20 June 2023 (*)

(Action for annulment – State aid – Irish legal sector – Payment of the fees of a client’s former solicitor by that client’s new solicitor – Rejection of a complaint – Decision finding that there is no State aid – State resources – Manifest inadmissibility in part – Action in part manifestly lacking any foundation in law)

In Case T‑771/22,

NO, represented by E. Smartt, Solicitor,

applicant,

European Commission, represented by I. Barcew and L. Nicolae, acting as Agents,

defendant,

THE GENERAL COURT (Fifth Chamber),

composed of J. Svenningsen, President, J. Martín y Pérez de Nanclares (Rapporteur) and M. Stancu, Judges,

Registrar: V. Di Bucci, Registrar,

having regard to the written part of the procedure,

makes the following

1By his action based on Article 263 TFEU, the applicant, NO, asks the General Court to annul the decision of the European Commission of 27 September 2022 rejecting his complaint of 12 September 2022 (‘the contested decision’).

Background to the dispute

2The applicant is a solicitor established in Ireland engaged in general practice with an emphasis on litigation in defence of the right of injured persons to obtain compensation for their injury. In particular, he works before the High Court of Ireland.

3In April 2014, in the context of a dispute concerning a personal injury compensation claim, a solicitor informed his client that the defendant proposed to pay the client the sum of EUR 25 000, including costs, by way of compensation. The solicitor told his client that since his costs and fees amounted to EUR 35 000, his client would still owe him (the solicitor) EUR 10 000 if he accepted the offer of compensation.

4The client rejected the offer of compensation made by his solicitor (‘the former solicitor’) and changed solicitor. The applicant thus became his new solicitor. At the end of the trial conducted by the applicant, the client obtained compensation in the amount of EUR 55 000, plus costs.

5At the same time, the former solicitor complained to the Law Society of Ireland (‘the Law Society’), claiming, in essence, that the applicant was required to pay him the sum corresponding to the costs of the parties, or part thereof, recovered by the client in the context of his action for damages.

6On 1 October 2015, the client lodged a complaint with the Law Society against the actions of the former solicitor, who had obtained a judgment from an Irish court for the payment of his costs and fees by the client. On that occasion, he stated that he was the beneficiary of the costs recovered and that the applicant had informed him of his obligations towards the former solicitor.

7On 13 October 2015, the Law Society rejected the client’s complaint, stating, inter alia, that it was not competent to issue directions concerning the enforcement of the judgment obtained by the former solicitor.

8By letter of 14 February 2020, the Law Society issued an order directing the applicant to reimburse his competitor, the former solicitor, for his fees relating to his work for the client.

9In November 2020, the Law Society lodged a complaint with the Solicitors Disciplinary Tribunal (Ireland; ‘the SDT’) against the applicant in the proceedings between him and the former solicitor concerning the reimbursement of fees relating to the latter’s work for the client. On 18 January 2022, the SDT held the complaint of the Law Society to be admissible and found that there were, prima facie, serious charges against the applicant.

10On 12 September 2022, the applicant, using the form set out in Annex IV to Commission Regulation (EC) No 794/2004 of 21 April 2004 implementing Council Regulation (EU) 2015/1589 laying down detailed rules for the application of Article 108 [TFEU] (OJ 2004 L 140, p. 1), lodged a complaint with the Commission (‘the complaint’). By that complaint, the applicant sought to complain of an unlawful State aid scheme implemented by the SDT.

11According to the applicant, the procedure before the SDT, described in paragraph 9 above, resulted in the grant of unlawful State aid to the former solicitor (‘the measure at issue’). It forms part of a scheme consisting, in particular, in a transfer of money from the applicant to business competitors and an improvement in the business and market conditions of his competitors. Thus, the objective of that scheme, implemented by the SDT through its decisions, is to benefit a solicitor member of the Law Society and competitor of the applicant (and other solicitors) through the support provided by the Law Society in the context of its action against the applicant for the recovery of his fees from the applicant.

