2009 EUI Workbook 2

University of CambridgeInstitute of Continuing Education

Faculty of LawCentre for European Legal Studies

INTRODUCTION TO ENGLISH AND EU LAWA Course by Correspondence with Tutoring

AN INTRODUCTION TO THELAW AND INSTITUTIONS OF

THE EUROPEAN UNION

DENISE ASHMORE LL.M.STEVE TERRETT PhD

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BOOK 1

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The author’s moral rights have been asserted.

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The University of Cambridge, Institute of Continuing Education is pleased to acknowledge the assistance, support and guidance ofthe Foreign and Commonwealth Office (Know How Fund) in this project.


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AN INTRODUCTION TO THE LAW ANDINSTITUTIONS OF THE EUROPEAN UNION

WORK BOOK 2

The Courts of the European Community/Union.

An Introduction to the English

Aims

To describe the composition and functions of the Courts of the EC/EU and to considerthe role of the European Court of Justice in the development of the law and constitutionof the European Community..

Objectives

You should be able to :1. Understand the composition and the powers of the Courts of the EC/EU.2. Describe the two pillars of the judicial system.3. Understand and briefly describe the preliminary ruling procedure underArticle 234 EC Treaty.

Contents

Unit 1The Courts of the EC/EU (composition and powers).Questions for Discussion

Unit 2Supremacy of Community Law

Unit 3Direct EffectIndirect Effect /Sympathetic InterpretationRemedies/ State LiabilityQuestions for Discussion

Unit 4Article 234 EC Treaty (Preliminary Ruling procedure)Questions for Discussion

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UNIT 1: The Courts

INTRODUCTION

In Workbook 1 we looked at the composition and functions of the political institutionsof the EC/EU. In this workbook we shall look at the role of the judicial institutions,namely the courts of the EC/EU. There are presently 3 Community courts and onetribunal and we will take a brief look at each of them. Nevertheless, the European Courtof Justice (ECJ) was the first of them and remains the most important; both in terms ofits functions and in terms of the role it has played in developing the European legalsystem.

We will begin this workbook with a look at the other 2 Community courts and in orderto avoid repetition, when these courts exhibit features which are identical to the ECJ, thiswill be noted and a more detailed discussion of those features will follow in the sectionwhich discusses the ECJ itself.

The Community courts are, of course, mentioned and regulated to some degree by theTreaties. Nevertheless, much of the organisation of the various courts comes not fromthe Treaties but from their own Rules of Procedure and, where this is the case it willbe indicated (e.g. CFI Rules, Article 29). Detailed discussion of the rules of Procedure isoutside the scope of this workbook. In addition certain of the relevant articles will berevised upon the entry into force of the draft EU constitution. Where appropriate thishas been indicated in the text.

A: THE COURT OF AUDITORS (CoA)

The CoA is governed by Articles 246-248. It was established by the second budgetarytreaty of 1975 and came into existence in 1977. It was formally recognised as aninstitution of the Community by the TEU.

CompositionThe CoA is composed of one member from each Member State, who is appointed bycommon accord of the Member States after having consulting Parliament. They havestaggered 6 yearly appointments, meaning that half of them retire every three years,unless of course they are re-appointed. Judges of the CoA must belong (or havebelonged) to an external audit body of a Member State or be ‘especially qualified’ for office.Their independence must be ‘beyond doubt’ and they must be ‘completely independent in theperformance of their duties’.A CoA judge may be removed by an ECJ decision that he ‘no longer fulfils the requisiteconditions or meets the obligations arising from his office.’

FunctionsIts aim is to ensure sound financial management of the EC and it possesses moresupervisory and review procedures than truly judicial functions. It has issued a number ofcritical reports about the way finance is run in the EC. One of these reports played animportant role in highlighting the financial irregularities which existed in the SanterCommission.

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The ToA increased the powers of the CoA by adding it to the list of applicants whocould bring an annulment action under Article 230, similar to the European Central Bankand Parliament. Such annulment actions will be looked at in Workbook 3.

It has no direct legal powers and relies on other bodies such as the European Anti-Fraudoffice to deal with fraud or any irregularities it discovers.

B: THE COURT OF FIRST INSTANCE (CFI)

The CFI was established in 1988, after the SEA introduced Article 225 to the EC Treaty.Although Article 225 is the only Treaty Article specifically dealing with the CFI, Article225(4) states that the CFI shall establish it’s Rules of Procedure in agreement with theECJ. These Rules provide far more detail on the organisation of the CFI.

The initial reason for the CFI’s creation was the growing case-load of the ECJ, whichwas becoming over-burdened and taking longer to decide cases, as the following tableindicates.

Year CasesPending

Average length ofpreliminary ruling

Average length of directaction

1980 328 9 months 18 months1988 605 18 months 24 months

As we all know, ‘justice delayed is justice denied’ and the CFI played an important role inrelieving the work-load of the ECJ. Another factor development designed to relieve theECJ’s work-load was the growing use of ‘chambers’ (see later).

The CFI has been of great assistance in complex factual cases (e.g. staff and competitioncases), which would otherwise have to be decided by the ECJ.

CompositionThe CFI is composed of 27 judges and the requirements for appointment are the sameas for appointment to the ECJ. There are no permanent Advocate-Generals (see later)but any CFI judge may be asked to act as Advocate-General, ‘whenever the legal or factualdifficulty of the case requires’ (Article 29[1] of the CFI’s Rules). Chambers are commonlyused.

Function(s)The CFI was originally empowered to hear any direct action (that is an action whichstarts and finishes at Community level, rather than national court level, and involves achallenge to EC action/inaction) brought by a natural/legal person (known as non-privileged applicants). It was not originally allowed to hear claims brought byCommunity institutions or Member States (known as privileged applicants). This waschanged under the TEU, however, and the CFI was given competence to hear directactions, regardless of the status of the claimant. Nevertheless, before such competencecould be exercised, approval of the Council of Ministers was required and, at the time ofwriting this workbook, no such approval has been given and no cases brought byMember States or EC institutions have been heard before the CFI.


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This could cause problems, since it means that the same issue could be raised beforeboth the CFI and ECJ by different parties, but at the same time. In such circumstances,either the ECJ or CFI can ‘stay’ (i.e. pause) proceedings (Article 82 ECJ Rules of Procedure)but this is not always an adequate solution. If the CFI stays proceedings which involve anindividual, that claimant can’t intervene in the proceedings which are continuing at theECJ. Furthermore, since the CFI’s findings of fact are not binding, if the ECJ decided tostay proceedings, it would have to subsequently establish facts in the case before it and itmay not reach the same factual conclusion.(E.g. are advertisements encouraging people to ‘Buy the Best of British Food’ a restriction onthe free movement of goods? See Meat and Livestock Commission v ManchesterMeat and Poultry Market Ltd [1997] CMLR 361.)The ability to ‘stay’ proceedings under Article 82a may be of some practical benefit to theapplicant but it also denies them the right to have their case heard by both courts.

The CFI’s suggestions to give it jurisdiction to hear cases regardless of the status ofapplicant were supported by the ECJ only after some initial hesitation. Nevertheless, theECJ has argued against the CFI having jurisdiction to give Article 234 preliminaryrulings on Community law, for the guidance of national courts. Given that Article 234references comprise over 50% of cases, it may be thought that there is a conflict betweenthe desire of the ECJ to reduce its own work-load and speed-up judicial decision-makingin the Community, on the one hand, and its desire to retain certain areas of judicialcompetence for itself alone, on the other hand.

The proposal in the draft Constitution to give the power to hear preliminary references isalso contained in the Lisbon Treaty in cases which will be defined in the Statute of theECJ (Article III-358(3)), as is the renaming of the court to the General Court to be givenappellate jurisdiction over any newly created specialist courts if there is the proposedrestructuring of the present court system.

The existence of 2 courts within the EC system clearly raises questions about whetherthe CFI is bound by its own precedent or that of the ECJ. In terms of the first question,the CFI is not formally bound by its own previous judgments but endeavours to followthem in order to ensure consistency in its case-law. In terms of the influence of the ECJ’sjurisprudence, the CFI has stated that“...the CFI is bound by the jurisprudence of the ECJ, first, in the circumstances laid down in the secondparagraph of Article 54 of the Statute of the ECJ [i.e. where an appeal against a CFI decision has beenmade and the ECJ has allowed the appeal] and, secondly, pursuant to the principle of res judicata. It issettled case-law that this can be the case only if the proceedings were between the same parties, had thesame purpose and were based on the same submissions as the present case...these conditions beingnecessarily cumulative.”

The creation of the CFI has not entirely eased concerns about the time taken to resolvecases in the ECJ, as can be seen by the table below, showing the length of time taken bythe ECJ to give judgment on the various types of cases. As the EU has enlarged thenumber of cases has also significantly increased and so recent reforms in procedure, thegreater use of chambers (see later) and the addition of new judges have also beenimportant elements in ensuring that cases are dealt with as efficiently as possible.In 2007 for example the ECJ had some 580 cases brought before it of which 265 werepreliminary rulings and 221 direct actions, which is an increase on the figure in 2005where there were 474 new cases.


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Year Average lengthofpreliminaryruling

Average lengthofdirect action

Average lengthof CFI appealcases

2003 25 months 25 months 28 months2004 23.8 months 20.2 months 21.3 months2005 20.4 months 21 months 21 months2007 19.3 months 18.2 months 17.8 months

Equally, the length of time taken for the CFI to resolve disputes, and the number ofpending cases before the CFI has begun to cause concern. The ECJ and CFI drew-up areport entitled ‘The Future of the Judicial System of the European Union’ in 1999, includingrecommendations to appoint more CFI judges, to allow single CFI judges to decidecases, to limit the national courts which could make preliminary ruling requests and torequire ECJ approval for any appeal from a CFI decision, but most of theserecommendations remain unimplemented, although the findings have clearly influencedthe reforms proposed in the Lisbon Treaty.

Decisions of the CFI are subject to appeal to the ECJ, on a point of law, within 2months from the date of the original decision.

The Lisbon Treaty will rename this court the General. It retains broadly the same areasof competence including the possibility of dealing with preliminary rulings in definedareas subject to the condition that if the General Court considers the ‘decision to be one thatmay affect the unity or consistency of EU Union law’, then it may choose to refer the ruling tothe ECJ instead.. There will remain a right of appeal to the ECJ against decisions takenby the General Court as well as a general right of review of decisions taken on appeal tothe General Court from one of the newly created specialized courts again incircumstances of the need to ensure unity and consistency.

C: THE EUROPEAN COURT OF JUSTICE (ECJ)

The rules governing the ECJ are to be found in Articles 220-245 but also in the Statute ofthe ECJ and the Rules of Procedure of the ECJ.These can be found on the web at:http://www.curia.eu.int/en/instit/txtdocfr/index.htm

The latter are adopted by the ECJ itself, after having obtained the unanimous assent ofthe Council of Ministers (Article 245). The ECJ has argued that the requirement ofunanimity could, in an enlarged EU, prevent necessary changes to the Rules of procedureand has requested to be able to change these rules unilaterally however this would haveremained unchanged in the Draft Constitution (Article III-355).

CompositionThe ECJ is composed of 27 Judges and 8 Advocate-Generals (A-G’s); this is now to beincreased to 11 Advocate Generals. Although the Treaty does not specifically state thateach Member State shall have a judge, in practice there is a judge from each of the 27Member States.

Judges are appointed by ‘common accord’ of the Member States (Article 225). They must


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be people whose ‘independence is beyond doubt’ and must be either chosen from the highestcourt of their State or be ‘jurisprudents of recognised competence’ (Article 223). The compositionof the ECJ has included members of the judiciary, civil service, advocates and academics.

Judges are appointed for 6 years but the terms are staggered and every 3 years, half arerenewed or reappointed. Re-election requires unanimity of all States, acting by ‘commonaccord’. In practice all judges so far have been re-elected until they voluntarily chose toretire. The former UK judge David Edwards, who retired in 2004 had been an ECJjudge since 1992 and the UK judge in the Court of First Instance since 1982. The currentUK judge is a former Court of Appeal judge Konrad Schieman.The judges then elect a president of the court, the most recent appointment beingVassilios Skouris who was re-elected in 2006 to serve until October 2009.

The EP requested a role in appointing judges but it was felt that this might cause judgesto make comments during EP interviews on issues which they may later have to decidein cases, which would compromise their impartiality. The EP accordingly retains no role.

The draft Lisbon Treaty would also herald some changes to the appointment structureinserting a new Article 224A which will create a judicial panel to advise on new judicialappointments proposed by the Member States. The 7 member panel would be made upfrom amongst previous members of both courts, “members of supreme national courts andlawyers of recognised competence, one of whom shall be proposed by the European Parliament”.

In respect to enlargement, the ECJ itself has stated that:“..the presence of members from all the national legal systems on the Court is undoubtedly conducive toharmonious development of Community case-law, taking into account concepts regarded as fundamentalin the various Member States and thus enhancing the acceptability of the solutions arrived at. It may alsobe considered that the presence of a judge from each Member State enhances the legitimacy of the Court.”Nevertheless, it also said that “any significant increase in the number of judges might mean that theplenary session of the Court would cross the invisible boundary between a collegiate court and adeliberative assembly. Moreover, as the great majority of cases would be heard by chambers, this increasecould pose a threat to the consistency of the case-law”.

Article 222 describes the role of Advocate-Generals. They are required to make reasonedsubmissions in open court with complete impartiality and independence. France,Germany, Italy, Spain and the UK each have an A-G, with the remaining positionsrotated between the other Member States, the increase to 11 AG’s will also provide apermanent AG for Poland.

Each judge and A-G has at least 3 referendaires who are legal secretaries performingfunctions similar to the USA’s judicial clerks. They will research the case and present theA-G with an opinion of their own which, whilst not binding, can often influence theapproach taken by the A-G.

Procedural OrganisationThe ECJ sits either as a full, or plenary, court or as a Grand Chamber of 13 judges(mainly comprising the president of the court and of the 5 judge chambers) or inchambers (fewer judges deciding a case). Article 221 allows the ECJ to sit in chambersand the Rules of the Court provide for extensive use of 3 and 5 judge chambers. AMember State or institution (privileged applicants) bringing a case before the ECJ, or


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submitting written observations in a case other than a preliminary reference case mayrequest a Grand Council session with plenary sessions reserved for cases of exceptionalimportance (Article 44 of Rules of Procedure) at the request of Member States.

Both the ECJ and the CFI have written and oral stages - in contrast with common-lawsystems, the written stage is the most important in the ECJ. This is undoubtedly linkedto the fact that the original six Member States all had continental civil law systems.

Once a case is referred to the court, a preliminary report is prepared to decide whether ahearing is needed, or whether the issue has already been dealt with in an earlier case andwhether an advocate general should be appointed. In the latter case once the parties havesubmitted their written pleadings, the oral pleadings stage begins. Oral hearings adopt theinquisitorial style, meaning that the judges are not limited to discussing what theadvocates put forward in argument but can also ask their own questions and raise theirown points. Following oral submissions, but before the judges begin their deliberations,an A-G presents an impartial opinion on how he would decide the case. These opinionsare often far more detailed and full of reasoning than the actual court’s decision. The A-G’s opinion is not binding on the judges but it is often followed, both in terms of resultand reasoning. Much of the ‘activism’ suggested of the court has come through the A-G’s - Lord Slynn, Francis Jacobs etc. - and a number of A-G’s have gone on to becomeECJ judges.

