Action for liability
Taking action for liability enables a private individual who has suffered damage caused by a Community activity to obtain redress from the institution responsible for the action.
It makes it possible to receive compensation for the legislative activity of the Community institutions when damage results from, for instance, the adoption of a Community regulation. It also makes it possible to render a Member State liable for breach of its Community obligations in the event of failure to transpose a directive.
Action for contractual liability, namely liability arising out of contracts concluded between the Community and a third party, is subject to particular rules, and the Court of Justice of the European Communities (Court of Justice) intervenes only if provision is made for this by a specific clause of the contract. The conditions and methods of action for liability are derived from the applicable law. This law is defined by the contract, and is in principle a national law. The Court of Justice may have jurisdiction in such cases on the condition that a contractual clause, the arbitration clause, makes express provision for this.
Conversely, action for non-contractual liability is subject to uniform rules, and the Court of Justice has jurisdiction in these cases. This is based on Article 288, second paragraph, of the Treaty establishing the European Community (EC Treaty), which states: "In the case of non-contractual liability, 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." It is supplemented by a significant amount of Court of Justice case law.
Any natural or legal person who has suffered damage, whether this is a Member State or an individual, can seek redress. The litigant must take the matter to the Court of Justice within five years of the occurrence of the event giving rise to it.
Action is brought against the institution responsible for the event giving rise to liability. It may be brought against an individual institution or against several institutions jointly, such as the Council and the Parliament, if the harmful act stems from a text adopted under the codecision procedure.
The liability of the Communities is subjective: it is a fault-based liability. This means that the litigant must demonstrate not that the act at issue is illegal, but that the institution that adopted the act was at fault.
The litigant must demonstrate damage and a link between the damage suffered and the action of the institution in cause:
- as far as the link is concerned, the Court of Justice requires there to be a direct causal link.
The damage may also stem from the behaviour of the litigant. Should this be the case, the liability of the institutions is reduced, or even rejected;
- as far as the damage is concerned, the litigant must demonstrate that he or she has suffered damage and that it is current, namely that it exists at the time that the matter is brought before the Court of Justice. The Court also accepts future losses, even if it is not yet possible to put an exact figure on them. It can accept future damage on the condition that it is imminent and foreseeable with sufficient certitude. However, the Court of Justice holds action for hypothetical damages to be inadmissible.
Liability of the legislative activity of the Community institutions
The Community may be called to account for its material acts, particularly those performed by its officials, but also for its legislative activity. The Court of Justice accepts this principle and confirms that the Community may be held liable for its regulations. It will not, however, grant compensation for damage caused by the Community treaties themselves.
In order to render the Community institutions liable, the litigant bringing action in the Court of Justice must meet three conditions.
Firstly, he or she must demonstrate the existence of a "sufficiently serious breach of a superior rule of law for the protection of the individual". The general principles of proportionality, respect for acquired rights, non-discrimination and legitimate expectations are recognised by the Court of Justice as these superior rules of law for the protection of the individual.
Secondly, the litigant must prove that the misconduct giving rise to the damage is wilful. The Court of Justice thus requires an act so serious as to render the conduct of the Community institutions "manifest and grave" and bordering on the arbitrary. For example, it considered that the Council had committed an act of wilful misconduct by deliberately breaking the equality of treatment between two categories of agricultural producers without justification.
Case-law evolved over the 1990s and no longer requires breach of a superior rule of law, but only the mere breach of an act (such as non-conformity of an implementing regulation with the basic act).
Thirdly, the litigant must demonstrate the link between the damage suffered and the legislative activity. In this regard, the Court of Justice requires the damage to be an "exceptional burden":
- it must be exceptional in that it concerns a restricted and clearly delimited group of operators. Conversely, a regulation causing damage to very large groups of economic operators cannot give rise to compensation;
- it must be a burden in that it exceeds "the limits of the economic risks inherent in operating in the sector concerned".
Liability of the Member States
The Court of Justice has established the principle of Member States' liability to individuals arising out of the failure to apply a rule of Community law or the incorrect application thereof. Individuals can take action for redress in the national courts on the condition that the damage is attributable to the Member State and that it arises from a material or legislative activity related to European law.
The conditions for the grounding of liability are:
- the result prescribed by the Community act must allocate rights to the advantage of individuals;
- the content of these rights must be identified on the basis of the provisions of the Community act;
- there must be a causal link between the breach of the obligation on the State and the damage suffered by the persons harmed.
Allocation of jurisdiction between the Court of Justice and the Court of First Instance
The Court of First Instance has jurisdiction in actions for non-contractual liability where redress is being sought for damage caused by the Community institutions or their officials. It also has jurisdiction in actions for contractual liability arising out of contracts concluded by the Communities when express provision is made for this in the said contracts.
The Court of Justice may hear appeals, restricted to legal questions, brought against rulings handed down by the Court of First Instance on actions for non-contractual liability. It also has jurisdiction in actions for contractual liability based on contracts concluded by the Communities which make provision for such jurisdiction.
This fact sheet is not legally binding on the European Commission, it does not claim to be exhaustive and does not represent an official interpretation of the text of the Treaty.
Further information on the site of the Court of Justice of the European Communities.