12By the contested decision, the Commission declined the applicant’s request. Principally, it considered, in essence, that the complaint did not establish that the measure at issue constituted State aid within the meaning of Article 107(1) TFEU, since he did not show that that measure involved the transfer of State resources. In the alternative, the Commission stated that, even if the measure complained of by the applicant were to be regarded as State aid, it should have been regarded as coming within the scope of Article 3 of Commission Regulation (EU) No 1407/2013 of 18 December 2013 on the application of Articles 107 and 108 of the Treaty on the Functioning of the European Union to de minimis aid (OJ 2013 L 352, p. 1), with the result that it could not have constituted unlawful State aid. Lastly, the Commission observed that, as regards future decisions of the SDT ordering similar fees to be paid to other lawyers, they could not be regarded as unlawful State aid within the meaning of Article 1(f) of Council Regulation (EU) 2015/1589 of 13 July 2015 laying down detailed rules for the application of Article 108 of the Treaty on the Functioning of the European Union (OJ 2015 L 248, p. 9), since they had not yet been implemented. In those circumstances, the Commission concluded that it did not intend to examine or investigate the matter further.

13On 28 September 2022, the applicant submitted observations to the Commission on the contested decision, asking it to reconsider its position on the measure at issue.

14On 10 October 2022, the applicant sent a letter of formal notice to the Commission requesting it to adopt a position on his letter of 28 September 2022.

15By letter of 27 October 2022, the Commission confirmed its position as expressed in the contested decision (‘the letter of 27 October 2022’).

Forms of order sought

16The applicant claims the Court should:

–annul the contested decision and, if necessary, the letter of 27 October 2022;

–order the Commission to pay the costs.

17Under Article 126 of the Rules of Procedure of the General Court, where it is clear that the Court has no jurisdiction to hear and determine an action or where the action is manifestly inadmissible or manifestly lacking any foundation in law, the Court may, on a proposal from the Judge-Rapporteur, at any time decide to give a decision by reasoned order without taking further steps in the proceedings.

18In the present case, the Court considers that it has sufficient information from the documents before it and has decided, pursuant to Article 126 of the Rules of Procedure, to give a decision without taking further steps in the proceedings.

19In support of his action, the applicant raises six pleas in law alleging, in essence: (i) a manifest error of assessment and infringement of Article 24(2) of Regulation 2015/1589; (ii) a manifest error of assessment in the examination of the lawfulness of the aid in the light of the conditions laid down by Regulation No 1407/2013; (iii) the existence of serious difficulties and infringement of the applicant’s procedural rights; (iv) infringement of the obligation to state reasons; (v) failure to take into account Ireland’s failure to fulfil its obligation to guarantee the applicant’s fundamental rights, in violation of the second subparagraph of Article 19(1) TEU; and (vi) infringement of the principle of non-discrimination, the freedom to provide services and the principle of equality before the law.

First plea: manifest error of assessment and infringement of Article 24(2) of Regulation 2015/1589

20The first plea is divided into two parts.

First part of the first plea: manifest error of assessment

21By the first part of the first plea, the applicant submits that the Commission incorrectly categorised the measure at issue as a ‘sum of money’ and not as an ‘advantage’, that it implies that the measure at issue was not attributable to Ireland, that it denies, in its letter of 27 October 2022, that the applicant’s complaint is a complaint, that it errs as regards the precedent-setting effect of a decision of the SDT and that it adopts a statement of reasons which is non-existent, tautological or contradictory.

22It should be borne in mind that, under the first paragraph of Article 21 of the Statute of the Court of Justice of the European Union, which is applicable to proceedings before the General Court by virtue of the first paragraph of Article 53 of that statute, and under Article 76 of the Rules of Procedure, the application must state, inter alia, the subject matter of the dispute, the pleas in law and arguments relied on and a summary of those pleas in law.

