Direct Effect
28/01/2014 14:15:00
EU Law Tute 3 Notes
A guide to Direct effect
Public/private divide: commission can sue Member States before the ECJ
for breach of EU law (only tiny fraction of breaches included in this) under
article 258 TFEU
ECJ took bold step of Legitimising private enforcement. Even though
countries with dualist approach to international law do not allow domestic
enforcement by citizens, the ECJ allowed that.
Broad definition of direct effect (objective direct effect), can arguably be
derived from Van Gend en Loos, and expressed as the capacity of a
provision of EU law to be invoked before a national court.
Narrower ‘classical’ definition of direct effect (subjective direct effect) is
the capacity of a provision of EU law to confer rights on individuals which
they may enforce before national courts.

Different meaning given to ‘right’ by ECJ in different contexts,
ranging from simply a right to invoke EU law to a right to some
substantive right
Direct effect expanded: applied to regulations and decisions as well as
treaty articles.
Moved to Directives: Held that directives could in principle have direct
effect, but only vertical direct effect (only effective against the national
govt).

Vertical/horizontal distinction created problems.
Treaty Provisions
Foundations: Van Gend En Loos
Van Gend En Loos imported chemicals form Germany into Netherlands. It
was charged with an import duty which had allegedly been increased
since coming into force of EEC, contrary to article 12. Question whether
article 12 has direct application raised.
ECJ: Wording of EEC and the aim of the Common Market make it a special
treaty. Article 177 (preliminary reference, now 258 TFEU) which aims to
secure uniform interpretation of the treaty, allows citizens to invoke EU
law. confirms that states have accepted a limit on their sovereignty and
that the community constitutes a new legal order. Article 12 creates
rights for individuals which member states must respect.
 Criteria for direct effect: precise, unconditional, negative
obligating
 Court says there is dual vigilance, member states can sue each
other and commission can sue but individuals can also sue

