Mulder v Council & Commission [1992] ECR I-3061

Facts

• The case involved regulations enacted by the Council and Commission of the European Community regarding milk production and sale.
• These regulations imposed milk quotas and levies on producers who exceeded their quotas to manage milk surpluses.
• Mr. Mulder, a Dutch farmer, suffered financial losses as a result of these regulations.
• His initial challenge to the validity of the regulations was unsuccessful.
• Subsequently, Mr. Mulder sought damages from the Community for non-contractual liability arising from these legislative acts.

Issues

1. Whether the European Community could be held non-contractually liable for individual damages caused by its legislative acts.
2. What criteria determine a "sufficiently serious breach" of a superior rule of law intended to confer rights on individuals.
3. Whether a direct causal link existed between the legislative measures and the financial loss suffered by Mr. Mulder.

Decision

• The European Court of Justice held that the Community may incur non-contractual liability for legislative acts, but only under strict conditions.
• Such liability arises if there is a sufficiently serious breach of a superior rule of law intended to confer rights on individuals.
• Actual and certain damage must be shown, and there must be a direct causal link between the breach and the alleged harm.
• The seriousness of the breach is assessed by examining the clarity and precision of the rule, the scope of institutional discretion, the intention behind the act, and whether any legal error was excusable.
• The Court acknowledged Mr. Mulder’s financial loss and found a sufficiently direct causal link to the regulations.

Legal Principles

• EU non-contractual liability for legislative acts is conditional on a sufficiently serious breach of a rule intended to confer rights, actual and certain damage, and a direct causal link.
• A "sufficiently serious breach" reflects manifest and grave disregard for the limits of the institution’s power.
• Assessment factors include the clarity of the rule, the extent of institutional discretion, the purpose of the measure, and the excusability of any legal error.
• Only actual and directly caused damages are relevant for liability.
• The principles outlined have been applied in subsequent EU case law on state liability and individual rights protection.

Conclusion

The case established that for the EU to be non-contractually liable for legislative acts, there must be a sufficiently serious breach of a superior rule, actual and certain damage, and a direct causal link, reinforcing institutional accountability and the protection of individual rights in EU law.