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The Relationship Between Eu Law And National Law Notes

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The Relationship Between EU Law and National Law: Direct Effect, Indirect Effect and
Incidental Effect Notes
There are two related points to remember when analysing the judicial creation of direct effect and its later concomitants:
(a) The EU legal system is defined by the way in which it interacts with other legal systems a. The purpose of the EU is to change and alter the legal order of Member
States
(b) Direct effect and its related doctrines attempt to define the extent to which the EU
changes and alters the legal order of Member States a. This speaks to whether or not the EU and Member State legal systems are distinct, and whether or not the EU is even a legal system in its own right.
What is direct effect?
Definition
Craig and de Búrca (2020) have said that there are two senses of direct effect:
(a) Broad sense - provisions of binding EU law that are sufficiently clear, precise and unconditional to be considered justiciable can be invoked and relied upon before national courts
(b) Narrow sense - the capacity of a provision of EU law to confer rights on individuals
Both of these senses effectively refer to the same thing: the direct enforceability in national courts of qualifying pieces of EU law
The seminal judgement of Van Gend en Loos first introduced this concept of direct effect
Van Gend en Loos

Facts: A company was importing chemicals from Germany to the Netherlands. They thought that they were subjected to a customs duty that had increased since the EEC
had come in to effect.
o The problem was that the Article 12 EEC (now Article 30 TFEU) prohibited any changes to customs duties between Member States.
 The company wanted to know if they could directly rely on Article 12
EEC in a national court in the Netherlands to have the increased customs duty disapplied
 NOTE: there was no explicit answer to this question in the
Treaty

3 of the 6 Member States offered their opinions on the issue as to how the question should be answered: Netherlands: "… the EEC Treaty does not differ from a standard international treaty. The conclusive factors in this respect are the intention of the parties and the provisions of the Treaty"
 Germany: "… Article 12 of the EEC treaty does not constitute a legal provision which is directly applicable in all Member States. It imposes on them an international obligation which must be implemented by national authorities endowed with legislative powers
 Belgium: "This is a typical question of how national constitutional law which has nothing to do with the interpretation of an Article of the
EEC Treaty and is within the exclusive jurisdiction of the Netherlands court, because it can only be answered according to the constitutional principles and jurisprudence of the national law of the
Netherlands

The Netherlands further commented that it thought there were only two ways (according to the Treaties) in which EU law could be enforced:
 Article 169 or 170 (now 258 or 259 TFEU) - on the initiative of another
Member State or of the Commission.
 Article 177 (now 267 TFEU) - the procedure of reference for a preliminary ruling

Held: The ECJ held that the Treaty was capable, in principle, of direct effect

Two strands of reasoning can be drawn from the ECJ;s judgement:
 The Treaties' Vision of a Legal Order
 The ECJ said that "… this Treaty is more than an agreement which merely creates mutual obligations between the contracting states"
o Note the Court's use of high constitutional rhetoric
 "… the Community constitutes a new legal order of international law for the benefit of which the states have limited their sovereign rights, albeit within limited fields, and the subjects of which comprise not only the Member States but also their nationals. Independently of the legislation of
Member States, Community law therefore not only imposes obligations on individuals, but it is also intended to confer upon them rights which become a part of their legal heritage"
o NOTE: The Court later dropped the idea of it being an
'international' legal order, preferring 'legal order'
alone.
 The Text of the Treaty
 The preamble refers to States and citizens.
o The preliminary ruling procedure (now Article 267
TFEU) envisaged that parties before national courts could plead and rely on points of EU law.
 Craig & De Burca (2015) argue that the 'textual'
argument not particularly strong, 

BUT: it is still interesting - if X could not invoke EU law in national courts through
Article 267 TFEU, then it could only be used where parties to case were both public bodies - no evidence in wording of Article 267 TFEU to indicate such a limitation.

