Case C-48/93 Factortame (No. 3)/Brasserie de Pêcheur [1996] ECR I-1029

Key point

  • In an area of member state discretion, Francovich liability arises only if the member state ‘manifestly and gravely disregarded the limits on its discretion’ such that there is a sufficiently serious breach

Facts

  • The claimants, including the Spanish fisherman from the Factortame case and German brewers from the Brasserie case, sought compensation from their governments for breach of Community law
  • National courts sought preliminary ruling from the Court of Justice on the conditions under which a right to reparation was guaranteed under EU law

Judgment

Three conditions for state liability

  • Where the breach of Community law occurs in an area where the national legislation has wide discretion to make legislative choices under Community law, the member state must make good any loss and damage caused to individuals by the breach if:
    1. The rule of Community law relied was intended to confer rights on individuals
    2. The breach was sufficiently serious
    3. There was a direct causal link between the breach and the damage suffered

Test for serious breach

  • The test for a sufficiently serious breach is whether the member state had ‘manifestly and gravely disregarded the limits on its discretion’
  • Reason
    • Where the Community legislates in an area of wide discretion, the Community only incurred non-contractual liability under Article 288 of the EC Treaty (now Article 340 TFEU) if there is a manifest and grave breach of limits on the powers
    • Where national authorities have wide discretion, the conditions should be the same
  • On any view, a breach will be sufficiently serious if it has persisted despite a decision of the ECJ that it is an infringement

Commentary

  • The test of manifest and grave breach of discretion was meant to unify the conditions of liability for member states and Community institutions – it was laid down as the applicable test for direct actions for compensation against EU institutions in Mulder
  • Lecz: The Court’s relaxation of the conditions of liability under Francovich, in particular the in­clusion among them of the requirement of serious breach in situations where the Member States had some discretion, largely disabled the remedy as a method of improving compli­ance and protecting individual rights