ReNEUAL 2.0

"The Committee of Ministers [...],
Considering that the system of legal liability of local elected representatives consequently has a particular influence on the smooth operation of local and regional democracy;
Considering that, when establishing such a system, account must be taken at the same time of the legitimate interests of citizens, of the state, of the different territorial authorities and of elected representatives;
Considering that local elected representatives must be fully accountable to citizens and that legal liability of local elected representatives is an important aspect of more effective local democracy;
Considering, nonetheless, that the implementation of such liability raises legitimate concerns on the part of local elected representatives and that the adoption of specific provisions concerning their financial liability may be justified in view of their increasingly complex duties and their elective status;
Having regard to the report of the Steering Committee on Local and Regional Democracy (CDLR) on the liability of local elected representatives for acts or omissions in the course of their duties;
Having regard to the opinion of the Congress of Local and Regional Authorities of Europe on this matter (opinion 9 (1998)),
Recommends that the governments of the member states:
1. review the legal and administrative framework for the financial liability of local elected representatives, taking into account the principles and the proposals set out in the guidelines appended to this recommendation;
2. involve local elected representatives in the considerations about reforms to be undertaken in this area and on the procedure for implementing such reforms.
Appendix to Recommendation No. R (99) 8
Guidelines concerning the financial liability of local elected representatives for acts or omissions in the course of their duties
[...]
I. Scope and application of the financial liability of local authorities and local elected representatives
1. The injured person’s right to sue and right to compensation
The persons who suffered unjustified damage as the result of an act or omission of local elected representatives should always have the right to sue the local authority in question for compensation. In this framework, compensation should not be dependent on proof of misconduct on the part of the local elected representatives who may be individually responsible.
Given that the injured person can claim for compensation to the local authority, the possibility of direct action against local elected representatives should be either excluded or confined to cases of serious negligence or deliberate tortious intent on their part.
2. Liability of elected representatives for damage caused to their local authorities
Elected representatives’ liability for damage caused to their local authorities should in general be confined to cases of serious negligence or deliberate tortious intent.
Where the law lays down no such restriction, the body that has the power to sue the liable elected representatives for compensation should be able to choose not to exercise its right to sue. This could be the case, for example, in the event of slight negligence, or where the good faith of the elected representatives concerned is not at issue and where, having regard to the circumstances, the latter have exercised care and attention."

There seems to be no Explanatory memorandum to this recommendation. Recommendation No. R (99)8 was, however, been prepared by a report by the Steering Committee on Local and Regional Democracy (CDLR) with the collaboration of Phillippe Petit (CoE (ed.), Liability of local elected representatives for acts or omissions in the course of their duties (1999))

5. Public liability and the fight against corruption

a) Guiding Principle 13 of Resolution 97(24) of the Committee of Ministers of the Council of Europe on the twenty guiding principles for the fight against corruption

"The Committee of Ministers [...]
Having received the draft 20 guiding principles for the fight against corruption, elaborated by the Multidisciplinary Group on Corruption (GMC);
Firmly resolved to fight corruption by joining the efforts of our countries,
agrees to adopt the 20 guiding principles for the fight against corruption set out below:
1. [...]
13. to ensure that the system of public liability or accountability takes account of the consequences of corrupt behaviour of public officials;
[...]."

Resolution 97(24) was prepared by CoE's 'Multidisciplinary Group on Corruption (GMC)' (cf. GMC's Activity Report (1994-2000) (CM(2000)158) 27 October 2000).

b) Article 5 of the Civil Law Convention on Corruption (ETS No. 174)

"Article 5 - State responsibility
Each Party shall provide in its internal law for appropriate procedures for persons who have suffered damage as a result of an act of corruption by its public officials in the exercise of their functions to claim for compensation from the State or, in the case of a non-state Party, from that Party’s appropriate authorities."

