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Causation in Francovich: The Neglected Problem

Published online by Cambridge University Press:  17 January 2008

Fiona Smith  and
Lorna Woods
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Extract

When the European Court of Justice gave judgment in Francovich it was hailed as a triumph, not necessarily for its erudite reasoning, but because it allowed an individual to claim damages from a member State for its failure to comply with Community law obligations, thus providing a method of redress where previously none existed. Although the scope of the remedy was unclear and appeared superficially limited to the facts of the case, it represents the final element necessary to establish a coherent doctrine for the effective protection of an individual's Community law rights.

Type
Shorter Articles, Comments and Notes
Information
International & Comparative Law Quarterly , Volume 46 , Issue 4 , October 1997 , pp. 925 - 941
Copyright
Copyright © British Institute of International and Comparative Law 1997

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References

1. Case C-6 and 9/90, Francovich v. Italy [1991] E.C.R. I-5357.Google Scholar

2. The Francovich remedy could be seen as merely a gap-filling exercise to allow the individual to obtain a remedy for the non-implementation of a non-directly effective directive: note the German, Irish and Netherlands' argument in Joined Cases C-46 and 48/93, Brasserie du Pêcheur SA v. Federal Republic of Germany and R. v. Secretary of State, ex p. Factortame Lid (Factortame (III) [1996] E.C.R. I–1029, para.18; this was firmly disregarded by the Court at para.19.Google Scholar

3. There is copious academic literature on this subject, inter alia: Steiner, “From Direct Effect to Francovich” (1993) 19 E.L.Rev. 3Google Scholar; Caranta, , “Governmental Liability after Francovich” [1993] C.L.J. 272Google Scholar; Ross, , “Beyond Francovich” (1993) 56 M.L.R. 55Google Scholar; Craig, , “Francovich, Remedies and the Scope of Damages Liability” (1993) 109 L.Q.R. 595Google Scholar; Bebr, , “Francovich v. Italy, Boniface v. Italy” (1992) 29 C.M.L.Rev. 559Google Scholar; Curtin, , “State Liability under Private Law: A New Remedy for Private Parties” (1992) 21 I.L.J. 74.Google Scholar

4. supra n.1, at para.40.

5. supra n.2. Confirmed in Case C-392/93, R. v. HM Treasury, ex p. BT [1996] E.C.R. I-1631Google Scholar and Case C-5/94, R. v. MAFF, ex p. Hedley Lomas [1996] 2 C.M.L.R. 391Google Scholar; Cases C-178/94, 179/94, 188/94, 189/94 and 190/94, Dillenkofer v. Germany [1996] 2 C.M.L.R. 469.Google Scholar

6. Factortame (III), supra n.2, at para.51.

7. Idem, para.45. Note that when Brasserie du Pêcheur was referred back to the Bundes-gerichtshof for decision, it declared that there was no “manifest and serious breach” of Community law: 24 Oct. 1996-III Z.R. 127/91.

8. Wooldridge, and D'Sa, , “ECJ Decides Factortame (III) and Brasserie du Pêcheur” (1996) 7 E.B.L.R. 161Google Scholar; Emiliou, , “State Liability under Community Law: Shedding More Light on the Francovich Principle” (1996) 21 E.L.Rev. 399Google Scholar; Van Gerven, “Bridging the Unbridgeable: Community and National Tort Laws after Francovich and Brasserie” (1996) 45 I.C.L.Q. 507.Google Scholar

9. The ECJ held (supra n.2 at para.65) that national courts should determine this issue in accordance with national rules taking into account the principle of non-discrimination: Case 33/76, Rewe [1976] E.C.R. 1989Google Scholar; Case 45/76, Comet [1976] E.C.R. 2043Google Scholar; Case 14/83, Von Colson [1984] E.C.R. 1891.Google Scholar

10. supra n.2, at para.20.

11. This affects the substantive content of the remedy: Francovich and Factortame, supra nn.1, 2; see Case C-271/91, Marshall (II) [1993] E.C.R. I-4367Google Scholar; see Ross, , “Redefining Effective Enjoyment” (1990) 15 E.L.Rev. 476.Google Scholar

12. Case C-312/93, Peterbroeck v. Belgium [1995] E.C.R. I–4599; Case C-431/93, Van Schijndel [1995] E.C.R. I–4705Google Scholar; see Heukels, , Casenote on Van Schijndel (1996) 33 C.M.L.Rev. 337Google Scholar; Case C-2/94, Denkavit [1996] 2 C.M.L.R. 504.Google Scholar

13. See Van Schijndel, ibid. Cf. Case C-213/89, R. v. Secretary of State for Transport, ex p. Factortame [1990] E.C.R. I–2433; infra Section B and Ross, op. cit. supra n.13, at p.478.Google Scholar

14. Case C-208/90, Emmott [1991] E.C.R. I–4269Google Scholar; cf. Case C-338/91, Steenhorst Neerings [1993] E.C.R. I–5475Google Scholar and Case C-62/93, BP Supergas v. Hellenic Republic [1995] E.C.R. I–1883; see also Marshall (II), supra n.11.Google Scholar

15. Case C-221/89, Factortame [1991] E.C.R. I–3905: it could be argued that the availability of the injunction in the case was really a procedural issue, and that the ECJ was merely taking out a procedural barrier.