23Those particulars must be sufficiently clear and precise to enable the defendant to prepare its defence and the Court to rule on the action, if necessary without any further information. In order to guarantee legal certainty and the sound administration of justice, it is necessary, for an action to be admissible, that the basic legal and factual particulars on which it is based be indicated, at least in summary form, coherently and intelligibly in the text of the application itself (see, to that effect, order of 28 April 1993, De Hoe v Commission, T‑85/92, EU:T:1993:39, paragraph 20 and the case-law cited). The application must, accordingly, specify the nature of the grounds on which the action is based, with the result that a mere abstract statement of the grounds does not satisfy the requirements of the Rules of Procedure. Similar requirements are called for where a submission is made in support of a plea in law (see judgment of 25 March 2015, Belgium v Commission, T‑538/11, EU:T:2015:188, paragraph 131 and the case-law cited; order of 27 November 2020, PL v Commission, T‑728/19, not published, EU:T:2020:575, paragraph 64).

24It follows that the applicant is required to set out in a sufficiently systematic manner the arguments relating to each plea which it puts forward, and the Court cannot be obliged, due to a lack of structure in the application or lack of rigour on the part of the applicant, to reconstruct the legal structure intended to support a plea by bringing together various diffuse elements of the application, at the risk of reconstructing that plea by giving it a scope which it did not have in the mind of that party. To decide otherwise would be contrary to the sound administration of justice, the principle that the subject matter of an action is delimited by the parties and the defendant’s rights of defence (judgment of 2 April 2019, Fleig v EEAS, T‑492/17, EU:T:2019:211, paragraph 44 (not published)).

25In the present case, the applicant merely sets out, in the context of the first part of the first plea, the complaints which he intends to raise against the contested decision, without elaborating on them. In that sense, he has not put forward any argument which makes it possible to understand why, in his submission, the Commission ought to have categorised the measure at issue as an ‘advantage’ and not as a ‘sum of money’. Nor does he specify the consequences, for the legality of the contested decision, of the fact that the Commission implied, incorrectly, that the measure at issue was not attributable to Ireland, or the fact that it denied, in its letter of 27 October 2022, that the applicant’s complaint was a complaint. Nor, lastly, did he explain the nature of the Commission’s error as regards the precedent-setting effect of a decision of the SDT, or how the statement of reasons for the contested decision was non-existent, tautological or contradictory.

26In those circumstances, the applicant has not enabled the Commission to prepare its defence or the Court to give judgment, with the result that the first part of the first plea must be rejected as manifestly inadmissible.

Second part of the first plea: infringement of Article 24(2) of Regulation 2015/1589

27By the second part of the first plea, the applicant submits that the Commission disregarded the requirements of Article 24(2) of Regulation 2015/1589 in so far as, in the contested decision and in its letter of 27 October 2022, the Commission did not invite the applicant to submit his observations within a specified period.

28Article 24(2) of Regulation 2015/1589 provides:

‘Any interested party may submit a complaint to inform the Commission of any alleged unlawful aid or any alleged misuse of aid. To that effect, the interested party shall duly complete a form that has been set out in an implementing provision referred to in Article 33 and shall provide the mandatory information requested therein.

Where the Commission considers that the interested party does not comply with the compulsory complaint form, or that the facts and points of law put forward by the interested party do not provide sufficient grounds to show, on the basis of a prima facie examination, the existence of unlawful aid or misuse of aid, it shall inform the interested party thereof and call upon it to submit comments within a prescribed period which shall not normally exceed [one] month. […]

The Commission shall send a copy of the decision on a case concerning the subject matter of the complaint to the complainant.’

29In the present case, first, it is not disputed that the applicant duly completed the form and provided the mandatory information requested therein. In addition, the applicant produced that form as an annex to a document in which he set out his arguments at length, seeking to establish the existence of unlawful State aid. He has also produced other documents to support his thesis.

30Second, it should be borne in mind that, according to settled case-law, categorisation as State aid within the meaning of Article 107(1) TFEU requires all the conditions set out in that provision to be satisfied. Thus, in order for a measure to be categorised as State aid, first, there must be an intervention by the State or through State resources; second, that intervention must be liable to affect trade between Member States; third, it must confer an advantage on the recipient; and, fourth, it must distort or threaten to distort competition (see judgment of 12 November 2013, MOL v Commission, T‑499/10, EU:T:2013:592, paragraph 51 and the case-law cited).

