Substance
The third and sixth questions
48
By its third and sixth questions, which it is appropriate to consider together, in the first place, the referring court asks, in essence, whether Article 1(3), and Article 10(1) of Directive 94/19 must be interpreted as precluding, first, national legislation according to which the determination that deposits have become unavailable is concomitant with the insolvency of that credit institution and the withdrawal of that institution’s banking licence and, second, derogation from the time limits provided by those provisions for the purposes of determining that deposits have become unavailable and of reimbursing those deposits on the ground that the credit institution must be placed under special supervision.
49
In that regard, it should be made clear that it is clear from the express wording of the first paragraph of Article 1(3)(i) of Directive 94/19 that the necessary and sufficient condition for determining whether a deposit that is due and payable has become unavailable is that, in the view of the relevant competent authority, a credit institution appears to be unable for the time being, for reasons which are directly related to its financial circumstances, to repay the deposit and to have no current prospect of being able to do so.
50
In addition, the second paragraph of Article 1(3)(i) of Directive 94/19 specifies that that determination must be made, by that relevant competent authority, ‘as soon as possible’ and ‘no later than five working days after first becoming satisfied [that the credit institution in question] has failed to repay deposits which are due and payable’.
51
It follows from those provisions that the determination that deposits of a credit institution have become unavailable cannot depend on the insolvency of the credit institution in question or on the withdrawal of its banking licence.
52
First, the unavailability of deposits must be determined within a very short period, without waiting for the necessary conditions for initiating insolvency proceedings or withdrawing a banking licence to be satisfied.
53
Second, the circumstances of insolvency of the credit institution and withdrawal of its banking licence differ from those set out in Article 1(3)(i) of Directive 94/19. For instance, withdrawal of a credit institution’s banking licence may, inter alia, result from failure to join a deposit-guarantee fund without, however, meaning that the deposits of that institution have become unavailable.
54
In addition, a credit institution’s insolvency and withdrawal of its banking licence tend to indicate that the credit institution is facing long-term difficulties. By contrast, since Article 1(3)(i) of Directive 94/19 subjects determination of the unavailability of deposits to the condition of the credit institution appearing unable ‘for the time being’ to repay the deposit and of having no current prospect of being able to do so, the unavailability may be temporary.
55
It follows that the determination of unavailability of deposits must take place even in the event of temporary difficulties, provided that the credit institution in question is unable to repay a deposit that is due and payable and that there is no current prospect of it being able to do so.
56
That interpretation is borne out by the twofold objective pursued by Directive 94/19. In that regard, it should be noted that that directive is intended, as its first and fourth recitals indicate, both to protect depositors and to ensure the stability of the banking system, by preventing massive withdrawal of deposits not only from a credit institution in difficulties but also from healthy institutions following a loss of public confidence in the soundness of the banking system (judgment of
22 March 2018,
Anisimovienė and Others
, C‑688/15 and C‑109/16, EU:C:2018:209, paragraph 83
).
57
As regards that twofold objective, it is imperative that the deposit-guarantee intervene, and as stated in the eighth and ninth recitals of that directive, within a ‘very short period’ as soon as a credit institution’s deposits become unavailable.
58
First, the protection of depositors requires that their deposits be reimbursed as soon as possible from the time of their unavailability so that such depositors are not deprived of their savings and not, as a result, unable, in particular, to meet their daily expenses. Second, the stability of the banking system also calls for the swift reimbursement of depositors in order to avoid a credit institution’s financial difficulties, even if temporary, from resulting in massive withdrawal of deposits and those difficulties thereby spreading to the rest of the banking system.
59
Indeed, having regard to the wording of Article 1(3)(i) of Directive 94/19 and in particular to the fact that that provision states that the relevant competent authority must determine that deposits have become unavailable if ‘in [its] view’ the necessary conditions in that regard are satisfied, that authority has some latitude. However, that latitude concerns its assessment of the conditions set out in that provision, not those conditions as such, nor the timing of such a determination.
60
As regards the possibility of derogating from the time limit for determining whether deposits are unavailable so that the credit institution may be placed under special supervision, clearly the period set out in the second paragraph of Article 1(3)(i) of Directive 94/19 is, according to the wording of that provision, a mandatory time limit, from which no other provision of that directive provides for a derogation.
