By Steve Peers

The European Court of Justice (ECJ) recently issued a noteworthy decision concerning the ‘infringement procedure,’ a system for directly upholding EU law within EU courts. This system operates alongside national courts enforcing EU law. Article 258 of the Treaty on the Functioning of the European Union (TFEU) outlines this system, allowing the Commission to bring cases to the ECJ against Member States allegedly violating EU law.

What happens if Member States disregard these rulings? National courts might take further action. Additionally, Article 260 TFEU outlines a process for the Commission to file another suit with the ECJ against a non-compliant Member State. If the ECJ sides with the Commission, it might impose a lump sum or recurring penalties on that Member State until they comply with the initial judgment. For further details, refer to my 2012 article in European Public Law.

A Member State’s obligation to pay penalties is clear-cut when they’ve undeniably complied with or ignored the initial judgment. (Let’s set aside situations where a Member State refuses to pay or the Commission waives payment). What if compliance is disputed? Imagine a Member State claiming full compliance while the Commission disagrees.

This problem isn’t exclusive to EU law; consider the “banana saga,” where the EU claimed compliance with World Trade Organisation (WTO) rulings while the USA disagreed. Lacking clear WTO rules on this, an ad hoc solution was needed.

Similarly, EU law lacks specific rules for this scenario. The EU General Court addressed this in 2011 when Portugal argued against a penalty payment demand, claiming compliance with a previous judgment concerning a public procurement directive violation (Case T-33/09 Portugal v Commission). The General Court sided with Portugal, stating that in such cases, the Commission couldn’t simply demand further penalties but had to initiate an entirely new infringement procedure.

The Commission appealed to the ECJ (Case C-292/11 P Commission v Portugal), which upheld the General Court’s decision. The ECJ stated that Portugal had fulfilled its obligation to repeal a specific law, as determined by case-law. The Commission argued that the replacement law still violated EU obligations, but it had to initiate new infringement proceedings to prove this breach.

The ECJ’s ruling was based on its exclusive jurisdiction to determine EU law violations, a jurisdiction neither the Commission nor the General Court could infringe upon. It also highlighted the issue of the ECJ’s limited review power, being unable to re-examine the General Court’s factual findings.

Additionally, granting the Commission authority to determine Member State compliance with Article 258 judgments would undermine the procedural rights Article 258 grants Member States, such as challenging the Commission’s claims before litigation.

Comments

The ECJ’s case-law is frequently criticized, sometimes rightfully, for prioritizing EU law effectiveness above all else. However, this judgment is arguably flawed for the opposite reason: it makes it too simple for Member States to replace one non-compliant law with another nearly as bad (assuming this doesn’t apply to identical replacements, which would be illogical).

In such cases, the Commission can’t collect further penalties without proving the breach again through fresh proceedings under Articles 258 and 260. Years later, what prevents the Member State from slightly tweaking the law, forcing the Commission into a third round of Article 258 proceedings to re-establish the ongoing violation?

The Court doesn’t address the effectiveness issue raised by the Commission. As for its reasoning, it’s debatable whether the Commission or General Court would encroach on the ECJ’s exclusive infringement jurisdiction, as this situation arises only after initial judgments under Articles 258 and 260.

The argument that Member States’ procedural rights are compromised is weak: these rights are fully exercised during the initial Articles 258 and 260 proceedings, and Member States can challenge any Commission decision declaring continued non-compliance with the initial ECJ judgment.

Lastly, regarding the ECJ’s appellate role, it could have ruled that a Member State’s compliance with its judgment is a legal, not factual, matter and therefore fully reviewable on appeal.

Many of the Court’s concerns revolve around jurisdiction and would be resolved by transferring infringement proceedings to the General Court. This wouldn’t require amending the Treaties; an amendment to the Statute of the Court of Justice, achievable through the ordinary legislative procedure, would suffice.

However, altering the EU’s judicial structure is undesirable given the General Court’s current workload. This could be addressed by appointing more judges, as suggested by the ECJ. Unfortunately, this proposal is stalled in the Council due to disagreements among Member States regarding the allocation of new judges. This raises the question: does this judgment have an ulterior motive?

Barnard & Peers: chapter 10