Q3 Zone A 2009
The doctrine of direct effect, first developed by the ECJ in 1963, is still
relevant today as it was then’. Outline the development of the doctrine to the
present day & consider whether this statement is accurate.
Introduction:
It is indeed true that the term direct effect was first introduced by the Court of
Justice of European Union (CJEU) previously known as the ECJ on 5 th
February 1963 in assessing the specific treaty articles in the Case 26/62 van
Gend en Loos v Nederlandse Administratie der Belastingen (1963).
This doctrine was a product by the CJEU to ensure that Union Law is
effectively applied (effet utile) as well as there is uniform application among
the Member States as well as the citizens.
The doctrine subjected to certain conditions created rights to citizens in which
they may rely and enforce at their national courts. This has definitely opened
the doorway for access of union law among individuals.
Content:
Although initially enforcement was done via proceedings under Article 258
& 259 of TFEU, nevertheless the courts have initiated a new principle called
direct effect in order to enforce EU law in member states.
This principle unlike the proceedings mentioned earlier, provide rights to the
citizens belonging to member states to enforce their rights.
Thus in Case 26/62 van Gend en Loos, when there was a conflict between
national customs regulation and the Treaty Article, the Courts decided that the
Treaty Article should be interpreted to produce direct effect & create
individuals rights to be enforced in national courts.
The justification given was that the Treaty is clear, unconditional & required
no legislative implementation measures and thus is ideally adapted to produce
direct effects between Member States and citizens.
The case was a stepping stone to show that citizens are able to enforce their
rights, and take note this can be done in both ways either vertically as was
seen in the case mentioned above or even in horizontal relationship as seen in
Case 43/75 Defrenne v Sabena (1976) in which private parties were
involved.
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It should be noted that when case laws were rapidly emerging, the need of
modifications of conditions did occur as well in relation to the doctrine of
direct effect.
In Case 2/74 Reyners v Belgian State (1974), the still referred to as Van Gen
en Loos criteria were restated as :
1) Provision must be sufficiently clear & precise
2) Provision must be unconditional or non-dependent
3) There must in fact be identifiable rights granted by the Treaty or legislative
provision on which the citizens rely.
Thus the application of the doctrine was clearly seen in relation to Treaty of
Articles and it was further applied to other secondary legislations as well.
Regulation (Case 39/72 Commision v Italy
( Slaughtered Cows )1973 Direct Effect is
Decisions (Case 9/70 Grad v Finanzant applicable provided
Traunstein 1970) the Van Gen en Loos
International Case 21-24/72 International criteria were
Agreements Fruit Company Produktschap satisfied
voor Groenten en Fruit 1972)
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.
From the definition itself, directive had created problems for the principle of
direct effect to be applicable, as take note the national authorities have the
choice of enacting the directive in their own method.
Therefore, should the Member States carry out their obligations, the Directive
will be enforced through their national law instead of EU law.
In Case 41/74 Van Duyn v Home Office (1974) , it was held that Directive
did have direct effect provided the wordings are sufficiently precise and other
remaining Van Gend’s criteria are satisfied
However it should be noted that, Directives are conditional as there is a time
limit for implementation.
Rights from the Directive can be enforced after the implementation however
it is problematic when the Directive is unimplemented or improperly
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implemented. Also, the rights contained in Directive during the
implementation period is not enforceable.
Case 147/78b Pubblico Ministero v Ratti (1979) – briefly describe the facts
– led to Van Gen en Loos criteria to be modified to cater directives in which
:
1) The provisions must be clear & precise;
2) Identifiable rights;
3) Time limit for implementation have passed.
However it should be noted that even after the criteria mentioned above are
satisfied, nevertheless it was only possible for a vertical direct effect to be
given as obligation can be imposed on Member States and not on private
individuals.
This issue was clearly seen in Case 152/84 Marshall v Southampton &
South West Hampshire Area Health Authority (1986), in which although
the applicant was able to bring a cause of action against the Area Health
Authority nevertheless it was only possible when it was recognized as an
organ of state.
The decision led to expanding the definition of State by including any body
/organization known to be emanation of State.
