EU Law –Direct Effect
Introduction:
Direct Effect refers to those provisions of EU legislation which are capable of enforcement by individuals before national courts. Provisions of both regulations and directives, as well as many provisions of the EC Treaty itself, are all capable of direct effect.
The principal of direct effect is not found in the EC treaty but has been created and developed by the ECJ in a series of judgments. It has greatly increased the impact of European Community law within the member states. Direct effect means that, subject to certain conditions, EC law creates rights and obligations which individuals may rely on and enforce in their national court.
Conditions for Direct Effect:
The first case in which the European Court of Justice (ECJ) explained the principal of direct effect is Van Gend en Loos vs Nederlandse Administratie der Belastingen. In this case a postal and transportation company, imported urea-formaldehyde from West Germany to the Netherlands. The Dutch customs authorities charged them a tariff on the import. Van Gend en Loos objected, submitting that the tariff was contrary to EC law. Article 12 of the Treaty of Rome[1]. Later in this case the court held that the European Community (EC) treaty was not merely an international agreement binding national government: it introduced a ‘new legal order’, with its own institutions and legislative powers, which conferred rights and obligations on individual citizens as well as on governments. An individual could plead an article of the Treaty in the national court provided above conditions were met. In Van Gend en Loos case, it was held by the ECJ that there are three conditions which needs to be satisfied for there to be direct effect. First, the EC Law must be clear and precise. Second, the law must be unconditional, Diamantabeides case. And third, the laws operation must not depend upon further action by national or EC authorities, Petrie v Allessi.
Application of the Direct Effect:
Direct effect principle applies to four types of law. They are:
1. Treaty Articles
2. Regulations
3. Decisions
4. Directives
Above laws are created by European Union institutions and such power has been given by Article 249 EC Treaty. The motives of the creation of the principal of direct effect were to make European Union law uniformly applicable and to make it efficient and strong within each member state.
Now, the principles of direct effect will be discussed chronologically.
Treaty Articles:
Direct effect is applicable to Treaty Articles provided the three conditions of the case of Van Gend en Loos is satisfied and on the other hand the parties in this case were in vertical situations. Treaty Articles is the primary legislation, under European Union law, which is formed by the signing of the member states only. Though the parties were in vertical situations on Van Gend en Loos case but later the ECJ confirmed that the treaty articles can have horizontal direct effect too in the case of Defrenne Vs SABENA[2].
Decisions:
Under Article 249 Decisions are binding in their entirety on those to whom they are addressed. The ECJ in Grad v Finanzant held that they can have direct effect.
Regulations:
The strongest secondary legislation of European Law is Regulation. Regulation shall have general application, it shall binding in its entirety and it is directly applicable to all member states, as declared by the Article 249. Here direct applicability means whenever a Regualtion is created it will be directly applicable to all member states. Member states cannot subject a regulation to any implementing measures than those require by the act itself. Amsterdam Bulb BV Case. However, a regulation can have direct effect if it satisfies the three conditions and it is both vertically and horizontally applicable. Azienda case.
Directives:
A directive is binding as to the result to be achieved upon each member state to which it is addressed. There has been considerable controversy over directives can create directly effective right or not. The nature of the directive is defined in Article 249 of EC treaty which provides that the member states have directions as to the manner and form in which they would implement directives. There had been a problem with implementing measure of directives. The ECJ in 1974 in Van Duyn V Home Office [3]addressed this problem and the ECJ held that where the community authorities have by directive imposed on Member State like obligations to pursue a particular conduct and the Member State failed to honor the obligation by failing to implement the directives the individual can rely upon the directive in the national court to enforce right. In other words, directives have maximum two years of implementation time. In Publico Ministero Vs Ratti it was held that a Directives can only be directly effective after the expiry of the time given for its implementation since until that time, the member state is not in breach of any obligation. The ECJ stated that the state cannot rely on wrong doing to frustrate the rights of individuals under directives. Thus where the member states are at fault an individual can claim against the state that he/she should have the directives been correctly implemented. On the other hand Advocate General Slynn supported the view that directives cannot have horizontal direct effect as the full direct effect would blur the distinction between regulation and directives. In Faccini Dori case the ECJ confirmed the original rule that Directives can only have vertical direct effect. In addition to the above criteria three more criteria has to be satisfied for direct effect of directives. It must me clear, precise and unconditional and the time limit for implementation must have expired. Not allowing horizontal direct effect of directives created injustice. However, the ECJ subsequently created three principles which reduced such injustice. At first, the ECJ in Foster v British Gas[4] expanded the scope of the definition of the state and thus extended the reach of vertical direct effect of directives. Secondly,
