#5760 - Direct Effect And Indirect Effect - GDL EU Law

Direct Effect

A258 TFEU: Commission may bring a case to the CJ vs a MS for not fulfilling treaty obligations

A.259: MS can do the same vs another MS

Van Gend en Loos: 1963 – imported formaldeyhyde from WG in 1960 – duty payable was increased from 3%-8%

• A12 EEC (now A30 TFEU): Abolition of customs

• CJ: ‘A12 must be interpreted as producing direct effects and creating individual rights’ – MS must protect

A new legal order: Rights + obligations which has direct effect on MS and on citizens – new legal order for which the MS have limited their sovereignty

• Individuals within MS can seek to enforce their rights in national courts – more likely obligations will be upheld

• Example of CJ filling in the gaps of the framework treaty

Supremacy of EU law:

• New legal order requires that EU law is supreme over national

• Confirmed in Costa v Enel (1964) : CJ – ‘impossible’ for MS to ‘accord precedence to a unilateral + subsequent measure over a legal system accepted by them on the basis of reciprocity’

Amministrazione delle Finanze dello Stato v Simmenthal SPA (1978): confirmed absolute nature of D.E – ‘every national court must…apply community law in its entirety’

Direct effect vs. Direct applicability

• A288 TFEU: defines regulations as having ‘general application…directly applicable in all MS’ – doesn’t need to be imported into national law: automatically becomes part of domestic law

• Directives: binding only ‘as to the results to be achieved’

• In UK: treaties themselves not directly applicable - need parliamentary ratification

VGL criteria

1. Sufficiently clear and precise to give rise to an identifiable individual right

2. Unconditional

• Two conditions defined in Cooperativa Agricola Zootecnica A. Antonio and Others v Amministrazione della Finanze dello Stato

• In Costa: a provision which satisfies VGL is ‘legally complete and capable of producing direct effects’

Direct effect won’t be precluded by:

• Mere fact that provision raises questions of interpretation: Van Duyn v Home Office

• Conditions which are intended to ensure that the right is correctly applied w/o abuse and which don’t affect the definition of the right itself: Becker v Finanzamt

• Existence of derogations which are subject to judicial control: Van Duyn

• Just because the MS can choose btw several means of achieving result: Francovich v Italian Govt

Defrenne v SABENA (No 2): Air hostess vs. employer: sexual discrimination – A119 EC (A.157 TFEU) – men/women should receive equal pay - court says that treaty article was sufficiently clear but not clear enough to protect vs. indirect discrimination

Van Colson v Lord Nordhein: 2 women failed in applications to work in state prisons for male offendors – A6 of Equal Treatment Directive not sufficiently clear/precise for specific action

Francovich v Italian Rep.: Considering Directive 80/987 – about workers being guaranteed wages in event of bankruptcy – clearly identified persons entitled to right and the content of right itself – but not who should provide it

Direct effect off treaty articles

• VGL – negative obligations

• Alfons Lutticke GmbH v Hauptzollamt Saarlouis – once there was no discretion lefts to MS to give effect to a positive obligation regarding removal of discriminatory internal taxes – the provision became directly effective

• Vertical + horizontal direct effect: Defrenne (No. 2): Court made it clear that A157 TFEU – horizontally as well as vertically directly effective

Direct effect of regulations: Forms of binding EU law (A288 TFEU) - capable of being directly effective

Franz Grad v Finanzmant Traunstein – regulations directly applicable and therefore capable of producing direct effects

Antonio Munoz y Cia SA v Frumer Ltd: ‘By their nature capable of producing direct effects’

Recommendations and Opinions: not binding EU law – so not directly effective (Grimaldi v Fonds des Maladies)

Direct effect of Directives

• Directly effective (Van Duyn) – Dutch scientologist case – but only if it is a vertical claim vs. the state

Implementation date must have passed: date specified in directive or if the directive is silent – within 20 days of publication in the official journal (A.297 TFEU)

• Public Ministero v Ratti: once deadline passes – Ratti could protect himself from prosecution by relying on Directive – reliance on D 77/173 was successful but reliance on D 77/173 was not – as date had not passed

• Marks & Spencer PLC v Commissioner of Customs + Excise: Even if directive has been completely implemented – citizens can still rely on a clear, precise and unconditional directive in their national court where the national measures are improperly applied

Vertical but NOT horizontal - “Emanations of the state”

