Amendments to the Law on State and Municipalities’ Liability for Damages (“LLSMD”), which provides a new procedure for hearing actions for damages of individuals or legal entities based on an infringement of European Union (“EU”) law, has been adopted at second reading from the National Assembly.
According to the passed amendments, the new provision of Art. 2v of LLSMD states the following:
“Procedure for hearing actions against the state for damages based on an infringement of European Union law.
Art. 2v (1) Where damages are caused by a sufficiently serious breach of European Union law, the claims shall be heard by the courts according to the following procedures:
- Administrative Procedure Code – for damages under art. 1, par. 1, as well as damages caused by judicial activity of the administrative courts and the Supreme Administrative Court;
- Civil Procedure Code – applied in the cases not mentioned in p. 1, the defendant shall be determined in accordance with the procedure of Art. 7.
(2) When the claim under par. 1 is brought against several defendants, it shall be reviewed according to the procedure as per the Administrative Procedure Code, if one of the parties is the administrative court, the Supreme Administrative Court or legal entity and the damages are caused by them during or in connection with their administrative activity. (3) Art. 9 and 10 shall apply for the fees and expenses due.”
These law amendments aim to overcome the controversial court resolutions regarding the procedure for hearing actions against the state for damages based on an infringement of EU law. The main conflict between the courts concerns the question whether the procedure is the one under LLSMD or the one under the Law on Obligations and Contracts (“LOC”). The basic advantage of the procedure under LLSMD is the strict liability of the state, as well as the fee, which amounts to BGN 10 for individuals and BGN 25 for legal entities. The court and the execution expenses are not to be pre-paid. The liability under LOC is based on finding of a fault as one of its elements and the fee is proportional – 4% of the material interest (the amount of the damages claimed).
In 2015, a joint interpretative case No 2/2015 of the Supreme Cassation Court and the Supreme Administrative Court, was opened, which had to give answer to the question regarding the procedure for hearing actions against the state for damages based on an infringement of EU law. This case was suspended due to the open case C-571/16 Kantarev v BNB before the European Court of Justice (“ECJ”), which gave guidance to our country regarding the procedure for reviewing the cases against the state for damages based on such an infringement.
This issue was finally resolved by the passed amendments in the LLSMD, which provides the new procedure for hearing actions for damages of individuals or legal entities based on an infringement of the EU law.