EU law

Question 1

When was the EU created?

Answer 1

In 1992 Maastricht Treaty.

Question 2

What is the authority for Direct Effect?

Answer 2

Van Gend en Loos. Van Gend en Loos argued before the Dutch authorities that Article 12 (now Article 30 TFEU) gave rise to rights which could be claimed by individuals and protected in the courts of Member States and that the company had an enforceable claim because the increased duty was contrary to Article 12.

The case is authority for the proposition that articles of the EC treaty are directly effective in their application against the state.The concept of direct effect is not mentioned in the treaty. The court held that such a doctrine was necessary in order to ensure the compliance of member states with their obligations under the Treaty of Rome. The case illustrates a procedure of enforcement of EC law at the national level—direct effect does not require the Commission to bring an action against the state. This is significant, because it provides a more effective, distributed enforcement mechanism.

Question 3

Why was Van Gend en Loos significant?

Answer 3

the CJ recognised in this case that Union law created rights and obligations which not only had a direct impact on Member States, but also upon the citizens of those states.With this decision, not only did the Commission and Member States have authority to seek to enforce those obligations, but also the citizens of Member States.

It was adjudged that Art 30 could be applied within a MS by the citizens of that MS enforcing individual rights which which could be protected by the national courts. It sets out a clear and unconditional prohibition, which is not a duty to act but a duty not to act.(see p 35)

Community law therefore not only imposes obligations on individuals but also confers on them legal rights.

Question 4

What was a major weakness of the Treaty of Rome?

Answer 4

It failed to provide adequate measures of enforcement against those MS who infringed Treaty obligations. In other words before Van Gend en Loos, individuals could not hold the national governments to account if they infringed on treaty obligations.

Question 5

Which authorities are used to establish the supremacy of EU law over conflicting national law?

Answer 5

1) Costa v ENEL

2) Amministrazione delle Finanze Stato v Simmenthal.

Question 6

What were the facts in Costa v ENEL?

Answer 6

Costa was a shareholder in an electricity company that was nationalised by the Italian government. He subsequently refused to pay his electricity account, which was for the sum of about £1. When sued for this amount, he argued the nationalisation legislation was contrary to Community law. On a reference to the CJ, the Italian government argued that the case was ‘inadmissible’ because its national courts were obliged to apply the law nationalising the electricity industry as the latest expression of the will of the Italian Parliament. The CJ did not agree. EU law reigns supreme!

Question 7

What are the criteria for direct effect?

Answer 7

1) The provision must be sufficiently clear and precise to give rise to an identifiable individual right.
2) It must be unconditional.

Question 8

Which authority defined the criteria of Direct Effect?

Answer 8

1) Van Gend en Loos.
2) Cooperativa Agricola Zootecnica S. Antonio and Others v Amministrazione delle finanze dello Stato [1996] ECR I-4373

18 A Community provision is unconditional where it sets forth an obligation which is not qualified by any condition, or subject, in its implementation or effects, to the taking of any measure either by the Community institutions or by the Member States… Moreover, a provision is sufficiently precise to be relied on by an individual and applied by a national court where it sets out an obligation in unequivocal terms…

Question 9

Which authority established that direct effect of articles could be applied to actions between individuals? (Horizontal direct effect)

Answer 9

Defrenne v SABENA. it was held that Article 119 (now Article 157 TFEU) could give rise to rights which protected against direct discrimination where a person by virtue of their gender received less pay than a person of the other gender for the same work, as had occurred in Defrenne’s case. The Treaty article was sufficiently clear and precise and unconditional to ground such a right.

Question 10

Is Article 119 EC (now Article 157 TFEU), which enshrines the principle that men and women should receive equal pay for equal work, sufficiently clear and precise and unconditional to ground such a right?

Answer 10

Yes. The legal authority is Defrenne v SABENA.

Question 11

Did the Equal Treatment directive in Von Colson & Kamann v Land Nordhein-Westflen confer a sufficiently clear and precise obligation that was unconditional?

Answer 11

The directive did not include an unconditional and sufficiently clear and precise obligation to provide a specific sanction for discrimination. The remedy by the German National Courts was the at for the travel expenses, the directive doesn’t include an obligation, therefore the directive is not directly effective.

