Discuss the extent to which the doctrines of direct effect and supremacy can be described as essential to the operation of the Community legal system.

Abenaa Konadu Student No: 0043001 16 Sept. 02

Direct effect and the supremacy of community law are two key concepts in EC law, which I will discuss in some detail in this essay.

European treaties are a primary source of EU law, with secondary sources of law building up more detailed legal rules.

It is important to distinguish the fact that on their own, treaties do not give individual rights; this is left up to the European Court of Justice (ECJ) to decide on, and the use of Case Law.

The direct effect doctrine is a key concept used by the European Courts. This is significant as it refers to the capacity of EU law to be put into use by individuals in proceedings before national courts.

A provision of EU Law is directly effective where it creates individual rights enforceable in national courts. Vertical creates individual rights against the state and horizontal creates individual rights against other individuals, this has important consequences for national sovereignty.

As said by J. Steiner in EC Law, 4.ed., 1994, pg. 26:

“If a provision of EC law is directly effective, domestic courts must not only apply it, but, following the principle of primacy of EC law must do so in priority over any conflicting provisions of national law”.

By virtue of direct applicability and direct effect, EU can introduce legislation that automatically forms part of English law, and that can create individual rights which the English courts must enforce raises the issue of sovereignty. It is suggested that if EU objectives are to be achieved, EU law must prevail over inconsistent national law (Costa v ENEL [1964]) members states have, therefore, made a permanent transfer of some of their sovereign rights to the EU (Costa), in cases of conflict, national courts must give priority to EU law and dis-apply inconsistent national law (Minister of Finance v Simmenthal [1978]).

I will now determine the difference between what is meant by directly effective and directly applicable. Directly applicability is prescribed in Article 249 for regulations, and states that the regulation must be acknowledge in each member state’s legal system without the need for individual validation by nation law, or without the need of any further implementation by that member state. Where the term directly effective means that a provision creates individual rights that a national court is required to protect.

This is a preview of the whole essay

The case of van Gend en Loos v Nederlandse Administratie der Bellastingen formed the backbone and set out the doctrine of direct effect. The case went to the European Court of Justice (ECJ) and the court held “this treaty is more than an agreement and clearly creates mutual rights by the contractual states”. Therefore the conclusion of this case was that the ECJ went about a new way of creating law, which applied to all member states. This case was important not only because it was the first case but also due to the fact that the ECJ gave legal rights to individuals, where in the past international treaties only gave rights to governments. Thus, this case concluded that individuals have the power to enforce a particular article/treaty. However referring to the case of Reyners v Belgium 1974, this case shows that the ECJ are prepared to depart from the conditions and apply a wider implication.

Another case which illustrates that the ECJ are prepared to depart from conditions and apply it in a wide sense is seen in the Defrenne v Sabena case. Under article 119, this stated that the general principle was that men and women should receive equal pay for equal work. Was this article 119 directly effective? The ECJ held yes it was, eve though article 119 was only general and didn’t define what equal pay or equal work actually was.

The only part of secondary legalisation that is directly applicable are regulations, this means that as soon as they are passed they have a direct effect. A regulation is described in the new article 249 as binding in its entirely and is directly applicable in all member states, taking immediate effect, without the need of further implication. If this new law is at conflict with any existing rule of national law then the EU law/regulation takes priority. Thus regulations take a uniform approach compared to directives that are much more flexible.

The extension of the principle of direct effect to directives has provoked some resistance from the domestic courts. (Francovitch)

Directives in the case of van Duyn v Home Office, [1974] ECR 1337, [1975] 1 CMLR 1, the ECJ suggest three grounds on which one might base the conclusion that directives could be directly effective: the provision in question is sufficiently clear and precise; it establishes an unconditional obligation; the obligation is complete and legally perfect and its implementation does not depend on measures being subsequently taken by Community institutions or Member States with discretionary power in the matter. (EC Law Manual 02/03).

Referring to the case of Flynn 1995 on the internal market this was where the ECJ held that article 14 was not directly effective as it did not satisfy all three conditions laid down. The ECJ concluded that member states are required to take various actions to control entry into a country, and as not all of the conditions were meet, therefore the treaty article was not capable of being applied in a court. However referring to the case of Rayners v Belgium 1974, this case shows that the ECJ are prepared to depart from the condition and apply a wider implication.

Treaties articles can either have a horizontal direct effect , individuals being action against other individuals, or vertical direct effect against the state.

