Case C-46/93 Factortame III [1996]

Facts

  • In light of the facts of the Factortame saga, having obtained short term relief by way of an injunction, Factortame sought to recover substantially from the UK government for their breaching of EU law

Issue

  • Could Factortame recover, and if so, under what rules?

Decision

  • Yes; see below

Reasoning

  • The UK had acted in violation of an equal treatment directive
  • Generally, directives (include this one), could not be relied upon by individuals
  • The EU must ensure that the treaties are observed, and therefore that Member States implement directives as required
  • When in breach of EU law, a Member State will be obliged to make good damage caused to citizens as a result
  • The test for state liability should be aligned with the test for contractual liability in [Art 340 TFEU]
  • A state will be liable where:
    • EU law intends to grant a right to a citizen
    • The breach of EU law by a Member State is sufficiently serious
    • There is a casual link between the state’s breach and the citizen’s loss
  • ‘sufficiently serious’ will be judged factually on the basis of whether a Member State manifestly disregarded the limits of its discretion, with reference to:
    • The clarity of the rule breached
    • The discretion left to the Member State
    • How intentional the breach was
    • Whether the breach was excusable
    • How much any EU institution contributed to the Member State’s omission
    • An contrary measures adopted by the Member State
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Posted in EU Law Revision Notes.

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