EU Law: Exam Summary Note on 'Direct & Indirect Effect'

DIRECT AND INDIRECT EFFECT

1. DIRECT EFFECT OF TREATY ARTICLES and PROVISIONS IN REGULATIONS

·      Direct Effect refers to those provisions of EU legislation which are capable of enforcement before national courts. The principle of direct effect was established in Van Gend en Loos.

·      Many provisions of the TFEU, plus provisions of both regulations and directives, are all capable of direct effect. For a particular provision of EU legislation to be directly effective, certain criteria must be met:

      sufficiently clear and precise;

      unconditional.

·      It is not possible to say that an entire regulation, directive, etc., is directly effective. Each individual provision must be tested separately to see if it satisfies the criteria.

TREATY ARTICLES

·      Many articles of the TFEU may have direct effect:

o   Article 21 – Baumbast

o   Article 30 – Van Gend en Loos

o   Article 34 – Ianelli & Volpi v Meroni

o   Article 35 – Pigs Marketing Board v Redmond

o   Article 45(1) – Van Duyn

o   Article 45(2) – Angonese

o   Article 49 – Reyners

o   Article 56 – Van Binsbergen

o   Article 101  – Courage Ltd v Crehan

o   Article 157  – Defrenne v SABENA

·      Where a Treaty article is directly effective then it is usually both vertically (enforceable against the State) and horizontally effective (enforceable against individuals). Cases of horizontal direct effect include Angonese and Casteels v British Airways (Article 45(2)), Viking Line (Article 49), Courage Ltd v Crehan (Article 101), Defrenne v SABENA (Article 157).

PROVISIONS in REGULATIONS

·      If a provision in a regulation is found to be sufficiently precise and unconditional, it will be directly effective vertically and horizontally (Muñoz & Superior Fruiticola v Frumar Ltd & Redbridge Ltd).

2. DIRECT EFFECT OF DIRECTIVES

·      Directives are designed to be ‘implemented’ or ‘transposed’ into national legislation. However, if a directive is still unimplemented after the implementation deadline has expired, then the possibility of direct effect arises. Thus was first decided in Van Duyn v Home Office.

1. Limitation on the Direct Effect of Directives I: Significance of the Time Limit for Implementation

·      Generally speaking, directives may only become directly effective once their implementation deadline has expired (Ratti). Until then, provisions within a directive may not be relied on.

·      However, an exception to this rule was introduced in Mangold v Helm, where a directive was held to be enforceable in advance of its implementation deadline – because the directive gave effect to the “general principle of equal treatment, in particular in respect of age”.

2. Limitation on the Direct Effect of Directives II: Directives are only enforceable against the “State”

·         The litigation in Van Duyn and Ratti was between individuals and the State. This is known as the “vertical direct effect of directives”. The justification for this is based on the fact that directives are specifically addressed to the Member States, who should not be allowed to avoid their obligations under a directive by failing to implement it (Van Duyn).

·         The “State” clearly includes central government (Van Duyn; Ratti; Becker).

·         It also includes local government (Constanzo; Jiménez Melgar) and public health authorities (Marshall).

·         In Johnston it was decided that directives could also be enforced against an “emanation” of the State, such as the police force. In Foster v British Gas, paragraph 18, the ECJ decided that directives were enforceable against any body:

Ø under the control of the State OR

Ø which has special powers

·      However, the Court then stated that directives were enforceable against bodies which were under State control AND had special powers (paragraph 20). In subsequent cases, English courts (see e.g. Doughty v Rolls Royce) and the ECJ itself (see e.g. Dominguez) have adopted paragraph 20 as the test.

·      If a case involves “vertical direct effect” then it does not matter in what capacity the State is operating (Farrell). Several cases involve the State acting in its capacity as an employer (Marshall; Johnston; Foster; Jiménez Melgar; Dominguez).

·      However, unimplemented directives may not be enforced against other individuals (Marshall v Southampton Area Health Authority).  There is therefore “no horizontal direct effect of directives”. There are two main reasons:

      There is no fault on the part of an individual that the directive has not been implemented;

      Until directives have been implemented into national law, individuals have a right to rely upon existing national legislation.         

·         The ECJ has continually refused to allow directives to be given direct effect in cases between individuals. This has been confirmed many times since (Faccini Dori v Recreb, El Corte Inglés v Blázquez Rivero). To the same effect see Doughty v Rolls Royce (Court of Appeal) and Webb v EMO Air Cargo (UK) Ltd (No.2) (House of Lords).

·      The refusal by the ECJ to allow directives to be enforced in the context of “horizontal” litigation does mean that it is arbitrary whether individuals will be able to rely on provisions in directives. For example, Nurse A employed by an NHS Trust (part of the “State”) will be able to rely on any directly effective provisions of a directive while Nurse B employed by BUPA (a private employer) will not.

·      There is no “reverse” vertical direct effect – the State may not enforce an unimplemented directive against an individual (Kolpinghuis).

Incidental Direct Effect

·      The ECJ has sometimes allowed something very similar to the horizontal direct effect of directives. The Court has allowed individuals to use a directive, defensively, to prevent other individuals from enforcing national legislation that is inconsistent with that directive (CIA Security v Signalson & Securitel, Abrahamsson & Anderson v Fogelqvist, Mangold v Helm, Kücükdeveci v Swedex, Roca Álvarez v Sesa Start España).

·      In Roca Álvarez, A-G Kokott referred to some of these cases as involving “horizontal direct effect”. However, the ECJ has not gone this far. For the time being, therefore, the principle in Marshall – that directives cannot be used, offensively, against individuals – remains good law.

Triangular Direct Effect

·      In Wells, the ECJ decided that an individual could enforce the provisions in a directive against the State even if this had the side-effect of imposing obligations on another individual.

3. inDIRECT EFFECT OF DIRECTIVES

·      Indirect effect requires national courts to interpret ambiguous national legislation “in the light of” any relevant EU directive, that is, by interpreting the national law in such a way as to promote the purpose(s) of the directive.

·      Indirect effect was introduced by the ECJ in 1984, in Von Colson.

·      Originally, indirect effect only covered the interpretation of national legislation passed specifically in order to implement a directive. An example is Pfeiffer, involving the interpretation of the German legislation adopted in order to implement Directive 93/104.

·      However, indirect effect was extended in Marleasing to the interpretation of all national legislation, even where it predated the relevant directive.

·      Indirect effect is also available in “horizontal” disputes. Examples include:

o    Litster v Forth Dry Dock & Engineering Co. Ltd., in which the House of Lords interpreted UK legislation in the light of Directive 77/187. Litster illustrates the Von Colson situation, as the UK legislation was designed to implement the directive.

o   Webb v EMO Air Cargo (UK) Ltd (No.2), in which the House of Lords interpreted the UK Sex Discrimination Act 1975 in the light of Directive 76/207. Webb illustrates the Marleasing situation as the 1975 Act predated the directive.

Limits on Indirect Effect

·      Indirect effect cannot be used if the effect of doing so would be to determine, or aggravate, the criminal liability of persons who act in contravention of the directive (Kolpinghuis; Arcaro).

·      Indirect effect imposes an obligation on national courts to implement domestic legislation only “so far as possible” (Marleasing). It does not, therefore, apply to national law which is utterly unambiguous and incapable of being “interpreted” by national courts (QDQ Media v Omedas Lecha). Similarly, A-G Sharpston said that indirect effect does not require national courts to impose an “artificial” or “strained” interpretation of national law (UNIBET).

·      The obligation to interpret national legislation only applies from the date of implementation of the directive (Adeneler).