Direct Effect
Direct effect gives rise to rights and obligations that an individual can enforce before their national court.
- Allows actions in UK Courts on basis of EU law
- Can be used as a shield or sword
- s2(1) ECA 1972 - UK courts are to give effect to EU law
Van Gend En Loos v Nederlandse
Authority: established the principle of and test for direct effect. Also demonstrates vertical direct effect.
Facts: a company sued the Dutch custom authorities in a Dutch court for a refund of the duty paid that was legal under Dutch law, but not not permitted under EU law. The problem boiled down to : could individuals rely on Articles despite the fact they are addressed to Member States?
Test: In order for an individual to be able to enforce a piece of EU legislation before their courts:
1. The provision needs to be sufficiently clear and precise
2. The provision must be unconditional
3. It must leave no room for the exercise of discretion in its implementation by an institution or national authority - This criterion is applicable to Treaty Articles only
If this test is satisfied the legislation has direct effect.
Facts: a company sued the Dutch custom authorities in a Dutch court for a refund of the duty paid that was legal under Dutch law, but not not permitted under EU law. The problem boiled down to : could individuals rely on Articles despite the fact they are addressed to Member States?
Test: In order for an individual to be able to enforce a piece of EU legislation before their courts:
1. The provision needs to be sufficiently clear and precise
2. The provision must be unconditional
3. It must leave no room for the exercise of discretion in its implementation by an institution or national authority - This criterion is applicable to Treaty Articles only
If this test is satisfied the legislation has direct effect.
Horizontal Direct Effect
Defrenne v Sabena
Authority: established all Treaty Articles have HDE, provided the Van Gend test is met (see above).
Facts: Private company airline Sabena paid female cabin crew members less wages than their male counterparts doing the same job, which Belgian law did not prohibit. Defrenne sought to rely on a Treaty Article which would protect her.
Held: The Belgian courts asked asked the ECJ whether an individual could rely on a Treaty Article to enforce rights against another individual in national courts. The ECJ used the purposive approach to interpret Article 119 and recognising social aims of the Union, held yes.
The ECJ rejected that argument that Article 119 was addressed expressly to Member States as courts as themselves part of the state and therefore need to ensure the effectiveness of EU law.
The distinction between HDE and VDE is illustrated by the following diagram:
Authority: established all Treaty Articles have HDE, provided the Van Gend test is met (see above).
Facts: Private company airline Sabena paid female cabin crew members less wages than their male counterparts doing the same job, which Belgian law did not prohibit. Defrenne sought to rely on a Treaty Article which would protect her.
Held: The Belgian courts asked asked the ECJ whether an individual could rely on a Treaty Article to enforce rights against another individual in national courts. The ECJ used the purposive approach to interpret Article 119 and recognising social aims of the Union, held yes.
The ECJ rejected that argument that Article 119 was addressed expressly to Member States as courts as themselves part of the state and therefore need to ensure the effectiveness of EU law.
The distinction between HDE and VDE is illustrated by the following diagram:
Direct Effect and Secondary Legislation
Regulations
Decisions
An individual wishing to rely on a Directive would usually use the relevant piece of national law (the implementing legislation). However, failure to implement or poor implementation would mean that they would have to rely on the Directive have direct effect.
Van Duyn v Home Office
Authority: Directives have VDE
Facts: Van Duyn wished to enter the UK to work for Scientology. She was refused entry as Scientology was thought to be socially undesirable. She took the matter to UK courts, claiming Article 45 TFEU - free movement of workers. The UK relied on the justification of public policy for restricting the freedom under Article 45(3). Van Duyn relied on Directive 64/221, which placed limits on the circumstances which Member States could rely on the public policy justification.
Held:
Case of VNO
Authority: A directive may still have direct effect even if it has had faulty implementation
Marshall v South Hampton Health Authority
Authority: Directives are capable of VDE. State can also be "emanation of the state". See below for when bodies qualify as an emanation of the state.
Facts: Mrs Marshall was employed by the NHS. Women, under UK law, could be forced to retire at 60, whereas the retirement age for men was 65. Mrs Marshall wanted to keep working. She could not rely on a Treaty Article as it was about pay, so she sought to rely of on the Equal Treatment Directive (ETD).
