European Union: Delayed EU Court Proceedings Can Give Rise To Claims For Damages

The time taken by the European judiciary1 to adjudicate on cases is of increasing concern. Failure by the General Court to conclude proceedings within a reasonable time triggers a right to compensation. In order to obtain damages, claimants need to make a fresh application before the General Court, separate from that seeking to annul or reduce the fines imposed by the Commission in antitrust cases. A number of damages actions for delayed EU Court proceedings were brought last year. It is now clear that the EU Courts will be held liable for their own delays. However, a number of questions remain unanswered, including the determination of the quantification of the damages.

Excessive Delays at the GC and the Right to a Fair Trial within a Reasonable Time

It is widely understood that the GC is overloaded and suffers from a significant backlog of cases, in particular as a result of the ever increasing number of appeals of EU decisions in complex competition cases.2While this inevitably means that the GC will take longer to process cases, an appellant still has a right to a fair trial within a reasonable time.

How Long is Too Long?

The CoJ has indicated that the reasonableness of the period for delivering judgment is to be determined on a case-by-case basis, assessing the individual facts and circumstances of each case. In making such an assessment, the CoJ takes account of a number of factors, such as the complexity of the dispute, the conduct of the parties, supervening procedural matters, etc.3 In the following recent cases, the CoJ found that the length of the proceedings before the GC could not be justified by any of the particular circumstances of the case:

Options Available for Corporations Affected by Excessive Delays in GC Proceedings

Corporations whose interests have been adversely affected by excessive delays in GC proceedings for the annulment of an antitrust decision have adopted one of two different approaches: (a) raising the issue before the GC itself in the annulment proceedings; or (b) appealing the GC's judgment before the CoJ, alleging procedural impropriety. The first option has been unsuccessful, with the GC expressing doubt as to whether an action for annulment constituted an appropriate framework for addressing and penalizing failures to determine the case in question within a reasonable time. Appropriately, the GC also held that the Chamber of the GC responsible for the case would not provide corporations with sufficient safeguards; notably guaranteed impartiality when assessing whether it, itself, committed a procedural irregularity in causing an unjustified delay.5 The second option has been more successful. Appellants have argued that excessive delays in GC proceedings amount to a procedural impropriety adversely affecting their rights and, as such, they have requested the CoJ to determine whether there has been a breach of the right to a fair trial within a reasonable time.6 Once a breach has been established, corporations can then seek redress.

Remedies for Unreasonable Delays in GC Proceedings – The CoJ has Made its Choice

Where the CoJ itself has established that proceedings before the GC have failed to be completed within a reasonable time, one might have expected the CoJ to take the appropriate measures to remedy the breach. This, however, is not the case.

Some corporations have claimed that a finding that the GC has failed to complete proceedings within a reasonable time justifies setting aside the judgment under appeal.7 The CoJ has, nonetheless, repeatedly held that such a measure would not remedy the infringement unless the applicant can demonstrate that the delay materially affected the outcome of the case.8 Failure by the GC to observe the reasonable time requirement in its proceedings would therefore in principle only give rise to a claim for compensation for the harm suffered. In Baustahlgewebe, having held that the plea alleging excessive duration of the proceedings was well founded, the CoJ considered that a sum of ECU 50,000 constituted "reasonable satisfaction" and reduced the fine accordingly, "[f]or reasons of economy of procedure and in order to ensure an immediate and effective remedy."9 Over time, however, compensation in the form of a reduction of fine has become inconceivable for the CoJ.10 Today, it appears that there is only one viable path: a claim for damages. A failure on the part of the GC to adjudicate within a reasonable time can give rise to a separate claim for damages.11 Such a claim may not be made directly to the CoJ in the context of the appeal against the GC's judgment; it must be brought before the GC itself, as a separate action.12 Last year, a number of corporations, including Kendrion and Gascogne Sack, followed that path and lodged a separate action, claiming damages before the GC. Last month, the GC addressed a key procedural question: who should be the defendant in these actions?

Action for Damages Lodged Against the European Judiciary or the Commission?

