private damage suits for breach of community law
TRANSCRIPT
Editorial Committee of the Cambridge Law Journal
Private Damage Suits for Breach of Community LawAuthor(s): Josephine ShawSource: The Cambridge Law Journal, Vol. 43, No. 2 (Nov., 1984), pp. 255-259Published by: Cambridge University Press on behalf of Editorial Committee of the Cambridge LawJournalStable URL: http://www.jstor.org/stable/4506650 .
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C.L.J. Case and Comment 255
Reliance on the Act was inapt, since it seeks only to counter claims by the American courts and seeks to regulate conduct outside the
United States, whereas the airlines operate within it. The rejection of
the "Bermuda 2" argument rests on an orthodox dualist view of
international law; an allegation of breach of treaty is a matter
between the parties to it, to be settled diplomatically or by the
methods the treaty lays down, and not by domestic courts. Nor is it
for those courts to interpret a treaty which has not been enacted into
English law.
What had caused the Court of Appeal to differ from Parker J. was
the promulgation after his judgment by the Secretary of State of an
Order and directions under the Protection of Trading Interests Act.
(An attempt by Laker to have these declared invalid failed.) These
had the effect of prohibiting BA and BC from complying with any
requirement or prohibition imposed on them under the anti-trust
laws and with any requirement for production of documents or
commercial information to the United States courts. According to the
Court of Appeal, this rendered the issues wholly untriable. Since BA
and BC disclaimed reliance upon this in the House of Lords, it was
only necessary for Lord Diplock to show convincingly (at
pp. 433-434) that the conclusion was based upon a misconstruction of
the Act and a misapprehensiofi of the effect of the directions.
Now, BA and BC might justifiably regard Laker's conduct as
"forum-shopping"; and it is not easy to see why one British company should be able to sue others in American courts when it cannot do so
here. However, the Court of Appeal's enjoining of Laker did result
in a serious confiict between the English and American courts and
because it was a consequence of British executive action, could lead
the American courts to suspect a conspiracy between our judiciary and government to interfere with the exercise of jurisdiction which
both they and our courts regard as properly theirs. But the price of
this restoration of judiciai harmony is the cacophonous sound of our
courts and government speaking in different tongues when the
interests of this country are very clearly affected. The wider issues are
evaded by treating the litigation as a purely private matter like an
action for breach of contract between Mr. X and Mr. Y. One
wonders whether this is not carrying judiciai modesty and comity too
far.
J. G. COLLIER.
C.L.J. Case and Comment 255
Reliance on the Act was inapt, since it seeks only to counter claims by the American courts and seeks to regulate conduct outside the
United States, whereas the airlines operate within it. The rejection of
the "Bermuda 2" argument rests on an orthodox dualist view of
international law; an allegation of breach of treaty is a matter
between the parties to it, to be settled diplomatically or by the
methods the treaty lays down, and not by domestic courts. Nor is it
for those courts to interpret a treaty which has not been enacted into
English law.
What had caused the Court of Appeal to differ from Parker J. was
the promulgation after his judgment by the Secretary of State of an
Order and directions under the Protection of Trading Interests Act.
(An attempt by Laker to have these declared invalid failed.) These
had the effect of prohibiting BA and BC from complying with any
requirement or prohibition imposed on them under the anti-trust
laws and with any requirement for production of documents or
commercial information to the United States courts. According to the
Court of Appeal, this rendered the issues wholly untriable. Since BA
and BC disclaimed reliance upon this in the House of Lords, it was
only necessary for Lord Diplock to show convincingly (at
pp. 433-434) that the conclusion was based upon a misconstruction of
the Act and a misapprehensiofi of the effect of the directions.
Now, BA and BC might justifiably regard Laker's conduct as
"forum-shopping"; and it is not easy to see why one British company should be able to sue others in American courts when it cannot do so
here. However, the Court of Appeal's enjoining of Laker did result
in a serious confiict between the English and American courts and
because it was a consequence of British executive action, could lead
the American courts to suspect a conspiracy between our judiciary and government to interfere with the exercise of jurisdiction which
both they and our courts regard as properly theirs. But the price of
this restoration of judiciai harmony is the cacophonous sound of our
courts and government speaking in different tongues when the
interests of this country are very clearly affected. The wider issues are
evaded by treating the litigation as a purely private matter like an
action for breach of contract between Mr. X and Mr. Y. One
wonders whether this is not carrying judiciai modesty and comity too
far.