There are two main benefits to the ECJ's approach in this case:
(a) Uniformity of enforceability -
a. Now that individuals can rely on EU law in their own national courts, the rights of individuals will be uniform across the Member States.
(b) Dual vigilance a. "The vigilance of individuals concerned to protect their rights amounts to an effective supervision in addition to the supervision entrusted by Articles 169 and 170 (258 and 259 TFEU) to the diligence of the Commission and of the
Member States."
i. Enforceability will depend upon the Commission and Member States,
and now upon individuals, thus improving the enforceability of EU
law.

1. Individuals are efficient enforcers of EU law a. The Commission is busy, and so having millions of enforcers will make it a more effective legal order.

Conditions
The ECJ in Van Gend en Loos laid down a number of conditions for DE, however they have been loosened in years since, including in the case of Reyners, so that they may now be summarised as:
'A Treaty Article will be accorded direct effect provided that it is sufficiently
(a) Clear;
(b) Precise; and
(c) Unconditional a. That is, it must not be qualified by any reservation on the part of Member
States which could make its implementation conditional upon a positive legislative measure enacted under national law i. It must not leave a discretion to Member States to implement it
Formerly it was also necessary for the relevant law to impose:
(d) A negative obligation Application to Directives
Post-Van Gend en Loos, questions arose as to whether or not direct effect would apply to things other than Treaty articles
 In Commission v Italy the CJEU held that regulations were capable of being directly effective
 In Defrenne v Sabena, it was clarified that Treaty Articles have direct effect both vertically (versus the state) and horizontally (versus another individual)
However, there were still questions as to whether or not direct effect was applicable to
Directives because of the discretion afforded to Member States in their implementation.
Article 288 TFEU:
A directive shall be 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.
This discretion relating to form and method is problematic in terms of the condition that the relevant EU law be unconditional.
 This is problematic though given the frequency with which Directives are used as a form of law-making - it leaves individuals without redress in respect of a seriously substantial body of law

This issue was addressed in the cases of Van Duyn v Home Office and Ratti
Van Duyn v Home Office - the ECJ held that Directives were, in principle able to have direct effect.
Across Van Duyn and Ratti, the CJEU gave four reasons for allowing Directives to have direct effect:

1. Functional - in Van Duyn, the CJEU said that not allowing direct effect of Directives would weaken the useful effect of EU law a. If the whole body of law created by Directives were to be excluded this would weaken the effectiveness and uniformity of EU law

2. Textual - in Van Duyn it was argued that Article 267 TFEU allows national courts to refer questions concerning any EU measure to ECJ, including Directives - this implies that such acts can be invoked by individuals before national courts.
a. NOTE: This reasoning was also used in Van Gend en Loos in relation to Treaty provisions.

3. Estoppel Justification - in Ratti, it was argued that Member States should be prevented from relying, as against individuals, on their own failure to implement
Directives.
a. Reasoning goes as follows -
i. Member State should have implemented the Directive; ii. Had Member State done so, the individual would have been able to rely on the national implementing law;
iii. Member State has committed a wrong by failing to implement the
Directive, and could not rely on that wrongdoing so as to deny binding effect of the Directive itself after date of implementation.
iv. Where necessary, conflicting national law should be disapplied.

4. Discretion Evaporates - in Ratti, it was said that Directives were only capable of direct effect once the date for implementation had passed a. The result of this was that the discretion of the Member State evaporated at this point rendering the Directive unconditional and so (provided it satisfied the other conditions) the Directive was capable of direct effect
As a result of this reasoning, it seemed that direct effect of a Directive will only take place:
(a) Where the implementation date had passed
(b) Where the direct effect claimed is vertical (i.e. against an organ of the state)
Horizontal Direct Effect:
Due to this estoppel justification, it appeared that horizontal direct effect of Directives was excluded. The ECJ addressed this issue in two cases:

