ON DIRECT EFFECT OF EU DIRECTIVES ON UK DOMESTIC LAW

QUESTION: ‘Recent case law has left the doctrine of direct effect with uncertain boundaries and dubious justifications with regards to where those boundaries should lie. The European Court of Justice has failed to establish a principled means to determine when and why Directives may exert an impact on the position of private parties in litigation before national courts.’ Discuss.

 

MY REFLECTIONS:

A key feature of the European Integration project is the perceived remoteness and aloofness of the EU institutions by the European citizenry. This alleged democratic deficit of the EU is caused by a few factors include the wholly appointed and largely unaccountable nature of the officials making decisions and the absurdity of some of the publicized EU decisions in the past.

However, the development of the doctrine of Direct Effect was an early endearing position for the EU project. Direct Effect simply put; means the capacity of any EU citizen to enforce rights conferred on him/her by a provision of European Law. This doctrine was substantively developed from the 1963 Van Gend en Loos decision, (Case 26/62); although the issues surrounding the concept have been flagged since 1956 relating to the ECSC Treaty. In the Van Gend 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.” 

The main contention in this case was whether Article 12 of EC Treaty was directly effective. There are two types of Direct effects. First is the Vertical Direct Effect, which relates to relationship between a citizen and an EU member state (or agents of the state). That is; an EU law is vertically effective, if it is enforceable against the state. Secondly there is the Horizontal Direct Effect with relates to EU laws that are enforceable against private individuals (corporations and individuals).

The direct effects doctrine hinges on the principle of the supremacy of EU law over national law. As such; this principle will make no sense unless citizens can enforce EU laws in national courts. This enforceability of EU legal rights in national law is the basis of the doctrine of Direct effect.

In Van Gend en Loos, the European Court of Justice (ECJ), held that Van Gend could enforce Article 30 (formerly Article 12, then 25)  against the Dutch government based on three main criteria:

• That the Article was a clear and unconditional
• That it imposes duty on the EU State without discretion or exception given
• That it produced direct effects between citizens and EU member States.

However, UE laws come in four main instruments. These are:

• Treaty Articles – These can be both vertically and horizontally effective.
• Regulations – These can be both vertically and horizontally effective.
• Directives and – These are vertically directive only.
• Decisions –  These are addressed to particular parties, so they are enforceable against those to home it is addressed.

A large part of EU laws comes in form of Directives. Directives are instructions to a EU state to introduce a law nationally. Hence why they are only vertically effective. The European Court of Justice (ECJ) in Van Gend case held that Directives have only vertical effects. This position many believed was due to the ECJ taking account of potential reaction from the EU Member states; who were not keen on the direct effects doctrine in the first place. But as years go by, it became unsustainable to maintain this position where the largest legal instrument the EU has (Directives), cannot be enforced against private individuals or companies. Hence the ECJ began expanding the original narrow scope of the direct effects application.

Over the years after the Van Gend case, the ECJ has through cases adjudicated upon clarified the key requirements for a Directive to become directly effective.  In Case 43/75 Defrenne v Sabena (No. 2), the ECJ posited that Directives must give Clear and Identifiable rights to individual EU citizens. Then, in Case 148/78, Ratti. the ECJ stated that the time limit for an EU State to implement a Directive must have passed, before it can become directly effective. And finally the ECJ decided that Directives can be enforced only against the State and not individuals in Case 152/84 Marshall.

With pressure mounting on the ECJ to change its position on the non-horizontal direct effectiveness of Directives, more cases emerged that showed the court trimming on the edges of its agreed position. For instance to increase the scope of the effects of Directives; the ECJ  expanded the definition of what a “State” is. Originally State simply mean an EU Member government. But in Case 188/89 Foster v British Gas [1990] ECR I-3313; the ECJ said a body will be classed as a State if:

• It is subject to the control of the State
• It has special powers given to it by the State.

Later in the case NUT v Governing Body of St Mary’s Church of England (Aided) Junior School [1997] 3 CMLR 630; the court held that the definition of “the State” should be a “Broad one”; thus extending the direct effects to schools and educational establishments. Spectacularly, in Case 14/83, Von Colson and Kaman; the court also decided that national courts are part of the “State”; hence they are under obligation to interpret national law in line  with EU law.  This could mean that individuals could enforce through national courts EU Directives against other individuals.

This development appears to resolve the difficulty created by the earlier limits of direct effects of Directives; hence this is known as the doctrine of Indirect effects. It is however important that national law exists that National courts can interpret in the first place; as noted by the court in  Case 106/89 Marleasing. The UK court affirmed this position in Litster v Forth Dry Dock [1989] 2 WLR 634.

It is also now possible for  a State to be sued for non implementation of a EU Directive or law. This principle of State Liability was established firmly in Case C-6&9/90 Francovich v Italy [1991] ECR I-5357. As customary, the ECJ again imposed three conditions that must be met for state liability to be established.  These are that:

• A Directive gives rights to individual citizens
• These rights are clearly stated in the words of the Directive
• A causal link is established between the state’s failure to implement a Directive and the damage for which a redress is sought.

This principle has now been applied to all forms of EU law in sufficiently serious cases as noted in Case C-46/93 Brasserie du Pecheur v Germany. Several difficulties have arisen in the past when States have failed to implement Directives, causing individuals not being able to get remedies. This incongruity is the reason why the split created by the court between public and private sectors on the vertical effects of Directives look unfair. This is due to the fact that those in the public sector can claim to be suing “an emanation” of the State as established by the Foster v British Gas case; but those who may want to enforce Directives against the private sector cannot do so. In post Lisbon, the European Commission can push for a fine to be imposed the first time a State is brought to the ECJ for non-compliance with EU Law.

So from the foregoing; it is clear that the ECJ has failed to establish a principled means for Directives to have Horizontal effects. There are several ways the court have tried to mitigate the effect of this anomaly; either through Indirect effects or State Liability principles. These make the EU legal framework unnecessarily complex and unfair in this area. There are many that believe some of the above scenario stems from the ECJ unwillingness to reverse itself after the Van Gend case. Regardless, I am hopeful that clarity and certainty will be put in place in the near future.

 

 

 

 

 

Bibliography

1. Case 26/62 Van Gend en Loos.
2. Case 11/70 Internationale Handelsgesellschaft GmbH.
3. Case 106/77 Simmenthal SpA.
4. Case 27/67 Firma Fink-Frucht GmbH.
5. Case 148/78, Ratti.
6. Case 152/84, Marshal.
7. Case 14/83, Von Colson and Kaman.
8. Case C-106/89, Marleasing.
9. CRAIG, Paul & DE BÚRCA, Gráinne, EU LAW. Text, Cases, and materials. Oxford University Press, 2003, Third Edition
10. HARTLEY, Trevor C., The Foundations of European Community Law, Oxford University Press, 1998, Fourth Fdition
11. ARNULL, Anthony, The European Union and Its Court of Justice, Oxford University EC Law Library, 2006, Second Edition
12. PRECHAL, S., Does Direct Effect Still Matter?, 37 CML Rev. 1047-1069, 2000
13. WINTER, Direct Applicability and Direct Effect-Two Distinct and Different Concepts in Community Law, (1972), CMLR 425 
14. CRAIG, Paul, Directives: Direct Effect, Indirect Effect and the Construction of National Legislation, 22 EUR. L. REV. 519, 519 (1997)
15. CURTIN, Directives: the Effectiveness of Judicial Protection of Individual Rights, (1990), 27 CMLR,
16. OJANEN,t.,  The Changing Concept of Direct Effect of European Community Law, ERPL/REDP, vol.12, no.4, winter/hiver 2000