State liability for judicial decisions – between the Portuguese regime and EU law, some lights in the Ferreira da Silva judgment

by Alessandra Silveira, Editor
and Sophie Perez Fernandes, Junior Editor

In the recent Ferreira da Silva ruling[1], the ECJ was given the opportunity to assess the compliance of the applicable Portuguese legal regime of State liability for damages caused in the exercise of judicial functions with the principles of EU law on State liability.

The facts of the main proceedings took place in 1993[2] and concerned the wound up of a company. After the dissolution, ninety-seven workers brought proceedings to challenge the collective redundancy. These proceedings first took place before the Tribunal de Trabalho de Lisboa (Lisbon Labour Court), and were subject to an appeal, first before the Tribunal da Relação de Lisboa (Lisbon Court of Appeal) and then (an appeal of cassation) before the Supremo Tribunal de Justiça (Supreme Court of Justice, henceforth STJ).  Some of the applicants asked the STJ to make a reference for a preliminary ruling to the ECJ. The problem concerned the interpretation of the concept of ‘transfer of a business’ within the meaning of the Directive 2001/23[3]. The STJ denied the requests considering that there were no doubts regarding the interpretation of the relevant provisions of EU law that could justify the reference for a preliminary ruling[4]. The reasoning of the STJ, the court adjudicating at last instance, was based on the Cilfit ruling[5].

Unsatisfied, the applicants brought proceedings regarding the non-contractual civil liability of the State, arguing that, in its decision, the STJ (i) had erroneously interpreted the concept of ‘transfer of a business’ within the meaning of the Directive 2001/23 and (ii) had not made a reference for a preliminary ruling to the ECJ when such a reference was mandatory under Article 267/3 TFEU[6]. In turn, the Portuguese State argued that, under Article 13/2 of the non-contractual civil liability of the State and other public bodies’ regime (RRCEE)[7], a claim for damages must be based on the prior setting aside, by the court having jurisdiction, of the decision that caused the loss or damage. Therefore, as the decision of the STJ had not been set aside, the damages sought were not payable[8].

These proceedings were carried before the Varas Cíveis de Lisboa (Civil Courts of Lisbon) that, considering the issues raised, decided to stay the proceedings and to make a reference for a preliminary ruling to the ECJ. The ECJ had, therefore, the opportunity to clarify the concept of ‘transfer of a business’ within the meaning of the Directive 2001/23[9] – which exposed a reasonable interpretative doubt within the meaning of the Cilfit ruling. In this sense, the ECJ summarized the Cilfit ruling as follows: “a court or tribunal against whose decisions there is no judicial remedy under national law is obliged, where a question of EU law is raised before it, to comply with its obligation to bring the matter before the Court of Justice, unless it has established that the question raised is irrelevant or that the provision of EU law concerned has already been interpreted by the Court or that the correct application of EU law is so obvious as to leave no scope for any reasonable doubt”, being that “the existence of such a possibility must be assessed in the light of the specific characteristics of EU law, the particular difficulties to which the interpretation of the latter gives rise and the risk of divergences in judicial decisions within the European Union”[10].

The ECJ acknowledged, however, that it is for the court or tribunal adjudicating at last instance the “sole responsibility for determining whether the correct application of EU law is so obvious as to leave no scope for any reasonable doubt and for deciding, as a result, to refrain from referring to the Court a question concerning the interpretation of EU law which has been raised before it”[11]. It also clarified that the existence of contradictory decisions of other national courts or tribunals was not a decisive enough element to trigger the obligation under Article 267/3 TFEU. Therefore, the court or tribunal adjudicating at last instance may, for example, understand that the interpretation that it gives to a certain provision is the one to be applied without giving raise to any reasonable doubt, even if it differs from the one given by inferior courts[12]. In other words, the fact that an inferior court decides to make a reference for a preliminary ruling in similar proceedings, could not in itself prevent a supreme court, keeping with the criteria laid down in Cilfit, from considering that at stake was indeed an ‘acte clair’.

However, the situation in Ferreira da Silva was characterised by conflicting lines of case law and difficulties of interpretation in the various Member States. Contrary to the conclusion reached by the STJ, the interpretation of the concept of ‘transfer of a business’ within the meaning of the Directive 2001/23 still raised questions to several national courts which, in return, asked for preliminary rulings to the ECJ. That is why the ECJ, in a very clear and straightforward fashion, concluded that in circumstances characterised both by (i) conflicting lines of case-law at national level regarding the concept of a ‘transfer of a business’ within the meaning of the Directive 2001/23 and by (ii) difficulties of interpretation of that same concept in the various Member States, a national court or tribunal against whose decisions there is no judicial remedy under national law, such as the STJ, “is obliged to make a reference to the Court for a preliminary ruling concerning the interpretation of that concept”[13]. In the Ferreira da Silva ruling, the ECJ states for the first time that a national court adjudicating at last instance had failed to comply with its obligation to make a reference for a preliminary ruling under Article 267/3 TFEU, for the ‘acte clair’ conditions were not met[14].

A violation of EU law attributable to a Member State being acknowledged, it was necessary to assess the responsibility in which it incurred as a result before the injured parties. The conditions for State liability for breaches of EU law have been well known since the rulings on Francovich and Brasserie du Pêcheur: (i) the rule of law infringed must have been intended to confer rights on individuals, (ii) the breach must be sufficiently serious and (iii) there must be a direct causal link between the breach of the obligation resting on the State and the damage sustained by the injured parties[15]. In Köbler[16] and Traghetti del Mediterraneo[17], this case law was applied to situations of breach of EU law attributable to a court or tribunal against whose decisions there was no judicial remedy under national law, as was the case of the decision from the STJ in Ferreira da Silva.

