2.

First, the fact complained of, which is the decision of 3 October 1963 by which the Commission authorized the German Government to maintain up to and including 4 October the protective measures taken as from 1 October. You have held it to be illegal because no serious disturbance of the market such as is envisaged in Article 22 was to be feared. But not every illegality or infringement of the rule of law necessarily gives rise to a right to reparation. The applicants admit that two conditions must in addition be fulfilled and consider that they are fulfilled in the present case. It is necessary that the provision infringed should be intended to protect the interests of those who have suffered injury. It is necessary further that the illegality committed should constitute a wrongful act. Although agreeing on these principles, the defendant does not agree on the application which the applicants claim should be made in the present case. (a) The first condition was imposed by you in the judgment in the Vloeberghs case (9 and 12/60, Rec. 1961, p. 391) when you had to interpret Article 40 of the ECSC Treaty, and one may logically extend the application of it within the framework of the second paragraph of Article 215. It is based upon German law where Article 34 of the Basic Law makes a public authority liable only when the party responsible for the damage has infringed its obligations to third parties in the performance of a duty which has been entrusted to it; it is necessary to say, further, that if one is to believe counsel for the applicant in Case 13/66 that concept should be interpreted today in a very flexible manner. It is not without analogy with that concept of Italian law that rules which exist exclusively or principally in the public interest create, according to the circumstances, a legitimate interest allowing an action for annulment to be brought, but give no subjective right on the basis of which an action for damages may be brought. But, although it is admissible, that condition should not be followed too strictly for fear of rendering the concept of liability devoid of meaning. The defendant states that by not supervising the use made by the German Government of its power to take protective measures it disregarded a rule which was not established in the interests of importers but in that of the community to which the regular functioning of the common organization of the markets is important. It compares Article 22 of the regulation to various articles of the Treaty with a similar procedure and points out that all these provisions have basically the same object as the power of supervision which Article 169 gives it, and of which it is not possible to say that it is used to protect the interests of a particular group of traders. It proposes in any case to remain within the sphere of Article 22; on the hypothesis that it also infringed Article 18 of the same regulation, which prohibits recourse to any other protective measure, it is a matter of a prohibition which is addressed directly only to the Member States and more or less indirectly to the Commission through the intermediary of Article 22. It is clear that the organization of the markets should be effected in the interest of the whole community, but it may be said also that that organization is founded upon the principle of free trade. Although it is intended to protect the position of producers, it does not ignore the fact that the increase in trade between the Member States presupposes, in the interests of the consumers themselves, that guarantees and opportunities should be given to intermediaries and in particular to importers. In order to be capable of use in support of an action for compensation it is not necessary that the disputed provisions should be intended exclusively to serve the interests of importers; it is sufficient that they also contribute to the defence of their interests. The precision with which Article 22 lays down the assumptions which allow freedom of trade to be limited is intended also to guarantee to commercial undertakings that the transactions which are the reason for their existence will not be upset except in strictly defined circumstances; one thinks for example of the necessity of making provision for rules so that goods in transit are not affected by protective measures, of a hope expressed in that article of not making exporters suffer damage which is excessive or avoidable, all being matters which are of no importance to the community considered as a whole. Even if these are not provisions which have been disregarded in the present case, it is proper to use them to describe Article 22 as a whole. I consider therefore that the nature of the rule infringed does not exclude the right of the applicants to take advantage of it by means of an action for damages. I would add — without insisting on the point — that your judgment in the Toepfer case may be regarded as pointing in that direction, to the extent to which it accepts that applicants are directly and individually concerned by the act annulled. No doubt it is necessary to take care not to confuse the conditions of admissibility of an application for annulment with those concerning the question whether an action for damages is well founded: the second paragraph of Article 176 of the Treaty provides that the obligation placed upon the author of the act annulled to take the necessary measures to comply with the judgment annulling the act shall not affect any obligation which may result from Article 215. But the effort which you have made by your judgment of 1 July 1965 to give access to the Court, which is so meanly granted by Article 173, would be hardly understandable were it not accompanied by an equal liberality in considering actions for damages. (b) This first point does not suffice to show that the decision of 3 October 1963 is of such a nature as to involve the liability of