Following the CoJ's judgment finding that the GC breached the corporation's right to a fair trial within a reasonable time, Kendrion brought a new separate action in June 2014, claiming damages before the GC. Kendrion lodged the claim against the European Union represented by the CJEU.13 In September 2014, the CJEU questioned admissibility, claiming that the GC should (a) dismiss the action as inadmissible as it is directed against the European Union represented by the CJEU, or in the alternative, (b) in the event that the GC considered that the claim for damages was admissible, order that the European Commission be substituted for the CJEU as the defendant. The CJEU did not dispute the fact that the action was to be lodged against the European Union or that the alleged harm originated from the behavior of the GC, but argued that the European Union should be represented by the Commission and not by the CJEU itself.

The GC rejected the CJEU's plea of inadmissibility by an order dated 6 January 2015.14 The applicant brought the action for damages against the European Union represented by the CJEU on the grounds that the European judiciary, and in particular the GC, violated its right to a fair trial within a reasonable time. The GC sided with the applicant: where the European Union is liable for a tortious act of one of its institutions, the European Union is to be represented before the GC by the institution responsible for the act in question. The GC found that the CJEU, which comprises the GC, was the right European institution to represent the European Union in this action. The case can now proceed on the merits.15 The next steps are for the GC to examine the actual existence of the alleged harm and the causal connection between that alleged harm and the excessive length of the legal proceedings. We believe that any appeal by the CJEU against the GC order will be unsuccessful. The European Commission has no general right to represent the European Union before the European judiciary. Also, according to settled case law, where the liability of the European Union is incurred by the act of one of its institutions, the European Union is represented before the GC or the CoJ by the institution(s) accused of the act giving rise to liability.16 However, actions for damages brought directly against the institutions have been equally admitted. Interestingly, soon after the CJEU raised its objection of admissibility in Kendrion, another alleged victim of excessive delays, Gascogne Sack, which had initially lodged its claim for damages against the CJEU17, subsequently lodged another action against the European Commission18 presumably to ensure that at least one of these actions would pass the admissibility threshold.

Major Takeaways

Corporations seeking remedies for excessive delays by the GC in determining appeals against Commission decisions in antitrust cases should not expect compensation in the form of a reduction of fines. To facilitate a claim, corporations can raise the procedural impropriety in appellant proceedings before the CoJ for it to examine the reasonableness of the alleged excessive period. If successful, the corporation can bring a subsequent action for damages before the GC. In an interesting development, two corporations, ASPLA and Armando Álvarez, have just launched an action for damages before the GC without having first argued the procedural impropriety before the CoJ.19 It appears that these corporations intend to rely – or free-ride – upon the CoJ judgments in Kendrion and Gascogne Sack finding that the GC failed to adjudicate within a reasonable time in their respective actions for annulment of the same Commission decision.20 It remains to be seen how the GC will react to this turn of events. It is currently unclear whether, taking a step further than ASPLA and Armando Álvarez, a corporation could bring an action before the GC in circumstances where neither it, nor another appellant has raised the procedural impropriety (or even appealed the GC judgment) before the CoJ. However, we cannot see any legal reason to prevent a corporation from doing so provided that the conditions for launching the action are met, in particular that the deadline for acting (five years from the date on which the damage occurred) is complied with. The need to launch separate damages actions before the GC, rather than the CoJ making an award for damages, seems counter-intuitive as it will add to the GC's already heavy case load, which is the main reason for excessive delays in the first place. The CoJ has apparently rejected arguments concerning the "economy of procedure" and the need "to ensure an immediate and effective remedy" disregarding the logical consequences that corporations will have to invest more time and resources bringing a fresh action to claim damages, having already faced years of litigation. Concerns also arise as to the potential for prosecutorial bias in circumstances where the GC would hear claims for damages resulting from its own procedural impropriety. The CoJ already addressed this issue in previous cases finding that when hearing such claims, the GC must sit in a different composition from that which heard the dispute giving rise to the procedure whose duration is criticized.21This does not however fully rectify the issue given the intractable appearance of bias when a judicial body is adjudicating on matters emanating from it. It is a trite but nonetheless relevant observation that not only must justice be done, it must also be seen to be done.22 The GC's case load has for years now fuelled an intense political debate. An increasing number of damages actions against the European Union resulting from judgments being delivered with excessive delays will unlikely appease the detractors. While the CJEU might have expected these damages actions to raise political awareness and trigger decisions to expand the number of judges and ameliorate the backlog of cases, it might not have anticipated actions to be brought against it.

