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Governmental Liability after Francovich

Published online by Cambridge University Press:  16 January 2009

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Governmental liability used to be on the retreat, especially but not only in the field of negligence liability. In Bourgoin S.A. v. Ministry of Agriculture, Fisheries and Food the majority of the Court of Appeal flatly stated that not every infringement of Community law was a tort. Moreover, in the recent decision in Murphy v. Brentwood District Council the House of Lords, departing from Anns v. Merton London Borough Council, dramatically curtailed any hope—or fear, it depends on the point of view—of development of governmental liability in the field of economic loss.

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Copyright © Cambridge Law Journal and Contributors 1993

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References

1 [1986] 1 Q.B. 716.

2 [1990] A.C. 728.

3 [1978] A.C. 728.

4 See Howarth, D., “Negligence after Murphy: Time to Re-think” [1991] C.L.J. 58: R. O'Dair, “Murphy v. Brentwood District Council: A House With Firm Foundations?” (1991) 54 M.L.R. 561Google Scholar; Harris, J.W., “Murphy makes it Eight—Overruling comes to Negligence” (1991) 11 Journal of Legal Studies 416; I.N.D. Wallace, “Anns Beyond Repair” (1991) 107 L.O.R. 228; B.S. Markcsinis and S. Dcakin, “The Random Element of their Lordships' Infallible Judgment: An Economic and Comparative Analysis of the Tort of Negligence from Anns to Murphy” (1992)55 M.L.R. 619.Google Scholar

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7 Lord Macmillan's speech has been recently studied by A. Rodger, “Lord Macmillan's Speech in Donoghue v. Stevenson” (1992) 108 L.O.R. 236; the passage quoted is discussed at p. 242.

8 [1964] A.C. 465; see Craig, P.P., “Negligent Misstatements, Negligent Acts and Economic Loss” (1976)92L.Q.R.213.Google Scholar

9 [1970] A.C. 1004 at 1026, per Lord Reid, who made a reference to the Atkin dictum.

10 [1978] A.C. 728 at 751 et seq.

11 See for example B. v. Islington Health Authority [1991] 1 Q.B. 638, (1992) 3 W.L.R. 637 (C.A.), in which the fact that the defendant was a public body is in no way discussed.

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20 [1991] 1 A.C. 398, 471.

21 [1991] 1 A.C. 398, 487.

22 [1991] 1 A.C. 398, 499.

23 [1964] A.C. 465; Hedley Byrne was followed by the Court of Appeal in Ministry of Housing and Local Government v. Sharp [1970] 2 Q.B. 223, unusual for a damages claim in that both the plaintiff and the second defendant were public authorities.

24 [1991] 1 A.C. 398, 490.

25 [1989] Q.B. 1, at 22, per Glidewell L.J., with whom his brethren concurred.

26 [1988] A.C. 175.

27 [1990] 1 W.L.R. 821 (P.C.).

28 Yuen Kun-yeu v. A -G of Hong Kong [1988] A.C. 175, 191 I., per Lord Keith of Kinkel.

29 Yuen Kun-yeu v. A-G of Hong Kong [1988] A.C. 175 at 196, per Lord Keith of Kinkel, and Davis v. Radcliffe [1990] 1 W.L.R. 821 at 827, per Lord Goff.

30 In Rowling v. Takaro Properties Ltd. [1988] A.C. 473, the Privy Council ruled that taking into consideration a legally irrelevant factor in coming to an administrative decision did not, in the circumstances of the case, amount to a breach of a duty of care, and consequently held it unnecessary to decide whether such a duty existed.

31 [1986] 1 O.B. 716.

32 Its limits were shown in the House of Lords decision in Jones v. Swansea City Council [1990] 1 W.L.R. 1453, reversing [1990] 1 W.L.R. 54 (C.A.).

33 Joint Cases C-6/90 and C-9/90, [1990] I.R.L.R. 84.

34 Pret. Bassano del Grappa, 30 decembre 1989, published in Dir. Prat. Lav. 1990, 1698, and Pret. Vicenza, 9 luglio 1989, unrep., whose text the author has read thanks to Av v.ti Claudio Mondin and Aldo Campesan, counsel to the plaintiffs in both cases.

