In the latest fallout from long delays in General Court proceedings, the Court of Justice of the European Union (CJEU) now finds itself appearing before its own judges in challenging Orders of the General Court that determined that the CJEU was the appropriate representative of the European Union (EU) in damage claims arising from such excessive delays. These internal clashes may lead to further delays for litigants before the EU General Court.
Overflowing caseloads
The controversy surrounding prolonged proceedings before the General Court arises from its inability to keep pace with an influx of cases that has grown steadily since its establishment in 1989. This heavier caseload follows expansions in both the General Court's jurisdiction and the EU's volume of legislative activity. Various efforts over the years to bolster the General Court with additional judges have failed to succeed, in the face of the substantial costs of and political in-fighting amongst the EU Member States.
Damage claims for delayed proceedings before the General Court
The origin of the CJEU's present appeals are the 2006
challenges by the companies Kendrion and Gascogne against the
Commission's 2005 decision imposing penalties for their
participation in the so-called "industrial bags" cartel.
The General Court took until 2011 – over 5 years – to
rule on these cases, leading Kendrion and Gascogne to appeal these
rulings to the Court of Justice (CoJ). The companies challenged the
excessively prolonged proceedings before the General Court as an
infringement of the fundamental right to obtain a decision within a
reasonable time, as guaranteed by the Charter of Fundamental Rights
of the European Union.
While the CoJ rejected the parties' claims to set aside or
reduce the fines, it indicated that such failure timely to
adjudicate gave rise to an action against the EU for damages caused
by the conduct of one of its institutions. The CoJ indicated that
such claims should be brought separately before the General Court.
In the interests of independence and impartiality, the CoJ
indicated that the General Court would sit in a composition
different from that which heard the underlying, lengthy dispute.
(Even so, it remains questionable as to whether a judicial body
should be entrusted with the task of determining whether its own
conduct is wrongful.)
In the wake of the CoJ's rulings in Kendrion and
Gascogne, Aalberts Industries also initiated a damage
claim for delayed proceedings at the General Court. Aalberts had
filed an action in 2006 to annul the Commission's fine imposed
in the "copper fittings" cartel. While the General Court
set aside the fine against Aalberts (as upheld by the CoJ), it took
over 4 years for the General Court to issue such judgment.
Controversy over the proper target in damage proceedings against the EU
In bringing their actions for damages, Kendrion, Gascogne, and
Aalberts Industries each directed claims against the CJEU (an
institution comprising three jurisdictions, including the General
Court and the CoJ), as representative of the EU.
The CJEU challenged these claims, contending that the European
Commission would be the proper representative of the EU in such
damage actions. The General Court dismissed the CJEU's
arguments and determined that the claims were properly directed
against the CJEU. The General Court held that, when an act of one
EU institution creates liability for the EU, then the EU shall be
represented before the General Court by the institution responsible
for the act. Clearly, these damage claims concern the behavior of
the General Court, which is part of the CJEU. Thus, the CJEU is the
proper representative of the EU in such cases.
The CJEU now has appealed these orders of the General Court,
arguing that the General Court failed to take account of the
requirements of judicial independence and impartiality when ruling
that the CJEU had to represent the EU in these damage actions. The
CJEU points out that the damage claims are (i) before the same
judicial body (the General Court) that allegedly caused the matter
in dispute and (ii) the General Court is also an integral part of
the defending party (the CJEU); therefore, judicial independence
and impartiality are compromised where the damages are to be
satisfied from the CJEU's budget (although the CJEU also
challenges this contention, claiming that compensation should
rather derive from the Commission's budget).
Other challenges and hoped-for relief
The General Court's difficulties in clearing its caseload
are echoed in other recent judgments of the CoJ (e.g.,
Deltafina, Guardian, and FLS Plast). In
these cases, the CoJ also determined that lengthy General Court
proceedings infringed the right to obtain a decision within a
reasonable time and that such failure could give rise to a separate
action for damages before the General Court. All together, the EU
courts are now facing over €20 million in damage claims for
failure to timely adjudicate.
Relief from this downward spiral is sought through a renewed
effort to expand the General Court. The EU Member States have
agreed to a plan to double the size of the General Court by 2019,
starting with the appointment of 12 new judges in September 2015.
Companies litigating cases in Luxembourg would be the main
beneficiaries of reform of the EU's first-tier court, which
should accelerate the entire EU judicial review and thereby open
the way for businesses to reconsider their litigation strategies at
the EU level. However, the European Parliament must still approve
the considerable costs of an expanded General Court (estimated at
some €14 million), which remain a point of controversy.
In the meantime, parties before the General Court will continue to
suffer from the absence of enough judges. As the growing wave of
damage actions shows, the General Court is falling seriously short
of protecting the fundamental right to the timely adjudication of
cases. However, while such claims may provide a source of relief
for aggrieved parties, these cases further burden the already
over-stretched General Court. This will necessarily result in
adding to delays in proceedings for litigants in other pending
cases. The General Court now also finds itself in the controversial
position of both ruling on its own shortcomings and clashing with
the CJEU, which firmly disputes its role as defendant in these
claims.
The CJEU's appeal against the Order of the General Court in
Kendrion can be found here: CJEU Appeal in Kendrion(the
CJEU's appeals in Gascogne and Aalberts
Industries are not yet published).
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