13/02/17

Litigation First : the European Union condemned for excessive length of proceedings before the EU General Court

European Union flag on gavel isolated on white.On 23 February 2006, the companies Gascogne Sack Deutschland and Gascogne brought an action before the General Court of the European Union, seeking an annulment of a European Commission decision imposing fines in the amount of €13.2 million for their participation in a cartel in the industrial bags sector. The General Court took almost 70 months to render its judgments in this case, i.e. about twice as long as the average in this type of matter, while Gascogne had to bear the cost of the bank guarantees and legal interest accruing on the fine until the end of the proceedings. The Court of Justice of the European Union upheld the General Court’s judgments, acknowledged the existence of a damage resulting from the unreasonable length of the proceeding and referred the applicants to the General Court for the assessment of the damage.

On 10 January 2016, the General Court delivered its judgment recognizing its own fault and ordering the European Union to redress the damage suffered.

The Court considered that there was a violation of the right to have a case heard within a reasonable time, within the meaning of the Charter of Fundamental Rights of the European Union, since the length of the proceedings, i.e. five years and nine months, could not be justified by any of the circumstances specific to those cases. Furthermore, the Court found that Gascogne suffered losses as a result of the costs it had incurred under the bank guarantee issued for the benefit of the European Commission, which constituted actual and certain pecuniary damage. Finally, the Court noted that if the proceedings had not exceeded the reasonable period of judgment, Gascogne would not have had to pay the bank guarantee fee during the period corresponding to that excess. It therefore found there to be a causal link between the conduct of the General Court and the damage in question.

Consequently, the Court awarded Gascogne an indemnity of €47,064.33 for the material damage suffered.

Concerning non-material damage, the Court recognized only the damage caused by the uncertainty in which the applicants were placed, which went beyond the uncertainty usually caused by judicial proceedings. However, in order to ensure that the compensation would not call into question the amount of the fine initially imposed on the applicants, the Court limited this compensation to an indemnity of €5,000 per company.

The Court dismissed all of Gascogne’s and Gascogne Sack’s other claims.

While this is the first time such a ruling has been rendered against the Court itself, the amount of the compensation granted should limit the expectations of potential applicants who find themselves in similar situations. The reform of the General Court, which will double the number of judges, should also clearly shorten the length of proceedings and thus protect the European Union from any accusations of slowness for the coming years. 

See also :
European Legal Watch n° 23

 


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