## Facts

- Dr. Köbler, a university professor, sought compensation from Austria for financial losses resulting from the Austrian Supreme Administrative Court’s denial of a length-of-service increment.
- The denial was based on the court’s misinterpretation of EU law regarding the right to the increment, contradicting established ECJ precedent on the free movement of workers.
- As a consequence, Dr. Köbler received a lower salary than was due under EU law, prompting his claim for damages against the Austrian state.

## Issues

1. Whether a Member State can be held liable for damages caused to individuals by a decision of its court of last instance that infringes EU law.
2. What conditions must be satisfied for such state liability to arise, particularly concerning judicial breaches of EU law.
3. How to determine if a breach by a supreme national court constitutes a “manifest breach” warranting liability.

## Decision

- The ECJ held that the principle of state liability applies to breaches of EU law caused by national courts of last instance.
- Liability is not automatic; it requires that the rule of law infringed is intended to confer rights on individuals, that the breach is sufficiently serious (i.e., manifest), and that a direct causal link exists between the breach and the damage suffered.
- The seriousness of the breach must be assessed case by case, considering factors such as clarity of the breached rule, the discretion available to the court, existence of prior case law, and whether the error was intentional or excusable.
- An error by a high court in interpreting EU law does not itself establish a manifest breach; liability only arises for clear, serious infringements.
- Member States must ensure effective judicial protection and compensation for individuals where these strict criteria are met.

## Legal Principles

- State liability for breaches of EU law by any state organ, including courts of last instance, is a fundamental principle that supports the effectiveness of EU law.
- Not all judicial errors give rise to state liability; only manifest and sufficiently serious breaches qualify.
- The manifest breach requirement balances state liability with the independence of the judiciary by setting a high threshold.
- Uniform and effective application of EU law within Member States is reinforced by allowing claims for compensation but limiting them to egregious judicial errors.

## Conclusion

Köbler v Austria established that Member States may be liable for damages arising from breaches of EU law by their supreme courts, but only when those breaches are clear, serious, and have caused specific loss, thereby strengthening individual rights while preserving judicial independence.

Köbler v Austria (Case C-224/01) [2003] ECR I-10239