals as a consequence of that action, by virtue of the provision contained in Article 215, second paragraph, of the Treaty, unless a sufficiently flagrant violation of a superior rule of law for the protection of the individual has occurred.”

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