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Preliminary Reference Notes

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PRELIMINARY REFERENCE Foundations: Art. 267 TFEU: CJEU has jurisdiction to give preliminary reference on: (a) "interpretation of the Treaties"; (b) "the validity and interpretation of acts of the institutions ... of the EU." National courts must make a reference "if it considers that a decision on the question [of the interpretation of EU law]
is necessary" The PR procedure has allowed the ECJ to shape the relationship between itself and the national courts; developing doctrines such as direct effect, supremacy, and fundamental rights. It is a reference system not an appeals system: CJEU interprets EU law, while national courts apply it (although the line can be very thin). Because the ECJ does not have to decide the law on the facts of a given case, it has had scope to use PR to develop broad constitutional principles. PR and standing: the standing of all national courts to make a PR can compensate the narrow standing rules for an individual to directly challenge an EU act under Art. 263. Relationship between ECJ and national courts under Art. 267 PR allows for dialogue between the ECJ and national courts. Relationship was originally horizontal and bilateral; however, CJEU has used Art. 267 to develop a more hierarchical, multi-lateral relationship: ECJ is superior to national courts (Foglia) and the CJEU's decisions are increasingly held to be binding on all national courts of all MS, not just the one which made the reference (International Chemical Corp). Questions which can be referred: the CJEU can rule on the interpretation of the Treaties and EU secondary legislation. A PR can be made regarding national law which implements EU law as long as the national act has a sufficient connection with EU law. Courts / Tribunals which can refer:
? What is a court / tribunal? For the ECJ to decide the categorisation under national law is not conclusive. E.g. in Broekmeulen an Appeals Committee for GPs was held be a court, even though it wasn't under Dutch law (relevant factors: adversarial procedure, legal representation, gave final decisions).
? Obligation / discretion to refer: most national courts have a discretion to refer issues of interpretation to the CJEU where necessary, but a national court "against whose decisions there is no judicial remedy" has an obligation to refer. What counts as 'no judicial remedy'?
o Abstract theory: bodies whose decisions are never subject to appeal (e.g. UKSC). o Concrete theory: key question is whether the court's decision is subject to appeal in the type of case in question. ECJ took this approach in Costa v ENEL (magistrate's decisions were capable of being appealed, but there was no right of appeal in the present case --- magistrate was treated as being a court from which there is no judicial remedy). If a national court of last resort breaches Art. 267 duty to refer, state may be liable under Kobler. Preliminary rulings and legal certainty:

?ECJ's rulings on interpretation take effect at the time the law entered force, not the time of the judgment --- so interpretation applies to legal relationships before the ruling was given. This has implications for the finality of national courts decisions --- e.g. where a national court gave the law one interpretation in a case in which a PR was not made, that is subsequently incompatible with a later decision of the ECJ. o Kuhne & Heitz [2004] establishes that the importance of loyal cooperation under the Treaty requires national courts to reopen final decisions, but only where it is possible to do so under national law.

PRECEDENT The effect of precedent is to shift the relationship between the national courts and the ECJ to a vertical hierarchy with multilateral relationships. National courts have no obligation to make a reference. Court can decide a reference is not needed because an issue has already been resolved, or there is no doubt as to the validity of an act. If an issue has been resolved, the ECJ will just restate their previous judgment:
?????Costa v ENEL: Art. 267: national courts can formally make a reference where the ECJ has previously decided the question referred, but ECJ will generally restate the previous judgment. Thus a statement could be made formally, but it must raise a new argument / factor or the substance will just be repeated. This shifts the relationship between national and EU courts from bilateral (rulings only of relevance to the national court that requested them) to multilateral (ECJ rulings have an impact on all national courts). The Costa principle has been developed by the ECJ in later cases --- an ECJ ruling can be relied upon even if: (i) the issue arose in a different type of proceedings; (ii) questions were not identical:
? CILFIT [1982]: Italian court sought a preliminary ruling on whether it was exempt from its Art. 267 duty to refer if the answer to the preliminary reference question was obvious. CJEU: ECJ's rulings are authoritative in situations where the point of law is the same, even though the questions posed in earlier cases were different and even though the types of legal proceedings in which the issue arose differed. o To refer a materially identical question " may deprive the obligation of its purpose and thus empty it of its substance" CILFIT encourages national courts to rely on the ECJ's prior rulings where the substance of the legal point has already been adjudicated --- effectively using them as precedents for national courts. International Chemical Corporation [1981]: although a preliminary ruling is primarily directed to the national court which made the reference, it should be relied on by other national courts before which the matter arises. ECJ rulings have a multilateral effect and precedential impact. Analysis: development of precedent:
? Largely inevitable --- the original bilateral conception (ECJ's rulings only relevant for the national court that requested them) was unrealistic --- the ECJ would be forced to hear matters it had already resolved, wasting time and resources.


