2009 EUI Workbook 2

University of Cambridge
Institute of Continuing Education

Faculty of Law
Centre for European Legal Studies
INTRODUCTION TO ENGLISH AND EU LAW

A Course by Correspondence with Tutoring
AN INTRODUCTION TO THE
LAW AND INSTITUTIONS OF
THE EUROPEAN UNION
DENISE ASHMORE LL.M.
STEVE TERRETT PhD
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BOOK 1
© University of Cambridge 2009
All rights reserved. No reproduction copy or transmission of this publication may be made without written permission.
The author’s moral rights have been asserted.
Published by
University of Cambridge Institute of Continuing Education
Madingley Hall
Madingley
Cambridge CB3 8AQ
England
The University of Cambridge, Institute of Continuing Education is pleased to acknowledge the assistance, support and guidance of
the Foreign and Commonwealth Office (Know How Fund) in this project.
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AN INTRODUCTION TO THE LAW AND

INSTITUTIONS OF THE EUROPEAN UNION
WORK BOOK 2
The Courts of the European Community/Union.
An Introduction to the English
AAIIM MSS
Aims
&
&
oobbjjeeccttiivveess To describe the composition and functions of the Courts of the EC/EU and to consider
the role of the European Court of Justice in the development of the law and constitution
of the European Community.
.
Objectives
You should be able to :

1. Understand the composition and the powers of the Courts of the EC/EU.
2. Describe the two pillars of the judicial system.
3. Understand and briefly describe the preliminary ruling procedure under
Article 234 EC Treaty.
Contents
Unit 1
The Courts of the EC/EU (composition and powers).
Questions for Discussion
C
COON
NTTE
ENNT
TSS
Unit 2
Supremacy of Community Law
Unit 3
Direct Effect
Indirect Effect /Sympathetic Interpretation
Remedies/ State Liability
Unit 4
Article 234 EC Treaty (Preliminary Ruling procedure)
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UNIT 1: The Courts

U
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Onnee INTRODUCTION
In Workbook 1 we looked at the composition and functions of the political institutions

of the EC/EU. In this workbook we shall look at the role of the judicial institutions,
namely the courts of the EC/EU. There are presently 3 Community courts and one
tribunal and we will take a brief look at each of them. Nevertheless, the European Court
of Justice (ECJ) was the first of them and remains the most important; both in terms of
its functions and in terms of the role it has played in developing the European legal
system.
We will begin this workbook with a look at the other 2 Community courts and in order
to avoid repetition, when these courts exhibit features which are identical to the ECJ, this
will be noted and a more detailed discussion of those features will follow in the section
which discusses the ECJ itself.
The Community courts are, of course, mentioned and regulated to some degree by the
Treaties. Nevertheless, much of the organisation of the various courts comes not from
the Treaties but from their own Rules of Procedure and, where this is the case it will
be indicated (e.g. CFI Rules, Article 29). Detailed discussion of the rules of Procedure is
outside the scope of this workbook. In addition certain of the relevant articles will be
revised upon the entry into force of the draft EU constitution. Where appropriate this
has been indicated in the text.
A: THE COURT OF AUDITORS (CoA)

The CoA is governed by Articles 246-248. It was established by the second budgetary
treaty of 1975 and came into existence in 1977. It was formally recognised as an
institution of the Community by the TEU.
 Composition
The CoA is composed of one member from each Member State, who is appointed by
common accord of the Member States after having consulting Parliament. They have
staggered 6 yearly appointments, meaning that half of them retire every three years,
unless of course they are re-appointed. Judges of the CoA must belong (or have
belonged) to an external audit body of a Member State or be ‘especially qualified’ for office.
Their independence must be ‘beyond doubt’ and they must be ‘completely independent in the
performance of their duties’.
A CoA judge may be removed by an ECJ decision that he ‘no longer fulfils the requisite
conditions or meets the obligations arising from his office.’
 Functions
Its aim is to ensure sound financial management of the EC and it possesses more
supervisory and review procedures than truly judicial functions. It has issued a number of
critical reports about the way finance is run in the EC. One of these reports played an
important role in highlighting the financial irregularities which existed in the Santer
Commission.
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The ToA increased the powers of the CoA by adding it to the list of applicants who
could bring an annulment action under Article 230, similar to the European Central Bank
and Parliament. Such annulment actions will be looked at in Workbook 3.
It has no direct legal powers and relies on other bodies such as the European Anti-Fraud
office to deal with fraud or any irregularities it discovers.
B: THE COURT OF FIRST INSTANCE (CFI)

The CFI was established in 1988, after the SEA introduced Article 225 to the EC Treaty.
Although Article 225 is the only Treaty Article specifically dealing with the CFI, Article
225(4) states that the CFI shall establish it’s Rules of Procedure in agreement with the
ECJ. These Rules provide far more detail on the organisation of the CFI.
The initial reason for the CFI’s creation was the growing case-load of the ECJ, which
was becoming over-burdened and taking longer to decide cases, as the following table
indicates.
Year Cases Average length of Average length of direct

Pending preliminary ruling action
1980 328 9 months 18 months
1988 605 18 months 24 months
As we all know, ‘justice delayed is justice denied’ and the CFI played an important role in
relieving the work-load of the ECJ. Another factor development designed to relieve the
ECJ’s work-load was the growing use of ‘chambers’ (see later).
The CFI has been of great assistance in complex factual cases (e.g. staff and competition
cases), which would otherwise have to be decided by the ECJ.
 Composition
The CFI is composed of 27 judges and the requirements for appointment are the same
as for appointment to the ECJ. There are no permanent Advocate-Generals (see later)
but any CFI judge may be asked to act as Advocate-General, ‘whenever the legal or factual
difficulty of the case requires’ (Article 29[1] of the CFI’s Rules). Chambers are commonly
used.
 Function(s)
The CFI was originally empowered to hear any direct action (that is an action which
starts and finishes at Community level, rather than national court level, and involves a
challenge to EC action/inaction) brought by a natural/legal person (known as non-
privileged applicants). It was not originally allowed to hear claims brought by
Community institutions or Member States (known as privileged applicants). This was
changed under the TEU, however, and the CFI was given competence to hear direct
actions, regardless of the status of the claimant. Nevertheless, before such competence
could be exercised, approval of the Council of Ministers was required and, at the time of
writing this workbook, no such approval has been given and no cases brought by
Member States or EC institutions have been heard before the CFI.
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This could cause problems, since it means that the same issue could be raised before
both the CFI and ECJ by different parties, but at the same time. In such circumstances,
either the ECJ or CFI can ‘stay’ (i.e. pause) proceedings (Article 82 ECJ Rules of Procedure)
but this is not always an adequate solution. If the CFI stays proceedings which involve an
individual, that claimant can’t intervene in the proceedings which are continuing at the
ECJ. Furthermore, since the CFI’s findings of fact are not binding, if the ECJ decided to
stay proceedings, it would have to subsequently establish facts in the case before it and it
may not reach the same factual conclusion.
(E.g. are advertisements encouraging people to ‘Buy the Best of British Food’ a restriction on
the free movement of goods? See Meat and Livestock Commission v Manchester
Meat and Poultry Market Ltd [1997] CMLR 361.)
The ability to ‘stay’ proceedings under Article 82a may be of some practical benefit to the
applicant but it also denies them the right to have their case heard by both courts.
The CFI’s suggestions to give it jurisdiction to hear cases regardless of the status of
applicant were supported by the ECJ only after some initial hesitation. Nevertheless, the
ECJ has argued against the CFI having jurisdiction to give Article 234 preliminary
rulings on Community law, for the guidance of national courts. Given that Article 234
references comprise over 50% of cases, it may be thought that there is a conflict between
the desire of the ECJ to reduce its own work-load and speed-up judicial decision-making
in the Community, on the one hand, and its desire to retain certain areas of judicial
competence for itself alone, on the other hand.
The proposal in the draft Constitution to give the power to hear preliminary references is
also contained in the Lisbon Treaty in cases which will be defined in the Statute of the
ECJ (Article III-358(3)), as is the renaming of the court to the General Court to be given
appellate jurisdiction over any newly created specialist courts if there is the proposed
restructuring of the present court system.
The existence of 2 courts within the EC system clearly raises questions about whether
the CFI is bound by its own precedent or that of the ECJ. In terms of the first question,
the CFI is not formally bound by its own previous judgments but endeavours to follow
them in order to ensure consistency in its case-law. In terms of the influence of the ECJ’s
jurisprudence, the CFI has stated that
“...the CFI is bound by the jurisprudence of the ECJ, first, in the circumstances laid down in the second
paragraph of Article 54 of the Statute of the ECJ [i.e. where an appeal against a CFI decision has been
made and the ECJ has allowed the appeal] and, secondly, pursuant to the principle of res judicata. It is
settled case-law that this can be the case only if the proceedings were between the same parties, had the
same purpose and were based on the same submissions as the present case...these conditions being
necessarily cumulative.”
The creation of the CFI has not entirely eased concerns about the time taken to resolve
cases in the ECJ, as can be seen by the table below, showing the length of time taken by
the ECJ to give judgment on the various types of cases. As the EU has enlarged the
number of cases has also significantly increased and so recent reforms in procedure, the
greater use of chambers (see later) and the addition of new judges have also been
important elements in ensuring that cases are dealt with as efficiently as possible.
In 2007 for example the ECJ had some 580 cases brought before it of which 265 were
preliminary rulings and 221 direct actions, which is an increase on the figure in 2005
where there were 474 new cases.
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Year Average length Average length Average length

of of of CFI appeal
preliminary direct action cases
ruling
2003 25 months 25 months 28 months
2004 23.8 months 20.2 months 21.3 months
2005 20.4 months 21 months 21 months
2007 19.3 months 18.2 months 17.8 months
Equally, the length of time taken for the CFI to resolve disputes, and the number of
pending cases before the CFI has begun to cause concern. The ECJ and CFI drew-up a
report entitled ‘The Future of the Judicial System of the European Union’ in 1999, including
recommendations to appoint more CFI judges, to allow single CFI judges to decide
cases, to limit the national courts which could make preliminary ruling requests and to
require ECJ approval for any appeal from a CFI decision, but most of these
recommendations remain unimplemented, although the findings have clearly influenced
the reforms proposed in the Lisbon Treaty.
Decisions of the CFI are subject to appeal to the ECJ, on a point of law, within 2
months from the date of the original decision.
The Lisbon Treaty will rename this court the General. It retains broadly the same areas
of competence including the possibility of dealing with preliminary rulings in defined
areas subject to the condition that if the General Court considers the ‘decision to be one that
may affect the unity or consistency of EU Union law’, then it may choose to refer the ruling to
the ECJ instead.. There will remain a right of appeal to the ECJ against decisions taken
by the General Court as well as a general right of review of decisions taken on appeal to
the General Court from one of the newly created specialized courts again in
circumstances of the need to ensure unity and consistency.
C: THE EUROPEAN COURT OF JUSTICE (ECJ)

The rules governing the ECJ are to be found in Articles 220-245 but also in the Statute of
the ECJ and the Rules of Procedure of the ECJ.
These can be found on the web at:
http://www.curia.eu.int/en/instit/txtdocfr/index.htm
The latter are adopted by the ECJ itself, after having obtained the unanimous assent of
the Council of Ministers (Article 245). The ECJ has argued that the requirement of
unanimity could, in an enlarged EU, prevent necessary changes to the Rules of procedure
and has requested to be able to change these rules unilaterally however this would have
remained unchanged in the Draft Constitution (Article III-355).
 Composition
The ECJ is composed of 27 Judges and 8 Advocate-Generals (A-G’s); this is now to be
increased to 11 Advocate Generals. Although the Treaty does not specifically state that
each Member State shall have a judge, in practice there is a judge from each of the 27
Member States.
Judges are appointed by ‘common accord’ of the Member States (Article 225). They must
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be people whose ‘independence is beyond doubt’ and must be either chosen from the highest
court of their State or be ‘jurisprudents of recognised competence’ (Article 223). The composition
of the ECJ has included members of the judiciary, civil service, advocates and academics.
Judges are appointed for 6 years but the terms are staggered and every 3 years, half are
renewed or reappointed. Re-election requires unanimity of all States, acting by ‘common
accord’. In practice all judges so far have been re-elected until they voluntarily chose to
retire. The former UK judge David Edwards, who retired in 2004 had been an ECJ
judge since 1992 and the UK judge in the Court of First Instance since 1982. The current
UK judge is a former Court of Appeal judge Konrad Schieman.
The judges then elect a president of the court, the most recent appointment being
Vassilios Skouris who was re-elected in 2006 to serve until October 2009.
The EP requested a role in appointing judges but it was felt that this might cause judges
to make comments during EP interviews on issues which they may later have to decide
in cases, which would compromise their impartiality. The EP accordingly retains no role.
The draft Lisbon Treaty would also herald some changes to the appointment structure
inserting a new Article 224A which will create a judicial panel to advise on new judicial
appointments proposed by the Member States. The 7 member panel would be made up
from amongst previous members of both courts, “members of supreme national courts and
lawyers of recognised competence, one of whom shall be proposed by the European Parliament”.
In respect to enlargement, the ECJ itself has stated that:

