The Principle of Direct Effect
st Yr Public Law Coursework - Assignment Two (1983) words
Scenario (a)
The Principle of Direct Effect
The power to issue directives is granted by Article 189 of the EC Treaty (new Article 234), paragraph 3. It provides 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.'
A directive is not directly applicable, which means it does not become law 'without further enactment', it must be implemented into the national law of the Member State. A directive is essentially an instruction to the member States to harmonize their laws accordingly. This is usually done by way of an Act of Parliament or Statutory Instrument.
An implementation date is issued to the member States for them to comply with the directive. A state is not considered in default until the time limit has expired.
Although directives are not directly applicable they can have a direct effect where the purpose of the directive is to grant rights to individuals; this means that a directive can be invoked to protect individuals in the courts, even when the State has failed to implement the directive. The object of allowing direct effect in such cases is to prevent the defaulting Member State from benefiting from their failure to implement, and subsequently encourage the Member State to implement the provision forthwith.
All provisions of EC law containing a binding legal obligation are capable of judicial enforcement, i.e. direct effect in the courts, provided they meet three conditions. The provisions contained in the directive must be:
i. sufficiently clear and precise,
ii. unconditional,
iii. the State must have failed to implement the directive or failed to implement the directive completely.
The Horticulture Standards directive would appear to be sufficiently precise and unconditional on it's new rules relating to tomatoes and cucumbers; it specifies a minimum circumference and weight for tomatoes and dictates that cucumbers must be straight with no apparent curvature. It would seem that the Directive confers a competitive advantage on parties such as El Tel Ltd, and other parties specialising in the importation or growth of European standard vegetables.
The Principle of State Liability
However, in our case the liability falls to the state itself for failure to implement in accordance with its legal obligations under the EC Treaty. This would perhaps be El Tel's strongest argument, and would allow El Tel to seek redress from the State in the form of damages for loss of trade.
In order for an individual to pursue a claim against the State for non-transposition of a directive, three conditions must be satisfied; these are laid down in Francovich;1
i. the result prescribed by the provision must confer rights on individuals,
ii. the content of those rights must be capable of definition on the basis of the directive, and
iii. there must be a causal link between the violation of the Treaty obligation and the loss suffered by the individual.
It may be difficult to prove that the provisions of the Horticulture Standards Directive intended to give rise to rights for individuals, although it is possible to argue that the right conferred was the competitive advantage over growers of inferior vegetables ...
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i. the result prescribed by the provision must confer rights on individuals,
ii. the content of those rights must be capable of definition on the basis of the directive, and
iii. there must be a causal link between the violation of the Treaty obligation and the loss suffered by the individual.
It may be difficult to prove that the provisions of the Horticulture Standards Directive intended to give rise to rights for individuals, although it is possible to argue that the right conferred was the competitive advantage over growers of inferior vegetables and that the State's failure to implement the directive will result in El Tel's loss of business and revenue.
However, according to Commission v Germany2 the Court made it clear that it was not necessary to prove that the provision in question intended to give rise to rights for individuals. It is sufficient that the provision imposes an unconditional and sufficiently precise legal obligation on a member State. In Russo v AIMA [1976]3 the Court held that 'if...damage has been caused through an infringement of Community law the State is liable to the injured party of the consequences in the context of the provisions of national law on the liability of the State.'
Francovich v Italian Republic [1991]4 reinforced the conclusions held in Russo v AIMA and illustrates that an individual can claim compensation from the State for failure to implement a directive. Francovich claimed the State was responsible for the payment of compensation either by virtue of direct effect or by virtue State liability for a failure to act. The Court held that individuals had a right to damages for non-implementation.
With regard to the claims made by the British growers and their supporters to the British government on the Horticulture Standards Directive; the case of Commission v Italian Republic [1978]5the Court held that 'a member State cannot rely upon domestic difficulties or provisions of it national legal system, even its constitutional system, for the purpose of justifying a failure to comply with obligations and time-limits contained in Community directives.'
Scenario (b)
The Von Colson Principle - The Principle of Indirect Effect
The Von Colson principle or the principle of indirect effect emerged from a pair of cases Von Colson v Land Nordrhein-Westfalen6 and Harz v Deutsche Tradax GmbH. The Court, instead of focusing on direct effect of the directive, focused on the legal obligation arising under Article 5 of the EC Treaty which provides, 'Member States shall take all appropriate measures, whether general or particular, to ensure fulfilment of the obligations arising out of this Treaty or resulting from action taken by the institutions of the Community. They shall facilitate the achievement of the Community's tasks. They shall abstain from any measure which could jeopardize the attainment of the objectives of this Treaty.'7
Given that the implementation period has expired it is possible to argue that the UK is in breach of Article 5 and has failed to take appropriate measures to facilitate the achievement of Community objectives.
The problem with bringing an action under Article 5 is that it heavily relies on the discretion of the judiciary to interpret national law in compliance with Community law. As the purposive approach to interpretation is more widely used in Europe than it is in the UK, judges in UK courts are less willing to 'read-in' words to national legislation in order to comply with the objectives laid down in EC directives.
However, in Pickstone v Freemans Plc [1989] AC 66 the House of Lords was prepared to adopt a purposive construction to the Equal Pay Act 1970 in order to make it comply with the UK's legal obligations under the Equal Pay Directive. Lord Oliver commented, "...a construction which permits the section to operate as a proper fulfilment of the UK's obligation under the Treaty involves not so much doing violence to the language of the section as filling a gap by an implication which arises, not from the words used, but from the manifest purpose of the Act and the mischief it was intended to remedy."
