#3514 - Direct Effect - European Law

Conditions

1. Initial(Van Gend en Loos)

1. Clear

2. Negative

3. Unconditional

4. Not dependent in implementation by MS

2. Qualified

1. DE possible even where MS have discretion, b/c its exercise can be judicially controlled

2. The need for implementing measures isn’t a bar to DE if substance of provision requires its application

3. Current

1. Intended to confer rights on individuals

2. Sufficiently clear & precise (sets out obl. in unequivocal terms)

3. Unconditional

• Leaves ECJ w/lots of room for manoeuvre

Applicability

1. Treaty Articles

• Van Gend en Loos- MS argued EC is an int. treaty w/states as main actors & individuals shouldn’t be allowed to bypass them by directly enforcing EU law b/fnat.’l courts. ECJ: Treaty Art. have DE – 3 reasons

1. Textual - Art 177 + Preamble - suggest MS acknowledged in the Treaty the authority of Comm. law which can thus be invoked by individuals b/f national courts

2. Teleological - EC constitutes new legal order, creating obligations for & conferring rights on individuals + strengthened enforcement by way of dual vigilance

3. Consistency - w/out DE, reception of EC law into MS wouldn’t be uniform but depend on nat.constit. orders

2. Regulations(Art 288TFEU)

3. Decisions

• Art 288 + can have HDE, if sufficiently clear, unconditional & precise

4. Directives

• Art 288 – binding as to the result but MS have a choice as to method and form fails criteria but has DE

• Justifications

1. Very common form of lawmaking – DE necessary

2. Easy for states to default – implementation, time limit etc.

3. Exclusion of DE for directives would be incompatible with Art 288 req. of binding nature

• Hartley – unsound; possible to be binding on int. level w/out individual enforcement in national courts

4. Directives are more effective if enforceable by individuals relying on them + effectiveness to EU law

5. MS shouldn’t be able to rely on own failure to properly implement in refusing to recognising binding DE of directive when pleaded against them (Ratti)

1. very strong – like equity: shouldn’t profit from own wrong

2. tends towards limiting DE to vertical situations (state/individual, not individual/individual)

3. limits DE to post implementation

4. requires that where implementation is to individual’s detriment, DE shouldn’t apply

1. Vertical DE

• Not precluded, even if application of Directive against MS will lead to adverse consequences for the individual

2. Horizontal DE

1. Initially = no HDE

• DE to be pleaded only against the state, not individuals

• Justifications

1. Individuals have other avenues for securing their rights (e.g. Francovich state liability)

• effectiveness questionable – hard to show actual loss!

2. Art 288 provides binding nature of Dir. exists for each MS to which it’s addressed, so it can’t impose obl. on individuals or be relied upon against them

• Art 288 says no such thing – merely, MS is bound where Dir. is addressed to it

• Contrast this textual faithfulness w/ECJ’s attention to effectiveness in Van Gend

3. HDE of Dir. would erode distinction b/w Regs& Dir. giving legal impact to the latter even w/out implementation

• This is happening anyway

• Distinction b/w Regs& Dir. is premised on the choice which MS have re implementation – HDE wouldn’t take it away but merely emphasise consequences which flow from non implementation

4. HDE of Dir. would jeopardise legal certainty – many of Dir. details aren’t fleshed out

• Unfinished nature of obl. is an argument against VDE & HDE alike

• Corresponding increase in uniformity is a kind of certainty

• Directives are now rather detailed anyway

2. Ways of circumventing “no HDE” rule

1. Broad definition of state

• Distinction b/w VDE & HDE required ECJ to determine meaning of state broad view

• Marshall – C relied on provisions of Dir. against Health Authority as part of state

• Foster v British Gas– ‘state’ = central bodies of govt. + other bodies w/special powers & privileges over and above those possessed by ordinary citizens

• Craig & DB: unusual inverse principle of state or vicarious responsibility

• Problems:

1. Degree of control may vary significantly – threshold is unclear

2. Why should a private company w/minimal state control bear resp. for its failure

3. Connection b/w control & responsibility under Dir. is far from clear

• ECJ’s justification: a price to be paid by an industry for powers given to it by MS is that it should be subject to duties which flow from Directive

• Me: strength of justification depends on how broad ECJ is prepared to define the ‘state’ – the broader the definition, the less persuasive its justification.