Question 12

Did the unimplemented directive in Francovich & Bonifaci v Italian Republic have direct effect?

Answer 12

No. The directive did not confer a sufficiently clear and precise obligation. The identity of the persons entitled to the guarantee provided by the Directive and the content of that guarantee were both sufficiently clear and precise from the provisions of the Directive but the identity of the person liable to provide the guarantee was not. It was not clear from the provisions whether this should be a public or a private body.

Question 13

What are treaty articles which impose negative obligations sometimes referred to as?

Answer 13

‘Standstill’ articles. All they require is that Member States refrain from making certain changes to national law.

Question 14

Which case established that treaty articles that conferred positive obligations were also directly effective?

Answer 14

Alfons Lütticke GmbH v Hauptzollamt Saarlouis. The Treaty imposed a positive obligation on Member States to remove any existing measures which had such a discriminatory effect. The CJ held that there was no discretion left to Member States to give effect to the positive obligation regarding removal of discriminatory internal taxes once the 1 January 1962 deadline had passed. At this point the provision became directly effective.

Question 15

What is the definition of Vertical direct effect?

Answer 15

Vertical direct effect refers to cases where an individual relies on rights arising from directly effective provisions of EU law against the state or an organ of the state. Van Gend en Loos concerned a vertical action, an individual against the state.

Question 16

What is the definition of Horizontal direct effect?

Answer 16

Horizontal direct effect refers to claims made by individuals against other individuals on the basis of rights arising from directly effective provisions of EU law. Defrenne concerned a horizontal action.

Question 17

Which authority established that regulations were directly effective?

Answer 17

Franz Grad v Finanzmant Traunstein. the CJ noted that Regulations are directly applicable and therefore by virtue of their nature capable of producing direct effects’, but also that, ‘it would be incompatible with the binding effect attributed to decisions by Article 288 to exclude in principle the possibility that persons affected may invoke the obligation imposed by a decision’.

Question 18

Are recommendations and opinions directly effective?

Answer 18

Recommendations and opinions are not binding forms of EU law and, as such, cannot be directly effective. The legal authority is Grimaldi v Fonds des Maladies Professionnelles.

Question 19

Which case established that directives can be directly effective so long as certain criteria are met?

Answer 19

Van Duyn v Home Office Case. Van Duyn, a Dutch National was barred from entering the UK because of his ‘pseudo-philosophical cult’ beliefs in Scientology. He began a court action invoking a directive to allege a breach of her right to freedom of movement. It was adjudged that Directive 64/221 was directly effective. The directive confers on individuals rights which are enforceable on them in the courts of a MS and which national courts must protect.

Question 20

Which authority established that directives could never be horizontally directly effective?

Answer 20

Marshall v Southampton and South West Area Health Authority.A person cannot rely on rights conferred directly by a directive against another individual, but only against the state. While Treaty articles and regulations and decisions can confer rights and impose obligations on individuals, directives can only confer rights on individuals. Remember what Article 288 says about directives – a directive is ‘binding, as to the result to be achieved, upon each Member State to which it is addressed, but shall leave to the national authorities the choice of form and methods’. The obligation under a directive is addressed only to Member States and it is only in a claim against the state that a person can rely on any directly effective rights established under a directive.

Question 21

What is the rationale behind limiting the scope of directives to vertical actions?

Answer 21

Allowing for the horizontal direct effect of directives would see individuals within Member States being held responsible, through claims brought against them by other individuals, for the failure of the Member State to implement the directive, something over which they cannot possibly have any control. It is Member States which must implement a directive and it seems unfair for the burden of non-implementation of a directive to fall upon individuals.

Question 22

Which authority established that a directive is only ever directly effective when the implementation date has passed?

Answer 22

Pubblico Ministero v Ratti. The CJ held that it is only once the deadline for implementation of a directive has passed, and not before, that the provisions of a directive, which otherwise satisfy the conditions for direct effect, can have direct effect.

Question 23

What are the material facts of the Ratti case?

