Newsline

Resource Centre > Cases > European Court of Justice and Court of First Instance

Damages for breaches of antitrust law, judicial cooperation in civil matters, product liability, and more...

LATEST:

Case 485/08, Société Moteurs Leroy Somer v. Société Dalkia France

ECJ was asked by the French Cour de Cassation whether the Product Liability Directive precluded application of national law, or settled case law, which introduced strict liability for damage caused by a defective product to property intended and used for professional purposes. The question arose in a case between Societe Moteurs and Societe Dalkia.

A hospital generator caught fire and caused damage to the hospital. The cause of the fire was the alternator which Societe Moteurs manufactured and introduced into circulation. Dalkia France, which was responsible for the maintenance of the installation, and its insurer, Ace Europe, paid compensation for the material damage caused to the hospital by that accident and, having taken over the hospital’s rights, brought an action against Moteurs Leroy Somer so as to obtain reimbursement of the sums paid by them.

The Product Liability Directive covers damage to property which was used and intended for professional purposes. Article 9 of the Directive specifically excludes its application to damage to professional property. French law, however, also provides the possibility of claiming compensation for damage to professional property under the strict liability rules (the victim only needs to prove defect, damage, and the causal link).

Societe Moteurs argued that the Directive precluded the Member States from introducing such strict liability rules for damage which is not covered by the Directive. The ECJ did not agree. It held that, although the Directive does establish a maximum, complete system of liability, which the Member States cannot detract from; as the damage to professional property is not within the scope of the Directive, Member States have the discretion to regulate this area: thus a strict liability system for such damage is permitted.

Courage

Individual right to damages for breaches of EU antitrust law – ECJ declares that “The full effectiveness of Article 85 of the Treaty and, in particular, the practical effect of the prohibition laid down in Article 85(1) would be put at risk if it were not open to any individual to claim damages for loss caused to him by a contract or by conduct liable to restrict or distort competition”.

Case C-453/99 Courage Ltd v Bernard Crehan, 20 September 2001

English Court of Appeal referred 4 questions to the ECJ concerning the interpretation of Article 85 of the EC Treaty (the questions concerned private damage actions for breaches of competition law). The ECJ responded as follows:

“– a party to a contract liable to restrict or distort competition within the meaning of Article 85 of the Treaty can rely on the breach of that article to obtain relief from the other contracting party;

– Article 85 of the Treaty precludes a rule of national law under which a party to a contract liable to restrict or distort competition within the meaning of that provision is barred from claiming damages for loss caused by performance of that contract on the sole ground that the claimant is a party to that contract;

– Community law does not preclude a rule of national law barring a party to a contract liable to restrict or distort competition from relying on his own unlawful actions to obtain damages where it is established that that party bears significant responsibility for the distortion of competition” (para. 36).

Manfredi

Individual right to damages for breaches of EU antitrust law: causation, scope of damages, limitation periods – the ECJ declares that “Article 81 EC must be interpreted as meaning that any individual can rely on the invalidity of an agreement or practice prohibited under that article and, where there is a causal relationship between the latter and the harm suffered, claim compensation for that harm.”

Cases C-295/04 to C-298/04 Vincenzo Manfredi v Lloyd Adriatico Assicurazioni SpA, 13 July 2006

Preliminary reference from an Italian court – questions were raised in an action for damages brought Vincenzo Manfredi, Antonio Cannito and Nicolò Tricarico and Pasqualina Murgulo in order to obtain an order against those insurance companies for repayment of the increase in the cost of premiums for compulsory civil liability insurance paid due to the increases implemented by those companies under an agreement declared unlawful by the national competition authority. The questions concerned an individual’s right to damages for breaches of EU antitrust rules, the scope of this right and some additional elements such as causal link and limitation periods.

The ECJ responded by confirming the individual’s right to compensation for breaches of Article 81 of the EC Treaty, and continued with more details concerning the scope and nature of this right:

“In the absence of Community rules governing the matter, it is for the domestic legal system of each Member State to prescribe the detailed rules governing the exercise of that right, including those on the application of the concept of ‘causal relationship’, provided that the principles of equivalence and effectiveness are observed.”

The ECJ then followed to state that it is for the domestic legal system to specify which courts or tribunals have jurisdiction to consider these cases and to prescribe detailed rules on these actions (subject to the principles of equivalence and effective protection - the provisions concerned must not be less favourable than those governing actions for damages based on an infringement of national competition rules and that those national provisions do not render practically impossible or excessively difficult the exercise of the right to seek compensation for the harm caused by an agreement or practice prohibited under Article 81 EC): such as the limitation periods and when they start running, the extent of damages.

With regard to the extent of damages, the ECJ held: “in accordance with the principle of equivalence, if it is possible to award particular damages, such as exemplary or punitive damages, in domestic actions similar to actions founded on the Community competition rules, it must also be possible to award such damages in actions founded on Community rules. However, Community law does not prevent national courts from taking steps to ensure that the protection of the rights guaranteed by Community law does not entail the unjust enrichment of those who enjoy them. Secondly, it follows from the principle of effectiveness and the right of individuals to seek compensation for loss caused by a contract or by conduct liable to restrict or distort competition that injured persons must be able to seek compensation not only for actual loss (damnum emergens) but also for loss of profit (lucrum cessans) plus interest.”