Leth v Republic of Austria

The CJEU (Fourth Chamber) has given judgment in the case of Leth v Republic of Austria, which concerns the extent to which Environmental Impact Assessment (“EIA”) covers the effects of a development – in that case an airport - on property prices.

The CJEU held that because of the environmentally-protective purpose of Directive 85/337 on EIA, EIA was not required to include the assessment of the effects of a project on the pecuniary value of material assets (including buildings).  Rather, it was necessary to take into account only those effects which, by their very nature, were also likely to have an impact on the environment – such as the direct and indirect effects of noise on the health of human beings living in a property affected by an airport.

The Court went on to consider the related question of whether a failure properly to carry out an EIA might give rise to an action for damages by a person adversely affected by the project in question.  The CJEU referred to the Francovich conditions (i) that the rule of EU law in question must be intended to confer rights on individuals; (ii) that the breach of the rule must be sufficiently serious; (iii) that there must be a direct causal link between the breach and the loss or damage sustained.  It noted that the existence of a direct causal link was an ‘indispensable condition governing the right to compensation’ and continued as follows (paras 46-47):

“To that end, the nature of the rule breached must be taken into account. In the present case, that rule prescribes an assessment of the environmental impact of a public or private project, but does not lay down the substantive rules in relation to the balancing of the environmental effects with other factors or prohibit the completion of projects which are liable to have negative effects on the environment. Those characteristics suggest that the breach of Article 3 of Directive 85/337, that is to say, in the present case, the failure to carry out the assessment prescribed by that article, does not, in principle, by itself constitute the reason for the decrease in the value of a property.

Consequently, it appears that, in accordance with European Union law, the fact that an environmental impact assessment was not carried out, in breach of the requirements of Directive 85/337, does not, in principle, by itself 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 environmental effects. …”

The judgment may be found here:
http://curia.europa.eu/juris/document/document.jsf?text=&docid=135025&pageIndex=0&doclang=EN&mode=lst&dir=&occ=first&part=1&cid=1765662

Emma Dixon appeared for the United Kingdom Government.