62000J0118
Judgment of the Court (First
Chamber) of 28 June 2001. - Gervais Larsy v Institut national d'assurances
sociales pour travailleurs indépendants (INASTI). - Reference for a preliminary
ruling: Cour du travail de Mons - Belgium. - Regulations (
European Court reports 2001 Page I-05063
Summary
Parties
Grounds
Decision on costs
Operative part
Keywords
1. Social
security for migrant workers - Old age and death insurance - Benefits -
Amendment of the calculation rules by Regulation No 1248/92 - Application of
the new calculation rules - Transitional provisions - Scope - Application by
the person concerned for review under the provisions of Regulation No 1248/92
(Council
Regulation No 1408/71, Art. 95a(4) to (6) and No 1248/92)
2. Community
law - Direct effect - Primacy - National provision prohibiting the court having
jurisdiction from setting aside national provisions that impair the
effectiveness of Community law - Obligations and powers of national courts and
tribunals
3. Social
security for migrant workers - Old age and death insurance - Benefits -
National rules against overlapping - Unenforceability pursuant to a judgment of
the Court of Justice - Limitation of the effects of a review of rights to the
detriment of the person concerned - Serious breach of Community law
(Council Regulation
No 1408/71, Art. 95(a)(4) to (6) and No 1248/92)
1. In order for the right to review provided for in
Article 95a of Regulation No 1408/71, as amended by Regulation No 1248/92, to
be capable of applying to a given situation, the application made to that
effect must be based on the new provisions inserted by Regulation No 1248/92.
Accordingly, Article 95a(4), (5) and (6) of Regulation No 1408/71, as amended,
does not apply to an application for review of a retirement pension, the amount
of which has been limited under an anti-overlapping rule applicable in a Member
State, on the ground that the person receiving that pension has also been
awarded a retirement pension paid by the competent institution of another
Member State, where the application for review is based on provisions other
than those in Regulation No 1248/92.
( see paras 28, 32 and operative part 1 )
2. Any provision of a national legal system and
any legislative, administrative or judicial practice which might impair the
effectiveness of Community law by withholding from the national court having
jurisdiction to apply such law the power to do everything necessary at the
moment of its application to set aside national legislative provisions which
might prevent, even temporarily, Community rules from having full force and
effect are incompatible with requirements that are the very essence of
Community law. That principle of the primacy of Community law means that not
only the lower courts but all the courts of the Member State are under a duty
to give full effect to Community law.
( see paras 51-52 )
3. The application by the competent institution of
a Member State of Article 95a(4), (5) and (6) of Regulation No 1408/71, as
amended by Regulation No 1248/92 to a request for review of a retirement
pension, thus limiting the retroactivity of the review to the detriment of the
person concerned, constitutes a serious breach of Community law if those
provisions are not applicable to the application in question and if it follows
from a judgment delivered by the Court of Justice before the decision by the
competent institution that the institution wrongly applied an anti-overlapping
rule of that Member State, and where it cannot be inferred from that judgment
that the retroactive effect of such a review could be limited.
( see para. 55 and operative part 2 )
In Case C-118/00,
REFERENCE to the Court under Article 234 EC by the
Cour du travail de Mons (Belgium) for a preliminary ruling in the proceedings
pending before that court between
Gervais Larsy
and
Institut national d'assurances sociales pour
travailleurs indépendants (Inasti),
on the interpretation of Article 95a of Regulation
(
THE COURT (First Chamber),
composed of: M. Wathelet, President of the Chamber,
P. Jann (Rapporteur) and L. Sevón, Judges,
Advocate General: P. Léger,
Registrar: H. von Holstein, Deputy Registrar,
after considering the written observations
submitted on behalf of:
- Mr Larsy, by himself,
- the Institut national d'assurances sociales pour
travailleurs indépendants (Inasti), by L. Paeme, acting as Agent,
- the Commission of the European Communities, by P.