Explanatory Report

"48. Article 5 requires each Party to provide in its internal law for appropriate procedures for persons who have suffered damage as a result of an act of corruption by its public officials in the exercise of their function, to claim for compensation from the State or, in case of a non-State Party, from that Party’s appropriate authorities. Indeed such a procedure exists already in a number of European States.
49. Article 5 does not indicate the conditions for the liability of the Party. The Convention leaves each Party free to determine in its internal law the conditions in which the Party would be liable. Therefore, the conditions and procedures for filing claims against the State for damage caused by acts of corruption committed by public officials in the exercise of their functions, will be governed by the domestic law of the Party concerned. However, Article 5 requires Parties to provide "appropriate procedures" to enable victims of acts of corruption by public officials to have effective procedures and reasonable time to seek compensation from the State (or, in the case of a non-State party, from that party’s appropriate authorities).
50. The provision contained in Article 5 does not prevent Parties from providing in their internal law for the possibility for persons who have suffered damage as a result of an act of corruption to sue public officials, as well as the possibility for such Parties to sue their public officials for the reimbursement of any loss (including, for instance, the costs of defending the claim), for which they are adjudged to be responsible. In any event, most European legal systems already provide for this possibility."

II. Reasons behind and Functions of Public Liability for Administrative Action

1. Preventive functions of public liability?

2. Public liability as an element of the rule of law?

3. Public liability as an element of justice

4. Public liability as part of the guarantees of fundamental freedoms, rights and liberties?

5. Public liability as an instrument to promote effectiveness of administration?

1. Preventive functions of public liability?

The idea that state liability has a preventive (deterrent) function, i.e. that state liability provides incentives for potential offenders to behave correctly, clearly underlies Article 5 on state liability of the Civil Law Convention on Corruption (ETS No. 174).

There seems to be consensus that personal liability of the official responsible for the damage may have such a deterrent effect (irrespective of whether he or she is directly liable to the injured party or only indirectly by means of a recourse of the public authority which is liable for the damage to the injured party). Conversely, it is discussed (with different results) whether such a preventive function of public liability is a plausible hypothesis.

• Cf. e. g. for a "law and economics" perspective: G. Dari-Mattiacci, N. Garoupa and F. Gómez-Pomar, 'State Liability', (2010) 18 European Review of Private Law, pp. 773 - 811; B. J. Hartmann, 'Perspectives on the Economic Analysis of Public Liability Law', (2012) 3 JETL, pp. 378 - 389; J. De Mot and M. Faure, 'The Liability of Public Authorities: An Economic Analysis' in K. Oliphant (ed.), The Liability of Public Authorities in Comparative Perspective (2016), pp. 587 - 618.
  

• Cf., e. g. on the discussion on the deterrent effect of the ECJ case law on liability of the EU member states for infringement of EU law: H.-B. Schäfer, 'Can member state liability for the infringement of European law deter national legislators? in T. Eger ad H.-B. Schäfer (eds.), Research Handbook on the Economics of European Union Law (2012), pp. 82 - 94).

2. Public liability as an element of the rule of law?

Public liability is not (directly) mentioned as an element of the 'rule of law'in the CoE's definitions of the rule of law like

• the document The Council of Europe and rule of law – an overview (CM(2008)170) 21. November 2008 (Report of the Secretary General of the CoE at the request of the Minister's Deputies Rapporteur Group on Legal Cooperation (GR-J); for the genesis of this report click here,

• the Report on the Rule of Law (CDL-AD(2011)003rev9) of 4 April 2011  of the Venice Commission or

• the Rule of Law Checklist (CDL-AD(2016)007) of 18 March 2016 of the Venice Commission

Nor can any references to the 'rule of law' be found in Recommendation No. R (84) 15 of the Committee of Ministers to member states relating to public liability or its Explanatory memorandum (Appendix II (pp. 9 ff.) of the Final Activity Report of the CDCJ on Public Liability (CDCJ (84) 27) 18 July 1984).

However, (at least) in German scholarship, there is a long tradition to associate 'public liability' with the 'principle of legality' and the duty to implement the law (cf., e. g., M. Breuer, Staatshaftung für judikatives Unrecht, 2011, pp. 143 ff.; H. Saurer, Öffentliches Reaktionsrecht (2021), pp. 246 ff.).

In this logic, public liability claims can be considered as an 'instrument to enforce the law' and to make breaches of the law transparent (through the judicial procedures) to the superiors and the public.

With regard to the CJEU case law on liability of the EU member states for infringement of EU law it is sometimes assumed that the desire to obtain a compensation through public liability may be an incentive for 'private enforcement' of EU law (cf. T. Lock, 'Is private enforcement of EU law through State liability a myth? An assessment 20 years after Francovich', (2012) 49 CML Rev., pp. 1675 - 1702).

