Justice in the Administrative Court of Appeal.
Assistant Professor in Administrative Law,
Faculty of Law, Democritus University of Thrace
As the Court (ECJ) has repeatedly held, the principle of liability on the part of a Member State for damage caused to individuals as a result of breaches of Community law for which the State is responsible is inherent in the system of the Treaty (Joined Cases C-6/90 and C-9/90 Francovich and Others  ECR I-5357, par. 35; Brasserie du Pêcheur and Factortame, par. 31; Case C-392/93 British Telecommunications  ECR I-1631, par. 38; Case C-5/94 Hedley Lomas  ECR I-2553, par. 24; Joined Cases C-178/94, C-179/94, C-188/94, C-189/94 and C-190/94 Dillenkofer and Others  ECR I-4845, par. 20, Case C-127/95 Norbrook Laboratories  ECR I-1531, par. 106 and Haim, par. 26; Case C-224/01, Köbler  par.30, 51; Case C-63/01 Evans , par.83; Case T 364/03 Medici Grimm KG ).
This obligation to make reparation constitutes a fundamental principle of Community law, which is as fundamental as that of the primacy of Community law or direct effect. Like those two principles, the obligation of the State to make good the loss or damage caused to individuals by breach of Community law helps to ensure the full effectiveness of Community law through effective judicial protection of the rights which individuals derive from the Community legal order . Indeed, the principle of State liability constitutes the necessary extension of the general principle of effective judicial protection or of the right to challenge a measure before the courts, whose importance has been regularly underlined by the Court and whose scope has been constantly extended through its case-law ( see, Opinion of Advocate General LÉGER delivered on 8 April 2003 Case C-224/01 Gerhard Köbler v. Republik Österreich par.35)
In particular, it follows from that case-law that in order to ensure ‘the full effectiveness of Community rules’, States are to grant individuals the opportunity ‘to obtain redress when their rights are infringed by a breach of Community law for which a Member State can be held responsible’.
As to the conditions to be satisfied for a Member State to be required to make reparation for loss and damage caused to individuals as a result of breaches of Community law for which the State is responsible, the Court has held that these are threefold: (i) there has been a sufficiently serious breach by the State of (ii) the infringed rule of law intended to confer rights on individuals and (iii) there is a direct causal link between that breach and the the loss or damage sustained by the injured parties .
Those three conditions are necessary and sufficient to found a right in favour of individuals to obtain redress, although this does not mean that the State cannot incur liability under less strict conditions on the basis of national law (see Brasserie du Pêcheur and Factortame, cited above, par. 66, Case C-224/01, Köbler  par.57). Hence, those three substantive terms under which the State is liable for the acts or omissions of its public authorities, are minimum conditions.
In adddition, it is settled case-law that in the absence of Community rules governing the matter, it is for the domestic legal system of each Member State to designate the competent courts and lay down the detailed procedural rules for legal proceedings intended fully to safeguard the rights which individuals derive from Community law (see the judgments in Case 33/76 Rewe  ECR 1989, paragraph 5; Case 45/76 Comet  ECR 2043, paragraph 13; Case 68/79 Just  ECR 501, paragraph 25; Frankovich and Others, cited above, paragraph 42, and Case C-312/93 Peterbroeck  ECR I-4599, paragraph 12; Case C-224/01, Köbler 30 September 2003 par.46). However, such rules must not be less favourable than those governing similar domestic actions (the principle of equivalence) and do not render virtually impossible or excessively difficult the exercise of rights conferred by Community law (the principle of effectiveness) (see, in particular, Case C-120/97 Upjohn  ECR I-223, par. 32; Case C-63/01 Evans par.45).
Accordingly, subject to the existence of a right to obtain reparation which is founded directly on Community law where the conditions mentioned above are met, it is on the basis of rules of national law on liability that the State must make reparation for the consequences of the loss and damage caused, with the proviso that the conditions for reparation of loss and damage laid down by the national legislation must not be less favourable than those relating to similar domestic claims and must not be so framed as to make it in practice impossible or excessively difficult to obtain reparation .
Furthermore, it should be borne in mind that, according to settled case-law, in principle, it is for the national courts to ascertain whether the procedural rules intended to ensure that the rights derived by individuals from Community law are safeguarded under national law comply with the above mentioned principles. The national courts are in the best position to make such an appraisal since it requires a relatively detailed knowledge of national procedural rules. Nonetheless, the Court generally takes the trouble to make some observations on that point in order to guide the national courts in their task (See, in particular, Case C-261/95 Palmisani  ECR I-4025, paragraph 33; Case C-326/96 Levez  ECR I-7835, paragraph 39, and Case C-78/98 Preston and Others  ECR I-3201, paragraph 56.)
