Opinion of Advocate General

Mr President,

Members of the Court,

1. The case before the Court is an application from the House of Lords for a preliminary ruling on Article 6 of Council Directive 76/207/EEC of 9 February 1976 on the implementation of the principle of equal treatment for men and women as regards access to employment, vocational training and promotion, and working conditions(hereinafter the directive). The questions arose in a dispute between Miss Marshall (the appellant in the main proceedings) and the South-West Hampshire Area Health Authority (the respondent in the main proceedings, hereinafter the Authority).

Background to the case

2. By judgment of 26 February 1986 the Court answered a preliminary question from the Court of Appeal of England and Wales on Article 5(1) of the directive. That article prohibits all discrimination on grounds of sex with regard to access to employment and working conditions. The Court held that an individual may rely upon Article 5(1) against a State authority acting in its capacity as employer, in order to avoid the application of any national provision which does not conform to that article. Miss Marshall, who was the victim of discrimination contrary to Article 5(1), was the appellant in the main proceedings in that case.

3. Finally, Miss Marshall appealed to the House of Lords, which referred three questions to the Court of Justice for a preliminary ruling. The questions are reproduced in extenso in the Report for the Hearing, which also contains a further explanation of the facts of the case, to which I would refer.

May individuals rely on Article 6 of the directive before national courts?

4. I shall consider the national court's third question first. By this question, the House of Lords seeks to establish whether a victim of discrimination prohibited by the directive is entitled to rely in the national courts against a public body of his or her Member State on Article 6 of the directive in order to set aside the limits imposed by the national legislation on the amount of compensation recoverable.

5. (Vertical) direct effect of Article 6 in so far as it provides for a judicial remedy. The Court has already considered the question of the direct effect of Article 6 of the directive in its judgment of 15 May 1986 in Johnston ν Chief Constable of the Royal Ulster Constabulary. The Court identified two elements in Article 6: the obligation for Member States to provide for an effective judicial remedy and the obligation to impose sanctions in respect of any prohibited discrimination. As far as the first element is concerned, the Court held as follows:

6. Does Article 6 have no (vertical) direct effect in so far as it introduces a requirement to impose sanctions, but only embodies an obligation to interpret national law in conformity with the directive? In contrast, in so far as the obligation to impose sanctions in respect of discrimination contrary to the directive is concerned, the Court held in Johnston that the directive did not contain in that regard any unconditional and sufficiently precise obligation which, in the absence of implementing measures adopted in good time, might be relied upon by individuals in order to obtain specific compensation under the directive, where that is not provided for or permitted under national law. In so doing, the Court confirmed two earlier judgments in Von Colson and Harz, in which the same conclusion was reached (paragraph 10, below).

7. The above does not signify that individuals affected by the limits in question may not derive any legal remedies at all from the Court's case-law as it stands. The Court has significantly extended the judicial protection of individuals in other ways, in particular by imposing on national courts an obligation to interpret their national law in accordance with Community law. In order to define that obligation, I should first call to mind the Court's case-law which specifies the rules of Community law relating to sanctions in respect of Community provisions.

8. However, the third paragraph of Article 189 of the EEC Treaty leaves the Member States free to choose the forms and methods of implementing directives. As regards the obligation to impose sanctions contained in Article 6 of the directive, the Court has stated as follows:

9. The Court also stated that infringements of Community law should be penalized, not only in a sufficiently enforceable manner but also in a comparable manner, that is say, under procedural and substantive conditions which are analogous to those applicable to corresponding infringements of national law:

10. Thus, even if individuals cannot rely, as regards rules on sanctions, directly on Article 6 of the directive (section 6, above, but see section 11, below), it is for the national courts, where a provision of a directive without direct effect is not implemented on time or even if it is incompletely or incorrectly implemented, to interpret the sanctions contained in their national legislation in accordance with the rules of Community law ensuing from Article 6 of the directive as described above.

11. The requirement to impose sanctions laid down by Article 6 of the directive none the less has direct effect. The national court will therefore not always be capable of being induced to achieve the result laid down by Community law by means of interpretation. If therefore the requirement for sanctions prescribed by Article 6 of the directive is to be sufficiently effective, it must be construed, just like the requirement for judicial protection which that provision entails (section 5, above), as a provision having direct effect at least vis-à-vis the Member States. I consider that there is every reason for taking this view.