Answer 23

Ratti had complied with the requirements of Directive 73/173 in packaging and labelling the solvent products his company produced. Italian law provided for different standards than the Directive and included penalties for noncompliance. The Italian authorities sought to prosecute Ratti under the domestic law. Ratti sought to protect himself by relying on the Directive. Italy had failed to implement Directive 73/173 by the time the deadline for implementation had passed.any discretion a Member State has to implement a directive is removed once the deadline for implementation has passed. At that point the legal obligation on Member States to implement crystallises and Member States are legally required to give effect to the terms of the directive.

Question 24

What happens if a directive is only partially or improperly implemented and the date of implementation has passed?

Answer 24

The directive is still directly effective and can be used by an individual against the state if it satisfies the criteria of a directive and date implementation has passed. The authority for this is Verbond van Nederlandse Ondernemingen (VNO) v Inspecteur der Invoerrechten en Accijnzen.

Question 25

Which case ensured that even when a directive is completely and correctly implemented, but the national measures are being improperly applied, that directives can have direct effect?

Answer 25

Marks & Spencer plc v Commissioners of Customs & Excise

Question 26

Which case highlighted the problems inherent in vertical direct effect of directives and state the problem?

Answer 26

Doughty v Rolls Royce plc. The problem is as follows…It seems unfair that one person might be able to successfully bring a claim in EU law against a public body because it is part of the state, such as Marshall was able to, whereas another person in an otherwise identical position, but whose claim falls not against the state but a private body, cannot rely on those same rights.

Question 27

What was the solution to the limited scope of directives as only ever vertically directly effective?

Answer 27

To extend the concept of ‘emanation of the state’ to include more bodies. To give the broadest possible scope to the vertical direct effect of directives.

Question 28

Are tax authorities an emanation of the state?

Answer 28

Yes - the legal authority is Becker v Finanzamt Münster-Innenstadt.

Question 29

Are local/ regional authorities an emanation of the state?

Answer 29

Yes - Fratelli Costanzo Spa v Comune di Milano.

Question 30

Does a constitutionally independent police force responsible for the maintenance of public order and safety constitute an emanation of the state?

Answer 30

Yes - Johnston v Chief Constable of the RUC.

Question 31

Which case established guidelines as to what ought to be seen as state, public body or emanation of the state?

Answer 31

Foster v British Gas Plc. The CJ applied the tripartite test and held that British Gas was an emanation of the State. Under the Gas Act 1972, British Gas provided a public service by supplying gas to citizens of the state generally. It did so under the control of the state as the Secretary of State could dictate its policies and the State retained its surplus revenue. British Gas also had a special monopoly power under which it could to prevent anyone else from supplying gas in the United Kingdom without its consent.

Question 32

What is the tripartite test?

Answer 32

A test to determine if a body is an emanation of the state. A body is an emanation of the state if 3 necessary and sufficient conditions are satisfied;

1) a body has been made responsible, pursuant to a measure adopted by the State, for providing a public service
2) under the control of the State; AND
3) has for that purpose special powers beyond those which result from the normal rules applicable in relations between individuals.

Question 33

Was Rolls Royce considered to be an emanation of the state?

Answer 33

No - Despite all of its shares being owned by the Government and its nominees. It operated as a ‘commercial undertaking.’It was not providing a public service and it did not have any special powers.(Doughty v Rolls Royce Plc)

Question 34

Was South West Water Services adjudged to be an emanation of the state using the tripartite test?

Answer 34

Yes - It was held that a privatised water company satisfied all three elements of the tripartite test. It had been made responsible, pursuant to a measure adopted by the State, for providing a public service by acting as a water and sewage undertaker under statute. The Secretary of State had appointed it as the water and sewage undertaker for the South West and exercised wide ranging powers of control over it. It also had a range of special powers such as to impose hosepipe bans, to make by-laws, to enter land and to lay pipes.
(Griffin v South West Water Services Ltd)

Question 35

Which other authorities applied the tripartite test to ascertain whether a particular body was emanation of the state?

Answer 35

Reiser Internationale Transporte GmbH v Autobahnen und Schellstrassen Finanzierungs AG (Asfinag).