3. Public liability as an element of justice

Recommendation No. R (84) 15 of the Committee of Ministers to member states relating to public liability:

"The Committee of Ministers [...]
Considering that public authorities interv enein an increasing number of fields, that their activities may affect the rights, liberties and interests of persons and may, sometimes, cause damage;
Considering that, since public authorities are serving the community, the latter should ensure reparation for such damage when it would be inappropriate for the persons concerned to bear it [...]."

"In a sense, the concept of the cheapest insurer applies to the state per se, since the latter is essentially financed from the taxes and duties paid by citizens. This is why the state can consistently transfer liability costs onto tax and duty payers. In economic terms, this notion is comparable to compulsory insurance. [Footnote 27 referring to G. Dari-Mattiacci, N. Garoupa and F. Gómez-Pomar, 'State Liability', (2010) 18 European Review of Private Law, pp. 773 - 811 (p. 778, pp. 793 ff.)]. In a sense the damages are ‘socialised’ among all those who benefit from the (potentially damage-causing) activity. The costs of car accidents, for instance, are borne by the community of drivers via the compulsory insurance premium, and the costs arising in cases of state liability are borne by the community of citizens via their liability to pay tax and duty to the extent of their taxable capacity. Citizens – including those who do not contribute to the financing of the state – are at the same time the persons in whose interest the state – bound by the standard of the common good and subject to democratic control – primarily acts."

4. Public liability as part of the guarantees of fundamental freedoms, rights and liberties?

Cf supra I 1 for the pertinent provisions of the ECHR and the case law of the ECtHR which clearly conceive a right to compensation in case of violation as an (implicit) element of the rights guaranteed by the ECHR

5. Public liability as an instrument to promote effectiveness of administration?

Recommendation No. R (99)8 of the Committee of Ministers to member states on the financial liability of local elected representatives for acts or omissions in the course of their duties is clearly based on the concern that a strict personal liability for administrative action may deterrend effect so that the willingness to make decisions (in time) decreases due to the fear of personal liability of those in charge. From this perspective public liability may also considered to be an instrument to promote effectiveness of administration. This argument is generalised in some jurisdictions (cf., e. g., K. A. Bettermann, 'Rechtsgrund und Rechtsnatur der Staatshaftung' (1954) Die Öffentliche Verwaltung, pp. 299 - 305 (p. 301)), so that public liability is also understood as a kind of liability insurance for the persons in charge.

However, such an "insurance effect" can only occur if the public official's internal liability vis-à-vis the body liable vis-à-vis the injured party is also limited, at least to a certain extent. This is clearly spelled out in Principle I 2 of Recommendation No. R (99)8 (cf. supra I 4).

CoE (ed.), The administration and you (2nd edition 2018), pp. 41 ff.

Recommendation No. R (84) 15 of the Committee of Ministers to member states relating to public liability:

"Appendix to Recommendation No. R (84) 15
[...]
Principles
I. [...].
III.
If the victim has, by his own fault or by his failure to use legal remedies, contributed to the damage, the reparation of the damage may be reduced accordingly or disallowed.
The same should apply if a person, for whom the victim is responsible under national law, has contributed to the damage.
[...].
V.
Reparation under Principle I should be made in full, it being understood that the determination of the heads of damage, of the nature and of the form of reparation falls within the competence of national law.
[...]."

"Principle III
28. The provisions of Principle III are based upon those relating to the same subject in the European Convention on Products Liability in regard to Personal Injury and Death. The principle covers cases in which the injured person has himself contributed to the damage. The fault of the victim is the main cause that modifies the liability. However, the case of the failure of the victim to use the legal remedies available to him, which might have prevented or reduced the damage, has been expressly mentioned. It will be for the court to determine in a specific case the contribution to the damage by the victim with a view to assessing the reparation or, if appropriate, disallow it.
29. The second paragraph states that reparation may also be reduced where the damage is the result of an act committed by a person for whom the victim is responsible under national law (for example, depending on the system : agent, minor).
30. Although the recommendation does not expressly mention this matter, public authorities will, as a general rule, be exonerated from liability in the case of force majeure. Force majeure, an example of which arises out of atmospheric phenomena, is characterised by the fact that, since the cause of the damage cannot be attributed to the public authorities, the actual occurrence of the act causing damage is normally unpredictable and its consequences are unavoidable. It is not possible,in such cases, to speak of acts of the public authorities or of causation which would justify attributing liability to the public authorities for the damage caused. The causal link may, in certain cases, be broken by the intervention of a third person which would, for example, by preventing the action of an administrative body, consequently free the public authorities from liability.
[...]
Principle V
34. This provision establishes the principle that reparation must be made in full, meaning that the victim must be compensated for all the damage resulting from the wrongful act which can be assessed in terms of money, and be appropriately compensated for other damage. However, it leaves it to domestic law to determine the heads of damage, the nature and the form of the reparation. In most legal systems, however, reparation covers both immediate material damage (damnum emergens) and the loss incurred (lucrum cessans).
35. [...]."

