Compensation for damage caused by an institution only in case of a flagrant violation of a superior rule of law protecting individuals.

Articles 178 and 215 (second paragraph) of the EEC Treaty. Article 178 lays down that “The Court of Justice shall have jurisdiction in disputes relating to compensation for damage provided for in the second paragraph of Article 215″, which provides “that In the case of non-contractual liability, the Community shall, in accordance with the general principles common to the laws of the Member States, make goods any damage caused by its institutions or by its servants in the performance of their duties”.


In this historical case, the CJEU assert that the action for damages provided for by Articles 178 and 215 of the EEC Treaty was introduced as an autonomous form of action, with a particular purpose to fulfil within the system of movements and subject to conditions on its use dictated by its specific nature. It differs from an application for annulment in that its end is not the abolition of a particular measure but compensation for damage caused by an institution.


In the case of a legislative act involving economic policy decisions, non-contractual liability on the part of the Community for damage suffered by individuals as a result of that act may be required only in the event of a sufficiently serious infringement of a higher rule of law protecting individuals, having regard to the second paragraph of Article 215 of the Treaty.


Now, Damages can only be obtained under Article 268 or 340 TFEU due to sufficiently flagrant violation of EU law.

Case law summary

In this case, Aktien-Zuckerfabrik Schöppenstedt filed an appeal for damages under the second paragraph of article 215 of the ECC Treaty, as compensation for damage caused by Regulation no 769/68 of the Council laying down the measures needed to offset the difference between the national sugar prices and the prices valid from 1 July 1968, against the Council of the European Communities.


The applicant claimed payment and compensation for the damage which it has suffered due to the loss of income concerning the former German price of raw sugar.


The CJEU dismissed the applicant’s action because it was not sufficiently concrete and because it understands that the non-contractual liability of the Community presupposes at the very least the unlawful nature of the act alleged to be the cause of the damage, where legislative action involving measures of economic policy is concerned, the Community does not incur non-contractual liability for damage suffered by individuals as a consequence of that action, under the provisions contained in Article 215, second paragraph, of the Treaty, unless a sufficiently flagrant violation of a superior rule of law for the protection of the individual has occurred. For that reason, in the present case, the court must first consider whether such a violation has occurred.


Furthermore, it considered that the difference referred to does not constitute discrimination because it is the result of a new system of standard organization of the market in sugar which does not recognize a single fixed price but has a maximum and minimum cost and lays down a framework of prices within which the level of actual prices depends on the development of the market.


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