Why another paper on the issue of damages within the European Union?
Since the European Court of Justice handed down its landmark decision in
Francovich,3 some eight years ago,
much has been written on the subject of Member State liability, so much,
indeed, as "to require apology for any more," according to one author.4 However, the bulk of the academic commentary has
focused on the implications of the rules set out in Francovich and its
progeny. To date there has been little consideration of the theoretical basis
and normative justification for Member State liability. It is into this gap in
the literature which this paper inserts itself.
My search for the theoretical underpinnings of Francovich is in essence a search for the theory of justice underlying liability. It is a normative inquiry, in that I ask whether there is a sense in which it is not simply the law, but also just, that a Member State should be required to pay a private litigant for losses caused by the State's violation of Community law. However, the normative exercise is not unconstrained, as the adequacy of any proposed theory will be assessed in part on the extent to which it is capable of explaining the scheme of Member State liability actually employed by the Court of Justice.
Many authors are content to describe EU Member State liability as an extension of administrative tort liability, and to account for the phenomenon by reference to external political factors. The most frequently-cited explanation is that a damages remedy was needed because Member States were neglecting to implement directives on time. As Steiner writes:
With the move towards completion of the internal market by December 31, 1992, to be achieved largely through harmonisation by directive, the problem of enforcement became acute. States were failing increasingly to implement directives on time. Despite redoubled efforts by the Commission under Article 169 States continued to neglect their duties of implementation and even successful proceedings failed to secure compliance. In 1989, 26 Article 169 proceedings were brought for the second time. If the internal market programme were to succeed, something more had to be done.5
In this account of Francovich, the damages remedy filled a gap in
the enforcement system for Community norms. Provisions of the Treaties6 and regulations were in some cases capable of
being relied on in domestic proceedings against a Member State or between
private parties, even in the absence of national implementing legislation
(i.e., they produced "direct effects"). By contrast, the Court had
unequivocally held that directives were not capable of producing direct effects
in litigation between private parties. Moreover, in the absence of national
implementing legislation, it was often impossible to invoke the directives in
domestic proceedings even against the Member States themselves, because
directives were usually worded so as to leave choices to the national
implementing authorities and therefore did not produce direct effects against
the State. This, so the story goes, created a potential bottleneck whereby
States, by failing to enact implementing legislation, could effectively deprive
their citizens of the rights which Community law intended to confer upon them.
I do not dispute this explanation as an account of the extrinsic considerations which the Court of Justice may well have taken into account, but the question remains whether principles of justice, and not only expediency, can be found at the base of the scheme of liability developed by the Court. Our understanding of the external context does not eliminate the necessity for a theoretical framework within which to situate the remedy of damages. Without such a framework, the doctrinal development of remedial damages in EU law runs the risk of normative incoherence. This is ultimately what is at stake in the search for a theory of State liability in the European Union.
My paper is divided into four parts. The first part of the paper describes the evolution of damages in the positive law of the European Union, culminating in the decisions of the Court of Justice in the Francovich line of cases. In the second part of the paper, I review the essential features of EU Member State liability and conclude that it presents the same formal characteristics as liability for constitutional torts. This finding leads me to examine, in the third part of the paper, the theories of justice which might underlie a system of constitutional torts, with a view to assessing their normative acceptability and their ability to explain the phenomenon of EU Member State liability. I conclude that the theories of justice which provide a normatively adequate rationalization of constitutional tort liability are incapable of explaining the liability of Member States for violation of EU law. In the fourth part of my paper, I suggest an explanation for the discrepancy and discuss the implications of this finding for further research on the issue of State liability in the European Union.
3 Case C-6/90, Francovich v. Italy,  I E.C.R. 5357,  2 C.M.L.R. 66.
4 C. Harlow, "Francovich and the Problem of the Disobedient State," 2 E.L.J. 199 at p. 199 (1996). A bibliography of articles on Francovich is included in Appendix A.
5 J. Steiner, , "From Direct Effects to Francovich: Shifting Means of Enforcement of Community Law," 18 E.L.Rev. 3, at p. 6 (1993). See, along the same lines, D. Curtin, "Directives: The Effectiveness of Judicial Protection of Individual Rights," 27 C.M.L.Rev. 709, at pp. 709-11.
6 European Community Treaty, European Coal and Steel Community Treaty, Euratom Treaty. Hereinafter, "Treaty" refers to the European Community Treaty.
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