This concerned an Austrian company which had been incorporated as a private company but whose sole shareholder was the Austrian State. It had been granted a contractual licence by the State making it responsible for the construction, planning, operation, maintenance and financing of Austrian motorways and expressways and authorising it to levy tolls and user charges, in its own name and on its own account, in order to recoup its expenses. The government had the right to check all company measures, to demand information about its activities at all times, to impose objectives about traffic organisation and to impose the tolls. In addition the company had to submit costed plans for maintenance work to the government. The CJ held that the requirements of the tripartite test were fulfilled. The company was an emanation of the State.

Question 36

What is the bipartite test?

Answer 36

Bodies are emanations of the state if they are;

1) subject to the authority or control of the State; OR
2) had special powers beyond those which result from the normal rules applicable to relations between individuals.

Question 37

Which authorities applied the bipartite test and how was it applied?

Answer 37

Kampelmann v Landschaftsverband Westfalen-Lippe. The case involved claims against authority responsible for, amongst other things, the construction, maintenance and management of highways; and against two public undertakings, each of which were responsible for the supply of energy to a town.

It held the Directive could be relied upon against organisations or bodies which are subject to the authority or control of the State or have special powers beyond those which result from the normal rules applicable to relations between individuals.

Question 38

Which authority established the principle that directives are capable of having ‘indirect effect’ in that their provisions can be used by national courts in interpreting the meaning and scope of national legislation?

Answer 38

Von Colson & Kamann v Land Nordhein-Westfalen.

Question 39

What is the Von Colson principle?

Answer 39

It is for the national courts to interpret and apply the legislation adopted for the implementation of the directive in conformity with the requirements of community law. National courts, as part of the state, are required to interpret domestic laws implementing a directive in conformity with the wording and purpose of the directive.

Question 40

Can a directive be indirectly effective where domestic legislation had not been made for the purpose of complying with the Directive and where is distorts the meaning of the act?

Answer 40

No - The legal authority is Duke v G.E.C. Reliance Ltd [1988]. This was a case in which female employees had been forced to retire earlier than male employees.They sought to rely on Directive 76/207. The Sex Discrimination Act 1975, which specifically excluded involuntary retirement from the ambit of the Act, could not be interpreted in a way that gave indirect effect to the directive.

Ratio = Von Colson only required a national court to interpret domestic legislation in conformity with a Directive where that domestic legislation had been made for the purpose of complying with the Directive and only in so far as the court was given discretion to do so under national law. The 1975 Act had not been drafted to give effect to the obligation under the Directive and was not capable under the law of England and Wales of being construed in a manner that rendered it compatible with any prohibition of differentiated retirement ages.

Question 41

Was the directive in the case of Litster v Forth Dry Dock and Engineering Co indirectly effective and what were the reasons for decision?

Answer 41

Yes it was indirectly effective.This case concerned Directive 77/187 which provided protection for the rights of employees in the event of a transfer of a business undertaking. The Transfer of Undertakings Regulations 1981 were deliberately made to implement the directive in domestic law but were expressed to apply only to persons employed ‘immediately before the transfer’. However, in this case, on a strict interpretation of the UK Regulations the employees were not so employed as they had been dismissed an hour before the Forth Dry Dock business was transferred. The House of Lords construed the words ‘immediately before’ in the Regulations purposively and extended their application to cover those employees who would have been employed immediately before the transfer had they not been unfairly dismissed before the transfer. In doing this, the House of Lords accepted that the Directive was designed to provide protection for employees from unfair dismissal by reason of a transfer of ownership and that the words of the Regulations should be interpreted in the light of this purpose.

Question 42

To what extent could the principle of indirect effect apply to non-implementing laws and, in particular, those passed before the EU made a rule in the area covered by the existing national law?

Answer 42

Marleasing SA v La Comercial Internacional de Alimentación SA is the authority that helps to clarify the Von Colson principle. Marleasing made clear that the (i) provisions of an unimplemented directive could be used to interpret national law, even in a purely horizontal action between individuals.The Court held that the Spanish law had to be interpreted, as far as possible, in the light of the wording and the purpose of the directive (even though it was unimplemented) in order to achieve the result pursued by the directive.