61
In addition, to allow the relevant competent authorities to derogate from the time limit set out in Directive 94/19 for determining that deposits are unavailable so that the credit institution may be placed under special supervision would run counter to the requirement of prompt action which follows from that directive. It is clear both from the twofold objective pursued by that directive, as mentioned in paragraph 56 above, and from the reduction of that time limit, from 21 to five days, introduced by Directive 2009/14, that such a determination must be made within a very short period.
62
Furthermore, the explanatory memorandum to the Proposal for a Council Directive on deposit-guarantee schemes of 4 June 1992 [COM(92) 188 final, OJ 1992 C 163, p. 6], which led to the adoption of Directive 94/19, states, precisely, that the payment of the deposit-guarantee should be based on the objective finding that a depositor has been deprived of the funds which should have been repaid by the credit institution ‘in order to speed up the payout of the guaranteed amount’ and ‘not to link this payout with the uncertainties of the procedures of reorganising and liquidating the credit institution’.
63
Indeed, recital 12 of Directive 2009/14 states that ‘deposits may be considered unavailable once [measures for the] early intervention or reorganisation [of the credit institution in question] have been unsuccessful’.
64
However, first, recital 12 refers only to the possibility of regarding deposits as unavailable where early intervention or reorganisation measures have been unsuccessful without subjecting the determination of unavailability to the fact that such preventative measures have failed.
65
Second, it is to be noted that the second sentence of that recital specifies that that possibility ‘should not prevent competent authorities from making further restructuring efforts during the payout delay’ and therefore implies that such measures do not affect the determination of the unavailability of deposits, nor their reimbursement.
66
As regards the time limit for reimbursing the deposits set out in Article 10(1) of Directive 94/19, it is clear from the wording of that provision that an extension of that time limit is possible only in the case of ‘wholly exceptional circumstances’ and that such extension ‘shall not exceed 10 working days’.
67
As regards a defaulting credit institution, placing it under special supervision, in order to prevent it from becoming insolvent, is not a wholly exceptional circumstance, but, on the contrary, a circumstance inherent to the activities of a credit institution and to the measure which may be adopted to remedy such a situation.
68
In any event, the fact that the extension of the time limit for reimbursing deposits is reduced to 10 working days shows that that extension does not concern measures which could be adopted in order to avoid that credit institution from becoming insolvent, since those measures require more than 10 days before taking full effect.
69
In the light of all those factors, the answer to the third and sixth questions is that Article 1(3), and Article 10(1) of Directive 94/19 must be interpreted as precluding, first, national legislation according to which the determination that deposits have become unavailable is concomitant with the insolvency of that credit institution and the withdrawal of that institution’s banking licence and, second, derogation from the time limits provided by those provisions for the purposes of determining that deposits have become unavailable and of reimbursing those deposits on the ground that the credit institution must be placed under special supervision.
The fourth question
70
By its fourth question, the referring court asks, in essence, whether Article 1(3)(i) of Directive 94/19 must be interpreted as meaning that the unavailability of deposits held by a credit institution must be determined expressly by the relevant competent authorities or whether it may be inferred from other acts of those authorities — such as the decision of the BNB to place KTB Bank under special supervision — or presumed from circumstances such as those in the main proceedings.
71
In that regard, the point must be made that Article 1(3)(i) of Directive 94/19 merely sets out the circumstances in which the relevant competent authorities must make a determination that the deposits of a credit institution are unavailable, and does not specify the form in which such a determination must be made.
72
However, it should be noted that, first, within the scheme of Directive 94/19, a determination that the deposits of a credit institution are unavailable triggers reimbursement of deposits by the guarantee schemes and, second, in accordance with Article 10(1) of that directive, that determination is the starting point for the period of time in which that reimbursement must take place.
73
Thus, in the light of those factors, the unavailability of deposits of a credit institution, within the meaning of Article 1(3)(i) of Directive 94/19 must necessarily be expressly determined by the relevant competent authorities responsible for determining whether deposits are unavailable, since any other interpretation would create a situation of uncertainty, which that directive precisely seeks to remedy.
74
It is clear from the twenty-first recital of Directive 94/19 that information is an essential element in depositor protection. In addition, as set out in paragraph 56 above, that directive seeks to achieve two closely related objectives, namely the stability of the banking system and depositor protection. Those objectives require that depositors may determine with certainty whether their deposits are unavailable and the moment from which they will be subject to a reimbursement procedure, in order to avoid any panic capable of jeopardising the stability of the banking system.
