Case C‑278/20

European Commission

v

Kingdom of Spain

Judgment of the Court (Grand Chamber), 28 June 2022

(Failure of a Member State to fulfil obligations – Liability of Member States for harm caused to individuals by infringements of EU law – Infringement of EU law attributable to the national legislature – Infringement of the Constitution of a Member State attributable to the national legislature – Principles of equivalence and effectiveness)

1. EU law – Rights conferred on individuals – Infringement by a Member State – Obligation to make good loss or harm caused to individuals – Conditions – Rules on compensation – Application of national law – Limits – Compliance with the principles of equivalence and effectiveness – National legislation aligning the rules on the liability of the national legislature for infringements of EU law with the rules laid down for infringements of the Constitution of the Member State by acts of the legislature – Compensation made impossible or excessively difficult – Infringement of the principle of effectiveness – Failure to fulfil obligations

   (see paragraphs 29-33, 59, 60, 84, 106, 123, 124, 141-144, 159, 164)

2. EU law – Rights conferred on individuals – Infringement by a Member State – Obligation to make good damage caused to individuals – Infringement attributable to the national legislature – Irrelevant

   (see paragraphs 30, 105)

Résumé

The principle of State liability for loss or harm caused to individuals by breaches of EU law for which the State can be held responsible is inherent in the system of the Treaties. ( 1 ) That principle applies irrespective of the body of the Member State whose action or omission is the cause of that infringement. ( 2 ) Where the three conditions for establishing the liability of the State for loss or harm caused to individuals have been met, ( 3 ) they have a right to compensation under EU law. ( 4 ) However, it is on the basis of the rules of national law on liability that the State must make reparation for the consequences of the loss or damage caused, provided that the conditions for reparation of loss and damage laid down by national law are not less favourable than those relating to similar domestic claims (principle of equivalence) and are not so framed as to make it, in practice, impossible or excessively difficult to obtain reparation (principle of effectiveness). ( 5 )

Those two principles lie at the heart of the present case in which the European Commission has brought an action against the Kingdom of Spain for failure to fulfil its obligations. Following complaints lodged by individuals, the Commission initiated an EU Pilot procedure ( 6 ) against that Member State. That procedure concerned certain national provisions aligning the rules on the liability of the State legislature for infringements of EU law with the rules on the liability of the State legislature for infringements of the Spanish Constitution. ( 7 ) That procedure, which proved unsuccessful, was closed and the Commission initiated infringement proceedings against the Kingdom of Spain.

By its application, the Commission requested the Court of Justice to declare that, by adopting and maintaining in force those national provisions, the Kingdom of Spain has failed to fulfil its obligations under the principles of effectiveness and equivalence.

Sitting as the Grand Chamber, the Court upholds the Commission’s action in part, finding that the Kingdom of Spain has failed to fulfil its obligations under the principle of effectiveness by adopting and maintaining in force the contested provisions, in that they make compensation for the loss or harm caused to individuals by the Spanish legislature as a result of an infringement of EU law subject to:

Findings of the Court

The first complaint, alleging breach of the principle of effectiveness, is upheld in part by the Court.

First of all, the Court recalls that making reparation, by a Member State, of loss or harm which it caused to an individual in breach of EU law conditional on the requirement that there must have been a prior finding by the Court of an infringement of EU law attributable to that Member State is contrary to the principle of the effectiveness of that law. Similarly, compensation for the loss or harm caused by a breach of EU law attributable to a Member State cannot be conditional on the requirement that the existence of such a breach must be clear from a preliminary ruling delivered by the Court. Consequently, in order to find that the Commission’s arguments are well founded, it is not necessary to determine whether the contested provisions require a decision of the Court finding that the Kingdom of Spain has failed to fulfil one of its obligations under EU law or whether those provisions must be understood as referring to any decision of the Court from which it may be inferred that an act or omission on the part of the Spanish legislature is incompatible with EU law. Compensation for loss or damage caused by a Member State, including the national legislature, as a result of an infringement of EU law cannot, in any event and without infringing the principle of effectiveness, be made subject to the prior delivery of such a decision by the Court.

Next, the Court finds that, although EU law does not preclude the application of national legislation which provides that an individual cannot obtain compensation for loss or harm which he or she has failed to prevent by exercising a legal remedy, it is only on condition that the use of that remedy does not give rise to undue hardship or may reasonably be required of the injured party. That condition is not satisfied by the contested provisions in so far as they make compensation for loss or harm caused by the legislature subject to the condition that the individual harmed has obtained, before any court, a final decision dismissing an action brought against the administrative act which caused the loss or harm, without providing for an exception for cases in which the loss or harm stems directly from an act or omission on the part of the legislature, contrary to EU law, without there being any administrative act open to challenge. In addition, the Court states that requiring the individual harmed, at the stage prior to the action being brought against the administrative act giving rise to the loss or harm, to have pleaded the infringement of EU law which is subsequently recognised, failing which he or she will not be able to obtain compensation for the loss or harm suffered, may amount to an excessive procedural complication, contrary to the principle of effectiveness. At such a stage, it may be excessively difficult, or even impossible, to anticipate what infringement of EU law will ultimately be recognised by the Court. However, the Court rejects the Commission’s arguments in so far as it maintains that only provisions of EU law having direct effect may be properly relied on in such an action.

