Francovich and Bonifaci v Italian Republic (Joined Cases C-6...

Facts

• The case concerned Italy's failure to implement Directive 80/987/EEC, which was intended to ensure minimum compensation for employees in the event of employer insolvency.
• Francovich and Bonifaci, former employees of insolvent companies, were unable to obtain the compensation guaranteed by the Directive as it had not been transposed into Italian law.
• Italy's omission prevented the applicants from exercising rights conferred by EU legislation.

Issues

1. Whether Member States are liable to compensate individuals who suffer loss due to a state's failure to implement an EU directive.
2. What conditions must be met for state liability when a directive is not implemented.
3. Whether the content of Directive 80/987/EEC provided identifiable rights to individuals affected by non-implementation.

Decision

• The Court of Justice of the European Union (CJEU) ruled that Member States are obligated to compensate individuals for losses caused by failure to implement an EU directive, subject to certain conditions.
• The CJEU articulated a three-part test for establishing state liability: (1) the directive confers specific rights on individuals, (2) those rights are identifiable from the directive, and (3) a causal link exists between the state's breach and the damages suffered.
• The CJEU found these conditions satisfied in the circumstances, establishing Italy's liability.

Legal Principles

• Member State liability is central to the effectiveness of EU law and protects individuals against breaches of rights conferred by directives.
• The three conditions for establishing state liability are:
  • The directive must confer rights on individuals.
  • The content of those rights must be identifiable.
  • There must be a direct causal link between the breach and the damage.
• Subsequent cases have clarified and broadened the principle, applying it to breaches of other EU law beyond directives and defining when a breach is “sufficiently serious.”
• The principle of state liability is linked to the guarantees of effective judicial protection under Article 19(1) TEU and Article 47 of the Charter of Fundamental Rights.

Conclusion

The Francovich decision established that Member States are liable to compensate individuals for loss resulting from failure to implement EU directives where rights conferred are clear, identifiable, and a causal link to the damage exists. This principle supports the effectiveness of EU law and strengthens judicial protection for individuals within the EU legal framework.