The German court of final instance had failed to refer to the ECJ a question on the interpretation of a Treaty article on the free movement of workers and reached a conclusion that an earlier ECJ decision had explicitly ruled out. The ECJ held that violations of EC law by national courts of last instance led to state liability.
ECJ: It would undermine the effectiveness of EC law if individuals were unable to enforce their rights because of the errors of courts, especially given how important national courts are in the protection of rights derived by individuals from community laws. ECJ rejected arguments based on res judicata, legal certainty, independence and authority of judiciary (and hence distinction with the rest of the ‘state’). Regard being had to the ‘specific nature of the judicial function’ and the ‘legitimate requirements of legal certainty,’ state liability in cases of judicial breach was governed by the same conditions (i.e. conferral of rights on individuals, a sufficiently serious breach, & a causal link between the State’s breach & damage to the individual) & by the same standard of liability as any other state violation of EC law. As far as the standard is concerned, liability can only be incurred ‘in the exceptional case where the court has manifestly infringed the applicable law.’