Although a restrictive approach was taken in Rolls-Royce Plc v. Doughty [1992] ICR 538 where the court concluded that Rolls-Royce did not possess the necessary special powers and responsibility and was not a public body, despite being owned by the crown. But did rule in National Union Of Teachers v. Governing Body Of St Mary’s Church Of England (Aided) Junior School [1997] 3 CMLR 630 that governors were a public body “charged by the state with running the school”. Other bodies, which have been held to be public bodies, include the Royal Ulster Constabulary: Johnston v. RUC (Case 224/84) [1986] ECR QB 129, local or regional authorities: ECSC v. Assiaiera Ferrier Bussen, (Case C-221/88 [1990] 1 ECR 495), and tax authorities: Becker v Finanzamt Munster (Case 8/81) [1982] ECR 53.
Therefore it is clear if Sophie’s employer is a public authority or organ of the state then the directive may be enforced against the state vertical, as long as the criteria for direct effect are satisfied. However if Sophie’s employer is a private individual then the directive cannot be enforced horizontally as seen in Dori v. Recreb Sri (Case C-91/92) [1994] ECRI-3325. As directives cannot be enforced against a private company as seen in Duke v GEC Reliance (1988). Therefore horizontally she has no claim until the country in question passes the relevant legislation.
Although the ECJ has not shown willing to allow horizontal direct effect of directives, it has developed an alternative tool by which individuals may rely on directives against another individual. This tool is known as the principle of ‘indirect effect’, which is an interpretative tool to be applied by domestic courts interpreting national legislation which conflicts with a directive in the same area. The principles of indirect effect were established in two cases, the case of Von Colson v. Land Nordrhein-Westfalen (Case 14/83)[1984] ECR 1891 and Harz v. Deutsche Tradax GmbH (Case 79/83) [1984] ECR 1921. In the two cases the vertical/ horizontal anomaly was openly raised and argued before the ECJ. Although the courts solution focused on Art 10 of the EC Treaty which states to “take all appropriate measures’ to ensure fulfilment of their community obligations”. The courts concluded the obligation applies to all the authorities of member states including the courts. It therefore falls on the courts of member states to interpret national law in such a way as to ensure the objectives of the directive are achieved.
However the Von Colson approach was rejected as the basis for interpretation of a UK Statute as seen in Duke v. Reliance Systems Ltd [1988] AC 618. Although in Litster v. Forth Dry Dock Engineering [1990] 1 AC 546 the House of Lords interpreted a UK regulation implementing directive 77/187 so as to comply with the directive. It was concluded that the national courts should adopt a purposive approach to statutory interpretation, wherever possible to translate English so as to comply with EC law, even if this involves departing from a strict, literal approach.
However the scope of the doctrine was considered in Marleasing SA v. La Comercial Internacional de Alimentacion (Case C-106/89) [1990] ECR I- 4135 where the ECJ under Art 234 held that the obligation to interpret national law, as far as possible, in the light of the wording and purpose of the directive applies whether the law was adopted before or after the directive and the court concluded that the courts were required to interpret domestic law to ensure that the objectives of the directive were achieved. Although the approach was slightly modified in Wagner Miret v Fondo de Garantira Salaria (Case C-334/92) [1993] ECR I-6911 where the courts acknowledged that national courts will not always be able to translate domestic law to comply with an EC directive. However Lord Keith in Webb v. EMO Air Cargo (UK) Ltd [1993] 1 WLR 49 noted that national courts were only required to translate domestic law to accord with the directive ‘only if it was possible to do so’.
Therefore it can be seen that the indirect application of EC directive by national courts cannot be guaranteed. However in the case of Kolpinghuis Nijmegen (Case 80/86) [1987] ECR 3969 the ECJ has imposed limitations on the indirect effect of directives. It was held in this case that a directive cannot have indirect effect in criminal proceedings where it would cause the accused to be convicted where he would otherwise have been acquitted. Nor can a directive indirectly aggravate guilt as seen in Arcaro (Case C-168/95) [1996] ECR I-4705 where the ECJ held that the obligation to interpret national law in line with a directive reaches a limit where the obligation has not been transposed.
Finally it can be seen from the case of Faccini Dori v. Recreb Srl (Case C-91/92) [1994] ECR I-3235 that directives do not create horizontal enforceable rights. In relation to the current directive 109/01 the circumstances may not make it possible to apply the directive even though the court may be under an obligation to apply national law either predating or postdating to achieve the results envisaged by the directive. As the courts concluded in Wagner Miret, it may not be possible to translate domestic law to comply with EC directive, particularly when the provision of domestic law are clearly at odds with an EC directive, and there is no evidence that the national legislature intended national law to comply with its provisions, or with a ruling on it provisions by the ECJ. Therefore in such a case Sophie will be better off pursing the alternative remedy of a claim in damages against the state under the principles laid down in Francovich v Italy (Case C-6 & 9/90) [1993] ECR 66.
The landmark decision in Francovich mitigated to some extend the lack of horizontal effect of a directive. The court concluded where a state had failed to implement an EC directive it would be obliged to compensate individuals for damage suffered as a result of its failure to implement the directive if three conditions were satisfied. This is, where
(a) The directive must confer rights for the benefit of individuals
(b) The content of the right must be identifiable from the directive
(c) There must be a causal link between the damage suffered and the breach.
