## Facts

- Austrian law granted university professors a length-of-service salary increment after 15 years of service counted only at Austrian universities.
- Gerhard Köbler, an Austrian professor with prior service at universities in other EU Member States, sought the increment, asserting EU free-movement and equal-treatment rights.
- The Verwaltungsgerichtshof (Austrian Supreme Administrative Court) initially sought a preliminary ruling but withdrew the reference and then rejected Köbler’s claim.
- Köbler filed a damages action against Austria, alleging the court of last instance breached EU law by misapplying free-movement rules and by withdrawing the reference.
- The Vienna Regional Civil Court referred questions on whether, and under what conditions, a Member State is liable in damages for EU-law breaches committed by a court adjudicating at last instance.

## Issues

1. Whether the EU principle requiring Member States to compensate individuals for damage caused by breaches of EU law applies when the breach results from a judgment of a court of last instance.
2. If so, what conditions govern liability for judicial breaches, particularly the seriousness threshold.
3. Whether the Austrian supreme administrative court’s actions met those conditions on these facts.

## Decision

- The Court of Justice held that EU state liability can arise from breaches of EU law attributable to any state authority, including courts of last instance.
- The Court held that liability for a last-instance court’s decision arises only in exceptional cases where the court manifestly infringed the applicable EU law.
- The Court indicated that, although the national rule restricting the increment to domestic service conflicted with EU free movement and equal treatment absent objective justification, the last-instance court’s error was not a manifest and sufficiently serious breach.
- The Court left formal application of the criteria to the referring court, while signaling that damages were not warranted on the facts presented.

## Legal Principles

- Member States must make good damage to individuals caused by breaches of EU law for which the State is responsible, regardless of whether the breach stems from the legislature, executive, or judiciary.
- Judicial independence and res judicata do not bar state liability because the claim is against the State (not the judge personally) and seeks compensation without overturning the final judgment.
- The general liability conditions are: (1) the EU rule infringed confers rights on individuals; (2) the breach is sufficiently serious; and (3) there is a direct causal link between breach and damage.
- For courts adjudicating at last instance, “sufficiently serious” requires a manifest infringement, assessed by factors including: clarity and precision of the rule; whether the error was excusable; intentionality; disregard of the duty to refer; and manifest disregard of settled Court of Justice case law.

## Conclusion

The Court of Justice confirmed that EU state liability may be based on a final national court judgment, but damages are available only where the last-instance court commits a manifest and sufficiently serious breach; on these facts, that high threshold was not met.


Köbler v. Republik Österreich, Case C-224/01, 2003 E.C.R. I-10239 (C.J. 2003)