Vidal-Hall v Google: Strengthening EU law remedies

 

Steve Peers

There are many laws which exist on paper, but cannot easily be enforced practically. One example is data protection law, which relies largely for its enforcement on overworked data protection authorities. Individual ‘data subjects’ whose data protection rights have been infringed can sue the infringing companies directly, but they face a number of barriers in this respect.

In particular, if they have not suffered any direct economic loss, can they sue for non-economic loss? If not, there is probably little point in bringing legal proceedings – and the infringing company faces fewer constraints upon its breach of the law concerned.

Of course, this issue is not unique to data protection law. But this was the subject-matter of the important judgmentof the Court of Appeal in Vidal-Hall v Google last week, which relied upon the EU Charter of Rights to strike down UK legislation which limited the ability to sue for non-economic losses as regards EU data protection law. This ruling could have broad implications not only on the enforcement of data protection rights, but also other rights protected by EU law.

Judgment

The case concerned allegations that Google had infringed the data protection rights of users of Apple’s Safari browser, by getting around protections against tracking which were intended to prevent Google from collecting information on those users’ behaviour online. American litigation on the same issue had foundered due to the inability of plaintiffs to obtain damages for non-economic losses under American law, although Google had reached a settlement with federal and state regulators which entailed payment of a large penalty.

As regards UK/EU law, the Court of Appeal had to address four issues: (a) is there a tort of ‘misuse of private information’; (b) whether it was possible to sue for non-economic damage; (c) whether the information involved was ‘personal data’ for the purposes of data protection law; and (d) whether there was an arguable case in tort and data protection law. The Court decided all four issues in favour of the plaintiffs, but that does not mean they have won the case yet: at this stage, the Court of Appeal was only deciding whether documents could be served on Google in the first place.

Remedies for breach of EU law

This judgment raises many important questions of privacy rights and data protection law, and substantially advances the enforcement of those rights and that law in the UK. There are excellent discussions of these finer points already by Jon Baines, Christopher Knight and Alexander Hanff. My focus here is on the broader importance of this judgment for the enforcement of EU law rights.

The starting point in this case is the EU’s data protection Directive, which provides that any person who has suffered damage due to breach of the Directive can receive compensation from the data controller for that breach. The UK Data Protection Act implements that rule by providing (in s. 13) for separate claims for damages and distress, imposing conditions (a link to damages, or data processing for special purposes) upon any claim for distress. UK courts have interpreted s. 13 of the Act to mean that ‘damages’ can only refer to economic loss, with non-economic loss subject to the more restrictive rules relating to ‘distress’.

However, the Court of Appeal ruled that the rule in the EU Directive had a wider meaning, covering both economic and non-economic loss, basing itself on CJEU case law relating to the EU’s package holidays Directive. It based this argument on its interpretation of the aim of the Directive (protecting privacy rights), read alongside the right to privacy in Article 8 ECHR and the data protection rights in Article 7 of the EU Charter of Fundamental Rights.

But what were the consequences of this finding? First of all, the Court of Appeal rejected the possibility of using the CJEU’s principle of indirect effect, set out in case law since Marleasing, to strike down s. 13(2) of the UK Act.  This is undoubtedly correct: CJEU case law makes clear that the principle of indirect effect is a rule of interpretation, requiring national courts to stretch the interpretation of national law on the books as far as possible to ensure that it implements EU law correctly. That principle reaches its limits when national law cannot be interpreted consistently with EU law, as the Court of Appeal determined in this case.

So the Court of Appeal rightly relied instead on Articles 7 and 8 of the Charter (privacy and data protection rights), applying Article 47 of the Charter (the right to a fair trial and effective remedy) to strike down national law, just as it had recently done in Benkharbouche (discussed here). That case involved a claim for employment law rights against foreign embassies, and the Court struck down the relevant provisions of the State Immunity Act to allow the suit to continue (insofar as the claims were based on EU law). The Court of Appeal did limit the impact of Article 47 of the Charter by confirming that it could not be used to strike down legislation where that would involve the courts rewriting a legislative scheme and making complex choices that should be left to the legislature to make. But that was not the case here.

