Ola! Here it is- Transportes Urbanos! As we all know (or those of us sad enough to call ourselves lawyers should know!) the principle of state liability arose in Mama Mia!- not the film- but Francovich & Bonifaci v Italian state. The case concerned workers who claimed receipt of their wages following the liquidation of their employers. The ECJ held that a member state could be liable to make reparations in respect of any losses incurred by an individual for a member state’s breach of EU law.
This was extended in the case of Brasserie du Pecheur. Whenever we think of a Brasserie a quaint little vignette of a cafe that serves coffee and croissants springs to mind! (or at least it does in mine). You might then be suprised to learn that this case concerned the purity of Beer. However, it is the test that is important. The act:
1) Must intend to confer rights on individuals
2) The breach must be sufficiently serious (manifest and grave disregard by a member state of the limits of their discretion)
3) There must be a causal link between the breach and the loss
But how does this apply to Transportes! This case concerned a dispute between Transportes and the Spanish Administration relating to spanish tax law. Under spanish law, law 37/1992 provides limits for the calculation of VAT which must be recorded in a self assessment. However, law 58/2003 states that a person has the right to request that his self assessment be rectified and any overpayments refunded. This is subject to a four year limitation period.
In this case Transportes had filed self assessments for the tax years 1999 and 2000 in accordance with law 37/1992 but had not taken advantage of law 58/2003. They then tried to claim overpaid tax back from the spanish authorities!
If you’re still awake (I’m the first to realise that spanish tax law isn’t the most stimulating topic) now comes the exciting part! Transportes claimed that law 37/1992 was incompatible with Sixth Council Directive 77/388/EEC of 17 May 1977.
The Spanish Administration (reluctant to cough up- the tight fisted rascals!) stated that Transportes had to exhaust all other remedies first. They also stated that the action was time barred. This meant that as Transportes had not submitted a claim for rectification during the four year period (see above) any attempt to claim there was a direct causal link between the breach and the loss was nonsense!
The ECJ held that it would provide the spanish court with guidance on the principles of effectiveness and equivalence, so as to enable it to assess whether, under EU law, it was permitted to disapply national rules regarding state liability.
The ECJ held that EU law precludes a member state from applying a rule which states that the applicant must exhaust all other remedies before having recourse to state liability.
This meant that Transportes could get their money back! Hooray!
I hope you have enjoyed this post. Adios!