the Community. The applicants admit in principle that it is necessary that the illegality should be wrongful; they dispute on the contrary that the wrongfulness required may ‘vary’ according to the circumstance in order to take into account the nature of the activity in question, as, for example, when the Commission carries out supervisory activities, it cannot be regarded as liable, except for ‘gross malfeasance’. Leaving this last question aside for the moment, I shall quickly consider the arguments developed by the parties. Taken together they reproduce on many points with a slightly different emphasis the arguments put forward in Joined Cases 106 and 107/63, which is not surprising. There it was a question whether such circumstances of fact (annual consumption of maize in the Federal Republic — tonnage of licences requested for January 1964, etc.), amounted to a threat of serious disturbance of the market sufficient to justify the validation by the Commission of the protective measures. Now that the assessment made by it which governed the legality of its decision has been held by you to be mistaken, it is a matter of stating whether that mistake was due to negligence on its part, as the applicants maintain, or whether, as the Commission says, it is due to the inherent complexity or uncertainty of forecasting in economic matters, with the result that no error could be attributed to it. That argument was developed in the written procedure; you will remember also that at the hearing the Agent of the Commission deduced from the wording of your judgment in the Toepfer case that you did not hold that the decision disputed at that time was insufficiently reasoned, or that it infringed the principle of proportionality or disregarded the concept of serious disturbance of the market, but was only an incorrect evalution of the factual situation; he attempted to show how, both because of the complexity and novelty of the problem put to the Commission and because of the very short period of time in which it had to make its decision, the error by which it was vitiated was thereby capable of being explained and was consequently not wrongful. That argument is not without weight. It is true, first of all, that the law of certain Member States does not regard every error of construction of legal wording as vitiated by a wrongful act. German law appears to take into account the uncertainties which may exist as to the scope of the wording which has not yet been clarified by the case-law of the highest court; if the opinion which has been arrived at after careful examination appears legally defensible, the fact that this opinion is later disapproved cannot be regarded retroactively as a wrongful act. We see in the same field of thinking that, in order to decide that errors in calculating the bases for equalization levies do not amount ipso facto to a wrongful act or omission, your judgment in the Meroni case points out that these errors may be the ‘'result of the difficulty of solution of intricate problems’ (14/60 Rec. 1961, at p. 341). The same reasons led the French Conseil d'État to give a narrow interpretation to the concept of a wrongful act or omission in respect of economic matters to the point where a commentator was able to say that in this sphere there existed a ‘wide margin of acceptable error’. It is usual in addition to take into account the conditions under which a decision must be made in order to decide upon the negligent or diligent conduct of the party responsible for it: the speed with which it must be taken and the necessity of engaging in numerous consultations in a short time are considerations which must certainly be taken into account. Whatever the value of the argument advanced by the Commission, it does not appear absolutely convincing to me. I consider for my part that the conduct of that institution was vitiated by a certain negligence which gave its illegal decision a wrongful character. I base my opinion for this on the following reasons: Because of certain, at least apparent, contradictions which are contained in its statements you have asked the Commission to inform you whether it could at the time have adopted a decision fixing free-at-frontier prices which would have avoided the hidden difficulties which appeared. The reply which you were given shows quite clearly — and I consider, in a convincing manner — that the decision of 27 September 1963, which was valid as from the following October and which did not include the fixing of a free-at-frontier price, amounted to a proper application of the rules then in force. There was therefore a gap in the system which contributed to the creation of the difficulties which the protective measure was intended to overcome, and it was to avoid the renewal of these difficulties that the Council on a proposal of the Commission instituted a system of premiums by Regulation No 56/64. I do not propose to consider in this respect the very delicate question whether the fact of an institution's not adopting a regulation or not making a proposal for this purpose to the authority competent to promulgate it may involve it in extra-contractual liability. I wish simply to emphasize that the legal position was such that the Commission should have expected difficulties and displayed special care. It should have done so all the more since 1 October, the date on which the decision of 27 September entered into force, was also that on which the new maize year began and which would cause alterations in price levels, and that on which importers could apply for licences at a rate of levy fixed in advance for the following January. The coincidence of these various facts should have alerted the departments which, one must accept, have a profound knowledge of the machinery of the agricultural markets. Furthermore, these departments have sufficient sources of information either of their own or through their