Direct Effect

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Direct Effect

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- no express reference to direct effect in the EU Treaties.

- concept of direct effect was developed by CJEU through its case law.

- allows a provision of EU law to applied in national courts.

- if a provision has direct effect an individual can enforce that provision before the national courts.

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Conditions for Direct Effect

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- concept of direct effect was establish in Van Gend en Loos (Case C- 26/62) [1963] ECR 1.

- the court was asked whether a company could rely on a provision of the EC Treaty. The corut held that the EC Treaty had established a new legal order which was capable of creating rights for individuals and these rights could be enforced in national courts.

- Three conditions must be met:

1. the provision must be clear and precise;

2. the provision must be unconditional; and

3. the provision must not require further implementation

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Direct Applicability

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- Article 288 TFEU appears to give regulations direct effect.

- Art 288 TFEU describes a regulation as being of general application........binding in its entirety and directly applicable in all Member States.

- Regulations clearly intended to take immediate effect without the need for futher implementation.

- Regulations are automatically part of the domestic law of Member States. This is 'direct applicability'.

- Regulations operate both between the individual and the state (vertical direct effect) and between citizen and citizen (horizontal direct effect).

- However, if a regulation requires implementation, it may not have direct effect.

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Direct Effect of Directives

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- Can be directly effective where the deadline for their implementation has passed

- Before the implementation period has elasped, MS must not do anything which will prejudice the eventual implementation of the directive

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Van Duyn v Home Office (C- Case 41/74) [1974] ECR 1337

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- the courts concluded that directives are capable of generating directly effective rights.

- The court stated that it would be incompatible with the binding effect attributed to a directive to exclude individuals from enforcing the rights created by the directive in their national court.

- Court went further on to say that the rights created by a directive would be weakened if individuals were prevented from relying on the rights before their national courts and if the national courts were prevented from taking the rights into consideration.

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Pubblico Ministero v Tullio Ratti ( Case 148/78) [1979] ECR 1629

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- court stated that in order for a directive to have direct effect the time frame prescribed for transposing the directive must have passed.

- court went on to say that a MS's obligation to transpose a directive only becomes absolute when the time limit for transposing the directive has expired

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Vertical effect of Directives

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- Vertical effect means that an individual can enforce a provision against a Member State before a national court.

- Directives can only be vertically effective

- the following conditions must be present in order for the citizen to establish vertical direct effect:

1. The provision must give clearly identifiable rights to individuals.

2. The timeframe for transposing the directive must have expired.

3. The provision can only be enforced vertically against a Member State.

- vertical direct effect is a means of monitoring and keeping Member States in check.

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Horizontal effect

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- Horizontal effect means that an individual can enforce a provision against another individual before a national court.

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Horizontal effect of Directives

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- Directives do not have horizontal effect as per Marshall v Southampton Health and South West Area Health Authority (Case C - 152/84) [1986] ECR 723.

- the claimant had been employed by the Southampton Health Authority and when she reached the age of 62 she was dismissed due to the fact that she had reached the authority's retirement age for females. She attempted to challenge her employer's compulsory retirement policy by relying on the Equal Treatment Directive 76/206 and she claimed that the retirement policy was discriminatory.

The claimant's employer was deemed to be part of the state and as a result the claimant was successful with her vertical action.

Even though the claimant's action was vertical the court took the opportunity to comment on horizontal direct effect and stated that a directive can only be relied on vertically and they were not capable of creating rights through horizontal direct effect.

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However.....

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- To reduce the number of potential injustices which may arise from this, the CJEU has:

* taken a broad/wide definition of what 'the state' or an 'emanation of the State' is: Marshall & Foster v British Gas

* Created the doctrine of indirect effect: Van Colson and Kamann

* Futher developing the doctrine of indirect effect in: Marleasing

* That Member States can be liable to pay damage to those who suffer as a result of their non-implementation of a Directive.

