EU intent on stubbing out tobacco

As the EU attempts to burn out subsidies paid to tobacco farmers, the European Court is faced with the question of judges' liability for erroneous judgments. June O'Keefe reports

Tobacco is one of those issues that has risen rapidly to the fore of public debate in recent years. The EU is no exception and has also been grappling with the issue and how best to tackle it. To make its health policies in this area more credible, the European Commission, as from this year, will be phasing out the subsidies paid to tobacco farmers. According to some estimates, tobacco farmers receive European grants averaging £5,000 a year each.


While the EU does not have the power to ban smoking outright as a number of countries have done, it can make life economically difficult for cigarette producers by severely curbing the way in which they market their products. The first attempt to do this occurred in a law dating back to 1998. However, that directive was subsequently struck down by the European Court of Justice on the grounds that it was based on the incorrect 'legal basis' - all European legislation has to be based on a treaty article that explicitly states what is covered.


Undeterred, the EU's legislators came up with a new proposal based on a different treaty article aimed at prohibiting advertising and marketing of tobacco products in newspapers, on television and via the Internet. This was challenged by the German government as going too far and for, among other arguments, breaching the principle of proportionality. In other words, you must not use a sledgehammer to crack a nut.


An interesting debate took place on the issue of freedom of speech in the economic sphere. The European court, in its opinion, held that this principle has to be balanced against other principles, particularly that of public health. Freedom of expression can be restricted to accommodate a 'pressing social need' such as public health. This is not the end of the story as final judgment has yet to be passed on this case, but it is unlikely that a different outcome will emerge at the end of the day.


When legislators get the law wrong, as happened under the original tobacco advertising directive, the laws get rewritten. But what happens when judges allegedly get it wrong? If you are in Italy and you are referring to the Supreme Court, the answer is virtually nothing. On the same day, 13 June, that the European court produced its opinion on the tobacco directive, judges in the grand chamber were ruling on the liability of their brethren in the member states.


The case concerned the grant of state subsidies to a maritime transport undertaking which effectively drove TDM, a competitor, out of business. TDM appealed all the way to the Italian Supreme Court, which rejected the case. TDM took the view that the Italian Supreme Court had misinterpreted EC treaties and, therefore, brought a challenge on the grounds of state liability for that alleged misinterpretation. The Genoa court before which the challenge was brought, in turn, referred the matter to the European court - a wise move in hindsight given the subject matter and outcome of the European court's decision.


The UK government intervened in support of the Italian system, which it argued was necessary to protect the independence of the judiciary and uphold the principle of legal certainty, while at the same time providing effective judicial protection for individuals in cases of flagrant breaches of European law. The Italian law at issue also excluded liability of judges in relation to the assessment of facts or evidence.


The European court held that the Italian law on liability was contrary to European law as it deprived claimants of an effective remedy. Nonetheless, this does not open the floodgates for claimants to start suing judges for incorrect interpretation of the law when cases do not go their way. Judges will only be responsible when they commit 'manifest infringement of the applicable law'. Such liability exists in many EU countries for breaches of purely national law. The notion that such liability be extended to cover breaches of European law is a relatively recent development.


So what are the consequences of this decision for European judges who may understandably err on the side of caution and be reluctant to be found liable for erroneous judgments? Will more and more start referring difficult cases to the already hugely overburdened European Court of Justice, thus adding to the delays in reaching a decision?


That would indeed be a pity and would not help applicants who have already been through the entire appeals process at national level. Instead of seeing the judgment as a threat, judges could instead welcome the invitation to be bold in applying what is, in effect, an additional series of rights and remedies, as many have been doing for a number of years, while bearing in mind the increasing challenge facing them.


Or to give the final word to Sir Francis Bacon: 'Judges must beware of hard constructions and strained inferences, for there is no worse torture than that of laws.'