A directive cannot have direct effect until the time limit has elapsed; this was established by Publico Ministero v Ratti [1979]8 in which the claimant sought to invoke two harmonization directives before their allocated implementation period had elapsed. The Court held that until the time limit for implementation had expired the directives could not have direct effect. Once the time limit has expired the Member State's legal obligation is absolute. In this case the time limit for implementation has not yet expired, and still leaves the UK government one month to implement the provision of the directive relating to cucumbers and tomatoes, and comply with their legal obligations. Therefore, El Tel Ltd cannot seek redress until one month has elapsed. However, if one month later the government has still not implemented the provision, then they are liable for failure to implement and will be in much the same position as if they had failed to implement the directive entirely, and El Tel will be able to seek the same redress as if they had failed completely to implement the directive. Again, El Tel's strongest argument will be that the State is liable for failure to implement according to its legal obligations.
In Brasserie du Pecheur SA v Germany and R v Secretary of State for Transport, ex parte Factortame [1996]9 it was suggested that the principle of State liability should not be restricted to cases where the State has failed to implement relevant directives or the provisions contained within them, but should also be available for legislative failures. It was also suggested that a State should only be liable where the provision was sufficiently clear and precise and the national authority's interpretation is 'manifestly wrong'. The statutory instrument in this case is defective and 'manifestly wrong'. Once the time limit allocated to the UK has expired it would be very easy to argue that there had been a legislative failure with manifestly wrong result.
However, because the directive has been implemented through a Statutory Instrument the UK courts can challenge the legislation on the grounds that it is 'ultra vires'. For the purposes of judicial review, the directive delegate powers to other bodies - namely Member States - and functions in much the same way as an enabling Act. The directive outlines the result required by Community law but leaves to the national authorities the 'choice of form and methods.'
'Ultra vires' means that the legislation has gone outside the power originally delegated to it and havs failed to follow the correct procedure laid down in the enabling Act [or EC directive]; Aylesbury Mushrooms Case [1972].10 This is known as procedural ultra vires . If the statutory instrument has gone 'outside its powers' it will be declared void and ineffective. It is possible for El Tel Ltd to argue that the statutory instrument has not followed the procedure laid down by the directive, by negating to mention the required standards on cucumbers and tomatoes, however it is unlikely that the courts will see this as procedural ultra vires, and would probably regard the failure to address the issue of cucumbers and tomatoes as an omission to act.
In Auer v Ministere Public[1983]11the Court stated that 'An individual can rely against the State on any part of the directive that is unconditional and sufficiently precise and has not been adequately implemented into national law.'
If the defective nature of the statutory instrument was brought to the attention of the Commission itself after the time limit had expired, it would be likely that it would bring an action against the UK for a breach of their legal obligations under Article 189 of the EC Treaty.
Scenario (c)
In specifying in the Horticulture Act that tomatoes and cucumbers of any size, shape or weight may be sold, the UK has made a provision in direct conflict with the Horticulture Standards Directive. Although the national courts can review delegated legislation, they do not have any jurisdiction to question Acts of Parliament. However, the ECJ does have the jurisdiction to scrutinize the national law of the Member States, and the Commission can bring an action against the Member State for breach of its legal obligations.
Where national law and European law conflict, European law will prevail, this was established in Costa v ENEL [1964]12. The ECJ stated in Van Gend en Loos [1963]13that 'the Community constitutes a new legal order of international law, for the benefit of which the states have limited their sovereign rights...'
The Factortame case14was the first British conflict with EC law, in which the Merchant Shipping Act 1988 was found by the ECJ to be incompatible with EC law, and later established that member States were liable for breaches of Community law.
As afore-mentioned the implementation period has not yet expired (although only one month in the future) and so the directive cannot presently have a direct effect.15 However, even where a directive has not been implemented into national law, the courts must interpret the law in light of any relevant directives16and cannot take any measures that might compromise the requirements set out by the directive.17
Case C-6, 9/90 Francovich v Italian State [1991] ECR I-5357
2 Case C-433/93 Commission of the European Communities v Federal Republic of Germany
3 Case 60/75 Russo v AIMA [1976] ECR 45
4 Case C-6, 9/90 Francovich v Italian State [1991] ECR I-5357
5 Case 100/77 The Commission of the European Communities v Italian Republic [1978] ECR 879
6 Case 14/83 Von Colson and Kamann v Land Nordrhein Westfalen [1984] ECR 1891
7 Article 5 of the Treaty of Rome 1957 as amended.
8 Case 148/78 Publico Ministero v Ratti [1979] ECR 1629
9 Brasserie du Pecheur SA v Federation of Republic of Germany [1996] 2 WLR 506
0 Aylesbury Mushrooms Case [1972] 1 All ER 280
1 Case 271/82 Auer v Ministere public [1983] ECR 2727, 2744 cited in Weatherill & Beaumont EC Law 1st Ed 1993 Penguin
2 Case 6/64 Costa v ENEL [1964] ECR 585
3 Case 26/62 Van Gend en Loos v Nederlandse Administratie der Belastingen [1963] ECR 1
4 Case C-46, 48/93 Brasserie du Pecheur v Germany, Secretary of State for Transport, ex parte Factortame (Factortame iii) [1996] 1CMLR 889
5 Case 148/78 Publico Ministero v Ratti [1979] ECR 1629
6 Case 14/83 Von Colson and Kamann v Land Nordrhein Westfalen [1984] ECR 1891
cited in Martin, J. The English Legal System Updated Ed 1997 Hodder & Stoughton
7 Inter-Environment Wallonie ASBL v Region Wallonie