Hillenkamp and H. Michard, acting as Agents,
having regard to the Report for the Hearing,
after hearing the oral observations of the Institut
national d'assurances sociales pour travailleurs indépendants (Inasti),
represented by L. Renaud, acting as Agent, and the Commission, represented by
H. Michard, at the hearing on 11 January 2001,
after hearing the Opinion of the Advocate General
at the sitting on 15 March 2001,
gives the following
Judgment
1 By judgment of 20 March 2000, received at the
Court on 29 March 2000, the Cour du Travail de Mons (Labour Court, Mons)
referred for a preliminary ruling under Article 234 EC two questions on the
interpretation of Article 95a of Regulation (
2 The two questions were raised in the proceedings
between Mr Gervais Larsy and the Institut national d'assurances sociales pour
travailleurs indépendants (hereinafter Inasti) relating to an application for
damages.
Legal background
3 Article 95a of Regulation No 1408/71 provides:
1. Under Regulation (
2. All insurance periods or periods of residence
completed under the legislation of a Member State before 1 June 1992 shall be
taken into consideration
for the determination of rights to benefits
pursuant to Regulation (
3. Subject to paragraph 1, a right shall be
acquired under Regulation (
4. The rights of a person to whom a pension was
awarded prior to 1 June 1992 may, on the application of the person concerned,
be reviewed, taking into account the provisions of Regulation (
5. If an application referred to in paragraph 4 is
submitted within two years from 1 June 1992 the rights acquired under
Regulation (
6. If the application referred to in paragraph 4 is
submitted after the expiry of the two year period after 1 June 1992, rights
which have not been forfeited or not barred by limitation shall have effect
from the date on which the application was submitted, except where more
favourable provisions of the legislation of any Member State apply.
The main proceedings and the questions referred
4 Mr Gervais Larsy, the appellant in the main
proceedings, is a Belgian national established in Belgium near the French
border. He was a self-employed nursery gardener in Belgium and France.
5 On 24 October 1985, Mr Larsy applied to Inasti
for a retirement pension as a self-employed worker.
6 By a decision notified on 3 July 1986, Inasti
granted him a retirement pension as from 1 November 1986 calculated on the
basis of a work record from 1 January 1941 to 31 December 1985 entitling him to
a full pension of 45/45.
7 Since Mr Larsy had also, from 1 January 1964 to
31 December 1977, paid social security contributions to the competent French
authorities, they awarded him a retirement pension as from 1 March 1987.
8 As a result, on 21 December 1988 Inasti adopted a
fresh decision reducing his pension entitlement to a 31/45 proportion, with
effect from 1 March 1987, in application of the principle, laid down in Article
19 of Royal Decree No 72 of 10 November 1967 (Moniteur Belge of 14 November
1967, p. 11840), that work records are unseverable.
9 On 16 January 1989, Mr Larsy brought an action
against that decision before the Tribunal du travail de Tournai (Labour
Tribunal, Tournai), Belgium, claiming that the initial amount of his pension
award should stand, notwithstanding that he had been awarded a French
retirement pension.
10 On 24 April 1990, that court dismissed his
action as unfounded. Since notice of it has not been served, the judgment has
not become final.
11 An action was then brought before the Tribunal du
travail de Tournai by Gervais Larsy's brother, Marius Larsy, who was in a
similar legal and factual situation.
12 During the proceedings, the Tribunal du travail
de Tournai decided to refer to the Court of Justice for a preliminary ruling
certain questions on the interpretation of Articles 12 and 46 of Regulation No
1408/71, those provisions governing overlapping benefits and their calculation
by the competent institutions of Member States.
13 In its judgment in Case C-31/92 Larsy [1993] ECR
I-4543, the Court held that Articles 12(2) and 46 of Regulation No 1408/71 did
not preclude the application of a national rule against overlapping benefits
when determining a pension in accordance with national legislation alone.
However, those Articles did preclude the application of the rule when
determining a pension under Article 46. Article 46(3) of Regulation No 1408/71
had to be interpreted as meaning that the rule against overlapping benefits in
that provision did not apply where a person had worked in two Member States
during one and the same period and had been obliged to pay old-age pension
insurance contributions in those States during that period.
14 In view of that interpretation of Regulation No
1408/71 by the Court of Justice, the Tribunal du travail de Tournai upheld
Marius Larsy's action and found that he should be awarded a retirement pension
as a self-employed worker calculated on a 45/45 basis, and that the pension
should not be proportionally reduced by the retirement pension awarded by the
competent institutions in France.
