Suitable Legal Framework

With particular reference to the case law of the European Court of Justice and Court of First Instance, critically assess to what extent the EC Treaty provisions on annulment actions (Article 230 EC) and on non-contractual liability (Articles 235 and 288 EC) provide a suitable legal framework for rendering the legislative activities of European Community institutions accountable to private individuals? Article 230 EC Article 230 EC provides that qualified persons may challenge the validity of Community acts before the European Courts. The act complained of may be declared void if such an action is successful. Under Article 230 of the Treaty the European Court of Justice is thus entitled to examine the actions of the EU institutions to determine their validity in the context of the acquis communautaire[1]. In partnership with Article 230, Article 232 EC stipulates that the Court may rule on the inactivity of the institutions in circumstances where they are under a legal duty to act.[2] Standing to sue or locus standi is determined in two classes: non-privileged applicants and privileged applicants. The class of privileged applicants includes the Member States, the European Commission and the European Council and as a result of the case Parliament v Council (Chernobyl),[3] the European Parliament and the European Central Bank where actions are initiated for the purpose of defending their prerogatives. Non-privileged applicants include all other natural and legal entities including private individuals. It is the standing of such private individuals that constitutes the focus of this paper and this class of litigant is therefore discussed in more detail below. The locus standi of private individuals As stated, EU citizens qualify as non-privileged applicants. Article 230 (4) defines the entitlement of non-privileged applicants: Any natural or legal person may, under the same conditions, institute proceedings against a decision addressed to that person or against a decision which, although in the form of a regulation or a decision addressed to another person, is of direct and individual concern to the former. The conditions emphasised are set down in the first paragraph of Article 230 and are applicable to both classes of applicant. To be reviewable the act must be of an EC institution, deriving legal effects. The applicant must meet a two month deadline (which runs from publication of the measure or its notification to the applicant) and he must claim one of the grounds for annulment stipulated in paragraph two, namely: infringement of an essential procedural requirement, lack of competence, misuse of powers, infringement of the treaty or any rule relating to its application.[4] The aim and effect of Article 230(4) is to restrict the availability access to judicial review in the European Court. Only measures which are individual or in which applicants have a strict personal interest are challengeable. Generally speaking, measures of general effect cannot typically be challenged by non-privileged applicants. In summary, Article 230 review proceedings can only be brought in the following situations: • 1. Where a decision is formally addressed to the applicant; • 2. Where a decision is addressed to third parties and the applicant asserts it is of direct and individual concern to him or her; • 3. Where a decision is in the form of a regulation and is of direct and individual concern to the applicant; Article 235 and 288(2) EC Articles 235 and 288(2) EC provide that where private individuals, companies or Member States sustain damage as a consequence of the fault of the European Community legal action for damages may be filed at the Court of First Instance (in the case of individuals and firms) or at the Court of Justice (in the case of Member States). The following conditions must be satisfied before an award of damages can be made: 1) There must be an unlawful act by a Community institution or by a member of its staff in the exercise of his functions; 2) Actual harm must have been suffered; 3) There must be a causal link between the act of the Community Institution and the damage sustained. The case of Edouard Dubois et Fils SA -v- Council[5] was decided under Articles 235 and 288(2). Here the applicant was a customs agent seeking damages for loss caused by completion of the single internal market. The applicant’s business had been effectively destroyed by the policy and he claimed compensation on the basis of strict liability or fault in the alternative. In dismissing the applicant’s application, the Court of First Instance ruled that the agreement to complete the Single Internal Market, which is enshrined in the Single European Act as an agreement between Member States, could not sustain liability on the part of the European Community Article 288 EC provides that: “In the case of non-contractual liability, the Community shall, in accordance with the general principles common to the laws of the Member States, make good any damage caused by its institutions or by its servants in the performance of their duties.” This rule applies under the same conditions to damage caused by the European Central Bank in the performance of its activities. In Schoppenstadt[6] the Court ruled that non-contractual liability of the Community pre-supposes, as a minimum, the unlawful nature of the act complained of. No non-contractual liability will arise concerning economic policy measures unless a sufficiently flagrant violation of a superior rule of law aimed at the protection of individuals has taken place. It is submitted that this construct incorporates such things as the general principles of equality and proportionality, however the concept of flagrant violation has been narrowly construed. In Bayersche HNL Vermehrungsbetriebe GMBH v Council[7] the Court found that no liability would be incurred unless the institution concerned had manifestly and gravely disregarded the limits on the exercise of its power and committed