“..the presence of members from all the national legal systems on the Court is undoubtedly conducive to
harmonious development of Community case-law, taking into account concepts regarded as fundamental
in the various Member States and thus enhancing the acceptability of the solutions arrived at. It may also
be considered that the presence of a judge from each Member State enhances the legitimacy of the Court.”
Nevertheless, it also said that “any significant increase in the number of judges might mean that the
plenary session of the Court would cross the invisible boundary between a collegiate court and a
deliberative assembly. Moreover, as the great majority of cases would be heard by chambers, this increase
could pose a threat to the consistency of the case-law”.
Article 222 describes the role of Advocate-Generals. They are required to make reasoned
submissions in open court with complete impartiality and independence. France,
Germany, Italy, Spain and the UK each have an A-G, with the remaining positions
rotated between the other Member States, the increase to 11 AG’s will also provide a
permanent AG for Poland.
Each judge and A-G has at least 3 referendaires who are legal secretaries performing
functions similar to the USA’s judicial clerks. They will research the case and present the
A-G with an opinion of their own which, whilst not binding, can often influence the
approach taken by the A-G.
 Procedural Organisation
The ECJ sits either as a full, or plenary, court or as a Grand Chamber of 13 judges
(mainly comprising the president of the court and of the 5 judge chambers) or in
chambers (fewer judges deciding a case). Article 221 allows the ECJ to sit in chambers
and the Rules of the Court provide for extensive use of 3 and 5 judge chambers. A
Member State or institution (privileged applicants) bringing a case before the ECJ, or
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submitting written observations in a case other than a preliminary reference case may
request a Grand Council session with plenary sessions reserved for cases of exceptional
importance (Article 44 of Rules of Procedure) at the request of Member States.
Both the ECJ and the CFI have written and oral stages - in contrast with common-law
systems, the written stage is the most important in the ECJ. This is undoubtedly linked
to the fact that the original six Member States all had continental civil law systems.
Once a case is referred to the court, a preliminary report is prepared to decide whether a
hearing is needed, or whether the issue has already been dealt with in an earlier case and
whether an advocate general should be appointed. In the latter case once the parties have
submitted their written pleadings, the oral pleadings stage begins. Oral hearings adopt the
inquisitorial style, meaning that the judges are not limited to discussing what the
advocates put forward in argument but can also ask their own questions and raise their
own points. Following oral submissions, but before the judges begin their deliberations,
an A-G presents an impartial opinion on how he would decide the case. These opinions
are often far more detailed and full of reasoning than the actual court’s decision. The A-
G’s opinion is not binding on the judges but it is often followed, both in terms of result
and reasoning. Much of the ‘activism’ suggested of the court has come through the A-
G’s - Lord Slynn, Francis Jacobs etc. - and a number of A-G’s have gone on to become
ECJ judges.
Following the A-G’s opinion, a juge rapporteur is selected from the presiding judges,
whose role is to present a brief summary of the factual and legal questions in the case.
He will prepare a draft court judgment which will then be discussed by the court or
chamber.
All presiding judges are required to vote on the case and, if a unanimous decision is not
possible, decisions are taken by majority. All judges are required to sign the judgment,
however, and there is no provision for dissenting opinions/judgments.
Certain problems may be caused by difficulties between the judges in agreeing the
common wording of judgments, in the absence of a unanimous decision. In the ICI v
Commission (Dyestuffs) Case [1972] ECR, 619, the inability of the full court to reach
a unanimous decision and wording caused a delay of 6 months.
It is now common to see ‘standard clauses’ for ECJ judgments which are repeated at the
beginning of every case on that subject matter
It has been said that “...the collegiate nature of the court’s judgments lends them certain flatness, such
as we associate with the language of a Government report. The tone is measured; there is neither
excitement nor humour. One must not expect the often elegant, sometimes idiosyncratic, prose of an
English judgment, upon which the individual judge will have imprinted his own personality and
particular style.” (Brown and Jacob’s, The Court of Justice of the EC, 2000, at p.57).
The language used during the Court procedure will be determined by the parties to the
proceedings. However, the language used by the judges at session is French. Once
judgment is given, all judgments are translated into the EC’s other working languages.
Up until 2006 all applications and references were fully translated into all official
languages but since enlargement this has been seen as impractical leading to a greater
number of summaries being prepared instead.
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The ECJ does not have a formal system of precedent, but in practice it often follows its
earlier decisions in order to ensure consistency. Nevertheless, the ECJ has on occasions
overruled its previous case-law, although with varying degrees of transparency.
e.g. In CNL-Sucal v HAG (HAG 2) [1990] ECR 1 3711, the ECJ overruled its earlier
approach to the doctrine of ‘common origin’ for the purposes of EC intellectual
property law, taken from Van Zuylen v HAG (HAG 1) [1974] ECR 731. This was the
first time that an earlier case was expressly overruled.
E.g. In Keck and Mitthouard [1993] ECR1 6097, the ECJ appeared to overrule its
earlier case-law on free movement of goods, whilst saying merely that it had decided to
‘re-examine and clarify its case-law on this matter.’
ECJ judgments are generally short in length and often contain very little substantive
reasoning for the decision taken in the case. The judgment may refer to previous cases or
to the A-G’s opinion, but tend to do so only where they support the court’s decision and
not when some passages of the A-G’s opinion or other ECJ cases which may go against
the court’s reasoning.
When interpreting EC legislation, whether from Treaty articles or instruments of

secondary legislation, the ECJ often uses teleological reasoning rather than the literal
approach which is more common of the English courts. It has been said that “The ECJ
has become well-known for interpreting provisions of Community law by reference not just - or even
principally - by reference to their wording, but also by reference to their spirit and the general scheme of the
instrument of which they form part.” (Wyatt and Dashwood’s EU Law, 2000, p.197.)
One English judge described it in the following way...
Customs and Excise v ApS Samex (1983) All ER 1042

“...the interpretation of Community instruments involves very often not the process familiar to common
lawyers of laboriously extracting the meaning from words used but the more creative process of applying
flesh to a spare and loosely-constructed skeleton.”
The fact that EC legislation is published in twenty three, equally authoritative, languages
may give some explanation for this approach.
Some point to the ECJ’s interpretative methods as one example of the ECJ’s activism,
whilst others note that use of such sources of inspiration is well established in
international law.
e.g. The Vienna Convention on the Law of Treaties 1969

Article 31 - “A treaty shall be interpreted in good faith and in accordance with the ordinary meaning to
be given to the terms of the treaty in their context and in the light of its object and purpose. The context
for the purpose and interpretation of a Treaty shall comprise… [inter alia]… its preamble and
annexes.”
Article 32 - “Recourse may be had to supplementary means of interpretation, including the preparatory
work [travaux preparatoires] of the treaty and the circumstances of its conclusion…”
John Major, a former UK Prime Minister, famously proposed that the ECJ was ‘a political
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rather than a judicial institution’ and argued that its judgments should be capable of being
overruled by the Council of Ministers. Francis Jacobs (A-G from the UK) has argued
that the option of being non-activist was not available to the ECJ and that only the UK
has a problem with it because it is unfamiliar with the constitutional-court type structure
which was created under the original treaties.
 Functions
The ECJ is the primary judicial institution of the Community, but one must remember
that its jurisdiction in respect of the other 2 pillars of the Union is not identical to its
jurisdiction under the EC pillar.
TEU Article 46 excludes the majority of TEU provisions from the ECJ’s jurisdiction and
the ECJ has no jurisdiction at all under the CFSP pillar.
Nevertheless, all acts falling outside the scope of ECJ review are specified in Article 47
TEU to be unable to affect the existing acquis communitaire. Article 47 TEU is justiciable by
the ECJ.
In terms of the second pillar (PJCCM) Article 35 confers jurisdiction on the ECJ to
review both matters which have been transferred to the EC pillar and issues which
remain under the PJCCM pillar. This Article, however, only gives the ECJ jurisdiction on
such matters subject to agreement by the relevant Member State, and only upon a
reference from the ‘court of last instance’(Article 68 EC), in comparison with ‘any court
or tribunal’ which may make a reference under the EC preliminary reference procedure
(Article 234). Provisions on law and order and internal security are excluded from review.
The Lisbon Treat would extend the competence of the ECJ bringing all three pillars
within the court's jurisdiction. The new Articles broadly provide a role of interpretation
of the Constitution upon direct request by Member States, as well as a review of validity
of legislation upon Member State request within one month of implementation. Some of
the present limits are retained however so that the ECJ will continue to play no role in
assessing or reviewing police action under the former PJCCM pillar. It will however be
given a wider judicial review role bringing within its umbrella the actions of the
European Council as well as procedural review of any decision to expel Members States
(although it cannot review the substance of such a decision). It will introduce a speedy
procedure for references made concerning a person held in custody in the new
procedural rules contained in the Lisbon Treaty Functioning of the EU (LTFEU), whose
provisions will run side by side with the Article 234 procedure in the revised primary
treaty (LTEU). It will introduce a speedy procedure for references made concerning a
person held in custody in the new procedural rules contained in the Lisbon Treaty
Functioning of the EU (LTFEU), whose provisions will run side by side with the Article
234 procedure in the revised primary treaty (LTEU).
In terms of the ECJ’s role within the EC pillar, the Treaty is rather brief, stating simply
that...
“The court shall ensure that in the interpretation and application of this Treaty the law is observed.”
Article 220.
This rather vague Treaty Article has been used by the ECJ on a number of occasions,
however, to justify controversial judgments in which it created doctrines important to the
EC legal system. In Workbook 1 we saw how the ECJ used this Article to develop the
doctrine of general principles of Community law.
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A number of other Treaty Articles govern the role of the ECJ in hearing various types of
cases.
The two general categories of potential cases are:

direct actions (i.e. those which start and finish before the ECJ) and
preliminary rulings (i.e. those in which the ECJ gives a ruling on Community law which
is requested by, and used by, a national court before which an issue relating to EC law is
pending).
Direct actions include

 cases brought by the Commission against a Member State (Article 226);
 one Member State against another Member State (Article 227);
 actions against wrongful Community action (Article 230) or inaction (Article 232);
and
 actions relating to the contractual or tortious liability of the EC (Article 235).
Preliminary rulings requested by a national court are governed by Article 234. The
preliminary rulings procedure will be looked at in Unit 4 of this workbook and the
remaining articles will be discussed in Workbook 3.
The Lisbon Treaty adopts the proposal for the creation of additional specialist courts. In
fact the first such of these has already been created by Council Decision 2004/752/EC
which sets up a new European Union Judicial Service Tribunal, whose initial panel of 7
judges have been given the task of resolving disputes arising from the staff of the civil
service of the European Union, with a right of appeal to the Court of First Instance. This
court was formally convened in December 2005, hearing its first case in March 2006.
QUESTIONS FOR DISCUSSION
The CFI
a) Do the Rules of the CFI require approval by any institution other than the ECJ?
b) Is there an appeal from the CFI to the ECJ and, if so, on what conditions?
c) In which ways is the jurisdiction of the CFI limited? Are such limitations
justifiable?
d) What are the advantages/ disadvantages of the ECJ’s stance in relation to the
jurisdiction of the CFI?
e) What/Who are the two categories of potential applicants before the CFI/ECJ? Is
it defensible to have different categories of applicant?
f) To what extent is the CFI bound by the jurisprudence of the ECJ?
The ECJ
g) Are there any potential criticisms of the way in which the judges of the CFI and
ECJ are appointed/reappointed?
h) What are the advantages/disadvantages of disallowing separate judgments or
dissenting opinions in the ECJ?
i) What are the advantages/disadvantages of not having a formal system of
precedent within the ECJ?
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j) Give examples where the ECJ appears to have deviated from its previous case-
law, other than those which are discussed in this workbook. (See Workbook 1
for other examples).
k) “There is a serious need to rethink the structure and organisation of the ECJ in light of its
increasing workload, perhaps even more crucially given the recent expansion eastwards.” To
what extent do you agree/disagree with this statement?
The Lisbon Treaty
I. What will be the effect of the Lisbon Treaty upon the present procedure and
jurisdiction of the court?
II. Would the proposed changes in the method of appointment of judges have
added to the effectiveness of the court?
UNIT 2: Supremacy of EU Law

Typically, international organisations specify whether the law of their organisation is
U
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T
Twwoo whether the relevant international law is supreme to domestic law. The EC Treaty,
however, does not deal directly with the question of whether EC law is supreme to the
national law of the EC Member States. The closest thing is Article 10 requiring all
Member states to “…take all appropriate measures, whether general or particular, to ensure the
fulfilment of the obligations arising out of this Treaty or resulting from action taken by the Community
institutions. They shall facilitate the achievement of the Community’s tasks.”
In Comet [1976] ECR 2043, the ECJ stated that the duty of cooperation in Article 10
extends to include the national courts of the Member States.
The doctrine of international legal supremacy has been found to exist in other
organisations and the ECJ was not the first court to rule that its own legal order was
supreme to the Member States’ systems. Nevertheless, the ECJ appears to have been
flexible in borrowing from traditional international law theory where useful to achieve its
aims and to have distanced the EC legal system from traditional law theory wherever the
latter ran contrary to its aims.
e.g. In Commission v Luxembourg and Belgium [1964] ECR 585 the ECJ rejected
the international law theory of ‘reciprocity’, which states that one Member of an
international organisation cannot bring an action against another Member State if both of
those States are in breach of the rules of the organisation. As we will see, the ECJ takes
the view that the EC/EU is a new legal order and this approach is visible in its
judgments.
The draft constitution would have put this issue beyond doubt by stating clearly that
supremacy lies with the EU (Art I-6), and this fact may well have affected the support
given to the draft document by the EU population.
‘The Constitution and law adopted by the Union’s Institutions in exercising competences conferred on it,
shall have primacy over the law of the Member States.’
A THE ECJ’S VIEW OF SUPREMACY
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The ability for an individual to enforce certain EC law in their national court (see Direct
Effect later) would be virtually useless unless EC law was also found to be supreme to
national law, otherwise the EC law could be modified or overruled by inconsistent
national law. In a series of important judgments, the ECJ described how, in its view, EC
law was supreme to national law.
Van Gend en Loos [1963] ECR 1

This case involved an Article 177 (now Article 234) preliminary reference asking whether
Article 12 (now 25) of the EC Treaty was capable of direct effect. Strictly speaking, this
issue did not raise the issue of supremacy because, if the ECJ found the Article 12 to have
direct effect, Dutch national law would automatically deem it superior to domestic law.
Nevertheless, in one paragraph, the ECJ indicated that it was also prepared to deal with
the issue of supremacy if it should arise directly. The ECJ stated that
“The object of the EEC Treaty, which is to establish a Common Market, the functioning of which is of
direct concern to interested parties in the Community, implies that this Treaty is more than an agreement
which merely creates mutual obligations between the contracting States. It is also confirmed more
specifically by the establishment of institutions endowed with sovereign rights... The conclusion to be
drawn from this is that the Community constitutes a new legal order in international law, for whose
benefit the States have limited their sovereign rights, albeit within limited fields.”
N. B. This judgment is a landmark decision by the ECJ, when one is aware that most of
the Member States intervened in the Van Gend case (as they are entitled to do under the
ECJ’s rules of procedure) and argued against the doctrine of supremacy and also against
the doctrine of direct effect, as indeed did the Advocate General who indicated that such
a view was unlikely to be accepted in the Member States.
The issue of supremacy did not take long to become the central issue in a case, however.
Costa v ENEL [1964] ECR 585

Nationalization of Italian electricity production to ENEL. Costa (a lawyer) was alleged by
ENEL to owe £1.10 bill and he challenged the act of nationalizing electricity production,
saying it was contrary to the Italian constitution and to certain provisions of EC law. A
dual reference was made - one to the Italian Supreme Court (on Italian law) and one to
the ECJ (on EC law). The Italian Supreme Court said that only its reference was
legitimate because only it could strike down Italian legislation. The ECJ said it was
capable of ruling on EC law without indirectly ruling on national law.
Advocate-General Lagrange’s opinion said that the Italian Court’s ruling had “dangerous
effects for the common market and threatened to undermine the very foundations of the Treaty”.
The ECJ said that
“By contrast with ordinary international Treaties, the EEC Treaty has created its own legal system
which, on entry into force of the Treaty, became an integral part of the legal systems of the Member States
and which their courts are bound to apply.”
Furthermore, “…by creating a Community of unlimited duration, having its own institutions, its own
personality, its own legal capacity and capacity of representation on the international plane and more
particularly real powers stemming from a limitation of sovereignty or a transfer of powers from the States
to the Community, the Member States have limited their sovereign rights, albeit within limited fields, and
have thus created a body of law which binds both their nationals and themselves.”
“The transfer by the States from their domestic legal systems to the Community legal system carries with
it a permanent limitation of their sovereign rights, against which a unilateral act incompatible with the
concept of the Community cannot prevail.”
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The court undeterred by the lack of a clear statement in the Treaties referred to “the terms
and spirit of the Treaty” to justify its position. It went further in the following case, which
we shall consider once again to consider the view of the national court concerned.
In Germany the court was concerned as to the level of protection of Human Rights
which they were obliged to protect under their constitution. The ECJ was clear that this
would not affect the status of European Community law.
Internationale Handgesellschaft mbH v Einfuhr [1970] ECR 1125
“Recourse to legal rules of concepts of national law in order to judge the validity of measures adopted by
the Community’s institutions would have an adverse effect on the uniformity and efficacy of EC law. In
fact, the law stemming from the Treaty, an independent source of law cannot by its very nature be
overridden by rules of national law, however framed, without being deprived of its character as
Community law and without the legal basis of the Community itself being called into question. Therefore,
the validity of a Community measure...cannot be affected by allegations that it runs counter to either
fundamental rights as formulated by the constitution of that State or the principles of a national
constitutional structure.”
Commission v Italy [1972] ECR 527

“...no appeal to provisions of internal law of any kind can prevail.”
In the following case the ECJ advised the national referring court how to deal with
conflicting national law
Simmenthal No.2 [1978] ECR 629