Footnotes

1 The Court of Justice of the European Union ("CJEU") is the European institution encompassing the European judiciary. It includes a number of courts, in particular the Court of Justice ("CoJ") (the highest court in the European legal system) and the General Court ("GC").

2 A proposal to double – in three stages over the next five years – the number of judges working at the GC is currently being discussed.

3 Baustahlgewebe v Commission, C-185/95 P, EU:C:1998:608, para. 29; Der Grüne Punkt – Duales System Deutschland GmbH v Commission, C-385/07 P, EU:C:2009:456, para. 184.

4 Kendrion v Commission, C-50/12 P, EU:C:2013:771.

5 Groupe Gascogne v Commission, C-58/12 P, EU:C:2013:770, para. 84; Saint-Gobain Glass France v Commission, T-56/09, EU:T:2014:160, para. 499–500.

6 Baustahlgewebe v Commission, para. 19.

7 See, e.g., Deltafina SpA v Commission, C-578/11 P, EU:C:2014:1742, para. 81.

8 See, e.g., Der Grüne Punkt, para. 193. The opposite approach would have allowed an appellant to reopen the question of the existence of an infringement on the sole ground that there was a failure to adjudicate within a reasonable time, whereas all of its substantive arguments had been rejected (Ibid., para. 194).

9 Baustahlgewebe, para. 48, 49, 141 and 142.

10 The solution proposed in Baustahlgewebe is understood to have been dictated inter alia, by the fact that, at the time, the jurisdiction of the GC was not set out in the Treaty of the European Union. It is only after the entry into force of the Treaty of Nice that the GC got exclusive jurisdiction in actions for compensation for damages caused by the European institutions in the performance of their duties (see Opinion of Advocate General Bot delivered on 31 March 2009 in Der Grüne Punkt, EU:C:2009:210).

11 Groupe Gascogne v Commission, para. 82.

12 Groupe Gascogne v Commission, para. 84.

13 Kendrion v European Union, T-479/14.

14 Kendrion v European Union, T-479/14, EU:T:2015:2.

15 Subject to any appeal. Arguably, the CJEU could appeal the GC's order which would result in the unprecedented situation of the CJEU requesting its highest court, the CoJ, to set aside an order of the GC.

16 Briantex and Di Domenico v EEC and Commission, C-353/88, EU:C:1989:415, para. 7.

17 Gascogne Sack Deutschland and Gascogne v Court of Justice of the European Union, T-577/14.

18 Gascogne Sack Deutschland and Gascogne v Commission, T-843/14.

19 ASPLA and Armando Álvarez v Court of Justice of the European Union, T-40/15.

20 Kendrion, Gascogne Sack and Aspla / Armando Álvarez all concern the industrial bags cartel. The length of proceedings before the GC in these three cases was similar, if not identical, however, unlike Kendrion and Gascogne Sack, neither Aspla nor Armando Álvarez raised this with the CoJ.

21. Kendrion v Commission, C-50/12 P, para. 101.

22. R v Sussex Justices, Ex parte McCarthy [1924] 1 KB 256.

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.

To print this article, all you need is to be registered on Mondaq.com.

Click to Login as an existing user or Register so you can print this article.

Authors
 
In association with
Related Topics
 
Related Articles
 
Related Video
Up-coming Events Search
Tools
Print
Font Size:
Translation
Channels
Mondaq on Twitter
 
Register for Access and our Free Biweekly Alert for
This service is completely free. Access 250,000 archived articles from 100+ countries and get a personalised email twice a week covering developments (and yes, our lawyers like to think you’ve read our Disclaimer).
 
