Boris Ignachkov Legal Principles and Key Points
- 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.
Issues
- 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.