The anxiously awaited opinion of the Advocate-General in the case of R v Secretary of Transport, ex p.

Factortame Ltd (Factortame) was delivered on 28 November 1995.

The facts of the Factortame trilogy are now well known.

In 1988 the UK government passed the Merchant Shipping Act (the 1988 Act) to regulate access to the fishing grounds off its shores.

The 1988 Act purported to restrict registration to vessels according to nationality, residence and domicile of their owners.

It is now accepted that the legislation infringed arts 7, 52 and 221 of the Treaty of Rome.

These provisions relate to non-discrimination on the grounds of nationality and freedom of establishment in member states for individuals and companies.The reference for a preliminary ruling was made by the High Court at the start of an action by owners of fishing vessels who claimed damages from the UK government for being refused registration.

The High Court asked the ECJ whether the owners of the fishing vessels were entitled to compensation and, if so, what considerations should apply.

Advocate-General Tesauro focused on the seminal case of Francovich and Bonafaci v Italian Government [1991] ECR 5357.

(In that case the Italian government had failed to implement relevant provisions of the Directive relating to protection of employees in the event of insolvency of their employers.

The ECJ held that they were liable to compensate workers who had suffered loss as a result of this non-implementation.) He concluded that Francovich was completely consistent with a logical extension of an important Community principle: effectiveness of Community provisions and hence complete judicial protection of the individual.The difficulty arises where the acts or omissions in question are committed by the legislature: failure to amend national law so as to bring it into conformity with Community law or the adoption of national law inconsistent with Community law.

The Advocate-General took the view that Community law itself should lay down at least the minimum conditions to determine the right to compensation.

in particular, the criteria by which those conditions were established and the 'Community' limits imposed on the 'national' conditions relating to compensation - procedural or otherwise - should be clearly identified.The Advocate-General compared the question of state liability with art 215 of the EC treaty which deals with non-contractual liability of Community institutions.

There was no reason why, he opined, the two branches of liability should not be similar.State liability could only be invoked where a serious and manifest breach of Community law had occurred.

These criteria would be met where there was infringement of clear and precise obligations.

This would usually mean that the ECJ's case-law had provided sufficient clarification of doubtful legal situations which were identical or, in any event, similar to that issue.

And the national authorities' interpretation of the relevant Community provisions in their legislative activity (or inactivity) would have had to be seen as manifestly wrong.

The Advocate-General considered that the concept of fault had no relevance as a separate criterion for evaluating liability.Damage suffered would have to be real, certain and actual but, apart from that, the Advocate-General sought to place no limits on types of damage; and there would have to be a causal link between breach of statutory duty and damage.

The Advocate-General accordingly recommended that the ECJ respond to the questions posed that a member state would be bound to pay damages to individuals even where the infringement consisted in the fact that the legislature passed a national law incompatible with Community law.

This liability would only arise if the rights and obligations were precise in every respect and clearly specified by relevant case law.

It was for the national court to determine what loss was recoverable according to ordinary principles no less favourable than those applying for similar domestic claims.

Main points of the A-G's Opinion -- There must be adequate protection of individuals' rights where loss is caused by State infringement of Community law.-- It is irrelevant that the infringement has been caused by the legislature;-- The obligation/right infringed must be precise and unambiguous as, for instance, when the member state fails to take established case law into account.-- Quantification of damages will be governed by national law.-- The obligation to make reparation arises when the infringement occurs (in the case of manifest or serious breach) or when the matter is determined by the national courts or the ECJ.