LLB & JA year 2 EUROPEAN UNION LAW Academic Session

2011/2012

CONSTITUTIONAL PILLARS OF EU LAW

1. Supremacy of EU law
In the original Treaty of Rome, it was envisaged that there would be occasions when national courts would have to apply EC laws. But this could cause difficulties if there was also a national law dealing with the issue. Which should the court apply? The normal rule when there are 2 conflicting laws is that you apply the most recent. But that wouldnt work as it would entitle states to breach EC laws by passing conflicting legislation after the EC law was made. The Treaty didnt actually specify the answer to this problem, so it was left to the ECJ. In Costa v ENEL 6/64, Costa was trying to get out of paying his electricity bill by claiming that an Italian statute nationalising the electricity industry was contrary to EC law. The statute had been passed after Italy joined the EC, so on the normal time rule, it would prevail over EC law. But the ECJ ruled that EC law always prevails over national law, whatever order they were passed. The ECJ went even further in Internationale Handellgesellschaft 11/70, where it held that EC law would prevail even over the constitutions of member states, though it managed to interpret the EC law in question so that it did not conflict with the German constitution. These cases placed national courts in an awkward position where national law restricted their power to rule a national law invalid. In Amministrazione delle Finanze v Simmenthal, 106/77, an Italian judge was faced with a conflict between EC and Italian law. Under Italian law only the Constitutional court can declare a law invalid. What should the judge do, refer the case to the constitutional court or declare the law invalid himself? The ECJ held that every national court must apply EC law in its entirety and set aside any provision of national law which conflicts with it.

In the UK, a key development in relation to supremacy was the case Factortame (No 1) C-213/89, which concerned the compatibility of the Merchant Shipping Act 1988 with the EC Treaty. Supremacy...was certainly well established in the jurisprudence of the ECJ long before the UK joined the Community. Thus, whatever limitation of its sovereignty Parliament accepted when it enacted the ECA 1972 it was entirely voluntary...it has always been clear that it was the duty of a United Kingdom court...to override any rule of national law found to be in conflict with any directly enforceable rule of Community law. See Lord Bridge [1991] 1 AC 603 at 658 Following this ECJ ruling, the EnglisEU law.h courts were given the power to issue injunctions against the Crown and disapply an Act of Parliament which conflicts with EU law.

2. Direct Effect.
Consider this problem. Suppose someone reads the Treaty and discovers that they are entitled to certain rights under the Treaty. But their state has either done nothing to give effect to those rights or, even worse, has legislated contrary to the Treaty. What can the individual do? The Treaty explains exactly what to do. Use the enforcement procedure in Article 250-260 TFEU. Complain to the Commission, who can take proceedings against the state before the ECJ. Eventually in 2-3 years time, the state will be held to be in breach and will apologise and put its law right. This is, as you know, a very long-winded and inefficient process, very much subject to political interference. The Commission may not take up the case, or may not pursue it through the court, accepting the states excuses and promises of future obedience. This is however the normal process for the enforcement of Treaties; they impose obligations on states which are enforceable only by other states or by special international machinery. International law is only concerned with states, not with individuals. Was the EC to be like any other Treaty or was it something different? This question came before the ECJ in the most important case it ever decided. Van Gend en Loos 26/62 The company imported a chemical from Germany to The Netherlands and were then told it had been reclassified so the customs duty payable had increased. This was clearly a breach of ex Art 12 TEEC which forbade the imposition of new customs duties between member states. Van Gend sued the Dutch authorities for their money back. The case was referred to the ECJ for a ruling under former Art 177 TEEC (now 267 TFEU). The AG argued that the Treaty imposed obligations on states which are enforceable only through [Art 258 TFEU]. But the ECJ went much further. It

