On 19 October 2009, International law firm Lovells LLP led a high-profile conference in Brussels on private enforcement of State aid rules. The firm was exclusively assigned by the European Commission to update a 2006 study which investigated private enforcement of State aid at national level. Jacques Derenne, partner and head of Lovells' State aid practice, presented the findings of the research study, which shows how private enforcement in the area of State aid is evolving. The conference included a keynote speech by Competition Commissioner Neelie Kroes on the achievements of the State aid action plan as far as actions before national court are concerned. The European Commission's 2006 study (which Lovells co-directed and co-authored) found that private parties use State aid in a defensive manner and although some cases showed that State aid law is used as a means to challenge competitors, there was not a single judgment of a national court awarding damages to a competitor, even though cases brought before national courts had more than tripled since 1999. On the basis of the study, the authors, who included Lovells and an international consortium of leading State aid experts, made recommendations to the Commission on ways to improve the enforcement of State aid rules at national level. This led to the Commission adopting guidance to Member States on how to speed up the implementation of State aid recovery (Recovery Notice, October 2007) and to assist courts in applying EU State aid rules (Enforcement Notice, April 2009).
Jacques Derenne presented the findings of the updated study which reviews cases from January 2006 to mid-2009 in the 27 Members States in the EU. Jacques discussed the issue of actions for damages before national courts. The new research shows that there has been an increase globally in the number of direct actions against competitors, but for third parties and competitors, the path to private enforcement of the State aid rules remains difficult. As found in the 1999 and 2006 Studies, locus standi remains an important hurdle for private enforcement. Damages actions remain limited and there have not been any cases in which competitors have actually been awarded monetary compensation.
Some key findings can be summarised as follows:
- State aid court cases have basically doubled since 2006
- Direct actions made by competitors and third parties has increased by around 45 % since 2006
- Damages have never been awarded
- A great majority of cases concern tax measures. Taxpayers often rely on State aid rules to contest the payment of taxes, alleging that the taxes are being used to finance unlawful State aid.
- In few exemplary cases, national courts have made use of the ability to ask the Commission for its opinion on cases
A book will be published by Lexxion which will contain the national report.
In addition to the Commission survey, Lovells extended the research to produce a State aid thesaurus for the competition law database e-Competitions. Lovells' State aid team in Brussels coordinated the work of an international consortium of 27 national rapporteurs, analysing the legal framework for the application of State aid rules at a national level and examining cases from the 27 Member States for the period 1999-2009. Almost 600 cases in total were analysed. An interactive database was produced which chronicles all State aid national cases, including reports and case comments.
The analysis gives national judges, national and EU officials, lawyers and other interested parties, including grantors, beneficiaries, third parties and investors, an extensive overview of the remedies available before national courts in relation to State aid issues. This is the first exhaustive analysis of how EU State aid rules are applied in practice by the national courts.
Lovells' State aid team is recognised as one of the most experienced in Europe. For more information on the European Commission survey or on State aid generally, please contact:
Jacques Derenne, partner
+32 2 62 69 261
jacques.derenne@lovells.com
Alix Müller-Rappard, counsel
+32 2 62 69 265
alix.muller-rappard@lovells.com
Nuala Kane, PR adviser
+44 (0)20 7 296 2539
nuala.kane@lovells.com