#17730 - The Relationship Between Eu Law And National Law - European Law

The Relationship Between EU Law and National Law: Direct Effect, Indirect Effect and Incidental Effect Notes

There are two related points to remember when analysing the judicial creation of direct effect and its later concomitants:

1. The EU legal system is defined by the way in which it interacts with other legal systems

   1. The purpose of the EU is to change and alter the legal order of Member States

2. Direct effect and its related doctrines attempt to define the extent to which the EU changes and alters the legal order of Member States

   1. This speaks to whether or not the EU and Member State legal systems are distinct, and whether or not the EU is even a legal system in its own right.

What is direct effect?

Definition

Craig and de Búrca (2020) have said that there are two senses of direct effect:

1. Broad sense – provisions of binding EU law that are sufficiently clear, precise and unconditional to be considered justiciable can be invoked and relied upon before national courts

2. Narrow sense – the capacity of a provision of EU law to confer rights on individuals

Both of these senses effectively refer to the same thing: the direct enforceability in national courts of qualifying pieces of EU law

The seminal judgement of Van Gend en Loos first introduced this concept of direct effect

Van Gend en Loos

• Facts: A company was importing chemicals from Germany to the Netherlands. They thought that they were subjected to a customs duty that had increased since the EEC had come in to effect.

  • The problem was that the Article 12 EEC (now Article 30 TFEU) prohibited any changes to customs duties between Member States.

    • The company wanted to know if they could directly rely on Article 12 EEC in a national court in the Netherlands to have the increased customs duty disapplied

      • NOTE: there was no explicit answer to this question in the Treaty

  • 3 of the 6 Member States offered their opinions on the issue as to how the question should be answered:

    • Netherlands: “… the EEC Treaty does not differ from a standard international treaty. The conclusive factors in this respect are the intention of the parties and the provisions of the Treaty”

    • Germany: “… Article 12 of the EEC treaty does not constitute a legal provision which is directly applicable in all Member States. It imposes on them an international obligation which must be implemented by national authorities endowed with legislative powers

    • Belgium: “This is a typical question of how national constitutional law which has nothing to do with the interpretation of an Article of the EEC Treaty and is within the exclusive jurisdiction of the Netherlands court, because it can only be answered according to the constitutional principles and jurisprudence of the national law of the Netherlands

  • The Netherlands further commented that it thought there were only two ways (according to the Treaties) in which EU law could be enforced:

    • Article 169 or 170 (now 258 or 259 TFEU) - on the initiative of another Member State or of the Commission.

    • Article 177 (now 267 TFEU) - the procedure of reference for a preliminary ruling

• Held: The ECJ held that the Treaty was capable, in principle, of direct effect

  • Two strands of reasoning can be drawn from the ECJ;s judgement:

    • The Treaties’ Vision of a Legal Order

      • The ECJ said that “… this Treaty is more than an agreement which merely creates mutual obligations between the contracting states”

        • Note the Court’s use of high constitutional rhetoric

      • “… the Community constitutes a new legal order of international law for the benefit of which the states have limited their sovereign rights, albeit within limited fields, and the subjects of which comprise not only the Member States but also their nationals. Independently of the legislation of Member States, Community law therefore not only imposes obligations on individuals, but it is also intended to confer upon them rights which become a part of their legal heritage”

        • NOTE: The Court later dropped the idea of it being an ‘international’ legal order, preferring ‘legal order’ alone.

    • The Text of the Treaty

      • The preamble refers to States and citizens.

        • The preliminary ruling procedure (now Article 267 TFEU) envisaged that parties before national courts could plead and rely on points of EU law.

          • Craig & De Burca (2015) argue that the ‘textual’ argument not particularly strong,

            • BUT: it is still interesting – if X could not invoke EU law in national courts through Article 267 TFEU, then it could only be used where parties to case were both public bodies – no evidence in wording of Article 267 TFEU to indicate such a limitation.

