The CJEU’s decision is likely to have significant implications for ongoing and future proceedings for damages claims under Art. 82 GDPR.
On April 15, 2021, the Austrian Supreme Court (OGH) referred key questions regarding non-material damages for data protection infringements under Art. 82 GDPR to the European Court of Justice (CJEU) for a preliminary ruling under Art. 267 TFEU. So far, a number of claims for non-material damages based on violations of the GDPR have been dismissed by the courts in Austria and Germany because the plaintiffs did not allege or prove any noticeable immaterial impairment. The OGH makes reference to a decision of the German Federal Constitutional Court (BVerfG) dated January 14, 2021 in which the court overturned a decision by the Goslar Local Court (AG). The BVerfG ruled that the AG would have had submit significant questions about damages to the CJEU before making a decision in the final instance. Whilst the OGH disagreed with the finding of the BVerfG, it considered it helpful to refer question to the CJEU in order to ensure a harmonized application of the law within the EU.
Questions to be decided by the CJEU
The OGH referred the following questions to the CJEU for a preliminary ruling:
- Is the mere breach of provisions of the GDPR in and of itself sufficient for the award of damages?
- In addition to the principles of effectiveness and equivalence, does EU law impose further requirements that national courts must observe when assessing damages under Art. 82 GDPR?
- Does non-material damage require an impairment (or other consequence of the infringement of at least some weight) that goes beyond the annoyance caused by the infringement?
The CJEU’s decision on the questions submitted by the OGH regarding the prerequisites for damages is likely to have significant implications for ongoing and future proceedings for damages claims under Art. 82 GDPR.
Experience shows that CJEU decisions are difficult to predict. However, the Luxembourg judges have tended to side with consumers rather than companies on data protection issues in recent years. Cases such as Schrems II show that the judges are not deterred from making “data protection-friendly” decisions even if such decisions raise significant questions of practical implementation.
The number of claims for damages for pain and suffering and court proceedings for damages under Art. 82 GDPR has increased sharply in recent years. The fact that the CJEU will now rule on central issues of immaterial GDPR damages could further encourage claimants, consumer-rights organisations, and litigation financiers to assert corresponding claims and seek to enforce them in court.
Courts in the EU Member States may consider suspending ongoing proceedings if the decision depends on the questions submitted by the OGH.
However, the CJEU referral should not always prevent courts from deciding ongoing cases. They may dismiss claims if an infringement or damage is not sufficiently proven or if the infringement was neither negligent nor intentional. The question of a suspension only arises if all other requirements to grant immaterial damages are fulfilled. Any judgement granting immaterial damage or refusing it with the argument that the proven immaterial damage was not significant enough, will be impacted by the CJEU decision. Courts may also decide not to suspend or make a request to the CJEU if the relevant court is not the last instance in the proceedings.
This post was prepared with the assistance of Johannes Zhou in the Frankfurt office of Latham & Watkins.