Following the A-G’s opinion, a juge rapporteur is selected from the presiding judges,whose role is to present a brief summary of the factual and legal questions in the case.He will prepare a draft court judgment which will then be discussed by the court orchamber.

All presiding judges are required to vote on the case and, if a unanimous decision is notpossible, decisions are taken by majority. All judges are required to sign the judgment,however, and there is no provision for dissenting opinions/judgments.

Certain problems may be caused by difficulties between the judges in agreeing thecommon wording of judgments, in the absence of a unanimous decision. In the ICI vCommission (Dyestuffs) Case [1972] ECR, 619, the inability of the full court to reacha unanimous decision and wording caused a delay of 6 months.

It is now common to see ‘standard clauses’ for ECJ judgments which are repeated at thebeginning of every case on that subject matter

It has been said that “...the collegiate nature of the court’s judgments lends them certain flatness, suchas we associate with the language of a Government report. The tone is measured; there is neitherexcitement nor humour. One must not expect the often elegant, sometimes idiosyncratic, prose of anEnglish judgment, upon which the individual judge will have imprinted his own personality andparticular style.” (Brown and Jacob’s, The Court of Justice of the EC, 2000, at p.57).

The language used during the Court procedure will be determined by the parties to theproceedings. However, the language used by the judges at session is French. Oncejudgment is given, all judgments are translated into the EC’s other working languages.Up until 2006 all applications and references were fully translated into all officiallanguages but since enlargement this has been seen as impractical leading to a greaternumber of summaries being prepared instead.


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The ECJ does not have a formal system of precedent, but in practice it often follows itsearlier decisions in order to ensure consistency. Nevertheless, the ECJ has on occasionsoverruled its previous case-law, although with varying degrees of transparency.

e.g. In CNL-Sucal v HAG (HAG 2) [1990] ECR 1 3711, the ECJ overruled its earlierapproach to the doctrine of ‘common origin’ for the purposes of EC intellectualproperty law, taken from Van Zuylen v HAG (HAG 1) [1974] ECR 731. This was thefirst time that an earlier case was expressly overruled.

E.g. In Keck and Mitthouard [1993] ECR1 6097, the ECJ appeared to overrule itsearlier case-law on free movement of goods, whilst saying merely that it had decided to‘re-examine and clarify its case-law on this matter.’

ECJ judgments are generally short in length and often contain very little substantivereasoning for the decision taken in the case. The judgment may refer to previous cases orto the A-G’s opinion, but tend to do so only where they support the court’s decision andnot when some passages of the A-G’s opinion or other ECJ cases which may go againstthe court’s reasoning.

When interpreting EC legislation, whether from Treaty articles or instruments ofsecondary legislation, the ECJ often uses teleological reasoning rather than the literalapproach which is more common of the English courts. It has been said that “The ECJhas become well-known for interpreting provisions of Community law by reference not just - or evenprincipally - by reference to their wording, but also by reference to their spirit and the general scheme of theinstrument of which they form part.” (Wyatt and Dashwood’s EU Law, 2000, p.197.)

One English judge described it in the following way...

Customs and Excise v ApS Samex (1983) All ER 1042“...the interpretation of Community instruments involves very often not the process familiar to commonlawyers of laboriously extracting the meaning from words used but the more creative process of applyingflesh to a spare and loosely-constructed skeleton.”

The fact that EC legislation is published in twenty three, equally authoritative, languagesmay give some explanation for this approach.

Some point to the ECJ’s interpretative methods as one example of the ECJ’s activism,whilst others note that use of such sources of inspiration is well established ininternational law.

e.g. The Vienna Convention on the Law of Treaties 1969Article 31 - “A treaty shall be interpreted in good faith and in accordance with the ordinary meaning tobe given to the terms of the treaty in their context and in the light of its object and purpose. The contextfor the purpose and interpretation of a Treaty shall comprise… [inter alia]… its preamble andannexes.”

Article 32 - “Recourse may be had to supplementary means of interpretation, including the preparatorywork [travaux preparatoires] of the treaty and the circumstances of its conclusion…”

John Major, a former UK Prime Minister, famously proposed that the ECJ was ‘a political


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rather than a judicial institution’ and argued that its judgments should be capable of beingoverruled by the Council of Ministers. Francis Jacobs (A-G from the UK) has arguedthat the option of being non-activist was not available to the ECJ and that only the UKhas a problem with it because it is unfamiliar with the constitutional-court type structurewhich was created under the original treaties.

FunctionsThe ECJ is the primary judicial institution of the Community, but one must rememberthat its jurisdiction in respect of the other 2 pillars of the Union is not identical to itsjurisdiction under the EC pillar.

TEU Article 46 excludes the majority of TEU provisions from the ECJ’s jurisdiction andthe ECJ has no jurisdiction at all under the CFSP pillar.Nevertheless, all acts falling outside the scope of ECJ review are specified in Article 47TEU to be unable to affect the existing acquis communitaire. Article 47 TEU is justiciable bythe ECJ.

In terms of the second pillar (PJCCM) Article 35 confers jurisdiction on the ECJ toreview both matters which have been transferred to the EC pillar and issues whichremain under the PJCCM pillar. This Article, however, only gives the ECJ jurisdiction onsuch matters subject to agreement by the relevant Member State, and only upon areference from the ‘court of last instance’(Article 68 EC), in comparison with ‘any courtor tribunal’ which may make a reference under the EC preliminary reference procedure(Article 234). Provisions on law and order and internal security are excluded from review.

The Lisbon Treat would extend the competence of the ECJ bringing all three pillarswithin the court's jurisdiction. The new Articles broadly provide a role of interpretationof the Constitution upon direct request by Member States, as well as a review of validityof legislation upon Member State request within one month of implementation. Some ofthe present limits are retained however so that the ECJ will continue to play no role inassessing or reviewing police action under the former PJCCM pillar. It will however begiven a wider judicial review role bringing within its umbrella the actions of theEuropean Council as well as procedural review of any decision to expel Members States(although it cannot review the substance of such a decision). It will introduce a speedyprocedure for references made concerning a person held in custody in the newprocedural rules contained in the Lisbon Treaty Functioning of the EU (LTFEU), whoseprovisions will run side by side with the Article 234 procedure in the revised primarytreaty (LTEU). It will introduce a speedy procedure for references made concerning aperson held in custody in the new procedural rules contained in the Lisbon TreatyFunctioning of the EU (LTFEU), whose provisions will run side by side with the Article234 procedure in the revised primary treaty (LTEU).

In terms of the ECJ’s role within the EC pillar, the Treaty is rather brief, stating simplythat...“The court shall ensure that in the interpretation and application of this Treaty the law is observed.”Article 220.

This rather vague Treaty Article has been used by the ECJ on a number of occasions,however, to justify controversial judgments in which it created doctrines important to theEC legal system. In Workbook 1 we saw how the ECJ used this Article to develop thedoctrine of general principles of Community law.


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A number of other Treaty Articles govern the role of the ECJ in hearing various types ofcases.

The two general categories of potential cases are:direct actions (i.e. those which start and finish before the ECJ) andpreliminary rulings (i.e. those in which the ECJ gives a ruling on Community law whichis requested by, and used by, a national court before which an issue relating to EC law ispending).

Direct actions include

cases brought by the Commission against a Member State (Article 226);

one Member State against another Member State (Article 227);

actions against wrongful Community action (Article 230) or inaction (Article 232);and

actions relating to the contractual or tortious liability of the EC (Article 235).

Preliminary rulings requested by a national court are governed by Article 234. Thepreliminary rulings procedure will be looked at in Unit 4 of this workbook and theremaining articles will be discussed in Workbook 3.

The Lisbon Treaty adopts the proposal for the creation of additional specialist courts. Infact the first such of these has already been created by Council Decision 2004/752/ECwhich sets up a new European Union Judicial Service Tribunal, whose initial panel of 7judges have been given the task of resolving disputes arising from the staff of the civilservice of the European Union, with a right of appeal to the Court of First Instance. Thiscourt was formally convened in December 2005, hearing its first case in March 2006.

QUESTIONS FOR DISCUSSION

The CFIa) Do the Rules of the CFI require approval by any institution other than the ECJ?b) Is there an appeal from the CFI to the ECJ and, if so, on what conditions?c) In which ways is the jurisdiction of the CFI limited? Are such limitations

justifiable?d) What are the advantages/ disadvantages of the ECJ’s stance in relation to the

jurisdiction of the CFI?e) What/Who are the two categories of potential applicants before the CFI/ECJ? Is

it defensible to have different categories of applicant?f) To what extent is the CFI bound by the jurisprudence of the ECJ?

The ECJg) Are there any potential criticisms of the way in which the judges of the CFI and

ECJ are appointed/reappointed?h) What are the advantages/disadvantages of disallowing separate judgments or

dissenting opinions in the ECJ?i) What are the advantages/disadvantages of not having a formal system of

precedent within the ECJ?


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j) Give examples where the ECJ appears to have deviated from its previous case-law, other than those which are discussed in this workbook. (See Workbook 1for other examples).

k) “There is a serious need to rethink the structure and organisation of the ECJ in light of itsincreasing workload, perhaps even more crucially given the recent expansion eastwards.” Towhat extent do you agree/disagree with this statement?

The Lisbon Treaty

I. What will be the effect of the Lisbon Treaty upon the present procedure andjurisdiction of the court?

II. Would the proposed changes in the method of appointment of judges haveadded to the effectiveness of the court?

UNIT 2: Supremacy of EU Law

Typically, international organisations specify whether the law of their organisation issupreme or not. Where they do not, it is normally a question of national law to decidewhether the relevant international law is supreme to domestic law. The EC Treaty,however, does not deal directly with the question of whether EC law is supreme to thenational law of the EC Member States. The closest thing is Article 10 requiring allMember states to “…take all appropriate measures, whether general or particular, to ensure thefulfilment of the obligations arising out of this Treaty or resulting from action taken by the Communityinstitutions. They shall facilitate the achievement of the Community’s tasks.”In Comet [1976] ECR 2043, the ECJ stated that the duty of cooperation in Article 10extends to include the national courts of the Member States.

The doctrine of international legal supremacy has been found to exist in otherorganisations and the ECJ was not the first court to rule that its own legal order wassupreme to the Member States’ systems. Nevertheless, the ECJ appears to have beenflexible in borrowing from traditional international law theory where useful to achieve itsaims and to have distanced the EC legal system from traditional law theory wherever thelatter ran contrary to its aims.e.g. In Commission v Luxembourg and Belgium [1964] ECR 585 the ECJ rejectedthe international law theory of ‘reciprocity’, which states that one Member of aninternational organisation cannot bring an action against another Member State if both ofthose States are in breach of the rules of the organisation. As we will see, the ECJ takesthe view that the EC/EU is a new legal order and this approach is visible in itsjudgments.

The draft constitution would have put this issue beyond doubt by stating clearly thatsupremacy lies with the EU (Art I-6), and this fact may well have affected the supportgiven to the draft document by the EU population.‘The Constitution and law adopted by the Union’s Institutions in exercising competences conferred on it,shall have primacy over the law of the Member States.’

A THE ECJ’S VIEW OF SUPREMACY

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The ability for an individual to enforce certain EC law in their national court (see DirectEffect later) would be virtually useless unless EC law was also found to be supreme tonational law, otherwise the EC law could be modified or overruled by inconsistentnational law. In a series of important judgments, the ECJ described how, in its view, EClaw was supreme to national law.

Van Gend en Loos [1963] ECR 1This case involved an Article 177 (now Article 234) preliminary reference asking whetherArticle 12 (now 25) of the EC Treaty was capable of direct effect. Strictly speaking, thisissue did not raise the issue of supremacy because, if the ECJ found the Article 12 to havedirect effect, Dutch national law would automatically deem it superior to domestic law.Nevertheless, in one paragraph, the ECJ indicated that it was also prepared to deal withthe issue of supremacy if it should arise directly. The ECJ stated that“The object of the EEC Treaty, which is to establish a Common Market, the functioning of which is ofdirect concern to interested parties in the Community, implies that this Treaty is more than an agreementwhich merely creates mutual obligations between the contracting States. It is also confirmed morespecifically by the establishment of institutions endowed with sovereign rights... The conclusion to bedrawn from this is that the Community constitutes a new legal order in international law, for whosebenefit the States have limited their sovereign rights, albeit within limited fields.”

N. B. This judgment is a landmark decision by the ECJ, when one is aware that most ofthe Member States intervened in the Van Gend case (as they are entitled to do under theECJ’s rules of procedure) and argued against the doctrine of supremacy and also againstthe doctrine of direct effect, as indeed did the Advocate General who indicated that sucha view was unlikely to be accepted in the Member States.

The issue of supremacy did not take long to become the central issue in a case, however.

Costa v ENEL [1964] ECR 585Nationalization of Italian electricity production to ENEL. Costa (a lawyer) was alleged byENEL to owe £1.10 bill and he challenged the act of nationalizing electricity production,saying it was contrary to the Italian constitution and to certain provisions of EC law. Adual reference was made - one to the Italian Supreme Court (on Italian law) and one tothe ECJ (on EC law). The Italian Supreme Court said that only its reference waslegitimate because only it could strike down Italian legislation. The ECJ said it wascapable of ruling on EC law without indirectly ruling on national law.Advocate-General Lagrange’s opinion said that the Italian Court’s ruling had “dangerouseffects for the common market and threatened to undermine the very foundations of the Treaty”.The ECJ said that“By contrast with ordinary international Treaties, the EEC Treaty has created its own legal systemwhich, on entry into force of the Treaty, became an integral part of the legal systems of the Member Statesand which their courts are bound to apply.”Furthermore, “…by creating a Community of unlimited duration, having its own institutions, its ownpersonality, its own legal capacity and capacity of representation on the international plane and moreparticularly real powers stemming from a limitation of sovereignty or a transfer of powers from the Statesto the Community, the Member States have limited their sovereign rights, albeit within limited fields, andhave thus created a body of law which binds both their nationals and themselves.”“The transfer by the States from their domestic legal systems to the Community legal system carries withit a permanent limitation of their sovereign rights, against which a unilateral act incompatible with theconcept of the Community cannot prevail.”


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The court undeterred by the lack of a clear statement in the Treaties referred to “the termsand spirit of the Treaty” to justify its position. It went further in the following case, whichwe shall consider once again to consider the view of the national court concerned.

In Germany the court was concerned as to the level of protection of Human Rightswhich they were obliged to protect under their constitution. The ECJ was clear that thiswould not affect the status of European Community law.Internationale Handgesellschaft mbH v Einfuhr [1970] ECR 1125“Recourse to legal rules of concepts of national law in order to judge the validity of measures adopted bythe Community’s institutions would have an adverse effect on the uniformity and efficacy of EC law. Infact, the law stemming from the Treaty, an independent source of law cannot by its very nature beoverridden by rules of national law, however framed, without being deprived of its character asCommunity law and without the legal basis of the Community itself being called into question. Therefore,the validity of a Community measure...cannot be affected by allegations that it runs counter to eitherfundamental rights as formulated by the constitution of that State or the principles of a nationalconstitutional structure.”

