Direct Effect of Directives - Coursework Example

Introduction EC Directives are a means by which the European Community seeks to harmonize domestic laws among its member s. Theoretically at least, EC Directives are calculated to afford Community citizens a means of redress in domestic courts in the event they are denied the benefit of rights under EC Directives.1 Directives are applied by virtue of the doctrine of Direct Effect which can be applied vertically or horizontally. Vertical Direct Effect is applicable against Member States and its agents in the event a directive is either improperly implemented by a Member State or not implemented within the timeframe provided for its implementation.2 Direct Horizontal Effect applies between citizens within the European Community and is only applicable if the EC Directive has been properly implemented.3 The ineffectiveness of Direct Horizontal Effect has been the subject of much debate among jurists and academics alike. This paper focuses on the doctrine of Direct Effect and the debilitating gap for redress imposed by the limited application of Directives under the Doctrine of Horizontal Effect. The Doctrine of Direct Effect The doctrine of Direct Effect is not provided for by any statutory instrument. Instead it is a principle of law formulated and developed by the European Court of Justice. The original rule was formulated by the European Court of Justice in the case of Van Gend en Loos v. Nederlandse Administratie der Belastingen (Case 26/62); [1963] ECR 1. In this case it was held that individual rights conferred upon the individual by virtue of EC law should be enforceable in the national courts. This right however was qualified in the following manner: "...wherever the provisions of a directive appear...to be unconditional and sufficiently precise, those provisions may, in the absence of implementing measures adopted within the prescribed period, be relied upon as against any national provision which is incompatible with the directive or in so far as the provisions define rights which individuals are able to assert against the State."4 Ideally Directives have the force of law throughout the European Community. In fact in Van Duyn v Home Office, the European Court expounded upon its previous ruling in Van Gend en Loos v. Nederlandse Administratie der Belastingen setting the tone by holding that Directives are unconditional if they were capable of strict application and not subject to an element of judicial navigation. In the Van Duyn case, it was determined that a provision relevant to the freedom of movement of workers was ineffective because the Directive was: “…subject to limitations justified on grounds of public policy, public security, or public health”.5 Moreover, in Publico Ministero v Ratti [1979] ECR it was held that by virtue of Article 189 (now Article 249) of the Treaty of Rome, regulations and directives are capable of having the force of law in each Member State if they contain language indicating that they are ‘unconditional and sufficiently precise.’6 Article 249 of the EC Treaty lays the framework for the application of Directives and at the same times provides a rationale for the restraints imposed by the Doctrine of Horizontal Direct Effect. Article 249 provides as follows: “In order to carry out their task and in accordance with the provisions of this Treaty, the European Parliament acting jointly with the Council, the Council and the Commission shall make regulations and issue directives, take decisions, make recommendations or deliver opinions. A regulation shall have general application. It shall be binding in its entirety and directly applicable in all Member States; A directive shall be binding, as to the result to be achieved, upon each Member State to which it is addressed, but shall leave to the national authorities the choice of form and methods; A decision shall be binding in its entirety upon those to whom it is addressed…”7 The European Court of Justice has demonstrated a willingness to interpret Article 249 in favor of the Vertical Direct Effect of Directives but have been hesitant in respect of Direct Horizontal Effect. The stop gap appears to be the provision that directives are binding “upon each Member State to which it is addressed.”8 Obviously European Community Law by virtue of the Horizontal Effect of Directives places limitations on individuals’ right to pursue one another in instances where an EC Directive has not been properly implemented by a Member State or not implemented at all. The European Community by imposing this stop gap in respect of Directives having a Horizontal Direct Effect is recognizing the autonomy of individual Member States.9 The Advocate-General in Marshall v Southampton Health Authority (No 1) [1986] ECR 73 Case No. 152/84 emphasized that Directives are not addressed to individuals and the notion of Horizontal Effect within the meaning of Article 249 (Article 189 as it then was) cannot as such be applied against the individual. The