15 Gervais Larsy requested that his situation be
resolved on the same terms as those applied to his brother and, in response,
Inasti asked him, relying on Article 95a(5) of Regulation No 1408/71, to submit
a new application for a pension in order for his entitlement to be reviewed.
16 Following that application of 3 June 1994,
Inasti, on 26 April 1995, adopted a fresh decision, awarding Gervais Larsy a
full retirement pension with effect from 1 July 1994.
17 After contacting the Commission, Mr Larsy, by
letter of 8 August 1997, appealed against the judgment of the Tribunal du
travail de Tournai of 24 April 1990 to the Cour du travail de Mons.
18 Before that court, the Inasti acknowledged that
Mr Larsy's pension rights should be calculated on a 45/45 basis, with effect
from 1 March 1987, and that the administrative decision of 21 December 1988
should be revised accordingly. However, it took the view that, in the absence
of any wrongful act, it could not be ordered to pay damages.
19 In its judgment of 10 February 1999, the Cour du
travail de Mons upheld Mr Larsy's appeal with regard to his right to a
retirement pension as a self-employed worker calculated on a 45/45 basis as
from 1 March 1987.
20 As regards Mr Larsy's application for damages of
BEF 1 for non-material damage and BEF 100 000 for additional material damage,
the Cour du travail de Mons found that it did not have sufficient information
and addressed to the parties a question relating, inter alia, to whether Inasti
should be considered to have committed a wrongful act in adopting the decision
of 26 April 1995 which, whilst it awarded Mr Larsy a full pension, provided
that the decision was to take effect as from 1 July 1994, whereas the initial
application for a retirement pension had been made in 1985 and the pension
rights in question had been reduced by Inasti as from 1 March 1987. The court
also adopted the arguments in the written opinion of the Belgian State Legal
Department, of 13 January 1999, which had considered that the judgment in Larsy
did not have the authority of res judicata but only moral authority and that,
by partially revising its decision of 21 December 1988 in regard to its
temporal application, Inasti had respected that moral authority. The Legal
Department also pointed out that the imposition of a temporal limitation on the
effects of the decision of 26 April 1995 appeared to be dictated by the
Community legislation, that is Article 95a(5) of Regulation No 1408/71.
21 In response to the question addressed to it by
the Cour du travail de Mons, Inasti submits that it did not commit any
sufficiently serious breach of Community law, since the applicable rules did
not authorise it to adopt of its own motion a fresh decision taking effect from
1 March 1987. Since the application for review was brought outside the period
provided for in Article 95a(5) of Regulation No 1408/71, the review had to
become effective on 1 July 1994. Inasti also points out that Mr Larsy did not
appeal against the judgment of 24 April 1990 until 8 December 1997 and that
this delay is the cause of the damage claimed.
22 Mr Larsy claims that Inasti failed to take
account of the moral authority of the Larsy decision and that the judgment of
the Cour du travail de Mons of 10 February 1999 proves that the breach of
Community law continued to subsist after the judgment of the Court of Justice
in that case.
23 In those circumstances, the Cour du travail de
Mons decided to stay proceedings and to refer the following two questions to
the Court for a preliminary ruling:
1. Must Article 95a(5) of Regulation (
2. Does the fact that that institution responsible
for the social security of self-employed workers of a Member State of the EU
applied Article 95a(5) of Regulation (
The first question
24 It must be observed first of all that, according
to its wording, this question relates only to the interpretation of Article
95a(5) of Regulation No 1408/71, which concerns the situation where an
application for review of pension rights is made within two years of 1 June
1992.
25 However, for the reasons given by the Advocate
General at points 36 to 39 of his Opinion, the national court needs to know
whether Inasti failed to take account of Community law and thus incurred
liability by limiting in time, on the basis of Article 95a(4), (5) and (6) of
Regulation No 1408/71, the effects of a decision reviewing the pension rights
of a self-employed worker such as Mr Larsy.