31In the present case, as noted in paragraph 12 above, the Commission adopted the contested decision after having examined the applicant’s complaint and having found, principally, that it did not establish the existence of State resources, as a result of which, in accordance with the case-law cited in paragraph 30 above, nor could the measure at issue be categorised as State aid.

32Since the measure at issue cannot be categorised as State aid, nor, a fortiori, can it be held to be unlawful aid or give rise to misuse of aid within the meaning of Article 1(f) and (g) of Regulation 2015/1589.

33Thus, the present case concerns a complaint which does not come within the scope of Article 24(2) of Regulation 2015/1589 on the ground that it does not concern the aid or detailed rules for implementing aid referred to in that provision.

34In those circumstances, the Commission was not required to inform the applicant of its intention to reject the complaint before adopting the contested decision.

35Since the applicant does not put forward any additional argument relating to infringement of Article 24(2) of Regulation 2015/1589 and the content of the contested decision leaves no room for doubt as to the Commission’s position on the question of the existence of State resources, this part of the plea must be rejected as manifestly unfounded.

36Accordingly, the first plea must be rejected as in part manifestly inadmissible and in part manifestly unfounded.

Second plea: manifest error of assessment in the examination of the lawfulness of the aid in the light of the conditions laid down in Regulation No 1407/2013

First, the applicant submits that the Commission conflated ‘unlawful aid’ and ‘notifiable aid’ and, in finding that the measure at issue was not notifiable, concluded in essence that it was not unlawful or that it was lawful. It also misinterpreted, but not without some justification, the allegations admitted by the SDT into its processes. In its letter of 27 October 2022, the Commission essentially repeated the errors in the contested decision. In particular, it conflated the SDT processes, which confer an advantage on the beneficiaries, with the issue of payment of a sum of money by the applicant.

39Second, the applicant claims that the shortcomings in the contested decision resulting from the insufficient and incomplete examination by the Commission demonstrate that, in the course of that examination, the Commission encountered serious difficulties which should have led it to open a formal investigation procedure. That procedural irregularity justifies the annulment of the contested decision, since the Commission’s administrative procedure could have had a different outcome had it not been for that irregularity.

40In that regard, suffice it to note that, by his second plea, the applicant seeks to challenge a ground of the contested decision put forward in the alternative by the Commission. As noted in paragraph 12 above, the main ground put forward by the Commission for rejecting the applicant’s complaint is the absence of State resources, which means that the measure at issue cannot be regarded as State aid within the meaning of Article 107(1) TFEU.

41The ground relating to the application of Article 3 of Regulation No 1407/2013 was put forward by the Commission only for the sake of completeness, in the event that there was State aid, which turned out not to be the case here.

42It should be borne in mind that, according to settled case-law, an incorrect ground need not lead to annulment of the measure thereby vitiated if it is superfluous and there are other grounds which provide a basis for it (see judgment of 7 April 2011, Greece v Commission, C‑321/09 P, not published, EU:C:2011:218, paragraph 61 and the case-law cited).

43Consequently, the second plea must be held to be ineffective.

Third plea: the existence of serious difficulties and infringement of the applicant’s procedural rights

44The applicant complains that the Commission failed to initiate a formal investigation procedure despite the serious difficulties and infringed his procedural rights to submit comments on aspects which raise serious doubts as to the compatibility of the aid with the internal market. In that regard, the applicant claims that the allegations made against him by the Law Society before the SDT are purely financial in nature and do not constitute overriding reasons in the public interest justifying a restriction on the exercise of regulated professions. He adds that, although he did not cite Article 6(3) of Directive (EU) 2018/958 of the European Parliament and of the Council of 28 June 2018 on a proportionality test before adoption of new regulation of professions (OJ 2018 L 173, p. 25) in his complaint, the Commission must be regarded as having informed itself of its relevance, it being applicable law, and to have misdirected itself in so doing.

45First of all, it is clear that the applicant does not specify the nature of the serious difficulties which ought to have led the Commission to initiate the formal investigation procedure, with the result that, under the provisions and case-law referred to in paragraphs 22 to 24 above, that complaint must be rejected as manifestly inadmissible.

