(contrast AG's opinion with that of the Court): P had subscribed to a language course with a company and later decided to cancel her subscription, which was allowed for by an EU directive. The company refused to cancel her subscription and assigned its rights to Recreb, who went to court to obtain the money from her. Court was unsure whether the EC directive, which had not been transposed into Italian law (despite the time limit for transposition expiring). The ECJ said (1) that the directive was clear, unconditional etc so that it could be said to confer rights; (2) that untransposed directives cannot grant private citizens rights that are enforceable against each other (Marshall- no horizontal direct effect); (3) that, however, following Marleasing, there was indirect effect so that the Italian court had to interpret Italian law within the meaning of the Directive; and (4) where interpretation is not possible and the plaintiff cannot enforce her rights granted by the directive, then the state must compensate her, under Francovich, since it is the state’s liability where someone has lost out because the state has not transposed a directive on time.
AG Lenz: Vertical direct effect is of limited use to an individual where the directive is targeted at individuals, businesses, etc (as here). The way the courts get round this is through a broad interpretation of state, construction of domestic law in a way that is consistent with the directive, and state compensation. He says it would be better to give directives horizontal effect (contrary to ECJ ruling in this case): It would ensure that companies throughout union are on level playing field (whereas at the moment companies in state that transpose directives in time are at a disadvantage; It would further the approximation of laws, as is the stated aim of the treaty article concerned here; prevents discrimination, both of companies and consumers, to allow EC laws to apply differently to citizens of different MSs; and it would be better for legal certainty.