Outline: Principle of effectiveness and national procedural autonomy

Principles of effectiveness and national procedural autonomy

NATIONAL PROCEDURAL AUTONOMY

Comet 1976

• ECJ established that the procedural rules of each Member State generally apply to cases of EU law. However, two basic principles must be adhered to “equivalence” (the procedure for EU cases must be equivalent to the procedure for domestic cases) and “effectiveness” (the procedure cannot render the law functionally ineffective.)
• Excessively difficult and impracticable.
• Doctrine of effectiveness in context= private enforcement of EU law.
• EU law is characterized by absence of procedural and remedial organization. This obliges it to reply on national arrangements borrowing the solutions adopted in similar domestic claims.

Rewe-Zentralfinanz v Landwirtschaftskammer 1976

• Article4(3) TFEU- in applying the principles laid down here= it’s the national courts which are entrusted with ensuring the legal protection which citizens derive from the direct effect of provisions of EC law.
• Para 6: it’s for the domestic legal system of each Member State to designate the courts having jurisdiction and to determine the procedural conditions governing actions at law intended to ensure the protection of the rights which citizens have from the direct effect of Community law

In the absence of such measures of harmonisation the right conferred by Community law must be exercised before the national courts in accordance with the conditions laid down by national rules

• The position would be different only if the conditions and time limits made it impossible in practice to exercise the rights which the national courts are obliged to protect.

Both above cases involve parties who paid illegal charges to the state. Straightforward case of state liability, in the absence of community rules on the subject it’s up to the domestic court.

Principle of effectiveness threatened NO NEW REMEDIES RULE.

               Principle of equivalence

Peterbroeck v Belgian State 1995

(the rule of reason)

• We have to look at the ROLE of the national procedural provision, its special features and its progress, viewed as a whole.
• If the time limit is reasonable= effectiveness will not be allowed.
• Analysed by reference to the role of that provision in the procedure, its progress and its special features, viewed as a whole, before the various national instances.

ECJs original approach to the application of the principle of effectiveness was strict and interventionist, assessing itself the effectiveness of national procedures and remedies, it gradually became more deferential.

• The currentposition on the field of national remedies for EU rightcan be summarized as follows:
  • It requires national courts to strike an appropriate proportionality based, case by case balance between the requirement of effective judicial protection for EU law rights and the application of legitimate national procedural remedial rules.

Marshall No2 1993

• In earlier cases ECJ had ruled it was for Member States to decided whether or not to award interest on the reimbursement of sums wrongly levied under community law, whereas in Marshall II it wasn’t open to the Member State to refuse to pay interest
• In this case the domestic cap on damages was inadequate and ineffective remedy- the cap was inconsistent with effectiveness of EU rights. Cap was lifted.
• The court intervened: you have the remedy (damages) in place, but it’s not a very effective/adequate remedy. That cap is inconsistent with the effectiveness of European rights. It can tweak the remedy to make it effective. Cap was lifted.
• Gradually court started being a little more intrusive – the emphasis started switching from creation of new remedies to the need of the domestic system to provide effective remedies (Marshall No 2 and Von Colson)

Von Colson 1984 (nominal compensation)

• Indirect effect case. Effectiveness says we should be able to intervene if we can’t enforce the right, in this case the remedy was there it just had to be readjusted.

Palmisani v INPS

• Time limits for actions are important as they provide legal certainty. Here 30 days was deemed a reasonable time limit, effectiveness principle couldn’t be used to set it aside.

Levec v Harlow Pools 1999

• “…it is for national courts to ascertain whether the procedural rules intended to secure that the rights derived from Community law are safeguarded under national law and comply with the principle of equivalence”

Article 47 EU Charter of Fundamental Rights

• Provides for the right to a fair trial and effective remedy.

3. EFFECTIVENESS AND CREATION OF NEW REMEDIES

• Effectiveness principle – rights should be applicable
• EU Law has created a right and this right of action, but what EU law hasn’t created is a pan-European procedure of remedies/procedures. So you have to rely on the domestic framework (Factortame).
• What EU law says is that you are entitled to these rights, and if you’re denied them you can sue the state – but it doesn’t tell you HOW. This creates a difficulty when enforcing these rights – e.g. time limit (10 days from the breach) à by the time you’ve researched stuff the deadline’s expired. SO these rights, if subject to a very restrictive national system, are undermined and very limited.

Application of art 47 of fundamental rights – you have the right to an EFFECTIVE remedy

The academic debate now is more along the lines of the charter.

Three phases:

• As powerful as the principle of effectiveness is IT CANNOT BE USED TO ENFORCE THE CREATION OF NEW REMEDIES IN A LEGAL SYSTEM (Rewe Handelsgesellschaft)
• Gradually court started being a little more intrusive – the emphasis started switching from creation of new remedies to the need of the domestic system to provide effective remedies (Marshall No 2 and Von Colson)
• In LIMITED CIRCUMSTANCES it can create new remedies. The list is very restrictive and exhaustive.
  1. State liability – damages
  2. San Giorgio – restitution
  3. Factortame I – interim relief
     • ECJ insisted on the priority of the requirement of effectiveness over settled principles of UK law to rather dramatic effect, since the national rule in question was a basic principle (‘no interim relief against the Crown’) which, according to the HoL, prohibited absolutely the grant of the particular remedy. The emphasis in this case is firmly on the requirement of effectiveness of EU law rather than on the primary role of national procedural law.