Commission v Italy [1972] ECR 527“...no appeal to provisions of internal law of any kind can prevail.”

In the following case the ECJ advised the national referring court how to deal withconflicting national law

Simmenthal No.2 [1978] ECR 629An Italian customs tariff was found by the ECJ to be unlawful under Article 30 (now 28).The Italian government accepted the supremacy of EC law but argued that nationalcourts other than the constitutional court could not overturn domestic legislation and soit would have to await a decision of the constitutional court or the overturning of thelegislation by the Italian government. The ECJ disagreed.“A national court which is called upon to apply EC law is under a duty to give effect to those provisions,if necessary refusing to apply conflicting national law even if adopted subsequently to the EC law and it isnot for that court to request or await the prior setting-aside of such provisions by legislative or otherconstitutional means.”Directly applicable measures of EC law “in so far as they are an integral part of, and takeprecedence in, the legal order applicable in the territory of each Member State, preclude the valid adoptionof new national measures to the extent to which they would be incompatible with Community provisions.It follows…..that every national court must...apply Community law in its entirety and protect rightswhich the latter confers on individuals and must accordingly set aside any provision of national law whichmay conflict with it, whether prior or subsequent to the Community rule.”

IN.CO.GE.Srl [1998] ECR I-6907“In Simmenthal the issue facing the court related in particular to the consequences of the directapplicability of a provision of Community law where that provision was incompatible with a subsequentlyadopted provision of national law...It cannot...be inferred from the judgment in Simmenthal that theincompatibility with Community law of a subsequently adopted rule of national law has the effect ofrendering that rule of national law non-existent. Faced with such a situation, the national court is,however, obliged to disapply that rule, provided always that this obligation does not restrict the power ofthe competent national courts to apply, from among the various procedures available under national law,those which are appropriate for protecting the individual rights conferred by Community law...”

This means that, where national law runs contrary to EC law, yet that national law


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contains remedies which may be used to enforce Community rights, the national rulemay be held valid insofar as those remedies but not as respects the provisions whichcontradict EC law.

In Larsy [2001] ECR I 5063 it was confirmed that this would apply equally toadministrative agencies in Member States.

In emphasising that rights must be exercisable in practice, the ECJ made it clear thatappropriate remedies must also be available nationally, whether or not these remedieswould be available in national law.

R v Secretary of State for Transport (ex parte Factortame Ltd.) [1990] ECR 2433The UK’s Merchant Shipping Act 1988 prevented Spanish fishermen using any of the UK’sallocated EC shipping-quota under the Common Fisheries Policy. It prevented theregistration of Spanish ships as English vessels, if such vessels were owned by a UK Co.where less than 75% of the shares were owned by UK residents. This Act was challengedas contrary to EC law by UK companies which had large Spanish shareholdings. Thecompanies also requested the suspension of the Act of Parliament until such time as theECJ had ruled on whether the Act breached EC law. The trial judge assumed that he hadthe power to suspend the UK Act on the prima facie case of the plaintiffs but Court ofAppeal ruled that was against the UK constitution (with its doctrine of Parliamentarysupremacy). The House of Lords, however, agreed with the trial judge that the plaintiffswould suffer irreparable harm unless interim relief was granted. It referred the issue tothe ECJ under the Article 234 procedure and asked whether a court such as itself, whichwas bound by constitutional theory to uphold the supremacy of national legislation, hadthe power under Community law to suspend the operation of one of its national statutesuntil it was decided whether that statute was itself in breach of Community law. The ECJruled that:“...the full effectiveness of EC law would be impaired if a national rule could prevent a court seized of adispute governed by Community law from granting interim relief in order to ensure the full effectiveness ofthe judgment. It follows that a court which in those circumstances would grant interim relief if it were notfor a rule of national law is obliged to set aside that rule…”

B THE RESPONSE OF THE NATIONAL COURTS

The development of the doctrine of supremacy by the ECJ clearly has far-reachingimpacts on the national court systems of the Member States. The reactions of some ofthe Member States will now be discussed.

(a) GermanyAs one of the founding Member States of the ECSC, Euratom and the EEC, it isimplicit, at least, in the reasoning of the ECJ that these States knew and intended tocreate the type of legal system described by the ECJ in cases such as Costa v ENEL.

Basic Law of the German Federal Republic 1949Article 24 - the Federation may by legislation transfer sovereign powers to intergovernmental institutionsArticle 25 - The general rules of public international law shall be an integral part of federal law. They

shall take precedence over the laws and shall directly create rights and duties for theinhabitants of the federal territory.


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Although Germany’s constitutional capacity to join the EEC was never in doubt, theGerman constitutional court expressed concerns over the absence of human-rights andfundamental freedoms in the EEC Treaty. If EC law were supreme, and could overridethe German constitution’s human-rights provisions, this could leave the German courtunable to enforce its role as protector of human-rights.

Internationale Handgesellschaft [1974] ECRThe German Constitutional Court said - “…EC law is neither a component part of the nationallegal system nor international law, but forms an independent system of law flowing from an autonomouslegal source. The ECJ cannot with binding effect rule on whether a rule of EC law is compatible with theConstitution, nor can this Bundesverfassungsgericht rule on whether a rule of secondary community law iscompatible with a primary rule of EC law. This does not lead to any difficulties so long as the twosystems of law do not come into conflict with one another in their substance. […]This ‘so long as’ proposition from the German Court has led this case to be known bythe German phrase ‘Solange’.Part of the reasoning of the German court was that, at the time, the Community couldstill be said to “...lack a democratically elected Parliament which possesses legislative powers and towhich community organs are fully responsible on a political level; it still lacks in particular a codifiedcatalogue of fundamental rights, the substance of which is reliably fixed for the future in the same way asthe substance of the Constitution.”

As may be seen from Workbook 1, the response of the ECJ to this threat to Recognitionof the supremacy doctrine was to develop the concept of general principles ofCommunity law as well as to deny the view by re-stating firmly that supremacyremained with the EC.

Following this development, the German court changed its approach (in a case known asSolange II).

Wunsche Handgesellschaft [1987] 3 CMLRev 225 (Solange II)The German court would no longer exercise its discretion to oversee Community law, solong as (‘solange’) the EC itself continued to guarantee human-rights to a level consistentwith those in the German constitution.

Brunner v TEU [1994] 1 CMLR 57In an unsuccessful attempt by a German national to challenge the TEU, (see Workbook1,) the German constitutional court noted that:“In future, it will have to be noted, as regards interpretation of enabling provisions by CommunityInstitutions and agencies, that the TEU as a matter of principle distinguishes between the exercise of asovereign power conferred for limited purposes and the amending of the Treaty so that its interpretationmay not have effects that are equivalent to an extension of the Treaty. Such an interpretation of enablingrules would not produce any binding effects in Germany.”

The German court seemingly wished to remind the EC that, as regards sovereign powerswhich had not been specifically ceded to the Community, the German courts retainedcompetency. There was a concern as to what was called ‘creeping competence’.

In a number of more recent decisions in the 1990’s involving the Banana Regulations,the attitude of the national courts seemed to be moving against the concept ofsupremacy where it clearly negatively affected German national rights. However themore recent decision of Alcan [2000] seems to indicate renewed acceptance of the


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principle of supremacy so far as the level of human rights protection available in theEuropean Union remains high.

However as with France there is a concern as to how far supremacy can be extended tocover Directives (Re A Rehabilitation Centre [1992] Unit 4)

b) Italy

Italy had similar concerns to those expressed in Germany. In the case ofFrontini -v- Ministero delle Finanze [1974] 2CMLR 372 it made it clear that it wouldretain the right at national level to safeguard the rights of its citizens saying:-“It is hardly necessary to add that by Article 11 of the Constitution limitations of sovereignty are allowedsolely for the purpose of the ends set out therein, and it should therefore be excluded that such limitationsof sovereignty ....can nevertheless give the organs of the EEC an unacceptable power to violate thefundamental principles of our constitutional order or the inalienable rights of man. And it is obvious thatif ever Article 189 had to be given such an aberrant interpretation, in such a case the guarantee wouldalways be assured that this Court would control the continuing compatibility of the Treaty with the abovementioned fundamental principles.’

c) France

France has a two-prong judicial system, with two supreme courts. The highest ordinarycourt, Cour de Cassation, accepted the supremacy of Community Law in 1975. Thesupreme administrative court, Conseil d’Etat, continued to reject supremacy until 1989.It reasoned that it had not been given the jurisdiction to review the validity of Frenchlegislation. Therefore it could not1) find the legislation incompatible with Community law; nor could it2) afford priority to EC law.

Finally in Raoul Georges Nicolo [1990] 1 CMLR 1734 2 French citizens sought theannulment of the European Parliament elections in 1989, it accepted, somewhatunwillingly, the idea of supremacy. It expressed its concern about supranationality linkedwith the purported law making activity of the judges, therefore its judgment cannot bedescribed as one of unqualified approval but rather an acceptance that it was the ‘odd manout’.It remains unprepared to accept that this principle can be extended beyond theapplication of Treaty Articles and Regulations and has not accepted the Direct Effect ofDirectives (Cohn Bendit [ 1980] see Unit 4)

d) BelgiumAnother one of the founding Member States, this country had no provision as tosupremacy in its constitution, however it accepted very early on that the EC Treaty was ahigher legal norm and should be accorded supremacy (LeSki [1972] CMLR 330)

e) United Kingdom

The UK was not an EC Member State at the time of the Van Gend and Costa v ENELrulings. Furthermore, since the UK has an unwritten constitution, it may be thought that


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membership of the EC would cause less constitutional problems than in the Statesconsidered above. Nevertheless, the fact that the UK is a dualist system (i.e. requiringnational legislation to implement international legal commitments) and the constitutionalprinciple of Parliamentary Supremacy (see English Legal System, Workbook 1)caused heated discussion over the relationship between EC law and UK law.

Briefly put, the Parliamentary Sovereignty principle states that one Parliament cannotbind its successors, so any legislation containing provisions that are contrary to earlierstatutes is deemed to have impliedly repealed the earlier law. This means that, even whenthe UK joined the EC and enacted the European Communities Act 1972,incorporating the Treaties as part of UK national law, this could be impliedly repealed bya subsequent statute which was contrary to EC law.

EC Act 1972 s.2“All rights, powers, liabilities, obligations and restrictions and all remedies and procedures provided forunder the Treaties are, without further enactment, to be given legal effect and shall be recognised andavailable law in the UK”.

Of course, the idea that the UK’s Community obligations could be repealed by asubsequent national statute runs completely counter to the notion of EC supremacy, yetthe idea that the 1972 Act could bind subsequent Parliaments seems to run counter tothe notion of Parliamentary supremacy.

For a while, English judges seemed reluctant to accept the notion that Parliament couldhave ceded its supremacy to the EC. Nevertheless, a cautious acknowledgement of thiscame in the following case.

McCarthy’s v Smith [1979]A case involving allegations of sex discrimination, with the applicant relying on Article141 (then Article 119) to claim the illegality of differences in pay.Lord Denning MR. “In construing our statute we are entitled to look at the treaty as an aid toconstruction but not only and an aid but as an overriding force. If our legislation should appear deficientor inconsistent with EC law by some oversight of our draftsmen then it is our duty to give priority to EClaw. Such is the result of s2 (1) and (4) of our European Communities Act 1972.’ I pausehere to make one constitutional point. Thus far I have assumed that our Parliament, when it passeslegislation, intends to fulfil its obligations under the Treaty. If the time should come when our Parliamentdeliberately passes an Act with the intention of repudiating the Treaty or any of its provisions, then Ishould have thought that it was the duty of our courts to follow the Statute of our Parliament.”

Duke v GEC Reliance [1988]Sex Discrimination Act 1975 was different to EC Council Directive on Equal Treatment(in respect of retirement ages).Lord Templeman. “s.2 of the EC Act does not, in my opinion, enable or constrain a British court todistort the meaning of a British Statute.”

Factortame Ltd -v- Secretary of State for Transport [1990] 2 AC 85Lord Bridge:‘Some public comments on the decision of the Court of Justice, affirming the jurisdiction of the courts ofmember states to override national legislation if necessary to obtain interim relief to be granted inprotection of rights under Community law, have suggested that this was a novel and dangerous invasion


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by a Community institution of the sovereignty of the United Kingdom Parliament. But such commentsare based on a misconception. If the supremacy within the European Community of Community law overthe national law of member states was not always inherent in the EEC Treaty it was certainly wellestablished in the jurisprudence of the Court of Justice long before the United Kingdom joined theCommunity. Thus, whatever limitation of its sovereignty Parliament accepted when it enacted theEuropean Communities Act 1972 was entirely voluntary.’Note: the legislation questioned in the case of Factortame was found to be incompatiblewith the United Kingdom’s obligations under Community Law and lead to judgmentagainst them combined with a damages award of some 30 million pounds sterling.

The possible effect that this had on the constitutional question of Parliamentarysupremacy was dealt with in the case of R-v- Secretary of State for Foreign andCommonwealth Affairs, ex parte Rees Mogg [1994] QBD 552 in which it wasconfirmed that the general principle of Parliamentary supremacy remained unchallenged,and that the agreement that Rees Mogg attempted to challenge, was not an abandonment ortransfer of prerogative powers, but an exercise of those powers.

QUESTIONS FOR DISCUSSIONa) Is a doctrine of Supremacy necessary for the EC?b) Is the reasoning of the ECJ in the cases of Van Gend and Costa v ENEL case a

convincing basis upon which to justify a doctrine of EC legal supremacy?“We note the criticisms of ‘judicial activism’ which have been levelled against the court [ECJ] butthese appear to be based mainly on cases where the Court has made Community law effective againstdefaulting Member States at the instance of individuals seeking to enforce their rights. We acceptthat enforceable remedies are essential to the application of Community legal obligations, with a highdegree of uniformity throughout the Member States.”Discuss, with reference to the cases which have incited criticisms of ‘judicialactivism’.c) Has the response of the national courts of the various Member States to the

development of the supremacy doctrine been consistent?d) To what extent has the UK’s theory of Parliamentary Supremacy survived the

UK’s membership of the EC?e) What effect would the entrance into force of the draft Constitution have upon

the issue of supremacy?f) How is the issue of EU supremacy dealt with in your own country following its

admission?

