Spencer v Secretary for Work & Pensions

A claim for Francovich damages accrues when a State’s failure to implement Community law first leaves the claimant with a less valuable package of rights and causes financially measurable loss. Precise quantification is unnecessary. The fact that domestic proceedings may later succeed, fail or reveal the extent of the loss does not postpone accrual.

A continuing failure to implement a measure does not create a fresh cause of action where one injury has already caused the loss. Exhaustion of domestic remedies concerns mitigation, not an additional condition of State liability. The ordinary risks of litigating alternative claims, including costs, do not make a concurrent Francovich claim excessively difficult.

Two appeals concerning limitation in claims for Francovich damages were heard together. Mr Spencer alleged that the United Kingdom had failed to implement Article 6(2) of the Framework Health and Safety Directive, with the result that his unsuccessful personal-injury claim against his employer lacked a civil remedy that should have been available.

Holland J dismissed Mr Spencer’s appeal from Master Miller’s decision on limitation: [2007] EWHC 1775 (QB). In the companion appeal, Eady J held that Mr Moore’s claim arising from compensation for injuries caused by an untraced driver was also time-barred: [2007] EWHC 879 (QB).

The common issue was whether the causes of action accrued on the claimants’ injuries or only when their domestic proceedings had failed to provide the remedy or compensation alleged to have been required by Community law.

1. The appeals were dismissed unanimously. Waller LJ held, with whom Carnwath and Stanley Burnton LJJ agreed, that both claims were barred by section 2 of the Limitation Act 1980. A Francovich claim is treated as a tort claim. Time runs when all its ingredients, including loss, are present.
2. The relevant loss arose when each claimant was injured. Assuming a sufficiently serious failure to implement Community law, each then held a package of rights less valuable than that which proper implementation would have supplied. That loss was financially measurable, even if its precise amount depended on later litigation or could not then be quantified accurately. The possibility that Mr Spencer might succeed against his employer did not make the loss contingent in the relevant sense.
3. The court applied the economic-loss analogy of a negligently drafted contract or ineffective insurance policy. In each example, a claimant receives something less valuable at once; later events affect measurement, not accrual. The same analysis applied to an inadequate untraced-driver scheme. Its alleged absence of interest, costs and procedural protection diminished the value of Mr Moore’s claim when his injury gave rise to it.
4. A continuing State failure did not assist either claimant. A continuing breach may give rise to fresh claims where each continuing breach causes distinct damage. Here, however, each claim arose from one accident and the initial injury completed the cause of action. There was no pleaded duty to introduce a scheme with retrospective effect for either claimant.
5. The three established conditions of Francovich liability were necessary and sufficient. Exhausting domestic remedies was not a further precondition; reasonable use of available remedies concerned mitigation. Nor did the cost risk of pursuing alternative defendants make a concurrent State-liability claim virtually impossible or excessively difficult.
6. Waller LJ added, strictly unnecessarily, that the safeguards in sections 33 and 68 of the Arbitration Act 1996 were available to address the procedural unfairness alleged by Mr Moore.

• Court of Appeal (Civil Division) Dismissed Mr Spencer’s and Mr Moore’s appeals on the ground that their Francovich claims were time-barred: [2008] EWCA Civ 750.
• Queen’s Bench Division Holland J dismissed Mr Spencer’s appeal from Master Miller’s limitation decision: [2007] EWHC 1775 (QB).
• Queen’s Bench Division Eady J held Mr Moore’s Francovich claim time-barred and rejected his arguable case on procedural unfairness: [2007] EWHC 879 (QB).