Advocate-General went on to explain: “I remain… of the view expressed…that a Directive not addressed to an individual cannot of itself impose obligations on him. It is, in cases like the present, addressed to Member States and not to the individual. The obligations imposed by such a Directive are on the Member States.”10 Obviously, once a directive is properly implemented by virtue of domestic legislation it is applicable by all citizens under the jurisdiction of the domestic venue. Until that time Directives are only applicable against Governments and its agencies under the doctrine of Horizontal Direct Effect. In the case of Emmot v Minister for Social Welfare and the AG [1991] a half-hearted attempt was made to explain the rationale for the limitations of the application of the doctrine of Horizontal Direct Effect. According to the ruling contained in Emmot v Minister for Social Welfare and the AG it is unfair to anticipate that individuals will know the law when it has not been properly legislated or not legislated at all. The Government is an entirely different mater altogether and already has an obligation to not only know the law but to see to it that the law is properly implemented and followed. There can be no justification for permitting the Government to avail itself of its own failure to properly legislate.11 At the same time it is argued that the limitations placed on the doctrine of Horizontal Direct Effect is necessary for the preservation of Member State’s discretion over domestic policies and at the same time allow for some measure of harmonization of individual rights and obligations within the European Community. However, James Marson points out that: “The problem with discretion is that Member States often default in the correct and timely application of EC obligations, and therefore individuals in different Member States have varying levels of protection depending on whether the particular Member State has fully implemented the Directive or not.”12 Ironically, restraints placed on the application of EC Directives under the doctrine of Horizontal Direct Effect have the result of compromising the protection of individuals that the Directive seeks to safeguard and promote. Academics argue that drawing the line in respect of the Horizontal Direct Effect to the extent that Directives not properly implemented cannot be enforced against individual runs counter to the new and improved spirit of citizen unity within the modern day European Community. As Dougan observes, since 1992 the EC has made a concerted effort to bring the citizens of Europe together in much the same manner as the citizens of a single nations under the principle of equality of rights and obligations and for the enhanced freedom of movement of goods and people among Member States. Dougan points out: “… the (European) Court’s denial of horizontal direct effect for Directives generates imbalances in the levels of legal protection enjoyed by different groups of citizen which should be viewed as politically unacceptable in the modern Union”.13 Marson however, defends the inconsistent impact of the doctrine of Horizontal Direct Effect by maintaining that it exists only as a means of permitting redress for those citizens who have been denied rights under a directive against government officials until such time as the Directive is implemented into domestic law.14 In other words the Government of a particular Member State has nothing to gain by deliberately refusing to properly implement an EC Directive since an individual can use it against the Government in the mean time. Be that as it may, it seems grossly unfair that Government negligence in respect of failure to legislate properly should deny individuals the protection of law granted them by virtue of a legally binding EC Directive. Szyszczak argues that: “Community law produces autonomous rights which are brought to citizens by way of a series of devices which in turn ensure that superior Community rights are enforceable in national legal systems... The logic of a Europe of citizens rather than a Europe of States would suggest that Community rights must be enforceable against the immediate parties in litigation, both public and private.”15 Perhaps the best argument in favor of the limitations placed upon the Doctrine of Horizontal direct Effect in founded upon the theory that in the absence of documented legislation individuals on both sides of a legal dispute have the uncertainty of law to deal with. In the absence of legislation it becomes a matter far too complicated for lay persons to argue for and against rights in an effective manner. It therefore becomes an exercise in futility when there is no means of identifying express rights and obligations. Directives as they stand require expert interpretation and adjustment so as to bring it within clearly defined parameters of domestic legislation. To permit individuals to use unimplemented directives have the potential for the creation of a myriad of inconsistent, uncertain