26 The first question must accordingly be
understood as asking essentially whether Article 95a(4), (5) and (6) of
Regulation No 1408/71 applies to an application for review of a retirement
pension the amount of which has been limited, under an anti-overlapping rule
applicable in a Member State, on the ground that the recipient has also been
awarded a retirement pension paid by the competent institution of another
Member State.
27 In that regard, it must be observed that Article
95a of Regulation No 1408/71 was inserted in that regulation by Regulation No
1248/92 by way of a transitional provision for the application of the latter
regulation.
28 It follows that, in order for the right to
review provided for in Article 95a to be capable of applying to a given situation,
the application made to that effect must be based on the new provisions
inserted by Regulation No 1248/92.
29 The Court has already held that the purpose of
Article 95a(4) is to enable the person concerned to ask for the benefits
awarded under the unamended regulation to be reviewed where it appears that the
rules of Regulation No 1248/92 are more favourable to him and to have benefits
awarded under the provisions of the unamended regulation maintained where these
appear more advantageous than those resulting from Regulation No 1248/92 (Case
C-307/96 Baldone [1997] ECR I-5123, paragraph 15).
30 That interpretation is confirmed by the wording
of Article 95a(4) of Regulation No 1408/71, which provides that the rights of
the persons concerned may be reviewed on the application of such persons taking
into account the provisions of Regulation (
31 It is common ground in the main proceedings that
Mr Larsy's application under Articles 12 and 46 of Regulation No 1408/71 was
for a retirement pension calculated on a 45/45 basis, including for the period
during which he enjoyed the benefit of a second pension in another Member
State. There is nothing in the file to suggest that he relied on any provision
in Regulation No 1248/92 which would be more favourable to him.
32 The answer to the first question must therefore
be that Article 95a(4), (5) and (6) of Regulation No 1408/71 does not apply to
an application for review of a retirement pension, the amount of which has been
limited under an anti-overlapping rule applicable in a Member State, on the
ground that the person receiving that pension has also been awarded a
retirement pension paid by the competent institution of another Member State,
where the application for review is based on provisions other than those in
Regulation No 1248/92.
The second question
33 By this question the national court is
essentially asking whether the fact that the competent institution of a Member
State applies Article 95a(4), (5) and (6) of Regulation No 1408/71 to an application
for review of a retirement pension, thus limiting the retroactivity of the
review to the detriment of the person concerned, constitutes a serious breach
of Community law if those provisions are not applicable to the application in
question and if it follows from a judgment of the Court of Justice delivered
before the decision by the competent institution that the institution wrongly
applied an anti-overlapping rule of that Member State, and where it cannot be
inferred from that judgment that the retroactive effect of such a review could
be limited.
34 First of all, it should be recalled that
liability for loss and damage caused to individuals as a result of breaches of
Community law attributable to a national public authority constitutes a principle,
inherent in the system of the EC Treaty, which gives rise to obligations on the
part of the Member States (see Joined Cases C-6/90 and C-9/90 Francovich and
Others [1991] ECR I-5357, paragraph 35; Joined Cases C-46/93 and C-48/93
Brasserie du Pêcheur and Factortame [1996] ECR I-1029, paragraph 31; Case
C-392/93 British Telecommunications [1996] ECR I-1631, paragraph 38; Case
C-5/94 Hedley Lomas [1996] ECR I-2553, paragraph 24; Joined Cases C-178/94,
C-179/94, C-188/94, C-189/94 and C-190/94 Dillenkofer and Others [1996] ECR
I-4845, paragraph 20; Case C-127/95 Norbrook Laboratories [1998] ECR I-1531,
paragraph 106; and Case C-424/97 Haim [2000] ECR I-5123, paragraph 26).
35 It is for each Member State to ensure that
individuals obtain reparation for loss and damage caused to them by
non-compliance with Community 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 (Case C-302/97
Konle [1999] ECR I-3099, paragraph 62, and Haim, cited above, paragraph 27).