75
Furthermore, since the determination that deposits are unavailable triggers the reimbursement of those deposits and is the starting point for the period of time in which it must take place, depositors and the depositor-guarantee fund must be provided with an express, clear and specific decision enabling them to know swiftly and with certainty whether, following the assessment set out in Article 1(3)(i) of Directive 94/19, deposits have been determined to be unavailable. Such a decision ensures, first, that the deposit-guarantee fund is in a position to initiate a reimbursement procedure and to ascertain when the time limit set out in Article 10(1) of Directive 94/19 begins to run and, second, that depositors may rely on the rights conferred on them by that directive.
76
It follows that an express decision must be adopted in order to determine whether deposits are unavailable and that the deposit-guarantee fund must be informed of that decision as soon as it is adopted.
77
In addition, the unavailability of deposits cannot be inferred from other acts taken by the competent national authority such as placing a bank under special supervision or presumed on the basis of circumstances such as those at issue in the main proceedings, since they do not result from an assessment of the unavailability of deposits such as the assessment laid down in Article 1(3)(i) of Directive 94/19.
78
Therefore, the answer to the fourth question is that Article 1(3)(i) of Directive 94/19 must be interpreted as meaning that the unavailability of deposits within the meaning of that provision must be determined expressly by the competent national authority and cannot be inferred from other acts of the national authorities — such as the decision of the BNB to place KTB Bank under special supervision — nor presumed from circumstances such as those in the case in the main proceedings.
The fifth question
79
By its fifth question, the referring court asks, in essence, whether Article 1(3) of Directive 94/19 must be interpreted as meaning that a determination that a bank deposit is unavailable, within the meaning of that provision, is subject to the condition that the account holder must first make an unsuccessful request for payment of funds from the credit institution.
80
In that regard, it follows from Article 1(1) read in conjunction with Article 1(3)(i) of Directive 94/19 that, although deposits must be repaid under the legal and contractual conditions applicable, the assessment of their unavailability is, by contrast, determined exclusively by the conditions laid down in Article 1(3)(i) of that directive.
81
That provision does not subject a determination that funds are unavailabile to a prior unsuccessful payout of funds.
82
As the European Commission correctly observes that determination is related to the objective financial situation of the credit institution and concerns the deposits held by that institution as a whole and not each of the deposits which it holds. Thus, the fact that that credit institution has not paid out certain deposits and that the conditions set out in Article 1(3)(i) of Directive 94/19 are satisfied is sufficient for a determination that all deposits held by that institution are unavailable.
83
Furthermore, the twofold objective pursued by Directive 94/19, as is clear from paragraph 56 above, could not be achieved if the holders of a deposit were required to have made an unsuccessful request for payment of funds of the credit institution in question in order for that deposit to be capable of being regarded as ‘unavailable’.
84
First, such a requirement would be liable to diminish depositor confidence in the deposit-guarantee scheme and to give rise to situations of massive requests for payment of deposits.
85
Second, such a requirement would complicate the procedure for determining whether deposits were unavailable and jeopardise the objective of prompt action in Directive 94/19.
86
Moreover, in circumstances such as those in the main proceedings, where all of a credit institution’s transactions and payments have been suspended, such a condition is even less justified since it is not necessary and its satisfaction would, in practice, be very difficult, if not impossible, given that the holder of a deposit is not necessarily able to prove that he has made a prior request for payment and that that request was unsuccessful.
87
Therefore, the answer to the fifth question referred is that Article 1(3)(i) of Directive 94/19 must be interpreted as meaning that a determination that a bank deposit is unavailable, within the meaning of that provision, cannot be subject to the condition that the account holder must first make an unsuccessful request for payment of funds from the credit institution.
The seventh and eight questions
88
By its seventh and eighth questions, which it is appropriate to consider together, the referring court asks, in essence, whether Article 1(3)(i) and Article 10(1) of Directive 94/19 must be interpreted as having direct effect and conferring on depositors the right to bring an action for damages for harm allegedly sustained due to late reimbursement of deposits, on the ground of State liability, for a breach of EU law against the public authority responsible for determining whether the deposits of a credit institution, such as the BNB, are unavailable. If so, the referring court asks for further clarification on the concept of a ‘sufficiently serious’ breach within the meaning of EU law and is uncertain of the relevance of certain facts of the case for the purposes of that assessment.