"Commentary
Liability
Liability arises whenever damage or loss is suffered by individuals as a result of failure by a public authority to comply with standards of conduct reasonably expected to be met in law. [...] .
A public authority will be liable for physical damage or financial loss and even nonpecuniary damage (for example, injury to reputation) where provided by national
law. There must be a direct causal link between the action or inaction of the public authority and the damage or loss suffered.
[...].

Redress
Public authorities should in general provide full redress to individuals for damage or loss suffered as a result of unlawful or negligent actions or inactions of public
authorities, whether within or outside their powers.
[...]
When a public authority fails to properly comply with its legal duties resulting in damage or loss to an individual, redress should be available to the individual regardless of any personal liability of public officials who may have caused the damage or loss.
"Redress", in this context, means all possible forms of making good any damage or loss suffered by an individual as a result of actions or inactions of public authorities. It includes compensation in the form of a monetary payment or other means aimed at compensating an individual for damage or loss that cannot be directly repaired. It also includes restitution (where a contract is rescinded or restoring previous rights or privileges before a contract was entered into), as a result of no-fault liability or an act of corruption committed by a public official. The nature and form of redress may vary and will be determined by national law, including the heads of damage in the case of compensation. The level of redress may be reduced or redress may be denied completely where an individual, or a person for whom he or she is responsible under national law, contributed to the damage or loss incurred or is deemed solely
liable.

The principle of "full redress" means that an individual is compensated for all damage caused by the unlawful or negligent action to the extent that it can be given a monetary value and appropriately compensated for. In most legal systems, compensation covers both immediate material damage and consequent loss."

"79. Reparation for injury caused by an administrative act, or by failure to take such an act, must be ensured:

(i) [...]
(ii) where an administrative act causes exceptional harm to an individual private person or to a group of private persons and it is manifestly unfair that such individual private person or group of private persons alone suffers the adverse effects of the act.
[...].
79.12. Comment re (ii): A person’s rights and legitimate interests may be infringed, and damage caused, not only when an administrative authority fails to conduct itself in the way required of it but also, in certain instances, when it acts in a proper manner and cannot be accused of breach of duty. Such damage is the consequence of a risk inherent in all social activity, and criteria must be established for determining those instances in which the damage should be borne by the injured person and those in which, on the other hand, it should be the responsibility of the community. A generally accepted principle of social solidarity requires persons to accept a whole range of inconveniences and damage as a normal consequence of life in society, when they are not excessively important or serious and they affect the population as a whole. Conversely, it seems unjust to require the injured person to bear damage to which the aforementioned qualifications do not apply and which constitutes an excessive burden for a specific person in relation to the principle of equality in sharing the consequences of public obligations. For these reasons, even if the conditions stated in paragraph 79 (i) are not met, in other words even if there has not been any failure by administrative authority to conduct itself in a way which could reasonably be expected of it, the Council of Europe expects states to provide in their internal law for rules granting reparation to the victim whenever it would be manifestly unjust for the injured person to bear the damage alone. In order to help to qualify the unjust character of the damage, this principle enumerates cumulative conditions.
80. The principle of liability for damages caused by lawful administrative acts (see above paragraph 79 (ii)) may be limited to certain categories of acts.
80.1. Comment: When the pertinent Council of Europe recommendation was drawn up in 1984, it was considered that, "since rules concerning reparation for damage caused by lawful acts may necessitate important changes in certain states’ legislation and practice, [there had to be] the possibility of limited application of [the principle of liability for lawful acts] in national systems with the possibility of a gradual extension".
[...].
81.4. Comment (ii): In the circumstances referred to in paragraph 79 (ii), in view of the characteristics of acts by administrative authorities which cause damage and having regard to the basis of the duty to make reparation, it may be appropriate for the injured person to bear a part of the damage. Indeed, since this provision specifically mentions cases in which it would be manifestly unjust for the injured person to bear the damage "alone", it follows that it may be just to make fair rather than full reparation. The amount of such reparation is to be fixed in the light of all the factors used in such cases to establish the degree of liability of administrative authorities and the consequent entitlement of the injured person."