UNIT 3: Direct and Indirect Effect/State Liability

1. DIRECT EFFECT

A legal provision is said to be directly effective if it grants individual rights which mustbe upheld by national courts. The first time that the Courts intimated the existence ofthis Doctrine was in Case 26/62 N.V Algemene Transporten ExpeditieOnderneming van Gend en Loos -v- Nederlandse Administratie der Belastingen[1963] ECR1 (ante)which stated that, in order to be directly effective, a provision must

UUU nnn iii tttTTT hhh rrr eee eee


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be:

clear and unambiguous

unconditional (not qualified by a reservation on the part of Member States)

not dependent on further action ( no legislative intervention necessary)

What does this mean?The best way of understanding is to consider the cases and how the principle has beenapplied and to differentiate between the different types of primary and secondarylegislation

A Treaty Provisions

Van Gend en Loos [1963] aboveThe applicant was charged a customs duty when importing certain products into theNetherlands from another Member State. Article 25 (ex Article 12) of the EC Treatyspecifically prohibited the introduction of any new customs duties and the applicantrelied on this Article in his case before the Tariefcommissie (Commission on Tariffs),which referred the question for interpretation under Article 234 (see Unit 4). Thereferred question asked whether a private individual could rely upon an EC TreatyArticle in a case before his national courts. The ECJ stated that the applicant could relyon the Treaty Article and that the EC was a ‘new legal order’ which created rights thatcould, in the prescribed circumstances, be relied upon by individuals before their nationalcourts (see Unit 2 also).“Independently of the legislation of Member States, Community law therefore not only imposesobligations on individuals but is also intended to confer upon them rights which become part of their legalheritage. These rights arise not only where they are expressly granted by the Treaty, but also by reason ofobligations which the Treaty imposes in a clearly defined way upon individuals as well as upon theMember States and upon the Institutions of the Community.The wording of Article 12 contains a clear and unconditional prohibition which is not a positive but anegative obligation. This obligation, moreover, is not qualified by any reservation on the part of stateswhich would make its implementation conditional upon a positive legislative measure enacted undernational law. The very nature of this prohibition makes it ideally adapted to produce direct effects in thelegal relationship between Member States and their subjects.The implementation of Article 12 does not require any legislative intervention on the part of the states.The fact that under this Article it is the Member States who are made the subject of the negativeobligation does not imply that their nationals cannot benefit from this obligation.In addition the argument based on Articles 169 and 170 of the Treaty put forward by the threeGovernments which have submitted observations to the Court in their statements of the case ismisconceived. The fact that these Articles of the Treaty enable the Commission and the Member States tobring before the Court a State which has not fulfilled its obligations does not mean that individualscannot plead these obligations, should the occasion arise, before a national court, any more than the factthat the Treaty places at the disposal of the Commission ways of ensuring that obligations imposed uponthose subject to the Treaty are observed, precludes the possibility, in actions between individuals before anational court, of pleading infringements of these obligations.A restriction of the guarantees against an infringement of Article 12 by Member States to the proceduresunder Article 169 and 170 would remove all direct legal protection of the individual rights of theirnationals. There is the risk that recourse to the procedure under these Articles would be ineffective if itwere to occur after the implementation of a national decision taken contrary to the provisions of theTreaty.The vigilance of individuals concerned to protect their rights amounts to an effective supervision in


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addition to the supervision entrusted by Articles 169 and 170 to the diligence of the Commission and ofthe Member States.It follows from the foregoing considerations that, according to the spirit, the general scheme and thewording of the Treaty, Article 12 must be interpreted as producing direct effects and creating individualrights which national courts must protect.”

As mentioned earlier, the fact that other EC Member States intervened to argue againstthe possibility of supremacy and direct effect clearly demonstrated their concern atpossible future implications of the development of these doctrines.

However we should not forget that once the ECJ had declared EC law as supreme, theoriginal concept of direct effect rather involved a choice between two types of nationallaw albeit with different sources.

The Van Gend en Loos case raised the following questions:

Which Treaty Articles would receive similar treatment from the Court?

Could secondary legislation of the Community be treated in a similar manner?

The Van Gend en Loos case conferred a claim upon an individual exercisable against aMember State, who, as a signatory to the EC Treaty, had agreed to be bound by itsterms. Claims between individuals relying upon the provisions of the Treaty could nothave the same basis as Van Gend en Loos. A distinction therefore needed to be drawnbetween a claim made against a Member State and one that could be brought by oneindividual against another.The ECJ chose to distinguish between these types of claims by highlighting two types ofdirect effect:

Vertical Direct Effect: EC rights which are enforceable by an individual against theState.

Horizontal Direct Effect: EC rights which are enforced by one individual against anon-State natural/legal person.

The possibility of Treaty Articles having vertical direct effect was established in VanGend. The following case answered the question of whether Treaty Articles could alsohave horizontal direct effect.

Case 43/75 Defrenne -v- Sabena [1976] ECR 547Miss Defrenne was an air hostess employed by Sabena Airlines, who claimedcompensation in relation to the pay discrimination she received, when compared withher male colleagues. She based her claim on Article 119 (now 141) which states that “EachMember shall...ensure and subsequently maintain the application of the principle that men and womenshould receive equal pay for equal work. “‘The question of the direct effect of Article 119 must be considered in the light of the nature of theprinciple of equal pay, the aim of this provision and its place in the scheme of the Treaty. [...]As is shown by the very findings of the judgment making the reference, in such a situation the court is ina position to establish all the facts which enable it to decide whether a woman worker is receiving lowerpay than a male worker performing the same tasks. In such a situation, at least, Article 119 is directly


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applicable and may thus give rise to individual rights which the court must protect.It is also impossible to put forward arguments based on the fact that the Article 119 only refers expresslyto ‘Member States’. Indeed, as the Court has already found in other contexts, the fact that certainprovisions of the Treaty are formally addressed to the Member States does not prevent rights from beingconferred at the same time on any individual who has an interest in the performance of the duties thuslaid down.The very wording of Article 119 shows that it imposes on States a duty to bring about a specific result tobe mandatorily achieved within a fixed period.The effectiveness of this provision cannot be affected by the fact that the duty imposed by the Treaty hasnot been discharged by certain Member States and that the joint institutions have not reacted sufficientlyenergetically against this failure to act.To accept the contrary view would be to risk raising the violation of the right to the status of a principle ofinterpretation, a position the adoption of which would not be consistent with task assigned to the Courtby Article 164 of the Treaty.Furthermore it is not possible to sustain any objection that the application by national courts of theprinciple of equal pay would amount to modifying independent agreements concluded privately or in thesphere of industrial relations such as individual contracts and collective labour agreements. In fact, sinceArticle 119 is mandatory in nature, the prohibition on discrimination between men and women appliesnot only to the action of public authorities, but also extends to all agreements which are intended toregulate paid labour collectively, as well as to contracts between individuals.’

The United Kingdom and Ireland expressed strong concern at the financial implicationsof this decision, whereupon the Court limited the potential retroactive effect of thejudgment, meaning that the judgment would only apply to those who had already begunclaims on the basis of Article 141 (ex 119).

The ECJ’s ruling that Treaty Articles satisfying the criteria for direct effect could beenforced against both State and natural/legal persons was justified on the basis thatMember States had assumed certain obligations by signing the Treaty, some of whichincluded prohibiting certain behaviour by their nationals as well as government organs.Furthermore, it could be argued that the Treaty had been published in each MemberState and, as a result, nationals in that State could be assumed to have knowledge of itscontents.

In 1983 in his Article The Doctrine of Direct Effect: An Infant Disease of theCommunity’, P Pescatore said:‘It appears that in the opinion of the Court, the Treaty has created a Community not only of States butalso of peoples and persons and that therefore not only Member States but also individuals must bevisualized as being subjects of Community law. This is the consequence of a democratic ideal, meaningthat in a Community as well as in a modern constitutional State, Governments may not say anymorewhat they are used to doing in international law: L’Etat c’est moi. Far from it; the Community calls forparticipation of everybody, with the result that private individuals are not only liable to burdens andobligations, but that they have also prerogatives and rights which must be legally protected. It was thus ahighly political idea, drawn from a perception of the constitutional system of the Community, which is atthe basis of Van Gend en Loos and which continues to inspire the whole doctrine flowing from it.’

The ECJ has held that, even where Treaty Articles give an element of discretion byrequiring action to be taken only by a certain future date, this will not prevent thoseprovisions having direct effect once the period for implementation has expired, since thediscretion to act then becomes a duty to act.


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Alfons Lutticke GmbH v Hauptzollamt Saarlouis [1966] ECR 205Article 95 (now 90) required the abolition of discriminatory taxation by the end of thefirst transitional period creating the common market. Although such a provision couldnot be capable of direct effect before the expiry of that period, it could have direct effectonce that date had passed, provided it fulfilled the other Van Gend criteria.

Equally, the ECJ has held that simply because a provision requires an ECJ interpretationof its meaning does not mean that it fails to meet the criterion of clarity as required byVan Gend.

Van Duyn v Home Office [1974] ECR 1337A provision on free movement of workers was capable of having direct effect eventhough the national court felt it necessary to request an ECJ interpretation of theexclusions to this provision.

The question whether the various types of secondary legislation could have direct effect(and if so, what type) took slightly longer to be answered and it is useful here to recall thedifferent types of secondary legislation described in Article 249 EC. (See Workbook 1 fordiscussion of the various types of secondary legislation).

B Regulations

Regulations are the only type of secondary legislation described in Article 249 EC as‘directly applicable’.

Case 39/72 Commission -v- Italy [1973] ECR 101,The ECJ took the clear view that regulations were capable of being directly effective.‘According to the terms of Articles 189 and 191 (now Articles 249 and 254) of the Treaty,Regulations are, as such, directly applicable in all Member States and come into force solely by virtue oftheir publication in the Official Journal of the Communities, as from the date specified in them, or in theabsence thereof, as from the date provided in the Treaty.Consequently, all methods of implementation are contrary to the Treaty which would have the result ofcreating an obstacle to the direct effect of Community Regulations and of jeopardising their simultaneousand uniform application in the whole of the Community.Under the terms of Article 189, the Regulation is binding ‘in its entirety’ for Member States. Inconsequence, it cannot be accepted that a Member State should apply in an incomplete or selective mannerprovisions of a Community Regulation so as to render abortive certain aspects of Community legislationwhich it has opposed or which it considers contrary to its national interests.’

Since Regulations are described in Article 249 as having “general application”, the ECJ heldthat they were capable of both vertical and horizontal direct effect. However asregulations do tend to have a more general application, the test of whether it creates clearand unambiguous rights becomes very pertinent.

C Decisions

Case 9/70 Franz Grad -v- Finanzamt Traunstein [1970] ECR 825In this case the Munich Finanzgericht referred a question regarding Council Decisionson turnover taxes and whether they were capable of direct effect.


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The argument of the German government was that the Treaty only describedRegulations as ‘directly applicable’ and this meant that neither Decisions nor Directivescould have direct effect. The ECJ replied:“...although it is true that by virtue of Article 189, regulations are directly applicable and therefore byvirtue of their nature capable of producing direct effects, it does not follow from this that other categories oflegal measures mentioned [ in Article 249] can never produce similar effects. In particular, the provisionaccording to which decisions are binding in their entirety on those to whom they are addressed enables thequestion to be put whether the obligation created by the decision can only be invoked by the Communityinstitutions against the addressee or whether such a right may possibly be exercised by all those who havean interest in the fulfillment of this obligation. It would be incompatible with the binding effect attributedto decisions by Article 189 (now 249) to exclude in principle the possibility that persons affected mayinvoke the obligation imposed by a decision. Particularly in cases, where for example, the Communityauthorities by means of a decision have imposed an obligation on a Member State or all the MemberStates to act in a certain way, the effectiveness (l’effet utile’) of such a measure would be weakened if thenationals of the State could not invoke it in the courts and the national courts could not take it intoconsideration as part of Community law. Although the effects of a decision may not be identical withthose of a provision contained in a regulation, this difference does not exclude the possibility that the endresult, namely the right of the individual to invoke the measure before the courts, may be the same asthat of a directly applicable provision of a regulation.’

Again a success for the individual both as a claimant but more importantly in extendingthe effectiveness of European Community law!

Since Decisions only bind those to whom they are addressed, they may have eithervertical or horizontal direct effect depending upon whom is the addressee of theparticular Decision.

D Directives

The purpose of this type of secondary legislation, in general, is to harmonize nationallaw. Member States are allowed some discretion as regards the implementation ofDirectives. The existence of such discretion appears to conflict with the Van Gendcriteria, in particular the requirement that the legal provision be unconditional and not inneed of further legislative action.

A further difficulty arises as to availability of this law within the Member State nationalsystem, particularly if it has not been implemented, returning us to the difficultiesexperienced by some national courts in the question of supremacy.

The possibility of the extension of the doctrine of direct effect to Directives was firstconsidered inCase 41/74 Van Duyn -v- Home Office [1974] ECR 1337[In this case the ECJ was not only dealing with the provisions of a Treaty Article (as inDefrenne), but needed additionally to consider the provisions of a related Directive.] MissVan Duyn, a Dutch national, was offered employment with the Church of Scientology inEngland. This Church, although not illegal in UK, was considered socially harmful by theBritish Government, so they refused her entry. The UK Government based theirargument upon the public policy exception contained in Article 39 EC Treaty (freemovement of workers). Miss Van Duyn challenged the Government’s decision byarguing that Regulation 1612/68 and Directive 64/221 had limited the manner in which


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the British Government were entitled to rely upon this exception and further that boththe Regulation and the Directive were directly effective. The High Court referred thequestion to the ECJ who agreed that the Directive was capable of being directlyeffective.However, the ECJ went on to say that, although the restriction contained in Article 3(1)of Directive 64/221 reduced the scope of the public policy exception by requiring theMember State to exercise its discretion on the basis of the particular individual’s personalconduct, it did not prevent the Member State (in this case the UK Government) fromthe exercise of a limited discretion.The High Court decided that on these facts, the British Government had acted withinthis limited discretion so Miss Van Duyn was not entitled to enter the UK.In this case, the ECJ made a number of interesting statements indicating why directiveswere also capable of having direct effect.‘It would be incompatible with the binding effect attributed to a Directive by Article 189 to exclude, inprinciple, the possibility that the obligation which it imposes may be invoked by those concerned. Inparticular, where the Community authorities have, by Directive, imposed on Member States theobligation to pursue a particular course of conduct, the useful effect of such an act would be weakened ifindividuals were prevented from relying on it before their national courts and if the latter were preventedfrom taking it into consideration as an element of Community Law by providing that measures taken ongrounds of public policy shall be based on the personal conduct of the individual concerned, Article 3(1) ofthe Directive No. 64/221 is intended to limit the discretionary power which national laws generallyconfer on the authorities responsible for the entry and expulsion of foreign nationals. First, the provisionlays down an obligation which is not subject to any exception or condition and which, by its very nature,does not require the intervention of any act on the part either of the institutions of the Community or ofMember States. Secondly, because Member States are thereby obliged, in implementing a clause whichderogates from one of the fundamental principles of the Treaty in favour of individuals, not to takeaccount of factors extraneous to personal conduct, legal certainty for the persons concerned requires thatthey should be able to rely on this obligation even though it has been laid down in a legislative act whichhas no automatic direct effect in its entirety.’

Van Duyn involved vertical direct effect, since the action was against a Member State, butthe possibility of horizontal direct effect was considered in the following case. Thenational courts accepted that a Member State who had agreed to the provisions of theDirective should be estopped (prevented) from being able to use their failure toimplement the provision, within the implementation time stated in the Directive, todefeat an individual’s claims to Community rights.

However, national courts and academics were concerned that allowing horizontal directeffect could lead to individuals facing liabilities under Community Law on the basis oflegislation which had never been transposed into national law.

