When a provision is sufficiently clear, precise and unconditional, direct effect can be invoked against treaty provisions, regulations and directives in vertical situations. [1]
National courts must disapply conflicting national law and offer (interim) remedies that are effective and equivalent to those offered in cases where an individual derives a right from national legislation.
Horizontal and Vertical Direct Effect of Directives:
Member states may choose how to implement directives, so long as they are given effect to. It does not matter how they are implemented at national law.
TFEU Art 288(3):
‘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.’
While perhaps more flexible, the usage of directives can be problematic as they are not enforceable until they are transposed into national law. This creates the potential for asymmetries between member states.
Vertical Direct Effect (VDE):
Litigation between an individual and member state can use direct effect to enforce EU law onto member states.
In VAN DUYN, the CJEU held that there is a presumption of VDE for all treaty provisions.
In RATTI, the CJEU held that member states cannot benefit from their own wrongdoing by failing to implement a Directive (similar to estoppel).
VDE is less controversial than HDE since member states are aware of EU law, have the means of implementing EU law and have signed up to their sovereignty being limited within the EU legal order. Furthermore, member states are the subjects of EU treaties, unlike individuals and private parties.
Horizontal Direct Effect (HDE):
Generally, litigation between two individuals cannot use direct effect to enforce EU law.
In MARSHALL, the CJEU ruled on horizontal direct effect, deciding that, where EU directives have not been implemented in national law, individuals litigating on other individuals cannot rely on direct effect.
[48]: ‘With regard to the argument that a directive may not be relied upon against an individual, it must be emphasized that according to [Art.288 TFEU], the binding nature of a directive, which constitutes the basis for the possibility of relying on the directive before a national court, exists only in relation to each Member State to which it is addressed. It follows that a directive may not of itself impose obligations on an individual and that a provision of a directive may not be relied upon as such against such a person’.
Justifications:
The Treaties do not say that HDE is enforceable.
Untransposed Directives are not formally part of national law.
Private parties may be unaware of obligations present in untransposed Directives as they are not yet part of national law.
Enforcing direct effect of Directives upon individuals would undermine the distinction between Directives and Regulations.
In FACCINI DORI, AG Lenz called for the abolition of the distinction between Vertical DE and Horizontal DE. The court reject this.
AG Lenz Arguments:
Protect the principle of non-discrimination between individuals.
Aid the functioning of the internal market and create better conditions for equal competition.
Protecting uniform application of EU law.
Still would allow member states to have the freedom to transpose Directives as they see fit.
Aids legal certainty and incentivises transposition of Directives.
COURT: ‘The effect of extending [the case-law on vertical DE] to the sphere of relations between individuals would be to recognise a power in the [Union] to enact obligations for individuals with immediate effect, whereas it has competence to do so only where it is empowered to adopt regulations.’
Exceptions allowing Horizontal Direct Effect:
There are a number of exceptions where direct effect is enforced in horizontal situations. Some argue that the exceptions to the no horizontal DE rule itself invalidates the rule in practice. [2]
Wide Interpretation of ‘State Actor’:
A wide definition of what is considered a state actor / part of the state machinery decreases the number of cases that merely amount to HDE by engaging VDE.
‘a body, whatever its legal form, which has been made responsible, pursuant to a measure adopted by the State, for providing a public service under the control of the State and has for that purpose special power beyond those which result from the normal rules applicable in relations between individuals’ (FOSTER at [20])
Only one of the criteria (above) are required to engage VDE. [3]
A wide interpretation means that a directive can be relied upon against a private law body conferred with a task in the public interest.
EG: includes universities, hospitals etc.
Indirect Effect:
Where a Directive cannot be relied upon directly (either because they are not implemented nationally, or because they are not sufficiently clear, precise and unconditional), national courts must interpret all domestic law so as to achieve the objective of the provision.
‘[N]ational courts are required to interpret their national law in the light of the wording and purpose of the directive in order to achieve the [required] result’. (VON COLSON)
This includes overturning precedent but is limited by the ways the court can interpret national law (their interpretation cannot directly oppose the law).
Arguably, this creates more legal uncertainty, directly conflicting with the reasoning given as to why there should be no HDE. However, it achieves the objective.
Incidental Direct Effect:
Incidental direct effect involves a disapplication of national law where a procedural obligation of a member state has not been met.
In CIA SECURITY, S say that CIA are not following Belgian law in their marketing. Belgium has adopted a decree, but not notified the Commission of this (they should’ve). CIA seeking ruling that this was slander. The court held that the decree, in violation of EU law, is to be disapplied. CIA won.
Direct Effect of General Principles (Fundamental Rights):
Where a directive ‘merely gives expression to’ a general principle of EU law, the general principle (though formally not the Directive itself) can be in invoked directly before the period of transposition has expired. [4]
Individuals have the right to have their unapplicable right judicially protected.
‘Article 47 of the Charter on the right to effective judicial protection is sufficient in itself and does not need to be made more specific by provisions of EU or national law to confer on individuals a right which they may rely on as such. Consequently … the national court would be required to ensure within its jurisdiction the judicial protection for individuals flowing from Article 47 of the Charter, and to guarantee the full effectiveness of those articles by disapplying if need be any contrary provision of national law.’ (EGENBERGER)
State Liability:
If no suitable remedies can be provided, individuals can claim money from a state for their failure to implement a directive.
‘The full effectiveness of [Union] rules would be impaired and the protection of the rights which they grant would be weakened if individuals were unable to obtain redress when their rights are infringed by a breach of [Union] law for which a Member State can be held responsible. It follows that the principle whereby a State must be liable for loss and damage caused to individuals as a result of breaches of [Union] law for which the State can be held responsible is inherent in the system of the Treaty.’ (FRANCOVICH)
There must be an individual right, a sufficiently serious breach of such right and a causal link between the non-implementation of the Directive and damage for a successful claim to be made.
Note: The sufficiently serious breach is always met in cases of non-implemented Directives.
This is not a way to grant individual rights but instead compensate for a right not being implemented and enforced. This creates an incentive for the member state to implement directives in the future.
Resources:
References:
[1] Case 26/62 Van Gend en Loos v Nederlandse Administratie der Belastingen [2] See Craig, ‘The legal effect of Directives: policy, rules and exceptions’ (2009) Vol 34(3) European Law Review, p349-377 [3] C-413/15 Farrell v MiBi [4] C-144/04 Mangold
Cases Mentioned:
Case C-41/74 Van Duyn
Case C-148/78 Ratti
Case C-152/84 Marshall
Case C-91/92 Faccini Dori
C-188/89 Foster
C-14/83 Von Colson
C-194/94 CIA Security v Signalson and Securitel
C-414/16, Egenberger
C-6/90 Francovich
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