"Commentary
Liability
[...] Where a public authority has neither acted unlawfully nor negligently, nor failed to conduct itself in a way that can be reasonably expected of it, national law may still impose liability on public authorities if it would be manifestly unfair for individuals alone to bear damage or loss sustained as a result of the public authority’s action or inaction.
[...].
An individual’s rights and legitimate interests may be infringed, and damage or loss caused, not only when a public authority acts unlawfully or negligently, or fails to properly conduct itself, but also in certain other situations, for example when it acts lawfully but improperly. In these cases, criteria must be established for determining the instances in which the burden of damage or loss should be borne by the injured person alone and when it should be borne by the community. The generally accepted principle of social solidarity requires the public to accept a whole range of inconveniences, damage or loss as a normal consequence of everyday life in society, which are not excessive or serious and affect the population as a whole. Conversely, when damage or loss is excessive or serious and is suffered by only one or some individuals or groups of individuals and it would be unfair for these persons to bear the full burden of the damage or loss themselves, they should be compensated. Accordingly, Recommendation No. R (84) 15 relating to public liability expects member states to provide in their national law rules for granting compensation to the injured person whenever it would be manifestly unjust for him or her alone to bear the burden of damage or loss.
[...].
Redress
[...]
National law may impose an obligation on public authorities to provide redress for damage or loss not resulting from unlawful or negligent actions or inactions of public authorities, where it would be manifestly unfair for the injured individual alone to bear such damage or loss. In these cases redress may be partial, provided it is fair.
[...]
"Fair redress" shall be determined on the basis of the following factors: the nature of the public interest giving rise to the individual’s damage or loss; the prevalence of the incident and the extent to which the action was exceptional or the fact that the resulting damage or loss was exceptional. [...]."

"167. The Court’s case-law enshrining, in accordance with the second paragraph of Article 288 EC, both the existence of the regime governing the non-contractual liability of the Community for the unlawful conduct of its institutions and the conditions for the regime’s application is thus firmly established. By contrast, that is not so in the case of a regime governing non-contractual Community liability in the absence of such unlawful conduct.

168. Contrary to what the Court of First Instance stated in the judgments under appeal, it cannot, first of all, be deduced from the case-law prior to those judgments that the Court of Justice has established the principle of such a regime.

169. As the Court of Justice noted in particular in Dorsch Consult v Council and Commission , paragraph 18 [...] the Court has on the contrary hitherto limited itself, as set out in settled case-law, to specifying some of the conditions under which such liability could be incurred in the event of the principle of Community liability for a lawful act being recognised in Community law (see also, in similar terms, Case 59/83 Biovilac v EEC [1984] ECR 4057, paragraph 28). It was solely on that basis that the Court noted in Dorsch Consult v Council and Commission , paragraph 19, that if the principle of such liability came to be recognised, at the very least three conditions, comprising the fact of damage, the existence of a causal link between it and the act concerned and the unusual and special nature of the damage, would all have to be satisfied in order for liability to be incurred.

170. Secondly, as regards the liability regime recognised in Community law, the Court, while noting that it is to the general principles common to the laws of the Member States that the second paragraph of Article 288 EC refers as the basis of the non-contractual liability of the Community for damage caused by its institutions or by its servants in the performance of their duties, has held that the principle of the non-contractual liability of the Community expressly laid down in that article is simply an expression of the general principle familiar to the legal systems of the Member States that an unlawful act or omission gives rise to an obligation to make good the damage caused (Brasserie du pêcheur and Factortame , paragraphs 28 and 29).

171. As regards, more specifically, liability for legislative activity, the Court moreover pointed out at a very early stage that, although the principles in the legal systems of the Member States governing the liability of public authorities for damage caused to individuals by legislative measures vary considerably from one Member State to another, it is however possible to state that the public authorities can only exceptionally and in special circumstances incur liability for legislative measures which are the result of choices of economic policy (Bayerische HNL Vermehrungsbetriebe and Others v Council and Commission , paragraph 5).

