Principle of State Liability
State liability can enable an individual, before his national court, to seek a remedy for losses suffered as a result of the failure by a Member State to implement, or apply correctly, provisions of EU law.
Francovich v Italian State
Facts: The claimants sought arrears of wages following their employers' insolvency. A Directive placed an obligation on Member States to ensure a payout fund for people in such a situation. This Directive was not implemented.
Francovich criteria for a claim:
1. The provision must confer rights on individuals; and
2. The content of those rights must be identifiable from the Directive; and
3. There must be a causal link between the failure to implement the Directive and the damage suffered by the injured parties
Factortame No 4. extended state liability beyond non-implementation. It included poor implementation of a Directive and all breaches of EU law by a MS. There must be:
Test for a sufficiently serious breach:
MS must manifestly and gravely disregard the limit on exercise of its powers - Factortame, Dillenkofer
Failure to implement a Directive is always a sufficiently serious breach - Dillenkofer
Ex parte BT - factors for a sufficiently serious breach:
Francovich criteria for a claim:
1. The provision must confer rights on individuals; and
2. The content of those rights must be identifiable from the Directive; and
3. There must be a causal link between the failure to implement the Directive and the damage suffered by the injured parties
Factortame No 4. extended state liability beyond non-implementation. It included poor implementation of a Directive and all breaches of EU law by a MS. There must be:
- breach of rule of law conferring rights on individuals
- breach must be sufficiently serious
- direct causal link between breach and damage
Test for a sufficiently serious breach:
MS must manifestly and gravely disregard the limit on exercise of its powers - Factortame, Dillenkofer
Failure to implement a Directive is always a sufficiently serious breach - Dillenkofer
Ex parte BT - factors for a sufficiently serious breach:
- Is Directive clear and precise?
- Does MS have a lawful excuse?
- Has the Commission given any guidance about implementation?
- Have other MS made the same mistake?