It is the responsibility of member states to determine the procedures and courts to enable individuals to pursue claims against the state. While Francovich has obvious immediate implications for insolvency and employment law, its scope is potentially wide for any breach of community law ‘ for which the state is responsible’. It removes any incentives a member state may have for not implementing a directive on time. The principles were further clarified in the case of Brasserie du Pecheur SA v. Germany and R v Secretary of State for Transport, ex parte Factortame (Cases C-46 & 48/93) [1996] ECR I-1029. As the decisions by Francovich established the principle of state liability but left many questions unanswered, including the question of whether state liability was restricted to non-implementation of a directive or whether it could be applied more widely to a breach of EC Law.
The ECJ held that the principles which should apply to the establishment of liability by member states should be the same as those governing the liability of the EC institutions as seen in Bayersische HNL GmbH v. Council and Commission (Cases 83/77) [1987] ECR 1209. Therefore this meant that the breach should be sufficiently serious and liability was not restricted to failure to implement a directive, but covered liability of the national legislature for acts and omissions contrary to EC law. To establish a breach of EC law by the state, three conditions must be satisfied;
(a) The rule of law infringed must be intended to confer rights on individuals
(b) The breach must be sufficiently serious; and
(c) There must be a direct causal link between the breach of the obligation resting on the state and the damage sustained by the injured parties.
In the case of R. V. Minister of Fisheries and Food, ex parte Hedley Lomas (Case C-5/94) [1996] ECR I-2553 The ECJ held that the decisive test for a sufficiently serious breach is whether the member states has manifestly and gravely disregarded the limits of its discretion. The factors, which should be taken into account, include;
(a) The EC rule breached is clear and concise
(b) Member states of the EC have any discretion
(c) The breach or damage was intentional
(d) The EC institutions may have contributed to this breach.
(e) Any national measure contrary to EC law have been retained.
The courts concluded that “member states must rely on trust in each other to carry out inspections in their respective territories” and hence held the breach was ‘sufficiently serious’ to give rise to liability under Francovich.
Sometimes member states do their best to implement EC law, with little help from the EC institutions, in areas where there is considerable national discretion, only to find that their implementation measure fall short of what is required as seen in R. V. HM Treasury, ex parte British Telecommunications Plc (Cases C-392/93) [1996] I-1631. The breach was held not to be sufficiently serious, following the guidelines in Hedley Lomas the ECJ found that the UK’s interpretation had been made in good faith, was in keeping with the aims and wording of the directive, and that no guidance had been made available to the UK government from the commission or from previous decisions of the ECJ. Although similar reasoning was adopted in Denkavit International v. Bundesamt Fur Finanzen (Case C-283, 291 and 292/94) [1996] ECR I-5063 where the ECJ held where the other member states had adopted the same approach the breach was not sufficiently serious.
The ECJ held in Dillenkofer v. Federal Republic Germany (Cases 178 etc./94) [1996] ECR I-4845 that a failure to implement a directive on time amounted to a serious breach. Although in Rechberger v. Austria (Cases C-140/97) [1999] ECR I-3499 the court held that incorrect transposition of a directive into national law may be sufficiently serious where the member state has no discretion as how to implement. Therefore Sophie can argue that the member state in question has breached EC law by not enforcing the directive at the relevant time. The directive laid down rights that were suppose to be enjoyed by employees like Sophie but as a result of non-implementation by the state this amounted to a serious breach by the member state in question whom have manifestly and gravely disregarded the limits of its discretion. The breach was clear because of the member states failure of non-implementation, although it had sufficient discretion in implementation and as a direct result of which Sophie suffered the loss of not being able to exercise her rights under the directive to take advantage of the foreign language training.
Therefore Sophie can show she suffered loss as a direct result of the states failure to implement the directive which amounted to a serious breach of the community law as seen in Schmidberger v Austria (Case C-112/00) Judgment of 12 June 2003 and as a result of the Factorame case claim damages from the state as a result of the serious breach of EC law.
However if Sophie wishes to continue to take advantage of the directive and any remedies she may have in community law, this will depend very much on whether her employer is a private or public body. If Sophie’s employer is a public body she can enforce the directive against the state by vertical direct effect as long as the criteria for direct effect are satisfied. Although if her employer is a private body it becomes more problematic as she cannot enforce the directive against the individual, as directives do not create horizontal enforceable rights. But she may be able to rely on the doctrine of indirect effect, where directives may be enforced against an individual, but this is not guaranteed even though the courts may be obliged to translate domestic law in line with a directive, sometimes this may not be possible, because the provisions of the domestic law may be clearly at odds with the EC directive and further there is no evidence that the national legislature intended national law to comply with its provisions or with a ruling on its provisions by the ECJ.
Therefore the alternative would be to claim damages against the state for non-implementation of a directive. Sophie can argue that the directive was clear and precise outlining her rights, which were sufficiently in serious breach by the member state whom had manifestly and gravely disregarded the limits of its discretion and as a result failed to implement the directive and thus breached EC law and which as a direct result Sophie suffered the loss of not being able to take advantage of the foreign language training.