Member states had said that they just signed an international
instrument and didn’t give up their sovereignty in this way
Defrenne
Further relaxed the criteria for direct effect. Article 141 EC (article 157
TFEU) required the state to ensure ‘the application of the principle that
men and women are paid equally for equal work’. Did not impose a very
precise negative obligation on the state, and neither the Commission not
the member states considered it to be directly applicable or legally
complete. The Court however, identified and isolated the principle of
equal pay and held it to be directly applicable, without going into the
nitty-gritties of potential difficult cases.
 Shows that at least treaty articles don’t need to be precise, clear,
negative and unconditional
Treaty articles can also have horizontal direct effect: Viking lines, the
treaty provisions on freedom of establishment were directly effective
against the striking union.
Regulations
Article 288 TFEU provides that a regulation ‘shall be binding in its entirety
amd directly applicable in all Member States’.
The Direct Effect of regulations was affirmed in the Slaughtered Cow case
National governments can pass domestic law to give effect to regulations,
but this must not subvert them or conceal their identity as EU law (and
hence, for example, as law that takes precedence over conflicting
domestic law).
In order to be directly effective, the article of the regulation needs to be
sufficiently clear, precise and certain.
Decisions
288 TFEU: A decision shall be binding in its entirety. A decision which
specifies those to whom it is addressed shall be binding only on them.
In order to be directly effective, the decision of the regulation needs to be
sufficiently clear, precise and unconditional.
Decisions made to member states only vertically directly effective: Carp.
Decisions made to individuals can be horizontally DE.
Directives
288 TFEU states that a directive ‘shall be binding as to the result that is 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.
However, ECJ held that directives could still in principle be directly
effective, as their proper application is crucial to harmonisation.
 Three main reasons given for this, first two in:
Van Duyn v Home Office
1. Where The Community authorities have imposed an obligation on a
member state, its useful effect would be weakened if individuals were
prevented from relying on it before their national courts.
2. Article 177 (now 267 TFEU) which empowers national courts to refer
questions of EU law to the ECJ does so for all the acts for EU
institutions without further distinction, implying that they all may be
invoked by individuals in national courts.
a. Underlying principle: unimplemented directives can have direct
effect
Third reason was articulated in Ratti
Member state going after trader who followed EU directive that the
member state failed to implement.
3. Estoppel: Member States were precluded by their failure to implement
a directive properly from refusing to recognise its binding effect in
cases where it was pleaded against them.
Sufficiently clear, precise and unconditional test
In Van Duyn, Directive 64/221 allowed member states to restrict the
movement of non-nationals on grounds such as public policy, without
defining the permissible range of public policy concerns. ECJ ruled that by
providing that the measures had to be based on personal conduct of the
individual, the directive had limited the discretionary power of the state
and hence the obligation imposed was clear, precise, and legally binding.
Vertical/Horizontal Distinction
Marshall
Retirement age at health authority 60 for women and 65 for men. Woman
sued and wanted to rely on directive. Held, directive not effective
horizontally since to hold it such would completely erode the
directive/regulation distinction present in the treaty (288 TFEU).
 Article doesn’t mention horizontal/vertical point though, contrast
Defrenne
Reasons against horizontal direct effect (Craig p 196)
1) Wording of article 288 TFEU doesn’t allow it
2) Rule of law implication, directives didn’t used to be published
3) Eroding directive/regulation distinction
4) Reducing legal certainty (Wells)
Definition of State broadened:
Health authority in Marshall part of State
Foster v British Gas
Nationalised British Gas had retirement age 65 for men and 60 for
women. Held that it was part of the state and hence direct effect applied
to it.
Who can direct effect be used against: Any body that is made responsible
for providing a public service under the control of the state, and has for
that purpose special powers beyond those applicable between individuals.
Vertical Direct Effect: Triangular situations
Wells
UK had to take environmental assessment before giving projects the goahead. Did not do so for mining operations, Wells bought action against
UK, which would result in mining operations being halted (effecting
private individual). Held, that even though provisions of a a directive can
only create rights for individuals and not obligations, the state is still
obliged to carry out the assessment. UK’s inverse direct effect argument
rejected.
One way in which the ECJ has tried to recognise the legal effect of
directives without giving them horizontal direct effect is through ‘Indirect
Effect’
Most important way in which this is done is via the principle of
harmonious interpretation: Courts encouraged to read domestic
legislation in line with EU directive (Von Colson)
 This was later expressed as a requirement of Article 4(3) TFEU
Adeneler
Does this obligation arise after the period for transposition has expired?
Yes, but even before that courts must refrain from interpreting domestic
law in a manner that might ‘seriously compromise’ the objective of the
directive.
Marleasing: Case involved declaring a company which was set up to
defraud creditors void. Held: An unimplemented directive should be relied
upon to influence the interpretation of national law in a case between
individuals
Scope of interpretation
1) applies to laws passed before directive
2) applies to domestic legal system as a whole and not just law that
implements the directive (Pfeiffer)
3) does not impose a reading of the national law that it cannot bear
Pfeiffer
Health and safety and working hours directive. Claimants required to
work in excess of 48 hours per week, in violation of directive. German
Court required to interpret the whole national law in order to try and
prevent the maximum weekly working time being violated.
Kolpinghuis: Interpretation in line with directive limited by general
principles of community law and in particular legal certainty and nonretroactivity. Cannot determine or aggravate criminal liability.
Centrosteel v Adipol
Centrosteel claimed payment under a contract, whereas Adipol argued
that the contract was void for failure to comply with Italian law. C argued
that EU directive meant it did not need to comply in the way A was
alleging. Held that national law must be read in the light of the directive,
hence C wins. This creates an obligation on A. Case is an example of
‘exclusionary effect’ of a directive as opposed to ‘substitution effect’. AG:
1) directive itself cannot impose obligations 2) can lead to interpretation
of national law which cannot impose criminal liability but can impose civil
liability.
Incidental Horizontal Direct Effect
Directives cannot impose obligations on private individuals, but can still
affect their obligations and rights by holding that a particular national rule
that breaches a directive does not apply. This causes ‘exclusionary effect’
(the rule is excluded) as opposed to ‘substitution effect’ (the rule is
replaced by EU rule.
Von Colson: applies to become a prison officer. They conduct a sham
interview, but they have a semi-official policy to never let women in.
 Couldn’t reply on directive cos it wasn’t specific enough
Treaty Peg: article 4 (3) TEU
CIA Security
CIA Security did not comply with national law which did not comply with
directive. Sued rivals who advertised that CIA’s alarm system was not
approved; success of this depended on whether national law which CIA
breached stood. Held that national law did not stand, since this would
better achieve the aim of the directive and protect the free movement of
goods. The rivals could now be sued for unfair trading.
Unilever v Central Food
Unilever’s olives complied with EU directive and not Italian law, whereas
Central Food wanted olives which complied with Italian law. AG’s opinion
that national legislation should not be rendered unenforceable since this
would lead to legal uncertainty and make private individuals liable for
state failure. ECJ held that it was unenforceable, on the same principles
as CIA Security. Insisted that it is not created obligation, simply holding
violating laws to be unenforceable.
General Principles of Law
Mangold
German man yearly contract because he is over a certain age. Directive
against discrimination based on age not in effect in Germany yet. ECJ
held that the source of the principle against discrimination was a general
principle of EU law, as could be seen from the preamble of the directive,
the common constitutional traditions of member states and various
international instruments. This general principle must be respected by
national courts and conflicting legislation set aside.
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
Are general principles directly effective then?
o Probably yes, as Craig says general principles can impose
obligations on individuals (p213)
Problems with Mangold: 1) Legal certainty compromised 2)
framers probably did not think an individual should be bound by
obligations from a general principle.
State Liability in damages: An individual can sue the state for failure to
implement a directive, pursuant to the Francovich ruling, provided he can
prove loss caused.
NEW CASE: AMS. TRADE UNION SUES FRENCH EMPLOYER, WHO IS IN
BREACH OF EU DIRECTIVE BUT NOT FRENCH LAW. EU DIRECTIVE ALSO
IN ARTICLE 27 OF THE CHARTER. COURT SAYS ITS NOT SPECIFIC
ENOUGH AND THEREFORE NO DIRECT EFFECT. DENIES THE TRADE
UNION A REMEDY.
 STRANGE THAT general principles had to be specific!! Didn’t
think it would have to be
TUTE!
DIRRECT EFFECT:
 EU law can work without direct effect
Political response to cohn-bendit case could have been not recognising
direct effect of directives cos in the case the French public law supreme
court doesn’t want to give directives direct effect. Just like political
response to german opposition
VON COLSON
1/28/2014 2:15:00 PM
1/28/2014 2:15:00 PM