16. The test acts as a filter to reduce the number of claims which the national court has to adjudicate and, second, the content of those rules is dictated by substantive questions of law: see Williams, , “Causation in the Law” [1961] C.LJ. 62Google Scholar; McGregor, , “Variations on the Enigma” (1970) 33 M.L.R. 378Google Scholar; Boon, , “Causation and the Increase of Risk” (1988) 51 M.L.R. 508Google Scholar; Stapleton, , “The Gist of Negligence” (1988) 104 L.Q.R. 389Google Scholar; Price, , “Causation: the Lords' Lost Chance?” (1989) 38 I.C.L.Q. 735.Google Scholar

17. See Factortame (III), supra n.2, at para.90 and A.G. Jacobs in Denkavit, supra n.12, at paras.62–74.

18. However, see Denkavit, ibid, for an attempt by A.G. Jacobs to correlate the two notions.

19. The ECJ specifically indicates that the use of misfeasance in public office as a cause of action in Factortame (III) would not be adequate: supra n.2, at para.73.

20. See infra Sections B and C.

21. English rules on causation are governed by the law of tort see generally Winfield and Jolowitz, Tort (1994)Google Scholar; Markesinis, and Deakin, , Law of Tort (3rd edn, 1995).Google Scholar

22. This would necessitate the proof of a manifest and serious breach on the part of the State: Factortame (III), supra n.2.

23. See detail on English law of tort infra Section C.

24. Hedley Lomas, supra n.5, at para. 189.

25. supra n.2, at para.79.

26. See infra Section B.

27. Van Gerven, op. cit. supra n.S.

28. This may be a manifestation of the principle of subsidiarity as it has sometimes been applied by both the Commission and the Court: see Commission's interpretation of the principle in Case C-91/95P, Tremblay v. Commission (judgment 24 Oct. 1996); and the ECJ's interpretation in Joined Cases C-319/93, C-224/94, C-40/94, C-399/93, Dijkstra & Luttikius [1995] E.C.R. I–4471 and 4515, para.26.Google Scholar

29. supra n.2, at para.29.

30. It is clear that the remedy created by Francovich and Factortame (III) is a Community law remedy. If the issue of causation is left to the national courts, it is evident that problems of uniformity will result; however, this discussion is beyond the scope of this article: see generally Honore, , “Causation and Remoteness of Damage”, in Tunc, T. (Ed.), International Comparative Law (1983), p.xi, chap.7Google Scholar; Van Gerven, op. cit. supra n.S.

31. See Emmott and Steenhorst, supra n.14.

32. See Van Schijndel, supra n.14: the ECJ remarked that it was for the parties alone to take the initiative to raise matters of Community law and that it would only be in exceptional cases that the ECJ would require domestic courts to raise the matter on their own initiative: para.21. See also Hoskins, , “Tilting the Balance: Supremacy and National Procedural Rules” (1996) 21 E.L.Rev. 365.Google Scholar

33. See Szyszczak, , “European Community Law: New Remedies, New Directions?” (1992) 55 M.L.R. 399Google Scholar.

34. supra n.13; see also Emmott, supra n.14 subject to the limitation discussed by Advocate General Jacobs in Denkavit, supra n.12, at para.71.

35. See Ross, op. cit. supra n.13.

36. supra n.2; also Szyszczak, “Making Europe More Relevant to its Citizens” (1996) 21 E.L.Rev. 351.Google Scholar

37. This will be even more acute if different national rules have different perceptions of the place that causation plays: see Van Gerven, op. cit. supra n.8 and Honore, op. cit. supra n.30.

38. See Emiliou, op. cit supra n.8.

39. Factortame (III), supra n.2, at para.67.

40. The ECJ specifically states that misfeasance in public office as a cause of action would make the enjoyment of the Community right “excessively difficult”: idem, para.72.

41. supra n.12.