1. Does it perform any public service.
2. Pursuant to a measure adopted by the state.
3. Under the control of the state
4. It should have special power going beyond those of normal undertakings.
It’s clear that the court in Foster widened the scope of Emanation of state which reduced unjust consequences of all allowing horizontal direct effects of directives. On the other hand incidental horizontal direct effect is a rare situation where by using EU law an individual can defend himself. Incidental horizontal direct effect is a concept used in CIA Security International Vs Signalson [5]as a defence. Directive requires a final permission from EU. This further reduces to some extent the negative impact of horizontal effect. In R (on the application of Wells) v Secretary of State for Transport, Local Government & the Regions, the ECJ decided that an individual could enforce the provisions in a directive against the state even if this had the incidental effect of imposing obligations on another individual. Mrs Wells, who lived near a quarry, enforced Directive 85/337 so as to compel UK planning authorities to carry out an environmental impact assessment on the quarry even though the effect of such an assessment would entail the quarry having to close in the meantime (to the detriment of the quarry owners).
Furthermore, the ECJ developed the concept of indirect effect to help the individuals in horizontal situations. The first case was the case of Von Colson when the ECJ said that through the principal of indirect effect the national courts are under a duty to interpret national legislation –“in the light of the wording and purpose” of community law. There is no question of vertical or horizontal situation for indirect effect as it imposed a duty to the court only. However very wide allowance allowed by Merleasing case was modified in the case Wagner Miret. In this case the ECJ said that indirect effect will not apply on the National Legislation when the National Legislation is clearly at odds with an EC directive.
Indirect effect:
This policy requires national courts to “interpret” ambiguous national legislation “in the light of” any relevant European Union directive, that is, by interpreting the national law in such a way as to promote the purpose(s) of the directive. It was introduced by the ECJ in Von Colson, strictly speaking, only covers the situation when national courts were interpreting national law passed specifically in order to implement a directive. A recent example of this was seen in Pfeiffer case, involving the German legislation adopted in 1994 in order to implement Directive 93/104. Von Colson case was confirmed and extended in Marleasing case, where the ECJ held that the doctrine applied to the interpretation of all national legislation, even where it predated the relevant directive. One obvious limitation of the policy is that it merely imposes an obligation on national courts to implement domestic legislation “so far as possible, in the light of the wording and the purpose of the directive”, according to the ECJ in Marleasing case. Thus, it will not apply to national law which is utterly unambiguous (and therefore incapable of being “interpreted” by national courts) Océano Grupo v Murciano Quintero and QDQ Media v Omedas Lecha.Another limitation is that the obligation to interpret national legislation under either Von Colson or Marleasing case only applies from the date of implementation of the directive. Adeneler case.
The principles of legal certainty and non-retroactivity will also be taken into consideration while deciding the national legislation can have indirect effect or not. Public Prosecutor v Kolpinghuis Nijmegen BF[6]. The ECJ held that the doctrine whether it would give rise to, or aggravate, criminal liability. Arcaro case. In Webb Vs EMO Cargo it was mentioned that if it concerns a Community law that has not been implemented by UK, then the national courts and the tribunals will only interpret the national law to avoid a conflict with Community law if the meaning of the national law is not distorted. On the other hand, in Lister Vs Forth Dry Dock it was stated that UK courts and tribunals will interpret the national implementing legislation to give effect to the directive even if the meaning of the UK’s implementing legislation is distorted.
Conclusion:
From the above discussion it may therefore be stated that the doctrine of indirect effect continues to be significant. However, there will be circumstances when it will not be possible to apply it. Various concepts have reduced the unjust consequences but did not able to eradicate the injustice for not allowing the horizontal direct effect of directives and thus the injustice remains. However, there are still limited situations which horizontal direct effect of directives can solve. So, it is best advised that the EC needs to overrule its decision in Marshall case and the horizontal direct effect of directives should be allowed.
