THE EFFECT OF COMMUNITY LAW IN THE

NATIONAL COURTS

Lecture Aims

• The examine the doctrine of direct effect of EC law• To understand why the ECJ developed the doctrine

of direct effect• To understand the difference between vertical and

horizontal direct effect• To understand the particular position regarding

directives

International treaties

• Usually agreements between governments• Do not usually confer any rights on individuals

• Community legal order however constitutes a “ new legal order of international law” in which the EC Treaty imposes legal obligations and confers legal rights on individuals and these obligations/rights are enforceable in the national courts

Van Gend en Loos Case 26/62

• Customs duty imposed by Dutch government

• Duty imposed contrary to Article 25 (then Art 12) of EC Treaty

• Customs duties on imports and exports and charges having equivalent effect shall be prohibited between Member States

Van Gend en Loos Case 26/62

• Preliminary ruling from Dutch Court (under Art 234 (ex 177))

• Does article 25 (ex 12) have direct application in national law in the sense that nationals of Member states may, on the basis of this Article, lay claim to rights which the national court must protect?

Van Gend en Loos Case 26/62

• Necessary to consider the “spirit, the general scheme and the wording” of these provisions

• Objective of the Treaty is to create a common market-of direct concerned to interested parties

• This implies the Treaty is more than just an agreement between states

• This is confirmed by:– Preamble of EC Treaty– The fact that the Treaty established institutions with sovereign rights in

particular the European Parliament– The existence of the preliminary rulings procedure (Art 234 EC Treaty (ex

Art 177))

Van Gend en Loos Case 26/62

• Community constitutes a new legal order• for the benefit of which States have limited

their sovereign rights...• the subjects of which comprise the Member

States and their nationals• Independently of national legislation,

Community law therefore imposes obligations on individuals and also confers rights which become part of the national heritage

Van Gend en Loos Case 26/62

• How did Art 25 confer any rights?

• “These rights arise not only where they are expressly granted by the Treaty, but also by reason of obligations which the Treaty imposes in a clearly defined way upon individuals as well as upon Member states and upon the institutions of the Community”

DIRECT EFFECT

• Directly effective provisions create individual rights which must be protected by the national courts

• Article 25 ideally suited to producing direct effects

Van Gend en Loos Case 26/62

• Dutch government argued that only way to deal with an infringement of Community law by a Member state was for Commission to bring infringement action under art 226 (ex 169)

• ECJ- the vigilance of individuals concerned to protect their rights amounts to an effective supervision in addition to the supervision entrusted to the Commission

• Dual vigilance

Conditions for direct effect

• Case 2/74 Reyners v Belgium• The provision of Community law must be• clear, precise and unambiguous• unconditional• the operation of the provision must not be dependent

on any further action being taken by the Community or the national authorities

Direct effect

• Vertical direct effect

• obligation on the state

• individual enforcing rights against the the state

• Van Gend en Loos

HORIZONTAL DIRECT EFFECT

• Defrenne v SABENA Case 43/75

• sex discrimination claims against employer

• Art 119 (now 141) Member States “shall ensure that the principle of equal pay for male and female workers for equal work or work of equal value is applied”

Defrenne v SABENA

• Was Article 119 capable of producing direct effect?

• Was Article 119 capable of imposing an obligation on an individual?

• In short was the article capable of horizontal direct effect?

Defrenne v SABENA

• Article 119 (now 141) confers individual rights which must be protected

• The fact that Art 119(now 141) is addressed to Member States does not prevent such rights being conferred on individuals

• Art 119 (now 141), being mandatory, extends to all agreements intended to regulate paid labour collectively

Treaty Articles

• Capable of direct effect• Capable of both vertical and horizontal direct

effect

• Vertical direct effect- as against the state• horizontal direct effect-as against another

individual

Direct effect cases

• Case 124/73 Sabam -Articles 81 and 82

• Case 36/74 Walrave v Koch -Article 12• “prohibition of such discrimination doe not only apply

to the acts of public authorities but extends likewise to rules of any other nature aimed at regulating in a collective manner gainful employment and the provision of services”

TREATY ARTICLES

• Can bind the State ( vertical direct effect)

• Can bind individuals ( horizontal direct effect)

• Article 28 (ex 30)• Article 39 (ex 48)• Article 43 (ex 52)

Direct effect of EC Secondary legislation

• Regulations

• Directives

• Decisions

A Note of caution

• Direct effect and direct applicability

• Directly applicable- self executing-no need for any implementing legislation

• Different to direct effect-direct effect concerned with enforceable rights

REGULATIONS

• Article 249 (ex 189) “directly applicable”

• May also be directly effective if they satisfy tests laid down in Van Gend en Loos

Decisions

• Case 9/70 Franz Grad v Finanzamt Traunstein

• “ It would be incompatible with the binding effect attributed to decisions by virtue of Art 249 to exclude in principle the possibility that persons affected may invoke the obligation imposed by the decision”

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 and form of methods”-

– Article249 (ex 189)

DIRECTIVES

• Directives are not (cf..regulations) directly applicable

• Need to be transposed into domestic law (thus conditional on Member State action)

• in a legally certain manner• by the date prescribed• must achieve the aims• Member States have discretion as to how to

achieve the aims

Direct effect of directives?