Email Address
Company Name
Password
Confirm Password
Position
Mondaq Topics -- Select your Interests
 Accounting
 Anti-trust
 Commercial
 Compliance
 Consumer
 Criminal
 Employment
 Energy
 Environment
 Family
 Finance
 Government
 Healthcare
 Immigration
 Insolvency
 Insurance
 International
 IP
 Law Performance
 Law Practice
 Litigation
 Media & IT
 Privacy
 Real Estate
 Strategy
 Tax
 Technology
 Transport
 Wealth Mgt
Regions
Africa
Asia
Asia Pacific
Australasia
Canada
Caribbean
Europe
European Union
Latin America
Middle East
U.K.
United States
Worldwide Updates
Registration (you must scroll down to set your data preferences)

Mondaq Ltd requires you to register and provide information that personally identifies you, including your content preferences, for three primary purposes (full details of Mondaq’s use of your personal data can be found in our Privacy and Cookies Notice):

  • To allow you to personalize the Mondaq websites you are visiting to show content ("Content") relevant to your interests.
  • To enable features such as password reminder, news alerts, email a colleague, and linking from Mondaq (and its affiliate sites) to your website.
  • To produce demographic feedback for our content providers ("Contributors") who contribute Content for free for your use.

Mondaq hopes that our registered users will support us in maintaining our free to view business model by consenting to our use of your personal data as described below.

Mondaq has a "free to view" business model. Our services are paid for by Contributors in exchange for Mondaq providing them with access to information about who accesses their content. Once personal data is transferred to our Contributors they become a data controller of this personal data. They use it to measure the response that their articles are receiving, as a form of market research. They may also use it to provide Mondaq users with information about their products and services.

Details of each Contributor to which your personal data will be transferred is clearly stated within the Content that you access. For full details of how this Contributor will use your personal data, you should review the Contributor’s own Privacy Notice.

Please indicate your preference below:

Yes, I am happy to support Mondaq in maintaining its free to view business model by agreeing to allow Mondaq to share my personal data with Contributors whose Content I access
No, I do not want Mondaq to share my personal data with Contributors

Also please let us know whether you are happy to receive communications promoting products and services offered by Mondaq:

Yes, I am happy to received promotional communications from Mondaq
No, please do not send me promotional communications from Mondaq
Terms & Conditions

Mondaq.com (the Website) is owned and managed by Mondaq Ltd (Mondaq). Mondaq grants you a non-exclusive, revocable licence to access the Website and associated services, such as the Mondaq News Alerts (Services), subject to and in consideration of your compliance with the following terms and conditions of use (Terms). Your use of the Website and/or Services constitutes your agreement to the Terms. Mondaq may terminate your use of the Website and Services if you are in breach of these Terms or if Mondaq decides to terminate the licence granted hereunder for any reason whatsoever.

Use of www.mondaq.com

To Use Mondaq.com you must be: eighteen (18) years old or over; legally capable of entering into binding contracts; and not in any way prohibited by the applicable law to enter into these Terms in the jurisdiction which you are currently located.

You may use the Website as an unregistered user, however, you are required to register as a user if you wish to read the full text of the Content or to receive the Services.

You may not modify, publish, transmit, transfer or sell, reproduce, create derivative works from, distribute, perform, link, display, or in any way exploit any of the Content, in whole or in part, except as expressly permitted in these Terms or with the prior written consent of Mondaq. You may not use electronic or other means to extract details or information from the Content. Nor shall you extract information about users or Contributors in order to offer them any services or products.

In your use of the Website and/or Services you shall: comply with all applicable laws, regulations, directives and legislations which apply to your Use of the Website and/or Services in whatever country you are physically located including without limitation any and all consumer law, export control laws and regulations; provide to us true, correct and accurate information and promptly inform us in the event that any information that you have provided to us changes or becomes inaccurate; notify Mondaq immediately of any circumstances where you have reason to believe that any Intellectual Property Rights or any other rights of any third party may have been infringed; co-operate with reasonable security or other checks or requests for information made by Mondaq from time to time; and at all times be fully liable for the breach of any of these Terms by a third party using your login details to access the Website and/or Services

however, you shall not: do anything likely to impair, interfere with or damage or cause harm or distress to any persons, or the network; do anything that will infringe any Intellectual Property Rights or other rights of Mondaq or any third party; or use the Website, Services and/or Content otherwise than in accordance with these Terms; use any trade marks or service marks of Mondaq or the Contributors, or do anything which may be seen to take unfair advantage of the reputation and goodwill of Mondaq or the Contributors, or the Website, Services and/or Content.

