In case T-48/05, the European Court of First Instance (CFI) ruled on an application for compensation for material and non-material damage sustained as a consequence of errors alleged to have been committed by the European Commission and OLAF in investigating the “Eurostat” case. The CFI ordered the European Commission to pay Mr. Yves Franchet and Mr. Daniel Byk the sum of 56 000 Euros and ordered the Commission to pay the costs.¹ The Commission decided not to appeal.

Three aspects of the ruling that are highlighted in this article relate to the presumption of innocence (I below), the right of the interested party to be informed and heard (II), and the role of the Supervisory Committee of OLAF (III).

I. Presumption of Innocence

Respect for the presumption of innocence requires that no one will be described or treated as guilty of an offence before his guilt has been established by a court.² This principle requires that no representative of the State declares that a person is guilty of an offence before his guilt has been established by a court.³ The applicants claimed that they had been named publicly as guilty of a number of criminal offences, which encouraged the belief in their guilt and prejudiced the assessment of the facts by the French court which examined the allegations, thus breaching the presumption of innocence.

The CFI noted that the ECtHR has emphasised the importance of the choice of words by agents of the State in any statement that they make before a person has been tried and found guilty of an offence.⁴ The ECtHR has recognised that, in the light of Article 10 ECHR, which guarantees freedom of expression, Article 6(2) ECHR does not prevent the authorities from informing the public about criminal investigations in progress, but it requires that this should be done with all the discretion and circumspection necessary if the presumption of innocence is to be respected.⁵ The principle has a corollary in the obligation to maintain confidentiality placed on OLAF pursuant to Article 8(2) of Regulation 1073/99.⁶

The CFI held that the Institutions cannot be prevented from informing the public about investigations in progress. However, in this case, the Commission could not be regarded as having done so with the necessary discretion and reserve, striking a proper balance between the applicants’ interests and those of the institution.⁷ In particular, the Commission breached the principle of the presumption of innocence by issuing a press release on 9 July 2003. By contrast, the CFI found that, although the Director General of OLAF had expressly referred to the applicants when he appeared before the European Parliament’s Committee on Budgetary Control (COCOBU), he cannot be considered to have breached the principle of the presumption of innocence on that occasion.⁸ This indicates that giving information to a committee concerning an investigation is not held to breach the presumption of innocence, whilst untimely press releases might do so if they contain information that implies guilt.

II. Right to be Informed and Heard

The applicants claimed that OLAF had breached the principle of sound administration, the inter partes principle, the rights of the defence and the requirement that investigations of incrimination and exonerating evidence must conform with the ECHR and the EU Charter of Fundamental Rights. The applicants also referred to Article 4 of Decision 1999/396. This article requires that an official must be informed rapidly that he may be personally implicated in an irregularity, as long as this would not be harmful to the investigation. In any event, conclusions referring by name to an official of the European Commission may not be drawn once the investigation has been completed without the interested party having been allowed to express his views on all facts which concern him.⁹

The CFI found that OLAF had committed a sufficiently serious breach of a rule of law¹⁰ conferring rights on individuals by failing to fulfil its obligation to inform the official under investigation. The CFI also ruled that, before information is sent to a judicial authority containing conclusions referring to the concerned person by name, the applicants are entitled to be informed and heard. It does not matter whether the information takes the form of a final report or not: as long as it contains conclusions, the rule applies. OLAF has some discretion in deciding whether to defer informing the person concerned, but no discretion with respect to the procedure to be followed once a decision to defer has been taken. This means that the agreement of the Secretary-General of the Commission should be sought before deferring.¹¹

III. Role of the Supervisory Committee

In accordance with Article 11(7) of Regulation 1073/99, the Director of OLAF must inform the Supervisory Committee of cases requiring information to be forwarded to the judicial authorities of a Member State. The applicants argued that this obligation was breached because the Supervisory Committee had not been informed before OLAF transmitted the information to the Luxembourg and French authorities with the consequence being an infringement of Article 11(7) of Regulation 1073/99 by OLAF. The CFI found that, by infringing Article 11(7) of Regulation 1073/99, OLAF infringed a rule of law conferring rights on individuals.¹² The obligation to inform the Supervisory Committee is unconditional and leaves no margin for discretion. Furthermore, the infringement is sufficiently serious.¹³

The CFI reasoned that the Supervisory Committee’s task is to protect the rights of persons who are the subjects of OLAF investigations. The requirement to consult that Committee before forwarding information to the national judicial authorities is intended to confer rights on the persons concerned.¹⁴

The CFI has therefore interpreted the last sentence in Article 11(7) to go beyond what had it had hitherto been understood to entail in practice. In the future, the Supervisory Committee will have to be consulted before information is transmitted to a judicial authority, rather than simply being informed at the time of the transmission. Presumably, the Supervisory Committee will be able to ask for changes to the wording of the transmission or to veto it. This gives the Supervisory Committee a review role which appears to go beyond a literal interpretation of Article 11(7) of Regulation 1073/99.

IV. Conclusion

There is no doubt that, for OLAF in particular, this case touches a nerve. The three aspects of Case T-48/05 briefly outlined above deal with procedural safeguards, media policy, and supervision of OLAF’s activities. On these three fronts, shortcomings were identified by the CFI.

Whether a claim for damages is the most appropriate context for tackling such issues is a question that can only be posed within the broader debate about the adequacy of the present legal framework and the present relationship of the European Courts of Justice with the ECHR. At present, however, a claim for damages appears to be the only way to bring EC investigation procedure issues to the fore.¹⁵

Case T-48/05 is a provocative case, in the sense that it will lead to changes of procedure and possibly to a change in the role of the OLAF Supervisory Committee in order to protect the rights of EC officials under investigation. The CFI understandably calls for clarification and codification of the investigation procedure, as the CFI and ECJ have done in the competition law field for the past forty years or more. OLAF’s investigation procedure will continue to evolve, as is fitting for a body of only ten years of age.