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Foster v British Gas (Case 188/89) [1990] ECR 1-13313

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- court considered the meaning of 'emanation of the State'.

- the claimant was employed by British Gas and the employers had in place different retirement ages for men and women.

- the claimant attempted to rely on the Equal Treatment Directive 76/207 in order to challenge the different compulsory retirement ages for men and women.

- CJEU provided a definition for what constitutes an emanation of State, providing three conditions:

1. The body must be providing a public service.

2. The public service must be under the control of the state.

3. The body must have special powers in excess of those that apply between individuals.

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Van Colson and Kamman v Land Nordrhein-Westfalen (Case 14/83), [1984] ECR 1891

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- CJEU introduced the doctrine of indirect effect in this case

- the claimants sought to rely on the equal treatment directive, however the court held that the directive did not have direct effect.

- Despite this finding, the court held that Member States are under an obligation under Article 4 TFEU to take all appropriate measures to fulfil their obligation under EU law.

- This duty extends to the national courts, who must interpret national law with reference to the purpose and wording of the directive and EU law.

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Marleasing v La Comercial Internacional de Alimentaacion SA (Case 106/89)

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- in this case, the court further developed the doctrine of indirect effect and stated that all national law should be interpreted in light of EU law

- appears to allow for horizontal direct effect of directives by allowing unincorporated directives to be enforced against individuals.

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Member State Liability

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- if an individual fails to obtain a remedy through direct or indirect effect, it is possible to seek a remedy through state liability.

- this principle allows individuals who have suffered a loss as a result of breach of EU law to obtain damages from the member state responsible for the breach.

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Francovich and Bonifaci v Republic of Italy (Case 9/90), [1991] ECR 1-5357

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- the court developed the principle of state liability.

- the claimants had been made redundant and they were attempting to obtain payment arrears from their bankrupt employer.

- they were seeking to rely on Council Directive 80/897/EEC, however, they were unable to rely on the directive either directly or indirectly.

- the court held that Italy had failed to fulfil its Treaty obligations by not implementing Council Directive 80/897/EEC

- on foot of the findings, the claimants were able to recover damages against the state for the loss suffered due to the state's failure to transpose the directive.

- The right to damages is not absolute and is subject to certain conditions.

- the court held that where a Member State fails to implement a directive, the right to damges depend on the following three conditions being met:

1. the directive must be intended to confer rights to the individual;

2. the content and those rights must be identifiable from the directive;

3. a casual link must exist between the member state's breach and the damage suffered by the individual.

- however, the decision in this case failed to address what would happen if a memeber state transposed a directive incorrectly or only partially.

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Joint Cases: Brasserie du Pecheur SA v Federal Republic of Germany and R v Secretary of State for Transport, ex p Factortame Ltd and Others (Cases C-49/93 and C-48/93), [1996] ECR 1-1029

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- the courts elaborated on the criteria for liability in cases involving a breach other than non-transposition.

- the court held that the right to damages depends on the nature of the breach.

- the following conditions for obtaining damages were held to apply when a member state enjoys a wide discretion under EU law.

1. The rule of law infringed must be intended to confer rights on individuals.

2. The breach must be sufficiently serious

3. There must be a casual link between the State's breach and the damage suffered.

- the test for a 'sufficiently serious breach' is whether the member state has manifestly and gravely disregarded the limits on its discretion.

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Judicial Liability: Kobler v Austria (Case C-224/01), [2003] ECR 1-10239

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- case further develops the principle of state liability.

- the court extended state liability to a decision of a national court of last resort.

- the claimant was a university professor who was refused a pay increment because he did not meet Austrian university requirements. He claimed that there was a breach of the free movement provisions due to this requirement and further that the national court had wrongly interpreted EU law.

- the CJEU found that the national court's interpretation of EU law was incrorrect and that the national court had failed to refer a preliminary question to the court. The court went on to say that an incorrect interpretation of EU law by a court of last resort is grounds for state liability.

- However, the courts found that the breach was not sufficiently serious.