89
As a preliminary matter, it is important to note that, contrary to what the BNB submits and as the Advocate General stated in points 78 to 82 of her Opinion, the facts which gave rise to the case in the main proceedings may be distinguished from those giving rise to the judgment of
12 October 2004,
Paul and Others
(C‑222/02, EU:C:2004:606
), as a result of which that judgment cannot provide answers to the questions posed by the referring court.
90
It is clear from the judgment of
12 October 2004,
Paul and Others
(C‑222/02, EU:C:2004:606
) that, where national law has established a deposit-guarantee scheme, Directive 94/19 does not preclude national legislation which limits individuals from claiming damages for harm sustained by insufficient or deficient supervision on the part of the national authority supervising credit institutions or from pursuing State liability under EU law on the ground that those responsibilities of supervision are fulfilled in the general interest.
91
In the present case, the referring court wishes to know whether a Member State may be held liable for an incorrect transposition of Directive 94/19 and for an incorrect implementation of the deposit-guarantee mechanism set out in that directive.
92
In that regard, it should be noted that, according to settled case-law, the principle of State liability for loss and damage caused to individuals as a result of breaches of European Union law for which the State can be held responsible is inherent in the system of the treaties on which the European Union is based (judgment of
26 January 2010,
Transportes Urbanos y Servicios Generales
, C‑118/08, EU:C:2010:39, paragraph 29
and the case-law cited).
93
Thus, it is for each Member State to ensure that individuals obtain reparation for loss and damage caused to them by non-compliance with EU law, whichever public authority is responsible for the breach and whichever public authority is in principle, under the law of the Member State concerned, responsible for making reparation (judgment of
25 November 2010,
Fuß
, C‑429/09, EU:C:2010:717, paragraph 46
and the case-law cited).
94
In addition, the Court has repeatedly held, concerning the conditions for incurring the non-contractual liability of the State to make reparation for loss and damage caused to individuals as a result of breaches of EU law for which it is responsible, that individuals who have been harmed have a right to reparation if three conditions are met: the rule of EU law infringed must be intended to confer rights on them; the breach of that rule must be sufficiently serious; and there must be a direct causal link between that breach and the loss or damage sustained by the individuals (judgment of
28 July 2016,
Tomášová
, C‑168/15, EU:C:2016:602, paragraph 22
and the case-law cited).
95
It also follows from settled case-law that it is, in principle, for the national courts to apply the criteria for establishing the liability of Member States for damage caused to individuals by breaches of EU law, in accordance with the guidelines laid down by the Court for the application of those criteria (judgments of
25 November 2010,
Fuß
, C‑429/09, EU:C:2010:717, paragraph 48
and of
19 June 2014,
Specht and Others
, C‑501/12 to C‑506/12, C‑540/12 and C‑541/12, EU:C:2014:2005, paragraph 100
).
96
As to whether Article 1(3)(i) and Article 10(1) of Directive 94/19 have direct effect and confer the right to bring an action for damages for the harm caused by late reimbursement of deposits, it must be made clear from the outset that, since the applicant is relying, before the referring court, on harm caused by a breach of Article 1(3)(i) of Directive 94/19 by the BNB, there is no need for the Court to rule on Article 10(1) of that directive.
97
As to whether Article 1(3)(i) of Directive 94/19 has direct effect, although such a condition is not required by the case-law for the purposes of holding a Member State liable for a breach of EU law (see, by analogy, judgment of
5 March 1996,
Brasserie du pêcheur and Factortame
, C‑46/93 and C‑48/93, EU:C:1996:79, paragraphs 21 and 22
), the referring court nevertheless states that if that provision has direct effect, the BNB breached EU law by failing to apply it in lieu of the national legislation transposing Directive 94/19.
98
In that regard, it must be stated that, whenever the provisions of a directive appear, so far as their subject matter is concerned, to be unconditional and sufficiently precise, they may be relied upon before the national courts by individuals against the Member State where the latter has failed to transpose the directive into domestic law by the end of the period prescribed or where it has failed to transpose it correctly (judgment of
25 June 2015,
Indėlių ir investicijų draudimas and Nemaniūnas
, C‑671/13, EU:C:2015:418, paragraph 57
).
99
Indeed, Article 1(3)(i) of Directive 94/19 leaves it to the discretion of the Member States to designate the authority responsible for determining whether deposits are unavailable and to the discretion of that authority to assess the financial situation of the relevant credit institution.