Held: Individuals could rely on Directives vertically against the state and state bodies. It was irrelevant that the state body in this instance was acting in their capacity as an employer.
Duke v GEC Reliance
Authority: Directives are not capable of HDE.
Facts: Duke had the exact same claim as Mrs Marshall (see above). The distinguishing fact was that she was employed by a private sector body.
Held: As her claim was horizontal, not vertical, the claim failed. The fact that her employer was a private body proved fatal to her claim.
Publico Ministero v Ratti
Authority: one cannot seek to rely on a Directive via direct effect until the deadline to implement has passed.
Facts: Ratti was prosecuted in 1978. He relied on two Directives in his defence. They had implementation deadlines of 1974 and 1979. Ratti could only rely on the Directive with the deadline in 1974.
NB: See also Faccini Dori
- Article 288 on regulations: "of general application... binding in its entirety and directly applicable in all MS". No need for implementation
- Direct effect depends on the Van Gend criteria being satisfied
- Capable of both horizontal and vertical effect - Antonio Munoz
Decisions
- Article 288 on decisions: "binding in its entirety upon those to whom it is addressed"
- Decisions may be directly effective, provided Van Gend is satisfied - Grad v Finanzamt Traustein
An individual wishing to rely on a Directive would usually use the relevant piece of national law (the implementing legislation). However, failure to implement or poor implementation would mean that they would have to rely on the Directive have direct effect.
- Article 288 on directives "binding, as to the result to be achieved upon each Member State to which it is addressed, but shall leave to the national authorities the choice of form and methods"
- Subject to Van Gend criteria and Ratti
Van Duyn v Home Office
Authority: Directives have VDE
Facts: Van Duyn wished to enter the UK to work for Scientology. She was refused entry as Scientology was thought to be socially undesirable. She took the matter to UK courts, claiming Article 45 TFEU - free movement of workers. The UK relied on the justification of public policy for restricting the freedom under Article 45(3). Van Duyn relied on Directive 64/221, which placed limits on the circumstances which Member States could rely on the public policy justification.
Held:
Case of VNO
Authority: A directive may still have direct effect even if it has had faulty implementation
Marshall v South Hampton Health Authority
Authority: Directives are capable of VDE. State can also be "emanation of the state". See below for when bodies qualify as an emanation of the state.
Facts: Mrs Marshall was employed by the NHS. Women, under UK law, could be forced to retire at 60, whereas the retirement age for men was 65. Mrs Marshall wanted to keep working. She could not rely on a Treaty Article as it was about pay, so she sought to rely of on the Equal Treatment Directive (ETD).
Held: Individuals could rely on Directives vertically against the state and state bodies. It was irrelevant that the state body in this instance was acting in their capacity as an employer.
Duke v GEC Reliance
Authority: Directives are not capable of HDE.
Facts: Duke had the exact same claim as Mrs Marshall (see above). The distinguishing fact was that she was employed by a private sector body.
Held: As her claim was horizontal, not vertical, the claim failed. The fact that her employer was a private body proved fatal to her claim.
Publico Ministero v Ratti
Authority: one cannot seek to rely on a Directive via direct effect until the deadline to implement has passed.
Facts: Ratti was prosecuted in 1978. He relied on two Directives in his defence. They had implementation deadlines of 1974 and 1979. Ratti could only rely on the Directive with the deadline in 1974.
NB: See also Faccini Dori
Emanation of the State (EOS)
As has been shown, Directives can only have vertical direct effect, against the state or state bodies. A claim is pivotal on this, so it is important to define what qualifies as a state body.
Foster v British Gas
The ECJ provided criteria for whether a body is an "emanation of the state":
The approach of the UK courts when deciding EOS
Exam tip - only use these cases in a UK context
1/3 of the Foster criteria met
2/3 of the Foster criteria met
3/3 of the Foster criteria met
Foster v British Gas
The ECJ provided criteria for whether a body is an "emanation of the state":
- Providing a public service pursuant to a statutory duty OR
- The industry/service is under state control OR
- Special powers for carrying out its functions
The approach of the UK courts when deciding EOS
Exam tip - only use these cases in a UK context
- Doughty v Rolls Royce plc
1/3 of the Foster criteria met
- NUT v St Mary's Junior School
2/3 of the Foster criteria met
- Griffin v South West Water Servies
3/3 of the Foster criteria met
Arguments For and Against Horizontal Direct Effect
FOR
|
AGAINST
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As has been shown above in the case of Duke v GEC Reliance, Directives do not have horizontal direct effect. The table above summarises the arguments for and against, which are fleshed out below.