usual informants to shape their decision: they know the annual consumption of maize in the Federal Republic and the import needs which would appear at the beginning of the following year. The relative increase in the number of transactions between that country and France, in accordance furthermore with the objectives of a common organization of the markets, should have enabled it to realize whether the licences requested were capable of disturbing the balance of this market. Even if it was one of the first times when the Commission had to make a decision on protective measures, the situation was not unforeseeable for it, but the seriousness of the measure to be taken required deeper consideration than that which the Commission gave it. The Commission takes refuge, it is true, behind the shortness of the time which was given to it, and during the course of which it had to consult the Member States meeting in the Management Committee. It emphasizes that these States, and in particular France which was especially concerned by the question, shared its opinion regarding the legality of the protective measures. But Article 22 (2) allowed it a maximum period of four working days as from the notification by the Federal Republic to make a decision; as that notification was made in the evening of 1 October, it was not required to make its decision until 3 October whilst conducting its investigation. It maintains that it had to deal with the situation created by the Federal Government as soon as possible; but not to the extent of taking an insufficiently considered decision. As to the fact that the Management Committee, which is required to be consulted, approved its view, this has no bearing upon the possible liability of the institution. I consider thus that in the present case there was negligence and consequently a wrongful act. Taking into account the possibility that you will agree with this point of view, the Commission adds that the disputed decision was taken by it in the performance of its duty of supervision; on such am assumption it could be liable only if it were possible to show that it had committed a ‘gross malfeasance’ that is to say, if its act — to use a concept of German law — had been affected by ‘gross negligence’ (große Fahrlässigkeit), and I readily admit that this cannot be said of it. In support of its argument, the Commission relies upon the opinion held in respect of Article 40 of the ECSC Treaty by certain of your Advocates-General (particularly in the cases of Vloeberghs—Rec. 1961, at p. 469 and Hants Fourneaux de Chasse [1962] E.C.R. 381, an opinion which your judgments have never expressly accepted or rejected. I would mention however that in recognizing the liability of the High Authority for the actions of the Brussels organizations which it controlled your judgment in the Fives-Lille-Cail case was based on the fact that the institution ‘seriously neglected the duties of supervision which normal diligence required of it’ (Joined Cases 19 and 21/60 and 2 and 3/61, Rec. 1961, at p. 592), whilst the judgment in the Forges de la Providence case restricts itself to finding ‘lack of care’ (Joined Cases 29, 31, 36, 39 to 47, 50 and 51/63, Rec. 1965, at p. 1157). Is it necessary to grade wrongdoing in the system of liability in the second paragraph of Article 215 so as to require gross malfeasance in respect of supervision, as is accepted for example in the French law of administrative liability? It does not appear necessary to me to decide that question today, because the action of the Commission within the framework of Article 22 of Regulation No 19 is outside the assumptions which explain this particular requirement. Classically, it justifies itself by the autonomy of the organization which is supervised, and also by the fact that supervision is exercised over general conduct but not over each individual act, so that, as your judgment in the Forges de la Providence case points out, certain actions of the body under supervision may escape the attention of the supervisory body. That is the difficulty of supervision which is behind the requirement of gross malfeasance to create liability. Here there is nothing like it, since the Commission is necessarily informed of the protective measure and is required to take a decision retaining, modifying or abolishing that measure. Even when it retains the measure, its situation is not the same as that of a supervisory body which simply refrains from intervening. In that respect, negligence such as that which I believe I have been able to show appears to me to amount to a wrongful act of involving the Community's liability. Although the applicants rely essentially on the concept of malfeasance, the majority of them have not set aside the concept that another basis could have been given to their action. They have claimed that they had a right to obtain the import licences for which they had applied; the decision of the Commission which deprived them of this right amounted to an intervention similar to expropriation, and there is a general principle of law that such intervention creates a right to monetary reparation. In fact it is, it appears, a principle of German Jaw in respect of measures taken legally or illegally by the public authorities but not amounting to a wrongful act (Ehle — Klage und Prozeßrecht des EWG-Vertrags — Commentary on Article 215, p. 6), to which the Commission raises the objection that the conditions necessary for its application are not fulfilled in the present case. It is certain in any case that on this point there is no principle common to the law of our six States: French law for example does not recognize liability without malfeasance, arising from a risk, unless the activity is lawful. Furthermore the applicants have only outlined their claims without trying to explain exactly the law on which they rely, which excuses me from dwelling longer on the matter.