An Italian customs tariff was found by the ECJ to be unlawful under Article 30 (now 28).
The Italian government accepted the supremacy of EC law but argued that national
courts other than the constitutional court could not overturn domestic legislation and so
it would have to await a decision of the constitutional court or the overturning of the
legislation by the Italian government. The ECJ disagreed.
“A national court which is called upon to apply EC law is under a duty to give effect to those provisions,
if necessary refusing to apply conflicting national law even if adopted subsequently to the EC law and it is
not for that court to request or await the prior setting-aside of such provisions by legislative or other
constitutional means.”
Directly applicable measures of EC law “in so far as they are an integral part of, and take
precedence in, the legal order applicable in the territory of each Member State, preclude the valid adoption
of new national measures to the extent to which they would be incompatible with Community provisions.
It follows…..that every national court must...apply Community law in its entirety and protect rights
which the latter confers on individuals and must accordingly set aside any provision of national law which
may conflict with it, whether prior or subsequent to the Community rule.”
IN.CO.GE.Srl [1998] ECR I-6907

“In Simmenthal the issue facing the court related in particular to the consequences of the direct
applicability of a provision of Community law where that provision was incompatible with a subsequently
adopted provision of national law...It cannot...be inferred from the judgment in Simmenthal that the
incompatibility with Community law of a subsequently adopted rule of national law has the effect of
rendering that rule of national law non-existent. Faced with such a situation, the national court is,
however, obliged to disapply that rule, provided always that this obligation does not restrict the power of
the competent national courts to apply, from among the various procedures available under national law,
those which are appropriate for protecting the individual rights conferred by Community law...”
This means that, where national law runs contrary to EC law, yet that national law
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contains remedies which may be used to enforce Community rights, the national rule
may be held valid insofar as those remedies but not as respects the provisions which
contradict EC law.
In Larsy [2001] ECR I 5063 it was confirmed that this would apply equally to
administrative agencies in Member States.
In emphasising that rights must be exercisable in practice, the ECJ made it clear that
appropriate remedies must also be available nationally, whether or not these remedies
would be available in national law.
R v Secretary of State for Transport (ex parte Factortame Ltd.) [1990] ECR 2433
The UK’s Merchant Shipping Act 1988 prevented Spanish fishermen using any of the UK’s
allocated EC shipping-quota under the Common Fisheries Policy. It prevented the
registration of Spanish ships as English vessels, if such vessels were owned by a UK Co.
where less than 75% of the shares were owned by UK residents. This Act was challenged
as contrary to EC law by UK companies which had large Spanish shareholdings. The
companies also requested the suspension of the Act of Parliament until such time as the
ECJ had ruled on whether the Act breached EC law. The trial judge assumed that he had
the power to suspend the UK Act on the prima facie case of the plaintiffs but Court of
Appeal ruled that was against the UK constitution (with its doctrine of Parliamentary
supremacy). The House of Lords, however, agreed with the trial judge that the plaintiffs
would suffer irreparable harm unless interim relief was granted. It referred the issue to
the ECJ under the Article 234 procedure and asked whether a court such as itself, which
was bound by constitutional theory to uphold the supremacy of national legislation, had
the power under Community law to suspend the operation of one of its national statutes
until it was decided whether that statute was itself in breach of Community law. The ECJ
ruled that:
“...the full effectiveness of EC law would be impaired if a national rule could prevent a court seized of a
dispute governed by Community law from granting interim relief in order to ensure the full effectiveness of
the judgment. It follows that a court which in those circumstances would grant interim relief if it were not
for a rule of national law is obliged to set aside that rule…”
B THE RESPONSE OF THE NATIONAL COURTS

The development of the doctrine of supremacy by the ECJ clearly has far-reaching
impacts on the national court systems of the Member States. The reactions of some of
the Member States will now be discussed.
(a) Germany
As one of the founding Member States of the ECSC, Euratom and the EEC, it is
implicit, at least, in the reasoning of the ECJ that these States knew and intended to
create the type of legal system described by the ECJ in cases such as Costa v ENEL.
Basic Law of the German Federal Republic 1949

Article 24 - the Federation may by legislation transfer sovereign powers to intergovernmental institutions
Article 25 - The general rules of public international law shall be an integral part of federal law. They
shall take precedence over the laws and shall directly create rights and duties for the
inhabitants of the federal territory.
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Although Germany’s constitutional capacity to join the EEC was never in doubt, the
German constitutional court expressed concerns over the absence of human-rights and
fundamental freedoms in the EEC Treaty. If EC law were supreme, and could override
the German constitution’s human-rights provisions, this could leave the German court
unable to enforce its role as protector of human-rights.
Internationale Handgesellschaft [1974] ECR

The German Constitutional Court said - “…EC law is neither a component part of the national
legal system nor international law, but forms an independent system of law flowing from an autonomous
legal source. The ECJ cannot with binding effect rule on whether a rule of EC law is compatible with the
Constitution, nor can this Bundesverfassungsgericht rule on whether a rule of secondary community law is
compatible with a primary rule of EC law. This does not lead to any difficulties so long as the two
systems of law do not come into conflict with one another in their substance. […]
This ‘so long as’ proposition from the German Court has led this case to be known by
the German phrase ‘Solange’.
Part of the reasoning of the German court was that, at the time, the Community could
still be said to “...lack a democratically elected Parliament which possesses legislative powers and to
which community organs are fully responsible on a political level; it still lacks in particular a codified
catalogue of fundamental rights, the substance of which is reliably fixed for the future in the same way as
the substance of the Constitution.”
As may be seen from Workbook 1, the response of the ECJ to this threat to Recognition
of the supremacy doctrine was to develop the concept of general principles of
Community law as well as to deny the view by re-stating firmly that supremacy
remained with the EC.
Following this development, the German court changed its approach (in a case known as
Solange II).
Wunsche Handgesellschaft [1987] 3 CMLRev 225 (Solange II)

The German court would no longer exercise its discretion to oversee Community law, so
long as (‘solange’) the EC itself continued to guarantee human-rights to a level consistent
with those in the German constitution.
Brunner v TEU [1994] 1 CMLR 57

In an unsuccessful attempt by a German national to challenge the TEU, (see Workbook
1,) the German constitutional court noted that:
“In future, it will have to be noted, as regards interpretation of enabling provisions by Community
Institutions and agencies, that the TEU as a matter of principle distinguishes between the exercise of a
sovereign power conferred for limited purposes and the amending of the Treaty so that its interpretation
may not have effects that are equivalent to an extension of the Treaty. Such an interpretation of enabling
rules would not produce any binding effects in Germany.”
The German court seemingly wished to remind the EC that, as regards sovereign powers
which had not been specifically ceded to the Community, the German courts retained
competency. There was a concern as to what was called ‘creeping competence’.
In a number of more recent decisions in the 1990’s involving the Banana Regulations,
the attitude of the national courts seemed to be moving against the concept of
supremacy where it clearly negatively affected German national rights. However the
more recent decision of Alcan [2000] seems to indicate renewed acceptance of the
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principle of supremacy so far as the level of human rights protection available in the
European Union remains high.
However as with France there is a concern as to how far supremacy can be extended to
cover Directives (Re A Rehabilitation Centre [1992] Unit 4)
b) Italy
Italy had similar concerns to those expressed in Germany. In the case of

Frontini -v- Ministero delle Finanze [1974] 2CMLR 372 it made it clear that it would
retain the right at national level to safeguard the rights of its citizens saying:-
“It is hardly necessary to add that by Article 11 of the Constitution limitations of sovereignty are allowed
solely for the purpose of the ends set out therein, and it should therefore be excluded that such limitations
of sovereignty ....can nevertheless give the organs of the EEC an unacceptable power to violate the
fundamental principles of our constitutional order or the inalienable rights of man. And it is obvious that
if ever Article 189 had to be given such an aberrant interpretation, in such a case the guarantee would
always be assured that this Court would control the continuing compatibility of the Treaty with the above
mentioned fundamental principles.’
c) France
France has a two-prong judicial system, with two supreme courts. The highest ordinary
court, Cour de Cassation, accepted the supremacy of Community Law in 1975. The
supreme administrative court, Conseil d’Etat, continued to reject supremacy until 1989.
It reasoned that it had not been given the jurisdiction to review the validity of French
legislation. Therefore it could not
1) find the legislation incompatible with Community law; nor could it
2) afford priority to EC law.
Finally in Raoul Georges Nicolo [1990] 1 CMLR 1734 2 French citizens sought the
annulment of the European Parliament elections in 1989, it accepted, somewhat
unwillingly, the idea of supremacy. It expressed its concern about supranationality linked
with the purported law making activity of the judges, therefore its judgment cannot be
described as one of unqualified approval but rather an acceptance that it was the ‘odd man
out’.
It remains unprepared to accept that this principle can be extended beyond the
application of Treaty Articles and Regulations and has not accepted the Direct Effect of
Directives (Cohn Bendit [ 1980] see Unit 4)
d) Belgium
Another one of the founding Member States, this country had no provision as to
supremacy in its constitution, however it accepted very early on that the EC Treaty was a
higher legal norm and should be accorded supremacy (LeSki [1972] CMLR 330)
e) United Kingdom
The UK was not an EC Member State at the time of the Van Gend and Costa v ENEL
rulings. Furthermore, since the UK has an unwritten constitution, it may be thought that
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membership of the EC would cause less constitutional problems than in the States
considered above. Nevertheless, the fact that the UK is a dualist system (i.e. requiring
national legislation to implement international legal commitments) and the constitutional
principle of Parliamentary Supremacy (see English Legal System, Workbook 1)
caused heated discussion over the relationship between EC law and UK law.
Briefly put, the Parliamentary Sovereignty principle states that one Parliament cannot
bind its successors, so any legislation containing provisions that are contrary to earlier
statutes is deemed to have impliedly repealed the earlier law. This means that, even when
the UK joined the EC and enacted the European Communities Act 1972,
incorporating the Treaties as part of UK national law, this could be impliedly repealed by
a subsequent statute which was contrary to EC law.
EC Act 1972 s.2

“All rights, powers, liabilities, obligations and restrictions and all remedies and procedures provided for
under the Treaties are, without further enactment, to be given legal effect and shall be recognised and
available law in the UK”.
Of course, the idea that the UK’s Community obligations could be repealed by a
subsequent national statute runs completely counter to the notion of EC supremacy, yet
the idea that the 1972 Act could bind subsequent Parliaments seems to run counter to
the notion of Parliamentary supremacy.
For a while, English judges seemed reluctant to accept the notion that Parliament could
have ceded its supremacy to the EC. Nevertheless, a cautious acknowledgement of this
came in the following case.
McCarthy’s v Smith [1979]

A case involving allegations of sex discrimination, with the applicant relying on Article
141 (then Article 119) to claim the illegality of differences in pay.
Lord Denning MR. “In construing our statute we are entitled to look at the treaty as an aid to
construction but not only and an aid but as an overriding force. If our legislation should appear deficient
or inconsistent with EC law by some oversight of our draftsmen then it is our duty to give priority to EC
law. Such is the result of s2 (1) and (4) of our European Communities Act 1972.’ I pause
here to make one constitutional point. Thus far I have assumed that our Parliament, when it passes
legislation, intends to fulfil its obligations under the Treaty. If the time should come when our Parliament
deliberately passes an Act with the intention of repudiating the Treaty or any of its provisions, then I
should have thought that it was the duty of our courts to follow the Statute of our Parliament.”
Duke v GEC Reliance [1988]

Sex Discrimination Act 1975 was different to EC Council Directive on Equal Treatment
(in respect of retirement ages).
Lord Templeman. “s.2 of the EC Act does not, in my opinion, enable or constrain a British court to
distort the meaning of a British Statute.”
Factortame Ltd -v- Secretary of State for Transport [1990] 2 AC 85

Lord Bridge:
‘Some public comments on the decision of the Court of Justice, affirming the jurisdiction of the courts of
member states to override national legislation if necessary to obtain interim relief to be granted in
protection of rights under Community law, have suggested that this was a novel and dangerous invasion
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by a Community institution of the sovereignty of the United Kingdom Parliament. But such comments
are based on a misconception. If the supremacy within the European Community of Community law over
the national law of member states was not always inherent in the EEC Treaty it was certainly well
established in the jurisprudence of the Court of Justice long before the United Kingdom joined the
Community. Thus, whatever limitation of its sovereignty Parliament accepted when it enacted the
European Communities Act 1972 was entirely voluntary.’
Note: the legislation questioned in the case of Factortame was found to be incompatible
with the United Kingdom’s obligations under Community Law and lead to judgment
against them combined with a damages award of some 30 million pounds sterling.
The possible effect that this had on the constitutional question of Parliamentary
supremacy was dealt with in the case of R-v- Secretary of State for Foreign and
Commonwealth Affairs, ex parte Rees Mogg [1994] QBD 552 in which it was
confirmed that the general principle of Parliamentary supremacy remained unchallenged,
and that the agreement that Rees Mogg attempted to challenge, was not an abandonment or
transfer of prerogative powers, but an exercise of those powers.

a) Is a doctrine of Supremacy necessary for the EC?
b) Is the reasoning of the ECJ in the cases of Van Gend and Costa v ENEL case a
convincing basis upon which to justify a doctrine of EC legal supremacy?
“We note the criticisms of ‘judicial activism’ which have been levelled against the court [ECJ] but
these appear to be based mainly on cases where the Court has made Community law effective against
defaulting Member States at the instance of individuals seeking to enforce their rights. We accept
that enforceable remedies are essential to the application of Community legal obligations, with a high
degree of uniformity throughout the Member States.”
Discuss, with reference to the cases which have incited criticisms of ‘judicial
activism’.
c) Has the response of the national courts of the various Member States to the
development of the supremacy doctrine been consistent?
d) To what extent has the UK’s theory of Parliamentary Supremacy survived the
UK’s membership of the EC?
e) What effect would the entrance into force of the draft Constitution have upon
the issue of supremacy?
f) How is the issue of EU supremacy dealt with in your own country following its
admission?
UNIT 3: Direct and Indirect Effect/State Liability

U
Unniitt
T
1. DIRECT EFFECT
Thhrreeee
A legal provision is said to be directly effective if it grants individual rights which must
be upheld by national courts. The first time that the Courts intimated the existence of
this Doctrine was in Case 26/62 N.V Algemene Transporten Expeditie
Onderneming van Gend en Loos -v- Nederlandse Administratie der Belastingen
[1963] ECR1 (ante)which stated that, in order to be directly effective, a provision must
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be:
 clear and unambiguous

 unconditional (not qualified by a reservation on the part of Member States)
 not dependent on further action ( no legislative intervention necessary)
What does this mean?