35 O.J.E.C. 1980, No. L. 283/23.

36 The liability problem had been analysed in detail by Simon, D. and A. Barav, “La responsabilitid´ l'administration nationale en cas de violation du droit communautaire”, (1987) R.M.C. 165 ff.Google Scholar

37 Case 26/62, Rec. 1963, 3, [1963] E.C.R. 10

38 Case 6/64, Rec. 1964, 1141, [1964] E.C.R. 585.

39 Case 106/77, Rec. 1978, 629, [1978] E.C.R. 629.

40 Case C-213/89, Rec. 1990,1, 2433, [1991] 1 A.C. 603.

41 The case law concerning article 5 is analysed by Lang, J.T., “Community Constitutional Law: Article 5 EEC Treaty” (1990) 27 C.M.L. Rev. 645.Google Scholar

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43 Case 45/76, [1976] E.C.R. 2053, cons. 12–17.

44 But for a traditional reading of the rule see Búrca, G.de, “Giving Effect to European Community Directives” (1992) 55 M.L.R. 215, at p. 238.Google Scholar

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47 Case 199/82, [1983] E.C.R. 3595.

48 R. v. Secretary of Stale for Transport, ex pane Factortame Ltd. No. 2. [1991] 1 A.C. 603; see the commentaries by Oliver, D., “Fishing on the Incoming Tide” (1991) 54 M.L.R. 442Google Scholar, and Toth, A.G. (1990) 27 C.M.L. Rev. 574Google Scholar; see also Wade, H.W.R., “What has Happened to the Sovereignty of Parliament?” (1991) 107 L.Q.R. 1; Id., “Injunctive Relief against the Crown and Ministers”Google Scholaribidem, 4; Gravells, N.P., “Disapplying an Act of Parliament Pending Ruling: Constitutional Enormity or Community Law Right?” [1989] P.L. 568Google Scholar; Barav, A., “Enforcement of Community Rights in the National Courts: The Case for Jurisdiction to Grant an Interim Relief” (1989) 26 C.M.L. Rev. 369 ff.Google Scholar

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51 [1990] 2 A.C. 85.

52 [1990] 2 A.C. 85 at 152, per Lord Bridge of Harwich, with whom all the other Law Lords concurred.

53 [1991] 1 A.C. 603, 644.

54 [1991] 1 A.C. 603, 643–4.

55 [1991] 1 A.C. 603, 644.

56 O.J.E.C. 1989, No. L. 395/34.

57 O.J.E.C. 1992, No. L. 76/14.

58 See Bronckers, M., “Private Enforcement of 1992: Do Trade and Industry Stand a Chance against Member States?” (1989) 26 C.M.L. Rev. 528.Google Scholar

59 Ross, M., “Beyond Francovich” (1993) 56 M.L.R. 55 at p. 62 assumes that the three conditions apply whatever instrument of Community law is concerned.Google Scholar

60 See on this point Parker, K., “State Liability in Damages for Breach of Community Law” (1992) 108 L.Q.R. 184Google Scholar. But cfSteiner, J., “From Direct Effects to Francovich: Shifting Means of Enforcement of Community Law” (1993) 18 E.L. Rev. 3.Google Scholar

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62 See Craig, P.P., “Compensation in Public Law” (1980) 96 L.Q.R. 444.Google Scholar

63 On Marshall see Arnull, A., “The Direct Effect of Directives: Grasping the Nettle” (1986) 35 I. & C.L.Q. 939.Google Scholar

64 See Cafagno, M., “Ordinamento comunitario e responsabilità per lesione di interessi legittimi”Google Scholar, and Spena, F. Russo, “La Corte di giustizia ridefinisce la responsabilità degli Stati membri per violazione del diritto comunitario, both in Rivisia iialiana di diritto pubblico comunitario 1992,138 etseq.Google Scholar; Caranta, R., “La responsabilita oggettiva dei pubblici poteri per violazioni del diritto comunitario”, in Giurisprudenzaiialiana 1992, 1, 1, 1169Google Scholar; Cartabia, M., “Omissioni del legislatore, diritti sociali e risarcimento dei danni (A proposito della sentenza ”Francovich“ della Corte di Giustizia delle Comunità europee)”, in Giurisprudenza costituzionale 1992, II, 483Google Scholar; Barone, A. and Pardolesi, R., “II fatto illecito del legislatore”Google Scholar, and Ponzanelli, G., “L'Europa e la responsabilita civile”, both in Foro italiano 1992, IV, 145 etseq.Google Scholar

65 For an outline of Italian law previous to Francovich see the contribution by Clarich, M. in Bradley, A.W. and Bell, J. (eds.). Governmental Liability, Compensation and the Law of Civil Wrongs: A Comparative Study (London 1991), ch. 10.Google Scholar

