Recent Developments May 2018
Conditions for EU Non-Contractual Liability of the Union
In accordance with the settled case law, a successful action for damages requires the following cumulative conditions for the EU's non-contractual liability to be met:
- An unlawful EU act or unlawful conduct: an EU institution must have acted unlawfully by committing a sufficiently serious breach of a rule of law intended to confer rights on individuals;
- Loss or actual damage: the harm alleged must actually exist (e.g. reduction of assets, loss of profit or an opportunity, non-material damage or future damage) and the existence and extent of the damage must be conclusively proven by the applicant; and,
- Causal link: there must be a direct link between the unlawful act or conduct on the part of the EU institution and the damage alleged.
In case C-376/16 P (EUIPO v European Dynamics), the EUIPO sought the annulment of the GC judgment in case T-556/11. The GC judgment annulled the EUIPO decision rejecting the tender of European Dynamics and ordered EUIPO to compensate European Dynamics for the damages suffered as a result of the loss of opportunity. On 3 May 2018, the CJEU partially annulled the judgment of the GC, and dismissed the claim for compensation for loss of opportunity. The CJEU reasoned that it is insufficient to put forward that the proper application of the tendering procedure would have resulted in a better ranking for the tender submitted by European Dynamics. It must be proved that European Dynamics would have been ranked first or would have obtained the contract at issue. Furthermore, the CJEU ruled that the causal link between that rejection and the damages suffered due to the loss of the opportunity to be awarded the contract at issue, was not established.
In case T-197/17 (Abel and Others v Commission) 1,429 applicants claimed that the EU Regulation (EU) 2016/646 setting the emission limits for light passenger and commercial vehicles (Euro 6) caused them both material and non-material damage. The GC held that the actual material damages could not be established, since the applicants failed to provide conclusive evidence that the deterioration of air quality was due to the regulation on emission limits. Furthermore, the applicants had not provided any individual evidence demonstrating the alleged harm to the 1,429 applicants who were living in different regions or in different circumstances. As to the non-material damages, the GC held that the high level of awareness of the problem of air pollution was insufficient to establish that the alleged health fears affect the applicants' living conditions to such an extent that a finding of damage can be made. More generally, the GC noted that a feeling that any person may have does not constitute non-material damage that may be the subject of compensation.
The dismissal of the group action for damages in case T-197/17 is without prejudice to the outcome of similar actions lodged by the cities of Paris (T-339/16), Brussels (T-352/16) and Madrid (T-391/16) against the same regulation on emission limits.
The recent dismissals demonstrate the high burden of proof on the applicants in EU actions for damages with regard to the three cumulative conditions for a successful action, namely (i) the unlawfulness of an act or conduct of the Union, (ii) the loss or actual damage and (iii) the causal link between the first two conditions.
The Houthoff EU team is available at email@example.com or +32 (0)2 507 98 00.