J. G. COLLIER.
PRIVATE DAMAGE SUITS FOR BREACH OF COMMUNITY LAW
European Community law has now become embroiled in the current
English debate about the distinction between public and private law
(See the note by Dr. Cripps, above p. 214). This was probably
PRIVATE DAMAGE SUITS FOR BREACH OF COMMUNITY LAW
European Community law has now become embroiled in the current
English debate about the distinction between public and private law
(See the note by Dr. Cripps, above p. 214). This was probably
This content downloaded from 185.44.78.105 on Wed, 11 Jun 2014 01:47:23 AMAll use subject to JSTOR Terms and Conditions
This content downloaded from 185.44.78.105 on Wed, 11 Jun 2014 01:47:23 AMAll use subject to JSTOR Terms and Conditions
This content downloaded from 185.44.78.105 on Wed, 11 Jun 2014 01:47:23 AMAll use subject to JSTOR Terms and Conditions
258 The Cambridge Law Journal [1984]
although that breach may relate to some public law duty or function
of the body, he is seeking to exercise private law rights and is not
reliant on the discretion of the court with regard to his remedy. Had
the IDB attempted to bring a direct challenge to the pricing policy of
the Board by seeking a declaration that its pricing decisions were
illegal since they were in breach of Community law, then it would
probably have been forced to use the procedure for judicial review; it
would then have been required to seek the leave of the court to apply and to overcome other procedural obstacles such as the three month
limitation period. However, in respect of the claim for damages, even
though both public and private law issues were undoubtedly at issue, both Neill J. and the Court of Appeal refused to distinguish between
points 3 to 6 of the claim which were based on an alleged breach of
the Regulations laying down the rules for the marketing of milk in the
United Kingdom and points 7 to 9 which relied on similar facts to
allege a breach of Article 86 of the Treaty in respect of the statutory
monopoly in the purchase of milk. That such a breach could be
alleged by way of ordinary action had already been established by
implication in Garden Cottage, in which the question of damages for
breach of Community law was considered in the context of private law only ([1984] 1 A.C. 130, 141, 144). Nevertheless it does seem
somewhat premature of Neill J. to accept (at paragraph 24 of his
judgment) that Garden Cottage is authority for the proposition that a
breach of a directly effective provision of Community law will always
give rise to a compensatory remedy; the existence of such a remedy must depend on the characteristics of the provisions in question and
cannot be a general rule.
The acceptance of a distinction between actions for damages
against statutory bodies for breach of a statutory duty (private law) and judicial review (public law) reflects a similar solution reached by the European Court in Case 4/69, Lutticke [1971] E.C.R. 325 and
Case 3/71, Zuckerfabrik Schoppenstedt [1971] E.C.R. 975. Whereas
the Court had originally accepted the contrary view in Case 25/62, Plaumanh [1963] E.C.R. 95, these cases finally established that there
are two separate routes whereby an individual can seek to gain redress for harm caused by (illegal) acts of the Community intended to have legal effects. It may be possible in an appropriate case for the
individual to evade the strict requirements of locus standi and the time limits which often make the Article 173 action for annulment so
difficult to pursue by instead proving non-contractual liability under
Articles 178 and 215. Although in many respects it would be more
convenient for the administration if actions for damages were made
dependent on successful actions for annulment (or certiorari or a
declaration), this would have the effect, at least in English law, of
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C.LJ. Case and Comment 259
nullifying the effect of the Crown Proceedings Act 1947 which
originally exposed the Crown to the same rules which an ordinary citizen must observe. Irrespective of whether the public interest
decrees the granting of a diseretionary remedy in the context of
judiciai review, individuals must be allowed to enforce English (or
Community) law whenever they have suffered loss, and, through actions for damages, place moral (and financial) pressure on the
administration to alter its practices in public law.