36 As regards the conditions to be satisfied in
order for a Member State to be required to make reparation for loss and damage
caused to individuals as a result of breaches of Community law for which the
State can be held responsible, it is clear from the case-law of the Court that
there are three: the rule of law infringed must have been intended to confer
rights on individuals; the breach must be sufficiently serious; and there must
be a direct causal link between the breach of the obligation resting on the
State and the loss or damage sustained by the injured parties (see the cases
cited above of Brasserie du Pêcheur and Factortame, paragraph 51; Dillenkofer
and Others, paragraphs 21 and 23; Norbrook Laboratories, paragraph 107, and
Haim, paragraph 36; see also Case C-150/99 Stockholm Lindöpark [2001] ECR
I-493, paragraph 37).
37 It is clear from the order for reference in the
main proceedings and from the wording of the question raised that the question
is confined to the second condition laid down by the case-law mentioned in
paragraph 36 above.
38 In that regard, it must be recalled, first, that
a breach of Community law is sufficiently serious where a Member State, in the
exercise of its legislative powers, has manifestly and gravely disregarded the
limits on its powers (see Brasserie du Pêcheur and Factortame, paragraph 55;
British Telecommunications, paragraph 42; and Dillenkofer and Others, paragraph
25) and, secondly, that where, at the time when it committed the infringement,
the Member State in question had only considerably reduced, or even no,
discretion, the mere infringement of Community law may be sufficient to
establish the existence of a sufficiently serious breach (see Hedley Lomas,
paragraph 28; Norbrook Laboratories, paragraph 109, and Haim, paragraph 38).
39 In order to determine whether such an
infringement of Community law constitutes a sufficiently serious breach, all
the factors which characterise the situation put before the national court must
be taken into account. Those factors include, in particular, the clarity and
precision of the rule infringed, whether the infringement and the damage caused
was intentional or involuntary, whether any error of law was excusable or
inexcusable, and the fact that the position taken by a Community institution
may have contributed towards the adoption or maintenance of national measures
or practices contrary to Community law (Haim, paragraphs 42 and 43).
40 Whilst it is in principle for the national
courts to determine whether the conditions for Member States to incur liability
for an infringement of Community law are met, the situation in the present case
is that the Court has all the necessary information to be able to assess
whether the facts of the case must be held to constitute a sufficiently serious
breach of Community law.
41 In that connection, it must be observed that in
circumstances such as those which led to the main proceedings, the competent
national institution had no substantive choice.
42 Inasti's breach of Community law relates, first
of all, to Articles 12 and 46 of Regulation No 1408/71, which entitled Mr Larsy
to maintain a retirement pension calculated on a 45/45 basis, including for the
period during which he enjoyed a retirement pension from the competent
institution of another Member State, and, secondly, to Article 95a of that
regulation, which cannot limit that entitlement in time, contrary to Inasti's
interpretation of the provision.
43 As regards Articles 12 and 46 of Regulation No
1408/71, the Court of Justice held, at paragraphs 19 and 22 of the Larsy
judgment, cited above, that overlapping pensions to the benefit of a person who
has, during the same period, worked in two Member States and who has during
that period been obliged to pay old-age insurance contributions in both of
those Member States cannot be deemed unjustified. The factual and legal
situation on which that judgment is based is comparable in every respect to
that which gave rise to the main proceedings.
44 In that connection, it must be recalled that a
breach of Community law will be sufficiently serious if it has persisted
despite a preliminary ruling from the Court from which it is clear that the
conduct in question constituted an infringement (Brasserie du Pêcheur and
Factortame, cited above, paragraph 57).
45 Thus, by refusing Mr Larsy's application for his
retirement pension to be calculated on a 45/45 basis, as it did in his
brother's case, the competent institution failed to draw all the consequences
from a judgment of the Court providing, by means of an interpretation of the
relevant provisions of Regulation No 1408/71, which applied to the situation of
the persons concerned in exactly the same manner, a clear answer to the issues
before that institution.
46 As regards the misapplication by Inasti of
Article 95a of Regulation No 1408/71, regard must also be had to the clarity
and precision of that provision.
47 The reply to be given to the first question,
namely that Article 95a of Regulation No 1408/71 did not apply in the
circumstances of the case, should not have been in any doubt, given the wording
and purpose of that provision.