Source:
1. https://login.westlaw.co.uk/maf/wluk/app/document?&src=ri&docguid=IE68F32A0E42811DA8FC2A0F0355337E9&refer=%2Fmaf%2Fwluk%2Fapp%2Fdocument%3Fdocguid%3DIE68F80C0E42811DA8FC2A0F0355337E9%26crumb-action%3Dreplace%26linktype%3Dref%26context%3D15%26src%3Ddoc&crumb-action=append&context=16
2. http://en.wikipedia.org
3. http://www.lexisnexis.com/uk/legal/results/docview/docview.do?docLinkInd=true&risb=21_T10365392786&format=GNBFULL&sort=JUDGMENT-DATE,D,H,$PSEUDOLOSK,A,H&startDocNo=1&resultsUrlKey=29_T10365392789&cisb=22_T10365392788&treeMax=true&treeWidth=0&csi=274668&docNo=3
4. https://login.westlaw.co.uk/maf/wluk/app/document?&src=rl&srguid=ia744c09a0000012bb6803741bdd04964&docguid=IA8944E00E42711DA8FC2A0F0355337E9&hitguid=IA8944E00E42711DA8FC2A0F0355337E9&spos=1&epos=1&td=5&crumb-action=append&context=42
5. http://www.lexisnexis.com/uk/legal/results/docview/docview.do?docLinkInd=true&risb=21_T10365524962&format=GNBFULL&sort=JUDGMENT-DATE,D,H,$PSEUDOLOSK,A,H&startDocNo=1&resultsUrlKey=29_T10365524965
6. http://www.ena.lu/judgment_court_justice_security_international_signalson_securitel_case_c_194_94_april_1996-020006984.html
7. http://www.oup.com/uk/orc/bin/9780199230358/01student/questions/ch07
Bibliography
1. Unlocking EU Law 2nd Edition, 2008
2. Law of the European Union 7th Edition, 2009
3. EU Law 9th Edition,2006
4. Blackstone’s EU Treaties and Legislation 2009/2010
5. Core EU Legislation 2009/2010
6. Northumbria EU LAW Work Book 2009/2010
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[1] http://en.wikipedia.org/wiki/Van_Gend_en_Loos_v_Nederlandse_Administratie_der_Belastingen
[2] A female air hostess performed the same work as a male cabin steward but until 1st February 1966 the plaintiff’s rate of pay as an air hostess was less than that of a male cabin steward. In that year the employer introduced equal pay in anticipation of Belgian equal pay legislation, which came into force in October 1967. The plaintiff retired at the beginning of 1968 and in March claimed damages from her employer for wrongfully failing to pay her at the same rate as a male cabin steward between 15 February 1963 and 1 February 1966.The basis of the plaintiff’s claim was that art 119a of the EEC Treaty gave her an enforceable right to equal pay as from 1st January 1962 and that therefore her employer’s disregard of that right rendered it liable to compensate her for her loss
3 The plaintiff, a Dutch national, was refused leave to enter on those grounds. The plaintiff having brought an action against the Home Office for a declaration that under Art.48 EEC she was entitled to enter and remain in the United Kingdom, the High Court referred this case to the European Court. And it was held that “the rights were directly enforceable by the aggrieved individuals; (2) that present, but not past, association with an organisation considered harmful although not illegal could be considered as “personal conduct” and despite the fact that there is no restriction upon nationals of the member state taking similar employment”.
[4] Under the employment contracts, female employees of the British Gas Corporation were required to retire at an earlier age than their male colleagues. Relying on Council Directive 76/207 Art.5(1), they complained to a tribunal of sex discrimination. The tribunal held that the directive could not be enforced against the corporation. That decision was upheld by the Court of Appeal. In the meantime, the European Court of Justice held that Art.5(1) could be relied on against anyone made responsible for the provision of a public service. Held, allowing the appeal, that the corporation was a body against which Art.5(1) could be enforced; the matter would be remitted for assessment of compensation
[5] According to the Court of Justice, in its judgement Articles 8 and 9 of the Directive laying down a procedure for the provision of information in the field of technical standards and regulations, under which Member States must notify the Commission of all draft technical regulations covered by the Directive and, except in particular urgent cases, suspend their adoption and implementation for specified periods, are to be interpreted as meaning that individuals may rely on them before the national court, which must decline to apply a national technical regulation which has not been notified in accordance with the Directive.
[6] The Court of Justice held in Case 80/86, Public Prosecutor v Kolpinghuis Nijmegen BF that the principle of indirect effects could not be applied by a member state to support the retroactive prosecution of a Dutch firm for stocking adulterated mineral water which was in breach of a Community directive. The implementation period had expired and the Netherlands should have implemented it, but had not, it would not those is such circumstances give rise to indirect effects.