Josephine Shaw.
C.LJ. Case and Comment 259
nullifying the effect of the Crown Proceedings Act 1947 which
originally exposed the Crown to the same rules which an ordinary citizen must observe. Irrespective of whether the public interest
decrees the granting of a diseretionary remedy in the context of
judiciai review, individuals must be allowed to enforce English (or
Community) law whenever they have suffered loss, and, through actions for damages, place moral (and financial) pressure on the
administration to alter its practices in public law.
Josephine Shaw.
THE REVENUE S TRUMP CARD AGAINST TAX AVOIDANCE
Furniss v. Dawson [1984] 2 W.L.R. 226, in the words of Lord Bridge (p. 232), "marks a further important step in the development of the court's increasingly critical approach to the manipulation of financial transactions to the advantage of the taxpayer" which first manifested itself in the House of Lords in W. T. Ramsay Ltd. v. I.R.C. [1982] A.C. 300 (though an earlier High Court harbinger was Black Nominees Ltd. v. Nicol [1975] S.T.C. 372). As Lord Scarman states
(p. 230), there is still
space in the law for the principle in I.R.C. v. Duke of Westminster [1936] A.C. 1 that every man is entitled if he can to order his affairs so as to diminish the burden of tax. The limits within which this principle is to operate remain to be probed and determined judicially. Difficult though the task may be for
judges, it is one which is beyond the power of the blunt instrument of legislation. Whatever a statute may provide, it has to be interpreted and applied by the courts; and ultimately it will
prove to be in this area of judge-made law that our elusive journey's end will be found.
Thus judiciai debate prevails over parliamentary debate. It appears that there is now a general judiciai associated operations rule, whereas formerly it was thought that there was only a statutory associated operations rule in the context of estate duty and then
capital transfer tax.
In Ramsay (noted [1982] C.L.J. 50) there was a preordained series of self-cancelling steps taken to manufacture an artificial allowable loss: disregarding the steps or looking at the composite picture there was neither a gain nor a loss for capital gains tax
purposes. Subsequently, in I.R.C. v. Burmah Oil Co. Ltd. [1982] S.T.C. 30 instead of circular transactions there were "linear"
THE REVENUE S TRUMP CARD AGAINST TAX AVOIDANCE
Furniss v. Dawson [1984] 2 W.L.R. 226, in the words of Lord Bridge (p. 232), "marks a further important step in the development of the court's increasingly critical approach to the manipulation of financial transactions to the advantage of the taxpayer" which first manifested itself in the House of Lords in W. T. Ramsay Ltd. v. I.R.C. [1982] A.C. 300 (though an earlier High Court harbinger was Black Nominees Ltd. v. Nicol [1975] S.T.C. 372). As Lord Scarman states
(p. 230), there is still
space in the law for the principle in I.R.C. v. Duke of Westminster [1936] A.C. 1 that every man is entitled if he can to order his affairs so as to diminish the burden of tax. The limits within which this principle is to operate remain to be probed and determined judicially. Difficult though the task may be for
judges, it is one which is beyond the power of the blunt instrument of legislation. Whatever a statute may provide, it has to be interpreted and applied by the courts; and ultimately it will
prove to be in this area of judge-made law that our elusive journey's end will be found.
Thus judiciai debate prevails over parliamentary debate. It appears that there is now a general judiciai associated operations rule, whereas formerly it was thought that there was only a statutory associated operations rule in the context of estate duty and then
capital transfer tax.
In Ramsay (noted [1982] C.L.J. 50) there was a preordained series of self-cancelling steps taken to manufacture an artificial allowable loss: disregarding the steps or looking at the composite picture there was neither a gain nor a loss for capital gains tax
purposes. Subsequently, in I.R.C. v. Burmah Oil Co. Ltd. [1982] S.T.C. 30 instead of circular transactions there were "linear"
This content downloaded from 185.44.78.105 on Wed, 11 Jun 2014 01:47:23 AMAll use subject to JSTOR Terms and Conditions