Following procedure

The creation of a damages remedy against national governments that breach Community law was arguably the most significant aspect of the ECJ's judicial creativity during the 1990s. Yet working out the details of the liability first recognised in joined cases C-6/90 and C-9/90 Francovich [1991] ECR I-5357 has taken time. The ECJ (Grand Chamber) returned to the subject in Case C-445/06 Danske Slagterier (24 March 2009).

The claimants were a group of Danish slaughterhouse companies. Community law permitted member states to prevent the sale of meat with a 'pronounced boar taint'. Germany relied on this rule to fix the permissible threshold for one hormone at a very low level. This effectively prevented the sale of meat from uncastrated pigs, just as a group of Danish farmers was experimenting with raising pigs without castration, using a quite different system to detect and eliminate tainted meat. The Danish farmers had to resume castration for pork intended for sale in Germany. They claimed to have suffered losses of more than DEM 200 million.

In 1998, the German action was held to be illegal by the ECJ (case C-102/96 Commission v Germany [1998] ECR I-6871). There were claims in Germany to recover the damage, and the German courts referred a number of issues to the ECJ. Of those, the most interesting related to limitation periods and the duty to mitigate damages.

Suspending the limitation period

German law provided a three-year limitation period, from the date on which the claimant became aware of the damage and the defendant's identity. If that limitation period applied then the claims were partially time-barred. The German court wondered, however, whether Community law might require a limitation period to be suspended during a period when the member state had not complied with its obligations and was the subject of enforcement action by the Commission.

The ECJ held that the limitation period was not suspended. Enforcement proceedings, which the Commission pursues in the general public interest, are quite different from individual action to vindicate Community rights. Nor is there any rule of Community law that limitation periods cannot run until the illegality is remedied: the slight suggestion to that effect in Case C-208/90 Emmott [1991] ECR I-4291 has now, repeatedly, been 'explained' so that it applies only if the effect of the limitation period in question is to make it impossible to rely on Community law rights.

Applying the mitigation rule

Finally, there was the question of mitigation. German law prevents claimants from recovering loss which could have been averted by using a legal remedy, if the claimant wilfully or negligently failed to use that remedy. Is such a rule compatible with EC law? Yes, in principle, according to the ECJ. The mitigation rule should be applied, so long as it is limited to steps that should reasonably have been taken. However, the ECJ did point out that it did not think that the fact that there might need to be a reference to it under Art.234 would make proceedings unreasonable, nor did the fact that the Commission was taking enforcement action.

This is not altogether surprising, but does deserve one comment. Throughout the case, as is customary, the ECJ treats rules about limitation and the detailed assessment of damages as procedural, subject to the national law of the forum. But why? The Rome II Regulation on non-contractual liability (Reg 864/2007) provides that it is the applicable law of a tort that governs limitation (Art.15 (h)) and assessment of damages (Art.15(c)). Because, in the case of the liability of member states, the basic governing law seems to be Community law directly, might the time not be coming to insist that such rules are treated as substantive and not procedural, and addressed directly by Community law?