and unpredictable legal precedents in national courts. James Marson argues against this submission on the basis that individuals are already at liberty to pursue claims under the Doctrine of Vertical Direct Effect in respect of unimplemented directives. Therefore if uncertainty and inconsistency are of no moment to the application of the Vertical Direct Effect they are not suddenly of concern in respect of the Doctrine of Horizontal Direct Effect. Marson explains as follows: “Arguments of legal certainty offer an unconvincing basis for denial of HDE when, as the law stands, it is necessary for an individual to take an action against the State under the doctrine of VDE (where applicable) or State Liability in order for the domestic law to be brought into line with the EC Directive.”16 There are other significant difficulties associated with the lifting on restraints on the doctrine of Horizontal Direct Effect in respect of unimplemented Directives. Chief among them is the difficulty with enforcing rights and obligations against a private individual who for all intents and purposes has not reliable means by which to know what his or her obligations are. In Faccini Dori v Recreb [1995] 1 C.M.L.R. 665 the European Court of Justice offered another reason for the limitations and restraints placed upon the application of the Doctrine of Horizontal Direct Effect. In essence the European Court of Justice pointed out that the spirit of the EC Treaty as expounded upon via Article 189 (now Article 249) requires that Regulations and Directives are both to be regarded as and treated as secondary sources of law. To permit Directives a broad application by virtue of Horizontal effect would open the door for similar treatment in respect of unimplemented Regulations. These kinds of measures are contrary to the EC Treaty which requires that Regulations and Directives merge with domestic law for effect and to do otherwise would have the effect of overriding and modifying the European Treaty which can not be altered by case law.17 The European Court of Justice added that to give full Horizontal Direct Effect to Directives not properly implemented would be: “... 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.”18 Regulations impose upon Member States a specific obligation and duty whereas Directives impose upon Member States a duty to achieve specific results.19 Another argument supportive of the limitations placed on the Doctrine of Horizontal Direct Effect in respect of individuals is founded on the grounds that individuals can seek redress by other legal mechanisms against the State and the individual. As Marson points out: “Thus an individual denied rights by non-implementation of the directive could  obtain the right indirectly via interpretation of the implementing legislation, or, failing that, by bringing a State Liability action for damages if they have suffered any loss.”20 This mechanism is referred to as the doctrine of indirect effect. Marson goes on to point out the weaknesses of this argument. To start with transparency is problematic for the individual who very likely has limited knowledge of EC Laws and relies by and large on domestic legislation. Moreover, the vehicle for state liability is more concerned with a remedy in damages and has very little to do with the enforcement of individual rights.21 There are instances where the European Court will bend the rules underlying the Doctrine of Horizontal Direct Effect in an appropriate case. For instance in the case of Barbara Bellone v Yokohama SpA  [1998] ECR I-2191 an individual attempted to secure payment under an agency contract with a private business. The legal issue involved Italy’s improper implementation of an EC Directive requiring registration of self-employed agency contracts. While holding that the Directive could not have Horizontal Direct Effect, the Advocate General ruled that Italian national laws could be interpreted in such a way so as to give effect to the directive.22 As a result the individual was entitled to relief against a private entity despite the limitations placed by virtue of the Doctrine of Horizontal Direct Effect. In another case, Unilever v Smithkline Beecham [1999] ECR I-431 one private firm was able to pursue a claim against another private entity on the basis that the domestic laws of one country were in contravention of an unimplemented EC Directive and contravened the rights of an individual of another Member State. In the Unilever case Smithkline Beecham were unable to export their cosmetic products to Unilever an Austrian Company since domestic laws of Austria forbid products containing certain properties. Beecham challenged Unilever’s ability to rely on domestic regulations on the grounds that it offended the EC Directive mandating the free movement of cosmetic goods throughout Member States. The ECJ held that Austria’s domestic laws did indeed contravene the provision of the EC Directive mandating the free movement of cosmetic laws and it would not be observed.23 