Dubrovnik, Croatia, 4 June 2009 Philippe Ruttley, EC Department, Clyde & Co LLP LITIGATING EC LAW.

Dubrovnik, Croatia,

4 June 2009

Philippe Ruttley, EC Department, Clyde & Co LLPLITIGATING EC LAWLITIGATING EC LAW

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ContentsContents Part One: The nature of EC rights

Part Two: Types of measures giving effect to EC Law

- Acts of Community Institutions

- Acts of Member States

Part Three: Litigating EC rights against Community Institutions

Part Four: Enforcing EC rights against Member States

Part Five: EC litigation against non-state parties

Part Six: Other procedures

Part Seven: Conclusion

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Part One:Part One: THE NATURE OF EC RIGHTS

Rights derived from the EC Treaty

Rights derived from EC legislation

“direct effect”

Fundamental rights

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Nature of EC rightsNature of EC rights

Rights derived from EC Treaty

e.g. specific Treaty article giving citizens rights

- Establishment (Article 43)

- To provide services in other Member States (Article 49)

Rights arising by operation of law

- Contained in Regulations and Directives

- Decisions

- Directly effective rights arising from EC Treaty articles

- Fundamental rights

- General principles of law

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“Direct Effect”“Direct Effect” Doctrine elaborated by ECJ since 1963 Case 26/62 Van Gend en Loos –v- Netherlands Customs Authority

Dutch trucking firm importing goods from Germany into the Netherlands. Dutch customs duties imposed.

Duties challenged on the grounds that they infringed Article 12 of the EEC Treaty:

“Member States shall refrain from introducing between themselves any new customs duties on imports or exports...”

Several Member States protested that this claim was inadmissible: a Treaty article which has not yet been transposed into the national laws of Member States cannot create rights for citizens of these treaty signatories.

In a revolutionary judgment, the European Court of Justice ruled for the citizens and against the Member States

Key conditions for “direct effect”

If EC Treaty Article or legislation creates a right

a) For benefit of an individual

b) Which is clear and precise

c) Does not require further implementation into national law

then the right is “directly effective” and can be enforced by individuals against a Member State or a Community Institution

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Examples

EC Treaty Article: Article 43 (ex 52) freedom of establishment in another Member State

Article 81 (ex 85) prohibition against anti-competitive agreements

EC Regulation: primary legislation applicable to about 27 Member States

EC Directive after deadline for implementation has expired e.g. Joined Cases C-6 and 9/90 Francovich v Italy directive on employee protection in cases of insolvency

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Fundamental rightsFundamental rights

Article 220 EC: “The ECJ shall ensure that in the interpretation and application of this Treaty the law is observed”

“Law” are general principles of law accepted by Member States’ legal traditions

Reflect common Roman/Christian heritage of EC states

Examples:

- Equality

- Non-discrimination

- Proportionality

- Non-retroactivity of law

- Nulle poena sine lege

- Ne bis in idem Rights enshrined in the European Convention on

Human Rights all EC Member States are signatories to the ECHR

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Part TwoPart Two MEASURES APPLYING EC RIGHTS

Community acts

Measures taken by Member States

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A. Community ActsA. Community Acts

Regulations

- Primary legislation adopted by Council or by Council and the Parliament under the “co-decision procedure”

- Immediately alters EC law and creates obligations or rights

- e.g. Regulations in air sector creating passenger rights (Reg. 261/2004 on denied boarding or cancellations)

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DirectivesDirectives Objective to be achieved by Member States under national laws by a set date

e.g. by 1 January 2010 employees rights in bankruptcies to be harmonised by all Member States

Member states given discretion on how to give effect to the Directive’s objective e.g. how to transpose the Directive’s objective into national law

directive on employee protection in cases of insolvency of their employers

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Decisionsaddressed to specific addresses creating objections or rights to them

Decisionsaddressed to specific addresses creating objections or rights to them

Enforcement decisions by Commission

e.g. competition law decisions imposing fines and prohibiting cartel practices

e.g. anti-dumping duties imposed by Council Regulation

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B. Measures taken by Member States to implement EC law

B. Measures taken by Member States to implement EC law

Art 10: duty of Community solidarity

“Member States shall take all appropriate measures … to ensure fulfilment of the obligations arising out of this Treaty resulting from action taken by the institutions of the Community. They shall facilitate the achievement of the Community’s tasks. They shall abstain from any measure which could jeopardise the attainment of the objective of this Treaty”.

Obligations not to create or maintain state-sponsored practices, breaching EC law e.g. Art 86 (i):

“In the case of public undertakings and undertakings to which Member States grant special or exclusive rights, Member States shall neither enact or maintain in force any measure contrary to rules contained in this Treaty”.