The best way of understanding is to consider the cases and how the principle has been
applied and to differentiate between the different types of primary and secondary
legislation
A Treaty Provisions
Van Gend en Loos [1963] above

The applicant was charged a customs duty when importing certain products into the
Netherlands from another Member State. Article 25 (ex Article 12) of the EC Treaty
specifically prohibited the introduction of any new customs duties and the applicant
relied on this Article in his case before the Tariefcommissie (Commission on Tariffs),
which referred the question for interpretation under Article 234 (see Unit 4). The
referred question asked whether a private individual could rely upon an EC Treaty
Article in a case before his national courts. The ECJ stated that the applicant could rely
on the Treaty Article and that the EC was a ‘new legal order’ which created rights that
could, in the prescribed circumstances, be relied upon by individuals before their national
courts (see Unit 2 also).
“Independently of the legislation of Member States, Community law therefore not only imposes
obligations on individuals but is also intended to confer upon them rights which become part of their legal
heritage. These rights arise not only where they are expressly granted by the Treaty, but also by reason of
obligations which the Treaty imposes in a clearly defined way upon individuals as well as upon the
Member States and upon the Institutions of the Community.
The wording of Article 12 contains a clear and unconditional prohibition which is not a positive but a
negative obligation. This obligation, moreover, is not qualified by any reservation on the part of states
which would make its implementation conditional upon a positive legislative measure enacted under
national law. The very nature of this prohibition makes it ideally adapted to produce direct effects in the
legal relationship between Member States and their subjects.
The implementation of Article 12 does not require any legislative intervention on the part of the states.
The fact that under this Article it is the Member States who are made the subject of the negative
obligation does not imply that their nationals cannot benefit from this obligation.
In addition the argument based on Articles 169 and 170 of the Treaty put forward by the three
Governments which have submitted observations to the Court in their statements of the case is
misconceived. The fact that these Articles of the Treaty enable the Commission and the Member States to
bring before the Court a State which has not fulfilled its obligations does not mean that individuals
cannot plead these obligations, should the occasion arise, before a national court, any more than the fact
that the Treaty places at the disposal of the Commission ways of ensuring that obligations imposed upon
those subject to the Treaty are observed, precludes the possibility, in actions between individuals before a
national court, of pleading infringements of these obligations.
A restriction of the guarantees against an infringement of Article 12 by Member States to the procedures
under Article 169 and 170 would remove all direct legal protection of the individual rights of their
nationals. There is the risk that recourse to the procedure under these Articles would be ineffective if it
were to occur after the implementation of a national decision taken contrary to the provisions of the
Treaty.
The vigilance of individuals concerned to protect their rights amounts to an effective supervision in
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addition to the supervision entrusted by Articles 169 and 170 to the diligence of the Commission and of
the Member States.
It follows from the foregoing considerations that, according to the spirit, the general scheme and the
wording of the Treaty, Article 12 must be interpreted as producing direct effects and creating individual
rights which national courts must protect.”
As mentioned earlier, the fact that other EC Member States intervened to argue against
the possibility of supremacy and direct effect clearly demonstrated their concern at
possible future implications of the development of these doctrines.
However we should not forget that once the ECJ had declared EC law as supreme, the
original concept of direct effect rather involved a choice between two types of national
law albeit with different sources.
The Van Gend en Loos case raised the following questions:
Which Treaty Articles would receive similar treatment from the Court?
Could secondary legislation of the Community be treated in a similar manner?
The Van Gend en Loos case conferred a claim upon an individual exercisable against a
Member State, who, as a signatory to the EC Treaty, had agreed to be bound by its
terms. Claims between individuals relying upon the provisions of the Treaty could not
have the same basis as Van Gend en Loos. A distinction therefore needed to be drawn
between a claim made against a Member State and one that could be brought by one
individual against another.
The ECJ chose to distinguish between these types of claims by highlighting two types of
direct effect:
Vertical Direct Effect: EC rights which are enforceable by an individual against the
State.
Horizontal Direct Effect: EC rights which are enforced by one individual against a
non-State natural/legal person.
The possibility of Treaty Articles having vertical direct effect was established in Van
Gend. The following case answered the question of whether Treaty Articles could also
have horizontal direct effect.
Case 43/75 Defrenne -v- Sabena [1976] ECR 547

Miss Defrenne was an air hostess employed by Sabena Airlines, who claimed
compensation in relation to the pay discrimination she received, when compared with
her male colleagues. She based her claim on Article 119 (now 141) which states that “Each
Member shall...ensure and subsequently maintain the application of the principle that men and women
should receive equal pay for equal work. “
‘The question of the direct effect of Article 119 must be considered in the light of the nature of the
principle of equal pay, the aim of this provision and its place in the scheme of the Treaty. [...]
As is shown by the very findings of the judgment making the reference, in such a situation the court is in
a position to establish all the facts which enable it to decide whether a woman worker is receiving lower
pay than a male worker performing the same tasks. In such a situation, at least, Article 119 is directly
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applicable and may thus give rise to individual rights which the court must protect.
It is also impossible to put forward arguments based on the fact that the Article 119 only refers expressly
to ‘Member States’. Indeed, as the Court has already found in other contexts, the fact that certain
provisions of the Treaty are formally addressed to the Member States does not prevent rights from being
conferred at the same time on any individual who has an interest in the performance of the duties thus
laid down.
The very wording of Article 119 shows that it imposes on States a duty to bring about a specific result to
be mandatorily achieved within a fixed period.
The effectiveness of this provision cannot be affected by the fact that the duty imposed by the Treaty has
not been discharged by certain Member States and that the joint institutions have not reacted sufficiently
energetically against this failure to act.
To accept the contrary view would be to risk raising the violation of the right to the status of a principle of
interpretation, a position the adoption of which would not be consistent with task assigned to the Court
by Article 164 of the Treaty.
Furthermore it is not possible to sustain any objection that the application by national courts of the
principle of equal pay would amount to modifying independent agreements concluded privately or in the
sphere of industrial relations such as individual contracts and collective labour agreements. In fact, since
Article 119 is mandatory in nature, the prohibition on discrimination between men and women applies
not only to the action of public authorities, but also extends to all agreements which are intended to
regulate paid labour collectively, as well as to contracts between individuals.’
The United Kingdom and Ireland expressed strong concern at the financial implications
of this decision, whereupon the Court limited the potential retroactive effect of the
judgment, meaning that the judgment would only apply to those who had already begun
claims on the basis of Article 141 (ex 119).
The ECJ’s ruling that Treaty Articles satisfying the criteria for direct effect could be
enforced against both State and natural/legal persons was justified on the basis that
Member States had assumed certain obligations by signing the Treaty, some of which
included prohibiting certain behaviour by their nationals as well as government organs.
Furthermore, it could be argued that the Treaty had been published in each Member
State and, as a result, nationals in that State could be assumed to have knowledge of its
contents.
In 1983 in his Article The Doctrine of Direct Effect: An Infant Disease of the
Community’, P Pescatore said:
‘It appears that in the opinion of the Court, the Treaty has created a Community not only of States but
also of peoples and persons and that therefore not only Member States but also individuals must be
visualized as being subjects of Community law. This is the consequence of a democratic ideal, meaning
that in a Community as well as in a modern constitutional State, Governments may not say anymore
what they are used to doing in international law: L’Etat c’est moi. Far from it; the Community calls for
participation of everybody, with the result that private individuals are not only liable to burdens and
obligations, but that they have also prerogatives and rights which must be legally protected. It was thus a
highly political idea, drawn from a perception of the constitutional system of the Community, which is at
the basis of Van Gend en Loos and which continues to inspire the whole doctrine flowing from it.’
The ECJ has held that, even where Treaty Articles give an element of discretion by
requiring action to be taken only by a certain future date, this will not prevent those
provisions having direct effect once the period for implementation has expired, since the
discretion to act then becomes a duty to act.
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Alfons Lutticke GmbH v Hauptzollamt Saarlouis [1966] ECR 205

Article 95 (now 90) required the abolition of discriminatory taxation by the end of the
first transitional period creating the common market. Although such a provision could
not be capable of direct effect before the expiry of that period, it could have direct effect
once that date had passed, provided it fulfilled the other Van Gend criteria.
Equally, the ECJ has held that simply because a provision requires an ECJ interpretation
of its meaning does not mean that it fails to meet the criterion of clarity as required by
Van Gend.
Van Duyn v Home Office [1974] ECR 1337

A provision on free movement of workers was capable of having direct effect even
though the national court felt it necessary to request an ECJ interpretation of the
exclusions to this provision.
The question whether the various types of secondary legislation could have direct effect
(and if so, what type) took slightly longer to be answered and it is useful here to recall the
different types of secondary legislation described in Article 249 EC. (See Workbook 1 for
discussion of the various types of secondary legislation).
B Regulations
Regulations are the only type of secondary legislation described in Article 249 EC as
‘directly applicable’.
Case 39/72 Commission -v- Italy [1973] ECR 101,

The ECJ took the clear view that regulations were capable of being directly effective.
‘According to the terms of Articles 189 and 191 (now Articles 249 and 254) of the Treaty,
Regulations are, as such, directly applicable in all Member States and come into force solely by virtue of
their publication in the Official Journal of the Communities, as from the date specified in them, or in the
absence thereof, as from the date provided in the Treaty.
Consequently, all methods of implementation are contrary to the Treaty which would have the result of
creating an obstacle to the direct effect of Community Regulations and of jeopardising their simultaneous
and uniform application in the whole of the Community.
Under the terms of Article 189, the Regulation is binding ‘in its entirety’ for Member States. In
consequence, it cannot be accepted that a Member State should apply in an incomplete or selective manner
provisions of a Community Regulation so as to render abortive certain aspects of Community legislation
which it has opposed or which it considers contrary to its national interests.’
Since Regulations are described in Article 249 as having “general application”, the ECJ held
that they were capable of both vertical and horizontal direct effect. However as
regulations do tend to have a more general application, the test of whether it creates clear
and unambiguous rights becomes very pertinent.
C Decisions
Case 9/70 Franz Grad -v- Finanzamt Traunstein [1970] ECR 825
In this case the Munich Finanzgericht referred a question regarding Council Decisions
on turnover taxes and whether they were capable of direct effect.
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The argument of the German government was that the Treaty only described
Regulations as ‘directly applicable’ and this meant that neither Decisions nor Directives
could have direct effect. The ECJ replied:
“...although it is true that by virtue of Article 189, regulations are directly applicable and therefore by
virtue of their nature capable of producing direct effects, it does not follow from this that other categories of
legal measures mentioned [ in Article 249] can never produce similar effects. In particular, the provision
according to which decisions are binding in their entirety on those to whom they are addressed enables the
question to be put whether the obligation created by the decision can only be invoked by the Community
institutions against the addressee or whether such a right may possibly be exercised by all those who have
an interest in the fulfillment of this obligation. It would be incompatible with the binding effect attributed
to decisions by Article 189 (now 249) to exclude in principle the possibility that persons affected may
invoke the obligation imposed by a decision. Particularly in cases, where for example, the Community
authorities by means of a decision have imposed an obligation on a Member State or all the Member
States to act in a certain way, the effectiveness (l’effet utile’) of such a measure would be weakened if the
nationals of the State could not invoke it in the courts and the national courts could not take it into
consideration as part of Community law. Although the effects of a decision may not be identical with
those of a provision contained in a regulation, this difference does not exclude the possibility that the end
result, namely the right of the individual to invoke the measure before the courts, may be the same as
that of a directly applicable provision of a regulation.’
Again a success for the individual both as a claimant but more importantly in extending
the effectiveness of European Community law!
Since Decisions only bind those to whom they are addressed, they may have either
vertical or horizontal direct effect depending upon whom is the addressee of the
particular Decision.
D Directives
The purpose of this type of secondary legislation, in general, is to harmonize national

law. Member States are allowed some discretion as regards the implementation of
Directives. The existence of such discretion appears to conflict with the Van Gend
criteria, in particular the requirement that the legal provision be unconditional and not in
need of further legislative action.
A further difficulty arises as to availability of this law within the Member State national
system, particularly if it has not been implemented, returning us to the difficulties
experienced by some national courts in the question of supremacy.
The possibility of the extension of the doctrine of direct effect to Directives was first
considered in
Case 41/74 Van Duyn -v- Home Office [1974] ECR 1337
[In this case the ECJ was not only dealing with the provisions of a Treaty Article (as in
Defrenne), but needed additionally to consider the provisions of a related Directive.] Miss
Van Duyn, a Dutch national, was offered employment with the Church of Scientology in
England. This Church, although not illegal in UK, was considered socially harmful by the
British Government, so they refused her entry. The UK Government based their
argument upon the public policy exception contained in Article 39 EC Treaty (free
movement of workers). Miss Van Duyn challenged the Government’s decision by
arguing that Regulation 1612/68 and Directive 64/221 had limited the manner in which
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the British Government were entitled to rely upon this exception and further that both
the Regulation and the Directive were directly effective. The High Court referred the
question to the ECJ who agreed that the Directive was capable of being directly
effective.
However, the ECJ went on to say that, although the restriction contained in Article 3(1)
of Directive 64/221 reduced the scope of the public policy exception by requiring the
Member State to exercise its discretion on the basis of the particular individual’s personal
conduct, it did not prevent the Member State (in this case the UK Government) from
the exercise of a limited discretion.
The High Court decided that on these facts, the British Government had acted within
this limited discretion so Miss Van Duyn was not entitled to enter the UK.
In this case, the ECJ made a number of interesting statements indicating why directives
were also capable of having direct effect.
‘It would be incompatible with the binding effect attributed to a Directive by Article 189 to exclude, in
principle, the possibility that the obligation which it imposes may be invoked by those concerned. In
particular, where the Community authorities have, by Directive, imposed on Member States the
obligation to pursue a particular course of conduct, the useful effect of such an act would be weakened if
individuals were prevented from relying on it before their national courts and if the latter were prevented
from taking it into consideration as an element of Community Law by providing that measures taken on
grounds of public policy shall be based on the personal conduct of the individual concerned, Article 3(1) of
the Directive No. 64/221 is intended to limit the discretionary power which national laws generally
confer on the authorities responsible for the entry and expulsion of foreign nationals. First, the provision
lays down an obligation which is not subject to any exception or condition and which, by its very nature,
does not require the intervention of any act on the part either of the institutions of the Community or of
Member States. Secondly, because Member States are thereby obliged, in implementing a clause which
derogates from one of the fundamental principles of the Treaty in favour of individuals, not to take
account of factors extraneous to personal conduct, legal certainty for the persons concerned requires that
they should be able to rely on this obligation even though it has been laid down in a legislative act which
has no automatic direct effect in its entirety.’
Van Duyn involved vertical direct effect, since the action was against a Member State, but
the possibility of horizontal direct effect was considered in the following case. The
national courts accepted that a Member State who had agreed to the provisions of the
Directive should be estopped (prevented) from being able to use their failure to
implement the provision, within the implementation time stated in the Directive, to
defeat an individual’s claims to Community rights.
However, national courts and academics were concerned that allowing horizontal direct
effect could lead to individuals facing liabilities under Community Law on the basis of
legislation which had never been transposed into national law.
The national courts, started to make further references to the ECJ under Article 234 EC
Treaty to seek clarification. The ECJ, clearly sensitive to the need for co-operation from
the national courts, took note of these concerns when deciding whether directives were
capable of horizontal direct effect, but as we will see later, this did not lead the court to
discard the basis of view that individuals should be able benefit equally from EC law, and
this should not depend upon the Member State of their residence. .
Case 152/84 Marshall-v- Southampton and South-West Hampshire Area Health

Authority [1986] ECR 723
Mrs. Marshall alleged discrimination, based upon the provisions in the Sex
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Discrimination Act 1975, concerning eligibility for state pension. She alleged that this
Act contravened the provisions of Council Directive 76/207 (Equal Treatment).
The ECJ followed the reasoning of Advocate-General Slynn and found that Directives
could be enforced against the State “regardless of the capacity in which the latter is acting, whether
employer or public authority.” Strictly speaking, this resolved the case since, on its facts, the
reference from the national court, had assumed that the employer was clearly an organ of
the State. Nevertheless, the ECJ also wished to deal with the issue of whether Directives
were also capable of horizontal direct effect and, having noted that Directives were
addressed only to “Member States” stated that
“...a Directive may not of itself impose obligations on an individual and a provision of a Directive may
not be relied upon as such against such a person.”
Having limited the possible direct effects of Directive to those of a vertical nature (apart
from the possible indirect effects of the CIA ruling considered below), we have to ask
what exactly is to be treated as ‘the State’ when seeking to enforce a Directive. It clearly
no longer means only the government and so widens the principle of estoppel applied
to date; the local health authority in Marshall clearly would have not been able to
implement the Directive itself.
Fratelli Costanzo SPA v Comune de Milano [1989] ECR 1839