In particular, as regards application of the principle of effectiveness, each case which raises the question whether a national procedural provision renders application of Community law impossible or excessively difficult must be analysed by reference to the role of that provision in the procedure, its progress and its special features, viewed as a whole, before the various national instances. In the light of that analysis, the basic principles of the domestic judicial system, such as protection of the rights of the defence, the principle of legal certainty and the proper conduct of procedure, must, where appropriate, be taken into consideration (see Joined Cases C-430/93 and C-431/93Van Schijndel and Van Veen  ECR I-4705, paragraph 19) Case C-63/01 (4 December 2003)) Samuel Sidney Evans par.46).
In that connection, in proceedings relating to the liability of Member States for infringement of Community law, in order to determine whether a violation of Community law committed by a public authority of the Member State constitutes a sufficiently serious breach, all the factors which characterise the situation must be taken into account. Those factors include, in particular, the clarity and precision of the rule infringed, whether the infringement or the damage caused was intentional or involuntary, whether any error of law was excusable or inexcusable, and the fact that the position taken by a Community institution may have contributed towards the adoption or maintenance of national measures or practices contrary to Community law (see, Case C-424/97 Haim  ECR I-5123, paragraph 43, and Case C-63/01 Evans  ECR I 14447, paragraph 86). Those criteria must in principle be applied by the national courts in accordance with the guidelines laid down by the Court (see, in particular, Brasserie du Pêcheur and Factortame, cited above, paragraphs 55 to 58, British Telecommunications, cited above, paragraph 411; Joined Cases C-283/94, C-291/94 and C-292/94 Denkavit and Others  ECR I-5063, par.49, and Konle, cited above, paragraph 58).
Inherent in the third condition is the existence of damage. If there is no damage, or if no damage can be proved, then any claim for reparation must fail. It is thus important that, in order to comply with the principle of effectiveness, national rules do not make it impossible or excessively difficult to obtain reparation for, or to prove the existence of, a particular kind of damage (Case C-63/01 (4 December 2003)) Samuel Sidney Evans).
It is for each Member State’s legal system to set the criteria for determining the extent of reparation , which must however be commensurate with the loss or damage sustained to ensure effective protection for the rights of the injured party . The national court may inquire whether the injured party showed reasonable diligence to avoid or limit the loss or damage. The general principle guiding the calculation of pecuniary damage is a comparison between the situation of the injured party in the presence and (hypothetically) in the absence of the damage in question. .
Moreover, there is no need for the three conditions for State liability to be examined in any particular order. Since they are cumulative, the absence of any one of them will suffice for the claim to fail. If no damage (and/or no causal link) can be established, it is not necessary to consider whether a rule of Community law intended to confer rights on individuals was infringed and whether the breach was sufficiently serious. On the contrary, the requirements of procedural economy would seem to militate against such an approach.
Finally, as the Court has also held, that principle applies to any case in which a Member State breaches Community law, whichever is the authority of the Member State whose act or omission was responsible for the breach (Brasserie du Pêcheur and Factortame, cited above, paragraph 32; Case C-302/97 Konle  ECR I-3099, paragraph 62 and Haim, cited above, paragraph 27; Case C-224/01, Köbler , par.31). In this way, the obligation to make good damage caused to individuals by breaches of Community law cannot depend on domestic rules as to the division of powers between constitutional authorities.
a. The substantive conditions determining State liability
In Greece, the rules of State liability law represent a coherent legal system and consist mainly of three successive articles embodied in the Introductory Law of the Greek Civil Code (Art. 104-106 EisNAK). The liability of the State for the acts or omissions of its officials on the plane of public law is governed by article 105 EisNAK which provides that: “In the event of unlawful acts or omissions of state officials, in the performance of a public office entrusted to them, liability for damages shall rest on the State, save in case the act or omission is in breach of a statute existing (exclusively) for the sake of general interest” .
Under these provisions of Article 105 EisNAK , for the foundation of the claim for damages against the State , there must be an act or omission of a state official in the exercise of a public duty, which is characterised as illegal, in the sense that it runs contrary to a legal provision, regardless of its kind and level (from constitutional and community law to municipal law, including subordinate forms of law such as presidential decrees, ministerial decisions etc.). Furthermore, in Greek legal theory and jurisprudence it is generally accepted that State liability for the illegal acts of all its officials (President of the State, Prime Minister, Ministers, public officials in general), is of an objective character in the sense that the violation of the law suffices irrespective of the fault of the public official. Subsequently, the wilful or negligent breach of law on the part of the official is not required as element of a claim under article 105 EisNAK. It is an innovative and progressive provision of the Greek Law, which deviates from the principle of “subjective liability”, i.e. the liability for damages based on any kind of fault .