The national courts, started to make further references to the ECJ under Article 234 ECTreaty to seek clarification. The ECJ, clearly sensitive to the need for co-operation fromthe national courts, took note of these concerns when deciding whether directives werecapable of horizontal direct effect, but as we will see later, this did not lead the court todiscard the basis of view that individuals should be able benefit equally from EC law, andthis should not depend upon the Member State of their residence. .

Case 152/84 Marshall-v- Southampton and South-West Hampshire Area HealthAuthority [1986] ECR 723Mrs. Marshall alleged discrimination, based upon the provisions in the Sex


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Discrimination Act 1975, concerning eligibility for state pension. She alleged that thisAct contravened the provisions of Council Directive 76/207 (Equal Treatment).The ECJ followed the reasoning of Advocate-General Slynn and found that Directivescould be enforced against the State “regardless of the capacity in which the latter is acting, whetheremployer or public authority.” Strictly speaking, this resolved the case since, on its facts, thereference from the national court, had assumed that the employer was clearly an organ ofthe State. Nevertheless, the ECJ also wished to deal with the issue of whether Directiveswere also capable of horizontal direct effect and, having noted that Directives wereaddressed only to “Member States” stated that“...a Directive may not of itself impose obligations on an individual and a provision of a Directive maynot be relied upon as such against such a person.”

Having limited the possible direct effects of Directive to those of a vertical nature (apartfrom the possible indirect effects of the CIA ruling considered below), we have to askwhat exactly is to be treated as ‘the State’ when seeking to enforce a Directive. It clearlyno longer means only the government and so widens the principle of estoppel appliedto date; the local health authority in Marshall clearly would have not been able toimplement the Directive itself.

Fratelli Costanzo SPA v Comune de Milano [1989] ECR 1839“...all organs of the administration, including decentralised authorities such as municipalities...”

In some circumstances it may be relatively easy to identify a State body: public healthauthorities (Marshall above) and police forces (Johnston v RUC [1986] ECR 1651)are clearly linked with State functions. Other examples may not be so clear-cut, however.

Foster v British Gas Plc [1991]2 AC 306]British Gas was a statutory company performing statutory duties under the supervisionof the Minister for Energy. The ECJ ruled that the test for the enforceability of aDirective was to decide if it was being enforced against “an emanation of the State.” The testfor deciding this was to ask if the defendant was:“...a body, whatever its legal form, which has been made responsible, pursuant to a measure adopted bythe State, for providing a public service under the control of the State and which has for that purposespecial powers beyond those which result from the normal rules applicable in relations betweenindividuals...”Based on this definition of EC law, the House of Lords (which made the Article 234reference) found British Gas to be an emanation of the State, so that an Equal TreatmentDirective could be enforced against it.

Rolls Royce Plc v Doughty [1992]ICR 538Rolls Royce, a nationalised company, manufactured engines for military aircraft.Nevertheless, the English Court of Appeal found that it did not possess special powersand that the services it provided were to the government (‘defence of the realm’) and notto the public, as required by the Foster test and so suggested that the UK court appliedthese tests cumulatively rather than as alternatives.

Whether the ECJ would itself apply these three tests so rigidly is unclear, but certainly inthe UK the national courts have followed the approach of Rolls Royce.

The ECJ subsequently developed a doctrine called Sympathetic Interpretation,requiring national courts to interpret national law in line with EC law. Since national law


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applies equally to State and non-State bodies, this seemed to produce a similar result toaccepting the horizontal effect of Directives. A number of A-G opinions argued that theinequalities caused by denying horizontal direct effect to Directives were worse thanaccepting the applicability of the doctrine. The issue was raised once more in thefollowing case.

Paolo Faccinin Dori v Recreb Srl [1994] 1 CMLR 665The claimant sought to cancel a contract for a language course, relying on a right ofcancellation contained in an EC Directive which had not been transposed into Italianlaw. Since entry into force of the TEU, there was a legal requirement for Directives to bepublished and this was sufficient for A-G Lenz to recommend that the ECJ accepthorizontal direct effect of Directives. Nevertheless, the ECJ denied that Directives couldhave such horizontal effect, since this would....“...recognise a power in the Community to enact obligations for individuals with immediate effect, whereasit has competence to do so only where it is empowered to adopt regulations.”Seven Member States intervened in this case and all except Greece argued against thepossibility of horizontal direct effect. The ECJ noted the existence of other possible waysfor an individual to seek redress in the absence of horizontal direct effect (SympatheticInterpretation, Damages against the State) which will be looked at later.

If we refer back to the original test from Van Gend and the tests of unconditionalityand discretion which prima facie seem to remain a problem when considering Directives,it becomes clear that in applying the estoppel principle, the ECJ has treated the date ofimplementation as a ‘cut off’ date. Once the ‘cut off’ date has passed, the aim of theDirective, and corresponding rights claimed is of prime importance and the State can nolonger defend itself against potential liability.

This test however can still create some difficulties as can be seen from the twocontrasting cases of Pubblico Administero v Ratti [1979] ECR 1629 where adefendant was not allowed to rely upon a Directive in conflict with national law, whenthe date due for implementation had not yet passed. In contrast in Becker –v-Finanzamt Munster Innenstadt [1982] ECR 53 the Member State had notimplemented EU law on the form of tax returns to be submitted, the claimant succeededin defending a prosecution against him on the basis that he used the EU form before theimplementation date.

Nevertheless, even before the expiry of the implementation period, a Member state maynot take actions which go against the aims of the Directive (Inter-EnvironmentWallonie ASBL v Region Wallonie [1997] ECR I-7411.

Even if a State has implemented a Directive, it is still be possible for that Directive tohave direct effect and be relied on directly: Verbond van NederlandseOndernemingen (VNO) v Inspecteur der Invoerrechten en Accijnzen [1977] ECR113.

Some Directives also allow Member States to seek derogations from the full effect of theprovisions. However if the time limit for implementation has expired this does notprevent the application of Direct Effect, even if no decision has yet been taken as towhether to grant the derogation due to delay on the part of the Commission Kortas(1999) ECRI-03143


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A rather confusing line of case-law arose from the following case.

CIA Security International v Signalson SA [1996]ECR I-2201An EC Directive required Member States to provide information to the EC Commissionabout of technical standards and regulations in their country. Belgian national lawincluded prohibitions on certain types of unfair trade practices and CIA were sued, byanother private firm, for allegedly breaching this law. In turn, CIA claimed that thenational law was invalid, since it had not been notified to the Commission and wastherefore contrary to the Directive. The ECJ found that the relevant Directive wasdirectly effective and this meant that the firm suing CIA were unable to rely on thenational law.It has been said that this is “horizontal [direct effect] in all but name.” (See Steiner, p.77)

In the more recent case of Unilever Italia SpA-v- Central Food Spa [2000] ECR I7535 the triangular effect achieved through this principle was considered again. This caseconsidered Italian national law concerning the geographical labeling of olive oil. Italy hadnotified the Commission of the intended law, in accordance with EC requirements.However as the EC were themselves considering legislation in this area, the Commissionrequired that no national law be implemented for a minimum period of 12 month. Italy,however, implemented the law in breach of the Commission ruling. Central Foodtherefore refused oil from Unilever which was not labeled in accordance with the Italiannational law. Unilever successfully argued that the law should be dis-applied as in breachof EC law. Although this clearly would affect the private contractual position withCentral Food, the Court were more concerned at the breach of EC law and not theeffect it would have on a private contract. They reaffirmed that there was no horizontaldirect effect of Directives and saw no conflict in this case, as the provisions of theArticles in question were not capable of direct effect in not seeking to create rights forindividuals.

So in giving judgment in the case, the Court dealt with the case as an entirely technicalbreach and was not proposing the extension of horizontal direct effect, although in suchsituations it is clear that private parties could be affected

In the case of Unibet (London) Ltd –v- Justitiekanslern [2007] C-432/05 the courtmade no reference to this line of authority when faced with a claim for interim reliefagainst the State caused by its enforcement of national law provisions which wereallegedly in conflict with European Community law. In dealing with the consequent losscaused to the claimant by the resulting cancellation of private contracts, the courtemphasized that EC law required that an independent cause of action should be availableto parties as a right of last resort where it was necessary to ensure that remedies forbreach of EC law should be both equivalent to and as effective as remedies available forbreaches of national law (this will be further considered in workbook 3).

E International Agreements

Direct effect has also been claimed in relation to areas of international law.

Association AgreementsThe principle of direct effect could also be a useful vehicle for citizens who had entered


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into Association Agreements with the EU, as was found in relation to one of the earliestAssociation agreements held with Turkey. This proved a fruitful source of litigation forclaimants, but the approach of the Court was rather to emphasise that such rightsemanated rather from decisions of the Association Council based upon the terms of theAgreement rather than directly from the Agreement itself.

Useful decisions in this area includeS.Z.Sevince –v- Staatsecretaris van Justitie [1990] ECR I 3461 where Mr Sevince, aTurkish citizen living in the Netherlands, successfully claimed that the TurkishAssociation Council’s adoption of decisions to implement the right of free movement ofworkers contained in the Association Agreement could be the subject of a claim of directeffect, although he lost his case on the facts.

Recent cases in relation to the Polish and Czech Association agreements in cases such asAldona Jany & Others-v-Staatsecretaris van Justitie [2001] ECR I 8615 haveconfirmed this general approach stating that”these provisions must be construed asestablishing… a precise and unconditional principle which is sufficiently operationalto be applied by a national court and which is therefore capable of governing thelegal position of individuals”.

World Trade AgreementsInternational Fruit Co –v- Produktschap voor Groenten en Fruit [1972] ECR 1219dealt with the G.A.T.T. agreement and stated that despite the fact that the EU memberstates now negotiated as a block, this type of agreement was too flexible and general toenable it to be subject to the principle of direct effect.

The Court was clearly aware here of the practical difficulties in reciprocity which wouldfollow, in other signatory countries. A similar approach has been adopted with the WTOand also the TRIPS agreement on intellectual property.

However the Court has been more prepared to accept the argument that standards set insuch international agreements which are then separately enacted in EU legislation couldbe subject to direct effect. EU Rules based upon the Vienna Convention have beenfound justiciable in the case of Racke GmbH –v- Hauptzollamt Mainz [1998] ECR I3655.


a) Is there any difference between the terms “directly applicable” and “directlyeffective”?

b) Give examples of Treaty Articles and pieces of secondary legislation which havebeen found to have direct effect (other than those referred to in this workbook).Against whom were they enforced and in which court were they relied upon?

c) Should all pieces of secondary legislation be directly effective? What are thepolicy reasons for denying horizontal direct effect to certain pieces of secondarylegislation?

d) It has been said that “...the British courts’ approach to, and the outcome of, the enquiry as towhether a particular body is an ‘emanation of the State’ for the purpose of enforcement of a


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Directive is unpredictable.” (per Steiner, J. and Woods, L., EC Law 7th Ed., 2000, at61). Why might this be so? What factors do you think the courts take intoaccount in deciding this question? Provide some examples from your country ofbodies which would come within the Foster definition.

Having discussed direct effect as one option for an individual to enforce their EC rights,let us now turn to some alternatives that the ECJ has developed.

2 INDIRECT EFFECT/SYMPATHETIC INTERPRETATION

This requires the national court to interpret the national provision in the light of and inaccordance with the relevant provision of Community law. A German Arbeitsgericht(Employment Court) was the first court to refer a question to the ECJ under Article 234EC Treaty which allowed the Court to develop the doctrine of Indirect Effect.

Von Colson and Kamann -v- Land Nordrhein-Westfalen [1984] ECR 1891Two unsuccessful applicants for the posts of social workers at a prison claimed that theyhad been discriminated against on the grounds of their sex. They brought proceedingsagainst the prison, relying upon Directive 76/207 (Equal Treatment) purportedly alreadyimplemented into German national law. In stating that the German code hadinadequately implemented this Directive, the ECJ relied upon the provisions of Article10 EC Treaty (see earlier), indicating that the remedies provided by German national lawwere insufficient to achieve the purpose of the Directive.In this case, despite the fact that they were clear victims of discrimination, the Germancode only allowed the applicants to claim their ‘reliance loss’, i.e. traveling expensesincurred in attending the interview.“Although, as has been stated in the reply to Question 1, full implementation of the directive does notrequire any specific form of sanction for unlawful discrimination, it does entail that that sanction be suchas to guarantee real and effective judicial protection. Moreover it must also have a real deterrent effect onthe employer.It follows that where a Member State chooses to penalize the breach of the prohibition of discriminationby the award of compensation, that compensation must in any event be adequate in relation to the damagesustained.In consequence it appears that national provisions limiting the right to compensation of persons who havebeen discriminated against as regards access to employment to a purely nominal amount, such as, forexample, the reimbursement of expenses incurred by them in submitting their application would notsatisfy the requirements of an effective transposition of the directive.However, the Member States’ obligation arising from a directive to achieve the result envisaged by thedirective and their duty under Article 5 (now 10) of the Treaty to take all appropriate measures, whethergeneral or particular, to ensure the fulfillment of that obligation, is binding on all the authorities ofMember States including, for matters within their jurisdiction, the courts. It follows that, in applying thenational law and in particular the provisions of a national law specifically introduced in order toimplement Directive No 76/207, national courts are required to interpret their national law in the lightof the wording and the purpose of the directive in order to achieve the result referred to in the thirdparagraph of Article 189.On the other hand, as the above considerations show, the directive does not include any unconditional andsufficiently precise obligation as regards sanctions for discrimination which, in the absence of implementingmeasures adopted in good time may be relied on by individuals in order to obtain specific compensationunder the directive, where that is not provided for or permitted under national law.It is for the national court to interpret and apply the legislation adopted for the implementation of the


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directive in conformity with the requirements of Community law, in so far as it is given discretion to do sounder national law.’

When it became clear that the national courts would not accept a further extension ofdirect effect (particularly in respect of Directives), the ECJ responded by developing theVon Colson ‘sympathetic interpretation’ doctrine.Unit 2.An Introduction to the Law and Institutions of the European Union WORYet again, the national courts showed some concern as to the extent of this doctrine. Anumber of references were made by national courts requesting preliminary rulings fromthe ECJ to clarify the following points.

Whether the doctrine would only apply when the wording of the nationalprovision was ambiguous?

Whether indirect effect would only have vertical effect (against the MemberState)?

Whether it could be applied only when there had been an inadequate attempt atimplementation (as in the Von Colson case)?

If not could it be applied before the expiry of the implementation date set out inthe Directive?

Kolpinghuis Nijmegen BV [1987] ECR 3969Member State commenced a prosecution against an individual relying upon an ECDirective which had not yet been implemented into national law. The ECJ, following anArticle 234 EC Treaty referral, confirmed that a Member State could not use anunimplemented Directive to commence a prosecution against an individual. The ECJrelied upon the fundamental principles of legal certainty and non-retroactivity stating thata Member State’s failure to carry out its obligations could not then be used to aggravatean individual’s criminal liability.

