LL232: Law & Institutions of the European Union

Michealmas Term Group Essay

Q: Discuss the pros and cons of the requirement of individual and direct concern for natural and legal persons to challenge Community acts pursuant to Article 230EC.

Under Art.230(4)EC ‘natural or legal persons’ may only directly challenge the Community acts of a decision addressed to a third party and a decision in the form of a regulation, and further only if they are of ‘direct and individual concern’ to the applicant. ‘Natural and legal persons’ are all non-privileged applicants (privileged applicants being the Member States and the EU institutions) thus including all individuals, private bodies, companies and interest groups.

The European Court in Plaumann ruled that an applicant is only ‘individually concerned’ if the contested decision affects them by reason of certain attributes which are peculiar to them, or by circumstances which differentiate them from all others, such that it distinguishes them as if the decision was individually addressed to them. This definition still, arguably, applies today and has sparked much controversy in the decades since it’s drafting, which should become apparent through the essay. The area of ‘individual concern’ will be tackled first and the issues to be discussed here are the restrictive nature of Art.230(4)EC, the efficiency of the ECJ as well as it’s competence, the alleged lack of legal redress Art.230(4)EC leaves individually concerned applicants with, the argument that the ECJ wishes to become a Supreme Community Court and the inconsistencies in Art.230(4) case law and it’s consequences. Finally the less controversial area of direct concern will be discussed.

Individual Concern

Art230- a ‘closed’ test

As P.Craig points out, the Plaumann measure of whether the applicant is individually concerned can be applied at one of three stages- when contested decision was made; when decision is being challenged; or some point in the future. The court has adopted the third option, as displayed in Toepfer and some of the applicants in Paraiki-Patraiki. The test is therefore almost impossible to satisfy unless the group of people affected by a measure was fixed before the measure was enacted. For example, in Glucoseries Ruenies, the applicant was one of twelve glucose producers in the EC, and the only one in his Member State, to be affected by a Commission decision on import duty, it was virtually impossible this position would change in the period the duty applied due to the time taken to set up the commercial activity. However, as in theory as it still remained a commercial activity open to any party to partake in the period of the decision, the applicant was not ‘individually concerned’ eventhough he was by common standards. Craig rightly so holds this analogous to a “mirage in the desert, ever receding and never capable of being grasped”.

Firstly, while in theory it may be possible for new bodies to partake in the affected commercial activity, in the time between the challenge and end of decision period, in practise it is almost impossible. This is because of the short time (mentioned above) as well as the fact that the present bodies exist as they meet the demand for that commercial activity with the EC- a surge in demand to justify new bodies entering that commercial area is not reasonably foreseeable therefore should not be taken into account. Secondly, the ECJ justifies it’s reluctant to give standing to those in an open group, as decision binds any future bodies who may enter the commercial activity, yet it has a convention of sticking to it’s case law (shown by use of Plaumann) in cases of similar circumstances. This makes the ECJ’s restrictive approach seem unrealistic, far-fetched and an excuse (below) to satisfy formalities.

The issue of challenging regulations initially hinged on whether the ‘regulation’ was actually a regulation or a ‘bundle of decisions’, regardless of whether the applicant was individually concerned or not (CAM / Wagner). However this question has moved from one of form to substance, the ECJ in Cordoniu ruling all that need be established is that the measure substantively applies to the applicant by the ‘legal or factual situation defined by the measure in question in relation to it’s purpose’. This move has also occurred with the question of direct concern, (International Fruit Co.) which previously relied on the regulation/directive formality. ...

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Furthermore, as Advocate-General Jacobs pointed out, the present standing criteria results in the greater the number of people detrimentally affected by the Community measure, the less likely any applicant will gain standing to challenge the measure. If Art230EC is a means by which EU citizens hold the institutions accountable for their actions- then this seems a perverse result.

Efficiency

The opposing argument to Art.230EC being over-restrictive, is that the ECJ simply does not have the resources nor capacity to deal with the large caseload a wide standing criteria would produce. As Vesterdorf highlights, in its 1954, the court received four new cases, by 2002 this figure is four hundred and seventy, with the average case duration of twenty-three months! Factors such as the enlargement of the EU have increased the caseload through more challenges by EU citizens and more infringement proceedings against MS’. This led to the birth of Court of First Instance in 1989-to relieve the ECJ of some of it’s workload. With greater caseload, the trial costs for each applicant would rise even further- making individual challenges to Community acts even less accessible.