2. Principle of harmonious interpretation (indirect effect) - nat. courts’ obligation to interpret within their jurisdictional remit both autonomous & implementing provisions of nat. law in light of wording & purpose of Dir. to ensure effectiveness of EU law

• Von Colson – equal treatment Dir. relied on by Cs for unlawful sex discrimination wasn’t sufficiently precise to guarantee a specific remedy but nat. court had obl. to interpret it in light of Dir.’s aim. ECJ: MS’s obl. pursuant to Art 4 to take all appropriate measures to ensure fulfilment of Dir. objective is also binding on the courts. Obligation is strong: derived from Art 4(3) TFEU + inherent in Treaty

1. Positive obligation of harmonious interpretationapplies only after time limit for implementation of Dir. has expired

• but nat. court in the mean is under a negative obligation to refrain from measures liable to compromise the objective

2. Obl. also applies in a horizontal case between private parties + where nat. law predates the Dir./has no specific connection with it

• Marleasing – C company brought a claim against D company to have its Art. of Association declared void b/c company created solely for purpose of defrauding/evading creditors. Spanish Civ. Code provided for ‘lack of cause’ as a ground for nullity of company but Dir. didn’t. ECJ: D could rely on provisions of unimplemented Dir. to preclude declaration of nullity other than on grounds set out in Dir.

3. Obligation applies to the legal system as a whole, not just nat. provisions implementing the Directive (Pfeiffer)

4. Obligation is strong but doesn’t require a contra legem interpretation of national law

• Pfeiffer–C, workers of German Red Cross, argued their working hours in excess of 48/week breached Working Time Dir. ECJ: no HDE to Dir. but nat. court has obligation to consider nat. law as a whole to find an interpretation, if possible, which wouldn’t produce a result contrary to Dir.

• Impact- where legislation can’t be applied retrospectively (facts predate legislation transposing of Dir. into nat. law), court must interpretnat. law which existed at the time of dispute in light of the Dir. to avoid a contra legem reading

5. Obligation can’t result in imposition or aggravation of crim. liability

• Berlusconi – Dir. can’t, in and of itself, independently of nat. law, determine or aggravate crim. liability of the accused

• Principles of non retroactivity + legal certainty (&contra legem) are key (Von Colson)

6. But questionable if it may lead to imposition of civil liability or obligation on an individual which wouldn’t have otherwise existed

• Arcaro–NO: where interpretation of nat. law in light of Dir. amounts to imposition on an individual of an obligation laid down in Dir., it goes too far & isn’t permitted/required by EU law.

• Distinction: imposition of obl. (not permitted) v creation of other kinds of legal disadvantage or adverse consequences falling short of legal obl. (permitted)

• Centrosteel– YES: Dir. can’t of itself, independently of implementation via nat. law, impose obligations on individuals, courts must in so far as possible interpret nat. law in light of wording & purpose of Dir. – while that process can’t have the effect of determining or aggravating crim. liability, it may well lead to imposition of civil liability/obl. which wouldn’t have otherwise existed (AG Jacobs)

• Later case law doesn’t clarify if ECJ endorses AG Jacobs’ opinion – ‘adverse repercussions’ were allowed in the latest case...

3. Incidental HDE – Dir. can have limited HDE where it doesn’t directly impose obl. on individuals but, using exclusionary effect, is invoked against individual to exclude (prevent the application of) conflicting provisions of national law, thus altering parties’ legal position

• CIA Security International– 2 companies sought to restrain CIA from marketing alarm system arguing it didn’t comply w/Belgian requirement of prior authorisation; CIA successfully argued in defence that requirement breached EU law + b/c Belgian govt. didn’t comply w/Dir. requiring notification to Commission of technical regulations, Belg. nat. law invalid.

• NB: although Dir. itself didnt impose obl. on Ds, it removed protection accorded by provisions of nat. law, exposing them to potential liability. Outcome = as if Dir. had HDE (terms of unimplemented Dir. relied on)

• The Medicine Control Agency [1996] - individual can bring action against another individual where latter’s been authorized to do something by nat. authority that’s incompliant with result to be achieved Dir.; e.g. C allowed to rely on the fact that nat. authority had authorized competitor to use the same name. Nat. legislation disapplied& C (although couldn’t rely on directive directly against D) was able to get the result he wanted. .

• Unilever–Italy adopted law regulating olive oil market but, contrary to Dir. (as in CIA), didn’t notify Comm., Unilever, seller of oil, brought a claim against buyer, Central Foods, for refusing to pay but CF...