Legal Grounds for Annulment and Liability in EU Law

Grounds for Annulment of EU Acts

Under EU law, there are several grounds upon which an act can be challenged and annulled. These include:

• Lack of Competence

  This occurs when an institution does not possess the necessary power to act. It can manifest by exercising a power not conferred upon it, exercising a non-existent power, or encroaching on the powers of another institution.

  Case Example: In Germany v European Parliament and Council (Tobacco Advertising), a directive banning tobacco advertising was annulled because it was primarily a public health measure, a field where the EU had limited competence at the time.

• Infringement of an Essential Procedural Requirement

  EU law imposes essential procedural requirements as safeguards. A failure to follow these can lead to the annulment of an act. This includes the duty to provide reasons for EU acts.

  Case Example: In Roquette Frères v Council, the Court annulled a measure because the Council had failed to consult the Parliament before its adoption, which was a required step in the legislative process.

• Infringement of the Treaty or Rule of Law

  This ground covers breaches of the EU Treaties or any superior rule of law relating to their application, including general principles of EU law.

  Case Example: The case of Transocean Marine Paint v Commission saw the annulment of a measure on the basis of a breach of the principle of natural justice.

• Misuse of Power

  This entails the adoption of a measure for a purpose other than that intended by the Treaty provision that constitutes its legal basis. It includes any illegitimate use of power.

  Case Example: In UK v Council, the UK argued, unsuccessfully, that the Working Time Directive was wrongly based on an article concerning the health and safety of workers. Another example is the Racke v Commission (Chinese Mushroom case).

Wrongful Acts and Non-Contractual Liability of the EU

The Schöppenstedt Formula and Liability Tests

The approach to EU liability for wrongful acts was historically defined by the Schöppenstedt formula, which distinguished between legislative and administrative acts.

• Administrative Acts: Breaches could be established on the basis of illegality alone. In Adams v Commission, Mr. Adams alerted the Commission to competition law breaches by his Swiss employer. The Commission disclosed documents to the company, leading to Adams' conviction for economic espionage in Switzerland. The Court of Justice (CoJ), under Article 340 TFEU, found the Commission's negligence gave rise to liability in damages.
• Legislative Acts: For general legislative measures involving choices of economic policy, a "sufficiently flagrant violation of a superior rule of law" is required. The CoJ applied this restrictive test to ensure that the risk of damages claims did not hinder the legislative function, meaning few actions succeeded.

Alignment of EU and State Liability Principles

A different approach developed with the Bergaderm case, influenced by the CoJ's development of state liability in Brasserie du Pêcheur v Germany. The CoJ subsequently aligned the principles governing state and EU liability.

Case Example: In Laboratoires Pharmaceutiques Bergaderm SA and Goupil v Commission, a damages claim for losses from a directive restricting cosmetic ingredients was rejected. On appeal, the CoJ affirmed that the same conditions for liability apply to both the EU institutions and the Member States.