46Next, as regards the infringement of the applicant’s procedural rights in that he was not invited to submit observations, that complaint relates to the second part of the first plea in law. Thus, for the same reasons as those set out in paragraphs 28 to 35 above, that complaint must be rejected as manifestly unfounded.

47In addition, as regards the complaint relating to the nature of the allegations made against the applicant by the Law Society, it must be noted that that complaint lacks clarity, with the result that, under the provisions and case-law referred to in paragraphs 22 to 24 above, it must be rejected as manifestly inadmissible.

48Lastly, the applicant is clearly not justified in complaining that the Commission misapplied Article 6(3) of Directive 2018/958 when, first, he himself admits that he did not cite it in his complaint and, second, that article is not cited in the contested decision.

49In the light of the foregoing, the third plea must be rejected as being in part manifestly inadmissible and in part manifestly unfounded.

Fourth plea: infringement of the obligation to state reasons

5049

51The applicant submits that the Commission infringed its obligation to state reasons in so far as, first, it failed to examine whether the aid was non-discriminatory and complied with the principles of freedom to provide services and freedom of establishment; second, it failed to assess the value of the competitive advantage granted to the former solicitor or other competitors of the applicant, failed to provide reasons for its assessment of the amount of the aid and failed to assess the harm caused to the applicant; and, third, it failed to examine the impact of the abusive proceedings brought against the applicant on the applicant’s former solicitor or other competitors of the applicant.

5250

53It is settled case-law that the statement of reasons required by Article 296 TFEU must be appropriate to the measure at issue and must disclose in a clear and unequivocal fashion the reasoning followed by the institution which adopted the measure in question in such a way as to enable the persons concerned to understand the justification for the measure and the court to ascertain whether it is well founded. The statement of reasons must be assessed on the basis of the circumstances of the case, and in particular the content of the measure at issue, the nature of the reasons given and the interest which its addressees, or other persons concerned, may have in obtaining explanations. It is not, however, necessary for the reasoning to go into all the relevant facts and points of law, since the question whether the statement of reasons meets the requirements of Article 296 TFEU is assessed taking into account both the wording of that measure and its legal and factual context (judgments of 13 March 1985, Netherlands and Leeuwarder Papierwarenfabriek v Commission, 296/82 and 318/82, not published, EU:C:1985:113, paragraph 19, and of 21 July 2011, Alcoa Trasformazioni v Commission, C‑194/09 P, EU:C:2011:497, paragraph 96). It is, thus, sufficient if the institution which adopted the measure sets out the facts and the legal considerations having decisive importance in the context of its decision (judgments of 14 July 1972, Cassella Farbwerke Mainkur v Commission, 55/69, EU:C:1972:76, paragraphs 22 and 23, and of 6 March 2003, Westdeutsche Landesbank Girozentrale and Land Nordrhein-Westfalen v Commission, T‑228/99 and T‑233/99, EU:T:2003:57, paragraph 280).

5451

55In the present case, in the contested decision, the Commission explained why, in its view, the measure at issue was not State aid, to wit, that there was no transfer of State resources.

5652

57As noted in paragraph 30 above, it should be borne in mind that, according to settled case-law, categorisation as State aid within the meaning of Article 107(1) TFEU requires all the conditions set out in that provision to be satisfied.

5853

59Consequently, since the Commission considered that the measure at issue did not involve the intervention of State resources, it was not required to examine whether the other conditions laid down in Article 107(1) TFEU were met and, a fortiori, it was not required to verify whether or not the aid allegedly granted to the former solicitor was discriminatory, complied with the principles of freedom to provide services and freedom of establishment, or to assess the value of the competitive advantage granted to the former solicitor or other competitors of the applicant, or to state reasons for its assessment of the amount of the aid, or to assess the harm caused to the applicant, or even the impact of the abusive proceedings brought against the applicant on the former solicitor or other competitors of the applicant.

6054

61Accordingly, the present plea must be rejected as being manifestly unfounded.

Fifth plea: failure to take into account Ireland’s failure to fulfil its obligation to guarantee the applicant’s fundamental rights, in violation of the second subparagraph of Article 19(1) TEU

6255

63The applicant submits that the Commission was not entitled to reject his complaint, even though he had essentially complained that his fundamental rights had not been adequately safeguarded by the SDT, a State body already seised and allegedly competent in the proceedings brought by the Law Society against the applicant.

