This panel was convened at 3:00 p.m., Friday, April 1, 2016, by its moderator Donald Francis Donovan of Debevoise & Plimpton LLP, who introduced the panellists: Andres Jana of Bofill Mir & Alvarez Jana, Abogados; Heikki Kanninen of the General Court of the European Union; Margarette May Macaulay of the Inter-American Commission on Human Rights; and Makane Mo'tse Mbengue of the University of Geneva Law School. *
REMARKS BY JUDGE HEIKKI KANNINEN ([dagger])
Within the framework of international law, the European Union (EU) appears as a genuine legal order. Its law departs to a large extent from the traditional approach of international law, which focuses on the relations between states, on the one hand, and on the relations between a state and its citizens, on the other hand. The EU is obviously a multiform structure, when we look at the remedies that are available in the field of its legal system.
Legal remedies at the national and/or EU levels constitute a comprehensive, although not always very understandable, system. Let me describe how this system works. In order not to be too abstract and due to the limited time, I will take an example in the field of environmental law.
The EU has a large competence in this field. Areas such as nature protection, waste management, air quality, water protection and industrial pollution control, environment impact assessment, and access to environmental information fall within the scope of EU legislation. This legislation is mainly adopted through EU directives, which are binding on member states as to their result but leave national authorities the choice of form and methods for their implementation and application at the national level.
In principle, a directive needs to be implemented in the member states by means of national legislation. It has to be done within a time limit fixed by the directive itself. However, it is interesting to figure out what the consequences are, when a member state fails to implement a directive within the indicated time limit. When it happens, there is a breach of EU law by the member state at stake, that can do individuals harm, have negative effect on the functioning of the EU internal market, and impede the achievement of the environmental objectives of the EU. It is relatively frequent that there are delays in the correct implementation of EU environmental directives.
In the EU legal system, it is remarkable that individuals are, under certain conditions, able to invoke directly the nonimplemented or incorrectly implemented EU directive at the national level, before a national court, in order to set aside the application of the conflicting national provision and, therefore, to get the directive directly applied. This means that, thanks to the direct effect of EU law in national law, national judicial remedies can often prevent infringement from causing damages. This illustrates one important feature of the EU system: reparation of damages is an important legal remedy, but it is subsidiary. The general approach of EU law is that it is preferable to have efficient legal remedies that enable the removal of the illegality than to let the illegality cause damage which will later be compensated.
However, even in the EU, compensation for damages is a useful, although complementary, remedy if the infringement of EU law by state authorities has caused damages to individuals. The principle of state liability in EU law is perhaps the one which departs the most radically from the traditional approach of international law concerning the relations between a state and its citizens.
It is currently well established in European case law that there is a right to get damages for infringement of EU law by state authorities, which include the courts of the member state, if some conditions are met. Basically, three conditions must be fulfilled to obtain damages:
The rule of infringed EU law must be intended to confer rights on individuals;
The breach of that rule must be sufficiently serious; and
There must be a causal link between the breach and the loss or damage sustained by the individuals in question.
The other aspects of the liability, for example the determination of the causal link and of damages, are governed by national law, providing that it is not impossible or excessively difficult for a remedy to be obtained.
As I have already explained, on the one hand, EU law tries to guarantee that it will be directly applicable by national courts even if the member state, especially its legislative and executive authorities, has failed to fulfill its obligations under EU law. On the other hand, a legal or natural person can obtain compensation for damages caused by the infringement of EU law by state authorities.
In addition to these remedies, there is a centralized remedy at the EU level, which takes place before the EU Court of Justice. It is the so-called "infringement procedure." Article 259 of the Treaty on the Functioning of the EU (TFEU) provides that a member state may initiate an action before the EU Court of Justice if it determines that another member state has failed to fulfill its obligation under EU law. This kind of litigation is extremely rare between two states because member states usually prefer to leave the "dirty job" to the European Commission, whose task it is to ensure, subject to judicial control by the EU Court of Justice, that EU law is applied.
If the European Commission considers that a member state has failed to fulfill its obligations under EU law, it can bring an infringement action against that member state before the EU Court of Justice pursuant to TFEU Article 258. If the Court agrees with the Commission, it will render a declaratory judgment, stating that the member state at stake has infringed EU law. This member State has the obligation to comply with the judgment of the EU Court of Justice.
Taking our example, this means that, firstly, the Commission examines whether the member state has correctly implemented the directive. Secondly, if the preliminary procedure (precontentious procedure) has failed, it can bring the case before the EU Court of Justice and ask the Court to declare that the member state has breached its EU obligation since it has not implemented the directive.
The Commission conducts routine monitoring of the implementation of directives and this can be followed by an infringement procedure. However, infringement procedures are often initiated by the Commission after it has received a complaint from individuals or, for example, interest groups or nongovernmental organizations.
As I previously mentioned, a judgment of the EU Court of Justice establishing that a member state has not fulfilled its EU obligations is by nature declaratory. The EU Court of Justice has no specific power to order the member state to do, or not do, something. The member state has the obligation to execute the EU judgment, but nobody can force the member state to do so. TFEU Article 260 provides: "If the Court of Justice of the European Union finds that a Member State has failed to fulfil an obligation under the Treaties, the State shall be required to take the necessary measures to comply with the judgment of the Court."
Unfortunately, compliance with the Court's judgments is by no means automatic. It may take years before the member state takes the necessary measures.
Initially, there was no provision in the Treaties for sanctions against a member state for disobeying a judgment. Today, the EU Court of Justice can impose a sanction: a fine. This possibility was introduced in 1992 by the Treaty of Maastricht.
If the Commission considers that a member state has failed to take the necessary measures to comply with a judgment of the EU Court of Justice, it can bring the case back before the EU Court of Justice and request that a lump sum and/or a penalty payment (periodic penalty payment is a payment of a specific amount for each day or period of time that elapses until compliance takes place) be paid by the member state concerned.
The Lisbon Treaty of 2007 sharpened the sanction procedure. On the one hand, it simplifies the pre-contentious procedure. On the other hand, it simplified the previous two-step procedure (first a declaratory judgment, then a second judgment imposing a sanction) in the case of nonimplementation of a directive adopted under legislative procedure. The Commission may specify the amount of a lump sum or penalty payment directly in the initial action brought before the EU Court of Justice. In that case, there is no need to first have a declaratory judgment.
Both sanctions (lump sum/penalty payment) can be imposed simultaneously, if the infringement continues by the time the EU Court of Justice delivers its judgment. These sanctions are, of course, not penal by their nature, but rather administrative. The lump sum is a one-off payment aimed at punishing the member state for its misbehavior. The penalty payment is imposed in order to force the member state to remove the infringement of EU law as soon as possible.
The next question is how to determine the amount of the sanctions. The EU Treaties are silent not only as to the proper amount of these fines, but also as to how they ought to be calculated.
When the Commission brings the case before the EU Court of Justice, it shall specify the amount of the lump sum or penalty payment which it considers appropriate in the circumstances. The EU Court of Justice is not bound by the amount specified by the Commission (it can even impose a higher amount than the amount proposed by the Commission; except in the case of TFEU Article 260, paragraph 3 where the Commission asks for the imposition of a lump sum or penalty already in the first action before the EU Court of Justice).
In the absence of treaty provisions providing more information, the...