“...all organs of the administration, including decentralised authorities such as municipalities...”
In some circumstances it may be relatively easy to identify a State body: public health
authorities (Marshall above) and police forces (Johnston v RUC [1986] ECR 1651)
are clearly linked with State functions. Other examples may not be so clear-cut, however.
Foster v British Gas Plc [1991]2 AC 306]

British Gas was a statutory company performing statutory duties under the supervision
of the Minister for Energy. The ECJ ruled that the test for the enforceability of a
Directive was to decide if it was being enforced against “an emanation of the State.” The test
for deciding this was to ask if the defendant was:
“...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 which has for that purpose
special powers beyond those which result from the normal rules applicable in relations between
individuals...”
Based on this definition of EC law, the House of Lords (which made the Article 234
reference) found British Gas to be an emanation of the State, so that an Equal Treatment
Directive could be enforced against it.
Rolls Royce Plc v Doughty [1992]ICR 538

Rolls Royce, a nationalised company, manufactured engines for military aircraft.
Nevertheless, the English Court of Appeal found that it did not possess special powers
and that the services it provided were to the government (‘defence of the realm’) and not
to the public, as required by the Foster test and so suggested that the UK court applied
these tests cumulatively rather than as alternatives.
Whether the ECJ would itself apply these three tests so rigidly is unclear, but certainly in
the UK the national courts have followed the approach of Rolls Royce.
The ECJ subsequently developed a doctrine called Sympathetic Interpretation,

requiring national courts to interpret national law in line with EC law. Since national law
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applies equally to State and non-State bodies, this seemed to produce a similar result to
accepting the horizontal effect of Directives. A number of A-G opinions argued that the
inequalities caused by denying horizontal direct effect to Directives were worse than
accepting the applicability of the doctrine. The issue was raised once more in the
following case.
Paolo Faccinin Dori v Recreb Srl [1994] 1 CMLR 665

The claimant sought to cancel a contract for a language course, relying on a right of
cancellation contained in an EC Directive which had not been transposed into Italian
law. Since entry into force of the TEU, there was a legal requirement for Directives to be
published and this was sufficient for A-G Lenz to recommend that the ECJ accept
horizontal direct effect of Directives. Nevertheless, the ECJ denied that Directives could
have such horizontal effect, since this would....
“...recognise a power in the Community to enact obligations for individuals with immediate effect, whereas
it has competence to do so only where it is empowered to adopt regulations.”
Seven Member States intervened in this case and all except Greece argued against the
possibility of horizontal direct effect. The ECJ noted the existence of other possible ways
for an individual to seek redress in the absence of horizontal direct effect (Sympathetic
Interpretation, Damages against the State) which will be looked at later.
If we refer back to the original test from Van Gend and the tests of unconditionality
and discretion which prima facie seem to remain a problem when considering Directives,
it becomes clear that in applying the estoppel principle, the ECJ has treated the date of
implementation as a ‘cut off’ date. Once the ‘cut off’ date has passed, the aim of the
Directive, and corresponding rights claimed is of prime importance and the State can no
longer defend itself against potential liability.
This test however can still create some difficulties as can be seen from the two
contrasting cases of Pubblico Administero v Ratti [1979] ECR 1629 where a
defendant was not allowed to rely upon a Directive in conflict with national law, when
the date due for implementation had not yet passed. In contrast in Becker –v-
Finanzamt Munster Innenstadt [1982] ECR 53 the Member State had not
implemented EU law on the form of tax returns to be submitted, the claimant succeeded
in defending a prosecution against him on the basis that he used the EU form before the
implementation date.
Nevertheless, even before the expiry of the implementation period, a Member state may
not take actions which go against the aims of the Directive (Inter-Environment
Wallonie ASBL v Region Wallonie [1997] ECR I-7411.
Even if a State has implemented a Directive, it is still be possible for that Directive to
have direct effect and be relied on directly: Verbond van Nederlandse
Ondernemingen (VNO) v Inspecteur der Invoerrechten en Accijnzen [1977] ECR
113.
Some Directives also allow Member States to seek derogations from the full effect of the
provisions. However if the time limit for implementation has expired this does not
prevent the application of Direct Effect, even if no decision has yet been taken as to
whether to grant the derogation due to delay on the part of the Commission Kortas
(1999) ECRI-03143
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A rather confusing line of case-law arose from the following case.
CIA Security International v Signalson SA [1996]ECR I-2201

An EC Directive required Member States to provide information to the EC Commission
about of technical standards and regulations in their country. Belgian national law
included prohibitions on certain types of unfair trade practices and CIA were sued, by
another private firm, for allegedly breaching this law. In turn, CIA claimed that the
national law was invalid, since it had not been notified to the Commission and was
therefore contrary to the Directive. The ECJ found that the relevant Directive was
directly effective and this meant that the firm suing CIA were unable to rely on the
national law.
It has been said that this is “horizontal [direct effect] in all but name.” (See Steiner, p.77)
In the more recent case of Unilever Italia SpA-v- Central Food Spa [2000] ECR I
7535 the triangular effect achieved through this principle was considered again. This case
considered Italian national law concerning the geographical labeling of olive oil. Italy had
notified the Commission of the intended law, in accordance with EC requirements.
However as the EC were themselves considering legislation in this area, the Commission
required that no national law be implemented for a minimum period of 12 month. Italy,
however, implemented the law in breach of the Commission ruling. Central Food
therefore refused oil from Unilever which was not labeled in accordance with the Italian
national law. Unilever successfully argued that the law should be dis-applied as in breach
of EC law. Although this clearly would affect the private contractual position with
Central Food, the Court were more concerned at the breach of EC law and not the
effect it would have on a private contract. They reaffirmed that there was no horizontal
direct effect of Directives and saw no conflict in this case, as the provisions of the
Articles in question were not capable of direct effect in not seeking to create rights for
individuals.
So in giving judgment in the case, the Court dealt with the case as an entirely technical
breach and was not proposing the extension of horizontal direct effect, although in such
situations it is clear that private parties could be affected
In the case of Unibet (London) Ltd –v- Justitiekanslern [2007] C-432/05 the court
made no reference to this line of authority when faced with a claim for interim relief
against the State caused by its enforcement of national law provisions which were
allegedly in conflict with European Community law. In dealing with the consequent loss
caused to the claimant by the resulting cancellation of private contracts, the court
emphasized that EC law required that an independent cause of action should be available
to parties as a right of last resort where it was necessary to ensure that remedies for
breach of EC law should be both equivalent to and as effective as remedies available for
breaches of national law (this will be further considered in workbook 3).
E International Agreements
Direct effect has also been claimed in relation to areas of international law.
Association Agreements
The principle of direct effect could also be a useful vehicle for citizens who had entered
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into Association Agreements with the EU, as was found in relation to one of the earliest
Association agreements held with Turkey. This proved a fruitful source of litigation for
claimants, but the approach of the Court was rather to emphasise that such rights
emanated rather from decisions of the Association Council based upon the terms of the
Agreement rather than directly from the Agreement itself.
Useful decisions in this area include

S.Z.Sevince –v- Staatsecretaris van Justitie [1990] ECR I 3461 where Mr Sevince, a
Turkish citizen living in the Netherlands, successfully claimed that the Turkish
Association Council’s adoption of decisions to implement the right of free movement of
workers contained in the Association Agreement could be the subject of a claim of direct
effect, although he lost his case on the facts.
Recent cases in relation to the Polish and Czech Association agreements in cases such as
Aldona Jany & Others-v-Staatsecretaris van Justitie [2001] ECR I 8615 have
confirmed this general approach stating that”these provisions must be construed as
establishing… a precise and unconditional principle which is sufficiently operational
to be applied by a national court and which is therefore capable of governing the
legal position of individuals”.
World Trade Agreements

International Fruit Co –v- Produktschap voor Groenten en Fruit [1972] ECR 1219
dealt with the G.A.T.T. agreement and stated that despite the fact that the EU member
states now negotiated as a block, this type of agreement was too flexible and general to
enable it to be subject to the principle of direct effect.
The Court was clearly aware here of the practical difficulties in reciprocity which would
follow, in other signatory countries. A similar approach has been adopted with the WTO
and also the TRIPS agreement on intellectual property.
However the Court has been more prepared to accept the argument that standards set in
such international agreements which are then separately enacted in EU legislation could
be subject to direct effect. EU Rules based upon the Vienna Convention have been
found justiciable in the case of Racke GmbH –v- Hauptzollamt Mainz [1998] ECR I
3655.
a) Is there any difference between the terms “directly applicable” and “directly
effective”?
b) Give examples of Treaty Articles and pieces of secondary legislation which have
been found to have direct effect (other than those referred to in this workbook).
Against whom were they enforced and in which court were they relied upon?
c) Should all pieces of secondary legislation be directly effective? What are the
policy reasons for denying horizontal direct effect to certain pieces of secondary
legislation?
d) It has been said that “...the British courts’ approach to, and the outcome of, the enquiry as to
whether a particular body is an ‘emanation of the State’ for the purpose of enforcement of a
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Directive is unpredictable.” (per Steiner, J. and Woods, L., EC Law 7th Ed., 2000, at
61). Why might this be so? What factors do you think the courts take into
account in deciding this question? Provide some examples from your country of
bodies which would come within the Foster definition.
Having discussed direct effect as one option for an individual to enforce their EC rights,
let us now turn to some alternatives that the ECJ has developed.
2 INDIRECT EFFECT/SYMPATHETIC INTERPRETATION

This requires the national court to interpret the national provision in the light of and in
accordance with the relevant provision of Community law. A German Arbeitsgericht
(Employment Court) was the first court to refer a question to the ECJ under Article 234
EC Treaty which allowed the Court to develop the doctrine of Indirect Effect.
Von Colson and Kamann -v- Land Nordrhein-Westfalen [1984] ECR 1891
Two unsuccessful applicants for the posts of social workers at a prison claimed that they
had been discriminated against on the grounds of their sex. They brought proceedings
against the prison, relying upon Directive 76/207 (Equal Treatment) purportedly already
implemented into German national law. In stating that the German code had
inadequately implemented this Directive, the ECJ relied upon the provisions of Article
10 EC Treaty (see earlier), indicating that the remedies provided by German national law
were insufficient to achieve the purpose of the Directive.
In this case, despite the fact that they were clear victims of discrimination, the German
code only allowed the applicants to claim their ‘reliance loss’, i.e. traveling expenses
incurred in attending the interview.
“Although, as has been stated in the reply to Question 1, full implementation of the directive does not
require any specific form of sanction for unlawful discrimination, it does entail that that sanction be such
as to guarantee real and effective judicial protection. Moreover it must also have a real deterrent effect on
the employer.
It follows that where a Member State chooses to penalize the breach of the prohibition of discrimination
by the award of compensation, that compensation must in any event be adequate in relation to the damage
sustained.
In consequence it appears that national provisions limiting the right to compensation of persons who have
been discriminated against as regards access to employment to a purely nominal amount, such as, for
example, the reimbursement of expenses incurred by them in submitting their application would not
satisfy the requirements of an effective transposition of the directive.
However, the Member States’ obligation arising from a directive to achieve the result envisaged by the
directive and their duty under Article 5 (now 10) of the Treaty to take all appropriate measures, whether
general or particular, to ensure the fulfillment of that obligation, is binding on all the authorities of
Member States including, for matters within their jurisdiction, the courts. It follows that, in applying the
national law and in particular the provisions of a national law specifically introduced in order to
implement Directive No 76/207, national courts are required to interpret their national law in the light
of the wording and the purpose of the directive in order to achieve the result referred to in the third
paragraph of Article 189.
On the other hand, as the above considerations show, the directive does not include any unconditional and
sufficiently precise obligation as regards sanctions for discrimination which, in the absence of implementing
measures adopted in good time may be relied on by individuals in order to obtain specific compensation
under the directive, where that is not provided for or permitted under national law.
It is for the national court to interpret and apply the legislation adopted for the implementation of the
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directive in conformity with the requirements of Community law, in so far as it is given discretion to do so
under national law.’
When it became clear that the national courts would not accept a further extension of
direct effect (particularly in respect of Directives), the ECJ responded by developing the
Von Colson ‘sympathetic interpretation’ doctrine.
Unit 2.An Introduction to the Law and Institutions of the European Union WOR
Yet again, the national courts showed some concern as to the extent of this doctrine. A
number of references were made by national courts requesting preliminary rulings from
the ECJ to clarify the following points.
 Whether the doctrine would only apply when the wording of the national
provision was ambiguous?
 Whether indirect effect would only have vertical effect (against the Member
State)?
 Whether it could be applied only when there had been an inadequate attempt at
implementation (as in the Von Colson case)?
 If not could it be applied before the expiry of the implementation date set out in
the Directive?
Kolpinghuis Nijmegen BV [1987] ECR 3969

Member State commenced a prosecution against an individual relying upon an EC
Directive which had not yet been implemented into national law. The ECJ, following an
Article 234 EC Treaty referral, confirmed that a Member State could not use an
unimplemented Directive to commence a prosecution against an individual. The ECJ
relied upon the fundamental principles of legal certainty and non-retroactivity stating that
a Member State’s failure to carry out its obligations could not then be used to aggravate
an individual’s criminal liability.
Marleasing SA v La Comercial Internacionale de Alimentacion SA [1990] ECR I-

4135
Indirect effect could be applied to an unimplemented Council Directive. In this case, the
doctrine was used to frustrate the alleged right of the claimant to rely upon the
provisions contained in the Spanish Civil code.
It is notable that this case enabled EC law to be used in a claim against a private
company, thereby achieving a similar result to horizontal direct effect of a Directive.
‘In order to reply to that question, it should be observed that, as the Court pointed out in its judgment in
Case 14/83 Von Colson and Kamann -v- Land Norrhein-westfalen [1984] ECR 1981, paragraph
26, the Member States obligation arising from a directive to achieve the result envisaged by the directive
and their duty under Article 5 of the Treaty to take all appropriate measures, whether general or
particular, to ensure that fulfilment of that obligation, is binding on all the authorities of Member States
including, for matters within their jurisdiction, the courts. It follows that, in applying national law,
whether the provisions in question were adopted before or after the directive, the national court called upon
to interpret it is required to do so, as far as possible, in the light of the wording and the purpose of the
directive in order to achieve the result pursued by the latter and thereby comply with the third paragraph
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of Article 189 of the Treaty.’