Mondaq reserves the right, in its sole discretion, to take any action that it deems necessary and appropriate in the event it considers that there is a breach or threatened breach of the Terms.

Mondaq’s Rights and Obligations

Unless otherwise expressly set out to the contrary, nothing in these Terms shall serve to transfer from Mondaq to you, any Intellectual Property Rights owned by and/or licensed to Mondaq and all rights, title and interest in and to such Intellectual Property Rights will remain exclusively with Mondaq and/or its licensors.

Mondaq shall use its reasonable endeavours to make the Website and Services available to you at all times, but we cannot guarantee an uninterrupted and fault free service.

Mondaq reserves the right to make changes to the services and/or the Website or part thereof, from time to time, and we may add, remove, modify and/or vary any elements of features and functionalities of the Website or the services.

Mondaq also reserves the right from time to time to monitor your Use of the Website and/or services.

Disclaimer

The Content is general information only. It is not intended to constitute legal advice or seek to be the complete and comprehensive statement of the law, nor is it intended to address your specific requirements or provide advice on which reliance should be placed. Mondaq and/or its Contributors and other suppliers make no representations about the suitability of the information contained in the Content for any purpose. All Content provided "as is" without warranty of any kind. Mondaq and/or its Contributors and other suppliers hereby exclude and disclaim all representations, warranties or guarantees with regard to the Content, including all implied warranties and conditions of merchantability, fitness for a particular purpose, title and non-infringement. To the maximum extent permitted by law, Mondaq expressly excludes all representations, warranties, obligations, and liabilities arising out of or in connection with all Content. In no event shall Mondaq and/or its respective suppliers be liable for any special, indirect or consequential damages or any damages whatsoever resulting from loss of use, data or profits, whether in an action of contract, negligence or other tortious action, arising out of or in connection with the use of the Content or performance of Mondaq’s Services.

General

Mondaq may alter or amend these Terms by amending them on the Website. By continuing to Use the Services and/or the Website after such amendment, you will be deemed to have accepted any amendment to these Terms.

These Terms shall be governed by and construed in accordance with the laws of England and Wales and you irrevocably submit to the exclusive jurisdiction of the courts of England and Wales to settle any dispute which may arise out of or in connection with these Terms. If you live outside the United Kingdom, English law shall apply only to the extent that English law shall not deprive you of any legal protection accorded in accordance with the law of the place where you are habitually resident ("Local Law"). In the event English law deprives you of any legal protection which is accorded to you under Local Law, then these terms shall be governed by Local Law and any dispute or claim arising out of or in connection with these Terms shall be subject to the non-exclusive jurisdiction of the courts where you are habitually resident.

You may print and keep a copy of these Terms, which form the entire agreement between you and Mondaq and supersede any other communications or advertising in respect of the Service and/or the Website.

No delay in exercising or non-exercise by you and/or Mondaq of any of its rights under or in connection with these Terms shall operate as a waiver or release of each of your or Mondaq’s right. Rather, any such waiver or release must be specifically granted in writing signed by the party granting it.

If any part of these Terms is held unenforceable, that part shall be enforced to the maximum extent permissible so as to give effect to the intent of the parties, and the Terms shall continue in full force and effect.

Mondaq shall not incur any liability to you on account of any loss or damage resulting from any delay or failure to perform all or any part of these Terms if such delay or failure is caused, in whole or in part, by events, occurrences, or causes beyond the control of Mondaq. Such events, occurrences or causes will include, without limitation, acts of God, strikes, lockouts, server and network failure, riots, acts of war, earthquakes, fire and explosions.

By clicking Register you state you have read and agree to our Terms and Conditions