If the EC finds that a state has not implemented Union law or has/is infringing the law it can refer the matter to the European Court of Justice (ECJ), which can result in a judgement against the member state. Additionally, the EC has powers to investigate and prevent monopolies and anti-competitive trade behaviours, such as price-fixing. Where such behaviour is proven, the EC can impose large fines.
The third institution is the European Parliament (EP), which is directly elected by the citizens of the EU member states. The EP doesn’t have any powers to create legislation, it is merely a consultative body and its main purpose is to discuss proposals put forward by the EC. It does have some power over the Union budget and also plays an important part in the decision as to whether new member states should be admitted into the Union.
Finally, the fourth institution of the EU is the European Court of Justice (ECJ) which resides in Luxembourg and has 15 judges, one from each member state. They are appointed under Article 223 of the Treaty of Rome, for a term of 6 years. The court ensures that EU law is observed and applied uniformly throughout all the member states. It also hears cases referred to it by the EC on this basis, as referred to above. In addition it decides points of law referred to it by the courts of the member states for a preliminary hearing under Article 234 of the Treaty of Rome. A court of first instance hears complex economic cases as well as disputes between the European Institutions and their employees. A major development by the ECJ has been the concept of direct effect.
The Treaty of Rome sets out the aims of the Union and governs how it is operated. The Treaty is automatically law in all member states. It has direct effect so that citizens of each member state can rely on its provisions. The two most important Articles in the Treaty which confer rights on individuals are:
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Article 39, which guarantees the free movement of workers throughout the EU;
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Article 141, which guarantees equal pay for equal work regardless of sex.
The effect of Article 39 is that there must be no discrimination as regards to employment, pay or other conditions of employment against workers from other member states based on nationality, unless it is justified on the grounds of public policy, public security or public health. Workers are allowed to enter another member state to take up employment or to look for work (though they can be deported if they do not find work after six months). Where a worker enters another EU country, his or her family may also enter (Regulation 1618/68). The Jean Marc Bosman case (1993).
Article 28 is concerned with free movement of goods in the EU and guarantees that Member States cannot prohibit goods being imported from other member states or set a limit on the amount of goods imported or take any other measures which will limit the importation unless it is necessary to:
- Protect public health
- Protect consumers
- Protect the environment
- Protect public minority (per R v Henn and Darby (1979))
- Protect public security
A case example illustrating this Articles’ implementation would be the case of the European Commission v Germany (German beer purity case) (1984).
EU law affects all states and as outlined, the main source of EU law is the Treaty of Rome, which is directly effective in all member states. The UK became a member of the EU as a result of signing the original three treaties but also because of the nature of the UK constitution. Britain has enforced the idea of direct effect through the European Communities Act 1972 which incorporates the Treaties into British law. Section 2(1) of the Act is most significant, stating:
- All EU law made before the UK joined was automatically incorporated into English law, at the expense of any inconsistent national law
- All EU law made after the UK joined would also become part of the law.
The UK has since accepted the other Treaties that have extended the EU including the Single European Act 1986, The Treaty on European Union (Maastricht) and the Amsterdam Treaty 1997. The EU is based on the idea of supranationalism, where by the European institutions have power to act over all member states on issues covered within the Treaties. There are two important consequences without which this could not function, firstly the supremacy of EU law, in that it prevails over all inconsistent national law and secondly the principle of direct effect, where EU law is enforceable in member states’ courts.
The Treaty of Rome also gives the power for further EU law to be made by regulations and directives. New treaties such as the Treaty of European Union can also create law.
Before new EU law is created, there is a lengthy consultative process, outlined by the diagram below:
Parliament approves Parliament amends Parliament rejects
Treaties are known as primary sources of EU law as they are the most important; they define the powers of the institutions, define the rights and obligations of the member states, state the broad objectives of the Treaties and provide some substantive law.
Two further important Articles set out by the Treaty of Rome are Articles number 234 and number 249. Article 234 sets out when national courts in Member States of the EU can refer a case to the European Court of Justice (ECJ) for a preliminary ruling on a point of law. If the national court is the final court of appeal, then the matter must be referred. The ECJ rules on the point of law and the national court then applies the ruling to the case. Article 249 states that the EU has the power to issue various types of orders. These are:
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Regulations, which are automatically ‘binding in every respect and directly applicable in each Member State’. This means that such laws automatically become law in all member states and ensures that the law is uniform in all member states. As per Re Tachographs: European Commission v UK (1979).
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Directives, which are binding on all Member States ‘as to the result to be achieved’ but allow each Member State to pass its own laws to bring the directive into effect
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Decisions, which are addressed to specific people, organisations or states and are binding on them
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Recommendations and opinions, which are not binding.
These are all secondary sources of legislation and the case law of the ECJ is another important source of legal principles.
The development of the concept of direct effect has been a very important one for the effectiveness of EU law. If the ECJ had not developed this concept, citizens of Member States would not have been able to enforce the rights given to them. In particular, where the Government has not implemented a directive, the rights of individuals in many important areas, especially in employment law and discrimination, would have been lost. The rulings of the ECJ have allowed individuals to rely on EU law in claims against the state and also forced the Government to implement EU law more fully. The development of the Francovitch principle has provided citizens with a remedy against the state, when otherwise they would not have had one. However, this brings its own problems as the ECJ has no mechanism for enforcing its judgements.
If a state does not implement a directive, it may be possible for a citizen of that state to rely on the effects of the directive if:
- The directive is sufficiently clear (Van Duyn v Home Office (1974));
- The claim is being made against the state or an ‘arm if the state’ (Foster v British Gas (1990)); this is the concept of vertical direct effect.
The concepts of vertical direct effect and horizontal direct effect are shown in the diagrams below:
EU law is issued EU law is issued
State fails to implement State fails to implement
Claim against state Claim not against state
Individual can rely on EU law Individual can rely on Treaty or
Regulation BUT not on directive
Clearly it would seem unfair that these conflicting documents of vertical and horizontal effect should give rights to individuals in some cases and not in others. The ECJ has taken another strategy under which it may be possible to take an action to claim damages against the Member State which has failed to implement the EU directive. This is known as the ‘Francovitch principle’, called so as it was decided by the case of Francovitch v Italian Republic (1991) However, a claim may only be made if:
- The purpose of the directive was to grant rights to individuals; and
- The directive is sufficiently clear that those rights can be identified; and
- The failure to implement has led directly to the loss
In the Francovitch case, the Italian Government failed to implement a directive aimed at protecting wages of employees whose employer became bankrupt. When the firm that Francovitch worked for went into liquidation, owing him wages, he could not use the directive as it had not been implemented. So, he sued subsequently sued the Government for his loss. The ECJ held that he was entitled to compensation.
The principle of Member States being liable to pay compensation has been extended to other breaches by Member Sates of Community law. This was seen in the joined cases of Brasserie du Pecheur SA v Federation of Republic of Germany and R v Secretary of State for Transport, ex parte Factortame Ltd (No 4)(1996).
Bibliography
Martin J and Gibbins M, The Complete A-Z Law Handbook, Hodder & Stoughton (2002), 2nd Ed, passim
Steiner J, Enforcing EC Law, Blackstone Press Ltd., (1995) p.3-26
Martin J, The English Legal System, Hodder & Stoughton, (2000) 2nd Ed, p.68-82
Charman M, Martin J & Turner C, A-Level Study Guide: Law, Pearson Education (2000), p.12-15
