Escalators, elevators and the bigger picture of civil liability for the violation of EU law
In the Kone-case, the CJEU continues ‘Europeanising’ national tort law requirements, but a bigger picture of liability for the violation of EU law is missing.
Civil liability for the violation of EU law is to be established on the basis of national tort law. That doesn’t mean that it’s a matter for the national courts exclusively though. Often interpretation of (the transposition in national statutory law of) EU directives or regulations is required, bringing the Court of Justice of the EU (CJEU) into play, as the supreme interpreter of EU law. In providing these interpretations, the CJEU may ‘Europeanise’ national tort law requirements and, in a way, develop a kind of European tort law. And this is the case these days. Some time ago, I discussed the Austrian case of Jutta Leth in this blog. Amongst other things, the CJEU introduced the rather complicated criterion of the ‘direct economic consequence’ to determine whether pure economic loss is within the protective scope of the (national law transposing the) EU directive on environmental impact assessments.
In another Austrian case, decided on by the CJEU this month, it truly turns national tort law upside down. This Kone-case is about the violation of primary EU law: Article 101 TFEU, forbidding any agreement distorting competition. The Austrian National Railway company (ÖBB) sued the members of an escalators and elevators cartel, because it would have paid less if it wasn’t for the cartel dividing the market and keeping prices artificially high. The twist was that ÖBB also claimed damages from the cartel members for so-called ‘umbrella pricing’. The cartel members were also to compensate for the damage ÖBB suffered by paying artificially high prices to escalator and elevator builders who themselves weren’t members of the cartel, but who seized the opportunity created by the cartel to charge higher prices.
The Austrian courts found that the damage wasn’t within the protective scope of the violated provision. The umbrella pricing was, in their view, merely a ‘side effect’ of the cartel, resulting from the ‘independent decision’ by a non-cartel member ‘based on his own business considerations’. For the same reason, the Austrian courts also found that there was no ‘adequate’ causal link (par. 14-15). The CJEU, on the contrary, found that damage as a consequence of umbrella pricing is something members of a cartel ought to be more or less aware of. In addition, according to the CJEU, in the Austrian view the full effectiveness of EU competition law would be jeopardised. The CJEU thus ended up deciding simply that Article 101 TFEU is to be interpreted that ‘it precludes the interpretation and application of domestic legislation enacted by a Member State which categorically excludes, for legal reasons, any civil liability of undertakings belonging to a cartel’ for losses of, in short, umbrella pricing (par. 38).
Thus Kone shows, even more so than Leth, the full potential of the CJEU to ‘Europeanise’ national tort law requirements. By its ruling out of any ‘categorical exclusion, for legal reasons’, the CJEU seems (for the moment at least) to entirely discard established doctrines on causation and the Schutznorm-requirement of Austrian national tort law. What’s perhaps the most striking, though, is the apparent absence of any bigger picture in the CJEU’s decision in Leth and Kone of liability for the violation of EU law. It seems to arrive at its decisions on a complete ad hoc basis. Obviously, these cases are about different instruments in different fields of EU law (a directive on environmental law versus a treaty provision of competition law). Perhaps it has also made a difference that Leth was adjudicated by the Fourth and Kone by the Fifth Chamber. Yet in the end these cases both are about civil liability for the violation of EU law. In Kone the CJEU doesn’t even refer to its previous decision in Leth. It’s time for the CJEU to broaden its focus on the effectiveness of EU law to a more balanced approach, also taking into account the coherence of a Europeanising national tort law (or a nationalising European tort law).