As in Benkharbouche, this judgment offers confirmation of the significant possibilities of using the Charter in human rights litigation. Unlike the prior judgment, it was not necessary in Vidal-Hallto distinguish between claims linked to EU law (where the Charter applies) and claims not connected to EU law (where the Charter does not apply), because all of the claims in this case are linked to EU law. The crucial relevance of that distinction is that the Charter can be used to disapply Acts of Parliament, whereas the Human Rights Act cannot. (Moreover, any UK court can disapply an act of Parliament conflicting with the Charter, whereas only the higher courts can issue declarations of incompatibility with the Human Rights Act).

It is clear from Vidal-Hall that Article 47 can be used not just to strike down Acts of Parliament that confer immunity upon defendants, but also to strike down rules that limit heads of damage that can be recovered. It follows that many other types of restrictions on remedies could be challenged: other forms of standing rules, time limits and restrictions on legal aid, for instance. It is also clear that the ‘complex legislative scheme’ exception should not be interpreted widely: plaintiffs should target their challenges to Acts of Parliament against very precise and specific limitations in order to ensure that the exception does not apply.

The existence of this exception does mean, however, that it might be significantly more difficult to use Article 47 to ask the courts to create an entirely new remedy for breach of EU law, because the counter-argument would be that the creation of new remedies is a complex issue best left to Parliament. On the other hand, plaintiffs in such cases could also argue that the common law should develop to create new forms of remedy to ensure effective protection of Charter rights, just as tort law relating to privacy rights was clarified in Vidal-Hall.  

It should be noted here that the Vidal-Hall litigation concerns the application of a Directive between private parties. The judgment thus clearly demonstrates the importance of the Charter in overcoming the traditional restriction on applying Directives against private parties, where national law is incompatible with the Directives (ie, the lack of ‘horizontal direct effect’ of Directives). The alternative option of bringing a Francovich damages action against the state for its breach of EU law is not even discussed here. Obviously it will always be simpler and cheaper for the plaintiffs to follow the direct route of disapplying the Act of Parliament in the main litigation, as compared to having to bring an action against the State instead – especially in cases like Vidal-Hall, where the merits of the case have not even been tried yet.

Furthermore, it should be emphasised that the court was applying Article 47 of the Charter to disapply UK law, not Articles 7 and 8 of the Charter, which set out the substantive rights to privacy and data protection. That is an important distinction because according to last year’s CJEU ruling in AMS(discussed here), not all Charter rights can be enforced by setting aside national law. The CJEU has yet to rule on whether Articles 7 and 8 can be enforced by this route (it dodged this bullet in Satamedia), but it will be hard to avoid it forever.

Finally, what other areas of EU law could this judgment be relevant to? A lot of EU law concerns economic damages in any event (cf the case law on private damages for breach of EU competition law). Even consumer law is largely about economic loss, too: the package holiday judgment referred to by the Court of Appeal is an exception, because in the case of holidays, consumers’ distress arises from being unable to spend their money on holiday as they had planned.

There is at least one obvious other area of EU law where this judgment may also be relevant: the free movement of EU citizens. It is possible to claim for economic loss in such cases, for instance where a person has lost his job as a result of breach of EU free movement law (see the discussion of a recent Irish judgment here). However, often the loss is purely personal: the inability to spend time with a spouse and children. There may also be some economic costs (due to the need to travel to visit a family member, or a job which is lost or cannot be applied for due to breaches of free movement law), but the inherent loss of family life is surely highly significant too. Moreover, the root human right being protected in such cases is in part the same right as that being protected in Vidal-Hall: the right to private and family life (Article 7 of the Charter, Article 8 ECHR).  The next UK government should ensure full compliance with the law on ‘Surinder Singh’ cases (as discussed here), if it does not wish to expose taxpayers to considerable liability.

