Leth v Republic of Austria and another (Case C-420/11)

Development – Environmental impact assessment – Council Directive 85/337/EEC – Assessment of effects of public and private projects on environment – National airport being extended without prior environmental impact assessment (EIA) – Appellant seeking compensation for consequent reduction in value of home due to increased noise – National court seeking preliminary ruling from ECJ – Whether EIA including assessment of effects of project on value of material assets – Whether assessment including protection of individuals against pecuniary damage – Preliminary ruling madeSince 1997, the appellant had owned a property situated within the security zone of Vienna-Schwechat airport. Since the accession of Austria to the European Union, on 1 January 1995, the authorities of the first respondent had, having carried out environmental impact assessments (EIA), consented to and completed several projects relating to the development and extension of the airport. The state of Lower Austria (the second respondent) had expressly stated that no EIA procedure was necessary in relation to the continued development and extensions of that airport.In 2009, the appellant brought an action before the Regional Civil Court in Vienna against the respondents seeking compensation for the decreased value of her property, in particular as a result of aircraft noise, and a declaration that the respondents would be liable for any future damage, including damage to her health, arising from the late and incomplete transposition of Council Directive 85/337/EEC (on the assessment of the effects of certain public and private projects on the environment), and from the failure to carry out an EIA before giving consent to the development of the airport.The court dismissed the action on the ground that the rights relied upon were time-barred. The Higher Regional Court confirmed the dismissal of the claim for compensation but set aside the dismissal in relation to the declaration as to future damage, referring the case back to the first-instance court. The higher court found that the claim for payment of compensation related only to purely pecuniary damage, which was not within the objective of protection pursued by the relevant EU directives, and by national law. However, the application for a declaration of liability in respect of future damage was not time-barred. The appellant appealed. The referring court took the view that the decision on those claims, which were in any event not time-barred in their entirety, depended on whether the duty to carry out an EIA, under both EU and national law, protected the individuals concerned against purely pecuniary damage caused by a project for which no EIA had been carried out. Accordingly the court referred to the European Court of Justice for a preliminary ruling.Held: A preliminary ruling was made. (1) The effect of a development project on the value of material assets was not a factor to be taken into account under Article 3 of Council Directive 85/337/EEC, as amended, when undertaking an environmental impact assessment (EIA). However, pecuniary damage was covered by the objective of protection of the environment pursued by the Directive, in so far as it was the direct economic consequence of the environmental effects of a project.(2) In circumstances where noise exposure resulting from a project covered by Directive 85/337 had significant effects on individuals, in the sense that a home affected by that noise was rendered less capable of fulfilling its function and the individuals’ environment, quality of life and, potentially, health were affected, a decrease in the pecuniary value of that house might be a direct economic consequence of such effects on the environment, which had to be examined on a case-by-case basis. As such economic damage was a direct consequence of such effects, it had to be distinguished from economic damage which did not have its direct source in the environmental effects and which, therefore, was not covered by the objective of protection, such as certain competitive disadvantages.(3) Moreover, the fact that an EIA had not been carried out in breach of Directive 85/337 did not, in principle, by itself, according to EU law, and without prejudice to rules of national law which were less restrictive as regards state liability, confer on an individual a right to compensation for purely pecuniary damage caused by the decrease in the value of his property as a result of the environmental effects of that project. However, it was for the national court to determine whether the requirements of EU law applicable to the right to compensation, including the existence of a direct causal link between the breach alleged and the damage sustained, had been satisfied.W Proksch (Rechtsanwalt) appeared for the appellant; C Pesendorfer and P Cede (acting as agents) appeared for the respondent; C Lind (Rechtsanwalt) appeared for Lower Austria; D Hadrousek and M Smolek (acting as agents) appeared for the Czech Government; D OÕHagan (acting as agent, assisted by E Fitzsimons SC) appeared for Ireland; G Karipsiades (acting as agent) appeared for the Greek Government; G Palmieri (acting as agent, assisted by S Varone) appeared for the Italian Government; I Kalnins and A Nikolajeva (acting as agents) appeared for the Latvian Government; J Beeko and L Seeboruth (acting as agents, assisted by Emma Dixon) appeared for the UK Government; P Oliver and G Wilmsby (acting as agents) appeared for the European Commission.Eileen O’Grady, barrister