In European Union law, direct effect is the principle that Union law may, if appropriately framed, confer rights on individuals which the courts of member states of the European Union are bound to recognise and enforce.
Direct effect is not explicitly stated in any of the EU Treaties. The principle of direct effect was first established by the Court of Justice of the European Union (CJEU) in Van Gend en Loos v. Nederlandse Administratie der Belastingen. Direct effect has subsequently been loosened in its application to treaty articles and the ECJ has expanded the principle, holding that it is capable of applying to virtually all of the possible forms of EU legislation, the most important of which are regulations, and in certain circumstances to directives.
The ECJ first articulated the doctrine of direct effect in the case of Van Gend en Loos, the European Court of Justice laid down the criteria (commonly referred to as the “Van Gend criteria”) for establishing direct effect. The EU article provision had to be:
- negative (a negative rather than a positive obligation)
- containing no reservation on the part of the member state, and
- not dependent on any national implementing measure.
If these criteria were satisfied, then the right or rights in question could be enforced before national courts. Whether or not any particular measure satisfies the criteria is a matter of EU law to be determined by the EU Courts.
Direct effect of European Union law. In European Union law, direct effect is the principle that Union law may, if appropriately framed, confer rights on individuals which the courts of member states of the European Union are bound to recognise and enforce.
First of all what is Direct effect, it is a rule that goes under the European Union law and the European Court of justice established the Direct effect in the case of Van Gend en Loos v. Nederlandse Administratie der Belastingen (Case 26/62);  ECR 1;  ECR 13, In this case, the Court held that:
“The wording of Article 12 contains a clear and unconditional prohibition which is not a positive but a negative obligation. This obligation, moreover, is not qualified by any reservation on the part of states which would make its implementation conditional upon a positive legislation measure enacted under national law. They are very nature of this prohibition makes it ideally adapted to produce direct effects in the legal relationship between Member States and their subjects.” 1
In this case it shows that the citizen could sue and have the right to sue the state.
The Two Aspects Of The Direct Effect:
There are two types of the direct effect which are vertical direct effect and horizontal direct effect, they were established by the European court of justice during the case Defrenne v. SABENA (Case 2/74)  ECR 631.
First Type Vertical Direct Effect:
It is the type where a citizen can enforce their rights and sue the state; it is the relationship between the citizen and the state, in this type of the direct effect citizen also could sue any sector that is controlled by the government which provides public services like in the case of Foster v. British Gas plc (Case C-188/89)  ECR I-3313).
Second Type Horizontal Direct Effect:
The horizontal direct effect was devolved by the European court of justice (ECJ), It is about the relationship between individuals, in other words they are able to sue each other or sue private companies which is not owned by the government at their national courts, by relying on the treaty previsions giving an example in the case of Defrenne v. SABENA (Case 2/74)  ECR 631, where the defendant which was a female sue a company for not being fair about her salary by paying a male colleague more for doing the same job, so she was defending equality, equal pay for women and men.
Article 249 EC states the following with regard to directives: ‘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.’2
The European court of justice ECJ ruled that the directives could be direct effect, but in a limited way, like in the case of Grad v Finanzamt Traunstein (Case 9/70)  ECR 825, which a case involving VAT, the European court of justice ECJ ruled in that case that a directive can be a directly effective
And it could become direct effect but if the expiry of the deadline of the implementation has passed, then it could be directive affected, like showed in the case of Pubblico Ministero v. Ratti (Case 148/78)  ECR 1629, where it showed that if the time limit of the implementationof the directive has not finished, then it cannot have or be a direct effect.
Directives only can be vertical directly effect, which means that it only could be used if the state or ‘emanations of the state’ are involved, and not citizens or individuals.
They cannot be horizontal directly effective in other words they cannot sue against anther citizens or individuals or private companies , this was discussed the question if directives could be horizontal direct effect in the case of Marshall v Southampton and south-west Hampshire Area Health Authority (Teaching) (Case 152/84)  ECR 732