Photo credit: milanox.eu 

Barnard & Peers: chapter 6, chapter 9

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Damages for breach of EU free movement law: an important Irish judgment

 

Steve Peers

It’s been well over twenty years since the CJEU established, in the case of Francovich, that individuals could sue Member States in damages for breach of EU law. Yet many of the cases concerned have been brought by businesses for lost profit. The CJEU has never had the opportunity to apply the principles relating to damages claims in a case concerning the free movement of EU citizens.

But in its recent judgment in Ogieriakhi, the Irish High Court delivered a ruling on this issue, awarding over €100,000 to the family member of an EU citizen for breach of EU free movement law. This judgment isn’t a precedent as such outside Ireland, but it is a useful indication of how such claims might be made. So I suggest below how it might be particularly relevant to some of the UK's current breaches of EU free movement law.

Background

The Irish judgment follows the CJEU’s ruling earlier last year in the same case (discussed here), which answered the High Court’s questions as regards substantive free movement law and damages issues. Mr. Ogieriakhi had been married to a French citizen in Ireland, then separated from her for several years while living with an Irish woman. Ultimately he got divorced from his French wife, married the Irish woman he had established a family with, and became an Irish citizen.

But in the meantime, he lost his job in the Irish post office, purely on the grounds that he was not legally entitled to be employed. He had been denied a renewed residence permit and had failed in his application to be considered a permanent resident on the basis of the EU citizens’ Directive, which awards that status to third-country national family members of EU citizens after five years’ legal residence.  

In light of developments in CJEU case law, he brought a claim for damages for loss of his job, which was the basis for the High Court asking the CJEU to clarify the substantive free movement law and damages issues. The CJEU ruled, following prior case law, that (a) third-country national family members of EU citizens still had free movement rights as long as the marriage was not formally dissolved, and (b) permanent residence could be acquired on the basis of time spent entirely before the deadline of 30 April 2006 to apply the EU citizens’ Directive, which created the notion of permanent residence. The Irish implementation of the Directive had taken a more restrictive approach on the latter point.

The national judgment

The CJEU judgment makes clear that Mr. Ogieriakhi was entitled to permanent residence status. However, while this will be relevant by analogy in similar cases, it was no longer directly relevant to his immigration status, since the Irish government had awarded him not only permanent residence but also citizenship in the meantime. On the other hand, it was very relevant to his claim for damages.

The High Court judge, Gerard Hogan, applied the EU law principles relating to damages. Mr. Ogieriakhi had to show that: the EU rules conferred rights upon him; the breach of EU law was sufficiently serious; and there was a direct causal link between the breach of EU law and the damages suffered. The CJEU judgment in this case had clarified one aspect of the second point: the mere fact that the national court had asked the CJEU for interpretation of EU law did not as such mean that the breach of EU law was not sufficiently serious.

Applying the principles in turn, the permanent residence rules in the citizens’ Directive aimed to confer rights on individuals. On the second point, the case law of the CJEU on damages says that there must be a manifest and grave disregard of the limits of Member States’ discretion, considering the clarity and precision of the rule breached, the degree of discretion left to Member States, whether the breach was intentional or excusable, the position of EU institutions and the existence of prior case law of the CJEU on the issue. A continuation of national breaches of EU law after a CJEU judgment will always constitute a sufficiently serious breach. In this case, Judge Hogan ruled that: the EU legislation was clear and precise; there was no national discretion; and the breach was not excusable, even though the CJEU did not confirm that pre-2006 periods of residence counted until 2010, since this should have been clear enough from the wording of the Directive. Finally, it was clear on the facts that Mr. Ogieriakhi only lost his job due to the breach of EU law.  

