Law Infringement in Europe

Liability of the Member States for Infringements of Union Law

Content about Law Infringement from the publication “The ABC of European Union law” (2010, European Union) by Klaus-Dieter Borchardt.

The liability of a Member State for harm suffered by individuals as a result of an infringement of Union law attributable to that State was established in principle by the Court of Justice in its judgment of 5 March 1996 in Joined Cases C-46/93 Brasserie du pêcheur and C-48/93 Factortame. This was a precedent- setting judgment on a par with earlier Court judgments on the primacy of Union law, the direct applicability of provisions of Union law and recognition of the Union’s own set of fundamental rights.

The judgment is even referred to by the Court itself it as ‘the necessary corollary of the direct effect of the Community provisions whose breach caused the damage sustained’, and considerably enhances the possibilities for an individual to force State bodies of all three centres of power (i.e. legislative, executive and judiciary) to comply with and implement Union law. The judgment is a further development of the Court’s rulings in Francovich and Bonifaci. Whilst the earlier judgments restricted the liability of the Member States to instances where individuals suffered harm as a result of failure to transpose in good time a directive granting them personal rights but not directly addressed to them, the latest judgment established the principle of general liability encompassing any infringement of Union law attributable to a Member State.

Infringements of EU Legislation

The European Commission both initiates legislation, and ensures that Member States then comply with it. If they have evidence that a Member State has either failed to transpose a directive properly, or is not enforcing legislation correctly, then they will begin legal proceedings to rectify the situation, known as infringement proceedings.

The powers which allow the European Commission to carry out infringement proceedings are provided for in Articles 258 and 260 of the Treaty on the Functioning of the European Union (EU).

Stages of Infringement Proceedings

Infringement proceedings go through a number of stages, which are as follows:

• Article 258 letter: is the first formal stage of the process. The letter informs the Member State that the European Commission considers it may be in breach of EU law. The Member State is normally given two months to reply.
• Article 258 Reasoned Opinion: is a formal determination by the European Commission that the Member State is in breach of its legal obligations. The opinion requires the Member State to comply with its EU obligations within a given time limit, normally two months.
• Court of Justice referral under Article 258: if the Member State fails to comply with a reasoned opinion within the prescribed period, the European Commission can apply to the Court of Justice for a ruling that the Member State is in breach of the Treaty. If the infringement is due to late transposition the European Commission can now ask the Court to issue financial penalties on the Member State at this stage.
• Article 260 letter: if a Member State has received a ruling from the Court of Justice and taken no action to comply with it, the European Commission will issue this formal notice indicating that it has failed to comply with a judgment of the Court of Justice. The Member State will be given a set timescale to make the necessary changes.
• Court of Justice referral under Article 260: if the Member State fails to meet the Article 260 deadline the European Commission can refer them back to the Court of Justice for financial penalties.

Consequences of Infringement Proceedings

The EU Commission has powers to apply financial sanctions to the UK where, following infringement proceedings for a breach of EU law, the Court of Justice has found the UK to be in breach of its obligations. Such financial sanctions may consist of both a daily penalty to induce the remedy of the breach (of up to circa €237,864 per day, a figure which is then multiplied by the duration of the breach) and a lump sum (based on an assessment of the effects of the breach for which the minimum for the UK is currently €9,938,000). The Scottish Government would be required to pay a percentage of any UK fine if the infringement related to a devolved matter. Fines are extremely rare and the European Commission works hard with Member States to avoid financial penalties wherever possible. Scotland and the UK as a whole has never received a fine from the Court of Justice.

Pilot cases

Since April 2008 the European Commission has been running a pilot scheme aimed at improving the efficiency of the infringement process by providing an early opportunity to investigate claims of breached legislation, prior to formal infringement proceedings. Member States are usually given 10 weeks in which to respond directly to the complainant (unless they prefer to remain anonymous) with a copy of that response also sent to the Commission. If the complainant is dissatisfied with the response or the Commission considers that there is a genuine case to answer, the Commission can then consider commencing infringement proceedings in the usual way.