QB-2022-001364 - [2025] EWHC 2758 (KB)

As for the first submission, Mr Strickland began by reminding me of the conditions for a Member State of the EU to be liable under Francovich principles for breach of EU law, as summarised by Sir Andrew Morrit V-C in Phonographic Performance Limited v Department for Trade and Industry [2004] 1 WLR 2893 at [11], a passage which was cited with approval by the Supreme Court in Energy Solutions EU Limited v Nuclear Decommissioning Authority [2017] UKSC 34, [2017] 1 WLR 1373. These are:

“that (1) the rule of Community law infringed is intended to confer rights on individuals; (2) the breach is sufficiently serious, and in particular that there was a manifest and grave disregard by the member state of its discretion; and (3) there is a direct causal link between the breach of the obligation resting on the member state and the damage sustained by the injured party.”

Mr Strickland pointed out that there is no dispute that before Brexit a Francovich claim was in principle available to Edge. Indeed, that is the nature of the claim which it and others brought in the Recall case, albeit the claim ultimately failed because the second Francovich condition was not satisfied. Such a claim was and is a private law claim in damages. In the Phonographic Performance case (supra) at [12] Sir Andrew Morrit V-C noted that, in R v Secretary of State for Transport ex parte Factortame Ltd (No 5) [1998] CMLR 1353, Hobhouse LJ (as he then was) said that Francovich liability was best understood as a breach of statutory duty imposed by the relevant EU law provision and section 2(1) of the European Communities Act 1972.

Mr Strickland also accepted that before Brexit the presumption in the present case would have been that Parliament did not intend that damages would be available unless the Francovich conditions were satisfied. Indeed, he said that the effect of the decision of the Supreme Court in the Energy Solutions case (supra) was that the only basis on which damages for breach of section 8(4) of the WTA 2006 could be claimed was by satisfying these conditions. In Energy Solutions, the issue was as to the circumstances in which damages could be recovered for alleged breaches of the Public Procurement Directive (2004/18/EC) read with the Remedies Directive (89/665/EC) and/or for breach of the Public Contracts Regulations 2006 which had implemented them. Mr Strickland referred to [39] of the judgment of Lord Mance JSC where, having found that the Francovich conditions applied to a claim under the Remedies Directive (see [25] of the judgment) he said, in relation to the Public Contracts Regulations 2006, that:

“Although there is no Marleasing imperative to construe the scheme so far as possible consistently with the Francovich conditions, it is I think a natural assumption that the UK legislator will not go further than required by EU law when implementing such a scheme, without considering this and making it clear.”

Overruling the Court of Appeal, in Energy Solutions the Supreme Court held that recovery of damages under the Remedies Directive required a claimant to satisfy the Francovich conditions, and there was no evidence that Parliament had intended that damages were available on a wider basis under the 2006 Regulations. It was therefore necessary for a claimant to show a “sufficiently serious breach” of the Remedies Directive and/or the 2006 Regulations. Mr Strickland referred to [37] where Lord Mance said this:

“37.

Where the Court of Appeal in the present case went in my opinion clearly wrong was in its assumption that any claim for damages under the 2006 Regulations was no more than a private law claim for breach of a domestically-based statutory duty, and for that reason subject to ordinary English law rules which include no requirement that a breach must be shown to be “sufficiently serious” before damages are awarded... The Court of Appeal appears to have assumed that the categorisation in domestic law of a claim based on EU law as being for breach of statutory duty freed it automatically from any conditions which would otherwise apply under EU law. That this is not so is clear if one takes the simple case of a domestic claim against the state for failure correctly to transpose EU law. Such a claim is subject to the Francovich and Brasserie du Pêcheur principles and conditions.”

Mr Strickland also referred me to the judgment of the Court of Appeal in Energy Solutions at [2015] EWCA Civ 1262, [2016] PTSR 689 at [66]-[68], to which Lord Mance was referring in the passage cited above. In the Court of Appeal, Vos LJ agreed that in theory the claimant had two separate rights – under the Directive and under the 2006 Regulations - but said that this did not make a difference to the damages which might be claimed in an English court. English law principles applied to a claim for damages for breach of the Public Contracts Regulations 2006. Such a claim was a claim for breach of statutory duty and there was no requirement under English law for a breach of statutory duty to be “sufficiently serious” before damages could be awarded.

Mr Stickland also referred to the following provisions of the European Union Withdrawal Act 2018 as amended by the Retained EU Law (Revocation and Reform) Act 2023 (“the EUWA 2018”):

Mr Strickland argued that these provisions removed the availability of what he termed “pure” Francovich claims i.e. complaints that the United Kingdom had failed to implement EU Directives into domestic law. Such complaints were now obsolete as there was no longer any obligation to implement EU law. However, these provisions were not directed at what he termed “secondary Francovich-style claims”, i.e. claims which concerned “an individual’s right to sue a public body domestically for their failure to adhere to faithfully transcribed EU-derived domestic legislation”. His position was that “secondary” Francovich claims are caught by sections 1 and 5 of the EUWA 2018.

Mr Strickland described the claim in the Energy Solutions case as a “secondary” Francovich claim in that the complaint was that the Nuclear Decommissioning Authority had breached the Public Procurement Directive and the Public Contracts Regulations 2006 in conducting a tender process, rather than that it had failed to implement EU law. His position was that Edge’s claim in these proceedings is also a secondary Francovich claim. He relied on the decision of the EFTA Court in Fosen-Linjen AS v AtB AS (Case E-16/16) at [59] and [64] as recognising his distinction between pure and secondary Francovich claims and he submitted that a rule that a secondary claim could only succeed if the Francovich conditions were satisfied “is incorrect as a matter of EEA law (and probably EU law)”. He reasoned from this that it would be a perverse result if such claims could succeed on a wider basis in EU and EEA countries than in the United Kingdom because, despite Brexit, the Francovich conditions continued to apply.

Mr Strickland’s contention was that the decision of the Supreme Court in Energy Solutions had therefore been superseded by the EUWA 2018 and is inconsistent with EU/EFTA law. The removal, by the EUWA 2018, of the right to claim damages under Francovich and the EU law underpinning the WTA 2006 meant that the rationale for the decision of the Supreme Court in Energy Solutions, as expressed at [37] and [39] of the judgment of Lord Mance, had also been removed. The “only logical conclusion” was that the consequence of this was that the pre Brexit ability to claim damages in the present case remained, post Brexit, but that the reasoning and approach of the Court of Appeal to such a claim in Energy Solutions was restored. There was therefore a right to bring a private law claim in damages in the present case but that right would be governed by English law and would not be subject to the limitations which would have applied before Brexit. In particular, there is no need, under the English law of tort, for Edge to prove that there was a “sufficiently serious” breach which was the reason why its COSUGs claim based on essentially the same facts had failed in the Recall case.

Mr Strickland also pointed out that in the present case the COSUGs claim was “ostensibly” brought within the 2 year window provided by [39(7)] of Schedule 8 to the 2018 Act. However, it was not clear how this made any difference to the analysis other than if it was addressing an anticipated argument which Mr Holmes was not in fact advancing.