42. Idem, para.78.

43. Marshall (II), supra n.11, at para.24, and Von Colson, supra a.9, at para.28.

44. Scotland has its own separate legal system which has different rules for non-contractual liability: See Philips, , “Lost Chances in Delict: All or Nothing?” (1995) 5 Juridical Rev. 401.Google Scholar

45. See Winfield and Jolowitz, Markesinis and Deakin, both op. cit. supra n.21. On the doctrine of precedent in English law generally, see Cross, R. and Harris, J. W., Precedent in English Law (4th edn, 1991).Google Scholar

46. This can be the case with causation: see Overseas Tankship (UK) Ltd v. Marts Dock and Engineering Co. Ltd, The Wagon Mound (No.1) [1961] 1 All E.R. 404 (PC).Google Scholar

47. Winfield, and Jolowitz, , op. cit. supra n.21, at p.155.Google Scholar

48. Factoname (III), supra n.2.

49. Winfield, and Jolowitz, , op. cit. supra n.21, at p.147.Google Scholar

50. Winfield and Jolowitz and Markesinis and Deakin both supra n.21.

51. Winfield, and Jolowitz, , op. cit. supra n.23, at p.148.Google Scholar

52. Harvey v. Institute of the Motor Industry (No.2) [1995] I.R.L.R. 416.

53. This was held to be the case despite the fact that the State was the sole shareholder in a public company. The company was deemed to be dealing at arm's length with the State, and therefore should be liable for any breach: Doughty v. Rolls-Royce [1992] 1 C.M.L.R. 1045.Google Scholar

54. The ECJ recognised that in certain circumstances an award of exemplary damages should be available, but left the rules to the national courts: Factortame (III), supra n.2, at para.89. The award of such damages would be unlikely in English law.

55. The ECJ has also made it clear elsewhere that compensating the victim may not be enough: Von Colson, supra n.9.

56. The law on the availability of exemplary damages is uncertain in the UK.

57. McChee v. National Coal Board [1972] 3 All E.R. 1008, 1011 (per Lord Reid).Google Scholar

58. Francovich, supra n.1, at p.5361.Google Scholar

59. Subject to the decision in Case C-479/93 Andrea Francovich v. Italian Republic [1995] E.C.R. I-3843.Google Scholar

60. Francovich may not now be able to recover damages in this situation: ibid.

61. Biggs v. Somerset County Council [1995] I.C.R. 811 (confirmed on appeal [1996] 2 All E.R. 734). Note R. v. Secretary of State for the Home Department, ex p. Gallagher [1996] 2 C.M.L.R. 957 on the application of the State liability principles.

62. Harvey, supra n.53, at p.420.Google Scholar

63. Bamet v. Chelsea & Kensington Hospital Management [1968] 2 W.L.R. 422.Google Scholar

64. Wilsher v. Essex Area Health Authority [1988] 2 W.L.R. 557.Google Scholar

65. McGhee, supra n.57Google Scholar; see also Weinrib, “A Step Forward in Factual Causation” (1975) 38 M.L.R. 518.Google Scholar

66. Boon, , op. cit. supra n.16, at p.513.Google Scholar

67. This appears to be the interpretation placed on the use of the ratio in McGhee, supra n.57, by the House of Lords in Wilsher, supra n.64.

68. Wilsher, ibid.

69. On States' obligations in regard to Community legislation, see Wyatt, and Dashwood, , EC Law (1993), chap.4. On incorrect implementation see BT, supra n.5Google Scholar; also Steyger, E., Europe and its Members: A Constitutional Approach (1995), pp.16–19.Google Scholar

70. Some commentators have argued that the Francovich judgment has even more far-reaching implications; see Ross, op. cit. supra n.3.

71. However, liability of the member State may be problematic following a return to a more formalistic interpretation of Art.90(l) in Case C-2/91, Meng [1993] E.C.R. I-5751Google Scholar; see Reich, , “The ‘November Revolution’ of the Court of Justice: Keck, Meng and Audi Revisited” (1994) 31 C.M.L.Rev. 459.Google Scholar

72. Ross, , op. cit. supra n.3, at p.67; see Von Colson, Rewe and Comet, all supra n.9.Google Scholar

73. See infra Section D.

74. [1987] 2 All E.R. 908 (HL)Google Scholar; cf. Chaplin v. Hick [1911] 2 K.B. 786 confirmed by Allied Maples Group pic v. Simmons & Simmons [1995] 1 W.L.R. 1602, 1610 (per Stuart-Smith LJ).Google Scholar

75. Hill, “A Lost Chance for Compensation in the Tort of Negligence by the House of Lords” (1991) 54 M.L.R. 511, 511Google Scholar; Lunney, , “What Price a Chance?” (1995) 15 L.S. 1Google Scholar; Rees, , “Loss of Chance in the Law” (1996) 59 M.L.R. 188.Google Scholar

76. Hotson v. East Berkshire AHA [1987] 1 All E.R. 210, 223 (CA).Google Scholar

77. Hill, , op. cit supra n.75, at p.515Google Scholar: Hill differentiates the type of chance, distinguishing a “personal chance” which would allow the plaintiff to recover from a mere “statistical chance” which would not—cf. Rees's (op. cit. supra n.79) philosophical approach.

