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. Last Updated: 07/27/2016

European Court Decision: States Can Be Held Liable

BRUSSELS -- The European Court of Justice, handing European Union citizens a powerful weapon against their governments, has ruled that EU states must compensate individuals for damages caused when they fail to enact EU laws.

The immediate impact of Tuesday's judgment means that Britain faces damage payments to Spanish companies illegally barred from running fishing businesses in Britain.

Britain reacted furiously. A government minister said the court ruling was crazy and would be challenged at a summit this month called to discuss the EU's future.

Germany is also subject to claims from a French beer exporter that it was barred from business by rules on beer purity that were later held to be against EU law.

EU lawyers said the case could trigger a torrent of claims, though national courts still hold important roles in deciding whether claims were justified.

"Although this case has the potential to open the floodgate on claims for breach of community law ... the European Court has left [it] to the national courts to decide whether the breach is a sufficiently serious one," Nicholas Forwood, of law firm Brick Court Chambers in Brussels, said. "There will be an enormous pressure on member states now to implement directives within the appropriate time scale because if they do not, they leave themselves wide open to damage claims."