Wednesday, July 19, 2017
Francovich and now Ogieriakhi? The Irish Supreme Court finds balance in determining a Member State’s liability in damages for breach of EU law.
The Supreme Court recently delivered its decision in the case of Ogieriakhi v Minister for Justice and Equality & Ors bringing some clarity to the circumstances in which EU Member States will be liable in damages for losses caused by the erroneous application of EU law.
The error of EU law and the damage caused
The EU laws central to these proceedings relate to the free movement of EU citizens and their family members and the application of these laws to Mr. Ogieriakhi, a Nigerian national who came to Ireland in 1998. In 1999, Mr. Ogieriakhi married a French citizen and was entitled to reside in Ireland under then applicable EU law (Regulation 1612/68). The couple separated and Mr. Ogieriakhi’s wife left Ireland in 2004 following which the Minister for Justice refused to extend his right to remain.
Meanwhile, the EU Citizenship Directive (2004/38/EC) introduced the right to permanent residency in an EU Member State after five years of continuous residence, even where followed by a break of up to two years. Mr. Ogieriakhi claimed that through his marriage (and despite his wife’s departure from the State) he was entitled to permanent residence pursuant to the Directive. The Minister rejected this argument and held that the relevant provisions did not avail him. However, following the judgment of the Court of Justice of the EU (ECJ) in the case of Lassal, the Minister was constrained to accept that its interpretation of the Directive was erroneous and that Mr. Ogieriakhi was indeed entitled to permanent residence as a matter of EU law.The fallout of the Minister’s original error was that in 2007 Mr. Ogieriakhi’s employer, An Post, fired him on the basis that he had no legal status and no right to work. Around this time, he was also threatened with deportation.
The claim for damages
Relying on the seminal EU decisions in Francovich and Brasserie du Pêcheur, Mr. Ogieriakhi sued the State for damages for loss of income. These cases establish that an EU Member State can be held liable for loss or damage to individuals caused by infringements of EU law as long as three conditions are met:
It was not disputed that the first and third conditions were met in Mr. Ogieriakhi’s case. His claim hinged on the second condition: that the infringement of EU law must be sufficiently serious.
What is a sufficiently serious infringement?
In response to an Article 267 referral from the High Court in Mr. Ogieriakhi’s proceedings, the ECJ confirmed that the “decisive test” for a sufficiently serious infringement was whether the Member State manifestly and gravely disregarded the limits on its discretion. The factors that would influence this include the clarity or precision of the rule breached, whether the damage caused was intentional, and whether an error of law was excusable or inexcusable. The standard to be met was not to be as high as that required for the establishment of misfeasance in public office (a domestic legal principle) and the fact of having to refer questions to the ECJ could not be taken as proof that the rule breached was of insufficient clarity or precision.
In the High Court, Mr. Ogieriakhi enjoyed a resounding victory after Hogan J. found that the Minister’s denial of residency was “sufficiently serious” and therefore satisfied all three Francovich conditions. Hogan J considered that although the officials in question acted honestly, the breach was objectively serious and the provisions of the Directive were ‘absolutely unambiguous’. Hogan J awarded damages to Mr. Ogieriakhi in excess of €100,000.
However, the Court of Appeal took an opposite view and emphatically rejected Hogan J’s interpretation of what constituted a sufficiently serious breach, applying instead a test that arguably comes closer to the test for misfeasance in public office within domestic law. The Court of Appeal considered that an infringement would not be sufficiently serious if based on an honest mistake that was neither bizarre nor eccentric or that was not actuated by a wrongful motive on the part of the Member State. The Court of Appeal found that the error of law was excusable and was buoyed in this position by a) the fact that other Member States had adopted a similar interpretation as Ireland and b) by the ‘more or less obvious’ fact that if a matter has to be referred to the ECJ the obligation in question cannot be considered clear. All told, in the Court of Appeal’s view the second Francovich criteria had not been met and no damages should be awarded.
The Supreme Court upheld the decision of the Court of Appeal and Mr. Ogieriakhi lost the case on the basis that the Irish State was not liable for damages because the breach of EU law was not sufficiently serious: the State had not “manifestly and gravely discarded the limits on its discretion” and the mistake was not “inexcusable”.
In reaching this conclusion, the Supreme Court applied a more balanced test as between the broad approach applied in the High Court and the narrow approach adopted by the Court of Appeal. Importantly, the Supreme Court held that the Court of Appeal wrongly placed too much emphasis on its view that the officials acted honestly on foot of a misapprehension which was not bizarre or eccentric; good faith and honest misapprehension cannot be sufficient to excuse the State from liability in an appropriate case. The Court also clarified that a mistake as to the true meaning of a legal measure might be shared with more than one Member State and yet still be objectively clearly wrong. However, the Supreme Court ultimately held that the legal issues in question raised complex considerations not expressly provided for in the Directive and which were not easily answered. As such, the error was not sufficiently serious and the second condition for Francovich liability had not been satisfied.
Whilst an unhappy end to a hard-fought battle for Mr. Ogieriakhi, the decision of the Supreme Court can be welcomed for clarifying that liability in damages may accrue for breach of EU law notwithstanding a lack of mala fides or unlawful motive. The facts in Mr. Ogieriakhi’s case were certainly at the more complicated end of the scale and one gets the sense that the Supreme Court was keen to leave the door open to appropriate future claims even where the error in question is based on the honest view of the authorities.