The recent landmark cases on the reasonable time requirement: Is the Court caught between Scylla and Charybdis?

In the landmark cases Kendrion, Gascogne and Gascogne Germany  the CJEU clarified some important procedural issues related to infringements of the reasonable time requirement. The most important legal question that the CJEU tackled is what is the appropriate remedy for infringements of the right to have the case adjudicated within a reasonable time. The CJEU had two options: the first one was to follow the Baustahlgewebe judgment in which the CJEU had concluded that the proceedings were excessively lengthy and subsequently reduced the fine the Commission had imposed upon the undertakings. The second was to follow the Der Grüne Punkt judgment where the CJEU also concluded that there had been an infringement, but required instead a separate action for damages to be lodged before the General Court. Following this path would, however, mean that the General Court itself would have to assess whether, and to what extent, the parties suffered any harm due to the  excessive length of proceedings. In the present cases, the CJEU has opted for the second solution.

Before arriving at this conclusion, the CJEU started its analysis under Article 47 of the Charter (which provides that ‘everyone is entitled to a fair and public hearing within a reasonable time by an independent and impartial tribunal established by law’) and its related principle of effective judicial protection (paras 77-78 (references derive from the Kendrion judgment)). By referring to the Strasbourg case Kudla v. Poland  (paras 156-157), the CJEU argued that there needed to be an effective remedy in case of a failure to adjudicate within a reasonable time (para 81). According to the applicants, setting aside the judgment under appeal, or in the alternative reducing the fine imposed on them, constituted such effective remedies. On the first remedy, the CJEU noted that the setting aside of the judgment under appeal (or annulling the contested decision) would not remedy the infringement as the failure to adjudicate within a reasonable time had no effect on the outcome of the dispute (paras 82-88). With respect to the second remedy (i.e. to reduce the fine), the CJEU referred to the case Baustahlgewebe, in which it had granted such an application for reasons of economy of procedure (para 91), and the case Der Grüne Punkt, in which the CJEU held that the failure to adjudicate within a reasonable time could give rise to a claim for damages (para 92). The CJEU admitted that the present cases concerned a situation analogous to the situation in Baustahlgewebe. However, the CJEU considered a claim for damages brought against the European Union pursuant to Articles 268 and 340 (2) TFEU an effective remedy of general application for asserting and penalising such a breach, “since such a claim can cover all the situations where a reasonable period of time has been exceeded in proceedings” (para 93). The CJEU concluded that the sanction for a breach of the EU Courts’ obligation to adjudicate cases within a reasonable time must be an action for damages brought before the General Court since such an action constitutes an effective remedy (para 94). “Such a claim for compensation may not to be made directly to the Court of Justice in the context of an appeal, but must be brought before the General Court itself (para 95).

 In the last part of the judgment the CJEU assessed whether the period was excessively long. First, it reiterated that such an assessment should take place in the light of the circumstances specific to each case, such as “the complexity of the case and the conduct of the parties” (para 96). The list of relevant criteria is not exhaustive (para 97). For example this means that the complexity of the case can justify a duration which is prima facie too long. According to the CJEU, the length of the proceedings before the General Court in these cases, which amounted to 5 years and 9 months, could not be justified by any such particular circumstances (para 102). The period between the end of the written procedure and the opening of the oral procedure lasted for approximately 3 years and 10 months (para 103). The length of this period could not be explained by the complexity of the case as the pleas relied on did not present any particular difficulties (para 104). Also the conduct of the parties and supervening procedural matters did not have any effect on the overall length of the proceedings (para 105). Therefore, the procedure breached Article 47 Charter in that it failed to comply with the requirement to adjudicate the case within a reasonable time. This constituted, according to the CJEU, “a sufficiently serious breach of a rule of law that is intended to confer rights on individuals” (para 106, referring here to Bergaderm and Council v. Commission, para 42).

 Some observations

The current judgments are landmark cases on the requirement of adjudicating a case within a reasonable time.There are two other reasonable time cases pending before the CJEU that has been suspended until the current judgments were delivered. It is interesting to see whether the CJEU will follow the same road it paved in the current cases (see here and here). The CJEU takes a far-reaching, but perhaps the most reasonable decision by holding that the appropriate remedy for an infringement of the reasonable time requirement is to lodge a separate action before the General Court. Two points deserve to be discussed: (i) the criteria for assessing the reasonable time requirement; and (ii) the remedy that the CJEU proposes.

 Criteria for assessing the reasonable time requirement

On the first point, I would argue that the CJEU’s final decision Is convincing. Looking at the specific circumstances of the three cases (i.e. the General Court’s non-active period of 3 years and 10 months), there was a clear breach of the reasonable time requirement. The reasoning of the CJEU is, however, somewhat disappointing.