The result was that one private individual was able to seek redress against another private individual in respect of an unimplemented directive and get past the limitations set by the Doctrine of Horizontal Direct Effect. In Vaneetveld v SA Le Foger [1994] ECR I-763, the Advocate General argued that the recent trend in EC Law as applied by the courts was to promote a uniformity of rights and obligations within the European Community. The denial of Horizontal Direct Effect was in essence grossly unfair in view of the current trend toward uniformity. The Advocate-General went on to say in greater detail: “It would be consistent, in particular, with the recent emphasis in the Court’s case law on the overriding duty of national courts to provide effective remedies for the protection of Community rights. It is perhaps because a new approach to Directives is required by the Court’s recent case law that the views of commentators have tended, recently, to advocate assigning horizontal effect to Directives. As for the argument based on the need for uniform application of Community law, the case is self-evident; but it is necessary to ensure that Community legislation is uniformly applied not only as between Member States but within Member States.”24 The overriding issue is one of equity and equality. It is inconsistent with the idea of comity among Member States of the European Community to regard individuals as equal citizens of the European Community but at the same time to make provisions for the implementation of Directives but to limit their effect when Member States fail to properly implement them. This contradicts the very reason Directives are issued and are required to be implemented. As Marson states, the right to enforce them against individuals should be as freely exercised as the right is exercised against the Member State. The stifling application of the Doctrine of Horizontal Direct Effect is a result of the European Court’s propensity to narrowly interpret the provisions contained in Article 249 of the EC Treaty. 25James Marson calls for a more liberal approach by the European Court of Justice and adds that: “Overall, a change is necessary in the provision of remedies available for non- or incorrect transposition of a directive. The current remedies allow too much scope for Member States to avoid their obligations.”26 Conclusion As noted throughout this discussion there are no reasonable arguments in favor of denial of the Doctrine of Horizontal Direct Effect. Any argument against its free application is easily countered by the fact that the Doctrine of Vertical Direct Effect is applied freely without significant exception. If those concerns can be overcome by the Doctrine of Vertical Direct Effect surely they can be overcome by the Doctrine of Horizontal Direct Effect. The right of an individual derived under an unimplemented Directive is no less important regardless of the identity of the defendant. Directives are designed to create or foster Community rights for all citizens within the Community. When a Member State fails to implement the Directive, the restraints placed on the application of the Doctrine of Horizontal Direct Effect function to limit individual rights. Directives have as their primary function the promotion and enforcement of equal rights and obligations of all citizens within the European Community. The denial of the application of the Doctrine of Horizontal Direct Effect as against individuals in the case of non-implementation or incorrect implementation of a Directive has only one aim and that is to undermine the true intent of the EC Treaty and the Directive itself. Works Cited Barnard, C., and Hepple, B. (2000) ‘Substantive Equality’ Cambridge Law Review, Vol. 59, pp. 562-585 Barbara Bellone v Yokohama SpA  [1998] ECR I-2191 Craig, P. P. (1997) “Directives: Direct Effect, Indirect Effect and the Construction of National Legislation”. European Law Review, December, pp. 519-538. Dougan, M. (2000) “The ‘Disguised’ Vertical Direct Effect of Directives?” Cambridge Law Journal, 59, 3, pp. 586-612 EC Treaty Emmot v Minister for Social Welfare and the AG [1991] 3 CMLR 894 Faccini Dori v Recreb [1995] 1 C.M.L.R. 665 Marshall v Southampton Health Authority (No 1) [1986] ECR 73 Case No. 152/84 Marson, James. “Access to justice: a deconstructionist approach to horizontal direct effect.” [2004] 4 Web JCLI http://webjcli.ncl.ac.uk/2004/issue4/marson4.html Viewed September, 2007 Publico Ministero v Ratti [1979] ECR Snyder, F (1993) ‘The Effectiveness of European Community Law: Institutions, Processes, Tools and Techniques’ The Modern Law Review, January 1993, pp. 19-54 Szyszczak, E. (1996) “Making Europe More Relevant to its Citizens: Effective Judicial Process”. European Law Review, Vol. 21, October, pp. 351-364 Unilever v Smithkline Beecham [1999] ECR I-431 Van Duyn v Home Office [1974] ECR 1337 Van Gend en Loos v. Nederlandse Administratie der Belastingen (Case 26/62); [1963] ECR 1 Vaneetveld v SA Le Foger [1994] ECR I-763 Read More