The judge then had to assess the amount of damages payable. Mr. Ogieriakhi had been unable to find work in the difficult economic climate in Ireland, and so was able to claim for several years’ lost wages. To a limited extent, he had failed to mitigate his losses, and so the award was reduced a little as a consequence. The final result was six years’ lost wages, amounting to €107,905, along with a further €20,000 for breach of Irish constitutional law (right to a good name).

Comments

This judgment shows how significant EU law can be in individual cases, in particular in the area of free movement of people. €127,000 is a small sum for a large corporation but a substantial amount for people of modest means, like the Ogieriakhi family. Moreover, Mr. Ogieriakhi doesn’t have to share any of this sum with lawyers, since he represented himself (congratulations to him for his success – and to those in Ireland who obviously taught him EU law very well). Of course, the award shouldn’t be regarded as an unjustified windfall, since it mostly constitutes money that Mr. Ogieriakhi would have earned if he had not been unlawfully dismissed due to breach of EU law.

What are its broader implications? Let’s examine them by applying this case to two other EU free movement issues: the position of EU citizens who move to another Member State to be with their family members, and then seek to return to their own Member State with their family; and the position of those who wish to visit the UK with their third-country national family members, without obtaining a visa.

For the first category of people (often known as Surinder Singh cases), the CJEU clarified last spring (as discussed here) that in principle it should be sufficient for them to spend three months in another Member State exercising free movement rights with their family members.  Then they could return to their home state. The CJEU judgment concerned a Dutch case, and I don’t know what the consequences have been in the Netherlands. But the UK government has continued to apply a ‘centre of life’ test that seems to be clearly more restrictive than the test in the Court’s judgment.

For the second category of cases, the CJEU ruled in December in McCarthy(discussed here) that the family members should not have to obtain a visa, if they had a residence card in their country of origin issued to family members of EU citizens. This was a UK reference, but the UK courts have not followed it up yet. Nor has the UK government changed its practice, as far as I know.

So let’s apply the EU damages principles to these two breaches of EU law. In the first case, the right to return to the UK is based on the Treaty rules on free movement of people, which clearly aim to confer rights on individuals. Any delay in returning to the UK with family members is in principle caused by the UK’s wrongful application of EU law, although there might be other reasons in individual cases why people delayed their return (finding work back in the UK, finishing school years, and so on). As for the ‘sufficiently serious’ requirement, it is clearly met since the Court’s ruling last year, but it harder to argue that it applied before that date, due to the lack of legislation on this issue and the lack of clarity before the Court’s judgment. The calculation of damages due to the UK’s breach of EU law will depend on each case, and it might be harder in many cases to show losses as compared to the Ogieriakhijudgment, where the total absence of work was solely attributable to breach of EU law, and the resulting damages were fairly easy to calculate.

In the second case, the right to visit the UK without a visa is clearly a rule intending to confer rights on individuals. Any costs incurred to get a visa (mainly travel to a consulate) are clearly directly attributable to the breach of EU law by the UK. The breach of EU law is sufficiently serious since the McCarthyjudgment, but in this case it is arguably sufficiently serious beforehand. It is blatantly obvious from the wording of the citizens’ Directive that third-country national family members with a residence card do not need a visa, and there is no provision in the Directive for the UK practice of requiring a family permit as a separate requirement for a visa exemption. Equally it was clear from prior CJEU case law that the concept of ‘abuse of rights’ could only apply in individual cases.

As always on this blog, the suggestions above do not constitute legal advice, and anyone considering legal action should consult a lawyer (unless they are sure that they can represent themselves as well as Mr. Ogieriakhi did). I don’t practice law, so this isn’t an attempt to drum up work for myself. Rather my concern is not only for the individuals who ought to be compensated for the losses caused by the illegal actions of the UK, but also for the broader principle of the rule of law. It simply is not acceptable for the UK government to flout its legal obligations as long as it has, and the more legal proceedings aiming to pressure it to comply with those obligations, the better.

 

Barnard & Peers: chapter 6, chapter 13

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