172. The Court has therefore held in particular that, in view of the second paragraph of Article 288 EC, the Community does not incur liability on account of a legislative measure which involves choices of economic policy unless a sufficiently serious breach of a superior rule of law for the protection of the individual has occurred (see, inter alia, Joined Cases 9/71 and 11/71 Compagnie d’approvisionnement, de transport et de crédit and Grands Moulins de Paris v Commission [1972] ECR 391, paragraph 13; Bayerische HNL Vermehrungsbetriebe and Others v Council and Commission , paragraph 4; Case 50/86 Les Grands Moulins de Paris v EEC [1987] ECR 4833, paragraph 8; and Case C-119/88 AERPO and Others v Commission [1990] ECR I‑2189, paragraph 18).

173. It has further pointed out, in this connection, that the rule of law the breach of which must be found has to be intended to confer rights on individuals (see to this effect, inter alia, Case C-352/98 P Bergaderm and Goupil v Commission [2000] ECR I‑5291, paragraphs 41 and 42, and Case C-282/05 P Holcim (Deutschland) v Commission [2007] ECR I‑2941, paragraph 47).
174. The Court has, moreover, stated that the strict approach taken towards the liability of the Community in the exercise of its legislative activities is attributable to two considerations. First, even where the legality of measures is subject to judicial review, exercise of the legislative function must not be hindered by the prospect of actions for damages whenever the general interest of the Community requires legislative measures to be adopted which may adversely affect individual interests. Second, in a legislative context characterised by the exercise of a wide discretion, which is essential for implementing a Community policy, the Community cannot incur liability unless the institution concerned has manifestly and gravely disregarded the limits on the exercise of its powers (see, in particular, Brasserie du pêcheur and Factortame , paragraphs 45).

175. Finally, it is clear that, while comparative examination of the Member States’ legal systems enabled the Court to make at a very early stage the finding recalled in paragraph 170 of the present judgment concerning convergence of those legal systems in the establishment of a principle of liability in the case of unlawful action or an unlawful omission of the authority, including of a legislative nature, that is in no way the position as regards the possible existence of a principle of liability in the case of a lawful act or omission of the public authorities, in particular where it is of a legislative nature.

176. In the light of all the foregoing considerations, it must be concluded that, as Community law currently stands, no liability regime exists under which the Community can incur liability for conduct falling within the sphere of its legislative competence in a situation where any failure of such conduct to comply with the WTO agreements cannot be relied upon before the Community courts.

177. In the case in point, the conduct which the appellants allege to have caused them damage comes within the context of establishment of a common organisation of the market and clearly falls within the sphere of legislative activity of the Community legislature.

178. It is immaterial in this regard whether that conduct is to be regarded as a positive act, namely the adoption of Regulations No 1637/98 and No 2362/98 following the DSB’s decision of 25 September 1997, or as an omission, namely the failure to adopt measures calculated to ensure the correct implementation of that decision. Failure on the part of the Community institutions to act can also fall within the legislative function of the Community, including in the context of actions for damages (see, to this effect, Les Grands Moulins de Paris v EEC , paragraph 9).

179. It follows from all of the foregoing that, in affirming in the judgments under appeal the existence of a regime providing for non-contractual liability of the Community on account of the lawful pursuit by it of its activities falling within the legislative sphere, the Court of First Instance erred in law.