However, Vesterdorf and Albors-Llorens argue that the other Art.230EC requirement of direct concern, and the strict two month time limit to bring actions (Art.230(5)), would act as filters, whilst M.P.Granger adds that Treaty of Nice reforms of extending CFI jurisdiction and giving it independence, as well as the new Rules of Procedure provide greater flexibility in handling cases hence will reduce trial lengths and costs. In the author’s opinion, it seems the EU institutions are failing to maintain the correct balance in law-making and applying between the need for efficiency and accessibility on the one hand and the need for democratic legitimacy through institution accountability on the other, with the Co-Decision legislating procedure at one end of the spectrum giving the representative European Parliament too much power hence slowing down the procedure and forcing law-making to actually occur in informal, unaccountable trilouges. The individual standing rules at the other end of the spectrum trying to be so efficient but yet sacrificing the very purpose of Art.230EC-to allow individuals to hold the EU institutions accountable, by being over-restrictive.

Treaty Competence

A further argument against the ECJ being over-restrictive is that the original ‘masters of the treaty’ of Rome never actually intended for individuals to challenge Community Acts. As C.Harlow points out, only the privileged applicants were meant to have the power to challenge community policy decisions, with the non-privileged applicants influencing them through political channels within the MS’. This is because the EEC was created as a community of MS- as intergovernmental rather than supranational.

However, whilst the EEC may have initially only applied to MS governments, not their citizens, it has since adopted a constitutional role- creating laws which affect individuals in MS and hold precedence over national law (Doctrine of Supremacy). The CFI in Jego-Quere highlighting the Community’s increased emphasis on fundamental rights with the adoption of the EU Charter of Fundamental Rights at Nice in 2000. However with an increased power over EU citizens comes the higher threshold of institutional accountability required. Especially since the EC sets a high minimum standard of judicial review for national law, it is hypocrisy not to do so for own it’s own legislation.

The restrictive nature of the Art.230EC can also be opposed by the fact that many of the Community decisions challenged by individuals are the result of careful decision-making by the Commission, Council and EP who strike a fine balance between the many conflicting community objectives, including the protection of human rights, the Common Agricultural Policy, efficiency and effectiveness of Commission decision-making and respect of the rule of law. However, the ECJ and CFI is composed of judges from MS’, who lack the Commission’s knowledge of community matters to significantly affect this ‘delicate equilibrium’ (M.P.Granger), hence the courts reluctance to overrule decisions taken by the other institutions. This can be achieved by either a high standard of review, or much more time saving - a high requirement of standing to restrict challenges in the first place.

Lack of legal redress

It is argued by many applicants, such as those in Jego Queres and VVG Internationale that the restrictive standing under Art.230EC leaves them with no legal redress eventhough they are detrimentally affected, due to the shortfalls of Art.234EC,which allows national courts to make references to the CFI and ECJ questioning the validity and interpretation of points of Community law during legal proceedings. Individuals can therefore indirectly challenge Community measures by bringing actions before the national courts then requesting references to ECJ. However the applicant must first have a cause of action in national law- not possible with regulations as have direct effect, requiring any individual wishing to challenge it to break that law then contest it’s legality at proceedings brought against them- a result which CFI in Jego Queres and Advocate-General Jacobs agree to be absurd. Furthermore there is the disadvantage of the applicant having to wait upon the national legislature to implement directives, the delay and costs involved by the absence of interim awards in this wait.

The other alternative to Art.230 is the applicant bringing proceedings under Art.235EC for damages caused to them by the Community act, based on non-contractual liability of the Community. However this fails to remedy the illegal Community act but merely ‘sticks a plaster’ (Arnull) on the Community’s breach of rule of law.

However, in the author’s opinion, the shortfalls of the national procedures to challenge Community acts do not justify the widening of Art.230, for as the ECJ ruled in UPA, while this may be true, it is matter for legislative reform in the MS rather than amendment of Art.230. The ability of individuals to challenge Community acts, is just as attainable from reforming national review methods than it is from amending Art.230EC-perhaps the concentration is misplaced!

ECJ- An Appellate court?