said the then EC constituted a new legal order; EC law confered rights on individuals which become part of their legal heritage. They can enforce these rights directly before the national court; the rights have direct effect. The ECJ admitted that the reason it made this decision was to provide an extra way to force states to obey EC law. Any individual could now claim rights under EC law and the national court would enforce them, with a ruling under [Art 267 TFEU] if necessary. It was no longer necessary to wait for the Commission to take action. In Van Gend en Loos, the ECJ held only that an individual could assert their rights against the state, but in Defrenne v Sabena 43/75, the ECJ went further. The applicant here complained that her employer, an airline company, was paying female air stewardesses less than male ones, contrary to Art 119 (141) which requires equal pay. The ECJ held that treaty provisions, such as that Article, had direct effect as against everyone. This is usually referred to as vertical and horizontal direct effect. It is considered reasonable to force individuals to obey treaty provisions irrespective of the national law, because they cannot really plead ignorance. Having invented direct effect, the ECJ had to elaborate exactly when a treaty provision would be regarded as conferring directly effective rights on an individual. They established 3 criteria:a) the provision must be unconditional i.e. the rights must not be subject to the agreement of some other body; b) the provision must be clear and precise. There are plenty of provisions in the treaty which are too vague to confer rights on anyone; and c) the provision must not be subject to any further implementation by either EU institutions or national ones (e.g., a directive cannot be directly effective until after the deadline it sets for its transposition into national laws) After inventing the direct effect of treaty provisions, the ECJ pushed it further. You will recall that regulations are directly applicable; that is they can be enforced in member states just like national laws. The ECJ therefore had no problem extending direct effect to regulations, because the treaty already made them directly applicable i.e. incorporated into the law of member states. If they are unconditional, clear and precise, there is no problem giving them both horizontal and vertical direct effect, so they can be enforced against the state and private individuals. But what about directives? It would seem clear that directives could not possibly have direct effect, as they are only instruction to the state to create or amend a national law so as to comply with the substance laid down in the directive. How could anyone claim any rights until the directive has been implemented? But the ECJ was worried by the fact that not all states implement all directives on time. Should people be deprived of their rights by the failure of the state to live up to its obligations? So the ECJ extended direct effect to directives. Van Duyn v Home Office 41/74

Miss Van Duyn, a Dutch woman, was refused admission to the UK because she was a scientologist, then thought to be a dangerous cult. She challenged this refusal on the basis of her right of freedom of movement for workers under a Directive, but the UK had not implemented the directive so argued she could have no rights. The ECJ held that even a directive could have direct effect, provided it was unconditional, clear and precise. This decision was and is controversial because it is plainly contrary to what the drafters of the treaty intended when they invented directives. It makes the difference between directives and regulations very small. Perhaps as a consequence of this concern the ECJ has put 2 restrictions on the direct effect of directives. 1. No directive can have direct effect until after the date for implementation has passed; Publico Ministero v Ratti 148/78. Until that date, there is no obligation to implement it, so no one can have any rights. 2. Directives can only have vertical direct effect. In Marshall v Southampton Area Health Authority 152/84, Ms Marshall complained that she was forced to retire at 62 though men could work until they were 65. This was contrary to an EC directive which required equal retirement ages, but the UK had not implemented the directive. The ECJ held that the justification for applying direct effect to directives was to stop a state relying on its own failure to implement; a form of estoppel. But this could only apply where the defendant was a state body. If the defendant was a private body it would be unfair to blame it for the non-implementation of the directive. Indeed it might never have heard of it. How would you set about finding an unimplemented EC directive of whose existence you are unaware? As Ms Marshall worked in the public sector, she won her case. This ruling of course produces all kind of anomalies; if she had worked in the private sector she would have lost. Some therefore argue that the ECJ should push the law on and give horizontal direct effect to directives. But in Facchini Dori v Recreb C91/92, the ECJ confirmed its decision. As a consequence, it becomes very important to define what counts as a public body and what a private. There are some obvious ones; government, central and local, health authorities, police are all public. In Foster v British Gas C188/89 the ECJ gave as a definition a body of whatever form which was made responsible for providing a public service under the control of the state. British Gas, before it was privatised, was held to be a public body; now it is probably not, though the privatised water companies have been held to be public for this purpose, as they are still responsible for providing a service and are under a degree of state control. But this still leaves all kinds of grey areas; is this University public or private? Because of the limitations of direct effect, the ECJ has developed another means of protecting the rights of EC citizens where states have not done so.

3. Indirect Effect
Von Colson v Land Nordrhein-Westfalen 14/83 Two women were discriminated against in seeking work, one in the public sector and one in the private sector. An EC directive required states to set up a system for giving redress to victims of sex discrimination. Germany had given them a right to sue, but only for wasted travelling expenses. The directive did not have direct effect and would in any case have helped only one of the women. The ECJ held that the courts in member states were obliged to try to interpret their own domestic law in such a way as to give effect to EC laws, including unimplemented directives and directives which did not have direct effect. In this case it was relatively easy to find an interpretation of the German law which would give effect to the directive. Indeed the German law had been intended all along to comply with EC law, and it would be normal for a national court to try hard to find a way of interpreting a law that would give the effect intended. But it is more difficult where the national law pre-dates the EC law, and cannot therefore have been intended to give effect to it. But in Marleasing 106/89, the ECJ held that the Spanish courts, in interpreting the Spanish Civil Code, should give effect to an unimplemented directive written years later. All national laws, whenever written, should as far as possible be interpreted in accordance with EC law. The tricky bit is the as far as possible. How far is the national court supposed to go? Clearly if the national law is ambiguous, it will be easy for the court to give preference to the interpretation which would give effect to the directive. But there must come a point at which the national court has to say such an interpretation is impossible. In Duke v GEC Reliance, which pre-dated Marleasing, the House of Lords refused to interpret the Sex Discrimination Act, which stated that men and women could have different retirement ages, as meaning that men and women must have the same retirement age. This seems quite right. There must come a point at which the law would be rendered completely uncertain if words had to be read as meaning something other than what they said. There is one clear limitation on the Marleasing principle; it cannot be used to increase penalties. In Re Kolpinghuis Nijmegen C80/86, the accused was prosecuted for filling bottles with tap water and selling it as mineral water. This was only an offence if Dutch law was interpreted in the light of an EC directive not yet implemented in the Netherlands. Held it would be unfair to take an unimplemented directive into account.