Marleasing SA v La Comercial Internacionale de Alimentacion SA [1990] ECR I-4135Indirect effect could be applied to an unimplemented Council Directive. In this case, thedoctrine was used to frustrate the alleged right of the claimant to rely upon theprovisions contained in the Spanish Civil code.

It is notable that this case enabled EC law to be used in a claim against a privatecompany, thereby achieving a similar result to horizontal direct effect of a Directive.

‘In order to reply to that question, it should be observed that, as the Court pointed out in its judgment inCase 14/83 Von Colson and Kamann -v- Land Norrhein-westfalen [1984] ECR 1981, paragraph26, the Member States obligation arising from a directive to achieve the result envisaged by the directiveand their duty under Article 5 of the Treaty to take all appropriate measures, whether general orparticular, to ensure that fulfilment of that obligation, is binding on all the authorities of Member Statesincluding, for matters within their jurisdiction, the courts. It follows that, in applying national law,whether the provisions in question were adopted before or after the directive, the national court called uponto interpret it is required to do so, as far as possible, in the light of the wording and the purpose of thedirective in order to achieve the result pursued by the latter and thereby comply with the third paragraph


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of Article 189 of the Treaty.’Unit 2.An Introduction to the Law and Institutions of the European Union WORThe ECJ acknowledged in Marleasing that the wording of certain national provisionswould not allow interpretation by national courts in the manner necessary to ‘achieve theresult pursued’, a problem already encountered in certain national courts who had cometo differing conclusions on their role in such a case.

Wagner Miret -v- Fondo di Garantia Salarial [1993] ECR I-6911Where the national provisions were incapable of interpretation in the manner soughtthen the individual should redirect his/her claim against the culpable Member State orinstitution.A national court must strive “...as far as possible...” to interpret domestic law to achieve theresult required by EC law.

Paolo Faccini Dori -v- Recreb SrL [1994] ECR I-3325The possibility of enforcing sympathetically-interpreted national law against individualsled A-G Lenz to suggest that the ECJ reconsider whether Directives were capable ofHorizontal Direct Effect. As seen earlier, however, the ECJ affirmed its stance thatdirectives could not have horizontal direct effect.

Murphy v An Bord Telecom Eireann [1988] ECR 673The ECJ said that national courts were required to set aside national legislation (as inFactortame earlier) only where it was impossible to give that national legislation asympathetic interpretation.

Clearly, a sympathetic approach to national legislation cannot be given if there is nonational legislation to interpret. Equally, it is clear that there is no duty to adopt asympathetic interpretation to legislation where no breach of Community law is involved.

Imperial Chemical Industries Plc (ICI) v HM Inspector of Taxes [1998] ECR I-4695The plaintiffs argued as a matter of principle that, in certain hypothetical circumstances,UK tax law could hinder the right to establishment of EC nationals. It was accepted thatthere was no hindrance to the right of establishment to the plaintiffs in this case but theysought to convince the national court that they must nevertheless interpret the nationallaw in their favour because of this potential breach of EC law.The ECJ held that the issue was outside the scope of EC law and that, in suchcircumstances...“...the national court is not required, under Community law, either to interpret its legislation in a wayconforming with Community law or to disapply that legislation. Where a particular provision must bedisapplied in a situation covered by Community law, but that same provision could remain applicable toa situation not so covered, it is for the competent body of the State concerned to remove that legaluncertainty in so far as it might affect rights deriving from Community rules.”

Advocate Jacobs attempted to summarise the position in his opinion in Centrosteel-v-Adipol [2000] ECRI 6007 as follows:-

A Directive cannot impose obligations on an individual in the absence of properimplementation

National courts must interpret national law so as not to aggravate criminal


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liability, but can impose obligations upon an individual in relation to civil liability.

The third pillar – intra-governmental legislation

An interesting line of case law was introduced by Pupino [2005] ECR I 5285 whichconsidered the effect of a Framework decision adopted pursuant to Article 34(2) EU andwhich was stated as being ‘binding upon the Member States as to the result to be achieved… shallleave to the national authorities the choice of form and method. It shall not entail direct effect’.The factual issue concerned the treatment of victims of a crime and how the nationaljudge should interpret national provisions on the law of evidence. As we will see later inUnit Four, there are limitations on the jurisdiction of the ECJ in relation to this pillar andso there was an initial argument of inadmissibility put forward by intervening MemberStates which was unsuccessful. The Court took the view that ‘the principle of conforminginterpretation’ was also binding for framework decisions and so that ‘the national court isrequired to take into consideration all the rules of national law and to interpret them, as far as possible,in the light of the wording and purpose of the Framework Decision’.

The principle of interpretation was revisited by the ECJ in Werner Mangold v RüdigerHelm [2005] ECR I 9981 where the Court were considering the effectiveness of Article6(1) of Council Directive 2000/78/EC of 27 November 2000 which established ageneral framework for equal treatment in employment. The Directive’s time forimplementation had not yet expired but the ECJ still took the view that ‘ It is theresponsibility of the national court to guarantee the full effectiveness of the general principle of non-discrimination in respect of age, setting aside any provision of national law which may conflict withCommunity law, even where the period prescribed for transposition of that directive has not yet expired’

QUESTION FOR DISCUSSION

1. Do you agree with the ECJ that the loyalty requirements of the Treaties act enableintra-governmental decisions to also have an effect on interpretation of national law by anational court when that decision is expressly stated not to have direct effect?

2. Has the Court entered a further period of ‘activism’ in cases such as Mangold andPupino? Is so can these decisions be justified in the present expanding EU?

3. A DAMAGES CLAIM AGAINST THE MEMBER STATE

The possibility of giving a sympathetic interpretation to national law, in order to give itthe same meaning as EC law, means that EC law may be enforced against an individualin his national court, even if the EC law has not been enacted or has been enactedinaccurately. This seems to go against much of the reasoning inherent in the ECJ’sdecision to deny horizontal direct effect to Directives (i.e. it is the fault of the State fornon/wrongful-implementation so why should an individual be held responsible for theState’s breach?)If an individual is prejudiced by the omission of his government, he needs an appropriateremedy to compensate him, and so much the better if this remedy, at the same time, will


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encourage the Member States to comply with their obligations under the Treaties. In thefollowing case, the ECJ allowed a claim for damages to be made against a Member State(in this case Italy) who had failed to carry out its Community obligations.

Francovich and Bonifaci -v- Italy [1991] ECR I -5357Following the non-implementation, in Italy, of Directive 80/987, which was intended toprovide certain guarantees for employees of insolvent companies, claims were madeagainst Italy for payment. The first claim that the provisions of the Directive weredirectly effective was not accepted by the Court. Nevertheless the Court found that:‘...It is a principle of Community law that the Member States are obliged to pay compensation for harmcaused to individuals by breaches of Community Law for which they can be held responsible’They set out three conditions to be satisfied by the claimant against the Member Statewho wished to seek compensation for damages he/she had suffered due to non-implementation of European Community legislation.

There must be

the grant of a right in favour of the individual

It must be possible to identify those rights on the basis of the Directive (now

amended by the case of Factortame (post)

There must be a causal link between the breach of the State’s obligations and theharm suffered.

The implications of this judgment for Member States were potentially considerable.

How far would this principle extend?Was it an additional remedy or only available if claims under the principles ofDirect Effect and Indirect Effect had been exhausted?Did the principle only apply to non-implementation or also to wrongfulimplementation of EC law?

In the joined cases C 46 & 48/93 Brasserie du Pecheur -v- Germany andFactortame -v- UK [1996] 2 WLR 506 the Court confirmed that the principle ofMember State liability would apply to breaches of all Community law, whether or notDirect Effect applied. However, the Court agreed that liability should lie on a similarbasis to that applicable to the Community Institutions under Article 288 EC Treaty (non-contractual liability claims against Community Institutions). Therefore if a Member Statewas given choices or discretion, liability would only attach if there was a ‘sufficiently seriousbreach’ of Community law which would be decided according to whether the MemberState or institution had ‘manifestly and gravely exceeded the limits of its discretion’.The Court accordingly re-phrased the threshold test amending the second limb to state

- the breach must be sufficiently serious.

They also set out a number of guidelines for national courts as to what would form asufficiently serious breach.

Clarity and precision of rule breached

Measure of discretion left in the hands of national or community authorities

Whether the infringement was intentional or involuntary, with the interpretationof law use excusable or inexcusable

Whether the position taken by the Commission had contributed towards the


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omission

Was it the adoption or retention of national measures or practices contrary toCommunity law

Whether there had been an earlier infringement established before the court andyet the practice continued.

All these were factors that the national courts could use. Additionally the ECJ reiteratedthe approach we have already seen in theVon Colson line of authority that communityremedies must be actually available in the Member States jurisdiction and must not bebarred in practice by national rules of procedure.

It was interesting that in later cases these factors seemed not to be crucial.Two early decisions indicate the difficulties that were faced by both the Member Statesand their national courts.

R-v- Her Majesty’s Treasury ex parte British Telecommunications plc [ 1996]ECRI 1631It was alleged that an EC Directive had been wrongfully implemented in the UK andthat this wrongful implementation had caused loss to British Telecom. The ECJdisagreed, stating that the wording of the Directive was sufficiently vague as to excusethe UK’s wrongful implementation.“..imprecisely worded and was reasonably capable of bearing...the interpretation given to it by the UK ingood faith... The interpretation, which was also shared by other Member States, was not manifestlycontrary to the wording of the Directive or to the objective pursued by it.”

R-v- Ministry of Agriculture, Fisheries & Food ex parte Hedley Lomas (Ireland)Ltd [1996]ECR I 2553The UK prohibited exportation of live sheep to Spain on the complaints of animal-welfare groups that Spanish slaughterhouses did not comply with an EC Directiveregulating the conditions for killing animals. The UK failed to adduce any evidence(either of specific slaughterhouses or general practices) that Spain was in breach of theDirective.“where...the Member State in question was not called upon to make any legislative choices and hadconsiderably reduced, or even no, discretion, the mere infringement of EC law may be sufficient toestablish the existence of a sufficiently serious breach.”

This approach has been confirmed in two recent decisions of Reichberger andGreindle –v- Austria [1999] ECR I 3499 and Norbrook Laboratories Ltd –v-Ministry of Agriculture Fisheries and Food [1998] ECR I 1531 where the test of thebreach in the first case came down to the clarity and precision of provisions breachedbut in the second was a case decided using the formula from Hedley Lomas.

Two seemingly separate lines of authorities now seemed to be established.

On the one hand the court is concerned with the actual breach and the discretion of theMember State concerned as in Dillenkoffer & Others –v- Federal Republic ofGermany [1996] ECR I 4845 when the Court found that the total failure by Germanyto implement a directive within the given time, would automatically fulfil the test ofsufficiently serious breach.

In other cases the Court has paid more attention to the clarity of the rule itself, and in


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cases such as Denkavit International -v- Bundesamt fur Finanzen [1996] has goneso far as indicating to the national court who referred the question that the breachclaimed was not sufficiently serious for this reason.

Another part of the Francovich test has also been highlighted, as to whether the rule wasintended to give rights to individuals. In the two cases Three Rivers District Council –v- Bank of England [1996] 3 All ER 558 and Bowden –v- South West WaterServices [1999] 3 CMLR 180 the English courts took the view that the relevantbanking and environmental directives were not intended to give individual rights and sothe claim failed on these ground, which has support from such cases as Verholen-v-Sociale Verzekeringsbank Amsterdam [1991] ECR I 3757.

It is also important that the claimant can establish his loss or damage, as was emphasizedin Schmidberger –v- Austria [2003] ECR I 5659 where a transportation was delayedby the closure of a motorway for 28 hours.

The Francovich principle will also apply to a breach by a public body as in Haim –v-Kassenzahnartzliche Vereinigung Nordrhein [1994] ECR I 425 and interestingly inthe recent case of Kobler –v- Austria [2003]ECRI-10239 found that a court would becapable of coming within the definition of a public body against which a breach could beclaimed. Although once again in Kobler the ECJ was at pains to state they did not thinkthere was a sufficiently serious breach on the facts of the case, which concerned equalityof treatment of an academic in an Austrian university, rather than leaving this as adecision for the national court. (we will return to this issue when looking at Article 234 inthe next Unit).

In the recent case of Traghetti des Mediterraneo SpA-v-Repubblia Italiana whereItalian legislation had purported to limit or exclude State liability, the Court made it clearthat it was not possible to exclude liability nor was it possible to set a higher standard forliability for national courts as here where legislation limited liability solely to cases ofinternational fault and serious misconduct on the part of the court. The relevant criteriawould remain that of manifest infringement of the applicable law as stated in Koblerabove, suggesting that the issue is one of competence not fault (note this issue will bereturned to in Workbook 3).

This decision could in theory bring with it the possibility that a lower court would berequired to assess the capacity and competence of its highest court, where the act of thehighest court were to be the basis of a claim for State Liability.

SUMMARYSo, in brief, an individual when seeking to rely upon a rule of European Union law,which is not available as a direct source of law within his national law system, has threepossible choices.

1. He can attempt to persuade his national court to rely directly upon the terms ofthe European Union legislation, if the rule he wishes to use can satisfy the Van

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Gend test. (remember here the difficulty with a Directive) ;

2. He can seek to find a similar rule in national law which is capable of beinginterpreted to reach the same result as the European legislation Von Colson; or ;

3. He can seek to claim his remedy from the state or public authority that isresponsible for his loss if the test in Francovich can be satisfied.

In Workbook 3 we will consider further the issue mentioned in Factortame as to thedifficulty of ensuring an appropriate national remedy for rights created by EuropeanUnion law


a) Is it preferable to allow Directives to have horizontal direct effect or to requirenational courts to interpret national law in line with EC law?

b) To what extent must national courts alter the interpretation of their national lawin order to comply with the indirect effect doctrine? Is there a difference betweenhow far the ECJ thinks national courts ought to interpret their legislation in linewith EC law and how far national courts are willing to distort their nationallegislation in order for it to mean the same thing as EC law?

c) If you were advising a client who wished to enforce an EC right, which of theaforementioned doctrines would you advise them to base their claim upon?

d) Were the national courts able to affect the development of these doctrines? If so,in what way?

UNIT 4: Preliminary References; Article 234

In Units 2 and 3 the two doctrines created by the ECJ which were designed to haveimmediate impact in the Member States and their national courts were considered.Although the relationship between the ECJ and the national courts was mentioned, itwas not described in detail. It is however essential to analyse that relationship, if thepresent position of the ECJ in the national court hierarchy and its resulting jurisprudence

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is to be fully understood.

When the founders of the European Community first drafted the Treaties, theyidentified the role to be allocated to the Court of Justice.

It wasfirstly; to resolve disputes between Member States, the Institutions and the employees ofthe Community,secondly; to ensure, through judicial review, that the institutions did not exceed theirpower,thirdly; to resolve disputes and claims made by external parties against the Communityand finally: (and essential to the judicial development of EC law), it would act as the finalinterpreter of the provisions of Community Law (Article 220 EC Treaty ante).