Vesterdorf and Rasmussen argue the ECJ is attempting to reshape the Community judiciary, itself adopting the role of Supreme Constitutional Court of Community law. Rasmussen envisages a hierarchy with the national courts of the MS as the court’s of first instance on Community law and the EU CFI midway. This is possible from the restrictive standing under Art.230EC to directly challenge Community acts, the creation of the CFI, the doctrine of direct effect and the clear drawing of it’s boundary by ECJ in UPA stating any other shortfalls of standing are a matter for the MS. This reshaping would reduce the workload of the ECJ, allowing it to pay better attention to the cases it does review. It would also ensure only the cases deserving the community law expertise of the ECJ judges reach their concern, mainly cases of constitutional importance and those dealing with new areas of Community law, or controversial laws for which no strict Community stance has been set, as the straightforward cases would be dealt with by the lower courts. In this way it would be analogous to the HL in British court system, dealing with few most important cases. However the risk remains that important cases deserving ECJ attention may not reach them due to the incompetence of the less experienced judges of the lower courts and if appeal is denied-resulting in injustice.

Lack of legal certainty

The present width of standing is very uncertain after a long line of cases inconsistent with the Plaumann test. The court adopted stricter standing rules than the Plaumann test in Antillean Rice Mills where the applicants had to prove they belonged to a closed group AND that the defendants were in breach of a legal duty owed to the applicants, to consider the implications of their acts upon them. However, more liberally, they gave standing where to refuse would discriminate against new parties in EP elections (Les Verts v. EP). The right of natural and legal persons to challenge acts they were involved in the enactment of has resulted in standing being given in anti-dumping cases (Timex), competition cases (Metro) and state-aid cases (Compagnie). The court has even given standing where to refuse would have severe adverse economic effects on the applicants (Extramet v. Council; Codorniu v. Council). Recently in Jego-Queres the CFI ruled standing may be given if the contested measure affects the applicants rights in a ‘definite and immediate’ manner-the number of other people in the same situation is irrelevant. However in UPA v. Council the ECJ reaffirmed the Plaumann test and stating any interpretations of standing rules must not set aside the Art.230(4)EC provisions. Since then in VVG Internationale the court rejected the applicants argument, that standing should be given where no other recourse to challenge Community legislation exists, was rejected but Van Den Broek argues that this does not rule out the chance of the court adopting a broader interpretation of Art.230EC.

On the one hand the inconsistencies highlighted could be argued as the result of Art.230(4)EC producing such unfair results as so restrictive, that the Community judges- as the ‘guardians of liberty’(Dicey) using their ‘intrinsic sense of justice’(Fairchild v. Glenhaven Funeral Services) are forced to deviate from the treaty to deliver justice. On the other hand this is contradicted in Antillean Rice Mills, as well as by the observation that individual standing rules receive their narrow characteristic not from the Treaty provision but from the judge’s interpretation of it in Plaumann- by adopting third stage to measure individual concern (see above).

Alarmingly, the inconsistencies can also be interpreted as the judge’s substantively deciding whether they want the case to proceed at their discretion, then applying whichever test produces their desired result. It may not be a coincidence that cases important to Community and MS relations (anti-dumping, state aids and competition) and Community perception (EP democratic elections) receive better treatment. However, the point is that this is only possible as the criteria for individual concern is so strict and unfair that a disguise of deviating to do justice exists.

Finally, this result of strict standing removes legal certainty from the area of individual standing, breaching the rule of law as natural and legal persons are then unable to hold the Community decision-makers accountable as no clear definition of standing criteria exists.

Direct Concern

The requirement of direct concern requires the legal situation suffered by the applicant be directly caused by the contested Community act. This means the addressee of the act (normally the MS) must have no discretion as to the act’s implementation. This prevents the Community being blamed for a situation beyond it’s control. Conversely, in the case of directives, where the MS has discretion on how to achieve the particular Community objective through it’s national law, the applicant must wait upon their national government to implement the objective and correctly, otherwise it must proceed an action against their MS under Art.228 for failure to act, before being able to challenge the measure- receiving no interim relief in this period of implementation. Secondly, whilst in theory directives may give MS discretion, often they are very prescriptive-so the measure is in fact a direct cause of the Community act. In such a case (International Fruit Co.) the court substantively measure the margin of discretion on MS and concluded the directive was of direct concern to the applicant.

Conclusion

In the author’s opinion, the requirement of ‘direct and individual concern’ is not unjust, but it’s interpretation of it in the Plaumann test is. This interpretation is so narrow that it allows for deviation from it under the guise of doing justice (as evident from the many inconsistencies), with the downside of risking abuse of discretion by the judges and absence of legal certainty. Broadening the interpretation to measure substantive legal affects on individuals would allow no excuses to deviate from the requirements-allowing for better accountability of the EU institutions and courts, whilst the simultaneous development of ECJ as highest appellate court would prevent any loss of efficiency.