EU Law Principles of Direct Effect, Indirect Effect, State Liability - Essay Example

Therefore, in conclusion, in respect of Scenario Eastern Interiors and the other company will not have much re under EU Law, since the matter concerns an EU regulation. All EU Regulations have a direct effect within the Member States and will be fully applicable and automatically implemented by them. Hence the law in the Member State that depends upon the Regulation will be determined by the terms specified within the Regulation itself and there is little scope for any modification by the Member State. According to the ECJ ruling in the case of Van Gend, European Community regulations can and must be tried before national courts and therefore Eastern Interiors can bring action on refusal of license in UK courts. However since the UK Government in Tachographics has left the matter of implementation of EU regulations to individuals without any State intervention, it is not likely to interfere unless Eastern Interiors can demonstrate a discriminatory bias in the decision of the European Commission to refuse its license. The other Company does not have any grounds for appeal, since it does not even have a reply from the Commission. Action can be bought against EU regulations by a Member State by going in appeal to the ECJ, which is the only authority that can possibly over rule the decisions of the Commission. However in this instance, since only two companies are affected by the refusal/denial of license, it is unlikely that any appeal will be entertained by UK Courts. Through the concept of direct effect, member states are bound to apply EU regulations in their entirety, and they cannot be implemented piece meal (See case 128/78 Commission v UK (1979) ECR 419). In the event of non compliance with the EU regulation, the UK may have to change its laws to accommodate EU Law (See the case of C-246/89R Commission v UK (1989). However this case concerns the refusal of licenses, for which restrictions on availability have already been specified, and since the regulation will be implemented in its entirety, the restriction on licenses and the right to refuse or deny a license as laid out in the Regulation, will have primary and predominant effect in the UK and individuals such as Eastern Interiors will have to accept and adhere to the terms of the Regulation. EU regulations are in general very detailed and unless any specific remedies are available to individuals under the terms of the regulation, it is unlikely that eastern Interiors or the other company can successfully seek remedy under EU law. In the case of Scenario 2, both the Direct and indirect effect can apply, since this concerns a Directive. A member State is bound to enforce a Directive, therefore UK has to enforce the terms of the EU Directive which seek to impose controls on furniture quality through inspection checks. A Directive can be directly effective in a Member State if it meets the conditions laid out in the Directive, but a Directive has also been said to have indirect effect because of the flexibility offered to the Member States in procedural implementation of the Directive, which is decided on the basis of equivalence and effectiveness. Eastern Interiors and the other companies have excellent remedies available under EU law, since individuals and corporations can bring action against member States for failure of implementation of a Directive. Under the criterion of “effectiveness “ of the Directive in relation to national law, it must be noted that the new statute or law introduced would render ineffective, EU law as laid out in the Directive. Therefore, it can be successfully challenged in the UK Courts. In the case of the new statute introduced by the UK, a ban has been imposed on furniture imports from China. This moves outside the purview of minor discrepancies arising out of the phenomenon of equivalence, where State law procedures may be different within each country. The Statute is a radical departure from the objectives set out in the EU Directive – while the Directive seeks only to impose regulation checks in the interest of health and safety, the new UK Statute seeks to ban import altogether, which goes against the principles of free trade and competition which are the objectives laid out in the EC Treaty. Hence State liability in this instance could even extend to monetary damages that Eastern Interiors are likely to sustain through losses from business opportunity which could even make these companies go out of business if the statute is enforced. Since the Statute has been introduced through parliamentary approval, the hesitation of the UK Courts is understandable, since enforcing community law as specified in the Directive could mean going against the statute which spells UK law. Therefore, the European Community Act of 1972 would form a good basis for an interpretation of EU Law by UK courts which could bring relief to the appellants Eastern Interiors and result in the statute being modified to conform to the specifications that have been laid out in the Directive, rather than extending into an area that challenges effectiveness, and makes the EU law ineffective. Read More