• In the case of Case 5/71 Schöppenstedt [1971] ECR 975, the European Court of Justice ruled on the distinction between an action for damages and an action for annulment.
  • This case involved Article 288(2) of the Treaty establishing the European Economic Community.
  • This case established the criteria for liability and the Schöppenstedt formula.

Facts of the Case

  • C contended Council Regulation No 769/6 caused them to incur losses. C claimed this violated the European Economic Community Treaty so they were entitled to damages.
  • The rule was that an action for annulment could not take place – while the events of the case were ongoing.


  • Can EU Member States consent to payments even though EU provisions state otherwise?
  • Was the European Economic Community Treaty breached?

Held by European Court of Justice

  • D’s claim allowed – the European Economic Community Treaty was not breached by the regulation in question.

European Court of Justice

Article 340 of the Treaty on the Functioning of the European Union

  • Member States cannot approve of payments without consent from EU law.
  • “When legislative action involving measures of economic policy is concerned, the Community does not incur non-contractual liability for damage suffered by individuals as a consequence of that action, by virtue of the provisions contained in Article [340], second paragraph, of Treaty [TFEU], unless a sufficiently flagrant violation of a superior rule of law for the protection of the individual has occurred.”
  • According to the European Court of Justice, there must be a violation of a rule of law principle, the breach must be sufficiently serious and finally the rule should uphold individual rights.
  • To prove liability the applicant should have incurred some damage and the EU should have acted unlawfully to cause the damage.

Editor’s Notes

  • This case demonstrated that action in damages does not apply to the EU.