In Stark Contrast: Deference and Margin of Assessment in German Administrative Law and EU Law

Guest Blogger

For the Balkinization Symposium on The Chevron Doctrine through the Lens of Comparative Law

Jasper Kamradt & Matthias Ruffert

German statutory provisions frequently contain indeterminate terms whose meaning must be determined by interpretation. Some even argue that there can be no such thing as an unambiguous term. Indeterminate or ambiguous legal terms thus cause problems regarding the interpretation of administrative law norms that specify the factual conditions under which the administrative body must or can act. Yet, in spite of the prevalence of such statutory terms, case law and doctrine on these issues have been settled for decades with very few exceptions, which will be mentioned in this contribution.

Germany has a separate three-tiered system of administrative courts whose judges are frequently asked to review the public authorities’ interpretation and application of ambiguous terms. If necessary, the courts correct administrative applications of the law without restriction to reach the only correct decision. The guarantee of legal protection under Article 19 (4) of the German Constitution (Grundgesetz, Basic Law) and the principle of the rule of law (Article 20 (3) of the Basic Law) generally require full judicial review of the interpretation of ambiguous legal terms. Beginning in the post-war 1950s, case law has consistently and generally affirmed the administrative courts’ comprehensive power of review and correction of the application of terms that are relevant to the decision. However, the courts do give administrators a “margin of assessment (or appreciation)”, a “prerogative of assessment” to resolve statutory ambiguities in specific areas of the law. In practice, this means that the court will accept the interpretation of ambiguous terms chosen by the authority/agency in specific fields of administrative law. Accordingly, the court will not question the application of said interpretation to the facts if it is within the range given by the specificity of these fields (which we will explain later in this contribution). Deference is not a political issue in the current German debate (Germans even have to take their time in understanding the problem, see here at pp. 288 ff. for those who read German). In contrast to the U.S., there is no substantial debate on the link between the scope of review and the political background of administrative actions. However, some commentators do question whether judges ought to have such unrestricted power to interpret and, if necessary, correct the authorities’ actions by claiming to reach the only correct decision under law. This blog post will explore the nature of this critique in the German public law context.

Only in specific fields of administrative law and for particular reasons does the case law assume that the administrative authority is given some leeway to make assessments. In these areas, it recognizes that the administration has a "margin of discretion" (Beurteilungsspielraum) or "authorization to make assessments", sometimes also referred to as "assessment prerogative" (Einschätzungsprärogative). For some time now, the statutory authorization for assessment by the administration has been invoked more and more often. In such cases, it must be determined whether the indeterminate legal term used in the law implies that the administration is authorized to make an independent assessment considering the entire regulation. In other words, the ambiguity is rather the result of a legislative choice to delegate, not a creation of the administration. In this regard, different groups of cases have emerged. 

The first set of cases considered the administration's scope for assessment concerned decisions to pass or fail students taking examinations in high school, at university (e.g., Master's thesis), or in state examinations (e.g., in medicine or law). In these cases, the courts assumed that the statutory and sub-statutory rules governing the respective examination contain authorizations for the administration, here mostly teachers and professors (the examiners), to make an independent assessment of the student’s examination performance. This is also an issue of equality: Only the examiners themselves have knowledge of all examinations, whereas the court can only consider the one exam that has been challenged. Second, and related to this, is the public employer's discretion in making decisions under the civil service law. The requirement of factual and situation-related equal treatment follows here from the unique principle of equality in Article 33 (2) of the Basic Law. There is, for example, leeway in assessing civil servants, soldiers, and probationary judges. Third, a margin of discretion is allowed in the case of value judgments made by bodies composed of recognizably competent experts. The basis here is both the particular expertise provided for in the law and the plurality of interests in the respective body. 

Finally, a margin of appreciation is also recognized in the case of prognostic and risk decisions, especially those of an economic nature, where the subject of the undefined term depends on the planning and future expectations of the authority. In European law, such leeway for forecasting is widely recognized as inherent in the effort to predict the future. Accordingly, it also has an impact on German administrative law, especially regulatory law (it should be noted that this area of the law, Regulierungsrecht, has a more restricted range in Germany than in the U.S.; it mainly concerns network industries such as telecommunications, energy, and rail transport that lacked private competition until the late 1990s). 