Error costs: risk national courts may misinterpret ECJ authority. Such costs do not undermine the system of precedent since they are outweighed by gains: (i) national courts become enforcers of EU law in their own right --- they are empowered to act where the ECJ has already sufficiently clarified the law; (ii) national courts become part of an EU judicial hierarchy; (iii) high rate of national implementation of ECJ rulings (96.3%).

ACTE CLAIR Where an answer is so clear that no reference is required. The doctrine gained limited support from the ECJ in CILFIT --- held doctrine may apply where: (i) correct application is "so obvious as to leave no scope for any reasonable doubt" as to the answer; (ii) answer must also be as clear to the courts of other MS and the ECJ. The question of whether a question is sufficiently obvious must be "assessed on the basis of the characteristic features of EU law" --- i.e. it is stated in multiple languages, which may bear different interpretations [difficult for national courts to determine]. These factors mean the ECJ will normally be best suited to the interpretation of EU law --- it will be extremely difficult for national courts to find the acte claire doctrine apples. Debate over acte claire
? Arnull: CILFIT is dangerous because MS courts will take advantage of acte clair to avoid referring questions to the ECJ, undermining uniform interpretation/application of EU law.
?????However, system is efficient in that it leaves clear cases to national courts, making them 'delegates' of EU law --- the limits balance 'error cost' with saving time / resources of ECJ. Further, there are safety devices built into the system, independently of CILFIT to ensure that national courts do not refuse to make a reference where the CILFIT cirteria are not met: o National courts who push the limits of the doctrine will be aware of the possibility of damages liability under Kobler. This not only encourages references by courts of last instance, but also by lower courts --- an individual will bring proceedings for Kobler damages before a lower court, who can then make a reference to the ECJ. o State may be liable to enforcement action under Art. 258 TFEU (Commission can give a reasoned opinion on MS failing to fulfil its Treaty obligations). o Issue may come before the ECJ via an alternate route --- i.e. might be brought before the courts of another MS, which then make a PR. ACCEPTANCE OF THE REFERENCE: ECJ'S PERSPECTIVE Initially the ECJ took a liberal approach, reading the reference so as to preserve its ability to pass judgement --- e.g. in Costa v ENEL the court did not scrutinise the reasons for the reference and they were willing to extract from an imperfectly formulated question one which really pertained to Treaty interpretation. This approach was used to foster a spirit of cooperation with national courts and to allow the ECJ to develop doctrines like direct effect and supremacy. However, it is now clear that the ECJ regards itself as having ultimate authority to decide whether or not a reference is warranted.
? Foglia v Novello (No. 1) [1980] ECJ refused to give a reference on the basis that the proceedings were "artificial" --- parties to a contract for the sale of wine had included a clause dealing with tax specifically to enable them to challenge French import tax via a preliminary reference. CJEU: a PR


would "jeopardise the whole system of legal remedies available to private individuals to enable them to protect themselves against tax provisions which are contrary to the Treaty". Foglia v Novello (No. 2) [1981]: Italian court made a PR asking if Foglia I was compatible with Costa (i.e. that it's for national courts to decide if they need a reference and ECJ will not look into their reasons for making one). CJEU: ECJ will look at the scope of its jurisdiction to see whether it can answer questions under Art. 267 and "in order to confirm its own jurisdiction" it will "examine, where necessary, the conditions in which the case has been referred to it by the national court."

In Foglia II ECJ declared itself as the ultimate decider of its own jurisdiction --- this reshaped the original division of function between national courts and the ECJ as separate but equal. ECJ made clear that it is not a passive receptor, forced to adjudicate on the issue before it --- it would assert control over the suitability of the reference. Foglia has been used to refuse PRs in the following types of case:
? Hypothetical cases: since it would be a waste of judicial resources to consider questions that may never arrive.
? Irrelevant questions: not relevant to the dispute (e.g. Foglia I, Meilicke: ruling declined since issue for PR (non-cash contributions of capital) was not at issue in the main dispute).
? Questions / facts not sufficiently clear. PRELIMINARY RULINGS ON THE VALIDITY OF EU LAW Basic rule: Only the ECJ can declare EU secondary legislation invalid --- confirmed in Foto-Frost:
? Foto-Frost [1987]: German court asked whether it had the power to declare a Commission decision on customs duties invalid (on grounds it breached an EU Regulation). CJEU: "National courts have no jurisdiction themselves to declare that acts of EU institutions are invalid " to find otherwise could cause divergences between national courts, which would "place in jeopardy the unity of the EU legal order." Further, the ECJ is the institution in the best position to make a judgment on validity of EU acts (e.g. can require other MS / EU institutions to provide information). Limited exception: national courts can grant interim relief suspending enforcement of a national measure adopted on the basis of an EU act while a PR is made on the validity of that act.
? Zuckerfabrik [1991] sugar manufacturers sought suspension of a payment demanded by German authorities under a special sugar levy imposed by a Regulation, which Cs considered incompatible with superior EU law. CJEU: right of an individual to a preliminary ruling would be compromised if they could not get interim relief (suspension of implementing national law) pending an ECJ judgment. o Conditions for such relief: (i) must be "serious doubts" as to the validity of an EU act on which the national measure is based; (ii) relief can only last until ECJ has ruled; (iii) suspension must be "necessary in order to avoid serious and irreparable damage"; (iv) damage must be liable to materialise before the EJH has been able to rule on the validity of the contested act; (v) must take into account the interests of the EU --- e.g. if an act would be "deprived of all usefulness if not immediately implemented."
? Atlanta [1995]: Could the Zuckerfabrik criteria be used by a national court to grant interim relief suspending an EU Regulation? CJEU: yes, as long as criteria were satisfied.