a serious and inexcusable breach. In JA©go-QuA©rA© et Cie SA v. Commission of the European Communities[8], which concerned an application for annulment of a fisheries regulation, it was argued that the procedural route of an action for damages based on the non-contractual liability of the Community cannot yield a remedy that effectively safeguards the interests of the affected individual. It was said that such an action will not cause the deletion from Community law of a measure which is nevertheless necessarily deemed illegal. Given that it assumes that damage has been caused directly by the application of the measure in question, such an action is subject to issues of substance and admissibility which differ from those determining actions for annulment, and does not therefore place the Community judicature in a position whereby it can carry out the comprehensive judicial review which it is its task to perform. Analysis It is true that individuals regularly make successful challenges to Commission decisions in the field of competition law.[9] Consten and Grundig v Commission[10] is one early example of the effectiveness of judicial review in that specific field. However, real problems arise where the decision challenged is addressed to another person (Plaumann[11] dictates that this includes Member States). As stated, a private individual can challenge a decision addressed to another party only where he or she is individually and directly concerned by the decision. This requires proof of more than a legal interest in the disputed measure.[12] Both the direct and individual elements must be met. A measure is treated as of direct concern if it affects the legal situation of the applicant directly and gives no discretion to the addressees of the measure given responsibility for implementation. Implementation must be the automatic consequence of Community rules without the need for the intervention of other intermediate rules: Bock v. Commission.[13] As to individual concern Plaumann was influential in determining the European Court of Justice’s attitude and approach to judicial review. The Court found that if a private individual is to be considered to have the right to seek to annul a decision not addressed to them, he or she must show that they are individually concerned by proving that the decision: ‘affects them by reason of certain attributes which are peculiar to them or by reason of circumstances in which they are differentiated from all other persons and by virtue of these factors distinguishes them individually’[14]. The so-called Plaumann test has been employed in many subsequent cases. The test is clearly narrow and restrictive and extremely hard to satisfy in reality. Toepfer v. Commission[15] is one rare example of success. The applicant, a cereal importer, was deemed to be individually concerned only because the disputted decision was restricted to a specific group of importers of cereals, who had been refused an import license on a particular day. It was in cases involving agriculture and customs that the Court’s restrictive approach was crystallised and it is perhaps easy why it took such a strict line in those respective contexts. However, as the EU has extended the scope and range of its activities and jurisdiction, the approach of the European Courts has remained highly restrictive, ostensibly because the Court continues to apply the jurisprudence set down in its earlier authorities: see for example: Zunis Holdings S.A. v. Commission[16] and Associazione Agricoltori della Provincia di Rovigo et al. v. Commission (Po Delta)[17], Conclusion It is clear that the Treaty and the Courts have conspired to make it extremely difficult for private individuals to hold the European Community institutions accountable for their legislative activities. The availability of annulment actions (Article 230 EC) and actions for non-contractual liability (Articles 235 and 288 EC) has been highly restricted by the Treaty and by the Court’s interpretation of it. This can come as no surprise and there are obvious policy concerns that mitigate against a situation in which open season could be declared on Community activities. However it is submitted that the case law is now too strict in both areas and that justice would be served by loosening the qualifications necessary to ground worthy applications. THE END WORD COUNT: 1768 (excluding footnotes) BIBLIOGRAPHY The Treaty of Rome (1957 as amended) Protecting the Interests of Civil Society in Community Decision-Making – The Limits of Article 230 EC, A Cygan, (2003) 52 International Comparative Law Quarterly 995-1012 Judicial Review of European Administrative Procedure, Jurgen Schwarz (2004) 68 Law & Contemp. Probs. 85 Basic Community Cases, Rudden and Phelan, (1997) Oxford University Press Law of the European Community, Fairhurst, J., (2005) Longman Textbook on EC Law, Steiner and Woods, (2003) Blackstone Law of the European Union, Kent, P., (2001) Longman Law of the European Union, Shaw J., (2000) Palgrave Law Masters Text, Cases and Materials on European Union Law, Tillotson and Foster, (2003) Cavendish 1

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Footnotes

[1] The total accumulated body of EU law. [2] Note also that Article 241 EC provides a mechanism for indirect review where a plea of illegality is made. [3] Case C-70/88. [4] See for comment: Protecting the Interests of Civil Society in Community Decision-Making – The Limits of Article 230 EC, A Cygan, (2003) 52 International Comparative Law Quarterly 995-1012. [5] T-113/93. [6] Case 5/71. [7] 1978 ECR 1. [8] Case T-177/01. [9] Law of the European Union, Jo Shaw, (2000) Palgrave Law Masters, p.506, [10] Case 56 and 58/64. [11] Case 25/62. [12] See for comment: Judicial Review of European Administrative Procedure, Jurgen Schwarz (2004) 68 Law & Contemp. Probs. 85. [13] Case 62/70. [14] Plaumann para.107. [15] Cases 106-107/63. [16] Case T-83/92. [17] Case T-117/94.

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