• Van Duyn v Home Office Case 41/74

• Directive 64/221/EEC

• It would be incompatible with the binding effect of directives to exclude the possibility that individuals might seek to rely on the obligations contained in them

Reasons

• Pubblico Ministero v Ratti Case 148/78

• incompatible with binding nature of directives to stop individuals relying on directives

• To make directives more effective• if directives were not capable of direct effect then the

useful effect (effet utile) would be weakened• to ‘estop’ a Member State from relying on its won

wrongdoing (failure to implement the directive)

Direct effect of directives

• Pubblico Ministero v Ratti Case 148/78

• directives cannot have direct effect before the time limit for implementation has expired

Limits to the direct effect of directives

• Marshall v Southampton Area Health Authority Case 152/84

• Directive 76/207/EEC

Marshall v Southampton Area Health Authority

• M works for SAHA• Dismissed because she had passed normal

retirement age of women• NO claim under Sex Discrimination act• M argues treatment contrary to Directive

76/207/EEC• Preliminary ruling from English court

Marshall v Southampton Area Health Authority

• Directive prohibited this form of discrimination• The directive was capable of conferring enforceable rights• UK argued that directive could not impose obligations on

individuals (the SAHA)

• “It follows that a directive may not of itself impose obligations on an individual and that a provision of a directive may not be relied upon as such against a person”

• Directives NOT capable of horizontal direct effect

Reasons

• Art 249 -Directives are addressed to Member States

• Therefore directives are only capable of imposing obligations on Member States

• (At the time there was no requirement that directives be published)

The Marshall case

• Directive can not directly impose obligations on individuals

• Question-had SAHA acted as an individual or as part of the state (even in its capacity as an employer)?

• ECH held that where a person is seeking to rely on a directive as against the state he may do so irregardless of the capacity in which the state acts

• Why? Because ”it is necessary to prevent the State from taking advantage of its own failure to comply with Community law”

The creation of an anomaly

• UK argued that this (limitation) would give rise to an arbitrary and unfair distinction between the rights of state employees and those in private sector

• ECJ-” Such a distinction can easily be avoided if the Member State concerned has correctly implemented the directive into national law”

The creation of an anomaly

• Problems:– the effectiveness of directives within the

national legal system is restricted– this threatens the uniform application of

Community law– discrimination between individuals litigants

as it depends upon whether they are seeking to enforce provisions in directive against the state or another individual

ECJ responses

• ECJ has not overruled Marshall

• ECJ has given a very broad interpretation to the definition of the state and emanations of the state

• ECJ has developed the principle of indirect effect and state liability

The State

• Case 103/88 Fratelli Constanzo v Commune di Milano

• “ all organs of the administration including decentralised authorities such as municipalities”

The State or an emanation of the state

• Foster v British Gas (Case C-188/89)

• Legal form of the body is not relevant

• Made responsible by the state for providing a public service

• The public service is under the control of the state AND

• The body has special powers

The State or an emanation of the state

• Johnston v Chief Constable Royal Ulster Constabulary Case 222/84

• Doughty v Rolls Royce plc [1992]

• Griffin v South West Water Services (1995)-the issue is whether the ‘services’ are under the control of the state

The State or an emanation of the state?

• The test…

• a body whatever its legal form

• made responsible by state for providing public service

• under the control of the state

• has for that purpose ‘special powers’

Horizontal Direct Effect revisited

• Case C-91/92 Dori (Paola Faccini) v Recreb Srl

• Advocate General Lenz

Dori (Paola Faccini) v Recreb Srl

• “The effect of extending the case law to the sphere of relations between individuals would be to recognise a power in the Community to enact obligations for individuals with immediate effect, whereas it has competence to do so only where it is

empowered to adopt regulations”

Other options

• Indirect effect

• State Liability

• The development of ‘incidental horizontal direct effects’

Conclusion

• Direct effect

• Treat articles- vertical and horizontal direct effect

• Directives ONLY capable of horizontal direct effect