It is also clear from this decision that (ii) it does not matter if the national law had been made before or after the directive: the directive can still be used to interpret that law. In mar leasing there was a pre-existing Spanish law (spanish civil code) before the EU had a directive that covered the area in question.

Question 43

Why was indirect effect not possible in Wagner Miret v Fondo di Garantía Salarial?

Answer 43

No - The directive required each Member State to establish a fund protecting employees from lost wages in the event of a company becoming insolvent.Spain had implemented the Directive, but it specifically excluded senior management from the ambit of the compensation fund it established.As a senior manager of an insolvent company, and so a member of the excluded class, Miret could not apply to the fund for compensation. Instead, he sought to rely directly on Directive 80/987, which did not require or sanction the exclusion of senior management from compensation in the event of their company becoming insolvent.As to the operation of the principle of indirect effect, the Court again referred to the principle that national courts were required ‘as far as possible’ to interpret national law in conformity with the wording and purpose of a directive, but in this case the Court made clear that that was a matter for national courts to determine. It accepted that it appeared from the national court’s reference that it was not possible to interpret the national law in a way that was consistent with the requirements of the Directive.

Question 44

Why was indirect effect not possible in the case Evobus Austria GmbH v Niederösterreichischer Gebietskrankenkasse?

Answer 44

It accepted that it was not possible to interpret Austrian law in a way that was consistent with the right to review under Directive (requiring Member States to lay down appropriate procedures for reviewing the legality of the procurement process in specified sectors including transport) as Austrian law specifically excluded authorities awarding transport sector contracts from its review system. In Pupino (Case C-105/03) [2005] ECR I‑5285, the CJ simply held that national courts are not required to interpret national law contra legum, that is against the clear meaning of its words.

Question 45

What are one of the limitations of the Van Colsen principle?

Answer 45

An obligation on national courts to interpret national law in conformity with a directive exists only once the deadline for the implementation of that directive has passed. This was established at Adeneler v Ellinikos Organismos Galaktos (ELOG)

Question 46

Can other forms of community we be indirectly effective?

Answer 46

Yes - The CJ has effectively recognised that even recommendations and opinions, the non-binding forms of EU law, can influence the interpretation of the domestic law of Member States by their national courts (see Grimaldi v Fonds des Maladies Professionnelles).

Question 47

What was the main principle established at Marleasing?

Answer 47

Marleasing had made it clear that national courts must use a purposive approach to interpretation to interpret all national laws in conformity with EU measures, including national laws that predate the EU measure, where they are able to do so.

Question 48

What following principles were laid out by HM Revenue and Customs v IDT Card Services Ireland Ltd?

Answer 48

1) There is no need to find that the statutory language should be ambiguous before interpreting the legislation.
2) The interpretation can change the meaning of the legislation in a way that involves a substantial departure from the language. It can read the language more restrictively or more expansively and can read words into the legislation.
3) However, the court must not rewrite legislation in a way that goes beyond interpretation. It cannot read words into the legislation that go against the grain of the legislation. Nor can it adopt a meaning that departs from a fundamental feature of the legislation or a cardinal principle of it.
4) The interpretation cannot entail the court making a decision which involves it making policy choices that it is not equipped to make nor where there will be practical repercussions which the court is not equipped to evaluate.

Question 49

What are the conditions of state liability laid out by Francovich & Bonifaci v Italian Republic?

Answer 49

The first of these conditions is that the result prescribed by the directive should entail the grant of rights to individuals. The second condition is that it should be possible to identify the content of those rights on the basis of provisions of the directive. Finally the third condition is the existence of a casual link between the breach of the states obligations and the harm suffered by the injured parties.

Question 50

Why were the state liable in Francovich & Bonifaci v Italian Republic?

Answer 50

The directive entailed the grant of rights of protection of workers outstanding wages from insolvency and it is possible to identify the rights. There is a clear causal link between the breach of the states obligation (failure to implement the directive) and the harm suffered by the Francovich workers that were not protected from insolvency for outstanding wages. Therefore the italian state was liable.

