EU ordered to pay more than EUR 50,000 in damages for slowness proceedings

The excessive length of proceedings before the General Court may cause harm and may engage the non-contractual responsibility of the European Union (the “EU”). This was invoked by Gascogne Sack Deutschland and Gascogne before the General Court, which ruled in their favour in case T-577/14.

On 23 February 2006, the two companies brought actions before the General Court seeking the annulment of a decision adopted by the European Commission in a case concerning a cartel in the industrial plastic bags sector. In November 2011, the Court dismissed those actions (in cases T-72/06 and T-79/06) and ordered the two companies to pay fines of a total amount of EUR 13.2 million. The Court of Justice then confirmed the judgments of the General Court in November 2013.

The General Court, sitting in an extended and different formation, examined the three cumulative conditions under which the EU non-contractual liability may arise:

• The institution’s conduct must be unlawful. In this case, over a total period of 46 months between the end of the written part of the procedure and the opening of the oral part, the General Court found that an inactivity period of 20 months was unjustified (in competition law, a period of 15 months between the end of the written part and the opening of the oral part constitutes an appropriate period).
• Actual damage must have been suffered. In this particular case, Gascogne suffered actual and certain material harm, during the unjustified period of inactivity, because of the costs incurred as a result of the bank guarantee provided to the European Commission.
• There must be a causal link between the conduct and the damage pleaded: if the reasonable period had not been breached, Gascogne would not have had to pay the costs related to the bank guarantee during the unjustified period of inactivity.

The Court therefore ordered the EU to pay compensation of more than EUR 50,000 for (i) the material damage caused by the violation of the reasonable time principle (which entails the payment of the above-mentioned bank guarantee costs) and (ii) the non-material damage incurred (the failure to adjudicate in a reasonable period led to greater uncertainty than usually caused by legal proceedings).

The judgments declaring the established EU’s liability remain rare. Case T-577/14 involves the first adjudication of EU non-contractual liability for the excessive length of proceedings. This judgment must, however, be seen in context, as statistics issued by the Court of Justice of the EU show that the average length of proceedings has been reduced in recent years.