In carrying out its function as interpreter, the Court’s relationship with the nationalcourts appeared to be a co-operative partnership. The national courts wouldindependently seek an interpretation from the court through the preliminary rulingprocedure in Article 234 and the reply of the ECJ would then enable the referring courtto apply Community law to the facts and thereby provide a resolution of the individualcase.No enforcement mechanism existed to persuade any unwilling national court to refer aquestion of interpretation to the ECJ (arguably Article 226 EC Treaty, see furtherWorkbook 3, may provide the necessary mechanism but no cases of its use arerecorded). The ECJ did not have any powers enabling it to fulfil the function of anappeal court, so if the national court chose not to refer questions for interpretation bythe ECJ, the national court’s interpretation would remain applicable unquestioned in thatMember State.

Very early on, the ECJ recognised the importance of acquiring the trust and confidenceof the national courts. If it wanted to see EC law uniformly applied in all Member States,its judgments had to be regarded as more than simply a response to one question.Instead, the answer should be accepted by the national courts as declaratory of the lawand therefore be applied uniformly in all Member States.

To be able to make these authoritative statements, it was necessary for the nationalcourts to refer questions to the ECJ. The ECJ therefore needed to encourage the use ofArticle 234 EC Treaty.

To achieve the aim of uniformity in the application of Community law in all MemberStates, the national courts needed to be convinced that EC law had to be accepted assuperior to national law and to apply that principle domestically.

This Unit charts the progress of the acceptance of Supremacy of EC law and theconsequential limitations imposed by the national courts on the ECJ.

THE COMMUNITY COURTS AND NATIONAL COURTS; THEPRELIMINARY RULING PROCEDURE.

Article 234 EC TREATY‘The Court of Justice shall have jurisdiction to give preliminary rulingsconcerning :


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(a) the interpretation of this Treaty;(b) the validity and interpretation of acts of the institutions of the Community and of the ECB(c) the interpretation of the statutes of bodies established by an act of the Council where those statutes soprovide.Where such a question is raised before any court or tribunal or a Member State, that court or tribunalmay, if it considers that a decision on the question is necessary to enable it to give judgment, request theCourt of Justice to give a ruling thereon.Where any such question is raised in a case pending before a court or tribunal of a Member State againstwhose decisions there is no judicial remedy under national law, that court or tribunal shall bring thematter before the Court of Justice.’

This Article is of fundamental importance as it has been the vehicle for the establishmentof the Two Judicial Pillars of Direct Effect and Supremacy. As soon as the courts ofMember States began to use the referral provisions contained in Article 234 EC, the ECJwas able to introduce and develop its two Judicial Pillars.

In this Unit we will be considering the mechanism used so successfully by the ECJ todevelop Community law.

As so poetically stated by Mancini and Keating‘If the doctrines of direct effect and supremacy are .... the ‘twin pillars of the Community’s legal system’,the reference procedure laid down in Article 177 must surely be the keystone in the edifice; without it theroof would collapse and the two pillars would be left as a desolate ruin, evocative of the temple at CapeSounion-beautiful, but not of much practical utility.’

Article 234(a) EC has been particularly relevant to the development of the judicial pillars,so how is this used within the national court systems?Unit 4.An Introduction to the Law and Institutions of the European Union WK1. An individual, who wishes to rely on a principle of Community law, will sue in hisnational court setting out in his pleadings (documents of claim) the relevant Communityprinciple on which he/she seeks to rely.

2. The national court can (this is obligatory if the national court is the last nationalappeal court) then seek a ruling through Article 234 EC Treaty by referring a question ofinterpretation to the ECJ.

3 The ECJ, in answering the question, will interpret the relevant provision of Communitylaw.

4. The national court will use the interpretation of Community law to resolve the issueraised with reference to the particular facts of the case.

As mentioned earlier, Article 234 referrals played a vital role in giving the ECJ anopportunity to develop the doctrines of European Legal Supremacy, Direct Effect,Indirect Effect and Damages against Defaulting Member States, which were all createdvia such preliminary rulings.

The change of the relationship between the ECJ and the national courts can clearly beseen from the following diagrams:


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By introducing this new relationship, the ECJ was also able to rely upon the nationalcourts to act as the enforcers of Community Law, both in respect of the State andindividuals and in the domestic arena. This was essential to ensure consistency and theuniform application of Community law in all Member States.

Note: This Article also plays a very important role in the area of Judicial Review,protecting individuals by regulating the acts of Institutions. This will be considered inmore detail in Workbook 3. In this Unit we will concentrate upon the mechanism itselfand Article 234 (a) EC Treaty.

It is useful to remember at this point, that not all articles of the TEC are subject toArticle 234. As mentioned in Unit One, certain issues which were transferred from thethird pillar have limited such references by lower courts in the national systems. Theissue of immigration is a good example here, as this can only be dealt with ‘a nationalcourt against whose decision there is no judicial remedy’( Art 68 EC) and an opt out has also beengranted in this Article to the UK and Ireland. Additionally references under the TEU arealso limited and some references may only be made at the specific request of a MemberState Article 35 TEU).

The Lisbon Treaty would remove both these exceptional procedures whilst widening thecompetence of the ECJ to include the two remaining pillars (see ante).

A: Limitations of the Court’s Jurisdiction

Article 234 EC Treaty places some limitations on the Court’s jurisdiction.


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1. Its competence is limited to Matters of Community Law.In Falcioli [1990] ECR I 191 it refused the reference following initial investigation onthe basis that there seemed the judgment seemed to have no reference to Communitylaw, similarly rejecting a reference in Salonia-v- Poidomani [1981] ECR 1563 statingthat the interpretation sought by the Court seemed to have no relation to the actualnature of the case or the subject of the main action but more to the theoretical interest ofthe party who was also an academic.Although it may not matter whether the interpretation is sought on EC legislation orimplementing national legislation, which also requires a consistent approach, as inDzodzi-v-Belgium [1990] ECR I 3763.A similar approach could be seen in the UK tax case ICI-v- Colmer [1998] ECR I-4695 where the ECJ did not agree with the approach of the UK government that thismust be an internal matter for the Member State, but rather emphasized that in questionsof differences of interpretation it was for the Court to declare on compatibility ofnational provisions.

2. It is a court of interpretation not application: It is difficult in some cases to assess theborderline observed by the ECJ between interpretation and application.In the case of Marleasing (see Unit 3 ante), the ECJ’s response to the question raisedwas so detailed that little was left for the Spanish court to do but to repeat the ECJruling. A similar approach can also be seen in the recent case of Kobler (ante).

This approach can also be seen as a desire to offer guidance to the national courts evenwhere this guidance may in practice be ‘unequivocal’ as in the trade marks case ofArsenal Football Club –v- Reed [2002] ECR I 10273The trial judge in this case found that the ECJ had therefore overstepped the mark bymaking findings on the facts “If this is so, the ECJ has exceeded its jurisdiction and I am notbound by the final conclusion, I must apply its guidance on the law to the facts as found at the trial…..The courts of this country cannot challenge rulings of the ECJ within its areas of competence. There is noadvantage to be gained by appearing to do so. Furthermore national courts do make references to theECJ with the intention of ignoring the result. On the other hand, no matter how tempting it maybe tofind an easy way out, the High court has not power to cede the ECJ a jurisdiction it does not have (para28).

3. The ECJ has maintained a strict policy of non-interference over decisions about whatto refer, when to refer and how to refer. This is a question for the national court todecide. However they have provided guidelines to assist the national courts as to thetiming and form that the reference should take.

………………….6. It must contain a statement of reasons which is succinct but sufficiently complete to give the Court, andthose to whom the decision must be notified (the Member States, the Commission, and in certain cases theCouncil and the European Parliament), a clear understanding of the factual and legal context of themain proceedings.In particular, it must include an account of the facts which are essential for understanding the full legalsignificance of the main proceedings, an account of the points of law which may apply, a statement of thereasons which prompted the national court to refer the question or questions to the Court of Justice and, ifneed be, a summary of the arguments of the parties. The purpose of all this is to put the Court of Justicein a position to give the national court an answer which will be of assistance to it.The decision making the reference must also be accompanied by copies of the documents needed for aproper understanding of the case, especially the text of the applicable national provisions.


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However, as the case-file or documents annexed to the decision making the reference are not alwaystranslated in full into the other official languages of the Community, the national court must make surethat its decision includes all the relevant information.(extract from ECJ Guidance Notes onReference by National Courts for Preliminary Rulings)

It is useful to consider this in some more detail

The initial approach ‘open door’To encourage the national courts to raise questions using the procedure under Article234 EC Treaty, the ECJ was happy to accept references that were insufficiently clear,incorrectly framed or in other ways deficient. It would simply reword the question andanswer it in the manner it felt most useful to the national court.Even the initial wording of Article 234 EC Treaty, which suggests that questions ofinterpretation should only be raised if it were necessary to resolve the case, was not arestriction raised by the ECJ.

Costa v ENEL (see Unit 2 ante)‘....the Court has power to extract from a question imperfectly formulated by the national court thosequestions which alone pertain to the interpretation of the Treaty. Consequently a decision should be givenby the Court not upon the validity of an Italian law in relation to the Treaty, but only upon theinterpretation of the above-mentioned Articles in the context of the points of law mentioned by theGuidice Conciliatore..... Since, however, Article 177 is based upon a clear separation of functionsbetween national courts and the Court of Justice, it cannot empower the latter either to investigate thefacts of the case or to criticise the grounds and purpose of the request for interpretation.’

This led to an acceleration in the workload of the ECJ, with consequential delay in thehearing and resolution of cases. It was also a factor that led to the establishment of theCFI.

The ECJ subsequently placed some limitations upon its open door policy.

Pasquale Foglia -v- Mariella Novello [1980] ECR 745The parties appeared to be in agreement regarding the issue to be resolved before theECJ, so the court refused to give a ruling feeling that an answer was not necessary toresolve a dispute.‘The questions asked by the national court,... do not fall within the framework of duties of the Courtunder Article 177 of the Treaty.’In the view of the ECJ the ruling sought by the contesting parties was fictional. Therehas been no development of this principle but the Foglia case has been referred to in latercases. Arguably Foglia can be cited as an example of the ability of the ECJ to control thelimits of its own jurisdiction, further confirming the change of its structure and itssuperiority in Community law in its relationship with national courts.

The Court will also be cautious as to references which seek to challenge legislation ofanother member state other than that in which the reference was made as they madeclear in Bacardi Martin SAS –v-Newcastle United Football Company Ltd [2003]ECR I 905 and in the case of TWD Textilwerke GmbH –v- Germany [1994] ECR I833 refused to entertain a reference where the parties had not availed themselves of theprocedure of judicial review within the time limits imposed under Article 230 (seeWorkbook 3 post) although in R-v-Intervention Board for Agriculture, ex parteAccrington Beef Co Ltd [1996] ECR I 6699 a less rigid approach was adopted when it


44

was not clear that a the parties would have been entitled to claim under Article 230.

The Court will also refuse a reference if insufficient details are provided by the nationalcourt as in Telemarsicaburzzo Sp-v-Circostel [1993] ECR I393.

A ruling also cannot be given if the main proceedings have themselves alreadyterminated as in Pardini [1988] 2041.

B Which Courts or Tribunals can refer under Article 234?

This is set out in Article 234 EC, but required some elaboration to assess the breadth oftribunals and courts which in the view of the ECJ was a matter of community and notnational law Corbiau –v- Administration des Contributions [1993]ECR I 1277.to the Law and Institutions of the European Union WORBroekmeulen [1981] ECR 2311.The ECJ was asked whether it could accept a reference from the appeal committee of aDutch professional medical body, who had refused to register the applicant as a doctor.‘If under the legal system of a Member State, the task of implementing Community provisions is assignedto a professional body acting under a degree of governmental supervision, and if that body creates appealprocedures which may affect exercise of rights granted by Community law, it is imperative, in order toensure the proper functioning of Community law, that the Court should have the opportunity of ruling onissues of interpretation and validity arising out of such proceedings. The appeal committee, which performsits duties with the approval of the public authorities and operates with their assistance, and whosedecisions are accepted following contentious proceedings and are in fact recognised as final, must be deemedto be a court of a Member State...”

Pretore di Salo [1987] ECR-2545A body is a “court or tribunal” for the purposes of Article 234, even though its functionsmay not be of a judicial nature, if it :

acts in the general context of a duty to act

acts independently and in accordance with the law

has jurisdiction conferred upon it

On the one side a private arbitrator has been found not to be a court or tribunalNordsee –v- Reederei Mond [1982] ECR 1095, whereas a individual immigrationofficer from the office of Immigration Adjudicator, a permanent body established bystatute with a body of fixed rules and a duty to provide reasons, was allowed to make areference (C-416-96 El Yassini –v- Sec of State for the Home Dept).

In Denuit –v- Transorient C-125/04 which concerned a dispute arising under thePackage Travel Directive which was brought before the arbitration panel of BelgianTravel Dispute Commissions the Nordsee decision. The court found that in a situationwhere the parties were under no obligation to refer the issue to arbitration and theBelgian authorities were not involved in the decision to opt for arbitration, then thisarbitration panel would not be ‘a court or tribunal’. The fact that in this case the partieshad entered into an arbitration agreement thereby requiring any national court beforewhich the issue would be raised to decline jurisdiction, was not considered a sufficientlyrelevant factor even though in a wider sense the aim of the national structure was toprovide greater protection to the consumer.


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In Victoria Film AS –v- Riksskattenverkert [1998] ECR I 7023 a court exercising itsadministrative duties was found not to be a court or tribunal as its function was not tosettle any dispute but to given advisory opinions .

In Gabalfrisa –v- AEAT C110-147/98 a Spanish economic administrative court,which did not form part of the judiciary but rather of the Ministry of Economic Affairsand Finance, was found to be within Article 234; it being found that there was sufficientseparation of its administrative and judicial functions to satisfy the requirements both ofindependence despite the contrary opinion of AG Saggio who expressed grave doubtsboth as to its independence and that its proceedings were truly inter partes.

C Which Courts must refer under Article 234?

Article 234(3) EC treaty lays down an obligation to refer questions of interpretation ofEuropean Community law to a court or tribunal ‘against whose decisions there is no judicialremedy under national law’.In the United Kingdom, we operate a system of requiring leave (permission) before anappeal can be lodged with the Court of Appeal or with the House of Lords. If suchpermission were refused, it is arguable that the court refusing permission would then fallwithin Article 234(3) EC Treaty. On the one hand, it may be argued that any court lowerthan the House of Lords cannot be described in the abstract as “...a court...against whosedecisions there is no judicial remedy under national law...” (the ‘abstract’ theory) because thereexisted, at least in theory, a possibility of appeal to the House of Lords. On the otherhand, it may be argued that this particular case has gone as far as it can and the absenceof appeal possibilities converts the court from which leave to appeal has been deniedinto such a court from whose decisions there is no actual possibility of appeal in this case(the ‘concrete’ theory).This difficulty has been resolved to some extent by the case Kenny Roland Lyckeskog[2002] ECR I 4839 supporting the abstract theory and paying due regard to theprocedural rules established in the relevant Member State.This issue was also developed in Kobler which confirmed that a failure to refer by anational court may also lead to a Francovich claim of state liability against the MemberState concerned.