The ECJ acknowledged in Marleasing that the wording of certain national provisions
would not allow interpretation by national courts in the manner necessary to ‘achieve the
result pursued’, a problem already encountered in certain national courts who had come
to differing conclusions on their role in such a case.
Wagner Miret -v- Fondo di Garantia Salarial [1993] ECR I-6911

Where the national provisions were incapable of interpretation in the manner sought
then the individual should redirect his/her claim against the culpable Member State or
institution.
A national court must strive “...as far as possible...” to interpret domestic law to achieve the
result required by EC law.
Paolo Faccini Dori -v- Recreb SrL [1994] ECR I-3325

The possibility of enforcing sympathetically-interpreted national law against individuals
led A-G Lenz to suggest that the ECJ reconsider whether Directives were capable of
Horizontal Direct Effect. As seen earlier, however, the ECJ affirmed its stance that
directives could not have horizontal direct effect.
Murphy v An Bord Telecom Eireann [1988] ECR 673

The ECJ said that national courts were required to set aside national legislation (as in
Factortame earlier) only where it was impossible to give that national legislation a
sympathetic interpretation.
Clearly, a sympathetic approach to national legislation cannot be given if there is no

national legislation to interpret. Equally, it is clear that there is no duty to adopt a
sympathetic interpretation to legislation where no breach of Community law is involved.
Imperial Chemical Industries Plc (ICI) v HM Inspector of Taxes [1998] ECR I-

4695
The plaintiffs argued as a matter of principle that, in certain hypothetical circumstances,
UK tax law could hinder the right to establishment of EC nationals. It was accepted that
there was no hindrance to the right of establishment to the plaintiffs in this case but they
sought to convince the national court that they must nevertheless interpret the national
law in their favour because of this potential breach of EC law.
The ECJ held that the issue was outside the scope of EC law and that, in such
circumstances...
“...the national court is not required, under Community law, either to interpret its legislation in a way
conforming with Community law or to disapply that legislation. Where a particular provision must be
disapplied in a situation covered by Community law, but that same provision could remain applicable to
a situation not so covered, it is for the competent body of the State concerned to remove that legal
uncertainty in so far as it might affect rights deriving from Community rules.”
Advocate Jacobs attempted to summarise the position in his opinion in Centrosteel-v-

Adipol [2000] ECRI 6007 as follows:-
 A Directive cannot impose obligations on an individual in the absence of proper
implementation
 National courts must interpret national law so as not to aggravate criminal
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liability, but can impose obligations upon an individual in relation to civil liability.
The third pillar – intra-governmental legislation
An interesting line of case law was introduced by Pupino [2005] ECR I 5285 which
considered the effect of a Framework decision adopted pursuant to Article 34(2) EU and
which was stated as being ‘binding upon the Member States as to the result to be achieved… shall
leave to the national authorities the choice of form and method. It shall not entail direct effect’.
The factual issue concerned the treatment of victims of a crime and how the national
judge should interpret national provisions on the law of evidence. As we will see later in
Unit Four, there are limitations on the jurisdiction of the ECJ in relation to this pillar and
so there was an initial argument of inadmissibility put forward by intervening Member
States which was unsuccessful. The Court took the view that ‘the principle of conforming
interpretation’ was also binding for framework decisions and so that ‘the national court is
required to take into consideration all the rules of national law and to interpret them, as far as possible,
in the light of the wording and purpose of the Framework Decision’.
The principle of interpretation was revisited by the ECJ in Werner Mangold v Rüdiger
Helm [2005] ECR I 9981 where the Court were considering the effectiveness of Article
6(1) of Council Directive 2000/78/EC of 27 November 2000 which established a
general framework for equal treatment in employment. The Directive’s time for
implementation had not yet expired but the ECJ still took the view that ‘ 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’
QUESTION FOR DISCUSSION
1. Do you agree with the ECJ that the loyalty requirements of the Treaties act enable
intra-governmental decisions to also have an effect on interpretation of national law by a
national court when that decision is expressly stated not to have direct effect?
2. Has the Court entered a further period of ‘activism’ in cases such as Mangold and
Pupino? Is so can these decisions be justified in the present expanding EU?
3. A DAMAGES CLAIM AGAINST THE MEMBER STATE
The possibility of giving a sympathetic interpretation to national law, in order to give it

the same meaning as EC law, means that EC law may be enforced against an individual
in his national court, even if the EC law has not been enacted or has been enacted
inaccurately. This seems to go against much of the reasoning inherent in the ECJ’s
decision to deny horizontal direct effect to Directives (i.e. it is the fault of the State for
non/wrongful-implementation so why should an individual be held responsible for the
State’s breach?)
If an individual is prejudiced by the omission of his government, he needs an appropriate
remedy to compensate him, and so much the better if this remedy, at the same time, will
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encourage the Member States to comply with their obligations under the Treaties. In the
following case, the ECJ allowed a claim for damages to be made against a Member State
(in this case Italy) who had failed to carry out its Community obligations.
Francovich and Bonifaci -v- Italy [1991] ECR I -5357

Following the non-implementation, in Italy, of Directive 80/987, which was intended to
provide certain guarantees for employees of insolvent companies, claims were made
against Italy for payment. The first claim that the provisions of the Directive were
directly effective was not accepted by the Court. Nevertheless the Court found that:
‘...It is a principle of Community law that the Member States are obliged to pay compensation for harm
caused to individuals by breaches of Community Law for which they can be held responsible’
They set out three conditions to be satisfied by the claimant against the Member State
who wished to seek compensation for damages he/she had suffered due to non-
implementation of European Community legislation.
There must be
 the grant of a right in favour of the individual
 It must be possible to identify those rights on the basis of the Directive (now
 amended by the case of Factortame (post)
 There must be a causal link between the breach of the State’s obligations and the
harm suffered.
The implications of this judgment for Member States were potentially considerable.
How far would this principle extend?

Was it an additional remedy or only available if claims under the principles of
Direct Effect and Indirect Effect had been exhausted?
Did the principle only apply to non-implementation or also to wrongful
implementation of EC law?
In the joined cases C 46 & 48/93 Brasserie du Pecheur -v- Germany and
Factortame -v- UK [1996] 2 WLR 506 the Court confirmed that the principle of
Member State liability would apply to breaches of all Community law, whether or not
Direct Effect applied. However, the Court agreed that liability should lie on a similar
basis to that applicable to the Community Institutions under Article 288 EC Treaty (non-
contractual liability claims against Community Institutions). Therefore if a Member State
was given choices or discretion, liability would only attach if there was a ‘sufficiently serious
breach’ of Community law which would be decided according to whether the Member
State or institution had ‘manifestly and gravely exceeded the limits of its discretion’.
The Court accordingly re-phrased the threshold test amending the second limb to state
- the breach must be sufficiently serious.
They also set out a number of guidelines for national courts as to what would form a
sufficiently serious breach.
 Clarity and precision of rule breached
 Measure of discretion left in the hands of national or community authorities
 Whether the infringement was intentional or involuntary, with the interpretation
of law use excusable or inexcusable
 Whether the position taken by the Commission had contributed towards the
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omission
 Was it the adoption or retention of national measures or practices contrary to
Community law
 Whether there had been an earlier infringement established before the court and
yet the practice continued.
All these were factors that the national courts could use. Additionally the ECJ reiterated
the approach we have already seen in theVon Colson line of authority that community
remedies must be actually available in the Member States jurisdiction and must not be
barred in practice by national rules of procedure.
It was interesting that in later cases these factors seemed not to be crucial.
Two early decisions indicate the difficulties that were faced by both the Member States
and their national courts.
R-v- Her Majesty’s Treasury ex parte British Telecommunications plc [ 1996]ECR

I 1631
It was alleged that an EC Directive had been wrongfully implemented in the UK and
that this wrongful implementation had caused loss to British Telecom. The ECJ
disagreed, stating that the wording of the Directive was sufficiently vague as to excuse
the UK’s wrongful implementation.
“..imprecisely worded and was reasonably capable of bearing...the interpretation given to it by the UK in
good faith... The interpretation, which was also shared by other Member States, was not manifestly
contrary to the wording of the Directive or to the objective pursued by it.”
R-v- Ministry of Agriculture, Fisheries & Food ex parte Hedley Lomas (Ireland)
Ltd [1996]ECR I 2553
The UK prohibited exportation of live sheep to Spain on the complaints of animal-
welfare groups that Spanish slaughterhouses did not comply with an EC Directive
regulating the conditions for killing animals. The UK failed to adduce any evidence
(either of specific slaughterhouses or general practices) that Spain was in breach of the
Directive.
“where...the Member State in question was not called upon to make any legislative choices and had
considerably reduced, or even no, discretion, the mere infringement of EC law may be sufficient to
establish the existence of a sufficiently serious breach.”
This approach has been confirmed in two recent decisions of Reichberger and
Greindle –v- Austria [1999] ECR I 3499 and Norbrook Laboratories Ltd –v-
Ministry of Agriculture Fisheries and Food [1998] ECR I 1531 where the test of the
breach in the first case came down to the clarity and precision of provisions breached
but in the second was a case decided using the formula from Hedley Lomas.
Two seemingly separate lines of authorities now seemed to be established.
On the one hand the court is concerned with the actual breach and the discretion of the
Member State concerned as in Dillenkoffer & Others –v- Federal Republic of
Germany [1996] ECR I 4845 when the Court found that the total failure by Germany
to implement a directive within the given time, would automatically fulfil the test of
sufficiently serious breach.
In other cases the Court has paid more attention to the clarity of the rule itself, and in
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cases such as Denkavit International -v- Bundesamt fur Finanzen [1996] has gone
so far as indicating to the national court who referred the question that the breach
claimed was not sufficiently serious for this reason.
Another part of the Francovich test has also been highlighted, as to whether the rule was
intended to give rights to individuals. In the two cases Three Rivers District Council –
v- Bank of England [1996] 3 All ER 558 and Bowden –v- South West Water
Services [1999] 3 CMLR 180 the English courts took the view that the relevant
banking and environmental directives were not intended to give individual rights and so
the claim failed on these ground, which has support from such cases as Verholen-v-
Sociale Verzekeringsbank Amsterdam [1991] ECR I 3757.
It is also important that the claimant can establish his loss or damage, as was emphasized
in Schmidberger –v- Austria [2003] ECR I 5659 where a transportation was delayed
by the closure of a motorway for 28 hours.
The Francovich principle will also apply to a breach by a public body as in Haim –v-
Kassenzahnartzliche Vereinigung Nordrhein [1994] ECR I 425 and interestingly in
the recent case of Kobler –v- Austria [2003]ECRI-10239 found that a court would be
capable of coming within the definition of a public body against which a breach could be
claimed. Although once again in Kobler the ECJ was at pains to state they did not think
there was a sufficiently serious breach on the facts of the case, which concerned equality
of treatment of an academic in an Austrian university, rather than leaving this as a
decision for the national court. (we will return to this issue when looking at Article 234 in
the next Unit).
In the recent case of Traghetti des Mediterraneo SpA-v-Repubblia Italiana where

Italian legislation had purported to limit or exclude State liability, the Court made it clear
that it was not possible to exclude liability nor was it possible to set a higher standard for
liability for national courts as here where legislation limited liability solely to cases of
international fault and serious misconduct on the part of the court. The relevant criteria
would remain that of manifest infringement of the applicable law as stated in Kobler
above, suggesting that the issue is one of competence not fault (note this issue will be
returned to in Workbook 3).
This decision could in theory bring with it the possibility that a lower court would be
required to assess the capacity and competence of its highest court, where the act of the
highest court were to be the basis of a claim for State Liability.
SUMMARY
So, in brief, an individual when seeking to rely upon a rule of European Union law,
SSuum
mmmaarryy which is not available as a direct source of law within his national law system, has three
possible choices.
1. He can attempt to persuade his national court to rely directly upon the terms of
the European Union legislation, if the rule he wishes to use can satisfy the Van
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Gend test. (remember here the difficulty with a Directive) ;
2. He can seek to find a similar rule in national law which is capable of being
interpreted to reach the same result as the European legislation Von Colson; or ;
3. He can seek to claim his remedy from the state or public authority that is
responsible for his loss if the test in Francovich can be satisfied.
In Workbook 3 we will consider further the issue mentioned in Factortame as to the

difficulty of ensuring an appropriate national remedy for rights created by European
Union law
a) Is it preferable to allow Directives to have horizontal direct effect or to require

national courts to interpret national law in line with EC law?
b) To what extent must national courts alter the interpretation of their national law
in order to comply with the indirect effect doctrine? Is there a difference between
how far the ECJ thinks national courts ought to interpret their legislation in line
with EC law and how far national courts are willing to distort their national
legislation in order for it to mean the same thing as EC law?
c) If you were advising a client who wished to enforce an EC right, which of the
aforementioned doctrines would you advise them to base their claim upon?
d) Were the national courts able to affect the development of these doctrines? If so,
in what way?
UNIT 4: Preliminary References; Article 234

UUnniitt In Units 2 and 3 the two doctrines created by the ECJ which were designed to have
FFoouurr immediate impact in the Member States and their national courts were considered.
Although the relationship between the ECJ and the national courts was mentioned, it
was not described in detail. It is however essential to analyse that relationship, if the
present position of the ECJ in the national court hierarchy and its resulting jurisprudence
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is to be fully understood.
When the founders of the European Community first drafted the Treaties, they
identified the role to be allocated to the Court of Justice.
It was
firstly; to resolve disputes between Member States, the Institutions and the employees of
the Community,
secondly; to ensure, through judicial review, that the institutions did not exceed their
power,
thirdly; to resolve disputes and claims made by external parties against the Community
and finally: (and essential to the judicial development of EC law), it would act as the final
interpreter of the provisions of Community Law (Article 220 EC Treaty ante).
In carrying out its function as interpreter, the Court’s relationship with the national
courts appeared to be a co-operative partnership. The national courts would
independently seek an interpretation from the court through the preliminary ruling
procedure in Article 234 and the reply of the ECJ would then enable the referring court
to apply Community law to the facts and thereby provide a resolution of the individual
case.
No enforcement mechanism existed to persuade any unwilling national court to refer a
question of interpretation to the ECJ (arguably Article 226 EC Treaty, see further
Workbook 3, may provide the necessary mechanism but no cases of its use are
recorded). The ECJ did not have any powers enabling it to fulfil the function of an
appeal court, so if the national court chose not to refer questions for interpretation by
the ECJ, the national court’s interpretation would remain applicable unquestioned in that
Member State.
Very early on, the ECJ recognised the importance of acquiring the trust and confidence
of the national courts. If it wanted to see EC law uniformly applied in all Member States,
its judgments had to be regarded as more than simply a response to one question.
Instead, the answer should be accepted by the national courts as declaratory of the law
and therefore be applied uniformly in all Member States.
To be able to make these authoritative statements, it was necessary for the national
courts to refer questions to the ECJ. The ECJ therefore needed to encourage the use of
Article 234 EC Treaty.
To achieve the aim of uniformity in the application of Community law in all Member
States, the national courts needed to be convinced that EC law had to be accepted as
superior to national law and to apply that principle domestically.
This Unit charts the progress of the acceptance of Supremacy of EC law and the
consequential limitations imposed by the national courts on the ECJ.
THE COMMUNITY COURTS AND NATIONAL COURTS; THE

PRELIMINARY RULING PROCEDURE.
Article 234 EC TREATY

‘The Court of Justice shall have jurisdiction to give preliminary rulings
concerning :
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(a) the interpretation of this Treaty;

(b) the validity and interpretation of acts of the institutions of the Community and of the ECB
(c) the interpretation of the statutes of bodies established by an act of the Council where those statutes so
provide.
Where such a question is raised before any court or tribunal or a Member State, that court or tribunal
may, if it considers that a decision on the question is necessary to enable it to give judgment, request the
Court of Justice to give a ruling thereon.
Where any such question is raised in a case pending before a court or tribunal of a Member State against
whose decisions there is no judicial remedy under national law, that court or tribunal shall bring the
matter before the Court of Justice.’
This Article is of fundamental importance as it has been the vehicle for the establishment
of the Two Judicial Pillars of Direct Effect and Supremacy. As soon as the courts of
Member States began to use the referral provisions contained in Article 234 EC, the ECJ
was able to introduce and develop its two Judicial Pillars.
In this Unit we will be considering the mechanism used so successfully by the ECJ to
develop Community law.
As so poetically stated by Mancini and Keating