Transposing Directions into national law by set date

Other EC duties e.g. customs/border controls

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Part Three:Part Three: LITIGATING AGAINST COMMUNITY INSTITUTIONS

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1. Community Acts1. Community Acts

Community Institutions, especially the European Commission, implement EC policies

Agricultural policy decisions, including distributing subsidies

Enforcement of EC competition policy, (cartel investigations or merger decisions)

Application of external trade policy (e.g anti-dumping)

Commission has wide administrative discretion

Judicial review e.g. challenges to Decisions before EC Courts is only permitted for “Community Acts”

“Act” = measure which definitely alters the legal situation of the addressee

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Case 60/81 IBM v Commission (1981)

Case 60/81 IBM v Commission (1981)

“Statement of Objections” addressed in competition proceedings, alleging IBM’s abuse of dominant position

SO challenged by IBM as ill-founded on errors of fact and law

ECJ dismissed the application: an S.O. is only a statement of accusations, not a final act making a finding of infringement

An S.O. is not an “act”. It is an opinion.

Only the Commission’s final Decision alters the legal situation of the addressee and is an “Act” capable of challenge in the Courts.

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Failure to actFailure to act Article 232

If a complaint to the Commission is not adopted or if Council fails to adopt new law

Wide administrative discretion of EC institutions, EC courts are usually very reluctant to interfere

Case 246/81 Lord Bethell v Commission

EC aviation policy

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Causes of action/grounds for challenges of Community Acts/Decisions

Causes of action/grounds for challenges of Community Acts/Decisions

“Direct Actions” : Article 230 EC

a) Lack of competence (e.g. Commission must act within scope of powers confirmed by Treaty or EC Regulations)

b) Infringement of essential procedural requirements (e.g. must use correct Regulation)

c) Infringement of the EC Treaty

d) Infringement of a rule of law relating to the EC Treaty application

e) Misuse of powers

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Enforcement of EC lawEnforcement of EC law

Pacta sunt servanda

Article 228: Member State must take necessary measures to comply with ECJ rulings and is subject to fines by ECJ for failure (Art 228(2) fourth paragraph)

Article 233: Community Institutions must take necessary actions to comply with ECJ Judgment

Damages: against Community Institutions under Article 288(2) “non-contractual” liability

Damages against Member States, according to national administrative law

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The Court of First Instance (“CFI”)

The Court of First Instance (“CFI”)

Established in 1989, situated in Luxembourg

Composition: 27 Judges (1 per Member State) with 6 year mandates

Sits in Chambers of 3 Judges (in 80% of cases) but for cases raising issues of greater concern in Chambers of 5, 13 (Grand Chamber) or Full Court (27 Judges)

Jurisdiction:

a) Actions challenging decisions of Community Institutions brought by individuals e.g against Commission decisions enforcing competition rules

b) State aids and anti-dumping

c) Actions for damages against Community Institutions

d) Some other areas e.g. Community trade marks

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CFICFI 1989-2006: over 5200 cases heard and ruled upon

Languages: any of the 23 official EC languages but internal working language is French

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Procedure of the CFIProcedure of the CFI

Mainly written procedure with one Hearing (apart from purely procedural hearings)

Written procedure

a) Application for annulment of Community decision being challenged

• Article 230 EC

• Within 2 months + 10 days of receipt of Act by the applicant (Art. 230 EC + Article 102 CFI Rules of Procedure)

• Sets out grounds of appeal and supporting facts

b) Defence by the Commission

c) Reply to the Defence (by Applicant)

d) Rejoinder to the Reply (by Commission)

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Procedure of the CFIProcedure of the CFI

Commission has the last word

Length of Written Procedure: about 12-18 months

Language: in language determined as language of the case, e.g. English, French, German etc.

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Interventions by third parties

Interventions by third parties

Interveners must show interest in outcome of the case (not simply acting pro bono publico or out of academic interest)

If Court grants leave to intervene, intervener can submit “observations” in support of Applicants or Defendants, having been supplied with copies of written pleadings. But cannot plead new arguments.

Useful for Applicants to have sympathetic Intervener who can then comment on Commission’s Rejoinder to the Reply and therefore have the last word!

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Oral procedureOral procedure Hearing before Judges of the Chamber

Speaking time is limited (about 1 hour) followed by questions from Judges

No cross-examination of witnesses under oath etc. Judges can ask questions of parties’ representatives

Length of hearings: 1 day normal

Oral pleadings in case language(s)

Oral hearing usually 6-12 months after close of written pleadings

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Post-hearing procedurePost-hearing procedure

Judges of the Chamber deliberate in camera

Written ruling produced by the Court, anonymously, no dissenting Minority opinions

CFI has plenary Jurisdiction and can

a) Uphold contested Act/Decision

b) Annual part of Decision or entirely

c) Award costs

d) Award damages (in specific procedures permitting this)

Judgment usually 6-12 months after Hearing

Total length of appeal process from original contested Decision: 2-3 years

“Expedition” e.g. accelerated hearing can be granted in exceptional cases

Appeals against CFI Ruling to the European Court of Justice

Within two months

On points of law only

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Interim proceedingsInterim proceedings

Appeals do not suspend the operation of a contested act or decision

Applicants can, however, obtain Order from President of CFI to suspend a Decision if this application is

Well founded

Suspension is urgently needed and Applicant would suffer irreparable harm without it

The balance of interest between this applicant and the public interest is in favour of suspension