In Case C-188/89 Foster v British Gas (1990)-
Court declared in Paragraph 18 a Directive could be relied against a body:
1) The body is subject to the authority or control of the state; OR
2) Body has special powers that is unavailable to private body
On the other hand, in Paragraph 20, court noted that British Gas was an
emanation of state because the body provided public service, under the control
of state and was able to exercise special powers that would not be available to
a private body.
Subsequently, when the case reached House of Lords, Paragraph 20 was
adopted.
However it must be noted that the criteria in Foster were subsequently
reviewed in Farrell v Whitty and Ors, Case C- 413/15 in which CJEU held the
criteria apply disjunctively, not conjunctively.
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Additional cases: Griffin v South West Water (1995); Doughty v Rolls
Royce plc (1992)
Thus, it can be seen that courts have gone far enough to create a test in order
to fit in as many organizations or bodies under the name of state for vertical
direct effect to take place, however there is still a loophole present in which
private bodies may still not be eligible to satisfy the test.
In short, directives still could not have a horizontal direct effect.
Indirect Effect & Incidental Effect
In order to solve the problems existing and to extend the development of
direct effect, there was an introduction made to indirect effect & incidental
horizontal effect.
1) Indirect effect
- known as the process of sympathetic interpretation
-in pursuant of the duty of harmonious interpretation which is to give much as
possible useful effect to Union Law (effet utile)
-Obligation is imposed on the courts & not the parties, thus whether the action is
in vertical or horizontal matter is irrelevant.
-Originated from the case Von Colson and thus is also known as the Von Colson
principle.
-In Case 14/83 von Colson v Land Nordrhein- Westfahlen (1984), it was held
that national court is under a duty to interpret the existing national law so far as
possible to achieve the result laid down by Directive via Article 4(3) of the TEU
which states that pursuant to the principle of sincere cooperation, the Union and
the Member States shall, in full mutual respect, assist each other in carrying out
tasks which flow from the Treaties
-In Case 79/83 Harz v Deutsche Tradax GmbH (1984), directives was applied
horizontally as well.
-There were limitations imposed on the doctrine as well such as:
In Case C-106/89 Marleasing SA v La Commercial Internacional de
Aliementacion (1990), National court asked to interpret national law is bound to
do so in every way possible in the light of text…’
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This was different with the ‘everything possible’ in Von Colson and ‘everything
necessary in Simmenthal SpA v Amministrazione delle Finanze dello Stato
(1978)
Additional cases:
Case 80/86 Officier van Justitie v Kolpinghuis Nijmegen BV (1987);
Case C-168/95 Criminal Proceedings against Luciano Arcaro (1996)
2) Incidental Horizontal effect
- Under this doctrine, courts without abandoning the stance against
horizontal direct effect have nevertheless chosen to recognize
circumstances in which State’s default may incidentally affect the position
of a private individual.
- This is done regardless of the fact if the Directive is unimplemented so
long as it was prejudicial to a private party.
- Case C-443/98 Unilever Italia SpA v Central Food SpA 2000
- Case C-194/94 CIA Security International SA (1996)
State Liability
Having noted regardless of all the attempts made, there are still some
limitations imposed that might leave a party without remedy especially due to
failure of a Member State to implement a Directive or improperly
implemented it.
State Liability was thus a method devised to avoid such problems.
Case C-6 & 9/90 Andrea Francovich & Bonifaci v Republic of Italy (1991)
– briefly describe.
Modifications made in Brasserie due Pecheur SA v Federal Republic of
Germany ; R v Secretary for Transport exparte Factortame (1996) C-
46/93 & C-48/93:
1) The rule of EU law infringed must be intended to confer rights on
individuals
2) The breach must be sufficiently serious to justify imposing state
liability
3) There must be a direct causal link between the breach of the obligation
imposed on the state & the damage actually suffered by the applicant.
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Additional cases:
Case C-224/01 Kobler v Republic of Austria (2003)
Courage Ltd v Crehan
Conclusion:
As it could be seen that the Direct Effect which was created in 1963 has
been broadly expanded and is still relevant till today.
Efficiency is affirmed as well as there is uniform application of EU law
among member states and thanks to Van Gend en Loos, individuals are
now able to enforce their rights in their national courts itself.
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