Finally, according to the contested provisions, first, the limitation period for actions to establish the liability of the State legislature for infringements of EU law attributable to it begins to run on the date of publication in the Official Journal of the Court’s decision finding that the Kingdom of Spain has failed to fulfil its obligations under EU law or from which it is apparent that the act or omission on the part of the legislature giving rise to that loss or harm is incompatible with EU law and, second, compensation may be awarded only in respect of loss or harm which occurred within five years preceding the date. In that regard, the Court finds, first, that the publication of such a decision in the Official Journal cannot, without infringing the principle of effectiveness, be the only possible starting point for that limitation period, since compensation for the loss or harm caused as a result of an infringement of EU law cannot be made subject to the condition that such a decision of the Court exists and the cases in which such a decision does not exist are not covered. Secondly, the Court points out that, in the absence of relevant provisions of EU law, it is for the domestic legal system of each Member State to establish the extent of the compensation and the rules relating to the assessment of the loss or harm caused by an infringement of EU law. However, national legislation setting out the criteria for determining that extent and those rules must, in particular, respect the principle of effectiveness and therefore allow compensation for loss or harm which is commensurate with the loss or harm sustained, in that it must enable the loss or harm actually sustained to be made good in full, which the contested provisions do not allow in all cases.

Examining the second complaint, alleging infringement of the principle of equivalence, the Court holds that this is based on a misreading of its case-law and must therefore be rejected as unfounded.

The Court points out that that principle seeks to circumscribe the procedural autonomy enjoyed by the Member States when they implement EU law and EU law makes no provision in that regard. Accordingly, that principle is intended to apply, as regards State liability for infringements of EU law attributable to it, only where that liability is established on the basis of EU law. In the present case, the Commission seeks, by its second complaint, to call into question, not the conditions under which the principle of State liability for infringements of EU law attributable to that State is implemented in Spain, but the actual conditions under which the State legislature may incur liability for infringements of EU law attributable to it, as they are defined in Spanish law, which faithfully reproduces the conditions laid down in the case-law of the Court. Therefore, even if the conditions for establishing the liability of the State for infringements of EU law attributable to it are less favourable than the conditions for establishing the liability of the State legislature in the event of an infringement of the Constitution, the principle of equivalence is not intended to apply to such a situation.

The Court has, moreover, made it clear that, if Member States can make provision for their liability to be established under less restrictive conditions than those laid down by the Court, then that liability must be regarded as being established not on the basis of EU law but on the basis of national law.

( 1 ) Judgments of 26 January 2010, Transportes Urbanos y Servicios Generales (C‑118/08, EU:C:2010:39, paragraph 29 and the case-law cited), and of 18 January 2022, Thelen Technopark Berlin (C‑261/20, EU:C:2022:33, paragraph 42 and the case-law cited).

( 2 ) To that effect, judgments of 5 March 1996, Brasserie du pêcheur and Factortame (C‑46/93 and C‑48/93, EU:C:1996:79, paragraphs 32 and 36), and of 25 November 2010, Fuß (C‑429/09, EU:C:2010:717, paragraph 46 and the case-law cited).

( 3 ) The three conditions are as follows: the rule of EU law infringed must be intended to confer rights on individuals, the breach of that rule must be sufficiently serious and there must be a direct causal link between that breach and the loss or harm sustained by the individuals.

( 4 ) Judgments of 26 January 2010, Transportes Urbanos y Servicios Generales (C‑118/08, EU:C:2010:39, paragraph 30 and the case-law cited), and of 18 January 2022, Thelen Technopark Berlin (C‑261/20, EU:C:2022:33, paragraph 44 and the case-law cited).

( 5 ) Judgments of 26 January 2010, Transportes Urbanos y Servicios Generales (C‑118/08, EU:C:2010:39, paragraph 31 and the case-law cited), and of 4 October 2018, Kantarev (C‑571/16, EU:C:2018:807, paragraph 123).

( 6 ) System used at an early stage by the Commission to attempt to clarify or resolve problems in order to avoid, where possible, the initiation of infringement proceedings against the Member State concerned.

( 7 ) Article 32(3) to (6) and the second subparagraph of Article 34(1) of Ley 40/2015 de Régimen Jurídico del Sector Público (Law 40/2015 on the legal system governing the public sector) of 1 October 2015 (BOE No 236 of 2 October 2015, p. 89411), and the third subparagraph of Article 67(1) of Ley 39/2015 del Procedimiento Administrativo Común de las Administraciones Públicas (Law 39/2015 on the common administrative procedure of the public authorities) of 1 October 2015 (BOE No 236 of 2 October 2015, p. 89343).