No Referral to the ECJ – Requirements for liability of a Member State

At the end of our last report, we deliberated whether the Republic of Austria might be liable for damages in case a court of last instance fails to comply with its obligation to file a referral to the ECJ concerning questions of Community Law.

Recently, the Austrian Supreme Court clarified the requirements for liability of the Republic of Austria in a non-IP case. In this case the Supreme Court found that basically it is up to the national court to decide whether to file a referral to the ECJ as even a court of last instance is not bound to file a referral to the ECJ if the case is a so-called "acte clair", which means that there are no reasonable doubts as how the case has to be decided. However, the decision of being an acte clair must not be judged from a national viewpoint but rather in view of the peculiarities of Community law in order to avoid contradicting judgments by national courts.

In case that damages are claimed from the Republic of Austria on the basis that a court of last instance has failed to comply with its obligation to file a referral to the ECJ, a competent national court has not to verify the correctness of the court's decision but rather whether it is arguable that the contentious case was an acte clair. The court of last instance has only to judge whether the legal opinion of the lower courts is completely unjustifiable.

Accordingly, the Republic of Austria would only be liable for damages in case that the court of last instance has not referred a question to the ECJ according to Art. 234 (3) EC Treaty if the decision that the contentious case is an acte clair is based on a clear misjudgment. In all other cases, the Republic of Austria is not liable for damages.

To the claimant's suggestion in the original case to file a referral to the ECJ, the Supreme Court replied that the parties of the proceedings have no right to claim such referral; to the claimant's suggestion for a referral in the liability case, the Supreme Court replied that the question of liability of a Member State does not concern Community Law. Both reasonings are correct.

However, the outcome is that a failure to comply with Art. 234 (3) EC Treaty will virtually never lead to any sanctions what derogates the whole provision. It remains to be seen whether the ECJ gets the opportunity to clarify the conditions under Art. 234 (3) EC Treaty for liability of a Member State; obviously, the ECJ and not a national Supreme Court would be the competent court to do so.

Dr. Rainer Beetz, LL.M.