Decisions however, are only binding on parties that they are directly addressed to. As in the case of Franz Frad v Finanzamt Traunstein 1970, this was concerned with new Article 234 on transport taxes and VAT. The ECJ said that the decision was directly effective on German authorities, as tax rates were incompatible, hence making them invalid. Therefore in this case as the decision meet all the conditions laid down, the ECJ gave it direct effect.

In the case of Marshall v Southampton and South West Hampshire Area Health Authority, [1986] ECR 723, [1986] 1 CMLR 688, the ECJ distinction between vertical and horizontal direct effect.

Directives, unlike regulations, do not become law straight away. Directives usually therefore have a time limit, usually 2-3 years to be implemented into national law. A good example of this is the case of Van Duyn v Home Office. Van Duya a Dutch national come to the UK to take up employment with the church of Scientology. She was refused entry, under directives – 64/221, the question here was could this directive be enforced. The ECJ held that it could be directly effective against the UK, and the UK could use it to restrict nationalist movement by use of public policy. This case concluded by the ECJ holding that the directive could be enforced, but the UK would have to recognise the binding effect upon them.

Vertical direct effect occurs when a provision is enforceable by a citizen against a member state. This contrasts with the horizontal direct effect that a regulation has. The case that illustrates this is the case of Marshall v Southamption AHA. Here Miss Marshall could not use national law as she was suing her employer (private firm). However by using the EU Directive 76/207, this stated that the directive would only have a direct effect if it was held against a member of the state. The ECJ held that she could appeal against the health authority (HA), as the HA was part of the state, thus having a vertical effect.

The ECJ adopted this broad version of the state again in the case of Foster v British Gas plc 1990, which involved retirement ages within a nationalised industry. The ECJ held that this article was vertically effective, as British Gas was part of the state or an organ of the state. The conclusion this case made therefore was that it leaves a gap of remedy as no definition of what an organ of the state was given.

In Van Den en Loos v Nederlandse Adminis traitie der Bertastingen the court of Justice stated that member states had: “limited their sovereign rights, albeit with limited fields”.

In Costa v ENEL, the ECJ made its first pronouncement of the principle of supremacy: “The transfer by the states from their domestic legal system to the community legal system of the rights and obligations arising under the Treaty carries with a permanent limitation of their sovereign rights, against which a subsequent unilateral act incompatible with the concept of the community cannot prevail”. (Simmenthal SpA [1978]).

This principle was applied and extended by the ECJ in the case of Factortame (No.2) [1990], which concerned, amongst other things, the granting by the UK Courts of an interim injunction against the Crown, something which national law did not permit. The ECJ held that national courts had to protect the rights laid down by Community law, and if that required that a national law be set aside, the national court was obliged to do so. The House of Lords went on to grant the injunction. (EC Manual 02/03 Extract Unit C)

The concept of supremacy of community law has been held to extend to the enforcement of community rights even if national courts are required to override national legislation. (Walker & Ward 1994, p.100).

Referring to the original question above, the doctrine of direct effect can be seen as essential to community legal system in that individuals have been empowered and thus gained rights in opposition to national practices that are incompatible with EU law. Private parties have also enjoyed empowerment, treaty article 12, was ruled directly effective in the customs duties between member states in the Van Gend En Loos case, a ruling arising out of a challenge at national level to obstruction the movement of goods into Netherlands from Germany. Article 30 (free movements of goods), Articles 48 and 52 (free movement of workers) and Article 59 (free movement of services) have all been found to have a direct effect. Along with treaty articles being capable of direct effect against the state, vertical direct effect, as seen in the Marshall case, with vertical and horizontal direct effect being clear in the Defrenne v Sabena case.

In this essay I have attempted to highlight that the ECJ looks at each individual case on its own, with one of the aims, in the past, to fill in the gaps and use the Purposive approach. Therefore the direct effect doctrine has been significant in determining individual legal rights, but the ECJ have in the past tended to depart from the conditions laid down on direct effect and seems to be flexible and willing to enhance individual legal rights wherever possible. The Francovich principle represents an important additional move in the direction of enhancing individuals rights, as it was where new initiative will make the direct effect doctrine even more effective by viewing this as such a wide implication, more importantly the Francovich principle shows that the member states need to implement directives properly and within the time limit otherwise face the threat of being sued for damages by individuals, who have rights.

(1,908 Words, without Bibliography)