12. During the oral procedure in this case, the following anomaly was raised: employees in the service of public bodies (in the broad sense given to that expression in the Court's case-law) are entitled, as against their employer, to rely upon provisions of directives which are sufficiently precise and unconditional — even, as in this case, with a view to obtaining compensation — even though employees in the private sector have no such remedy available against their employer. As appears from the judgment in Harz, employees in the private sector arc entitled in the national courts only to invoke the obligation, to which I have already referred, to interpret national law in conformity with the directive.

13. Conclusion. In the light of the above, I propose that the Court should answer the national court's third question as follows. The requirement to impose sanctions arising under Article 6 of the directive — as has been specified in the meantime by the Court's case-law on the basis of general principles of Community law — may be relied upon by individuals in any event against the Member State and its public bodies and undertakings. In the event that the Court should not accept that direct effect, the national courts should nevertheless interpret and apply their national law as far as possible in accordance with the system of sanctions prescribed by Article 6 as it has been specified in the Court's case-law.

Is a statutory upper limit on compensation compatible with Article 6 of the directive?

14. Section 65(1) of the Sex Discrimination Act 1975 provides that an Industrial Tribunal can make an order requiring compensation to be paid where it finds a complaint relating to sex discrimination in employment is well founded. Under section 65(2) of the SDA, however, the amount of such compensation may not exceed a specified limit. When Miss Marshall's complaint was considered by the Industrial Tribunal, that limit was UKL 6250. Since then, it has been increased on several occasions, so that it now amounts to UKL 10 000.

15. Before answering those two questions, I would refer to the relationship between the two criteria applied by the Court with regard to national systems for imposing sanctions in respect of provisions of Community law. Earlier (section 9, above) I referred to those two criteria as the criterion of sufficient enforceability and the criterion of comparability. The two criteria are cumulative. In other words, it is not sufficient that an infringement of Community law should be repressed in a comparable way to an analogous infringement of national law if it appears that the sanctions imposed for infringements of Community law and national law are not capable of securing actual and effective judicial protection or do not have sufficient deterrent effect, and are therefore not adequate in relation to the damage sustained. In my view, this follows from the requirement as to the uniform application of Community law (section 11, above), which requires the same infringement of Community law to be repressed in a sufficiently effective and deterrent manner in all the Member States.

16. The criterion of sufficient enforceability. The Court has stated with regard to this criterion that where a Member State chooses to penalize the breach of the prohibition of discrimination by the award of compensation, that compensation must in any event be adequate in relation to the damage sustained. A purely nominal amount, such as for example the reimbursement of expenses incurred in connection with [a candidates] applicationdoes not satisfy that criterion (see the passage from the judgments in Von Colson and Harz quoted at the end of section 8).

17. The fact that the compensation should in any event be adequate in relation to the damage sustained must however mean, in my view, also that the Court — in the present state of Community law and therefore in the absence of rules harmonizing the divergent national rules governing liability — is prepared to accept less than compensation for the full damage sustained. In other words, the compensation must be adequate in relation to the damage sustained but does not have to be equal thereto.

18. It therefore appears to me that to lay down national upper limits on compensation is, as Community law stands, not unlawful. However, the precondition is that the limit should be pitched high enough in order not to deprive the sanction of its effective, uniform and deterrent nature and does not prevent its being adequate in relation to the damage normally sustained as a result of an infringement.

19. In the case before the Court, the Industrial Tribunal assessed the actual damage sustained by Miss Marshall at UKL19405, made up of UKL 1000 in respect of injury to feelings, UKL 8220 in respect of loss of earnings, UKL 2475 in respect of inter alia loss of pension and UKL 7710 in respect of interest on the heads of financial loss. As far as that sum in respect of interest is concerned, it relates, as far as I can see, to interest accruing between the date of the unlawful discrimination and the date of the Industrial Tribunal's decision of 21 June 1988.

20. The criterion of comparability. As has already been stated, this criterion has to be applied cumulatively with the above. It entails that if more extensive compensation is provided for for comparable infringements of national law — for instance, compensation in full — than the adequate compensation required by Community law, the more extensive compensation should also apply in respect of infringements of Community law. In order to ascertain whether the United Kingdom (also) falls short in this respect, consideration should be given to the machinery for sanctions established by the SDA at the material time.