• Marshall v Southampton + SW Area Health Authority: only vertical direct effect: Marshall dismissed on grounds of compulsory retirement (earlier for women than men) – vs. D 76/207 Equal Treatment Directive – Health Authority is an ‘organ of the state’ so direct effect applies

• Doughty v Rolls Royce plc – private body so couldn’t rely on the same rights

Emanation of the state: Has included tax authorities (Becker v Finanzamt), local/regional authorities (Fratelli Constanzo Spa v Comune Di Milano), Constitutionally independent police force responsible for maintenance of public order/safety (Johnson v Chief Constable of the RUC)

• Foster v British Gas Plc: 6 women sought to rely on D 76/207 (Equal Treatment Directive)

• Steps:

1. The Bipartite Test: bodies which were i) subject to the authority or control of the state OR had special powers beyond those which result from the normal rules applicable to relations btw individuals

2. The Tripartite Test: i) body which had been made responsible for providing a public service, ii) under the control of the state AND iii) has for that purpose special powers beyond those which result from the normal rules applicable to relations btw individuals

3. The Answer: no mention of bipartitie test: only makes reference to the tripartite test

Tripartite applied in:

• Doughty (not emanation despite being owned by the government – operated as a ‘commercial undertaking’

• Griffin v SW Water Services: privatised water company fulfilled tripartite test BUT tripartite test not to be used in every event - National Union of Teachers v Governing Body of CofE School – no need to demonstrate special powers: compatible with the bipartitie test

Bipartite: Kampelmann: Applied bipartite test: also cited in Sozialhilfeverband Rohrbach v Arbeiterkammer Oberosterriech – 2 limited liability companies were held to be emanations because provided social assistance

Tripartite: Salamander AG, Una Film City Revue GmbH and others v European Parliament and Council of the European Union and in Reiser Internationale Transporte GmbH v Autobahen und Schellstrassed Finanzierungs AG (Asfinag) – Austrian company held to be emanation under tripartite

• Tripartite also cited in Dominguez v Centre Informatique du Centre Ouest Atlantique

• Relationship btw the tests unclear – in Vassallo - cited both Foster and Reiser as authority

Inverse/Triangular cases:

Expansive definition given to emanation + purposive interpretation by the courts: inadvertent horizontal effect – R(Wells) v Secretary of State for Transport – able to suspend quarry by enforcing directive vs. MS to carry out environmental survey

• Arcor AG& Co. KG v Germany – consequences of DE felt by Deutsche Telecom (third party)

Indirect Effect

“The Von Colson Principle” – Von Colson & Kamann v Lord Nordhein-Westfalen

• 2 female workers wanting to work in prison service – A6 of Equal Treatment Directive insufficiently clear/precise

• BUT – turned to A4(3) TOTEU – ‘principle of indirect effect’ – national courts required to interpret domestic law in conformity with wording/purpose of the D: removes the need to distinguish btw horizontal/vertical – Harze v Deustche Tradax

Response of the UK: Duke v G.E.C Reliance Ltd: GEC not an emanation – therefore tried to use IE instead but court held that S6(4) of the Sex Discrimination Act couldn’t be interpreted in a way so as to give IE: narrow interpretation – not having to distort the meaning of the Act

• Pickstone (Equal Pay Act 1970) and Lister (Directive 77/187) – VC only required court to interpret in conformity where domestic legislation had been created to comply with D

Clarification of VC: 1. Could it apply to laws passed before EU rule in the area? 2. Qualification about national courts discretion – ‘in so far as it is given discretion to do so under national law’

• Marleasing SA v La Comercial internacional de Alimentacion SA: btw 2 private companies (no DE) – conflict btw Company Law Directive 68/151 and Spanish Law – Spain hadn’t implemented D – didn’t matter if the law had been made before or after the Directive – little purchase to the ‘as far as possible’ qualification

• Wagner Miret v Fondo di Garantia Salarial: stepped back from lack of discretion in Marleasing – accepted that it wasn’t possible to interpret law to make it compatible

• Evobus v Niederosterreichischer: IE not possible – Austria had failed to follow D 92/13: but couldn’t make it compatible

• Pupino: CJ held that national courts not required to interpret national law contra legume (vs. clear meaning) – concerned framework decision (IE can be relevant for recommendations & opinions - Grimaldi

• Adeneler v Elinikos Organismos Galaktos: obligation only once the deadline for implementation of D passed

• Kolphinguis Nijmengen BV: primciples of legal certainty and non-retroactivity – MS tried to rely on IE of unimplemented D to bring criminal action vs individual...