In Cartesio [2008] Case C-210/06 in which the Hungarian Court of Appeal also raisedthe issue of whether proceedings appealing a decision of the Hungarian commercialregister court were inter partes proceedings, arguably more interesting was the issue as tothe compatibility of the Hungarian rules of procedure which seemed to permit review byan appellate court of the right of a lower court to make an Article 234 reference. TheECJ firmly stated “the jurisdiction conferred on any national court or tribunal … to make a referenceto the Court for a preliminary ruling cannot be called into question by the application of [national] rules,where they permit the appellate court to vary the order for reference, to set aside the reference and to orderthe court to referring court to resume the domestic law proceedings”

When should a reference be made?There is no limitation on the timing of reference chosen by a national court nor upon thelevel of court (for the definition of court see Broekmeulen ante) which should make areference. The ECJ, in operating its ‘open door policy’, made it clear that it was content toaccept a reference at any stage, subject to the limitation that the reference should benecessary to enable the national court to resolve the dispute before it (see Foglia ante).


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CILFIT and Lanificio di Gavardo SpA -v- Ministry of Health [1982] ECR 3415‘.. those courts or tribunals are not obliged to refer to the Court of Justice a question concerning theinterpretation of Community law raised before them if that question is not relevant, that is to say, if theanswer to that question, regardless of what it may be, can in no way affect the outcome of that case.’Unit 4.An Introduction to the Law and Institutions of the European Union WORWith the doctrines of EC Supremacy and Direct Effect having been established, the ECJwas receiving many more preliminary rulings requests than before and needed to ensurethat its time was used constructively, dealing only with necessary references and notanswering questions which had already been covered in previous proceedings.

From the French legal system it borrowed The doctrine of ‘acte clair’‘... a court or tribunal against whose decisions there is no judicial remedy under national law is required ,where a question of Community law is raised before it, to comply with its obligation to bring the matterbefore the Court of Justice, unless it has established that the question raised is irrelevant or that theCommunity provision in question has already been interpreted by the Court or that the correctapplication of Community law is so obvious as to leave no scope for any reasonable doubt. The existenceof such a possibility must be assessed in the light of the specific characteristics of Community law, theparticular difficulties to which its interpretation gives rise and the risk of divergence in judicial decisionswithin the Community.’

In simpler terms if the interpretation of Community law is so clear that it needs noexplanation or clarification then the national court need not refer. The use of thedoctrine does need however to be placed in the context of the multiplicity of legalsystems and languages used by national courts in the Community. The provision ofCommunity law should be clear enough to receive the same interpretation, whichevernational court were dealing with the question, for the doctrine of ‘acte claire’ to apply.

Da Costa en Scaake NV and others -v- Nederlandse Belastingadministratie [1963]ECR 31The ECJ said that, where the referred question of EC law was “...materially identical...” tothat which had been decided in the Van Gend case, the ECJ said that it was not necessaryto refer the issue again, even for the highest courts who would otherwise be under a dutyto refer.

However, in accepting the doctrine, the ECJ was placing a great deal of trust in thenational courts, by delegating the discretion to determine if the issue was clear and settledby them. In the past the national view on when to refer had not always been comparablewith the view of the ECJ, as can be seen from the English case of

Bulmer -v- Bollinger [1974] Ch 401Sitting in the Court of Appeal, Lord Denning refused to refer an issue of EC law to theECJ setting out his own criteria for when a referral should be made. He concluded that itmust be NECESSARY, then added that, in deciding thereafter whether to exercise thecourt’s discretion to refer, the following were relevant considerations1. The time it would take to obtain a ruling2. Wish not to overload ECJ.3. Difficulty and importance of the issue (if neither, keep in UK).4. Expense.5. Wishes of the parties (this would still not be conclusive).6. The question must be capable of clear formulation.


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Bulmer -v- Bollinger is a famous case in British terms, due to the following quotation...

‘But when we come to matters with a European element, the Treaty is like an incoming tide. It flows upthe estuaries and up the rivers. It cannot be held back. Parliament has decreed that the Treaty is to partof our law.’

.. But it certainly did not reflect the approach to references under Article 234 EC Treatywhich had been adopted by the ECJ.

The British view, as that of other national courts, has changed over the years.

Although cases such as R-v-Secretary of State for Home Department ex parteSandhu [1982] 2 CMLR 553 indicate the type of problems that can exist. Here thequestion concerned the status of a third country national, now divorced from his EUnational spouse. The English court relied upon the ECJ case of Diatta –v- Land Berlin[1985] which dealt with a separated spouse, and stated that this had provided aconclusive ruling. It is quite clear however that the lower court judge had taken adifferent view and that the issue could not therefore be said to be clear even in thenational courts, without consideration of the differences that might emerge in otherMember State courts.

Re Patented Feedingstuffs [1989] 2 CMLR 902 demonstrates the approach taken bythe German constitutional court who took the view that they would regard the action ofa national court as an arbitrary refusal to comply with Article 234 when:

The national court gave no consideration to a reference despite the acceptedrelevance of European law and doubt as to its application

Where the Court consciously departs from ECJ case law and makes no newreference

Where there has not as yet been a decisive judgment on the point or previousjudgments have not given an exhaustive answer, or there is more than a remotepossibility of ECJ developing case law or national court exceeding its jurisdiction

The increasing membership of the European Community and the related increase inreferences under Article 234 EC placed increasing demands upon the ECJ. In additionCommunity legislation became more prolific and detailed leading the ECJ to play anincreasing role in enforcement and review of the Acts of Institutions and Member States.In this climate the ECJ needed assistance to carry out its task of ensuring effective anduniform application of European Community law. The national courts were obviouslyplaced to provide assistance and have been accordingly enrolled to assist the ECJ inimplementing and enforcing the legislation of the European Communities.

Is there a system of Precedent in the Community?In considering the manner in which the Article 234 procedure works, it is also interestingto note considerable similarities to the system of precedent, so essential in a CommonLaw system. Although the original members of the European Community were CivilLaw countries, the addition of other traditions and cultures has clearly contributed to andassisted the development of the jurisprudence of the ECJ.


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a) What role did Article 234 EC play in the eyes of the ECJ?b) Who was able to use Article 234 EC?c) Give examples of the bodies which have been found to be competent to refer

issues for preliminary rulings form the ECJ other than the ones in this workbook.d) Describe how Article 234 works, using your own practical example.e) It has been said that national courts would be more likely to make referrals to the

ECJ “...if they are confident that the ECJ will not abuse its power in these proceedings byinterpreting law too freely and failing to pay sufficient regard to important considerations of legalcertainty.” (per Steiner, J. and Woods, L., EC Law 7th Ed., 2000, at p.488).

f) To what extent do you think this statement reflects the past and currentrelationship between the ECJ and national courts?

g) What is the purpose of the doctrine of acte clair and could it present any threats toensuring the consistency of application of EC law?

h) To what extent will the recent decision of Kobler (unit 3) affect the position ofnational courts in considering whether to refer a question for preliminaryreference?

i) What are the consequences of the stand taken by the ECJ in the cases ofNordsee and Denuit in view of the greater role visible in national jurisdictions ofalternative methods of dispute resolution such as arbitration or mediation?

Prepare the following questions for discussion in the seminar.

1. Fictional EC Directive 99/01 was adopted by the EC on 1st January 1999. TheDirective was specified to be based on Article 17 (citizenship of the Union) EC and itspreamble stated that its aim was “...to strengthen the rights of European Union citizens by addingto the areas of everyday life which EU citizens may enjoy regardless of the Member State within whichthey are currently residing.”

The Directive contains the following provisions:Article 1 states that “Member States shall ensure that all EU citizens shall enjoy the right to claimnecessary medical attention in any hospital or health clinic.”Article 2 states that “Member States shall ensure that all EU citizens present in their territory areduly registered for the purposes of allowing them to vote in regional or national elections.”Article 3 states that “Member States shall ensure that all EU citizens shall enjoy the right to attendreligious and cultural events of their choice.”

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QQQUUUEEESSSTTTIIIOOONNNSSS


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Anne is a UK citizen who requires physiotherapy for a sports injury, which she normallyreceives free of charge from her local hospital. Whilst she is on holiday in Italy shewishes to continue receiving her therapy but is refused free treatment by a number ofItalian hospitals, some of which are State hospitals and some of which are privatehospitals.

Benito, an Italian who is spending the summer holidays with his girlfriend in France, asksto be registered for a European election which is happening the following month. He isrefused on the basis that the appropriate French legislation, which dates back to 1914,requires voters to have been living in France for at least 12 months previous to anyelection.

Charles, a UK national living in England, wishes to attend a meeting of the ‘Church ofSin-tology’, but is informed by the police that the planned meeting has been prohibitedby the local chief of police. Charles wishes to challenge this and is told that he maychallenge the decision at the next meeting of the ‘Police Complaints Commission’, whichis composed of senior policemen and local magistrates and reviews decisions taken bypolice-officers. At the Commission’s meeting, Charles’ challenge is refused and his pleasto consider the terms of the Directive are ignored. Undeterred, he brings an action in theHigh Court seeking judicial review of the Commission’s decision and, when he loses, heappeals to the Court of Appeal. The Court of Appeal refuses to make a reference to theECJ in order to decide whether the Directive is applicable and, if so, whether Charlesenjoys any rights thereunder. After losing again in the Court of Appeal, leave to appeal tothe House of Lords was denied.

Advise the parties as to any rights and remedies they may have under Directive 99/01and the Treaty Articles on which it was based. Advise the parties also how they mayenforce any rights they may have.

2. Fictitious Council Directive 1000/98 on the protection of the environment againstvisual pollution was adopted on 1 April 1998. The Directive includes an Article 5, whichreads as follows:

‘Member States shall take all necessary measures, including provision for criminalsanctions in the form of an appropriate fine and or/ imprisonment, to ensure thathouseholders do not place plastic garden gnomes in a position where they are visible toneighbours or to members of the public.

Any person suffering visual pollution as a result of the placing of plastic gnomes inneighbour’s garden shall be entitled to a remedy in damages. ‘

The date for the implementation of the Directive is January 1999.

On 12th December 1999 a bill was placed before Parliament intending to implement theDirective. The opposition defeated the bill stating Article 5 was a typically ridiculousbreach of European interference in national affairs and since that time it has remainedunimplemented. In the draft bill one penny was stated as the appropriate fine ordamages.

Tracey, who loves garden gnomes, has three gnomes in her front garden which her


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neighbour Sharon hates. Sharon has complained to the local council environmentaldepartment, who refuses to take any actions against Tracey stating that there is nonational law prohibiting gnomes, although there is a local bye-law stating that gardenobjects causing a nuisance must be removed. No successful cases have been pursuedunder this provision of the bye-law to date.

1. Advise Tracey as to her legal positionand2. Assuming that the bill passed through Parliament and been implemented inDecember, what effect would this have had on Tracey’s legal position?

3. Directive 2000/007 was adopted by the EC Member States pursuant to Article 174 ofthe EC Treaty (environmental protection) on 1st January 2000. Article 1 of that Directivestates that: “In order to ensure the prudent and rational utilisation ofnatural resources, and to ensure that European pollution levels do not continue to rise above their currentlevels, Member States shall take all measures necessary to discourage the use of environmentallyunfriendly chemicals in the production of goods.”

Under UK law the Environmental Protection 1980 states that: “The use ofenvironmentally unfriendly chemicals shall be allowed only in so far as it is necessary for the manufactureor development of medicines and other essential products.”

Bill is an environmental protection activist who wishes to protest against the useof environmentally unfriendly chemicals by Friendly-Fire ltd, a manufacturer building anew weapon for the Ministry of Defence. As one of only 2 EC producers of suchweapons, Bill is sure that he will make a great impact on environmental protection in theUK if he manages to challenge this contract.

He also wishes to protest against the use of similar chemicals in tests to develop anew microwave oven. These tests are conducted by Nuke-‘Em ltd plc, a company inwhich the British government owns many shares. The government has also refused toallow any other company to conduct the same experiments.

Having brought legal actions against both companies, Bill loses his case in theHigh Court. The court decides that neither EC law nor UK is of any help to Bill’s case.The judge also said that, even if EC law were applicable, the government would be ableto justify failure to apply the EC law because both contracts represent a vital nationalinterest. Although the High Court allows an appeal to the Court of Appeal, Bill is unableto afford to pay for his lawyer’s bills and is unable to bring the case.

Meanwhile, the EC has passed a Regulation which aims to strengthen theprohibition on the use of environmentally unfriendly chemicals. The Regulation statesthat:“All non-medical uses of environmentally unfriendly chemicals shall be prohibited. Any contracts enteredinto after 1st February 2002 which involve the commercial exploitation of environmentally unfriendlychemicals shall be rendered null and void.”

Both Friendly-Fire ltd and Nuke-‘Em plc wish to challenge the validity of thisRegulation, since their respective contracts would otherwise be void. Although Nuke-‘Em plc has sufficient funds to bring such a case, Friendly-Fire ltd does not. The UKWeapons Manufacturer’s Society, however, has said that it is willing to bring a challengeto the Regulation on behalf of Friendly-Fire ltd.

Advise the parties as to any rights and remedies they may have under EC law.


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4. Directive 24/2004 (Fictional) requires Member States to take appropriate measures “toensure that all workers on underground transportation systems are given a bio-hazardprotection suit so that they are protected in the event of a terrorist attack”. The deadlinefor the implementation of the directive was 31st December 2004. It is now 2006 and theDirective still has not been explicitly implemented in the UK.

The UK does however have the Terrorism Act 2001 which states that “all employersmust take all possible measures to minimize the threat of terrorism to employees while atwork”. The UK government takes the position that this is sufficient to implementdirective 22/2004.

Jane is a part-time worker selling tickets on the platforms of “BirminghamUnderground” (BU). Jane is allowed, pursuant to the Terrorism Act 2001, access to abio-hazard protection suit while she is at work. Every morning she has to request thesuit and she has to give it back at the end of her shift. Jane brings an action in theTransport Tribunal claiming on the basis of Directive 24/2004 that BU has to provideher with a Bio-hazard protection suit which must be her property and which she must beallowed to take home with her so that she is protected from terrorist attacks at all times.Full-time employees are provided with a suit which they are able to take home and whichconstitutes property of the employee and not BU.

BU was originally a statutory corporation but was privatised by the Government in 1991and has since been privately owned. BU has always been unprofitable since itsprivatisation and it has been given government aid to keep the trains running on 5occasions since 1991. BU has exclusive control and ownership of all tunnels andpublicly accessible subways in Birmingham. BU claims that it is not bound by thedirective and in any event the directive does not entitle Jane to what she is asking for.The Transport Tribunal agrees and rules in favour of BU, refusing to make a reference tothe ECJ. Jane then commences proceedings in the High Court to challenge the decisionof the Transport Tribunal.

Jane also finds out that employees driving trains for “Birmingham Underground” havereceived an increase in salary of 10% which constitutes ‘danger money’. BU claims thatthis money constitutes compensation for the imminent threat to those closest to thetrains. 80% of train drivers are men.

Jane wishes to bring an action against BU for sex discrimination, and to pursue anyfurther means she may have of enforcing her rights under directive 24/2004.

Advise Jane as to the availability of proceedings, prospects of success and remedies.

Documents

2009 EUI Workbook 2