21. At first sight, one might infer from this that the United Kingdom proceeds less diligently against infringements of Community law (sex discrimination in employment) than it does against infringements of analogous national law (sex discrimination in other areas). In my view, such an inference is not justified. There is a good explanation for the distinction made by the United Kingdom: the industrial tribunals set up in 1965 deal with all complaints relating to unfair dismissal, a statutory tort introduced by the Employment Protection (Consolidation) Act 1978. Thus complaints based on racial discrimination in employment are also dealt with by an industrial tribunal and the compensation which may be awarded in such cases is also subject to upper limits identical to those laid down in section 65(2) of the SDA.

Is a possible lack of power to award interest compatible with Article 6 of the directive?

22. It appears from the Statement of Facts appended to the order for reference that there was at the relevant time no power — or alternatively the relevant provisions of English law were ambiguous as to whether there was a power — in the Industrial Tribunal to award interest on, or as an element of, compensation for an act of unlawful sex discrimination in relation to employment.

23. Compensatory versus legal interest. As appears from the passage quoted in section 22, the preliminary questions relate to interest granted on, or as an element of, compensation. Indeed, in the second part of its second question for a preliminary ruling, the House of Lords seeks to establish whether correct implementation of Article 6 of the directive requires the compensation to include interest on the principal amount from the date of the unlawful discrimination to the date when compensation is paid.

24. Case-law of the Court on the award of interest. First I shall consider the case-law on the award of interest in proceedings based on Articles 178 and 215 of the EEC Treaty. This established case-law certainly does not leave any doubts subsisting as to the permissibility of a claim for the grant of interest. As the Court held in the judgment in Sofrimport:

25. Although the Court's staff case-law is concerned with cases coming under the special rules of the Staff Regulations, I would not leave it completely out of account, since it nevertheless also applies other provisions of Community law.

26. Is there an obligation to pay interest under Article 6 of the directive? The Court's case-law which I have discussed above indicates in any event that it is possible under Community law to award interest on account of the time elapsed between the determination by the court of the unlawful act which gives rise to the obligation to pay compensation and therefore certainly as from the judicial decision determining the amount of the damage. But is there also any obligation to that effect?

27. This answers only part of the preliminary question as it was put by the House of Lords. The question relates to all interest due from the date of the unlawful discrimination to the date when compensation is paid. I should therefore further consider to what extent Community law entails an obligation to award compensatory interest as a component of the compensation determined by the first court. As I have already mentioned, the interest of UKL7710 awarded by the Industrial Tribunal constitutes such compensatory interest. It relates to the damage sustained by Miss Marshall up until the date of the Tribunal's decision.

28. For the sake of completeness, I would add a few words on the rate of interest. In principle, in the absence of Community legislation, this is a matter for the national court to decide. However, in order for the interest applied to constitute adequate compensation, it should be commensurate with claimant's loss of purchasing power caused by the effluxion of time. In my view, this means that the rate may vary from country to country, since it is related to the inflation rate obtaining in the country concerned and to the usual interest paid on capital.

Conclusion

29. In conclusion, I propose that the Court should answer the questions put by the House of Lords, in the order in which I have considered them in my Opinion, as follows:

1 Original language: Dutch.

2 OJ 1976 L 39. p. 40.

3 Judgment in Case 152/84 Marshall ν Southampton and Sontb West Hampshire Area Health Authority [1986] ECR 723.

4 The Statement of Facts submitted by the House of Lords refers to a sum of UKL 7700 in respect of interest. However, I infer from paragraph 11 of the Statement, which mentions the sum of UKL 5445.00, being the balance of the capital sum awarded to Miss Marshall by the Industrial Tribunal, that this must be a typing error. In any event, in their written observations to the Court both the Commission and the United Kingdom refer to an amount of UKL 7710.

5 The Court decided as early as 1982 that the provisions of a directive may, under certain conditions, be relied upon in the national courts directly by individuals against public authorities. Sec the judgment in Case 8/81 Becker ν Finanzamt Münster-Innenstadt [1982] ECR 53, paragraph 25.

6 Case 222/84 Johnston ν Chief Constable of the Royal Ulster Constabulary [1986] ECR 1651. See also the judgment in Case 222/86 Union nationale des entraîneurs el Cadres tech niques professionnels du football (Uneclef) ν Heylens and Others [1987] LCR 4097, paragraph 14.

7 Judgment in Johnston, paragraph 58.

8 Judgment in Case 14/83 Von Colson and Kamann [1984] LCR 1891, paragraph 27; judgment in Case 79/83 Harz ν Deutsche Tradax [1984] ECR 1921, paragraph 27.