A recent case of the German Federal Constitutional Court (Bundesverfassungsgericht (BVerfG) highlights the intricacies of this fourth category and its interplay with judicial deference. In this case, the applicant's request for permits to build wind turbines was denied due to the prohibition of killing protected species of wild animals, notably the red kites (Milvus milvus). The lower circuit courts upheld the deference granted to the authority's prerogative to assess the risk to red kites posed by the projects, leading to an unsuccessful constitutional complaint by the applicants claiming a violation of their right to effective legal protection, Rechtschutzgarantie Art. 19 (4) Basic Law. 

The BVerfG upheld the decisions of the lower courts based on the argument that the decisions in question were of extrajudicial character, for which no general scientific standards existed. In such cases, it is nearly impossible to discern whether the administrative authority's decision was right or wrong. Importantly, however, the BVerfG clarified that this is not due to the judicial deference granted to the authority (or administrative prerogative) but rather due to the above-mentioned difficulty in assessing the administrative authorities' decision when there is a lack of scientific evidence. An answer simply may not exist or is yet to be discovered. Thus, when a so-called knowledge deficit exists, the administrative court may defer and base its ruling on the reasoning presented by the authority, if plausible. The Federal Constitutional Court held that Courts could and should not be responsible for addressing such knowledge gaps but are instead obligated to assess whether the administration made errors in formulating the decision. Hence, the Courts must only consider whether fact-based objections regarding the administration’s methodology have been raised and, in turn, if these objections substantially challenge the administration's methodology. According to the BVerfG, this will only be the case if the employed method is no longer tenable according to current scientific standards. 

Lastly, the BVerfG emphasized that the legislator is responsible for addressing an existing "vacuum of scientific knowledge". The legislator must act via regulations or guidelines to "fill" this vacuum with a standard-setting process. In short: Judicial deference is allowed to exist but must be addressed as soon as possible by the legislator. In the Red Kite-case, these reflections were part of the obiter dictum, as the constitutional complaint was not admitted for formal reasons. The duty of the legislator would have to be claimed in later proceedings. In such a case, the BVerfG usually declares that a statute becomes void if the legislator does not react within a certain time limit that the court fixes according to the individual situation. 

To conclude, consider the impact of the German doctrine on the administrative margin of appreciation in European law. First, compared to other European jurisdictions, the German concept is often characterized as isolated. Elsewhere in the EU, in particular in those Member States following the French model with its strong étatist bias, there is a lot more leeway for administrative authorities. What is more, German doctrine differentiates between the construction of statutes (Tatbestand) as described here, on the one hand, and the range of possible administrative actions (Rechtsfolge), on the other. No other European jurisdiction has followed this path (except, in a certain way, the Austrian). Second, perhaps due to these doctrinal particularities, there is a significant tension between the idea of administrative deference in Germany and in the EU. Because EU institutions have considerably more leeway in making economic assessments than their German counterparts, this difference helps to explain the greatest-ever conflict between the BVerfG and the CJEU. The latter had held that the European Central Bank had acted within its discretion when it bought state bonds for roughly 2.5 bn Euros from 2015 to 2019. In contrast, the BVerfG considered these purchases disproportionate and asked for a proportionality evaluation (which was provided later so that the matter could be settled). 

One can therefore conclude that the question of deference in administrative law is less controversial in Germany, but there is an imminent  risk of conflict between Germany and the EU in the coming years.

Matthias Ruffert is Professor of Public Law and European Law at Humboldt University, Berlin, <matthias.ruffert@hu-berlin.de>, Jasper Kamradt is research assistant and Ph. D. candidate at Humboldt University and an LL.M. Candidate (International Legal Studies) at NYU Law School, <jasper.kamradt@hu-berlin.de>.