Rewe Handelsgesellschaft v Hauptzollant Kiel  (the butter buying cruises case)

• Enabling private person to bring direct action before ECJ was not intended to create new remedies in the national courts to ensure the observance of community law rather than those already laid down by national law.
• Underlying principle of no new remedies rule- no new remedies are to be created on the basis of effectiveness, you have to rely on the framework that’s already there.
• Facts: case involved illegal payments to the state (charges for inspections and export). This was a breach of EU law, state liability action was brought. They were suffering loss because of another trader. Was asking the court to order the competitor to comply with EU law, this remedy didn’t exist. The question arose, since this right is based on EU law, and since this right has to be effective, and it wouldn’t be effective unless a new remedy existed – should there be a new remedy? The court makes it absolutely clear that no new remedies are to be created on the basis of the effectiveness principle.
• In the absence of community law on the subject it’s for domestic state/court todetermine the procedural conditions. The court imposes two constraint son procedural autonomy:
  • Principle of equivalence: para 6. Such conditions cannot be less favourable than those relating to similar actions of a domestic nature. E.g. if the time limit for bringing a claim is 2yrs then it should be the same for EU law.
  • Principle of effectiveness: we will respect procedural conditions BUT if your rules become so restrictive that it becomes impossible to enforce the right then EU law will set it aside- this has been changed from IMPOSSIBLE to VIRTUALLY IMPOSSIBLE to EXCESSIVELY DIFFICULT.

Emphasis on gradually switching from the creation of new remedies, to the need for the domestic system to provide effective remedies.

The principles of equivalence and practical possibility

1. The principle of equivalence- remedies and forms of action available to ensure the observance of national law must be made available in the same way to ensure the observance of EU law
2. Practical possibility= national rules and procedures shouldn’t make the exercise of an EU law right impossible to practice.

The no new remedies rule has been qualified in various ways. (Drake “no new remedies we don’t need that” :’) )

San Giorgio 1983 (repayment of charges)

• Facts: Italian law no repayment of illegal tax levies, no remedial restitution if this happened. Imported apples were subject to an inspection which they had to pay for- contrary to EU law. They tried to bring an action but the court was like no sorry you have to rely on the framework already available in Italy because of national procedural autonomy. They said what’s the point of having this right if I can’t get my money back in Italy.
• The court created a right to restitution for illegal tax levies= creation of a remedy that didn’t exist before.

Metallgesellschaft & Hoechst v Inland Revenue 2001

• The ECJ ruled that it was for the national court to classify the nature of an action brought, whether as an action for restitution or an action for compensation for damage.

Factortame I 1989 (interim relief)

• Interim relief not granted because YOU CANNOT SUSPEND ACT OF PARLIAMENT. Interim relief didn’t exist as a remedy against the state.
• EU court said they would grant it would set aside the national rule that was limiting the conferral of rights. 

Why does the EU just create its own system of damages and remedies for breaches of EC law????

Aziz v Catalunyacaixa 2013

• Facts: concerned validity of certain terms of mortgage loan agreement and whether they were contrary to an EU Directive. Aziz defaulted and sought annulment of the clause on the ground that it was unfair. Spanish court referred matter to EU as it wasn’t clear whether Spanish law conformed to the Directive.
• Decision: Spanish law contravened EU law, it impaired protection sought by the Directive by making it impossible for the debtor to object to mortgage enforcement proceedings= unfair.

Francovich 1991 (tortious liability in damages)

Unibet 2007

• This case was an opportunity for the EU to create remedies but they didn’t seize it.
• Facts: Unibet British gambling company that went to Sweden, they placed ads there but this is illegal in Sweden as they promote gambling. Swedish authorities bring criminal action against the people who gave Unibet ad space, Unibet believed that a prohibition on gambling services was contrary to the treaty (a right to provide services.) they bring an against Swedish authorities asking for a declaration that Swedish law violated EU law, no such remedy in Swedish law.
• Question for the court- whether principle of effectiveness applied, in order to make their rights effective, a new independent remedy of a declaration needed to be created. Para 40: EU law isn’t intended to create remedies. But in para 41: seems to be a slight shift- if no legal remedy existed which made it possible even indirectly to ensure respect for the community rights. Sometimes EU law will require the creation of new remedies.
• Court suggested there were two other indirect ways Unibet could get what they wanted
• Paragraph 58 of the judgement: bringing an action for damages. As part of the action for damages, the issue of compatibility is raised so indirectly you will get the declaration. Limitation: in this case, Unibet was allowed to advertise, it would be difficult to prove loss that would give rise to damages.
• Paragraph 60/61: process in Swedish law that enables you to apply for an exception from the advertising restrictions. You can get declaration as part of a judicial review of the rejection for the exception.
• Because there are two alternate indirect actions, there was no need to create a right to a declaration.
  • You shouldn’t be forcing people to pursue counter-intuitive actions just to pursue the remedy you want