100
However, by stating that the relevant authority must determine whether deposits are unavailable as soon as possible and in any event no later than five working days after first becoming satisfied that a credit institution has failed to repay deposits which are due and payable, that provision lays down an unconditional and sufficiently precise obligation with which it is for the BNB, the authority designated for determining whether deposits are unavailable, to ensure compliance within the course of its responsibilities.
101
Such an interpretation does not affect the fact that the matter of whether a public authority has breached EU law must be determined by the national courts according to the law of the Member State in question.
102
As to whether Article 1(3)(i) of Directive 94/19 constitutes a rule of EU law intended to confer rights on specific individuals, it should be noted that Directive 94/19 aims, inter alia, to protect depositors.
103
In addition, the determination that deposits are unavailable directly affects the legal situation of a depositor since that determination triggers the deposit-guarantee mechanism and, accordingly, the reimbursement of depositors.
104
In those circumstances, it is clear that Article 1(3)(i) of Directive 94/19 constitutes a rule of EU law intended to confer rights on individuals.
105
As regards the condition in respect of there being a sufficiently serious breach of EU law, it should be noted that, according to the Court’s case-law, such a breach implies a manifest and grave disregard by the Member State for the limits set on its discretion. The factors which may be taken into consideration in that regard include, inter alia, the clarity and precision of the rule breached, the measure of discretion left by that rule to the national authorities, whether any error of law was excusable or inexcusable, whether the infringement and the damage caused was intentional or involuntary, or the fact that the position taken by an EU institution may have contributed towards the omission, adoption or retention of national measures or practices contrary to EU law (see, to that effect, judgment of
5 March 1996,
Brasserie du pêcheur
and
Factortame
, C‑46/93 and C‑48/93, EU:C:1996:79, paragraph 56
).
106
In the present case, it must be pointed out that although the BNB has, under Article 1(3)(i) of Directive 94/19 some latitude as regards the determination that a credit institution’s deposits are unavailable, that latitude is nevertheless circumscribed.
107
Article 1(3)(i) of Directive 94/19 clearly sets out the conditions to which the determination that deposits are unavailable is subject and the time limit in which such a determination must be made.
108
Accordingly, if the conditions set out in Article 1(3)(i) of Directive 94/19 are satisfied, the relevant national authority must determine that deposits are unavailable within the mandatory time limit of five days.
109
It is clear from analysis of the facts in the case in the main proceedings that, following the information provided by KTB Bank with regard to the financial difficulties and liquidity problems it faced, the BNB placed KTB Bank under special supervision due to a risk of insolvency and decided to suspend all of KTB Bank’s payments and banking transactions. Thus, the supervisory measures taken by the BNB show that it harboured doubts, in the light of the financial situation of KTB Bank, concerning the ability of KTB Bank to repay the deposits quickly. In addition, the measures taken by the BNB for the suspension of KTB Bank’s payments and transactions prevented KTB Bank from repaying the deposits.
110
In addition to those factors, it will also be for the referring court, for the purposes of assessing the illegality of the BNB’s actions, to take into account whether the damage caused was intentional or involuntary.
111
Lastly, the other facts mentioned by the referring court are irrelevant in determining whether, in the circumstances of the case in the main proceedings, by not determining that deposits were unavailable within the time limit of five days laid down in Article 1(3)(i) of Directive 94/19, the BNB committed a serious breach within the meaning of EU law.
112
In the first place, the fact that the Fund did not have sufficient funds to cover all the guaranteed deposits is irrelevant in so far as that factor is not included amongst those that the relevant national authority must take into consideration for the purposes of determining whether it is appropriate to determine that deposits are unavailable.
113
In the second place, the fact that, during the period in which payments were suspended, the credit institution had been placed under special supervision in order to protect it from insolvency and the fact that the deposit of the applicant in the main proceedings was repaid after the finding, established by the BNB, that the restructuration measures had failed are also irrelevant. First, as the Court has made clear in reply to the third question referred, Directive 94/19 does not subject the determination that deposits are unavailable to the insolvency of a credit institution. Second, Directive 94/19 aims to protect depositors by requiring that the deposits which they hold are guaranteed and repaid within very short periods of time.
