Compensation under EU law influence
Compensation under EU Law: Overview
The EU legal order recognizes the right of individuals to seek compensation (damages) when they suffer losses due to:
Breach of EU law by Member States (state liability)
Breach by EU institutions
Private parties infringing EU competition law
The doctrine of state liability was developed to ensure effective enforcement of EU law.
Compensation claims can be brought before national courts but are governed by EU principles.
Key principles include: causation, sufficiently serious breach, and direct link between breach and damage.
Key Case Law Illustrating Compensation under EU Law
1. Francovich and Bonifaci v. Italy (Joined Cases C-6/90 and C-9/90, 1991)
Facts: Italy failed to implement an EU Directive on workers’ protection against insolvency.
Issue: Whether individuals can claim compensation from the State for failure to implement EU law.
Ruling: The ECJ established the doctrine of state liability, holding that Member States must compensate individuals for losses caused by failure to implement EU directives.
Significance: Created a fundamental right to compensation where EU law is breached by Member States.
2. Brasserie du Pêcheur and Factortame III (Joined Cases C-46/93 and C-48/93, 1996)
Facts: Germany and the UK enacted laws breaching EU competition law and other EU obligations.
Issue: Conditions under which Member States are liable for damages caused by breaches of EU law.
Ruling: The Court refined the state liability test:
The rule of law infringed must be intended to confer rights on individuals.
The breach must be sufficiently serious.
There must be a direct causal link between the breach and damage.
Significance: Provided detailed criteria for state liability, widely applied across the EU.
3. Köbler v. Austria (Case C-224/01, 2003)
Facts: An individual claimed compensation for damage caused by a judicial decision that breached EU law.
Issue: Whether Member States can be liable for breaches of EU law by their courts.
Ruling: The ECJ confirmed that Member States can be liable for judicial breaches of EU law, applying the same state liability principles.
Significance: Extended state liability to the judiciary, ensuring accountability in all branches of government.
4. Unibet (London) Ltd v. Justitiekanslern (Case C-432/05, 2007)
Facts: The applicant sought compensation for damage caused by Swedish legislation restricting betting activities.
Issue: Whether restrictions justified under EU law can still give rise to state liability.
Ruling: The Court stated that if legislation breaches EU law and causes damage, compensation may be due unless the breach is excusable.
Significance: Emphasized that Member States’ liability arises even when implementing legislation, if it violates EU law.
5. Manfredi v. Lloyd Adriatico Assicurazioni SpA (Joined Cases C-295/04 to C-298/04, 2006)
Facts: Claimants sought compensation for damages caused by breaches of EU competition law by private undertakings.
Issue: Whether individuals can claim damages from companies breaching EU competition rules.
Ruling: The ECJ ruled that individuals have the right to claim full compensation for harm caused by competition law violations by private parties.
Significance: Developed the private enforcement of EU competition law, expanding access to compensation.
Summary of Principles on Compensation under EU Law
| Principle | Explanation | Case Example |
|---|---|---|
| State liability for breaches | Member States must compensate individuals for damages caused by breaches of EU law | Francovich; Brasserie du Pêcheur |
| Liability for judicial breach | Liability extends to breaches by national courts | Köbler |
| Strict conditions | Liability requires a sufficiently serious breach, direct link to damage | Brasserie du Pêcheur |
| Compensation for private breaches | Individuals can claim damages for harm caused by private parties violating EU law (e.g., competition) | Manfredi |
| Legislative breaches | Member States liable even for damage caused by legislation breaching EU law | Unibet |
Final Notes:
EU law compensation principles ensure effective enforcement and protection of individual rights.
They motivate Member States to comply with EU obligations carefully.
Compensation claims are mostly heard in national courts, applying EU principles directly.
The doctrines continue to evolve with case law expanding the scope of liability and remedies.
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