Advocates General
Advocates -General in the ECJ give opinions that are not binding but assist judges. Various Attorney-Generals have criticised the lack of HDE for Directives in the cases below and argued very powerfully for HDE.
Marshall No 2
Facts: Referred regarding the amount of compensation. English law had an upper law, whereas the Equal Treatment Directive contained no upper limit. Mrs Marshall could rely on the Directive as her claim was vertical.
AG Van Herven pointed to inequality: public sector workers have greater rights which is not fair. He cited the principle of "equality before the law" under Article 20 of the EU Charter of Fundamental Rights 2000.
Vaneetveld v Le Foyer
Facts: Mrs Vaneetveld, following an accident, claimed under her husband's insurance. Le Foyer, an insurance comapny, paid out as they were under the impression that they were no longer married. Le Foyer later found out they were merely separated and still married. Le Foyer then tried to reclaim the money - which was allowed under Belgium law. Mrs Vaneetveld tried to rely on a Directive to protect her.
AG Jacobs expressed concerns about the uniformity of the law - directives could be relied upon by those dealing with public bodies only. He said the HDE would ensure people dealing with private bodies would not be disadvantaged, and that there would be more consistency and fairness between MS. He highlighted there was a need to ensure the effectiveness of Community law and for EU law to be applied the same way in all Member States.
Faccini Dori v Recreb
Facts: Miss Dori bought an English language course from a sales rep but changed her mind and tried to cancel the contract relying on rights to cancellations under an unimplemented Directive. HDE was required.
A-G Lenz proposed a compromise. He reviewed the history of HDE and understood that pre-TEU Directives were not published - so it indeed was not fair to give them HDE. However, he noted that the recent Treaty on European Union 1993 required all Directives adopted since 1st November 1993 to be published in the EU's Official Journal. As these new directives were in the public domain, individuals can be assumed to know them. He suggested these new Directives should be capable of both VDE and HDE, subject to Van Gend. This satisfies the legitimate expectations principle.
He also noted that the current position offends the prohibition of discrimination and the conduct of Member States should not prevent individuals from enforcing their rights.
ECJ considered A-G Lenz arguments but rejected them on the following grounds:
However, they failed to mention the fact that state liability and indirect effect are less popular options. These claims are less predictable in outcome and suing the state is not only daunting, but also costly.
The ECJ continue to refuse the HDE of Directives.
Advocates General
Advocates -General in the ECJ give opinions that are not binding but assist judges. Various Attorney-Generals have criticised the lack of HDE for Directives in the cases below and argued very powerfully for HDE.
Marshall No 2
Facts: Referred regarding the amount of compensation. English law had an upper law, whereas the Equal Treatment Directive contained no upper limit. Mrs Marshall could rely on the Directive as her claim was vertical.
AG Van Herven pointed to inequality: public sector workers have greater rights which is not fair. He cited the principle of "equality before the law" under Article 20 of the EU Charter of Fundamental Rights 2000.
Vaneetveld v Le Foyer
Facts: Mrs Vaneetveld, following an accident, claimed under her husband's insurance. Le Foyer, an insurance comapny, paid out as they were under the impression that they were no longer married. Le Foyer later found out they were merely separated and still married. Le Foyer then tried to reclaim the money - which was allowed under Belgium law. Mrs Vaneetveld tried to rely on a Directive to protect her.
AG Jacobs expressed concerns about the uniformity of the law - directives could be relied upon by those dealing with public bodies only. He said the HDE would ensure people dealing with private bodies would not be disadvantaged, and that there would be more consistency and fairness between MS. He highlighted there was a need to ensure the effectiveness of Community law and for EU law to be applied the same way in all Member States.
Faccini Dori v Recreb
Facts: Miss Dori bought an English language course from a sales rep but changed her mind and tried to cancel the contract relying on rights to cancellations under an unimplemented Directive. HDE was required.