There are two main benefits to the ECJ’s approach in this case:

1. Uniformity of enforceability –

   1. Now that individuals can rely on EU law in their own national courts, the rights of individuals will be uniform across the Member States.

2. Dual vigilance

   1. “The vigilance of individuals concerned to protect their rights amounts to an effective supervision in addition to the supervision entrusted by Articles 169 and 170 (258 and 259 TFEU) to the diligence of the Commission and of the Member States.”

      1. Enforceability will depend upon the Commission and Member States, and now upon individuals, thus improving the enforceability of EU law.

         1. Individuals are efficient enforcers of EU law

            1. The Commission is busy, and so having millions of enforcers will make it a more effective legal order.

Conditions

The ECJ in Van Gend en Loos laid down a number of conditions for DE, however they have been loosened in years since, including in the case of Reyners, so that they may now be summarised as:

‘A Treaty Article will be accorded direct effect provided that it is sufficiently

1. Clear;

2. Precise; and

3. Unconditional

   1. That is, it must not be qualified by any reservation on the part of Member States which could make its implementation conditional upon a positive legislative measure enacted under national law

      1. It must not leave a discretion to Member States to implement it

Formerly it was also necessary for the relevant law to impose:

4. A negative obligation

Application to Directives

Post-Van Gend en Loos, questions arose as to whether or not direct effect would apply to things other than Treaty articles

• In Commission v Italy the CJEU held that regulations were capable of being directly effective

• In Defrenne v Sabena, it was clarified that Treaty Articles have direct effect both vertically (versus the state) and horizontally (versus another individual)

However, there were still questions as to whether or not direct effect was applicable to Directives because of the discretion afforded to Member States in their implementation.

Article 288 TFEU:

A directive shall be binding, as to the result to be achieved, upon each Member State to which it is addressed, but shall leave to the national authorities the choice of form and methods.

This discretion relating to form and method is problematic in terms of the condition that the relevant EU law be unconditional.

• This is problematic though given the frequency with which Directives are used as a form of law-making – it leaves individuals without redress in respect of a seriously substantial body of law

  • This issue was addressed in the cases of Van Duyn v Home Office and Ratti

Van Duyn v Home Office – the ECJ held that Directives were, in principle able to have direct effect.

Across Van Duyn and Ratti, the CJEU gave four reasons for allowing Directives to have direct effect:

1. Functional – in Van Duyn, the CJEU said that not allowing direct effect of Directives would weaken the useful effect of EU law

   1. If the whole body of law created by Directives were to be excluded this would weaken the effectiveness and uniformity of EU law

2. Textual – in Van Duyn it was argued that Article 267 TFEU allows national courts to refer questions concerning any EU measure to ECJ, including Directives – this implies that such acts can be invoked by individuals before national courts.

   1. NOTE: This reasoning was also used in Van Gend en Loos in relation to Treaty provisions.

3. Estoppel Justification – in Ratti, it was argued that Member States should be prevented from relying, as against individuals, on their own failure to implement Directives.

   1. Reasoning goes as follows –

      1. Member State should have implemented the Directive;

      2. Had Member State done so, the individual would have been able to rely on the national implementing law;

      3. Member State has committed a wrong by failing to implement the Directive, and could not rely on that wrongdoing so as to deny binding effect of the Directive itself after date of implementation.

      4. Where necessary, conflicting national law should be disapplied.

4. Discretion Evaporates – in Ratti, it was said that Directives were only capable of direct effect once the date for implementation had passed

   1. The result of this was that the discretion of the Member State evaporated at this point rendering the Directive unconditional and so (provided it satisfied the other conditions) the Directive was capable of direct effect

As a result of this reasoning, it seemed that direct effect of a Directive will only take place:

1. Where the implementation date had passed

2. Where the direct effect claimed is vertical (i.e. against an organ of the state)

Horizontal Direct Effect:

Due to this estoppel justification, it appeared that horizontal direct effect of Directives was excluded. The ECJ addressed this issue in two cases:

• Marshall v Southampton and South West Hampshire Health Authority

  • Facts: M was dismissed after 14...