Legal Implications of the Hungary's Lawsuit against the Court of Justice

https://doi.org/10.63189/AUAT6286

In July 2024, the Court of Justice (CJEU) decided in case C-123/22 European Commission v. Hungary to impose on Hungary a hitherto unprecedented lump sum fine and record-equalling periodic penalty payment for breaching the EU migration rules (the Penalty Judgment),^[i] about which the CJEU had decided already in 2020 in case C-808/18 European Commission v. Hungary (the Infringement Judgment).^[ii] In December 2025, Hungary brought an action for damages against the CJEU by the General Court (GC) in case T-855/25 Hungary v. Court of Justice of the European Union (Action for Damages).^[iii]

An action for damages brought by a Member State against a CJEU’s judgment brings many hitherto unresolved legal questions. In this contribution, I will discuss the conditions that an action for damages needs to satisfy, both in general and specifically with respect to the one in question.

Admissibility of claims for damages

According to Article 340 of the Treaty on the Functioning of the European Union (TFEU), the EU shall make good any damages caused by its institutions in the performance of their duties. The first question is whether an action for damages may be based on a CJEU judgment, i.e. whether damage may be caused by a judgment of a top EU court, the ultimate guarantor of legality in the EU.

In my opinion, the answer should in principle be affirmative. In the same argument as in Köbler, where the CJEU decided that alleged infringement giving rise to damage may stems from a decision of a court of the Member State adjudicating at last instance,^[iv] the CJEU ruled in Guardian Europe that infringements of EU law arising from a decision of the General Court cannot give rise to liability of the EU,^[v] because an appeal is the appropriate means of correcting errors of law committed in those decisions.^[vi] Conversely, the CJEU, against the judgments of which there is no possibility to appeal, should be included, as are the Member States’ top courts. Admittedly, the CJEU has not decided in Guardian Europeexplicitly that an action for damages against the CJEU’s decision is admissible, as it was not the issue in that case, the entire logic of the judgment nonetheless supports this conclusion.

Legal problems may still be connected with further requirements, specifically, that the act giving rise to damage needs to be “of an unlawful nature”.^[vii] There needs to be a breach of a rule of EU law in order for the EU to incur liability. But what institution has the power to question the lawfulness of judgments of the CJEU, the EU’s ultimate arbiter on legality? May it be the General Court, that is in essence the court of first-instance, subject to review of the CJEU?

As an analogy, we may again refer to the Köbler case, because in case of non-contractual liability of member States, this was not perceived as an obstacle to damages claims. On the contrary, the CJEU argued that the very fact that the judgment is final necessitates the possibility to claim damages: “a court adjudicating at last instance is by definition the last judicial body before which individuals may assert the rights conferred on them by EU law. […] [S]ince an infringement of those rights by a final decision of such a court cannot […] normally be corrected, individuals cannot be deprived of the possibility of rendering the State liable in order in that way to obtain legal protection of their rights“.^[viii] This leads me to the conclusion that claims for damages based on an alleged breach of law by the CJEU are in principle admissible.

Second legal issue concerning admissibility stems from the fact that actions for damages are typically connected with individuals. The CJEU’s case-law consistently refers to applicants as to individuals. The rules of law breached need to be intended to confer rights on individuals. May a Member State rely on such provisions? In my opinion, it may. The TFEU itself does not limit the potential claimants in any way. The claims in law on which the Hungarian Action for Damages is based are all essentially fair trial guarantees. These are definitely rules intended to confer rights on individuals (see in more detail below), and I can see no reason why such essentially procedural rights would not merit protection in case of a public authority.

I thus take the position that even though first of its kind, the Hungarian Action for Damages should be regarded as admissible.

The EU’s non-contractual liability

The conditions that must be satisfied in order for the EU to incur liability are not specified in the TFEU, which only refers to general principles common to the laws of the Member States (Art. 340 TFEU). At the same time, the conditions for non-contractual liability for breach of EU law shall be the same for both the EU and the Member States.^[ix] They include “the existence of a sufficiently serious breach of a rule of law intended to confer rights on individuals, the fact of damage and the existence of a causal link between the breach of the obligation resting on the author of the act and the damage sustained by the injured parties”.^[x] To put it in a different order, there must be a (i) breach of EU law, (ii) which is intended to confer rights on individuals and is (iii) sufficiently serious, (iv) attributable to the EU and (v) causing (vi) damage to the applicant.

In the specific context of the Action for Damages, it cannot be disputed that a CJEU’s judgment is attributable to the EU. The calculation of damages is also clearly understandable in this specific case, and the rules on causation apply in the same way as in any other case. In the rest of this post, I would therefore like to concentrate only on the question whether the alleged infringement satisfies the criteria required by the case-law on EU liability.

Sufficiently serious breach of law

The Action for Damages is based on three pleas in law. The first alleges that the CJEU acted in breach of the right to a fair trial under Article 47 (2) of the Charter of Fundamental Rights of the European Union. According to the second, the CJEU acted in breach of the principle of equality between the Member States under Article 4 (2) of the Treaty on European Union. And finally, the third plea alleges that the CJEU acted in breach of the principles of legal certainty, foreseeability and transparency.^[xi] These are in essence fundamental principles of EU law, considered to be rules conferring rights in individuals.^[xii] This condition therefore seems to be satisfied.

Was the alleged breach sufficiently serious? The details of the pleas in law are unfortunately not available. According to the Action for Damages, the CJEU “has manifestly and gravely disregarded the limits on its discretion under Article 260 (2) TFEU“, thus committing a „sufficiently serious violation of EU law“.^[xiii] This condition cannot be analysed without detailed knowledge of the Action for Damages itself, we may nonetheless discuss the factors limiting the CJEU’s discretion, as the putative infringement would arguably stem overstepping this limitation.

