The applicant, a Belgian national, operated a clinical laboratory in Belgium which was declared insolvent. Following a complaint to the European Commission, the laboratory brought an action before the Court of Justice of the European Union seeking a declaration that by its legislation, Belgium had failed to fulfil its obligations under article 52 of the EC Treaty (later article 43EC). The action was dismissed on the ground, inter alia, that provided that equal treatment was respected, each member state was, in the absence of Community rules in that area, free to lay down rules on freedom of establishment for its own territory governing the activities of such laboratories. The court concluded that the Belgian legislation in question applied without distinction to Belgian nationals and those of other member states. Some years later the laboratory was the subject of a criminal investigation prompted by suspicion of tax evasion and the applicant was convicted of concealment of the illegal operation of a laboratory, contrary to Belgian provisions. On conviction, various orders were made against the applicant, including a sentence of imprisonment and various fines.
The applicant subsequently brought proceedings against the Belgian State, seeking to be indemnified against all the financial consequences of the orders made against him in all the proceedings. The applicant’s application was declared inadmissible on the ground that it was out of time. On the applicant’s appeal, the Brussels Court of Appeal referred to the Court of Justice for a preliminary ruling the question whether the system of non-contractual liability of a member state for damage caused by a breach of EU law was applicable in the case of damage allegedly caused to an individual as a result of an alleged breach of the fundamental freedoms under article 49FEU (freedom of establishment), 56FEU (freedom to provide services) or 63FEU (free movement of capital) by national legislation that was applicable without distinction to the state’s own nationals and those of other member states, in a case which was confined in all respects within that single member state.
Held, since the non-contractual liability of a state for damage caused to individuals by breaches of European Union (“EU”) law could be engaged only if the rule of EU law concerned was intended to confer rights on those individuals, it had to be determined whether an individual in a situation such as that of the applicant derived rights from the relevant provisions of the FEU Treaty. According to previous authority, the provisions of the FEU Treaty on the freedom of establishment, the freedom to provide services and the free movement of capital did not apply to a situation which was confined within a single member state. The dispute in the present case was confined within Belgium, since the applicant, a Belgian national who operated a clinical laboratory in Belgian territory, had asked the Belgian State to compensate him for the damage allegedly suffered as a result of the alleged incompatibility with EU law of Belgian legislation. The fact that the Court of Justice had assessed the observance by Belgium of one of the fundamental freedoms laid down by the EEC Treaty did not in itself meant that that freedom could be relied on by an individual in a case such as that in issue, confined within a single member state. Since the dispute in issue did not display any connecting factor with articles 49FEU, 56FEU or 63FEU, those provisions, which were intended to protect persons making actual use of the fundamental freedoms, were not capable of conferring rights on the applicant, and EU law could not therefore give rise to non-contractual liability of the member state concerned. Accordingly, the system of non-contractual liability of a member state for damage caused by a breach of EU law did not apply in the case of damage allegedly caused to an individual as a result of an alleged breach of a fundamental freedom laid down in articles 49FEU, 56FEU or 63FEU by national legislation that was applicable without distinction to the state’s own nationals and those of other member states, where, in a situation which was confined within a single member state, there was no link between the subject or circumstances of the dispute and those articles (judgment, paras 46, 47, 49, 57, 58, operative part).
Francovich v Italian Republic (Joined Cases C-6/90 and C-9/90) [1995] ICR 722, ECJ; Brasserie du Pêcheur SA v Federal Republic of Germany (Joined Cases C-46/93 and C-48/93) [1996] QB 404, ECJ; Caixa d’Estalvis i Pensions de Barcelona v Generalidad de Cataluña (Case C-139/12) [2014] BVC 21, ECJ and Admiral Casinos & Entertainment AG v Balmatic Handelsgesellschaft mbH (Case C‑464/15) EU:C:2016:500, ECJ considered.
E Cusas, J Derenne, M Lagrue and N Pourbaix for the applicant.
L Grauer, R Jafferali and R van Melsen (instructed by J‑C Halleux, C Pochet and S Vanrie, agents) for the Belgian Government.
J‑P Keppenne and W Mölls, agents, for the European Commission.