Question 51

Why was direct and indirect effect not possible in Francovich?

Answer 51

Direct effect was not possible because the directive lacked clarity about where exactly the money was coming from with which to pay the workers. Indirect effect was not possible because of the absence of any national law capable of interpretation in line with objective of the directive.

Question 52

What questions did Francovich fail to address?

Answer 52

Would the ruling of state liability only apply where there was a total failure to implement a directive or did it apply to other EU law?

Question 53

Which case ensured that a breach doesn’t have to be total (failing completely to implement a directive)?

Answer 53

Brasserie du Pêcheur SA v Germany. This case demonstrates that the breach does not have to be total, as in failure to implement (can be partial failure or wrongly implemented directives) and the breach is not limited to directives (Brasserie and treaty article breach). So long as the breach is ‘sufficiently serious’ it will constitute state liability.

Question 54

What constitutes a ‘sufficiently serious’ breach?

Answer 54

If the Member State had ‘manifestly and gravely disregarded the limits of its discretion’ it would constitute a sufficiently serious breach. A further list of factors constitutes a sufficiently serious breach;

1) the clarity and precision of the rule breached;
2) the measure of discretion left to the Member State by the rule;
3) whether the breach was intentional;
4) whether the breach was excusable;
5) the extent to which a position taken by a Union institution may have contributed to the breach; and
6) the extent to which the Member States had adopted or retained national measures contrary to EU law.

Question 55

Which 3 conditions must be satisfied for a claim in state liability to be established?

Answer 55

1) the rule of law infringed must be intended to confer rights on individuals;
(2) the breach must be sufficiently serious; and (3) there must be a direct causal link between the breach of the obligation resting on the state and the damage sustained by the injured parties.

The legal authority is Brasserie du Pêcheur SA v Germany.

Question 56

Why was thee no state liability in R v HM Treasury, ex p British Telecommunications plc?

Answer 56

The breach, ie the incorrect implementation of the directive of procurement procedures in the telecommunications sector was ‘not sufficiently serious.’

The breach was excusable for a number of reasons;

1) the lack of precision in the relevant provision of the directive;
2) the UK’s interpretation of what was required was made in good faith;
3) the same interpretation of the provision as made by the UK had also been made by other Member States;
4) that interpretation ‘was not manifestly contrary to the wording of the directive or the objective pursued by it’;
5) there was no guidance available through either case law of the CJ or from the Commission, which had not raised the matter with the UK when it had implemented the Directive.

Question 57

What did the case Dillenkofer and others v Germany make clear?

Answer 57

Failure by a Member State to implement a directive at all once the deadline for implementation has passed, as had occurred in Francovich, is of itself a sufficiently serious breach to establish state liability.

Question 58

What is the definition of goods and which case ascertains the definition?

Answer 58

Goods = products which can be valued in money and which are capable of forming the subject of commercial transactions. (Commission v Italy) In this case artistic works constituted ‘goods.’

Question 59

What did the Commission v Italy ( the glass case) establish?

Answer 59

Customs duties are to be prohibited even if the purposes of the duty are something other than protectionism. In the Italian glass case it was actually the retention of art which was the purpose. The effect is the important factor of prohibiting customs duties, not the motive.

Question 60

Which case established that charges having equivalent affect would be prohibited in EU law?

Answer 60

Commission. V Italy ( the statistical levy case) In this case, the Italian govt imposed a small levy on goods exported to MS claiming that the levy was imposed for the purpose of collecting statistical data for the analysis of trade patterns. Again the motive is irrelevant, EU law looks at the effect.

It was adjudged that any pecuniary charge, however small and whatever its designation and mode of application, which is imposed unilaterally on domestic or foreign goods by reason of the fact that they cross a frontier and which is not a customs duty in the strict sense constitutes a charge having equivalent effect even if it is not imposed for the benefit of the State, is not discriminatory or protective in effect and if the product on which the charge is imposed is not in competition with any domestic product.

Question 61

What does Article 30 TFEU state?

Answer 61

The prohibition of customs duties and charges having equivalent effect;