Tag Archives: ECJ

Commission Wins on Salaries Dispute with Council

This may not be hot news, but raises some questions. The ECJ has partially annulled Council Regulation (EU, Euratom) 1296/2009 on the adjustment of the remuneration and pensions of officials of the European Union.

In November 2009, the Commission proposed a salary increase of 3.7%. On 23 December 2009, the Council decided on an increase, in the contested regulation. It considered that the Commission’s proposal for adjusting salaries should be modified to take account of the economic and financial crisis. It fixed new salary levels on the basis of an increase of 1.85%.

The Commission brought an action for annulment against the provisions of the regulation setting out those amounts. It argued that the Staff Regulations establish an automatic method for adjusting salaries that leaves no margin of discretion to the Council that would allow it to reject the Commission’s proposal.

The ECJ has concluded that the Council has no margin of discretion allowing it to decide upon a salary adjustment different to that proposed by the Commission on the basis of the criteria laid down in Article 3 of Annex XI of the Staff Regulations alone, except under the special procedure provided for by Article 10 of that Annex.

Interestingly, the ECJ has held that in order to avoid creating a legal vacuum in the EU salary regime, the effects of those articles are maintained until such time as a new regulation, adopted by the Council, enters into force.

Here are the questions:

What was the Council Legal Service actually thinking? Did they explain to Council members that they were about to make a blatant violation of relevant EU law? If yes, did the Council adopt the regulation anyway to score a political point against the Commission?



Interinstitutional (Dis)Agreement

Legal and political scholars pay great attention to the interinstitutional agreements among EU institutions, and for a good reason: it’s where a lot of the institutional innovations first take hold. Now an interinstitutional agreement (IIA) between the European Parliament (EP) and the European Commission has become an object of dispute. The Council has voiced its  strong criticism of the document, claiming that several provisions of the framework agreement have modified the institutional balance set, providing certain prerogatives for the European Parliament that are not provided for in the treaties and that are limiting the autonomy of the Commission and its President (hat tip: EUobserver).

The Council is concerned about the participation of the EP in international talks and its increased access to classified documents and to information related to legal cases pursued by the Commission against Member States. The Council threatens to challenge any action of the Commission and the EP that would have an effect contrary to the interests and the prerogatives conferred upon it by the Treaties.

The question is whether these provisions do constitute a shift of the institutional balance that breaches the Treaties. This is a twofold question. We very well know that IIAs do shift the institutional balance to some extent, and this agreement is a good example. But does this one breach the Treaties?

Martinned thinks that the agreement shifts the political balance, and not so much the legal balance of power. Piotr Kaczynski from CEPS is quoted by EUobserver saying that the IIA as such doesn’t necessarily break the Lisbon Treaty.

I concur that the IIA probably does not breach the Treaties simply because it does not have the potential to do so. Naturally, the Council may wish to challenge the actions based on the IIA, but will likely face little understanding from the ECJ, provided that the Commission and the EP haven’t made a flagrant violation, of course.

2009 Report on Monitoring the Application of EU Law

The Commission has published its 2009 Report on Monitoring the Application of EU Law. The report outlines the main trends in the implementation and application of EU law during 2009.

At the end of 2009, the Commission was handling around 2900 complaints and infringement files. Around 77 % of complaints were closed before the first formal step in an infringement proceeding; around a further 12 % of the total were closed before the reasoned opinion and around a further 7 % before a ruling from the ECJ. The average time taken to process infringements, from opening the file to sending the application to the ECJ under Article 258 TFEU, fell from around 27 to 24 months.

According to the Commission late transposition and late reporting continue to constitute a widespread, systematic problem, affecting both technical updating of measures important to EU industry, priority EU policies and measures of interest to individual citizens.

The Commission underscores the use of correlation tables and expert groups for improving its cooperation with Member states on the monitoring of the application of EU law.

The Commission plans a review of its general policy on the registration of complaints and relations with complainants in the light of experience of the new methods now being tested. According to the Commission horizontal instruments, such as SOLVIT and EU Pilot, continue to develop and prove their worth, quickly resolving problems faced by citizens and enterprises.

The Commission also intends to step up the use of inspections in areas such as transport safety and security, where they can play a strong role in confirming the interpretation of the law and ensuring its correct application.

Guest Blogger Ana Yankova: The Court Confirmed the Scope of Legal Professional Privilege in the Field of EU Competition Law

I am glad to introduce the first post by a guest blogger on this blog. Ana Yankova has graduated from the European Studies Department of the Sofia University “St. Kliment Ohridski” and has genuine interest in ECJ case law.

By its judgment from 14.09.2010 the Court dismissed the appeal of Akzo Nobel and Akcros against the 2007 judgment of the Court of First Instance (now ‘ the General Court’) and confirmed the constant case law which excludes internal company communications with in-house lawyers from the scope of legal professional privilege.

The appellants based the grounds of appeal on two main arguments.