114
Third, the fact that the deposit of the applicant in the main proceedings was repaid with the applicable interest, including from 20 June 2014 to 6 November 2014, relates to the harm sustained by Mr Kantarev and not to whether there was a sufficiently serious breach of Article 1(3)(i) of Directive 94/19.
115
In the light of the previous factors and subject to findings to be made by the referring court, the failure to determine that deposits were unavailable within the time limit of five days laid down in Article 1(3)(i) of Directive 94/19, despite the fact that the conditions clearly set out in that provision had been satisfied, is capable of constituting, on the facts of the case in the main proceedings, a sufficiently serious breach, within the meaning of EU law, since the other facts mentioned by the referring court are irrelevant in that regard.
116
As regards the third condition for a finding of State liability due to a breach of EU law, it is for the referring court to ascertain whether, as seems to be the case from the file before the Court, there is a direct causal link between the breach of Article 1(3)(i) of Directive 94/19 and the harm sustained by Mr Kantarev.
117
In the light of all of the foregoing considerations, the answer to the seventh and eighth questions is that Article 1(3)(i) of Directive 94/19 has direct effect and constitutes a rule of law intended to confer rights on individuals allowing depositors to bring an action for damages for the harm sustained by late repayment of deposits. It is for the referring court to ascertain, first, whether the failure to determine that deposits were unavailable within the time limit of five working days laid down in that provision, despite the fact that the conditions which were clearly set out in that provision were satisfied, in the circumstances of the case in the main proceedings, amounts to a sufficiently serious breach, within the meaning of EU law and, second, whether there is a direct causal link between that breach and the harm sustained by a depositor, such as Mr Kantarev.
The first and second questions
118
By its first and second questions, which it is appropriate to consider together, the referring court asks, in essence, whether Article 4(3) TEU and the principles of equivalence and effectiveness must be interpreted as, in the absence of a specific procedure in Bulgaria holding that Member State liable for harm caused by a national authority’s breach of EU law, precluding national legislation, such as that at issue in the main proceedings, which, first, provides for two different remedies falling within the jurisdiction of different courts subject to different conditions, and, second, subjects the right of individuals to obtain damages to the intention of the national authority in question to cause the harm, to the requirement that the individual provide proof of fault, to payment of a flat-rate fee or one proportionate to the value in dispute, or to prior annulment of the administrative measure which caused the harm.
119
In that regard, the referring court states that there are opposing views in the case-law as regards the legal rules applicable to actions brought against the BNB on the ground of breach of EU law, certain courts having held that such actions are governed by the Law on State Liability whereas other courts have held that they are governed by general tort law as laid down in the Law on Obligations and Contracts. In addition, the Law on the Bulgarian Central Bank limits the liability of the BNB for actions taken in the course of its supervisory responsibilities only to harm caused by intentional acts.
120
It should be noted from the outset that, according to the Court’s case-law, the three conditions referred to in paragraph 94 above are sufficient to give rise to a right to reparation for individuals (judgment of
25 November 2010,
Fuß
, C‑429/09, EU:C:2010:717, paragraph 65
and the case-law cited).
121
It follows that, while EU law does not at all rule out the possibility of a State being liable in less restrictive conditions on the basis of national law, it precludes, by contrast, additional conditions from being imposed under national law in that regard (judgment of
25 November 2010,
Fuß
, C‑429/09, EU:C:2010:717, paragraph 66
and the case-law cited).
122
It should also be noted that, in the absence of EU legislation in the field, it is for the internal legal order of each Member State to designate the competent courts and lay down detailed procedural rules for legal proceedings intended to safeguard the rights which individuals derive from EU law (judgment of
30 September 2003,
Köbler
, C‑224/01, EU:C:2003:513, paragraph 46
and the case-law cited).
123
However, the Court has also made clear that, subject to the right to reparation which flows directly from EU law where the relevant necessary conditions are satisfied, it is on the basis of the rules of national law on liability that the State must make reparation for the consequences of the loss and damage caused, provided that the conditions for reparation of loss and damage laid down by national law are not less favourable than those relating to similar domestic claims (principle of equivalence) and are not so framed as to make it, in practice, impossible or excessively difficult to obtain reparation (principle of effectiveness) (judgment of
26 January 2010,
Transportes Urbanos y Servicios Generales
, C‑118/08, EU:C:2010:39, paragraph 31
and the case-law cited).