A-G Lenz proposed a compromise. He reviewed the history of HDE and understood that pre-TEU Directives were not published - so it indeed was not fair to give them HDE. However, he noted that the recent Treaty on European Union 1993 required all Directives adopted since 1st November 1993 to be published in the EU's Official Journal. As these new directives were in the public domain, individuals can be assumed to know them. He suggested these new Directives should be capable of both VDE and HDE, subject to Van Gend. This satisfies the legitimate expectations principle.
He also noted that the current position offends the prohibition of discrimination and the conduct of Member States should not prevent individuals from enforcing their rights.
ECJ considered A-G Lenz arguments but rejected them on the following grounds:
- If the community intends to confer rights on individuals against individuals, regulations would be used
- Observed state liability and indirect effect are available
- Article 189 - Directives are binging on Member States only
However, they failed to mention the fact that state liability and indirect effect are less popular options. These claims are less predictable in outcome and suing the state is not only daunting, but also costly.
The ECJ continue to refuse the HDE of Directives.
Consolidation
DA? | VDE? | HDE? | |
Treaty Article | Yes | Yes, if Van Gend satisfied | Yes, if Van Gend satisfied |
Regulation | Yes | Yes, if Van Gend satisfied | Yes, if Van Gend satisfied |
Directive | No | Yes, if Van Gend and Ratti are satisfied | No |
Decisions | No | Yes, if addressed to a MS and VG satisfied | Yes, if addressed to an individual and VD satisfied |
Direct Effect Flowchart for Directives
Note: Incidental Direct Effect
Directive 98/34 requires Member States to notify the Commission of any technical regulations before adoption into national law.
CIA Security - non-notification means such national regulation can't apply to individuals. Thus the claimant cannot rely on national law in its claim against another individual i.e. Directive incidentally relied upon by the party in horizontal claim.
Unilever - the ECJ applied the CIA Security principle to contractual relations between individuals.
In Unilever, the ECJ affirmed case law in Marshall and Faccini Dori (i.e. no HDE for Directives) but distinguished Unilever.
The ECJ held that Dir 98/34 was procedural only and created no new rights or imposed obligations on individuals. Instead the Directive simply removed national law without replacing it without any EU law. The effect of this is that the Directive was incidentally relied upon in a horizontal contractual claim.
CIA Security - non-notification means such national regulation can't apply to individuals. Thus the claimant cannot rely on national law in its claim against another individual i.e. Directive incidentally relied upon by the party in horizontal claim.
Unilever - the ECJ applied the CIA Security principle to contractual relations between individuals.
In Unilever, the ECJ affirmed case law in Marshall and Faccini Dori (i.e. no HDE for Directives) but distinguished Unilever.
The ECJ held that Dir 98/34 was procedural only and created no new rights or imposed obligations on individuals. Instead the Directive simply removed national law without replacing it without any EU law. The effect of this is that the Directive was incidentally relied upon in a horizontal contractual claim.
General Principles of EU Law and HDE: Through the back door?
Directive 200/78 prohibits age (and other discrimination) but in Mangold and Kucukdeveci neither Claimant could rely on its direct effect. However the ECJ held prohibitions on age discrimination is a general principle of EU Law to which Directive 2000/78 gave expression.
Therefore, to ensure the effectiveness of EU rules, national courts should disapply any national law that conflicts with the general principle. This is a similar approach to that of CIA Security and Unilever, where the claimants did not rely on Directive 2000/78 directly but rather on the exclusion of national rules contradicting the general principle of law.
The effect of the judgement meant that the Directive was relied upon in a horizontal claim. Following this, the case of Duke may have been decidedly differently.
Arguments against ECJs judgement in Mangold
Arguments for
Therefore, to ensure the effectiveness of EU rules, national courts should disapply any national law that conflicts with the general principle. This is a similar approach to that of CIA Security and Unilever, where the claimants did not rely on Directive 2000/78 directly but rather on the exclusion of national rules contradicting the general principle of law.
The effect of the judgement meant that the Directive was relied upon in a horizontal claim. Following this, the case of Duke may have been decidedly differently.
Arguments against ECJs judgement in Mangold
- The key argument against HDE was that individuals should not have obligations imposed on them but the judgement does exactly that
- The appropriate claim should be state liability
- Contrary to the principle of legal certainty
- Difficult to establish when Directives give effect to general principles of EU law
Arguments for
- The principle of non-discrimination is so fundamental that even private employers should have to abide by it