EU Held Liable To Pay Damages As A Result Of The 'Excessive' Length Of Judicial Proceedings For An Appeal Against A Cartel Decision

The possibility for a claim to be brought against the European Union (the "EU") as a result of "damage" caused by its institutions is enshrined in Article 340 of the Treaty on the Functioning of the European Union ("TFEU"). In a General Court judgment of 10 January 2017, Case T-577/14 Gascogne Sack Deutschland and Gascogne v European Union (EU:T:2017:1), the appellants successfully brought a claim for material and non-material harm suffered as a result of the "excessive" length of the judicial proceedings in the context of an appeal against a European Commission ("Commission") decision of 30 November 2005.

The timing of the process was as follows. On 23 February 2006, two entities from the Gascogne group filed appeals before the General Court against the Commission decision of 30 November 2005 finding the existence of a cartel in the plastic industrial bags sector in a number of Member States. The written procedure of the General Court proceedings in each of these cases ended in February 2007 and the oral procedure began in December 2010. The appeal was not dismissed by the General Court until 16 November 2011.

The Gascogne entities proceeded to file appeals before the Court of Justice on 27 January 2012 (see cases C-40/12 P, Gascogne Sack Deutschland v Commission, EU:C:2013:768, and C-58/12 P, Groupe Gascogne v Commission, EU:C:2013:770) on the grounds that, inter alia, the General Court judgments should be set aside, or the fine imposed be reduced, as a result of the length of the procedure. The Court of Justice held that the appropriate remedy for the appellants was not a reduction in the fine, but rather a separate action for damages that should be filed before the General Court pursuant to the second paragraph of Article 340 TFEU and Article 268 TFEU (see paragraphs 88 of case C-40/12 P and 82 of case C-58/12 P), hence the case at issue.

In finding that the claim by the Gascogne entities for material and non-material harm was well-founded, the General Court applied the cumulative test for non-contractual liability for the EU as a result of damage caused by an institution. The test is as follows:

The conduct of the institution in question must be unlawful and in the case of judicial proceedings, regard should be had to the specific circumstances of the case, such as its complexity and the conduct of the parties; Actual damage must have been suffered, which can result in "material harm" as well as "non-material harm"; and There must be...