66 For a brief outline in English see Certoma, G.L., The Italian Legal System (London 1985), pp. 2223Google Scholar. Aslate as 1987 a seminar devoted to the theme “ma che cos'é questo interesse legittimo?” (what is a legitimate interest?) was held among some leading scholars; but of course problems were not solved: see the proceedings published in Foro amministrativo 1988, 317 et seq., and the remarks by Angeletti, A., “L'interesse legittimo tra prowedimento amministrativo e criteri discretivi”, in Scritti in onore di M.S.Giannini, vol. III, Milan, 1988, pp. 53et seq.Google Scholar

67 For a detailed analysis see Angeletti, A., Aspetti problematici della discriminazione delle giurisdizioni e Stato amministrativo (Milan 1980).Google Scholar

68 Such a rule was even impugned before the Constitutional Court, to no avail: see decision 25 marzo, 1980 n. 35, in Giurisprudenza costituzionale 1980, I, 262.Google Scholar

69 See, with reference to banking activity, Corte di cassazione 25 marzo 1988, in Banca, borsa, titoli di credito, 1989, II, 7.Google Scholar

70 See Corte di cassazione 14 gennaio 1992 n. 367, in Banca, Borsa, Titoli di credito 1992, I, 393Google Scholar, with considerations by Marzona, N., “Le posizioni soggettive del risparmiatore secondo il giudicedella giurisdizione: una difficile tutela”.Google Scholar

71 For more detail and references see Tassone, S., “Ancora sul risarcimento del danno per lesione di interessi legittimi”, in Giurisprudenza ilaliana 1992, I, 1, 303.Google Scholar

72 Case 380/97 [1989] E.C.R. 2491

73 See Barav, A., (1991) 141 N.L.J. 1584.Google Scholar

74 Pret. Bassano, 3 agosto 1992, unrep.

75 Pret. Treviso, 31 ottobre 1992, unrep.

76 Pistoia, Pret, 20 ottobre 1992, in Giustizia civile 1993, 1, 301.Google Scholar

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79 Case 90/82 [1983] E.C.R. 2011, and Case 169/87 [1988] E.C.R. 4093.

80 See also Parker, K., op. cit. supra note 60, p. 181Google Scholar; Szyszczak, E. “European Community Law: New Remedies, New Directions?” (1992) 55 M.L.R. 690, at p. 696.Google Scholar

81 [1986] Q.B. 716. This opinion is widely shared: see Greenwood, C., “Effect of EC Directives in National Law” [1992] C.L.J. 3, at p. 6.Google Scholar

82 [1974] Ch. 381, at 396.

83 In Garden Cottage Foods Ltd. v. Milk Marketing Board [1984] 1 A.C. 130, the House of Lords, Lord Wilberforce dissenting, held it clearly arguable that the infringement of article 86 of the EEC Treaty by the defendant public body could give rise to an action for damages; the decision, rendered in a proceeding for interim relief, was distinguished by the majority of the Court of Appeal in Bourgoin owing to the private law nature of the act imputed to the Board.Google Scholar

84 [1986] Q.B. 716 at 775, per Oliver, L.J., with whom his brethren concurred.Google Scholar

85 [1984] 1 A.C. 130 at 145, per Lord Diplock, and at 151, per Lord Wilberforce, with whom the other Law Lords concurred.

86 [1986] Q.B. 716 at 790.

87 [1986] Q.B. 716 at 788.

88 In R. v. Inland Revenue Commissioners [1982] A.C. 617 at 641, Lord Diplock observed:“progress towards a comprehensive system of administrative law … I regard as having been the greatest achievement of the English courts in my judicial life-time”.

89 [1983] 2 A.C. 237.

90 [1983] 2 A.C. 286.

91 On the latter decision see the remarks by Weir, T., “Governmental Liability” [1989] P.L. 40 at p. 52et seq.; Cocks was distinguished in Davy v. Spelthorne Borough Council [1984] 1 A.C. 262, an action for damages.Google Scholar

92 See Cane, P., “Private Rights and Public Procedure” [1992] P.L. 193Google Scholar; Beatson, J., “‘Public’ and ‘Private” in English Administrative Law”” (1987)Google Scholar 103 L.Q.R. 39; SirWoolf, Harry, “Public Law–Private Law: Why the Divide? A Personal View” [1986] P.L. 221.Google Scholar

93 Legitimate (or reasonable) interest (or expectation) has been a term of art in many decisions by Common law courts: e.g., as to the use of “legitimate expectation”, Schmidt v. Secretary of State for Home Affairs [1969] 2 Ch. 149, 170, per Lord Denning; for “reasonable expectation”, Attorney-General of Hong Kong v. Ng Yeun Shiu [1983] 2 A.C. 629, at 636, per Lord Fraser of Tullybelton; in O'Reilly v. Mackman [1983] 2 A.C. 237, 275, per Lord Diplock “legitimate expectation” is opposed to “private law right” some examples of the use of “legitimate expectations” are to be found in Council of Civil Service Unions v. Minister of the Civil Service [1985] 1 A.C. 374.

