The doctrine of direct effect has been fundamentally undermined by the Court of Justice employing unnecessary limitations, inconsistent principles, arbitrary distinctions and flawed reasoning

September 26, 2020

Critically discuss the above statement with reference to relevant treaty articles, decided cases and academic opinion.

The doctrine of direct effect along with the principle of precedence are the main basis of European Union system of individuals’ rights protection in frame of EU standards.

The doctrine of direct effect was established by the Court of Justice of European Union (CJEU) in decision of Van Gend en Loos of 5 February 1963, which Hartley regards as “one of the most important judgments ever handed down by the European Court” (TREVOR C. HARTLEY. EUROPEAN UNION LAW IN A GLOBAL CONTEXT: TEXT, CASES, note 2 at 191 / 12070351/SSRN-id850364.pdf?sequence=1 ).

In the subsequent case of Simmenthal the Court explained the full implications of the concept of direct effect. It stated: “[Direct effect] means that rules of Community law must be fully and uniformly applied in all the member states from the date of their entry into force and for so long as they continue in force. These provisions are therefore a direct source of rights and duties for all those affected thereby, whether member states or individuals, who are parties to legal relationships under Community law. This consequence also concerns any national court whose task it is as an organ of a member state to protect, in a case within its jurisdiction, the rights conferred upon individuals by Community law” (Case 106/77, Amministrazione delle Finanze dello Stato v Simmenthal SpA.[1978] EUECJ R-106/77; [1978] ECR 629).

It is also necessary to mention that the nature of doctrine has two aspects: vertical and horizontal. Vertical direct effect is of consequence in relations between individuals and the State. This means that individuals can invoke a European provision in relation to the State. Horizontal direct effect is consequential in relations between individuals. This means that an individual can invoke a European provision in relation to another individual (The direct effect of European law//

Van Gend and Loos decision concerned the direct applicability of Treaty articles (named article 12 violation of which caused litigation) imposed

  • negative obligations that were
  • clear, unconditional and
  • not dependent on any positive national legal measures (Case 26/62 Van Gend en Loos [1963] ECR 1).

Thus in the moment of establishing of doctrine of direct effect by CJEU there was only three requirements which were necessary to meet for the article of Treaty to be directly applicable in the states-members of EU. But further decisions of CJEU create more and more restrictions for EU acts to meet the doctrine of direct effect that is considered by some scientists as a regressive process, as undermining of doctrine that may have the negative consequences in form of the lack of protection of persons’ rights in European Union.

Concerning the direct effect of Treaties it could be mentioned Becker judgment (of 19 January 1982) with which the Court of Justice rejected the direct effect where the States have a margin of discretion, however minimal, regarding the implementation of the provision in question (The direct effect of European law / decisionmaking_process/l14547_en.htm). This decision is to maintain the stability of legal practice and to prevent cases when state rejects to fulfill the court decision on the ground of discretion regarding question of implementation of some norms.

In reference to acts of EU secondary legislation there are much more conditions for direct applicability. For instance, Decisions according to Art. 288 of TFEU may have direct effect when they refer to a Member State as the addressee. The Court of Justice therefore recognizes only a direct vertical effect (Judgement 10 November 1972, Hansa Fleisch).

But the greatest resonances create limitations imposed by the Court of Justice concerning the direct applicability of EU Directives. Among such CJEU judgements are first of all Marshall (1986) and Ratti (1979) decisions.

Thus, in Marshall, the Court of Justice held that Directives had direct effect only against the state and not in litigation between private individuals (Case 152/84 Marshall [1986] ECR 723). In Ratti, the Court of Justice defended the (vertical) direct effect of Directives based on an estoppel-inspired principle. The State has an obligation properly to implement the Directive. If they do so, individuals can rely on the substance of the Directive in national courts. The State's failure to implement the Directive is a wrong. States may not use their own wrong as a way of taking from individuals they should have derived from EU legislation (Case 148/78 Ratti [1979] ECR 1629 at [23]). This argument supports the rule in Marshall.

The opinion of negative consequences of such conditions of direct applicability of EU Directives imposed by CJEU is really discussible. Newly established (after Van Gend and Loos) limitations presented in Marshall and Ratti decisions are reasonable on the strength of following statements.

