Francovich principle

''Francovich v Italy'' (1991) C-6/90 was a decision of the European Court of Justice which established that European Union Member States could be liable to pay compensation to individuals who suffered a loss by reason of the Member State's failure to transpose an EU directive into national law. This principle is sometimes known as the principle of state liability or "the rule in ''Francovich''" in European Union law.UK Legislation
European Union (Withdrawal) Act 2018
Schedule 1 accessed 8 July 2018

Facts

Under the Insolvency Protection Directive 80/987/EC, EU Member States were expected to enact provisions in their national law to provide for a minimum level of insurance for employees who had wages unpaid if their employers went insolvent. Mr Francovich, who had worked in Vicenza for CDN Elettronica SnC, was owed 6 million Lira, and Mrs Bonifaci and 33 of her colleagues were owed 253 million Lira together after their company, Gaia Confezioni Srl, had gone bankrupt. The Directive was meant to be implemented by 1983, but five years later they had been paid nothing, as the company liquidators had informed them that no money was left. They brought a claim against the Italian state, arguing that it must pay damages to compensate for their losses instead, on account of a failure to implement the Directive.

Judgment

The European Court of Justice held that the Italian government had breached its obligations, and was liable to compensate the workers' loss resulting from the breach. The Court further held that the damages for such breaches should be available before national courts, and that to establish state liability on the basis of the failure to implement a directive, claimants must prove that the directive conferred specific rights on them, identifiable in its wording, and that there is a causal link between the state's failure to implement the directive and the loss suffered.

Enforcement

The court stipulated that national procedures should determine how each Member State's liability was to be enforced. In an analysis of 35 cases following ''Francovich v Italy (1991),'' Takis Tridimas has shown that the European Court of Justice takes one of three approaches to resolving disputes of state liability:

# Outcome cases: the court provides the referring national court ready-made specific solutions that almost provide no room for maneuverability. In these cases, the court will determine the compatibility of a national measure with European Union law or provide “as to how the correct interpretation of the EU requires the dispute to be resolved” thereby demonstrating the liability.
# Guidance cases: the court provides guidelines and clarifications designed to inform the national court’s interpretation of the compatibility of national law with European Union law. The court does not find the liability for the national authority.
# Deference cases:  the court provides an abstract or theoretical ruling, leaving to the national court the determination of seriousness and compatibility. These cases appear less.

It has also been shown that the principle of state liability has primarily served commercial interests in the Union. There are several obstacles to state liability for other groups of rights (environmental, social, consumer) including the inability to claim an ‘identifiable right’ under the judgment'','' struggling to sue as the losses are spread over many claimants, and an inability to prove the loss for an individual (environmental pollution).

See also

*United Kingdom labour law
* European labour law
*Direct effect
* Incidental effect
*Indirect effect

Notes

{{Reflist

External links

''Francovich and Bonifaci v Republic of Italy''
(Cases C-6 and 9/90) 991ECR I-5375

Court of Justice of the European Union case law
1991 in case law
1991 in Italy
Italian case law