9 Sec the judgment in Case 68/88 Commission ν Greece [1989] ECR 2965, paragraph 23; the judgment of 10 July 1980 in Case C-326/88 Hansen [1990] I-2911, paragraph 17; the judgment in Case C-7/90 Vandevenne [1991] I-4371, paragraph 11. The judgment in Case 50/76 Amsterdam Bulb [1977] ECR 137, paragraphs 32 and 33, already contains the beginnings of this case-law.

10 Judgments in Von Colson and Harz, paragraph 22. See also paragraph 15.

11 Judgments in Von Colson and Harz, paragraph 18.

12 Judgments in Von Colson and Harz, paragraphs 23 and 24

13 Sec the judgments (cited in footnote 8) in Commission ν Greece, paragraph 24, Hansen, paragraph 17, and Vande venne, paragraph 11.

14 Judgments in Commission ν Greece, paragraphs 24 and 25, Hansen, paragraph 17, and Vandevenne, paragraph 11. Although those judgments are concerned with criminal penalties, the criterion of comparability applies undimin ished to civil sanctions, see the judgment of 19 November 1991 in Joined Cases C-6/90 and C-9/90 Francovich and Bomfact [1991] ECR I-5357, paragraph 43.

15 Judgment of 25 July 1991 in Case C-208/90 immoli v Mm ister for Social Welfare and the Attorney General [1991] ECR I-4269, paragraph 16.

16 Judgments in Von Colson and Harz, paragraph 28.

17 Judgment in Case C-106/89 Marleasing [1990] ECR I-4155.

18 Albeit having regard to the general principles of law, such as the principles of legal certainty and non-retroactivity: see the judgment in Case 80/86 Kolpinghiiis Nijmegen [1987] ECR 3969, paragraph 13.

19 Y. Galmot and J. C. Bonichot, La Cour de Justice des Communautés européennes et la transposition des directives en droit national, Rev. fr. droit, adm. 1988, 1, especially at p. 20 et seq.

20 Sec the Statement of Facts, paragraph 8(3), cited in section 3 above.

21 As in the case of the German court after Von Colson, Arbeitsgericht Hamm, judgment of 6 September 1984, Der Betrieb (1984), p. 2700.

22 h appears, from the Court's case law that, as far as provi stons of national law arc concerned, the scone oí a legisla tive provision has to be determined in the light oí the inter pretation given to that provision by the courts see thc reccnt judgment of 16 December 1992 :n Joined Cases C-132/91, C-138/91 and C-139/91 Kaisihas and Other, [1992] ECR I 6577. paragraph 39: ef. the judemeni in Case C-347/89 Furom Pharm [1991] ECR I 1747. paragraph 15

23 Judgment in Joined Cases C-143/88 and C-92/89 Zucker fahrih Suderduhmarchen and Zuckerfahrik Soesl [1991] ECR 1415, paragraph 25 et set]

24 Judgment in Case C-188/89 losler and Olhen 1990 LCR I-3313, paragraph 22

25 In the case dealt with in that judgment, the discrimination challenged by the plaintif: in the main proceedings was committed by a company governed by private law, namely a German Gesellschaft mit beschrankter Haítung (limited habtlitv company).

26 Sec, inter alia, the judgment in Foster, cited above.

27 For the problems to which this has given rise in the United Kingdom see G. de Búrca, Giving effect to European Community Directives, Modern Law Review, 1992, 215-240.

28 See footnote 13.

29 See to this effect F. Emmert, Horizontale Drittwirkung von Richtlinien? Lieber ein Ende mit Schrecken als ein Schrecken ohne Ende, Europäische Wirtschafts-und Steiterrecht-EWS, 1992, p. 56 et seq. In that article the misapprehension is refuted that at the end of the period for implementation — not before — the recognition of horizontal direct effect would remove the distinction drawn by Article 189 of the EEC Treaty between regulations and directives.

30 The phrase used in any event (in elk geval, en tout cas) docs not seem to me to be synonymous with in each [particular] case (in ieder [afzonderlijk] geval, dans chaque cas [particulier]).

31 These are Directives 80/987/EEC of 20 October 1980 (OJ 1980 L 283, p. 23), 85/374/EEC of 25 July 1985 (OJ 1985 L 210, p. 29) and 90/314/EEC of 13 June 1990 (OJ 1990 L 158, p. 59) on, respectively, wage claims of employees of insolvent undertakings, product liability and package holidays.