RELATIONSHIP BETWEEN ART. 263 AND ART. 267 Art. 267 can act as a safety net, providing judicial protection for individuals who fall outside the strict standing requirements to bring a direct challenge under Art. 263. This system has advantages in that it saves the ECJ time and resources when it is overburdened with cases from 28 MS, allows national courts to filter out claims with minimal chance of success. However, the ECJ has imposed limits on Art. 267 being used to circumvent restrictions on Art. 263:
? TWD Textilwerke [1994]: C had a right to challenge a Commission Decision (requiring C to repay state aid it had received) under Art. 263, but did not do so before the time limit expired. In national proceedings to recover the aid, the German court made an Art. 267 reference to challenge the Decision. CJEU: did not allow the challenge. To allow C to challenge the validity of the Decision via Art 267 would allow compromise legal certainty and the system of remedies under EU law
--- once the time limit expires under Art. 263, the Decision becomes binding o AG: A person who is adversely affected by an EU act but lacks standing to challenge it under Art 263 should not be prevented from challenging it indirectly under Art 267; however, in this case both C and Germany knew they had standing to challenge the Decision and did not do so. However, if it is not completely clear that C would have standing under Art. 263, they may be entitled for a referral through Art. 267:
? Eurotunnel v Sea France [1995]: C challenged two Directives on duty free shopping via Art 267. C had not attempted to challenge the Directives under Art 263. ECJ: C's indirect challenge through Art 267 was permissible. TWD Textilewerke involved a company, C, which unquestionably had standing to challenge the validity of the Decision under Art 263, but here it is not certain C would have had standing under Art. 263 as the Directive was addressed in general terms to MS, not private companies. Art. 267 compensates for and justifies the strict Art 263 standing requirements; Arts 263 and 267 must establish effective judicial protection overall, not individually However, there are problems with Art.

267. PROBLEMS AND REFORM Key problem is the ECJ's increasing workload and consequent increases in time taken to process a preliminary ruling: 221 in 2005 to 302 in 2009. However, time per reference down from high of 25 months (2003) to 17 months (2009), although there are 438 preliminary references pending. o Increase in judges from newer accession countries will be offset my more references. o Lisbon Treaty making the Charter binding will also have an effect (more litigation). Failure to reduce the docket may result in consequences worse than lack of uniformity, through diluting or degrading the manner in which each case is handled, or in greater damage caused by long delay. Attachment to uniformity runs strongly against any claim that may be made by the EU to be evolving into a more mature legal order. In any developed legal system, a play-off is always made between uniformity and competing desire for legal certainty.

o While superficially, an emphasis on uniformity may promote integration, there has been increasing concern that the CJEU's attachment to uniformity is not facilitating, but rather jeopardising and undermining legal integration. DJ: should adopt reform directed at curtailing no. of references received, rather than managing volume:
? Need a filtering system, where only the questions that genuinely require ECJ assistance are addressed.
? Even without institutional changes, refusing to judge on marginal jurisdiction cases or placing more trust it national courts could help the problem. Issue


Main problem is that the system is a Whilst number of preliminary references has risen, the time taken for each has victim of its own success: more fallen. references are being made as the ? Provisions for expedited hearings in case of emergency. number of MS increases and EU's areas
? Preliminary rulings can be given by reasoned order where ECJ refers to of competence expand; added MS prior case law in certain types of cases means more official languages,
? Case can be decided without AG opinion requiring additional interpreters and
? Increase in MS has coincided with an increase in judges. increasing costs of proceedings. Limiting national courtempowerment to make references e.g. only highest court?

This could mean important questions go unanswered as cases don't make it to the highest court for reasons of cost.Would prompt national courts to be more selective, reduce workload, allow ECJ to concentrate on cases fundamental to uniformity and development. But two problems: o National courts might refrain from referring questions to the ECJ to avoid being rejected for lack of interest, jeopardising the machinery for ensuring EU law is uniformly interpreted across MS; o Unlike USA, the Art. 267 procedure is not an appeals system, so if the ECJ declines to give a PR there will be no answer to the question of EU law.Most national courts are not EU law experts: identifying a question does not mean competence to suggest an answer. Higher level courts may have such expertise, but this would then require detailed argument by counsel in those courts for the national court to make its suggestion. Would not ease up work load necessarily since ECJ would still need to consider the issue in some detail.

Introduce case filtering system - ECJ only deals with novel, complex, and important

National court proposes answer to the ?
question in the reference - enhances cooperation

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