No Francovich damages for GSM Gateway operators

29/10/14

On 28 October 2014 the Court of Appeal (Richards, Black and Rafferty LJJ) handed down judgment in Recall Support Services Limited & Ors v Secretary of State for Culture, Media & Sport [2014] EWCA Civ 1370 in which it upheld the decision of Rose J dismissing the Claimants’ £400m claim for Francovich damages.

The Claimants sought to contend that the maintenance in force of a licencing regime for the commercial use of telecommunications equipment known as a GSM Gateway contravened EU law. The Court of Appeal held that public security was available as a ground of justification for the maintenance in force of the commercial use restriction and dismissed the Claimants’ argument that a Member State wishing to rely on such a ground was required to notify the European Commission under Article 114(4) TFEU. The Claimants’ argument that the manner in which the applicable Directive was transposed into national law precluded reliance on public security as a justification was also dismissed.

The Court of Appeal was further satisfied that there was no basis for interfering with the Judge’s conclusion that the very narrow incompatibility with EU law identified by the Judge did not give rise to a sufficiently serious breach of EU law. Indeed, it went further and observed that even if, contrary to the Court of Appeal’s view, a wider breach of EU law arose from the unsatisfactory features of the domestic implementing legislation that would still not justify a finding of sufficiently serious breach.

The judgment is here.

Judgment