32 Judgment in Francovich and Bonifaci, cited in footnote 13, paragraph 40.

33 Idem, paragraph 42.

34 Idem, paragraph 43.

35 This is, moreover, no more than logical The system of sanctions required under Article 6 oi the directive can be regarded as a lex specialis namely in connection with compensation for discrimination prohibited by the directive as against the Francovich liability which, more specifi cally with regard to the failure correctly to implement directives, constitutes the lex generalis

36 1 his does not prevent national legal systems and indeed Article 215 of the I I· C Treaty from laving down, as a general rule, an obligation to compensate in lull (or almost in full, see footnote 41) I consider nevertheless that it does not follow trom Community law as it stands at present that a national legal system may not lav down a statutory limit on specific claims tor damages, the precondition being that the criteria ot sufficient entorceability and comparability discussed above are complied with

37 According to the Statement ot tacts appended to the order for reference, the award ot moral damages (injury to feel ings) and ot interest is a remedv available in the ordinary courts

38 It appears from the United Kingdom's observations — which are not contradicted in this respect by any of the other parties — that victims of unfair dismissal can now require themselves to be reinstated in their posts. If a recommendation to this effect by a court is ignored, they will be entitled to additional compensation of up to UKL 10650.

39 Section 63(1) of the SDA.

40 Section 66(4) of the SDA.

41 According to the Commission's written observations, both the industrial tribunals and the County Court can also apply other sanctions (such as, for example, an order to reinstate the person who has suffered discrimination), but such an order is rare.

42 The principle of compensation in full (or virtually in full: differences remain between the national legal systems, for instance in connection with moral damage or unforeseen damage) is, indeed, the system common to the laws of the Member States. This docs not prevent there being in all countries and even in Community law itself (see footnote 30) limits applied to specific damage claims for various rea sons, such as exist in the United Kingdom in respect of the rules at issue in this case. Greater uniformity in this sphere can be contemplated only by the Community legislature.

43 See section 54 of the Race Relations Act 1976.

44 I say as a rule, since sometimes legal interest starts to run from the date of the document by which the proceedings were brought before the court.

45 The pecuniary loss determined by the Industrial Tribunal related primarily (apart from interest) to Miss Marshall's loss of salary for the period between her unfair dismissal on her 62nd birthday and the date when she reached the age of 65 (that is to say, when she would have reached pensionable age if she had not been subject to discrimination) and her loss of pension as a result of her premature dismissal.

46 Up to now, I have avoided the use of the expression default interest. That expression is more general: it encompasses both types of interest to which I have referred, namely compensatory and legal interest, and covers all interest awarded an account of effluxion of time before or after judgment.

47 Judgment in Case C-152/88 Sofrimport ν Commission [1990] LCR I-2477, paragraph 32, subsequently confirmed by the judgment in Joined Cases C-104/89 and C-37/90 MMer [1992] ECR I-3062, paragraph 35. Sec pre viously also the judgments in Case 238/78 Ircks Arkady ν Commission [1979] ECR 2955, paragraph 20, in Joined Cases 241, 242 and 245 to 250/78 DCV ν Council und Commission [1979] ECR 3017, paragraph 22, in Joined Cases 261 and 262/78 Inlerquell Slurke -Chemie ν Council and Commission [1979] ECR 3045, paragraph 23, in Joined Cases 64 and 113/76, 167 and 239/78, 27, 28 and 45/79 Dumorlier frères ν Coimai [1979] LCR 3091, para graph 25, in Joined Cases 64 and 113/76, 167 and 239/78, 27, 28 and 45/79 Dumorlier Ireres ν Coimai [1982] ECR 1733, paragraph 11, in Case 256/81 Pauls Agriculture ν Coimai and Commission [1983] ECR 1707, paragraph 17, and in Joined Cases 256, 257, 267/80, 5 and 51/81 and 282/82 Birra Wahrer ν Coimai and Commission [1984] ECR 3693, paragraph 37.

48 Sec footnote 45.

49 Order of the President of the Court in Case 78/83 R Usinor v Commission [1983] ECR 2183, paragraph 1 of the operative part.

50 Judgment in Case 115/76 Leonardini v Commission [1978] ECR 735.

51 Judgment in Case 21/86 Samara v Commission [1987] ECR 795.

52 Judgment in Case 266/83 Samara v Commission [1985] ECR 189.