124
The principle of equivalence requires that all the rules applicable to actions apply without distinction to actions alleging infringement of EU law and to similar actions alleging infringement of national law (judgment of
15 March 2017,
Aquino
, C‑3/16, EU:C:2017:209, paragraph 50
and the case-law cited).
125
According to the principle of effectiveness, national procedural rules must not be such as to render impossible in practice or excessively difficult the exercise of rights conferred by the EU legal order (judgment of
15 March 2017,
Aquino
, C‑3/16, EU:C:2017:209, paragraph 52
and the case-law cited).
126
In the present case, as regards the substantive conditions to which an action such as that of the applicant in the main proceedings is subject, by subjecting the right to damages to an intention on the part of the BNB to cause harm, the Law on the Bulgarian Central Bank subjects that right to a condition additional to that of a sufficiently serious breach of EU law.
127
As regards the condition laid down in the Law on Obligations and Contracts requiring the applicant in the main proceedings to provide proof of wrongdoing, the Court has already held that, while certain objective and subjective factors connected with the concept of ‘fault’ under a national legal system may be relevant, in the light of the case-law referred to in paragraph 105 above, for the purpose of determining whether or not a given breach of EU law is sufficiently serious, the obligation to make reparation for loss or damage caused to individuals cannot depend upon a condition based on any concept of fault going beyond that of a sufficiently serious breach of EU law (judgment of
25 November 2010,
Fuß
, C‑429/09, EU:C:2010:717, paragraph 67
and the case-law cited).
128
Accordingly, first, EU law precludes, in the context of an action such as that in the main proceedings, the right to damages from being subject to the intention of the national authority in question to cause the harm. The liability of the BNB in a case such as that in the main proceedings cannot therefore be determined under the conditions laid down in the Law on the Bulgarian Central Bank. Second, it is for the referring court to establish whether the concept of ‘fault’, within the meaning of the Law on Obligations and Contracts, goes beyond that of a sufficiently serious breach of EU law.
129
As regards national procedural rules, it should be noted that the matter of whether the jurisdiction of a national court and the procedure for disposing of a case must depend on the nature of the public authority responsible for the breach and of the alleged action or failure to act falls within the procedural autonomy of the Member States (see, to that effect, judgment of
30 September 2003,
Köbler
, C‑224/01, EU:C:2003:513, paragraph 47
).
130
As the Advocate General stated in point 102 of her Opinion, where more than one procedure is possible, EU law is not required to designate which is to be applied. Nevertheless, in choosing the appropriate procedure and, therefore, the rules of liability, regard must be had both to the conditions for holding the State liable for harm caused to individuals for breaches of EU law which follow from the Court’s case-law and the principles of equivalence and effectiveness.
131
As regards the principle of equivalence, no information has been laid before the Court which could lead it to question whether the rules established by the Law on State Liability or by the Law on Obligations and Contracts comply with that principle.
132
As regards the principle of effectiveness, the referring court is uncertain, first, as to whether the fee which must be paid under the Law on State Liability and under the Law on Obligations and Contracts complies with that principle.
133
In that regard, it should be borne in mind that every case in which the question arises as to whether a rule of national procedure makes the exercise of rights conferred on individuals by the legal order of the European Union impossible or excessively difficult must be analysed by reference to the importance of that provision in the proceedings as a whole, the way in which the proceedings are conducted and the special features of that provision, before the various national bodies (see, to that effect, judgment of
6 October 2015,
Târşia
, C‑69/14, EU:C:2015:662, paragraph 36
).
134
Accordingly, it must be established whether the national legislation subjects the exercise of the action for damages to the payment of the fee and whether there is any possibility of exemption.
135
Account must also be taken of the amount of the fee which must be made and whether or not that fee might represent an insurmountable obstacle to access to the courts (see, by analogy, judgment of
22 December 2010,
DEB
, C‑279/09, EU:C:2010:811, paragraph 61
).
136
According to the documents in the case file submitted to the Court, in a case such as that in the main proceedings, a natural person such as Mr Kantarev must, in order to bring an action under the Law on State Liability, pay a fixed-fee of BGN 10 (approximately EUR 5) and for an action under the Law on Obligations and Contracts, a proportional fee, capped at 4% of the value in dispute.
137
In the light of the information laid before the Court, a fixed-fee in the amount of BGN 10 (approximately EUR 5) would not appear to represent an insurmountable obstacle to access to the courts, which is for the referring court to ascertain.
