The rule against the horizontal direct effect of directives should be abandoned" Discuss.

APPLICATION OF THE CONCEPT OF DIRECT EFFECT

Direct effect was developed by the Court of Justice to apply to Treaty Articles, Regulations, Directives and Decisions. The concept of direct effect was first established in Van Gend en Loos v Nederlandse Administratie der Belastingen when referring to the nationals of the member states as ‘subjects’ held that the Treaty “ also intended to confer upon them rights which become part of their legal heritage”. However, for a Community provision in order to be qualified as directly effective, it must satisfy three criteria namely “it must be sufficiently clear and precise for judicial application; must establish an unconditional obligation; must be legally perfect, not dependent on any national implementing measure”. As it was established in Ratti regarding directives an additional criterion must be satisfied in order for directives to be directly effective namely the time-limit of the implementation must be expired.

Regarding directives, the early approach on the concept of direct effect was reluctant because it was thought not to be precise enough to give rights to direct effects, because they were not directly applicable and only obligated the Member States to achieve an end result upon their discretion. Grad v Finanzamt Transtein was the first case to consider the possibility of directs effects of other forms of community law. Finally in the case of Van Duyn v Home Office was confirmed that directives could also give rise to direct effects provided they also satisfy the criteria. However, even when the directives are sufficiently precise and unconditional to be capable of direct effects, “they are not directly effective against all parties”.

VERTICAL – HORIZONTAL DIRECT EFFECT

The direct effect of directives was not given free-availability and some measure of constraint was imposed through the concepts of vertical and horizontal effect. Vertical direct effect occurs when a provision is enforceable by a citizen against a member state. This contrasts with the horizontal direct effect where provisions can be relied upon by individuals against other private parties.

The case that illustrates this is Marshall V Southampton AHA. Here Ms 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 and they confirm that, “that a directive may not of itself impose obligations on an individual and that a provision may not be relied upon as such against such a person”. The ECJ held that she could appeal against the area health authority as the AHA was part of the state, thus having a vertical direct effect.

The result of this decision made a crucial distinction between public service and private body. This can be seen in the later UK case of Duke V Reliance in which on similar facts a claim for compensation was lost by Ms Duke for being forced to retire earlier than men. Therefore between public and private employers within member states and between member states there is no uniformity in the application of Community Law out of the different concepts of what the state is and what private and public employers are. Thus a ‘horizontal’ limitation was placed upon the scope of the direct effect of directives.

Alternative ways of rectifying the problem

Nevertheless, this was not the end of the matter, as the ECJ developed a number of alternative ways to reduce the impact of Marshall. The principle of indirect effect was established in Von Colson concerning Art 6 of the Equal Treatment Directive (76/207). Here the ECJ allowed national law to be interpreted in the light of directives. “By urging national courts to read domestic law in such a way as to conform to the provisions of directives, the court sought to ensure that directives would be given some effect despite the absence of proper implementation”.The Court has given indirect effect to unimplemented directives via Article 10(old 5) EC Treaty. This article requires member states to “take all appropriate measures” to ensure the fulfilment of the obligations arising out of the Treaty.

Another way, in which it is possible for an individual to enforce a directive when the barrier to horizontal direct effect is encountered, was established in Francovich in which it was declared that member states may be liable to make good damage for its failure to implement a directive.

Do we need an extension of the principle?

A considerable literature has been generated upon the issue of horizontal direct effect and the arguments have remained the same throughout the years. Arguments against horizontal direct effect focus on the nature of directives themselves; that they are addressed to member states only, that only member states are responsible for the non-implementation of directives, that directives are not directly applicable(although neither are Treaty Articles) and that directives need not be published. Arguments in favour of horizontal direct effect are based primarily on considerations of fairness and equity; that the conditions are the same for directives as for Treaty Articles and therefore should be applied in the same way, that the ECJ has always looked to the content rather the form of a measure, that the principle of effectiveness requires that directly effective directives should be binding on individuals as well as member states and that arbitrary discrimination would occur between public and private sector employees

Arguments for the extension of horizontal direct effect to directives

In a number of cases that took place in 1993-94 including Faccini Dori

a number of reasons had been put forward by the Advocates General for the extension of the concept of horizontal direct effect. These were referring to the willingness of the court to give horizontal direct effect to Treaty Articles but not to directives, despite the fact that they are both addressed to Member States. Secondly the Single market’s emergence make it necessary to enforce equality of the conditions of the prohibition of discrimination and competition; and lastly they argue that the TEU has been amended by EC Treaty requiring publication of directives in the Official Journal and for this reason private persons would be inexcusable not to know their responsibilities under a directive.

All the possible arguments seem to be on the table; some are more convincing than others, but not one of them is entirely decisive. It can be argued that, it is the issue of legal certainty which lies at the heart of the entire discussion. On the one hand there is the legal certainty of those who are entitled to expect that their position as secured by the directive will be protected. On the other hand there is the legal certainty of those who would be faced with an obligation which is not laid down in national law. Whose legal certainty deserves protection? This

depends on the context of the case. It can be contended that an individual should be able to rely on and enforce a provision of a directive against another individual. The latter may raise in his defence that he was not and could not have been aware with the obligations resulting from the directive at issue. Whether this defence will succeed depends on several factors, such as the publication of the directive, the experience and awareness of the defendant.

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