180. However, two further points should be made.
181. First, the finding in paragraph 179 of the present judgment is made without prejudice to the broad discretion which the Community legislature enjoys where appropriate for the purpose of assessing whether the adoption of a given legislative measure justifies, when account is taken of certain harmful effects that are to result from its adoption, the provision of certain forms of compensation (see to this effect, with regard to agricultural policy, Joined Cases C-20/00 and C‑64/00 Booker Aquaculture and Hydro Seafood [2003] ECR I‑7411, paragraph 85).
182. Second, it is to be remembered that it is settled case-law that fundamental rights form an integral part of the general principles of law the observance of which the Court ensures.
183. With regard, more specifically, to the right to property and the freedom to pursue a trade or profession, the Court has long recognised that they are general principles of Community law, while pointing out however that they do not constitute absolute prerogatives, but must be viewed in relation to their social function. It has thus held that, while the exercise of the right to property and to pursue a trade or profession freely may be restricted, particularly in the context of a common organisation of the market, that is on condition that those restrictions in fact correspond to objectives of general interest pursued by the Community and that they do not constitute, with regard to the aim pursued, a disproportionate and intolerable interference which infringes upon the very substance of the rights guaranteed (see, inter alia, Case 265/87 Schräder HS Kraftfutter [1989] ECR 2237, paragraph 15; Germany v Council , paragraph 78; and Case C-295/03 P Alessandrini and Others v Commission [2005] ECR I‑5673, paragraph 86).
184. It follows that a Community legislative measure whose application leads to restrictions of the right to property and the freedom to pursue a trade or profession that impair the very substance of those rights in a disproportionate and intolerable manner, perhaps precisely because no provision has been made for compensation calculated to avoid or remedy that impairment, could give rise to non-contractual liability on the part of the Community."

Recommendation No. R (84) 15 of the Committee of Ministers to member states relating to public liability:

"The Committee of Ministers [...]
[...].
Recommends the governments of member states:
a. to be guided in their law and practice by the principles annexed to this recommendation;
b. to examine the advisability of setting up in their internal order, where necessary, appropriate machinery for preventing obligations of public authorities in the field of public liability from being unsatisfied through lack of funds.
Principles
I. [...].
IV.
The right to bring an action against a public authority should not be subject to the obligation to act first against its agent.
If there is an administrative conciliation system prior to judicial proceedings, recourse to such system should not jeopardise access to judicial proceedings.
V. [...].
VI.
Decisions granting reparation should be implemented as quickly as possible. This should be ensured by appropriate budgetary or other measures.
If, under domestic law, a system for a special implementation procedure is provided for, it should be easily accessible and expeditious.
VII.
Rules concerning time-limits relating to public liability actions and their starting points should not jeopardise the effective exercise of the right of action.
VIII. [...]."

"Principle IV
31. This principle departs from the approach, now discarded by many states, whereby a person having suffered damage caused by a public activity or service had to bring a claim against the official or civil servant allegedly liable. This solution did not provide the victim with satisfactory protection because it was sometimes impossible to find the person who had actually caused the damage, or very often, that person was insolvent.
32. The liability of public authorities is at present the victim’s basic guarantee that he will obtain proper compensation, but there are two different means whereby action can be taken. In cases where the official or person who has caused the injury can be identified, some legal systems allow the victim to claim either against the public authority for which the official was working at the time or against the official himself, or against both simultaneously. Under other systems, claims must always be brought against the public authority, which can then take action against the official or civil servant who has caused the damage. The instrument adopts a compromise solution, establishing that states should not hinder the victim in the exercise of his right to proceed directly against the public authority liable or bound to make good the damage, thus leaving it to the victim to choose in countries where direct action can be taken against the official in question. [...].
33. The recommendation does not pronounce on the desirability of establishing administrative conciliation systems prior to judicial proceedings. Their main advantage could be said to be to facilitate friendly settlements in certain cases, although they might also have the disadvantage of making procedures unwieldy or of discouraging ill-informed persons from exercising their legitimate rights. Work has already been carried out on this question in the Council of Europe and attention may be drawn to Principle 3 of Recommendation No. R (81) 7 of the Committee of Ministers on measures facilitating access to justice, which states that "Measures should be taken to facilitate or encourage, where appropriate, the conciliation of the parties and the amicable settlement of disputes before any court proceedings have been instituted or in the course of proceedings". This principle is explained in greater detail in the Explanatory memorandum to the recommendation, which states, inter alia, that "for the sake of efficiency, purely formal and dilatory conciliation proceedings should be avoided".
This recommendation merely introduces therefore a principle according to which, where conciliation procedures are provided for in law, they should be conceived and implemented in a manner which does not jeopardise the taking of legal action, since that is the principal means whereby a victim may obtain compensation.
[...].