4. State liability
Francovich v Italy C-6 & 9/90

MS can be found liable for damages suffered as a result of their failure to comply with EU Law. Brasserie du Pcheur & Factortame C-46 & 48/93 In such circumstances, Community law confers a right to reparation where three conditions are met: the rule of law infringed must be intended to confer rights on individuals; the breach must be sufficiently serious; and 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. [1996] ECR I-1029 at 51 Sufficiently Serious Breach of EU Law The test is whether the Member State or the [EU] institution concerned manifestly and gravely disregarded the limits on its discretion. (Joined Cases C-46 & 48/93 Brasserie du Pcheur SA v Germany & R v Secretary of State for Transport ex parte Factortame Ltd [1996] ECR I-1029, para 55) Factors to take into account: the clarity and precision of the rule breached (British Telecom) the measure of discretion left by that rule to the national or [EU] authorities (Case C-5/94 R v Ministry of Agriculture, Fisheries & Food, ex parte Hedley Lomas (Ireland) Ltd [1996] ECR I2553 and Joined Cases C-178-179 & 188-190/94 Dillenkofer, Erdmann, Schulte, Heuer, Werner, & Knor v Germany [1996] ECR I-4845) whether the infringement and the damage caused was intentional or involuntary (Joined Cases C-178-179 & 188-190/94 Dillenkofer, Erdmann, Schulte, Heuer, Werner, & Knor v Germany [1996] ECR I4845) whether any error of law was excusable or inexcusable, the fact that the position taken by a [EU] institution may have contributed towards the omission, and the adoption or retention of national measures or practices contrary to [EU] law. (Joined Cases C-46 & 48/93 Brasserie du Pcheur SA v Germany & R v Secretary of State for Transport ex parte Factortame Ltd [1996] ECR I-1029, para 56)

5. The pressure for horizontal direct effect of directives is on

Unilever C-443/98 - Procedural HDE Directive 83/189 prescribed certain procedures to be followed when a Member State intended to adopt technical regulations. The purpose of those procedures was to facilitate the proper functioning of the internal market by obviating the restrictions on the free movement of goods which might arise from Member States technical requirements for goods marketed or used

within their territories. A Member State which intended to adopt such provisions was required to notify them in advance and then refrain from enacting them for a specified standstill period, in order to allow the Commission and the other Member States to submit observations concerning possible obstacles to trade at a stage at which they can be taken into account, and to allow the Community legislature, if it thinks fit, to adopt legislation regulating the field in question. The question referred to the ECJ by an Italian court concerned civil proceedings between individuals arising from a contract and whether a national court should disapply a national technical regulation which, although notified to the Commission in accordance with Council Directive 83/189 was adopted before the expiry of the 'standstill period applicable under that directive. The ECJ responded: a national court is required, in civil proceedings between individuals concerning contractual rights and obligations, to refuse to apply a national technical regulation which was adopted during a period of postponement of adoption prescribed in Article 9 of Directive 83/189. Mangold C-144/04 The Arbeitsgericht (Labour Court) Munich referred to the Court under Article 234 EC (now 267 TFEU) three questions on the interpretation of Council Directive 1999/70/EC of 28 June 1999 concerning the framework agreement on fixed-term work concluded by ETUC, UNICE and CEEP and Council Directive 2000/78/EC of 27 November 2000 establishing a general framework for equal treatment in employment and occupation. T The national court wishes to know whether in the context of a dispute between private parties those directives preclude a national rule allowing older people to be employed on fixed-term contracts with no restrictions. In essence, without giving horizontal direct effect to the directives concerned, the Court concluded that: The principle of non-discrimination on grounds of age must thus be regarded as a general principle of Community law. Where national rules fall within the scope of Community law, which is the case with Paragraph 14(3) of the TzBfG, as amended by the Law of 2002, as being a measure implementing Directive 1999/70 (see also, in this respect, paragraphs 51 and 64 above), and reference is made to the Court for a preliminary ruling, the Court must provide all the criteria of interpretation needed by the national court to determine whether those rules are compatible with such a principle (Case C-442/00 Rodrguez Caballero [2002] ECR I-11915, paragraphs 30 to 32). (para. 75) Consequently, observance of the general principle of equal treatment, in particular in respect of age, cannot as such be conditional upon the