‘If the doctrines of direct effect and supremacy are .... the ‘twin pillars of the Community’s legal system’,
the reference procedure laid down in Article 177 must surely be the keystone in the edifice; without it the
roof would collapse and the two pillars would be left as a desolate ruin, evocative of the temple at Cape
Sounion-beautiful, but not of much practical utility.’
Article 234(a) EC has been particularly relevant to the development of the judicial pillars,
so how is this used within the national court systems?
Unit 4.An Introduction to the Law and Institutions of the European Union WK
1. An individual, who wishes to rely on a principle of Community law, will sue in his
national court setting out in his pleadings (documents of claim) the relevant Community
principle on which he/she seeks to rely.
2. The national court can (this is obligatory if the national court is the last national
appeal court) then seek a ruling through Article 234 EC Treaty by referring a question of
interpretation to the ECJ.
3 The ECJ, in answering the question, will interpret the relevant provision of Community
law.
4. The national court will use the interpretation of Community law to resolve the issue
raised with reference to the particular facts of the case.
As mentioned earlier, Article 234 referrals played a vital role in giving the ECJ an
opportunity to develop the doctrines of European Legal Supremacy, Direct Effect,
Indirect Effect and Damages against Defaulting Member States, which were all created
via such preliminary rulings.
The change of the relationship between the ECJ and the national courts can clearly be
seen from the following diagrams:
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By introducing this new relationship, the ECJ was also able to rely upon the national
courts to act as the enforcers of Community Law, both in respect of the State and
individuals and in the domestic arena. This was essential to ensure consistency and the
uniform application of Community law in all Member States.
Note: This Article also plays a very important role in the area of Judicial Review,
protecting individuals by regulating the acts of Institutions. This will be considered in
more detail in Workbook 3. In this Unit we will concentrate upon the mechanism itself
and Article 234 (a) EC Treaty.
It is useful to remember at this point, that not all articles of the TEC are subject to
Article 234. As mentioned in Unit One, certain issues which were transferred from the
third pillar have limited such references by lower courts in the national systems. The
issue of immigration is a good example here, as this can only be dealt with ‘a national
court against whose decision there is no judicial remedy’( Art 68 EC) and an opt out has also been
granted in this Article to the UK and Ireland. Additionally references under the TEU are
also limited and some references may only be made at the specific request of a Member
State Article 35 TEU).
The Lisbon Treaty would remove both these exceptional procedures whilst widening the
competence of the ECJ to include the two remaining pillars (see ante).
A: Limitations of the Court’s Jurisdiction
Article 234 EC Treaty places some limitations on the Court’s jurisdiction.
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1. Its competence is limited to Matters of Community Law.

In Falcioli [1990] ECR I 191 it refused the reference following initial investigation on
the basis that there seemed the judgment seemed to have no reference to Community
law, similarly rejecting a reference in Salonia-v- Poidomani [1981] ECR 1563 stating
that the interpretation sought by the Court seemed to have no relation to the actual
nature of the case or the subject of the main action but more to the theoretical interest of
the party who was also an academic.
Although it may not matter whether the interpretation is sought on EC legislation or
implementing national legislation, which also requires a consistent approach, as in
Dzodzi-v-Belgium [1990] ECR I 3763.
A similar approach could be seen in the UK tax case ICI-v- Colmer [1998] ECR I-
4695 where the ECJ did not agree with the approach of the UK government that this
must be an internal matter for the Member State, but rather emphasized that in questions
of differences of interpretation it was for the Court to declare on compatibility of
national provisions.
2. It is a court of interpretation not application: It is difficult in some cases to assess the

borderline observed by the ECJ between interpretation and application.
In the case of Marleasing (see Unit 3 ante), the ECJ’s response to the question raised
was so detailed that little was left for the Spanish court to do but to repeat the ECJ
ruling. A similar approach can also be seen in the recent case of Kobler (ante).
This approach can also be seen as a desire to offer guidance to the national courts even
where this guidance may in practice be ‘unequivocal’ as in the trade marks case of
Arsenal Football Club –v- Reed [2002] ECR I 10273
The trial judge in this case found that the ECJ had therefore overstepped the mark by
making findings on the facts “If this is so, the ECJ has exceeded its jurisdiction and I am not
bound by the final conclusion, I must apply its guidance on the law to the facts as found at the trial…..
The courts of this country cannot challenge rulings of the ECJ within its areas of competence. There is no
advantage to be gained by appearing to do so. Furthermore national courts do make references to the
ECJ with the intention of ignoring the result. On the other hand, no matter how tempting it maybe to
find an easy way out, the High court has not power to cede the ECJ a jurisdiction it does not have (para
28).
3. The ECJ has maintained a strict policy of non-interference over decisions about what
to refer, when to refer and how to refer. This is a question for the national court to
decide. However they have provided guidelines to assist the national courts as to the
timing and form that the reference should take.
………………….
6. It must contain a statement of reasons which is succinct but sufficiently complete to give the Court, and
those to whom the decision must be notified (the Member States, the Commission, and in certain cases the
Council and the European Parliament), a clear understanding of the factual and legal context of the
main proceedings.
In particular, it must include an account of the facts which are essential for understanding the full legal
significance of the main proceedings, an account of the points of law which may apply, a statement of the
reasons which prompted the national court to refer the question or questions to the Court of Justice and, if
need be, a summary of the arguments of the parties. The purpose of all this is to put the Court of Justice
in a position to give the national court an answer which will be of assistance to it.
The decision making the reference must also be accompanied by copies of the documents needed for a
proper understanding of the case, especially the text of the applicable national provisions.
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However, as the case-file or documents annexed to the decision making the reference are not always
translated in full into the other official languages of the Community, the national court must make sure
that its decision includes all the relevant information.(extract from ECJ Guidance Notes on
Reference by National Courts for Preliminary Rulings)
It is useful to consider this in some more detail
The initial approach ‘open door’

To encourage the national courts to raise questions using the procedure under Article
234 EC Treaty, the ECJ was happy to accept references that were insufficiently clear,
incorrectly framed or in other ways deficient. It would simply reword the question and
answer it in the manner it felt most useful to the national court.
Even the initial wording of Article 234 EC Treaty, which suggests that questions of
interpretation should only be raised if it were necessary to resolve the case, was not a
restriction raised by the ECJ.
Costa v ENEL (see Unit 2 ante)

‘....the Court has power to extract from a question imperfectly formulated by the national court those
questions which alone pertain to the interpretation of the Treaty. Consequently a decision should be given
by the Court not upon the validity of an Italian law in relation to the Treaty, but only upon the
interpretation of the above-mentioned Articles in the context of the points of law mentioned by the
Guidice Conciliatore..... Since, however, Article 177 is based upon a clear separation of functions
between national courts and the Court of Justice, it cannot empower the latter either to investigate the
facts of the case or to criticise the grounds and purpose of the request for interpretation.’
This led to an acceleration in the workload of the ECJ, with consequential delay in the
hearing and resolution of cases. It was also a factor that led to the establishment of the
CFI.
The ECJ subsequently placed some limitations upon its open door policy.
Pasquale Foglia -v- Mariella Novello [1980] ECR 745

The parties appeared to be in agreement regarding the issue to be resolved before the
ECJ, so the court refused to give a ruling feeling that an answer was not necessary to
resolve a dispute.
‘The questions asked by the national court,... do not fall within the framework of duties of the Court
under Article 177 of the Treaty.’
In the view of the ECJ the ruling sought by the contesting parties was fictional. There
has been no development of this principle but the Foglia case has been referred to in later
cases. Arguably Foglia can be cited as an example of the ability of the ECJ to control the
limits of its own jurisdiction, further confirming the change of its structure and its
superiority in Community law in its relationship with national courts.
The Court will also be cautious as to references which seek to challenge legislation of
another member state other than that in which the reference was made as they made
clear in Bacardi Martin SAS –v-Newcastle United Football Company Ltd [2003]
ECR I 905 and in the case of TWD Textilwerke GmbH –v- Germany [1994] ECR I
833 refused to entertain a reference where the parties had not availed themselves of the
procedure of judicial review within the time limits imposed under Article 230 (see
Workbook 3 post) although in R-v-Intervention Board for Agriculture, ex parte
Accrington Beef Co Ltd [1996] ECR I 6699 a less rigid approach was adopted when it
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was not clear that a the parties would have been entitled to claim under Article 230.
The Court will also refuse a reference if insufficient details are provided by the national
court as in Telemarsicaburzzo Sp-v-Circostel [1993] ECR I393.
A ruling also cannot be given if the main proceedings have themselves already
terminated as in Pardini [1988] 2041.
B Which Courts or Tribunals can refer under Article 234?
This is set out in Article 234 EC, but required some elaboration to assess the breadth of
tribunals and courts which in the view of the ECJ was a matter of community and not
national law Corbiau –v- Administration des Contributions [1993]ECR I 1277.
to the Law and Institutions of the European Union WOR
Broekmeulen [1981] ECR 2311.
The ECJ was asked whether it could accept a reference from the appeal committee of a
Dutch professional medical body, who had refused to register the applicant as a doctor.
‘If under the legal system of a Member State, the task of implementing Community provisions is assigned
to a professional body acting under a degree of governmental supervision, and if that body creates appeal
procedures which may affect exercise of rights granted by Community law, it is imperative, in order to
ensure the proper functioning of Community law, that the Court should have the opportunity of ruling on
issues of interpretation and validity arising out of such proceedings. The appeal committee, which performs
its duties with the approval of the public authorities and operates with their assistance, and whose
decisions are accepted following contentious proceedings and are in fact recognised as final, must be deemed
to be a court of a Member State...”
Pretore di Salo [1987] ECR-2545

A body is a “court or tribunal” for the purposes of Article 234, even though its functions
may not be of a judicial nature, if it :
 acts in the general context of a duty to act
 acts independently and in accordance with the law
 has jurisdiction conferred upon it
On the one side a private arbitrator has been found not to be a court or tribunal
Nordsee –v- Reederei Mond [1982] ECR 1095, whereas a individual immigration
officer from the office of Immigration Adjudicator, a permanent body established by
statute with a body of fixed rules and a duty to provide reasons, was allowed to make a
reference (C-416-96 El Yassini –v- Sec of State for the Home Dept).
In Denuit –v- Transorient C-125/04 which concerned a dispute arising under the
Package Travel Directive which was brought before the arbitration panel of Belgian
Travel Dispute Commissions the Nordsee decision. The court found that in a situation
where the parties were under no obligation to refer the issue to arbitration and the
Belgian authorities were not involved in the decision to opt for arbitration, then this
arbitration panel would not be ‘a court or tribunal’. The fact that in this case the parties
had entered into an arbitration agreement thereby requiring any national court before
which the issue would be raised to decline jurisdiction, was not considered a sufficiently
relevant factor even though in a wider sense the aim of the national structure was to
provide greater protection to the consumer.
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In Victoria Film AS –v- Riksskattenverkert [1998] ECR I 7023 a court exercising its
administrative duties was found not to be a court or tribunal as its function was not to
settle any dispute but to given advisory opinions .
In Gabalfrisa –v- AEAT C110-147/98 a Spanish economic administrative court,

which did not form part of the judiciary but rather of the Ministry of Economic Affairs
and Finance, was found to be within Article 234; it being found that there was sufficient
separation of its administrative and judicial functions to satisfy the requirements both of
independence despite the contrary opinion of AG Saggio who expressed grave doubts
both as to its independence and that its proceedings were truly inter partes.
C Which Courts must refer under Article 234?
Article 234(3) EC treaty lays down an obligation to refer questions of interpretation of

European Community law to a court or tribunal ‘against whose decisions there is no judicial
remedy under national law’.
In the United Kingdom, we operate a system of requiring leave (permission) before an
appeal can be lodged with the Court of Appeal or with the House of Lords. If such
permission were refused, it is arguable that the court refusing permission would then fall
within Article 234(3) EC Treaty. On the one hand, it may be argued that any court lower
than the House of Lords cannot be described in the abstract as “...a court...against whose
decisions there is no judicial remedy under national law...” (the ‘abstract’ theory) because there
existed, at least in theory, a possibility of appeal to the House of Lords. On the other
hand, it may be argued that this particular case has gone as far as it can and the absence
of appeal possibilities converts the court from which leave to appeal has been denied
into such a court from whose decisions there is no actual possibility of appeal in this case
(the ‘concrete’ theory).
This difficulty has been resolved to some extent by the case Kenny Roland Lyckeskog
[2002] ECR I 4839 supporting the abstract theory and paying due regard to the
procedural rules established in the relevant Member State.
This issue was also developed in Kobler which confirmed that a failure to refer by a
national court may also lead to a Francovich claim of state liability against the Member
State concerned.
In Cartesio [2008] Case C-210/06 in which the Hungarian Court of Appeal also raised
the issue of whether proceedings appealing a decision of the Hungarian commercial
register court were inter partes proceedings, arguably more interesting was the issue as to
the compatibility of the Hungarian rules of procedure which seemed to permit review by
an appellate court of the right of a lower court to make an Article 234 reference. The
ECJ firmly stated “the jurisdiction conferred on any national court or tribunal … to make a reference
to the Court for a preliminary ruling cannot be called into question by the application of [national] rules,
where they permit the appellate court to vary the order for reference, to set aside the reference and to order
the court to referring court to resume the domestic law proceedings”
When should a reference be made?