First of all, what would actually constitute a “sufficiently serious” breach of law in case of a judgment? We don’t have a specific benchmark with regard to liability of the EU, we may nonetheless rely on jurisprudence concerning states’ liability, according to which the liability is “incurred only in the exceptional case where the court has manifestly infringed the applicable law”.^[xiv] A “manifest breach of the case-law of the Court in the matter” would suffice.^[xv] The factors to be taken into account include “the degree of clarity and precision of the rule infringed, the scope of the room for assessment that the infringed rule allows for national authorities, whether the infringement and the damage caused were intentional or involuntary, [and] whether any error of law was excusable or inexcusable“.^[xvi] It needs to be admitted that the success rate of such claims for damages is extremely low.^[xvii]

Interestingly, the CJEU links the conditions for state liability for judiciary to liability for legislature, enjoying broad discretion;^[xviii] in the letter case, the liability arises only where the state has “manifestly and gravely disregarded the limits on its discretion”.^[xix] This interpretation could be of particular importance with regard to the Action for Damages, where the extraordinary level of fines is criticised.

The CJEU’s discretion concerning fines is unique. Art. 260 (2) TFEU only requires fines to be “appropriate in the circumstances”.^[xx] Setting fine in this way has rightly been criticised in the academia: “without yardsticks, benchmarks, or points of reference, [it] may […] prove hazardous. In the absence of rules set out in advance, what may seem fair to one, often seems unfair to another”.^[xxi] This method is said to be “in particular vulnerable in light of the principles of transparency, predictability and legal certainty”,^[xxii] which are exactly those principles on which the Action for Damages relies.

Still, admittedly, it would be hard to establish that the CJEU, enjoying such a “wide discretion”,^[xxiii] manifestly and gravely disregarded its limits.

Final Remarks

Action for damages by a Member State against the CJEU has not been brought before. Before the merits, its admissibility is sure to be discussed. I tried to outline in this contribution the arguments why I believe such an action is admissible.

Concerning the merits, the information currently available do not enable a more detailed analysis. The benchmark for establishing the EU’s liability is nonetheless very high. The Action for Damages would in effect need to demonstrate that the CJEU manifestly and gravely disregarded the limits of its discretion, something which was successfully done only in a few cases in the past.

^[i] CJEU, C-123/22, 13 July 2022 (Penalty Judgment).

^[ii] CJEU, C-808/18, 17 December 2020.

^[iii] Case T-855/25: Action brought on 15 December 2025 – Hungary v Court of Justice of the European Union(C/2026/1223), 9 March 2026, available at: https://eur-lex.europa.eu/legal-content/EN/TXT/?uri=CELEX:62025TN0855 (Action for Damages).

^[iv] CJEU, C-224/01, 30 September 2003, par. 50.

^[v] CJEU, C-447/17 P, 5 September 2019, par. 84.

^[vi] Ibid, par. 83.

^[vii] CJEU, C-120/06 P and C-12/06 P, 9 September 2008, par. 166.

^[viii] CJEU, C-447/17 P, 5 September 2019, par. 75.

^[xix] Tridimas (2001), p. 322.

^[x] CJEU, C-65/21 P, 16 June 2022, par. 43.

^[xi] Action for Damages.

^[xii] Kellerbauer, Klamert & Tomkin (2024), p. 2681.

^[xiii] Action for Damages.

^[xiv] CJEU, C-224/01, 30 September 2003, par. 53; emphasis added.

^[xv] Ibid, par. 56.

^[xvi] CJEU, C-168/15, 28 July 2016, par. 25.

^[xvii] Chalmers, Davies, Monti & Heyvaert (2004), p. 304.

^[xviii] Beutler (2009), p. 798.

^[xix] CJEU, C-46/93 and C-48/93, 5 March 1996, par. 55.

^[xx] Koznerov (2014), p. 312: According to the author, Article 260 (2) TFEU „is exceptionally meagre in content. In fact, it does not say anything about the magnitude of fines, or how they should be calculated“.

^[xxi] Kornezov (2014), p. 324. See also Pohjankoski (2025), p. 97.

^[xxii] Kornezov (2014), p. 324.

^[xxiii] CJEU, C-241/11, 25 June 2013, par. 42.

References

Beutler, B. (2009), ‘State liability for breaches of Community law by national courts: Is the requirement of a manifest infringement of the applicable law an insurmountable obstacle?’, Common Market Law Review, 46 (3), pp. 773 – 804

Chalmers, D., Davies, G., Monti, G., Heyvaert, V. (2024), European Union Law. Fifth edition, Cambridge: Cambridge University Press, 1100 p.

Kellerbauer, M., Klamert, M, Tomkin, J. (2024), The EU Treaties and the Charter of Fundamental Rights. A Commentary. Second edition. Volume II, Oxford: Oxford University Press, 2744 p.

Kornezov, A. (2014), ‘Imposing the right amount of sanctions under Article 260 (2) TFEU: Fairness v. predictability, or How to “bridge the gaps”’, Columbia Journal of European Law, 20 (3), pp. 307 - 331

Pohjankoski, P. (2025), ‘Bolstering federal execution of EU law: Case C-123/22 Commission v. Hungary (Reception of applicants for international protection II)’, Maastricht Journal of European and Comparative Law, 32 (1), pp. 89 - 100

Tridimas, T. (2001), ‘Liability for breach of Community law: Growing up and mellowing down?’, Common Market Law Review, 38 (2), pp. 301-332