Luxembourg paves way for £20m suit against Government

PUBLIC sector contractors are one step closer to launching a £20 million legal action against the UK Government after a decision in Luxembourg ruled that wrongful implementation of EU directives was actionable.

The Advocate General, handing down his opinion on a case over Spanish trawlermen suing the UK Government for the wrongful implementation of EU fishing laws, extended the scope of legal recourse for actions involving the transposition of directives into domestic law.

At present suits can only be launched in cases which involve a total failure to implement. However, if the European Court of Justice supports the Advocate General's opinion, this would be extended to wrongful or partial implementation.

Public Contractors Association (PCA) co-ordinator Cliff Davis-Coleman said the opinion gave “considerable encouragement” for compensation claims against the Government.

The 200 contractors affected, many PCA members, have instructed a group of lawyers to recoup about £20 million from the Government in legal and other costs incurred when relying on “defective” national law before industrial tribunals.

One of the arguments expected to be put forward by the PCA in the case involving employment laws stemming from the Acquired Rights Directive, surrounds a letter believed to have been sent from the Treasury Solicitor's Office to a member of the Attorney General's legal staff.

The letter allegedly admits that internal advice indicated the UK had not satisfactorily implemented the directive.

“It would be far better if ministers would meet with us and discuss the costs incurred by companies following, in good faith, national implementing legislation,” said Davis-Coleman.

“We have no desire to drag the Government through the courts but we may have little option. Hopefully this case will make ministers reconsider the merits of using public money to fight an indefensible case.”

Barnett Alexander Chart employment specialist Ruth Harvey, who is acting for the PCA, said the opinion and other precedential cases indicated actions involving wrongful implementation could also be taken.

“This can cover a range of scenarios from a wholly innocent error to a deliberate breach,” she said. “Where there has been a manifest failure to implement EU law, the UK Government will be liable to pay compensation to individuals or entities who have suffered direct loss whatever the nature of that breach.”