There is no limitation on the timing of reference chosen by a national court nor upon the
level of court (for the definition of court see Broekmeulen ante) which should make a
reference. The ECJ, in operating its ‘open door policy’, made it clear that it was content to
accept a reference at any stage, subject to the limitation that the reference should be
necessary to enable the national court to resolve the dispute before it (see Foglia ante).
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CILFIT and Lanificio di Gavardo SpA -v- Ministry of Health [1982] ECR 3415
‘.. those courts or tribunals are not obliged to refer to the Court of Justice a question concerning the
interpretation of Community law raised before them if that question is not relevant, that is to say, if the
answer to that question, regardless of what it may be, can in no way affect the outcome of that case.’
With the doctrines of EC Supremacy and Direct Effect having been established, the ECJ
was receiving many more preliminary rulings requests than before and needed to ensure
that its time was used constructively, dealing only with necessary references and not
answering questions which had already been covered in previous proceedings.
From the French legal system it borrowed The doctrine of ‘acte clair’
‘... a court or tribunal against whose decisions there is no judicial remedy under national law is required ,
where a question of Community law is raised before it, to comply with its obligation to bring the matter
before the Court of Justice, unless it has established that the question raised is irrelevant or that the
Community provision in question has already been interpreted by the Court or that the correct
application of Community law is so obvious as to leave no scope for any reasonable doubt. The existence
of such a possibility must be assessed in the light of the specific characteristics of Community law, the
particular difficulties to which its interpretation gives rise and the risk of divergence in judicial decisions
within the Community.’
In simpler terms if the interpretation of Community law is so clear that it needs no

explanation or clarification then the national court need not refer. The use of the
doctrine does need however to be placed in the context of the multiplicity of legal
systems and languages used by national courts in the Community. The provision of
Community law should be clear enough to receive the same interpretation, whichever
national court were dealing with the question, for the doctrine of ‘acte claire’ to apply.
Da Costa en Scaake NV and others -v- Nederlandse Belastingadministratie [1963]

ECR 31
The ECJ said that, where the referred question of EC law was “...materially identical...” to
that which had been decided in the Van Gend case, the ECJ said that it was not necessary
to refer the issue again, even for the highest courts who would otherwise be under a duty
to refer.
However, in accepting the doctrine, the ECJ was placing a great deal of trust in the
national courts, by delegating the discretion to determine if the issue was clear and settled
by them. In the past the national view on when to refer had not always been comparable
with the view of the ECJ, as can be seen from the English case of
Bulmer -v- Bollinger [1974] Ch 401

Sitting in the Court of Appeal, Lord Denning refused to refer an issue of EC law to the
ECJ setting out his own criteria for when a referral should be made. He concluded that it
must be NECESSARY, then added that, in deciding thereafter whether to exercise the
court’s discretion to refer, the following were relevant considerations
1. The time it would take to obtain a ruling
2. Wish not to overload ECJ.
3. Difficulty and importance of the issue (if neither, keep in UK).
4. Expense.
5. Wishes of the parties (this would still not be conclusive).
6. The question must be capable of clear formulation.
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Bulmer -v- Bollinger is a famous case in British terms, due to the following quotation...
‘But when we come to matters with a European element, the Treaty is like an incoming tide. It flows up
the estuaries and up the rivers. It cannot be held back. Parliament has decreed that the Treaty is to part
of our law.’
.. But it certainly did not reflect the approach to references under Article 234 EC Treaty
which had been adopted by the ECJ.
The British view, as that of other national courts, has changed over the years.
Although cases such as R-v-Secretary of State for Home Department ex parte

Sandhu [1982] 2 CMLR 553 indicate the type of problems that can exist. Here the
question concerned the status of a third country national, now divorced from his EU
national spouse. The English court relied upon the ECJ case of Diatta –v- Land Berlin
[1985] which dealt with a separated spouse, and stated that this had provided a
conclusive ruling. It is quite clear however that the lower court judge had taken a
different view and that the issue could not therefore be said to be clear even in the
national courts, without consideration of the differences that might emerge in other
Member State courts.
Re Patented Feedingstuffs [1989] 2 CMLR 902 demonstrates the approach taken by

the German constitutional court who took the view that they would regard the action of
a national court as an arbitrary refusal to comply with Article 234 when:
 The national court gave no consideration to a reference despite the accepted
relevance of European law and doubt as to its application
 Where the Court consciously departs from ECJ case law and makes no new
reference
 Where there has not as yet been a decisive judgment on the point or previous
judgments have not given an exhaustive answer, or there is more than a remote
possibility of ECJ developing case law or national court exceeding its jurisdiction
The increasing membership of the European Community and the related increase in
references under Article 234 EC placed increasing demands upon the ECJ. In addition
Community legislation became more prolific and detailed leading the ECJ to play an
increasing role in enforcement and review of the Acts of Institutions and Member States.
In this climate the ECJ needed assistance to carry out its task of ensuring effective and
uniform application of European Community law. The national courts were obviously
placed to provide assistance and have been accordingly enrolled to assist the ECJ in
implementing and enforcing the legislation of the European Communities.
Is there a system of Precedent in the Community?

In considering the manner in which the Article 234 procedure works, it is also interesting
to note considerable similarities to the system of precedent, so essential in a Common
Law system. Although the original members of the European Community were Civil
Law countries, the addition of other traditions and cultures has clearly contributed to and
assisted the development of the jurisprudence of the ECJ.
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a) What role did Article 234 EC play in the eyes of the ECJ?
b) Who was able to use Article 234 EC?
c) Give examples of the bodies which have been found to be competent to refer
issues for preliminary rulings form the ECJ other than the ones in this workbook.
d) Describe how Article 234 works, using your own practical example.
e) It has been said that national courts would be more likely to make referrals to the
ECJ “...if they are confident that the ECJ will not abuse its power in these proceedings by
interpreting law too freely and failing to pay sufficient regard to important considerations of legal
certainty.” (per Steiner, J. and Woods, L., EC Law 7th Ed., 2000, at p.488).
f) To what extent do you think this statement reflects the past and current
relationship between the ECJ and national courts?
g) What is the purpose of the doctrine of acte clair and could it present any threats to
ensuring the consistency of application of EC law?
h) To what extent will the recent decision of Kobler (unit 3) affect the position of
national courts in considering whether to refer a question for preliminary
reference?
i) What are the consequences of the stand taken by the ECJ in the cases of
Nordsee and Denuit in view of the greater role visible in national jurisdictions of
alternative methods of dispute resolution such as arbitration or mediation?
Prepare the following questions for discussion in the seminar.
SSEEM
MIINNAARR
Q 1. Fictional EC Directive 99/01 was adopted by the EC on 1st January 1999. The
QU UEESST
TIIO
ONNSS
Directive was specified to be based on Article 17 (citizenship of the Union) EC and its
preamble stated that its aim was “...to strengthen the rights of European Union citizens by adding
to the areas of everyday life which EU citizens may enjoy regardless of the Member State within which
they are currently residing.”
The Directive contains the following provisions:

Article 1 states that “Member States shall ensure that all EU citizens shall enjoy the right to claim
necessary medical attention in any hospital or health clinic.”
Article 2 states that “Member States shall ensure that all EU citizens present in their territory are
duly registered for the purposes of allowing them to vote in regional or national elections.”
Article 3 states that “Member States shall ensure that all EU citizens shall enjoy the right to attend
religious and cultural events of their choice.”
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Anne is a UK citizen who requires physiotherapy for a sports injury, which she normally
receives free of charge from her local hospital. Whilst she is on holiday in Italy she
wishes to continue receiving her therapy but is refused free treatment by a number of
Italian hospitals, some of which are State hospitals and some of which are private
hospitals.
Benito, an Italian who is spending the summer holidays with his girlfriend in France, asks
to be registered for a European election which is happening the following month. He is
refused on the basis that the appropriate French legislation, which dates back to 1914,
requires voters to have been living in France for at least 12 months previous to any
election.
Charles, a UK national living in England, wishes to attend a meeting of the ‘Church of

Sin-tology’, but is informed by the police that the planned meeting has been prohibited
by the local chief of police. Charles wishes to challenge this and is told that he may
challenge the decision at the next meeting of the ‘Police Complaints Commission’, which
is composed of senior policemen and local magistrates and reviews decisions taken by
police-officers. At the Commission’s meeting, Charles’ challenge is refused and his pleas
to consider the terms of the Directive are ignored. Undeterred, he brings an action in the
High Court seeking judicial review of the Commission’s decision and, when he loses, he
appeals to the Court of Appeal. The Court of Appeal refuses to make a reference to the
ECJ in order to decide whether the Directive is applicable and, if so, whether Charles
enjoys any rights thereunder. After losing again in the Court of Appeal, leave to appeal to
the House of Lords was denied.
Advise the parties as to any rights and remedies they may have under Directive 99/01
and the Treaty Articles on which it was based. Advise the parties also how they may
enforce any rights they may have.
2. Fictitious Council Directive 1000/98 on the protection of the environment against

visual pollution was adopted on 1 April 1998. The Directive includes an Article 5, which
reads as follows:
‘Member States shall take all necessary measures, including provision for criminal
sanctions in the form of an appropriate fine and or/ imprisonment, to ensure that
householders do not place plastic garden gnomes in a position where they are visible to
neighbours or to members of the public.
Any person suffering visual pollution as a result of the placing of plastic gnomes in
neighbour’s garden shall be entitled to a remedy in damages. ‘
The date for the implementation of the Directive is January 1999.
On 12th December 1999 a bill was placed before Parliament intending to implement the
Directive. The opposition defeated the bill stating Article 5 was a typically ridiculous
breach of European interference in national affairs and since that time it has remained
unimplemented. In the draft bill one penny was stated as the appropriate fine or
damages.
Tracey, who loves garden gnomes, has three gnomes in her front garden which her
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neighbour Sharon hates. Sharon has complained to the local council environmental
department, who refuses to take any actions against Tracey stating that there is no
national law prohibiting gnomes, although there is a local bye-law stating that garden
objects causing a nuisance must be removed. No successful cases have been pursued
under this provision of the bye-law to date.
1. Advise Tracey as to her legal position

and
2. Assuming that the bill passed through Parliament and been implemented in
December, what effect would this have had on Tracey’s legal position?
3. Directive 2000/007 was adopted by the EC Member States pursuant to Article 174 of
the EC Treaty (environmental protection) on 1st January 2000. Article 1 of that Directive
states that: “In order to ensure the prudent and rational utilisation of
natural resources, and to ensure that European pollution levels do not continue to rise above their current
levels, Member States shall take all measures necessary to discourage the use of environmentally
unfriendly chemicals in the production of goods.”
Under UK law the Environmental Protection 1980 states that: “The use of
environmentally unfriendly chemicals shall be allowed only in so far as it is necessary for the manufacture
or development of medicines and other essential products.”
Bill is an environmental protection activist who wishes to protest against the use
of environmentally unfriendly chemicals by Friendly-Fire ltd, a manufacturer building a
new weapon for the Ministry of Defence. As one of only 2 EC producers of such
weapons, Bill is sure that he will make a great impact on environmental protection in the
UK if he manages to challenge this contract.
He also wishes to protest against the use of similar chemicals in tests to develop a
new microwave oven. These tests are conducted by Nuke-‘Em ltd plc, a company in
which the British government owns many shares. The government has also refused to
allow any other company to conduct the same experiments.
Having brought legal actions against both companies, Bill loses his case in the
High Court. The court decides that neither EC law nor UK is of any help to Bill’s case.
The judge also said that, even if EC law were applicable, the government would be able
to justify failure to apply the EC law because both contracts represent a vital national
interest. Although the High Court allows an appeal to the Court of Appeal, Bill is unable
to afford to pay for his lawyer’s bills and is unable to bring the case.
Meanwhile, the EC has passed a Regulation which aims to strengthen the
prohibition on the use of environmentally unfriendly chemicals. The Regulation states
that:
“All non-medical uses of environmentally unfriendly chemicals shall be prohibited. Any contracts entered
into after 1st February 2002 which involve the commercial exploitation of environmentally unfriendly
chemicals shall be rendered null and void.”
Both Friendly-Fire ltd and Nuke-‘Em plc wish to challenge the validity of this
Regulation, since their respective contracts would otherwise be void. Although Nuke-
‘Em plc has sufficient funds to bring such a case, Friendly-Fire ltd does not. The UK
Weapons Manufacturer’s Society, however, has said that it is willing to bring a challenge
to the Regulation on behalf of Friendly-Fire ltd.
Advise the parties as to any rights and remedies they may have under EC law.
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4. Directive 24/2004 (Fictional) requires Member States to take appropriate measures “to
ensure that all workers on underground transportation systems are given a bio-hazard
protection suit so that they are protected in the event of a terrorist attack”. The deadline
for the implementation of the directive was 31st December 2004. It is now 2006 and the
Directive still has not been explicitly implemented in the UK.
The UK does however have the Terrorism Act 2001 which states that “all employers
must take all possible measures to minimize the threat of terrorism to employees while at
work”. The UK government takes the position that this is sufficient to implement
directive 22/2004.
Jane is a part-time worker selling tickets on the platforms of “Birmingham

Underground” (BU). Jane is allowed, pursuant to the Terrorism Act 2001, access to a
bio-hazard protection suit while she is at work. Every morning she has to request the
suit and she has to give it back at the end of her shift. Jane brings an action in the
Transport Tribunal claiming on the basis of Directive 24/2004 that BU has to provide
her with a Bio-hazard protection suit which must be her property and which she must be
allowed to take home with her so that she is protected from terrorist attacks at all times.
Full-time employees are provided with a suit which they are able to take home and which
constitutes property of the employee and not BU.
BU was originally a statutory corporation but was privatised by the Government in 1991
and has since been privately owned. BU has always been unprofitable since its
privatisation and it has been given government aid to keep the trains running on 5
occasions since 1991. BU has exclusive control and ownership of all tunnels and
publicly accessible subways in Birmingham. BU claims that it is not bound by the
directive and in any event the directive does not entitle Jane to what she is asking for.
The Transport Tribunal agrees and rules in favour of BU, refusing to make a reference to
the ECJ. Jane then commences proceedings in the High Court to challenge the decision
of the Transport Tribunal.
Jane also finds out that employees driving trains for “Birmingham Underground” have
received an increase in salary of 10% which constitutes ‘danger money’. BU claims that
this money constitutes compensation for the imminent threat to those closest to the
trains. 80% of train drivers are men.
Jane wishes to bring an action against BU for sex discrimination, and to pursue any
further means she may have of enforcing her rights under directive 24/2004.
Advise Jane as to the availability of proceedings, prospects of success and remedies.
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University of Cambridge

Institute of Continuing Education

INTRODUCTION TO ENGLISH AND EU LAW

The author’s moral rights have been asserted.

AN INTRODUCTION TO THE LAW AND

You should be able to :

UNIT 1: The Courts

In Workbook 1 we looked at the composition and functions of the political institutions

A: THE COURT OF AUDITORS (CoA)

B: THE COURT OF FIRST INSTANCE (CFI)

Year Cases Average length of Average length of direct

Year Average length Average length Average length

C: THE EUROPEAN COURT OF JUSTICE (ECJ)

In respect to enlargement, the ECJ itself has stated that:

When interpreting EC legislation, whether from Treaty articles or instruments of

One English judge described it in the following way...

Customs and Excise v ApS Samex (1983) All ER 1042

e.g. The Vienna Convention on the Law of Treaties 1969

The two general categories of potential cases are:

Direct actions include

QUESTIONS FOR DISCUSSION

The Lisbon Treaty

UNIT 2: Supremacy of EU Law

A THE ECJ’S VIEW OF SUPREMACY

Van Gend en Loos [1963] ECR 1

Costa v ENEL [1964] ECR 585

Commission v Italy [1972] ECR 527

Simmenthal No.2 [1978] ECR 629

IN.CO.GE.Srl [1998] ECR I-6907

B THE RESPONSE OF THE NATIONAL COURTS

Basic Law of the German Federal Republic 1949

Internationale Handgesellschaft [1974] ECR

Wunsche Handgesellschaft [1987] 3 CMLRev 225 (Solange II)

Brunner v TEU [1994] 1 CMLR 57

Italy had similar concerns to those expressed in Germany. In the case of

EC Act 1972 s.2

McCarthy’s v Smith [1979]

Duke v GEC Reliance [1988]

Factortame Ltd -v- Secretary of State for Transport [1990] 2 AC 85

QUESTIONS FOR DISCUSSION

UNIT 3: Direct and Indirect Effect/State Liability

 clear and unambiguous

What does this mean?

Van Gend en Loos [1963] above

The Van Gend en Loos case raised the following questions:

Could secondary legislation of the Community be treated in a similar manner?

Case 43/75 Defrenne -v- Sabena [1976] ECR 547

Alfons Lutticke GmbH v Hauptzollamt Saarlouis [1966] ECR 205

Van Duyn v Home Office [1974] ECR 1337

Case 39/72 Commission -v- Italy [1973] ECR 101,

The purpose of this type of secondary legislation, in general, is to harmonize national

Case 152/84 Marshall-v- Southampton and South-West Hampshire Area Health

Fratelli Costanzo SPA v Comune de Milano [1989] ECR 1839

Foster v British Gas Plc [1991]2 AC 306]

Rolls Royce Plc v Doughty [1992]ICR 538

The ECJ subsequently developed a doctrine called Sympathetic Interpretation,

Paolo Faccinin Dori v Recreb Srl [1994] 1 CMLR 665

A rather confusing line of case-law arose from the following case.

CIA Security International v Signalson SA [1996]ECR I-2201

Useful decisions in this area include

World Trade Agreements

QUESTIONS FOR DISCUSSION

2 INDIRECT EFFECT/SYMPATHETIC INTERPRETATION

Kolpinghuis Nijmegen BV [1987] ECR 3969