138
By contrast, it cannot be ruled out that a proportional fee, capped at 4% of the value in dispute does not represent an insurmountable obstacle to the exercise of the action for damages, in particular, if there is no possibility of exemption from the payment of such a fee, which is for the referring court to ascertain.
139
Second, the referring court asks whether the fact that the Law on State Liability limits the right to damages only to cases in which the harm was caused by an annulled illegal measure or unlawful action or failure to act by the administration complies with the principle of effectiveness.
140
In that regard, it must be pointed out that, with regard to the use of the available legal remedies in order to establish the liability of a Member State for breach of EU law, the Court has previously held that national courts may enquire whether the injured person showed reasonable diligence in order to avoid the loss or damage or limit its extent and whether, inter alia, he availed himself in time of all the legal remedies available to him (judgment of
25 November 2010,
Fuß
, C‑429/09, EU:C:2010:717, paragraph 75
and the case-law cited).
141
It is a general principle common to the legal systems of the Member States that the injured party must show reasonable diligence in limiting the extent of the loss or damage, or risk having to bear the loss or damage himself (judgment of
25 November 2010,
Fuß
, C‑429/09, EU:C:2010:717, paragraph 76
and the case-law cited).
142
However, it is clear from the case-law that it would be contrary to the principle of effectiveness to oblige injured parties to have recourse systematically to all the legal remedies available to them even if that would give rise to excessive difficulties or could not reasonably be required of them (judgment of
25 November 2010,
Fuß
, C‑429/09, EU:C:2010:717, paragraph 77
and the case-law cited).
143
Thus, the duty to seek prior annulment of the administrative measure which caused the harm is not, per se, contrary to the principle of effectiveness. However, such a duty may make it excessively difficult to obtain reparation for the loss or damage caused by the infringement of EU law if, in practice, that annulment is precluded (see, to that effect, judgment of
9 September 2015,
Ferreira da Silva e Brito and Others
, C‑160/14, EU:C:2015:565, paragraph 51
) or highly circumscribed.
144
In the present case, the point must be made that the requirement that a measure of an administrative authority be illegal or its action or failure to act unlawful is not a procedural requirement, but a condition for holding the State liable, akin to the concept of a sufficiently serious breach within the meaning of EU law.
145
By contrast, subjecting State liability and, therefore, the right to damages, to the prior annulment, under the procedure provided for that purpose, of the administrative measure which caused the harm is a procedural requirement.
146
In order to establish whether that requirement is, in a situation such as that at issue in the main proceedings, contrary to the principle of effectiveness, it is for the referring court to ascertain, in respect of the facts of the case in the main proceedings as a whole, of the Bulgarian legislation and, in particular, of the procedural possibilities for bringing actions for the annulment of administrative acts and of the conditions to which such annulment is subject, whether the annulment of the administrative measure which caused the harm in question is, in principle, precluded or highly circumscribed.
147
Article 4(3) TEU and the principles of equivalence and effectiveness must be interpreted as, in the absence of a specific procedure in Bulgaria holding that Member State liable for harm caused by a national authority’s breach of EU law:
-
not precluding national legislation which provides for two different remedies falling within the jurisdiction of different courts subject to different conditions, provided that the referring court ascertains whether, in respect of national law, a national authority such as the BNB must be held liable on the basis of the Law on State Liability or the Law on Obligations and Contracts and that each of the two remedies complies with the principles of equivalence and effectiveness;
-
precluding national legislation which subjects the right of individuals to obtain damages to the additional condition that the national authority in question intended to cause the harm;
-
not precluding national legislation which subjects the right of individuals to obtain damages to the duty of providing proof of fault provided that, which it is for the referring court to ascertain, the concept of ‘fault’ does not go beyond that of a ‘sufficiently serious breach’;
-
not precluding national legislation which provides for the payment of a fixed-fee or fee proportional to the value in dispute provided that, which it is for the referring court to ascertain, the payment of a fixed-fee or fee proportional to the value in dispute is not contrary to the principle of effectiveness, in the light of the amount and level of the fee, whether or not that fee might represent an insurmountable obstacle to access to the courts, whether it is mandatory and of the possibilities of exemption; and
-
not precluding national legislation which subjects the right of individuals to obtain damages to prior annulment of the administrative measure which caused the harm, provided that, which it is for the referring court to ascertain, that requirement may reasonably be required of the injured party.