expiry of the period allowed the Member States for the transposition of a directive intended to lay down a general framework for combating discrimination on the grounds of age, in particular so far as the organisation of appropriate legal remedies, the burden of proof, protection against victimisation, social dialogue, affirmative action and other specific measures to implement such a directive are concerned. (para. 76) It is the responsibility of the national court to guarantee the full effectiveness of the general principle of non-discrimination in respect of age, setting aside any provision of national law which may conflict with Community law, even where the period prescribed for transposition of that directive has not yet expired. Kckdeveci C-555/07 Again on a reference from a German court, this case was an opportunity for the Court to clarify the legal rules governing the general principle of nondiscrimination on grounds of age and the function which that principle fulfils in a situation in which the time-limit for the transposition of Council Directive 2000/78/EC of 27 November 2000 establishing a general framework for equal treatment in employment and occupation has expired, and to determine the role and the powers of national courts faced with national rules containing age discrimination when the facts of the case occurred after the expiry of the time-limit for the transposition of Directive 2000/78 and the proceedings involve two private parties. According to AG Bot, directives should have horizontal direct effect in certain circumstances, notably when they apply fundamental principles, such as nondiscrimination. In so far as Directive 2000/78 is intended to facilitate the specific application of the prohibition of age discrimination and, in particular, to improve judicial protection for workers who may have been wronged by a breach of that prohibition, it cannot, including and all the more so after the expiry of the period granted to the Member States for its transposition, affect the scope of that prohibition. It is difficult in that regard to imagine that the consequences of the primacy of Community law are weakened after the expiry of the timelimit for the transposition of Directive 2000/78. Most of all, it cannot be accepted that the protection of individuals against discrimination which is contrary to [EU] law is reduced after the expiry of that period even though the purpose of the rule in question is to increase their protection. To my mind, therefore, it should be possible to rely on Directive 2000/78 in proceedings between private parties in order to exclude a national provision which is contrary to [EU] law. (para 87) To adopt such an approach in the present case would not force the Court to reverse its earlier case-law concerning the absence of horizontal direct effect of directives. All that is at stake in the present case is the exclusion of a

national provision contrary to Directive 2000/78, namely the last sentence of Paragraph 622(2) of the (German Civil Code), to allow the national court to apply the remaining provisions of that paragraph, namely the periods of notice calculated on the basis of the length of the employment relationship. Directive 2000/78 is not therefore to be applied to independent private conduct not subject to any particular State rule, such as the decision of an employer to take on workers over the age of 45 or under the age of 35. Only that situation would call into question the appropriateness of recognising that the directive has genuine horizontal direct effect. (para 88). Again, without resorting to horizontal direct effect, the ECJ confirmed the Mangold ruling. It is for the national court, hearing proceedings between individuals, to ensure that the principle of non-discrimination on grounds of age, as given expression in Directive 2000/78, is complied with, disapplying if need be any contrary provision of national legislation, independently of whether it makes use of its entitlement, in the cases referred to in the second paragraph of Article 267 TFEU, to ask the Court of Justice of the European Union for a preliminary ruling on the interpretation of that principle.

However, the last observation by AG Bot is worth noting. To finish, I would like to point out that, given the ever increasing intervention of Community law in relations between private persons, the Court will, in my view, be inevitably confronted with other situations which raise the question of the right to rely, in proceedings between private persons, on directives which contribute to ensuring observance of fundamental rights. Those situations will probably increase in number if the Charter of Fundamental Rights of the European Union becomes legally binding in the future, since among the fundamental rights contained in that charter are a number which are already part of the existing body of Community law in the form of directives. In that perspective, the Court must, in my view, think now about whether the designation of rights guaranteed by directives as fundamental rights does or does not strengthen the right to rely on them in proceedings between private parties. The present case offers the Court an opportunity to set out the answer which it wishes to give to that important question. (para. 90). Further Reading:

Kaczorowska, European Union Law (Routledge-Cavendish, 2d edn 2010) Ch. 13, 12, 14 Harltey, The Foundations of European Union Law (OUP, &th edn 2010) Ch. 7

Criag & De Burca, EU Law. Text, Cases, and Materials (OUP, 5th edn 2011) Ch. 7, 8(7), 9

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