48 Furthermore, as the Commission observed in its
submissions and the Advocate General pointed out at point 87 of his Opinion,
paragraphs (4), (5) and (6) of Article 95a Regulation No 1408/71 are worded in
terms similar to paragraphs (5), (6) and (7) of Article 94 of the same
regulation. The Court had already held, well before Inasti adopted its decision
on the basis of Article 95a, that the transitional provisions in Regulation No
1408/71, which include Article 94(5), are based on the principle that benefits
awarded under the old version of Regulation No 1408/71 are not to be reduced.
The purpose of that provision is therefore to give the person concerned the
right to request the review in his favour of benefits payable under the old
version of Regulation No 1408/71 (see Case 83/87 Viva [1988] ECR 2521,
paragraph 10).
49 It must therefore be observed that application
of Article 95a of Regulation No 1408/71 to a situation such as that at issue in
the main proceedings, which resulted in limiting the effect of Articles 12 and
46 of that regulation in time, constitutes a serious breach of Community law.
50 That breach cannot be justified by the fact that
Inasti applied, as it claims it did, Article 95a of Regulation No 1408/71 to Mr
Larsy's situation because, under national procedural law, that was the only
provision under which his pension rights could be reviewed with partial
retroactive effect.
51 Suffice it to observe in that regard that the
Court has held that any provision of a national legal system and any
legislative, administrative or judicial practice which might impair the
effectiveness of Community law by withholding from the national court having
jurisdiction to apply such law the power to do everything necessary at the
moment of its application to set aside national legislative provisions which
might prevent, even temporarily, Community rules from having full force and
effect are incompatible with those requirements, which are the very essence of
Community law (Cases 106/77 Simmenthal [1978] ECR 629, paragraph 22, and
C-213/89 Factortame and Others [1990] ECR I-2433, paragraph 20).
52 That principle of the primacy of Community law
means that not only the lower courts but all the courts of the Member State are
under a duty to give full effect to Community law (see, to that effect, Cases
48/71 Commission v Italy [1972] ECR 529, paragraph 7, and C-101/91 Commission v
Italy [1993] ECR I-191, paragraph 24).
53 So, to the extent that national procedural rules
precluded effective protection of Mr Larsy's rights derived under the direct
effect of Community law, Inasti should have disapplied those provisions.
54 Moreover, Inasti's argument that the binding
nature of the judgment of the Tribunal du travail de Tournai of 24 April 1990
prevented it from reviewing Mr Larsy's rights with retroactive effect is
totally undermined by the manner in which that institution dealt with his
application, which was, by decision of 26 April 1995, to review his pension
rights with effect from 1 July 1994.
55 It follows from all the foregoing that the
reply to the second question must be that the application by the competent
institution of a Member State of Article 95a(4), (5) and (6) of Regulation No
1408/71 to a request for review of a retirement pension, thus limiting the
retroactivity of the review to the detriment of the person concerned,
constitutes a serious breach of Community law if those provisions are not
applicable to the application in question and if it follows from a judgment
delivered by the Court of Justice before the decision by the competent
institution that the institution wrongly applied an anti-overlapping rule of
that Member State, and where it cannot be inferred from that judgment that the
retroactive effect of such a review could be limited.
Costs
56 The costs incurred by the Commission, which has
submitted observations to the Court, are not recoverable. Since these
proceedings are, for the parties to the main proceedings, a step in the action
pending before the national court, the decision on costs is a matter for that
court.
On those grounds,
THE COURT (First Chamber),
in answer to the questions referred to it by the
Cour du travail de Mons by judgment of 20 March 2000, hereby rules:
1. Article 95a(4), (5) and (6) of Regulation (
2. The application by the competent institution
of a Member State of Article 95a(4), (5) and (6) of Regulation No 1408/71 to a
request for review of a retirement pension, thus limiting the retroactivity of the review to
the detriment of the person concerned, constitutes a serious breach of
Community law if those provisions are not applicable to the application in
question and if it follows from
a judgment delivered by the Court of Justice before the decision by the
competent institution that the institution wrongly applied an anti-overlapping
rule of that Member State, and where
it cannot be inferred from that judgment that the retroactive effect of such a
review could be limited.