Suspension orders are very rarely granted

Example: Commission decisions of 1994 against liner shipping conference tariffs. Commission decisions were suspended until outcome of CFI appeals process and the CFI President ruled that the balance of convenience lay in preserving the Liner Conference system - See Case T-395/94 R Order of 11 March 1995; Case C-149/95 P (R) Commission v Atlantic Container Line & Others

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The European Court of Justice (ECJ)

The European Court of Justice (ECJ)

Established 1957, situated in Luxembourg

Composition: 27 Judges (1 per Member State) with 6 year mandates

8 Advocates-General

Sits in Chambers of 3 or 5 Judges, but sometimes on Grand Chamber of 13 Judges or Full Court of 27

Full court for cases of exceptional importance

Grand Chamber if requested by Member State or Community Institution requests or if case is particularly complex

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Advocates-GeneralAdvocates-General

French tradition of “Commissaire du Governement” in the Conseil d’Etat

AG acts as “advisor” to the Court producing an opinion on facts and legal issues raised by the case

AG opinion are usually influential but ECJ Judges can rule differently than as recommended

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PART FOUR:PART FOUR: ENFORCING EC RIGHTS AGAINST MEMBER STATES

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Enforcing EC law against Member States


Enforcement of EC law by individuals against the state

Member state duty to give full effect to EC rights

Art 10EC

Art 86: cannot maintain/create conditions contrary to competition rules

Directives: determine an objective to be achieved by Member State by a set date e.g. harmonise disability benefits by 1 Jan 2010

Member states are free to decide how to transpose EC objective into their national laws

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Exercise of their discretion is difficult to challenge

After deadline for implementation, citizens can enforce Directive

Joined Cases C-6 and 9/90 Francovich v Italy directive on employee protection in cases of insolvency

“Vertical enforcement of Directives”

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ReferencesReferences National Courts asking the ECJ to interpret EC law (Article 234 EC)

Procedure whereby national courts/tribunals can refer questions of EC law to ECJ for interpretative rulings

ECJ Interpretation of EC law is binding on national Courts - guarantees uniform interpretation throughout EC Member States

Not available to arbitration panels

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ReferencesReferences Any court can make References, final court must refer

Questions can raise questions of law, interpretation of EC law, validity of community law

Not for theoretical questions or “manufactured” disputes to test EC law

Case C-244/90 Foglia v Novello

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ProcedureProcedure National court drafts questions in order for reference (with submissions of parties’ lawyers)

Each party submits written observations on the questions referred to ECJ

Member States and Community Institutions (Council, Parliament or Commission) can intervene

Advocate – general produces opinion

ECJ rules on questions referred

ECJ ruling (answers) sent to national court for application in national proceedings

The Factortame saga – (Spanish fisherman fishing in British waters using UK based companies to fish under national quotas

Created 3 references

Case C-213/89 R v Sec. of State for Transport ex parte Factortame Ltd and Others

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Part Five:Part Five: LITIGATING EC RIGHTS AGAINST OTHER CITIZENS

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Actions for damagesActions for damages

Civil damages for breach of employment rights, competition law infringements

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Private actionsPrivate actions Victims of cartels or state interference with EC rights can take private actions before national courts

Member state national courts must apply EC law

- Art 10 EC, duty of Community solidarity

- Art 6, Reg 1/2003, national courts power to apply EC Competition rules

- EC law (including procedural rules) overrides inflicting national laws

- Case 199/82 Italian Treasury v SpA San Giorgio: full effect to EC law/rights

Right to damages ECJ: Case C-453/99 Courage v Crehan and Cases C-295 and 298/04 Manfredi v Lloyd Adriatico

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ArbitrationsArbitrations Arbitrators must apply EC law

- Case C-126/97 Eco Swiss v Benetton (1999)

- But cannot refer questions to ECJ as they are not “courts” or “tribunals” as defined in Art 234 EC

- ECJ: Case 102/81 Nordsee

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Part six:Part six: OTHER PROCEDURES

a) Action by Commission against Member States for breach of EC Treaty: Article 226 (ex 169)

b) Actions by one Member State against another for breach of EC Treaty: Article 227 (ex 170)

c) Opinions of European Court of Justice e.g. on validity of Treaties under Article 300 (6) EC – e.g. Op. 1/94 WTO Agreement

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ConclusionsConclusions 1. EC law is a dynamic, evolving law

2. EC courts strongly supports integration, usually supports Community Institutions against Member States on questions of jurisdiction and competence

3. EC courts are vigilant in promoting individual rights, particularly regarding enforcement of rights derived from EC law

4. Procedures strongly influenced by civil law tradition, but Anglo Saxon style oral procedures are increasingly important

5. By contrast to other systems, efficient and quick, rulings of a high standard

6. Defects: complex interaction between EC and national law makes for lengthy litigation from national courts. Direct actions in EC court are a quicker way to enforce EC rights. Review of Community decisions by EC Courts is arguably too deferential, but there is an increasing trend for Commission Decisions to be annulled or revised

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Dubrovnik, Croatia, 4 June 2009 Philippe Ruttley, EC Department, Clyde & Co LLP LITIGATING EC LAW.

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Transcript of Dubrovnik, Croatia, 4 June 2009 Philippe Ruttley, EC Department, Clyde & Co LLP LITIGATING EC LAW.