European Union Law ( EU Law) - Actions against institutions for damages under Article 340 of the TFEU
Paragraph 2 of Article 340 stipulates that in the instance of non-contractual liability, the EU shall make good any damage caused by the institutions or by its servants in the course of their duties in accordance with the general principles common to the laws of the member states. So, it is possible to understand how the Article 340 action and a specific kind of general tort action are related. However, it is important to keep in mind that five of the initial six EC members had civil liability laws based on the French Civil Code. As a result, it is more accurate to see liability under Article 340 as being based on this type of liability. In any instance, the Treaty stipulates that the CJEU shall hear any cases brought pursuant to Article 340. The circumstances for culpability and the requirements for claim admission are two important concerns to take into account. Admissibility In such claims, locus standi must necessarily be practically limitless. As a result, any individual—natural or legal—can file a lawsuit. The primary criteria for admissibility is that the person filing the claim can establish beyond a reasonable doubt that he has experienced harm as a result of an institution's or its agent's deed or omission. This prevented the action from being launched, for example, by a trade union on behalf of a member or members. Werhahn Hansamuhle v. Council (Cases 63 to 69/72) [1973] ECR 1229, the ECJ determined that the claim must be specifically stated against an organization or its employee. Therefore, it was impossible to make a claim against the EU as a whole. Five years from the date of the alleged occurrence that produced the damage and gave rise to the action should be the proper time limit for filing a claim. prerequisites for liability To make a valid claim, the following three conditions must be met: First, the occurrence of the applicant's damage: This could involve not only financial loss but also any kind of bodily harm, such as loss of profits as well as actual harm. The requirement in general is that the harm be certain, demonstrable, and quantified. Future loss is also recoverable, but under very specific conditions. A claim for a future loss was recognized in Kampffmeyer et al. v. Commission (Cases 5, 7 and 13 to 24/66) [1967] ECR 245 when contracts were already cancelled at the time the illegal measure was created. In some cases, even highly speculative and immaterial losses have been accepted: Case 145/83 - Adams v. Commission (1986) QB 138 As a result of his discovery that Hoffmann La Roche was in violation of EC [now EU] competition legislation when he was working for the pharmaceutical company, Adams notified the Commission as required by law. However, his wife hanged herself after he was detained for industrial espionage. This was acknowledged as damage that might be recovered and created liability. Second, the existence of fault on the part of the institution complained about: In this context, it suffices to demonstrate that the institution owed the applicant a duty that was later broken, as was the case in Adams v. Commission (1986). The CJEU may be less inclined to reach this conclusion, though, if the institution was directly involved in formulating policy decisions and committed judgment mistakes that contributed to the harm that was sustained. Case 5/71) Zuckerfabrik Schoppenstedt v. Council [1971] ECR 975 In this case, a regulation established actions to balance out the variations between national sugar prices and Community [now EU] reference prices that were effective as of a specific date. The applicant claimed that the criteria were incorrect and had cost him money, but he was unsuccessful in his claim. The ECJ established some standards for determining fault, known as the "Schoppenstedt formula": there must be a legislative measure that involves decisions about economic policy; this must involve a serious enough violation of a higher standard of legal conduct; and the higher standard of legal conduct must be of a type that was intended to protect individuals. Fault will only be apparent if all components are satisfied. Third, it must be possible to establish a link between the alleged action and the harm sustained: As a result, an action for damages under Article 340 cannot be brought simply because a damage exists. Liability cannot be established based solely on evidence of damage without also showing that the challenged institution's actions directly contributed to the damage. In this approach, it is evident that distance from the damage is a crucial consideration: Pool v. Council (Case 49/79), ECR 569 (1981). The conversion rates for sterling (UK currency), also referred to as "green rates," allegedly caused a cattle farmer in England to lose money. His argument was dismissed by the ECJ as being too speculative.
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