Article 105 EisNAK imposes liability on the State on account of the objectively unlawful behaviour (act or omission in the exercise of a public office) of its officials, so that the institution of State liability functions not only as sanction for the breach of law on the part of the Administration (and the State in general) but also as a remedy for the restoration of balance which has been upset by way of the unlawful and harmful State activity (administrative act or omission etc.) concerning the rights and legal interests of the private individual.
Nonetheless, it is important to bear in mind that, in spite of the considerable advantages which State liability may have for individuals, reinstating [the] financial content [of the individual’s right] is something less, a minimum remedy compared with full substantive reinstatement, which remains the optimum means of protection. Nothing is worth as much as the immediate, direct and substantive protection of the rights which individuals derive from law.
The damage to be restored might be purely material or non-material. Moreover, there is a distinction made in law (article 298 of Greek Civil Code) between actual damage and loss of profit (damnum emergens and lucrum cessans), which is of significance in matters of proof .
By contrast to the denial –at least until 2002- of the Greek Administrative Courts to acknowledge the constitutional basis of the claim for damages of the private individual for public liability according to Article 105 EisNAK, the affirmative view has been prevalent in the legal doctrine in Greece. However, in Judgement 980/2002, the Supreme Administrative Court (Council of State), espoused the view of the Greek legal docrtine and acknowledged expressis verbis the consistutional basis of the institution of State liability, underlining that the obligation for compensation on account of an unlawful and harmful administrative activity has got the character of a special public burden, which should be apportioned to all citizens equally . The Supreme Administrative Court, leaning against the Constitution , takes the binding for the Legislator decision that the inflicted damages should not fall on the victim of the illegal act or omission of the state official but it should constitute part of the public expenditure.
At this point, it should be mentioned that the Greek Courts newly held that any statute (Act of the Parliament etc.) that abolishes a claim for damages or grants to a natural person or legal entity immunity against claims for damages, violates article 1 of the First Protocol to the European Convention for the Protection of Human Rights and Fundamental Freedoms (the ECHR) , which protects a person’s “peaceful enjoyment of his possessions .
b. Subjects of procedural nature
The adjudication of disputes between the private persons or bodies and the State or public bodies with regard to the State Liability for damages is regarded to be an administrative dispute and falls within the exclusive jurisdiction of the ordinary Administrative Courts, as an administrative dispute of “complete jurisdiction” (“contentieux administratif de pleine juridiction”) according to Article 94 of the Greek Constitution. Consitutional separation of juridictions for civil, criminal and administrative matters must be followed by ordinary statutes (i.e. of the Parliament, President of the State etc.), when allocating cases to the different branches of courts. Otherwise, opposite legal norms are unconstitutional and every Court in Greece enjoys the power to determine their unconstitutionality .
Furthermore, the action for damages is lodged with the Registrar of the Administrative Court of First Instance (Dioikitiko Protodikio) , which passes a judgement on the merits of the case, after it has found this judicial remedy admissible. On appeal the case rests with the Administrative Court of Appeal (Dioikitiko Efetio). Finally, in the cassation proceedings, the Supreme Administrative Court in Greece (Council of State) does not engage in fact-finding of its own, and is bound by the facts as found by the Administrative Court of Appeal. So, it can only review the decision of the lower Court in respect of errors of law (review on the points of law) .
By drawing parallels between the aforementioned two systems, at least three (3) points of interest come up:
1. The substantive terms for establishing State liability and awarding damages are more favourable in national law than those flowing from the case law of the Court (ECJ).
As opposed to the conditions set out by the case law of the Court (ECJ), which require –as a general principle- for the establishment of the liability of the Member State a sufficiently serious infringement of EC law, under national law it suffices any breach of law. This more favourable term of domestic law for founding the claim for the reparation of the individual’s damage or loss is also applicable in case of breach of EC law by Greek public authorities .
2. The procedural way in which the adminstrative Court takes into consideration the violation of EC law: Is it for the administrative judge to put forward a breach of EC law by his own motion in the context of an action for damages against the State?
At this point, it must be emphasised that there is a distincion made on the plane of Greek national law between the case where the administrative judge directly reviews the compliance of the administrative decision (act or omission) with the law, namely its substantive and/or procedural consistency with the prescribed rules, and the case in which this takes place in an indirect way.
