Case Discussion: Francovich v. Italy (1991) C-6&9/90

This case discussion analyzes the Francovich v. Italy (1991) C-6&9/90 case, where the issue of state liability for damages caused by the breach of community law is examined. The European Court of Justice ruled in favor of the plaintiffs, highlighting the importance of implementing EU directives and protecting the rights of citizens.

Case Discussion
IRAC Framework

Francovich v. Italy (1991) C-6&9/90
Facts
In the present case Mr. Francovich and other employees were not paid for their jobs due to the
insolvency of their employer. The plaintiff approached the Italian court and when they failed to
recognise the issue the plaintiff moved to the European Court of Justice. The protection of
employees was threatened and to safeguard the same direct effect and general principle of the
ECJ was implemented.
Issue
Were Francovich and the others liable for payment from its employer that was liquidated and
was there any liability of the state (Italy) in the damages caused by the breach by the state
community law?
Rule
The provisions are simple that every state has to safeguard its people and within the EU all
entities have to abide by the rules and regulations of EU. The court created general principle
direct effect which would be applicable.
Analysis
The case is quite clear that the liquidated company did have obligation towards its employees
which was clearly not met as it was dissolved. What stands to be important is to understand the
role of the Italian court and the government and how they behaved initially. As per the rulings of
European Court of Justice it is important to note that every country within the European Union
has to implement the general principles and laws which were not done in the present case. Italy
as a nation failed to implement Council Directive 80/897. Van Gend en Loos v. Nederlandse
Administratie der Belastingen Case 26/62 is one of the benchmark cases which has helped to
establish the role of directives and its direct effect on a case. In this case it is important to note
that the EU laws are largely supranational in nature. The laws could not only take the form of
preliminary laws but could also be considered as directives and verdict. The directives mainly act
as a right that could be enforced against a state in the local courts of member states and in this
case this is exactly what happened. The case clearly highlights that the development of the state

liability is an active approach to execute a uniform law for the European citizens hence, the
applicability of the EU law in its member states stands to be a concern. The case of Brasserie du
Pêcheur v Germany and R (Factortame) v SS for Transport (No 3) (1996) C-46/93 and C-48/93
shows the state liability and the breach of community law which also helped giving the verdict in
the best possible manner.
This is clearly a case of state liability where the state initially failed to take responsibilities for
what happened to its citizens. According to Article 10 formerly Article 5 EC treaty a member
state is obliged to compensate a person or a group for any kind of loss suffered by them due to
the failure of the member state to implement community law. Hence, the court was right to
mention that Italy Government will be obliged to pay for the damages done against Francovich
and Bonifaci based on certain key conditions:
 It has to be done through the directive which bestows the right of citizens.
 The information has to be measured
 There should be a link between the damage done and failure to implement the directive.
Conclusion
The ECJ was right to give the verdict in favor of the plaintiff as the failure of the Italy
Government to implement the directive affected the citizen of the country and in these
circumstances EU is open to bring justice.