Firstly in Van Gend and Loos the Court concerned only Treaties’ provisions and emphasized that the Treaties were contractual, that they created obligations for the Member States and that the action taken by them must not be such as to derogate from or nullify the obligations they have undertaken under the treaties. It is in that context (albeit expressed subsequently) that we should consider what the Court said in Van Gend en Loos (DAVID EDWARD. DIRECT EFFECT - MYTH, MESS OR MYSTERY? / So as follows from each Preamble of EU Treaty, they were signed by each member state and it means that each member state took part in creation and has agreed with obligations fixed in the Treaty. In turn we should consider that EU Directives which are Marshall and Ratti decisions about, are the acts of secondary legislation of European Union and thus have less importance than Treaties, are adopted by EU organs and have special procedure of adoption and acceptance by member states.

Secondly, the Art 288 of TFEU stated that Directives bind only “each Member State to which [they are] addressed”, unimplemented Directives could impose obligations only on the Member State itself and not on private persons. So it can be concluded that Marshall decision’s rule of only “vertical direct effect” (i.e. in relations only between state and person, not by two or more individuals) is created with the purpose of fulfillment of art. 288 TFEU it means that is a lawful decision so it even could not be discussed its’ reasonability and effectiveness.

Thirdly, Marshall decision, allowing only vertical direct effect regarding EU Directives creates a liberal, instrumentalist conception of “the Member State”. In Foster v British Gas (1990) the Court of Justice held that a body, “whatever its legal form” which has been made responsible for providing some public service “under the control of the State” and for that end enjoys “special powers beyond those which result from the normal rules applicable between individuals” will be subject to obligations under an unimplemented Directive (Case C-188/89 Foster v British Gas [1990] ECR I-3313).

The absence of horizontal direct effect of Directives is also compensated by Court of Justice by decisions in cases in which a Directive and a general principle are combined to produce effects, the former being considered a mere “concretization” of the latter. This combination, as a method of compensating for the lack of implementation, or defective implementation, of Directives, is an instrument specific to EU law that requires transposition in national law (Sophie Robin-Olivier. The evolution of direct effect in the EU: Stocktaking, problems, projections / In Mangold and Kücükdeveci, quite remarkably, the general principle of non-discrimination compensates for the absence of horizontal direct effect of Directive 2000/78/EC on Equal Treatment in Employment and Occupation. In this case the Court pointed that, European Union law, more particularly the principle of non-discrimination on grounds of age as given expression by Directive 2000/78, must be interpreted as precluding national legislation, without regard on the fact of implementation of Directive by member state in the ground of EU law principles’ priority before national legislation (C-555/07 Kücükdeveci, 2010 E.C.R. I-00365).

Perhaps the most influential circumvention of the prohibition on horizontal direct effect of Directives is the doctrine of “indirect effect”; an obligation on the part of domestic courts to attempt “harmonious interpretation”. In Von Colson, the Court of Justice held that the Equal Treatment Directive was insufficiently precise to have direct effect. Nonetheless, the Court noted the Member States' obligation under the Directive to achieve its ends, combined with their general Treaty obligation to take all appropriate steps to ensure fulfillment of the Community obligations. Since this obligation bound all manifestations of the State, including its courts, national courts were consequently bound “in applying...the provisions of national law specifically introduced in order to implement [the Directive] interpret their national law in the light of the purpose and wording of the Directive” (Case 14/83 Von Colson [1984] ECR 1891). The interpretive obligation was strengthened in subsequent case law, such as in Marleasing [1990]. here the Court of Justice reiterated its ruling in Von Colson but made express that the interpretive obligation applied to national laws enacted before or after the Directive required implementation. It further applies even where the national law has nothing to do with the Directive and is not enacted specifically to implement it. The duty to interpret harmoniously exists even where national law is clear and unambiguous – the interpretive obligation is not confined to the resolution of ambiguity. The decision in Pfeiffer v Deutches Rotes Kreuz makes clear that the interpretive obligation applies not only to specific statutes but to the entire corpus of national law (Joined Cases C-397/01 to 403/01 Pfeiffer and Others [2004] ECR I-8835).

Thus it is obvious that Court of Justice by imposing the supplementary limitations of direct effect of EU Directives had no purpose to make the process of individuals rights’ protection more complicated. These limitations are necessary to maintain the stability of EU law system and also law systems of member states, to affirm the principle of legal certainty preventing the decision making process of cases when, for instance, EU Directive was applied directly by individual and it was approved by the Court before the end of implementation period after which member state reject the implementation of EU Directive. It is quite reasonable and beneficial both for state and individual. Moreover Court of Justice found additional methods to better protection of individual rights in regard with the absence of horizontal direct effect of Directives – set the wide definition of state organ and linked, if it is possible, Directives’ provisions with general principles of EU law which have unconditional priority before national law, established the doctrine of indirect effect.