6456

65He adds that the proceedings brought against him by the Law Society before the SDT are abusive and infringe Articles 101 and 102 TFEU and Articles 1 and 2 of Council Regulation (EC) No 1/2003 of 16 December 2002 on the implementation of the rules on competition laid down in Articles [101] and [102 TFEU] (OJ 2003 L 1, p. 1). Moreover, he alerted the Commission to the fact that the SDT was not competent to take the decision of 18 January 2022 (see paragraph 9 above) and that it had exceeded its powers by failing to give reasons for its decision.

6657

67Lastly, in the applicant’s submission, the SDT, by favouring the former solicitor, a member of the Law Society, the beneficiary of the aid which it granted to him, implicitly relied on the origin of the applicant’s ‘property’. The fact that the Commission erred as to the ownership of the ‘property’ in question shows that it had serious doubts. The SDT’s decision of 18 January 2022 was, in itself, discrimination on the ground of ‘property’.

6858

69First, as regards the applicant’s arguments alleging infringement of his fundamental rights and of Articles 101 and 102 TFEU by the SDT and the Law Society respectively, it is clear that they do not call into question the Commission’s findings in the contested decision, to the effect that the funds involved are not State resources, with the result that there is no State aid. Consequently, such arguments must be rejected as ineffective.

7059

71Second, as regards the error allegedly made by the Commission as regards the ownership of the applicant’s ‘property’, it should be noted that the applicant does not explain exactly what that error consists of. In that regard, it does not put forward any argument to support the conclusion that there were serious doubts that the funds involved were State resources. Moreover, it should be noted that the applicant himself explained, both in his complaint and in his application, that the funds concerned came from costs paid to the client by the defendant in the context of a dispute involving a personal injury compensation claim. It follows that the funds concerned were clearly private funds. Therefore, the appellant’s complaint is manifestly unfounded.

7260

73In the light of the foregoing, the fifth plea must be rejected as manifestly unfounded.

Sixth plea: infringement of the principle of non-discrimination, the freedom to provide services and the principle of equality before the law

7461

75The applicant submits that, by failing to assess the compatibility of the aid measure with the fundamental principles of the single market enshrined in the EU and TFEU Treaties, such as the principle of non-discrimination, the principle of freedom to provide services and the freedom of establishment, the Commission infringed those principles and erred in law. In that regard, neither the constitutive characteristics of the aid measure, nor the specific ground relied on in the present case, nor the case-law of the Court of Justice can exempt the Commission from its obligation to assess the compatibility of the aid measure with those principles.

7662

77As noted in paragraph 30 above, categorisation as State aid within the meaning of Article 107(1) TFEU requires all the conditions set out in that provision to be satisfied. Consequently, it is sufficient that one of them is not satisfied in order for categorisation as State aid to be ruled out.

7863

79In the present case, first, as observed in paragraphs 51 and 53 above, the Commission considered that the condition relating to the existence of State resources was not satisfied. Second, it has been established in paragraph 59 above that the applicant has not demonstrated that the Commission erred in finding that the funds involved were of private origin.

8064

81Therefore, contrary to what the applicant claims, since it found that there were no State resources, the Commission was not required to assess the compatibility of the alleged State aid with the principle of non-discrimination, the principle of the freedom to provide services and the freedom of establishment. It must therefore be held that the present plea is ineffective.

8265

83In the light of all the foregoing, the present action must be dismissed as being in part manifestly inadmissible and in part manifestly unfounded.

Costs

8466

85Under Article 133 of the Rules of Procedure, the General Court is to give a decision as to costs in the judgment or order which closes the proceedings. Since the present order closes the proceedings, the applicant must be ordered to pay the costs.

On those grounds,

hereby orders:

1.The action is dismissed as being in part manifestly inadmissible and in part manifestly unfounded.

2.NO is ordered to pay the costs.

Luxembourg, 20 June 2023.

Registrar

President

—

Language of the case: English.