Advocates Library Parliament House Edinburgh EH1 1RF
In late 2014 the CJEU upheld an argument that a particular provision (the so-called “best value rule") of the EU Regulations governing the single farm payment scheme was unlawful. Sir Crispin Agnew of Lochnaw, Bart. QC took the case to Luxembourg. Michael Howlin QC teamed up with Sir Crispin at an earlier stage when the case was before the Scottish Land Court. Michael’s note on the European judgment is available below...
THE SINGLE FARM PAYMENT SCHEME
SUCCESS IN THE EUROPEAN COURT
1. Last year Michael Howlin QC teamed up with Sir Crispin Agnew of Lochnaw, Bart., QC to launch an attack in the Scottish Land Court on the lawfulness of the manner in which the Scottish Government had calculated the "single farm payment" to which their client was entitled (Feakins v. The Scottish Ministers (2013) SLC 11/12). It was in fact a two-pronged attack, with Sir Crispin dealing with the the Scottish Ministers' interpretation of Article 18(2) of the applicable EU Commission regulation and Michael Howlin arguing that, if that article meant what the Scottish Ministers said it meant, then the European Commission had no power to enact it.
2. In a rare example of a reference from a Scottish court (and a unique example of such a reference from the Scottish Land Court), the Land Court referred to the CJEU several questions going to the proper interpretation and to the legality of Article 18(2). On 19 June 2014 Advocate General Kokott delivered an opinion favouring the argument that Article 18(2) was unlawful. That opinion has now been upheld by the CJEU (Case C-335/13 Robin John Feakins v The Scottish Ministers (6 November 2014, ECLI:EU:C:2014:2343).
3. The single farm payment scheme is too complicated to explain in full here. In essence, what it does is to take a multiplicity of payments which used to be paid to farmers in respect of individual farming activities (cultivating rice, nuts, olives, cotton, tobacco, hops … , rearing sheep, goats, dairy cattle …) and convert them into a single payment (hence the name!) payable to the farmer himself in order to support the farmer, rather than the activities. In other words, the new scheme supports the producer, not the product. In Eurospeak, it is "decoupled" from production.
4. The scheme works by allocating to the farmer concerned a "reference amount" for each of the activities he carried on under the old schemes during a three-year reference period and averaging those amounts out so as to arrive at a sum (in Euros) per qualifying hectare to be paid under the new scheme. The old reference amount is in theory easy to ascertain, because you look at the EU grants and subsidies that the farmer actually received for this or that activity and tot them up. The difficulty is that, during the three-year qualifying period, the payments received by a given farmer may have been distorted (and, in particular, lessened) by exceptional circumstances amounting to force majeure - such as the foot and mouth outbreak in the UK in 2001 - a state of affairs that was compensated for by allocating additional reference amounts (hardship payments) to the farmer. Article 18(2) of the regulation provided (in layman's terms) that if a farmer had qualified for two or more hardship payments of a specific description, he was not entitled to cumulate them for the purpose of calculating his single farm payment: instead, he was to have the "benefit" of whichever hardship payment was the highest (the so-called "best value" rule). The trouble with this was that, as not all hardship payments were included under the "best value" rule, one farmer could find himself, on the particular facts of his case, restricted to one single hardship payment whilst another farmer in essentially similar circumstances would be under no such restriction. It is precisely for this reason that the CJEU declared (in highly technical language which we will not attempt to simplify) that:
"Article 18(2) of Regulation No 795/2004, as amended by Regulation No 1974/2004, is invalid in so far as it precludes a farmer who has suffered exceptional circumstances, within the meaning of Article 40 of Regulation No 1782/2003, from benefiting from both an adjustment of his reference amount under that provision and an additional reference amount from the national reserve under one of Articles 19 to 23a of Regulation No 795/2004, as amended by Regulation No 1974/2004, whereas a farmer who has not faced such circumstances and who has been allocated a reference amount calculated pursuant to Article 37(1) of Regulation No 1782/2003 may receive both that amount and a reference amount from the national reserve under one of Articles 19 to 23a of Regulation No 795/2004, as amended by Regulation No 1974/2004."
5. By way of explanation, what the Court has done is to start by finding that Article 18(2) means what the Scottish Ministers (and for that matter the Commission) say it means and then go on to hold that, precisely because it does have that meaning - a meaning which involves failing to give equal treatment to farmers in essentially similar circumstances - the Commission had no power to enact it in its present form. So the upshot is that the Article is invalid in so far as it leads to unequal treatment. From the practitioner's point of view, the significance of the case goes far beyond the single farm payment scheme, because the Court's reasoning is capable of being replicated in numerous other areas of EU law which are entirely unrelated to the Common Agricultural Policy.
6. A judgment of the CJEU is declaratory in nature, which means that it speaks, not from the date of the judgment (ex nunc), but rather from the earlier date of the Treaty provision, EU legislation or administrative act in question (ex tunc). However, the Court has power to restrict the back-dating effect of its judgment. In this case, it chose not to exercise that power. This means that in certain Member States, including the UK, there may be a number of individual decisions on the application of Article 18(2) which, subject to any relevant rules of prescription or time-bar, are now subject to judicial review.
7. Michael Howlin says: Having stood shoulder to shoulder with Sir Crispin in the Scottish Land Court, I am very grateful to him for having taken the argument to Luxembourg and won it. If this case is an example of anything at all, it is an example of the need to see beyond the "black letter" wording of EU legislation and get to grips with the underlying principles of EU law. It also exemplifies the benefits of comparing different language versions of the same piece of legislation, as the various versions often differ slightly (and sometimes more than slightly) in content and, by their very differences, throw light on the true interpretation of the legislation: the true interpretation must, of course, be the same whatever the language. It is also a timely reminder that, in approaching questions as to the interpretation and - as here - the legality of EU legislation, the CJEU uses techniques of judicial reasoning which, being partly home-grown and partly rooted in French and German administrative law, tend not to be within the comfort zone of lawyers trained in the common law or Scottish traditions. Those who are interested in the legal analysis which led to the European Court's conclusion of illegality should read paragraphs 46 to 60 of the judgment and, for more detail, paragraphs 47 to 102 of the Advocate General's opinion.
8. Sir Crispin says: I am grateful to Michael for coming up with what turned out - in Luxembourg - to be the winning argument.
9 February 2015
 Commission Regulation (EC) No 795/2004 of 21 April 2004 laying down detailed rules for the implementation of the single payment scheme provided for in Regulation (EC) No 1782/2003 establishing common rules for direct support schemes under the common agricultural policy and establishing certain support schemes for farmers (OJ 2004 L 141, p.1).
 New cases such are no longer published in the European law Reports (ECR). Instead, each judgment and each opinion has a dedicated reference number in the Electronic Case Law Index (ECLI).
 For a masterly summary of the legislation, see the lucid judgment of David Richards LJ, giving the unanimous opinion of the (English) Court of Appeal in Regina (TA Gwillim and Sons) -v.- Welsh Ministers  EWCA Civ 1048,  1 WLR 966.