First, according to Akzo Nobel and Akcros the Court of First Instance incorrectly interpreted the principle of legal professional privilege, declared by the Court of Justice of the European Communities in AM & S/Commission. The Court held that the confidentiality of written communications between lawyers and clients should be protected by Community law and stated that that protection was subject to two cumulative conditions: (1) such communications are made for the purposes and in the interests of the client’s rights of defence and (2) the documents emanate from independent lawyers, that is to say, lawyers who are not bound to the client by a relationship of employment.

Taking into account the arguments of the appellants the Court came to the conclusion that “an in-house lawyer, despite his enrolment with a Bar or Law Society and the professional ethical obligations to which he is, as a result, subject, does not enjoy the same degree of independence from his employer as a lawyer working in an external law firm does in relation to his client”. The main reasons put forward are the in-house lawyer’s economic dependence and the close ties with the employer that render professional independence comparable to that of an external lawyer impossible.

The second main argument of Akzo Nobel and Akcros is an alleged evolution of the national legal systems. According to the appellants, “notwithstanding the lack of a uniform tendency at national level, European Union law could set legal standards for the protection of the rights of defence which are higher than those set in certain national legal orders”. Akzo Nobel and Akcros claimed that the significant recent developments in the legal landscape necessitated broadening of the scope of legal professional privilege in the field of EU Competition law.

By this argument the appellants summarize the long-lasting criticisms of the judgment in AM & S/Commission. In its findings the Court refers to the comparative examination conducted by the Court of First Instance which shows that a considerable number of Member States still exclude correspondence with in-house lawyers from protection under legal professional privilege and do not allow in-house lawyers to be admitted to a Bar or Law Society. That is the reason why the Court held that “no predominant trend towards protection under legal professional privilege of communications within a company or group with in-house lawyers may be discerned”. In the Court’s view the evolution which took place during the years following the judgment in AM & S/Commission is not capable of justifying a change in the case-law and recognition for in-house lawyers of the benefit of legal professional privilege.

Regretfully, in this case there was no opportunity for the appellants to draw the attention of the Court to another important issue in regards to the scope of legal professional privilege – the European Union law does not protect communications between a client and a lawyer registered in a third country. Some commentators underline that this limitation is applicable to lawyers from the States affording analogous protection to EU lawyers.

New Restrictive Decisions of the ECJ on Access to Documents

There are two new decisions of the Court of Justice of the European Union that deal with the Access to Documents Regulation. Both decisions repeal earlier decisions of the General Court (former Court of First Instance), and are more restrictive in their understanding of the right of access to documents.

The first decision – on Case T-194/04 Bavarian Lager v Commission, deals with personal data. The Court points out that where a request based on the Access to Documents Regulation seeks to obtain access to documents including personal data, the provisions of the Data Protection Regulation become applicable in their entirety. This means that the recipient of personal data has to establish the need for the disclosure of the personal data, and the subject in question has the right to object at any time, on compelling legitimate grounds relating to his or her particular situation, to the processing of data relating to him or her.

In the second decision – on Case T-237/02 Technische Glaswerke Ilmenau v Commission, the Court examines the specifics of the state aid procedure. According to the Court interested parties other than the Member State responsible for granting the aid do not have a right under those procedures to consult the documents on the Commission’s administrative file.

Important Judgment on the Principles of EU Law

A judgment on a reference for a recent preliminary ruling by the European Court of Justice has serious implications for the application of European Union law in the future.

In Case C‑555/07 (Kücükdeveci) the Court was asked to clarify the question of the application of the principle of non-discrimination on grounds of age. ECJ stated that the principle of non-discrimination on grounds of age is a general principle of European Union law in that it constitutes a specific application of the general principle of equal treatment.

The Court says that Directive 2000/78 “merely gives expression to, but does not lay down, the principle of equal treatment in employment and occupation, and that the principle of non-discrimination on grounds of age is a general principle of European Union law in that it constitutes a specific application of the general principle of equal treatment”.

This is really interesting, because the ECJ actually says that any directive can “give expression” to a general principle of EU law, and thus have horizontal direct effect.

Some commentators do not agree with the ECJ, and others think a battle between the ECJ and the German Constitutional Court is pending.

ECJ: Ownership of Pharmacies May Be Restricted

ECJ has ruled on the question whether national restrictions for ownership and operation of pharmacies contradicts with the principle of free competition.

In its judgments ECJ states that excluding the possibility for non-pharmacists to operate pharmacies or to acquire stakes in companies or firms operating pharmacies constitutes a restriction on the freedom of establishment and the free movement of capital.

That restriction can nevertheless be justified by the objective of ensuring that the provision of medicinal products to the public is reliable and of good quality.

First Judgment on a Preliminary Ruling for Bulgaria

The European Court of Justice has reached a judgment in Case C‑545/07, reference for a preliminary ruling under Article 234 EC from the Sofiyski gradski sad (Bulgaria), in the proceedings “Apis-Hristovich EOOD v Lakorda AD” (thanks to Ana Yankova for the quick reaction).

The judgement is historic, for it is the first on a reference for a preliminary ruling from a Bulgarian court. The content of the judgement relates to a highly specialized legal area. The important fact is that the whole road – from the reference of the national jurisdiction to the judgment on the preliminary ruling, has been walked.

Let us hope that more will follow (which hasn’t happened yet).