94 [1991] 4 All E.R. 973; [1992] 4 All E.R. 280 (C.A.).

95 [1949] A.C. 398.

96 [1949] A.C. 398, at 405, per Lord Simonds; similarly at 411, per Lord du Parcq; at 413, per Lord Normand.

97 In this light could be read Jones v. Department of Employment[1989] Q.B. 1: see also Cane, P., Tort Law and Economic Interests (Oxford 1991), 256.CrossRefGoogle Scholar

98 [1949] A.C. 398 at 414, per Lord Normand; 416 per Lord Reid.

99 (1878) 3 App. Cas. 430.

100 The House of Lords' decision in Geddis was distinguished by Goff J., as he then was, in Fellowes v. Rother District Council [1983] 1 AU E.R. 513; as Cane, P., “Ultra Vires Breach of Statutory Duty” [1981] P.L. 18, observed, in order to impose liability courts sometimes see duties where only powers are.Google Scholar

101 [1992] 3 W.L.R. 170, 188.

102 On Kirklees see also Ross, M., op. cit. supra note 59, p. 70et. seqGoogle Scholar., and Robertson, A.,“Effective Remedies in EEC law before the House of Lords”, (1993) 109, L.Q.R. 27.Google Scholar

103 Since 1971 the rule is that the claim for damages “was established by the Treaty as an independent form of action with a particular purpose to fulfil within the system of actions”: Case 4/69, E.C.R. 1971, 336, cons. 6. But see the contrary opinion by Duffy, P., “Damages against the State: a new Remedy for Failure to Implement Community Obligations” (1992) 17 E.L. Rev. 133, at p. 135.Google Scholar

104 See Ukrow, S. Schlemmer-Schulte–J., “Haftung des Staatcs gegeniiber dem Marktbiirger fur gemeinschaftsrechtswidriges Verhalten”, in Europarecht 1992, 82, p. 93Google Scholar; Nettesheim, M.Google Scholar, Gemeinschaftsrechtliche Vorgaben für das deutsche Staatshaftungsrecht”, Die Öffentliche Verwaltung 1992, 999, p. 1004.Google Scholar In Germany, too, many commentaries have been devoted to the Francovich decision: see also Ossenbiihl, F., “Der gemeinschaftsrechtliche Staatshaftungsanspruch”, in Deutsches Verwaltungsblatt 1992, 993Google Scholar; Hailbronner, K., “Staatshaftung bei saumiger Umsetzung von EG-Richtlinien”, in Juristen Zeitung 1992, 284Google Scholar; Triantafyllou, D., “Haftung der Mitgliedstaaten fur Nichtumsctzung von EG-Recht”, Die Offentliche Verwaltung 1992, 564.Google Scholar

105 Op. cit. supra note 61, p. 482, where references to the European Court decisions can be found.

106 See Greenwood, C., op. cit. supra note 81, p. 6. In Duke v. G.E.C. Reliance Ltd. [ 1988] 1 A.C. 618, the action brought by a woman forced to retire at an age different from that applied to men was dismissed: Council Directive 76/207 was thought not to have direct (horizontal) effect against the employer, which was a private person; there was the same outcome in Finnegan v. Clowney Youth Training Programme Ltd. [1990] 2 All E.R. 546, another case related to the age for retirement, and in Webb v. EMO Air Cargo (UK) Ltd. 11992] 2 All E.R. 43 (C. A.), which decided on a dismissal of a woman on grounds related to her pregnancy. On appeal the question was referred to the European Court by the House of Lords: [1992] 4 All E.R. 929.Google Scholar

107 See more generally Schwarze, J., “Tendencies towards a Common Administrative Law in Europe” (1991) 16 E.L.Rev. 3Google Scholar; Rivero, J., “Vers un droit commun européen: nouvelles perspectives en droit administratif', in Pages de doctrine (Paris 1980), p. 489et. seq.Google Scholar:Chiti, M.P., “I signori del diritto comunitario: la Corte di giustizia e lo sviluppo del diritto amministrativo europeo”, in Rivista trimestrale di diritto pubblico 1991, 796.Google Scholar

108 Joint Cases C-143/88 and C-92/89, [1991] 1 E.C.R. 415; the decision was considered by Lord Goff of Chieveley in Kirklees Metropolitan Borough Council v. Wickes Building Supplies Ltd.[1992] 3 W.L.R. 170, 187.

109 See cons. 27.

110 [1986] O.B. 716 at 783, per Parker L.J.