Brexit Institute News

Event Report: The EU General Court and the Preliminary Reference Procedure

Berin Szóka (Dublin City University)

On Wednesday 9 October, the DCU Brexit Institute hosted a special event within the framework of the Jean Monnet Centre of Excellence REBUILD and with the support of the Jean Monnet Modules NGEU-Law, Post Brexit-Law and LPF-Law.

The event featured a keynote speech by Judge Savvas Papasavvas, Vice President of the EU General Court and it was opportunity to examine one of the most significant changes in the EU judicial system in decades — namely the recent amendment to the Protocol of the European Court of Justice, which empowers for the first time the EU General Court to hear preliminary references by national courts in several specific fields, including customs law, VAT and passengers rights. In addition to Judge Papasavvas‘ keynote, welcoming remarks were provided by Dr. Tanya Ní Mhuirthile (Head of the School of Law & Government, DCU) and Prof. Federico Fabbrini (Full Professor of EU Law and Founding Director of the DCU Brexit Institute) acted as chair.

The keystone of the European Union’s judiciary is the preliminary reference procedure: national courts can ask the European Court of Justice for clarification on matters of European law. This is essential to ensuring uniform interpretation of European law. Now, for the first time, certain preliminary references will go to the General Court, a European Union’s second-tier appeals court, which primarily handles matters involving certain administrative agencies. Those six areas are Value Added Tax (VAT); excise duties; the Customs Code and tariff; passengers’ rights to compensation and assistance; and the greenhouse gas emissions allowance trading scheme. To preserve legal certainty, the reform concerns only those six areas, as they are sufficiently defined and separable from other areas. The Court of Justice will retain competence over requests for a preliminary ruling that raise questions of principle, such as interpretation of the Treaties or the Charter of Fundamental Rights. Every request for a preliminary ruling must be submitted to the Court of Justice, so it could determine whether the request is to be transmitted to the General Court. For transparency, the ECJ will provide reasons as to why it is competent to hear and determine the question referred for a preliminary ruling. 

This reform was made possible by the 2001 Treaty of Nice. Article 256 of the Treaty on the Functioning of the European Union (TFEU) authorises the General Court to hear preliminary references in certain matters. But, explained Judge Savvas Papasavvas of Cyprus, Vice-President of the General Court, this treaty reform remained a “dead letter” until this year. The Court of Justice submitted a proposal to amend Protocol No 3 on its Statute in December 2022. The changes were agreed under the ordinary legislative procedure in negotiations between the European Parliament and the Council on 7 December 2023, with the participation of the Court of Justice and the Commission. The EP adopted the draft regulation on 27 February 2024 and the Council gave green light to it on 19 March 2024. The final act was signed on 11 April 2024. This reform affects questions referred for preliminary ruling from 1 October 2024.

The reform aims to reduce the workload of the ECJ in the sphere of preliminary rulings and to “enable the Court of Justice to devote more time and resources to examining the most complex and sensitive requests for a preliminary ruling and, in that framework, to enhance the dialogue with European courts.” In other words, said Judge Papasavvas, the ECJ would focus more on its core mission as a constitutional court. Yet the reform is exciting for the General Court because it means the lower court will, for the first time, be deciding questions of a constitutional character (if less important ones) with horizontal effect. The GC is “keen to learn and eager to perform,” even if it means deciding cases the ECJ isn’t excited about resolving. 

“If someone had told me 25 years ago,” quipped Pappasavvas, “that I would be excited about deciding a VAT case, I would have told them they were out of their minds.” VAT, excise taxes and the like aren’t normally what one would describe as “fun cases to deal with, but if it were fun… the ECJ would keep it to themselves.” It was, he joked, like the old joke about the food offered to soldiers: “If it were any worse, we couldn’t eat it, and if it were any better, they wouldn’t give it to us.”

“We will be trying,” Judge Papasavvas promised, to deliver decisions with the “same quality, same time frame but with more enthusiasm” than the ECJ–given the overwhelming workload of the high court. Because the ECJ must decide PRs, it decides a far greater volume of cases (roughly ten times more) than the United States Supreme Court, which has discretion over which cases it accepts. 

The General Court offers to increase the judgepower available to the ECJ, with two judges for each Member State instead of one, as for the ECJ. The Court has called on volunteers from its judges to handle PRs on top of their existing workload. The General Court will follow the ECJ’s approach, with an Advocate General (AG) assigned to each case and similar formations handling cases. 

The GC will try, “as scrupulously as possible,” to follow the timelines established by the ECJ for its own hearings. The General Court will aim to decide cases within 15-16 months. To “handle new types of cases and new types of law,” Papasavvas said, will require a “a totally different mindset” and “a substantial paradigm shift”: Over the previous 35 years, the GC has handled direct actions involving fact-intensive questions in lengthy pleadings and long hearings necessary to resolve them. This procedure is simply too slow to resolve PRs. The General Court will apply a new preliminary reference regime with shorter pleadings focused more on discrete legal questions. 

From the perspective of national courts, little will change up front: they will continue to send all PRs to the ECJ (a guichet unique – or single window), which will decide whether the PR implicates one of the six areas assigned to the General Court, and only such areas. If so, the case will be sent to the GC (with a T-number (for Tribunal) instead of C-). If the GC, in examining the case, decides that the case in fact involves issues outside of the six areas assigned to it, the GC may send the case back to the ECJ. 

Dr. Niels Kirst noted two potential complications. First, national courts may circumvent the GC’s review by including in the PR submission an issue (e.g.., horizontal effect) outside one of the six assigned to the GC. But, noted Papasavvas, the ECJ was going to keep those cases anyway. Second, Dr. Kirst noted, if the goal of the reform was to accelerate decision-making, what if we wound up with two rounds of litigation–first, AG opinion and court judgement at the GC and then the same at the ECJ if the ECJ decided that the GC’s judgement implicated issues outside the six areas assigned to it or if the GC got something wrong. In such a case, Papasavvas responded, it would be worth having two rounds of review.

One thing will certainly have to change: Because the GC has focused on fact-intensive disputes, national judges have tended to assume that GC decisions offer a ready-made template for their own decisions. But this isn’t how the ECJ writes its judgements on PRs, and it won’t be how the General Court decides PRs, either. So national courts will have to treat GC decisions more like they treat ECJ judgements on PRs: as frameworks outlining European law, not deciding specific cases.

Despite the seemingly small stakes of the six areas assigned to it, the General Court could well decide questions of great importance. Professor Federico Fabbrini, Founding Director of the DCU Brexit Institute, reminded the audience that some of the most important rulings of the ECJ came from seemingly trivial cases. “Small cases make big law,” he noted, and “big cases make bad law.”

Perhaps, by focusing greater attention and judicial resources on small cases, the General Court will help improve the quality of European law.

 

Berin Szóka is a PhD candidate at the School of Law and Government of Dublin City University. In 2010, he founded TechFreedom, a think tank that has studied the legal aspects of the digital revolution since 2010. His research focuses on comparing U.S. and European approaches to regulating governance of content and platforms online, and on avoiding weaponization of such laws, especially for political ends.

The views expressed in this blog post are the position of the author and not necessarily those of the Brexit Institute blog. 

Reference: https://curia.europa.eu/jcms/upload/docs/application/pdf/2024-08/cp240125en.pdf