Marshall v Southampton and South West Hampshire Health Authority

Facts: M was dismissed after 14 years' employment due ot the fact she had passed the age of 60. The policy of her employer required female employers to retire at 60 and male employees to retire at 65. M argued that her dismissal violated the 1976 Equal Treatment Directive
 The question for the court was whether or not M could rely on the
Directive against here employer

Held: Directives cannot have horizontal direct effect - this would prejudice individuals for the fault of the state
 A textual justification was given for this, to the extent that the binding nature of a Directive, constituting the basis for the possibility of relying on a Directive before a national court, exists only in relation to 'each Member State to which it is addressed' (Article 288 TFEU)
 As such, Directives could not be binding on individuals as they sonly being binding on the Member State to which they are addressed

Craig and de Búrca (2020) argue that this reasoning is unconvincing.
 Article 288 TFEU merely signifies that a Member
State is bound by a Directive only if mentioned therein, by way of contrast to which Regulations which bind all Member States - Craig and de
Búrca effectively criticise the Court for not reading Article 288 TFEU as a whole (the part 

about Directives and the part about
Regulations)
 The wording of Article 288 TFEU says nothing as to whether, if a particular
Member State is bound by a Directive,
the Directive may also impose an obligation on a private individual
HOWEVER: the ECJ held that this was irrelevant, as the employer in this case was a health authority which formed a part of the State
 This was therefore a vertical situation which was capable of benefitting from direct effect
 The ECJ said that it was for the national court to deduce whether the NHS is an 'arm of the state' as opposed to an
'independent legal person'

Marshall was upheld by Faccini Dori:

Faccini Dori

Facts: Dori entered in to a contract for an English language correspondence course. Dori cancelled her order, but was then told that the company offering the course had assigned a claim against her to Recreb.
 Dori asserted that she had a right of cancellation within 7 days under the Consumer Long Distance Contracts Directive, however Italy had not taken steps to transpose this Directive into national law

Held:
 AG: AG Lenz systematically laid out the reasons why the lack of horizontal direct effect was problematic:
 Prohibition on Discrimination

The fundamental prohibition on discrimination militates in favour of horizontal direct effect of directives
 It is unsatisfactory that individuals should be subject to different rules, depending on whether they have comparable legal relations with a body connected with the State or with a private individual
 Internal Market

It is contrary to the requirements of an internal market for individuals to be subject to different laws in the various Member States even though harmonizing measures have been adopted by the Community
 Denying horizontal direct effect "goes against the stated aim of the approximation legislation"
 Justice 

o It is not desirable that Member State can abandon individual's situation for an indefinite period in default of its obligations
Problems with the Textual Justification

The freedom given to Member States as to the choice of the form and methods for implementing directives is completely unaffected until the transitional period expires
Problems with the Legal Certainty Argument

It is questionable whether a private person whose conduct is lawful under the national legal system should have burdens imposed upon him under an unimplemented directive not addressed to him for which, moreover, he will have scarcely any remedy against the Member State in default
 BUT: these issues are solved post-Maastricht by the introduction of a requirement that
Directives are published in a Journal
Problems with the Careless Transposition Argument

"The objection that recognition of the horizontal direct effect of directives would increase Member State's carelessness in transposing them does not convince me,
since the national legislature remains responsible for their implementation in full"
Problems with the Democratic Deficit Argument

It cannot be argued that the national legislature is bypassed, as it has every freedom during the transposition period to choose the forms and means of transposing the Directive in to national law.

CJEU: Marshall was upheld - Directives are intended to confer rights on individual, not obligations
 Allowing horizontal direct effect of directives would blur the lines between Directives and Regulations - Directives give the state a discretion as to method of implementation

NOTE: Faccini Dori was decided in 1994, just two years after subsidiary had entered in to EU law via Article 5(1) TEU (at the Maastricht Treaty in 1992), which was symbolically important in terms of protecting Member
State competences
 The ECJ was not going to make an inroad on
Member State competence in light of this by taking away their discretion in implementing
Directives

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