In particular, when the disputed case comes before the administrative court in the context of an application for annulment of the administrative decision, the judge is empowered to review the legality of that act or omission and quash it as unlawful on his own initiative. In this case, he determines on the legallity of the challeged administrative decision directly.
By constast, when the case lies with the court in the context of an action for damages, then the judge gets on his duty of determining the lawfulness of the administrative behaviour indirectly under the proviso that the inconsistencies of the latter with the law, whatever be the nature of it (Constitution, EC law, etc.), are pleaded by the plaintiff.
From the perspective of EC law, this jurisprudence could be called in question when it comes to breaches of its relevant rules. Indeed, as already mentioned, it is for the Member States to lay down the procedural rules governing the proceedings in this kind of disputes. But this procedural autonomy of the national systems is associated with the necessary limitations relating to respect for the principle of equivalence and effectiveness.
Specifically, the Court (ECJ) has held that Community law precludes, in certain circumstances (in particular in the absence of a second court), the application of a national procedural rule which prevents the national court, seised of a matter falling within its jurisdiction, from considering of its own motion whether a measure of domestic law is compatible with a provision of Community law when the latter provision has not been invoked by the litigant within a certain period (See Case C-312/93 Peterbroeck  ECR I-4599, par. 21). Furthermore, the Court has held that where, by virtue of domestic law, courts or tribunals must raise of their own motion points of law based on binding domestic rules which have not been raised by the parties, such an obligation also exists where binding Community rules are concerned. It stated further that the same is true where domestic law confers on courts and tribunals a mere discretion - and not an obligation - to apply of their own motion binding rules of law. (See Joined Cases C-430/93 and C-431/93 Van Schijndel and Van Veen  ECR I-4705, par. 13 and 14).
3. The burden of proof: who bears the burden of establishing the substantive conditions of State liability for the suffered damage and what are the implications if this burden is not discharged in accordance with the law?
The Greek Code of Adminstrative Courts’ Rules of Procedure provides in article 145 for a general rule which basically governs the allocation of the burden of proof in all kinds of proceedings before the Administrative Courts. According to this stipulation “Each party is obliged to prove the facts he alleges to in support of his claims, save in cases otherwise provided for by law. The other parties have a right to counterproof” . In view of this provision of procedural law, both the burden of pleading and of proving a certain fact rests on the same party .
In this context, in cases of action for damages against the State the burden of proof falls, as a general rule, on the plaintiff. First of all, as it goes for every application to the Administrative Court, the action must contain the subject-matter of the dispute, the form of order sought and a brief statement of the pleas of the facts on which it is based. That statement must be sufficiently clear and precise to enable the defendant (State or other pulbic body) to prepare its defence and the Court to rule on the application . Moreover, in order to satisfy those requirements, an application seeking compensation for damage allegedly caused by a public authority must sufficiently identify the relevant act or the conduct of that allegedly caused the damage, the reasons for which the applicant considers this act or conduct as unlawful as well as the causal link which exists between the conduct and the damage it claims to have suffered, and the nature and extent of that damage
Nevertheless, all this procedural aspects and rules must be in accordance with the limitations flowing from the principle of effectiveness, meaning that the application of national rules of substantive or procedural law should not curtail the ability of the individual to assert claims which are well founded under Community law. In this context, it is unacceptable for procedural rules to make the burden of proof so heavy that claims justified under Community law may be frustrated, as for example in San Giorgio, in which the Court held that where a charge had been levied contrary to Community law a presumption or rule of evidence requiring the taxpayer to prove, in order to obtain repayment, that the charge had not been passed on to other persons, or excluding evidence of certain kinds, was not permissible.
The principle that individuals must be able to obtain compensation for a breach of EC Law attributable to a Member State is of paramount importance for the implementation and effectiveness of EC Law. The case law of the Court (ECJ) has not only shaped the doctrine of State liability in damages in a profoundly challenging way, but it also shows signs of being alert to boldly extend it so as to cover all aspects of this issue.
In this context, the relationship between EC Law and national legal systems, with regard to the substantive and procedural terms for implementing the aforesaid doctrine, is characterised by a constant interaction, which brings forward interesting legal matters reflecting the growing convergence going on between the different national orders as to claims against public authorities and the protection of rights conferred upon the individuals under EC Law. Furthermore, the developing jurisprudence of ECJ in this field, constitutes a stark reminder that Community law is not just words on papers but can have effects on the lives of individuals within the Community.