But, where the conditions for a State to incur liability are satisfied, it is on the basis of the rules of national law concerning liability that the State must make reparation for the consequences of the loss or damage caused, provided that the conditions laid down by national law respect both the principles of equivalence and effectiveness[18]. In the proceedings pending before the Varas Cíveis de Lisboa, the Portuguese State shielded itself in the provision of Article 13/2 RRCEE in order to avoid liability. The application of this provision has, and had in the case in analysis, the consequence that “any action for damages against the State for infringement of the obligation stemming from the failure to comply with the duty imposed by the third paragraph of Article 267 TFEU will be inadmissible if the decision that caused the loss or damage has not been set aside”[19].

Therefore, it was not particularly difficult to the ECJ to consider the provision of Article 13/2 RRCEE contrary to the principle of effectiveness as it makes it extremely difficult to obtain reparation[20]. It was confirmed, in the different phases of the proceedings, that the situations in which decisions of the STJ may be subject to appeal are extremely limited. Moreover, the obstacle set out by Article 13/2 RRCEE could not be justified by other general principles of EU law, such as the principle of res judicata or legal certainty[21].

The incompatibility of Article 13/2 RRCE with the principle of effectiveness may seem like a trivial conclusion. It is not the case, however, if one considers that the reference for a preliminary ruling that occasioned the Ferreira da Silva ruling is more overdue than premature. Within the context of the approval of the RRCEE, the Portuguese doctrine had already highlighted the fact that State liability for damages caused in the exercise of judicial functions existed irrespective of the revision or the withdrawal of the harmful decision when at stake was a breach of EU law[22]. During the proceedings on Ferreira da Silva, the STJ applied the provision on other proceedings that fell outside the scope of EU law, not considering it unconstitutional[23]. The Ferreira da Silva ruling thus contributes to make the Portuguese legal regime on the State liability for damages caused in the exercise of the judicial functions compliant with the ECJ’s case law on the matter. As it can be inferred from the proceedings pending in the Varas Cíveis de Lisboa, the question was not as blunt as the reasoning behind the ECJ’s decision may imply.

__References__

[1] ECJ 9 September 2015, Ferreira da Silva, Case C-160/14.

[2] See Ferreira da Silva e Brito, cit., para 8-19.

[3] See Article 1/1 of the Council Directive 2001/23/CE of 12 March 2001, on the approximation of the laws of the Member States relating to the safeguarding of employees’ rights in the event of transfers of undertakings, businesses or parts of undertakings or businesses, OJ L 82, 22.3.2001, p. 16-20.

[4] See STJ 25 February 2009, Case 08S2309, para 3.7, available at www.dgsi.pt, with some transcribed excerpts in Ferreira da Silva, cit., para 16-18.

[5] ECJ 6 October 1982, Cilfit, Case 283/81.

[6] See Ferreira da Silva, cit., para 19.

[7] Approved by the Law n.º 67/2007 of 31 December and altered by the Law n.º 31/2008 of 17 July.

[8] See Ferreira da Silva, cit., para 7 and 20.

[9] See Ferreira da Silva, cit., para 23-35.

[10] See Ferreira da Silva, cit., para 38-39.

[11] See Ferreira da Silva, cit., para 40.

[12] See Ferreira da Silva, cit., para 41-42.

[13] See Ferreira da Silva, cit., para 43-45.

[14] In this sense, see ECJ 9 September 2015, X, Joined Cases C72/14 and C197/14, and ECJ 1 October 2015, Doc Generici, Case C-452/14.

[15] See ECJ 19 November 1991, Francovich, Joined Cases C-6/90 and C-9/90, para 38-40, and ECJ 5 March 1996, Brasserie du Pêcheur, Joined cases C-46/93 and C-48/93, para 51.

[16] ECJ 30 September 2003, Köbler, Case C-224/01.

[17] ECJ 13 June 2006, Traghetti del Mediterraneo, Case C-173/03 .

[18] See Ferreira da Silva, cit., para 50.

[19] See Ferreira da Silva, cit., para 49.

[20] See Ferreira da Silva, cit., para 51-59.

[21] See Ferreira da Silva, cit., para 58-60.

[22] See Alessandra Silveira, “Da (ir)responsabilidade do Estado-juiz por violação do Direito da União Europeia. Anotação ao Acórdão do Supremo Tribunal de Justiça de 3 de Dezembro de 2009”, in Scientia Iuridica, n.º 320, 2009, p. 773-804; Maria José Rangel Mesquita, “Irresponsabilidade do Estado-Juiz por incumprimento do Direito da União Europeia: um acórdão sem futuro. Anotação ao Acórdão do STJ (1.ª Secção), de 13 de dezembro de 2009”, in Cadernos de Justiça Administrativa, n.º 79, 2010, p. 29-45; and Carla Amado Gomes, “ABC da (ir)responsabilidade dos juízes no quadro da Lei n.º 67/2007, de 31 de Dezembro”, in Scientia Iuridica, n.º 322, 2010, p. 261-277.

[23] See STJ 24 February 2015, Case 2210/12.9TVLSB.L1.S1, available at www.dgsi.pt.

 

 

 

 

 

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