Firstly, it is surprising that the CJEU did not elaborate on the case law of the Strasbourg Court on the reasonable time requirement. The CJEU’s analysis is limited to an assessment under Article 47 Charter. The CJEU does not refer to its corresponding right in the European Convention on Human Rights (“ECHR”), Article 6 ECHR, or case law of the Strasbourg Court. The Charter requires, however, that insofar as the Charter contains rights which correspond to rights guaranteed by the ECHR, the meaning and scope of those rights shall be the same as those laid down by the said ECHR (see Article 52 (3) Charter). The lack of any discussion of Strasbourg case law on the reasonable time requirement is even more surprising as the CJEU deemed it necessary to refer to the case Kudla v. Poland in which the Strasbourg Court held that an infringement of the reasonable time requirement should give rise to an effective remedy. In the previous reasonable time case, Baustahlgewebe, the CJEU mentioned several Strasbourg cases (see para 29 of that case), and in the case Der Grüne Punkt, the CJEU at least mentioned Article 6 ECHR (see para 177 of that case). Can we deduce from the fact that the CJEU is now only referring to Article 47 Charter that the CJEU is adopting an ‘autonomous’ approach towards procedural fundamental rights?

Secondly, it is unfortunate that the CJEU did not touch upon the discussion which approximate time range in EU competition law proceedings (taking into consideration the peculiarities of the proceedings) can be considered as unreasonable lengthy. For example, in the Netherlands the State Councillor Advocate Widdershoven was asked to advise what periods of time the courts would define as reasonable. After studying in-depth the case law of the Strasbourg court, he advised the Dutch highest administrative courts to observe a uniform reasonable time of four years for cases involving an objection procedure and court proceedings at two separate instances.

 The suggested remedy

The second points of criticism relate to the remedy the CJEU proposes.[1] As discussed above, the CJEU could have followed two directions: the Baustahlgewebe-direction or the Der Grüne Punkt-direction. As neither direction is perfect it seems that the CJEU was caught between Scylla and Charybdis. The Baustahlgewebe remedy (reduction in the fine) has the advantage of procedural economy. From a legal point of view this remedy is however manifestly wrong. First, the CJEU has no legal basis for its decision to reduce the fine. The unlimited jurisdiction of the Court of Justice (compare Article 31 of Regulation 1/2003) relates to the fine the Commission imposed for an infringement of EU competition law and does not cover fine reductions for the breach of a procedural irregularity. Second, the remedy is only applicable to situations where the Commission imposed a fine and the General Court upheld the fine. What about situations where leniency applicants received immunity from fines or Commission decisions have been annulled and subsequently no fine reduction can take place?[2] It seems that, in the underlying cases, the CJEU considered this point as decisive for giving preference to the Der Grüne Punkt remedy when it held that the a damage action “can cover all the situations” where a reasonable period of time has been exceeded. Third, the remedy does not provide any opportunity for the General Court to explain its conduct. Hence this could be considered as a breach of the principle of equality of arms which on its own could be ground for a possible infringement of Article 6 ECHR.

            The Der Grüne Punkt remedy (separate damage action) implies that the General Court has to assess the harm alleged by its own failure to adjudicate within a reasonable time and the causal link between that harm and the excessive length of its own legal proceedings. The first condition for the non-contractual liability of the EU has already been settled by the CJEU when it held that the infringement constituted a “sufficiently serious breach of a rule of law that is intended to confer rights on individuals”. Apart from the problem that pursuing a separate damage action means the elapse of additional time, this remedy runs counter to the principle of impartiality. The suggestion of the CJEU that a different composition of the General Court will assess the damage action (para 101) will not rebut the objective impression of partiality, which will not be removed when the composition of a court has been changed. In the context of objective impartiality, the Strasbourg Court emphasised the importance of ‘appearances’ (see for example the case Sramek v. Austria, para 42). What is crucial in applying the objective test is whether there is a legitimate doubt as to the impartiality (compare e.g. the decision in Hauschildt v. Denmark, para 48). I acknowledge that the General Court has no direct interest in the financial consequences of the proceedings. This does not, however, overcome the problem that the General Court will act as judge in its own case which can cast doubts on its impartiality. For exactly this reason, Advocate General Léger rightly advised in his opinion in the Baustahlgewebe case that the jurisdiction of the General Court must be understood ‘as not extending to actions for compensation relating to judicial acts of that Court itself’ (para 70). As Lord Heward CJ phrased in a leading English case on the impartiality of judges (R v. Sussex) ‘not only must justice be done, it must also be seen to be done’.