The Remedies Directive (Directive 89/665) sets minimum national review standards to address weaknesses in the legal remedies available to participants in tender procedures in all Member States.
In the case INGSTEEL (C‑547/22) handled by the Court of Justice on 6 June 2024, the referring court essentially asked whether national legislation or practice preventing bidders illegally evicted from a public procurement procedure from claiming compensation for the loss of opportunity to participate in the procedure and potentially secure the contract would violate EU law. The Court of Justice answered in the affirmative.
The questions arose in the context of a dispute between Ingsteel and the Slovak Republic. The tenderer had been excluded from a public procurement procedure for the (re)construction of football stadiums because the tenderer allegedly did not meet the selection criteria. The contracting authority’s decision to exclude the tenderer was annulled on review. Since the tender procedure had meanwhile been completed and closed, the aggrieved tenderer subsequently claimed damages.
A tenderer harmed by a violation of EU public procurement law is entitled to compensation when it has suffered a loss of profit as a result of not securing a public contract that it would have secured had the contracting authority acted legally. The Court was now asked whether compensation was also due when a tenderer lost the opportunity to participate in the procurement procedure, while obtaining the contract would not have been certain (or nearly certain) even if the contracting authority had not violated public procurement rules.
The Court’s assessment
The Court first observed that the requirement for Member States to provide remedies to tenderers harmed by an infringement of public procurement law in the form of damages was broadly formulated in the Remedies Directive. Absent a distinction, compensation would need to cover any type of damage suffered, including loss of opportunity to participate in a procurement procedure. The review procedures must be accessible at least to any person who has (or had) an interest in obtaining a specific contract and who has been (or risks being) harmed by an alleged violation. The Remedies Directive does not allow Member States to limit this access. Damages were meant as a legal remedy of last resort when other legal remedies were no longer available, such as suspension of an award decision following summary proceedings.
For the Court of Justice, the damage resulting from not obtaining a public contract is distinct from the damage resulting from losing an opportunity to compete for a contract. Such damage must also be subject to compensation under the Remedies Directive. The Court was in fact given an opportunity to apply to a public procurement case its existing case law on compensation of damages in tort.
While the Remedies Directive requires that damages can be awarded to persons harmed by a violation of EU public procurement law, it is up to each Member State to set the criteria to determine and evaluate the damage resulting from loss of opportunity, provided that the principles of equivalence and effectiveness are respected.
In this regard, the Court appears to suggest that the contested Slovak provision (Article 17 of Law No. 514/2003) would not meet such requirements because compensable damage only includes "actual damage" and "loss of profit", but not loss of opportunity. The Slovak provision therefore does not provide for the granting of damages to any tenderer who was a victim of a violation of EU public procurement law.
The highest EU jurisdiction finally recalled that national courts must interpret their domestic law as far as possible in conformity with EU law. If necessary, national courts must amend their case law accordingly.
Loss of opportunity under Belgian law
Under Belgian law, illegally evicted tenderers can be indemnified from a loss of opportunity to participate in the award process for a public contract in order to obtain such contract.
In Ingsteel, the tenderer had argued that loss of opportunity and loss of profit were two different heads of claim. The Court of Justice accepted this reasoning. In fact, in its case law on damages as legal remedies for unsuccessful tenderers in the context of tender procedures by the EU’s institutions, bodies, agencies or offices, the Court of Justice also considers loss of opportunity and loss of profit as separate heads of claim. These tender procedures, however, are not subject to the Remedies Directive. More information on legal remedies in EU tenders can be found in our article “Domestic versus EU tender procedures: a double standard.”
On 1 July 2024, the law introducing a new Book 6 of the Civil Code was published – it introduces significant changes to the country's tort liability regime. The new Book 6 will enter into force on 1 January 2025. Among others, Book 6 codifies the indemnification of loss of opportunity while introducing changes in this matter. The judgement in Ingsteel comes at a time when the indemnification of loss of opportunity is about to experience a significant conceptual change.
Before the entry into force of the new Book 6, loss of opportunity will continue to be conceived as a head of claim different and separate from loss of profit. This will no longer be the case with the reform, however. Instead, loss of opportunity will be understood in terms of the uncertainty of the causal link between the reproached illicit behaviour and the damage incurred. If it is uncertain whether the reproached fault (e.g., a breach of public procurement rules) is a necessary condition for the damage (e.g., the loss of profit from not concluding a public contract), compensation for the loss of opportunity is possible. This uncertainty arises because the damage could have occurred even if the person at fault had behaved lawfully. In such cases, the injured party is entitled to partial compensation. This compensation is proportional to the probability that the fault caused the damage.
The decision of the Court of Justice in Ingsteel illustrates the delicate interplay between EU law and domestic law in an area of EU law that is not fully harmonised. This conceptual change brought about by Book 6 of the Civil code goes in the opposite direction to that of the Court of Justice’s case law on extracontractual damages. Yet, we do not foresee any (negative) implications for the effectiveness of the Remedies Directive in Belgium.
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