Principle VI
36. The final decision recognising the right of the victim to receive reparation does not always result in effective reparation being received without delay. Procedurally speaking, the enforcement of decisions in this field is made according to one of the following systems :
a. The decision can be immediately enforced and constitutes sufficient title to obtain reparation ;
b. The decision cannot be immediately enforced and a special procedure is provided for in order to obtain effective reparation.
37. In principle, the first system permits fast reparation. Nevertheless, it was thought useful to lay down the general principle according to which enforcement of decisions in this field should be made as quickly as possible. If the second system is followed, the recommendation emphasises that the enforcement procedure should be easily accessible and fast. These two rules comply with the principles contained in No. R (81) 7 of the Committee of Ministers on measures facilitating access to justice.
38. However, practical or legal obstacles to obtaining an effective reparation may exist. One is represented by strict budgetary rules of the state or other public entities which might prevent the disposal of the funds necessary to comply with the decision. Another possible obstacle is the inertia of the officials of the administration. A third obstacle lies in the prohibition, in some states, of enforcement in respect of the public authorities.
39. The instrument does not describe specific measures to overcome such obstacles, and recommends that states adopt budgetary or other appropriate measures. In some states, for example, budgetary rules provide for orders to pay and, if necessary, the automatic entry in the following year’s budget of the sums which are due to the victim. To remedy the inertia or malicious conduct of officials of the administration, some systems provide for the possibility of the personal liability of the agents concerned.

Principle VII
40. Procedural time-limits and rules relating to their calculation have the double aim of fixing the period within which a right of action must be exercised and of instituting a measure of legal certainty by reasonably limiting the possibility of affecting legal rights. In the sector of private law, the first factor prevails and, consequently, time-limits are usually long. Long periods may sometimes constitute an obstacle to the smooth operation and effectiveness of administration action and, at the same time, would not seem indispensable for the protection of individual rights. For this reason, states lay down shorter periods. The recommendation recognises the need for this but it also underlines that such rules must not jeopardise the effective exercise of the right of action."

"81. Reparation on grounds of public liability :
(i) must not depend on an administrative claim having been made or on a prior attempt to sue the agent responsible ;
(ii) [...];
(v) must be decided and paid straightforwardly and without undue delay.
(vi) [...].
81.1. Comment re (i): Administrative conciliation systems prior to judicial proceedings may have the main advantage of facilitating friendly settlements in certain cases, although they might also have the disadvantage of making procedures unwieldy or of discouraging ill-informed persons from exercising their legitimate rights. Therefore it is requested that where conciliation procedures are provided for in law, they should be conceived and implemented in a manner which does not jeopardise the taking of legal action since that is the principal means whereby a victim may obtain compensation.
81.2. Comment re (i): In cases where the official or person who has caused the injury can be identified, some legal systems allow the victim to claim either against the administrative authority for which the official was working at the time or against the official himself, or against both simultaneously. Under other systems, claims must always be brought against the administrative
authority, which can then take action against the official or civil servant who has caused the damage. The Council of Europe advocates a compromise solution, establishing that states should not hinder the victim in the exercise of his right to proceed directly against the administrative authority liable or bound to make good the damage, thus leaving it to the victim to choose in countries where direct action can be taken against the official in question.
[...]
81.6. Comment re (v): The final decision (administrative act) recognising the right of the victim to receive reparation does not always result in effective reparation being received without delay. Procedurally speaking, the enforcement of decisions in this field is made according to one of the following systems : (a) The decision can be immediately enforced and constitutes sufficient title to obtain reparation ; or (b) the decision cannot be immediately enforced and a special procedure is provided for in order to obtain effective reparation. In principle, the first system permits fast reparation.
Nevertheless, it was thought useful to lay down the general principle according to which enforcement of decisions in this field should be made as quickly as possible. If the second system is followed, the enforcement procedure should be easily accessible and fast.
81.7. Comment re (v): However, practical or legal obstacles to obtaining an effective reparation may exist. One is represented by strict budgetary rules of the state or other public entities which might prevent the disposal of the funds necessary to enforce the decision (execute that administrative act). Another possible obstacle is the inertia of the officials of the administration. A third obstacle lies in the prohibition, in some states, of enforcement in respect of the administrative authorities. The Council of Europe does not describe specific measures to overcome such obstacle and recommends that states adopt budgetary or other appropriate measures. In some states, for example, budgetary rules provide for orders to pay and, if necessary, the automatic entry in the following year’s budget of the sums which are due to the victim. To remedy the inertia or malicious conduct of officials of the administration, some systems provide for the possibility of the personal liability of the agents concerned."