78. Hotson, , supra n.74, at p.915 (per Lord Mackay).Google Scholar

79. Hill, , op. cit. supra n.75, at p.516; cf. Stapleton, op. cit. supra n.16.Google Scholar

80. The facts of Hotson would traditionally fit within the difficulties engendered by multiple causes, and also the problem of whether the damage would still have occurred without the doctors' negligence.

81. Winfield, and Jolowitz, , op. cit. supra n.21, at p.155.Google Scholar

82. Wagon Mound, supra n.47: this test has caused considerable difficulties and has generated considerable academic comment. See Davies, “The Road From Morocco: Polemis Through Donoghue to No-Fault” (1982) 45 M.L.R. 534; Honore, op. cit. supra n.30.

83. Wagon Mound, ibid, and Tremain v. Pike [1969] 3 W.L.R. 1556.

84. See generally Winfield and Jolowitz, op. cit supra n.21, at chap.26 and Markesinis, and Deakin, , op. cit supra n.21, at p.342.Google Scholar

85. Factortame (III), supra n.2 and Hedley Lomas, supra n.5.

86. Factortame (III), idem, para.97.

87. Idem, para.98 Advocate-General's Opinion. This approach is also taken by the ECJ in this case, at para.79.

88. Markesinis, and Deakin, , op. cit. supra n.21, at p.183.Google ScholarSee also Zweigert, and Kotz, , Introduction to Comparative Law, Vol.11 (2nd edn, 1987).Google Scholar

89. See infra Section D.

90. Suggested by the ECJ in Factortame (III), supra n.2, at para.41.

91. Zweigert and Kotz, op. cit. supra n.88. See also in relation to Art.215(2) Case 36/62, Société des Actéries du Temple v. High Authority [1965] E.C.R. 938, para.8. Also A.G. Tesauro in Factortame (III), idem, para.97.Google Scholar

92. The ECJ thought Art.215 should be able to play some role in this remedy: Factortame (III), idem, para.28.

93. E.g. A.G. Tesauro in Case C-308/87, Grifoni [1990] E.C.R. I-1203, para.30.Google Scholar

94. Distinction between causation in fact and remoteness. Germany also adopts this bifurcated view. There is also overlap between novus actus, contributory negligence and the requirement for mitigation. It seems that the ECJ is adopting an approach similar in parts to that used in France. See Honore, , op. cit. supra n.30. Questions relating to actual and certain damage also intrude: Case T-478/93, Wafer Zoo v. Commission [1995] E.C.R. II-1479.Google Scholar

95. Cases C-363 and 4/88, Finsider v. Commission [1992] E.C.R. I-359.Google Scholar

96. E.g. Case 310/81, EISS v. Commission [1984] E.C.R. 1341Google Scholar, Case 239/78, Dumortier Frères [1979] E.C.R. 3091Google Scholar, and Case T-168/94, Blackspur DIY Limited v. Council [1995] E.C.R. II-2628 (Blackspur has appealed).Google Scholar

97. Joined Cases C-104/89 and C-37/90, Mulder and Others v. Commission [1992] E.C.R. I-3061, para33.Google Scholar

98. Case 169/73, Compagnie Continental [1975] E.C.R. 117.Google Scholar

99. Idem, para.22.

100. Case 5m, Aktien Zuckerfabrik Schöppenstedt v. Council [1971] E.C.R. 975. The ECJ held that liability does not arise in the case of legislative action involving measures of economic policy, “unless a sufficiently flagrant violation of a superior rule of law for the protection of the individual has occurred”: para.ll.Google Scholar

101. supra n.93.

102. supra n.97.

103. Idem, para.38.

104. E.g. Case T-572/93, Odigritria v. Council/ [1995] E.C.R. II-2025Google Scholar; Cases C-258 and 259/90, Pesquerias De Bermeo & Naviera Laida v. Commission [1992] E.C.R. I-2901.Google Scholar

105. See the Bundesgerichtshof in Brasserie du Pecheur, supra n.7.

106. Mulder and Grifoni (supra nn.97,93) may be rare examples.

107. supra n.96. This is a case involving unsatisfactory plaintiffs, however, and there may well be other reasons for stating that their claim should not succeed.

108. This approach was suggested in Stavely Iron and Chemical Co. v. Jones [1956] A.C. 607, 628 (per Lord Tucker).Google Scholar

109. E.g. Continental Can, supra n.98.

110. Hedley Lomas, supra n.5, at para.192.

111. supra n.96.

112. Ibid.