Direct/Indirect Essay

Intro/background

The multiplicity of occasions has promulgated that the EU law takes precedence
over national law, in its sphere of application and domestic courts are under an
absolute obligation to give full effect to EU law.
After effects of WW2, left Europe in tatters and the only way out was to establish a
union, hence way, EU was founded on economic co-operation, and the intention was
to develop into a strongest regional block. The idea behind this was economic
consolidation and trade harmonization, and protection to individual residents and is
clearly stated by the courts, as “Union law not only imposes obligations on
individuals but also confers them legal rights” (Van Gen den Loos)

What is it why is it required?

Direct effect allows and provides and individual with a right to invoke the EU law in
their domestic courts, ensuring grass root level applicability as it was specifically
designed to ensure effectiveness of objectives of uniformity, harmony for the people
of its territory. To achieve the idea, CJ developed interrelated doctrines, namely,
direct effect, indirect effect, and state liability in the case on Van Gen den Loos
En masse, these doctrines seek to ensure that every individual is given protection
before their national courts, which seemingly is the forum for direct effect as ECJ has
no appellant authority.

Definition/ scope

Direct effect is an absolute product of judicial activism that can be demonstrated by

(Van Gend). As a result of this case, ECJ produced two fundamental doctrines;
direct effect and doctrine of supremacy of EU law, or could be seen, as surrendering
of sovereignty. Either the state is governed by dualism or monism, is subject to EU
law, and bound by it- example of it can be derived by the constitutional implications
regarding United Kingdom, prior to Brexit. Subject to dualist states courts made it
clear that any Act of parliament had to be read as subject to enforceable rights under
union law (Factortame)

Conditions

However, further to create certainty, courts stated that EU law will have direct effect if
the conditions stated in (Van Gend) are fulfilled. First condition was for the law to be
precise and clear which brings us our second condition that stated that the law must
be unconditional, meaning it must ensure that the rights are not left upon the
member state’s discretion. Moreover, exceptions and derogations to the law will not
prevent it from taking direct effect (Van Colson) as long as the claim falls under the
general rule, it will take direct effect (Francovich v Italy). The third and last
requirement was for the law to be not dependent upon any further act by member
state. Precisely, it should not have any further implementing measure

Sources and direct effect

Direct effect can be either vertical or horizontal or both. Vertical direct effect is a
mechanism that enables a citizen to invoke rights protected under EU law against
the member state, however, horizontal direct effect is a mechanism that allows the
citizen to invoke rights protected under EU, against another citizen.

Articles
Treaty Articles, being a primary source of EU law, can have both vertical and
horizontal direct effect as clarified by the courts in (Defrenne v Sabena) as it stated
that treaties are formally addressed to member states and does not prevent rights of
individuals from being conferred. The same was advocated in Van Gend which
concerned application of Article 30 TFEU.

Decisions/ International agreements

Decisions or Agreements are also considered as a source of EU law.
While international agreements are complex and complicated in nature so the picture
is quite blur, as the judgments create uncertainty. As in (IFC v Porduktschap) courts
held that the requirements needed for direct effect were not sufficiently provided,
hence claim was denied. And, in (Polydor v Harlequin) the courts held the
agreement to be incapable of creating direct effect as it was not converging with the
aim of the single market. But there are instances where the conditions were held to
be met and agreement was directly effective (Haupzollamt). Provided uncertainty
suggest it to be an area of crux.
Decisions on the other hand only have vertical direct effect (Grad) as the picture in
unclear whether decisions have a horizontal direct effect or not (Recorad)

Regulations
The authority of regulations (another source of eu law) comes from the primary
source itself as Article 288 TFEU defines regulations as directly and generally
applicable to all member states “binding in its entirety” it can also be demonstrated
by the case of (Munoz).
However, if the three conditions mentioned above are not met, will fail the test for
direct effect, as advocated by the case of (Azienda v Regione) as there are
instances where further implementing measures are required. In this case, the
definition of farmer was left up to members state’s discretion. Nevertheless, ECJ has
also stated that “regulations should not be subjected to further incorporation for it,
will make the nature and source of the right obscure” (Commission v Italy
(slaughtered cows)). Reverse approach has been seen in (Commission v UK)
where further implementing measures were acceptable if regulation terms are vague
however should be compatible with regulation, and cannot change the subject matter
of the regulation (Amsterdam v Bulb)

Directives
The major uncertainty arises when it comes to directives. Initially, the ground
breaking judgment of Van Gend expressly stated that Directive don’t have direct
effect since it does not fulfil the third condition “no further implementing measures”,
because the implementation of law is left upon the discretion of member state.
However, as a matter of policy, direct effect of directives was established beyond
doubt in (Van Duyn v Home Office). The case was regarding Van Duyn, the
claimant, who sought to invoke Article 3 of Directive 64/221 to challenge the refusal
to enter and pursue work with Church of scientology. Van Duyn was successful and
entitled to invoke the Directive directly before her national court. if had been in its
prior state, given by Van Gend, member states would have abused their power and
discretion to the detriment of the resident individuals, which would allow attempts of
individuals to take their minor claims to the ECJ, resulting in floodgates.

The current law depicts that a directive is capable of having a direct effect if member
state fails to domesticate the law within the implementation period, and will be
estopped from relying on it, and consequently the directive will only have vertical
direct effect when the time lapses and does not have horizontal direct effect
(Pubblico v Ratti). The rationale behind this restriction was to protect individuals, as
they are not to be obligated or held liable for non-implementation of a directive, as
expressed by the courts in (Marshall v Southhampton), further affirmed by full
bench of ECJ in (Faccini Dori), adding that state must be restricted from taking
advantage of its own failure to comply with community law.

Regulations and Directives have similar issues of restriction upon having direct
effect, however under regulations courts do allow direct effect but to a very restricted
level, and it should converge with the regulation. The question then arises that since
both require further implementation, why does there seem to be a vacuum of
horizontal effect in directives? Courts have explained it in Marshall member states
are under obligation as they are to whom directives are addressed and not
individuals as stated by Article 288 TFEU.

However, we begin to see broader aspect adopted by courts that gradually provided
the remedial development as to the position of horizontal direct defect. Courts have
resorted to other measure, to give effect to union law that at first sight would be
purely horizontal cases. Such as in (Manhold v Helm), a case concering two
individuals, we see a sudden turnabout as ECJ ruled that it was responsibility to
member state to set aside the national law to give full effectiveness of the general
principle. Court suggested that it not necessary to wait for the implementation period
to expire, Direct effect can take place before the period expires. Through a single
stroke of a pen, a tangent elucidation has dilated the entire rationale and extent,
leaving wiggle room for the claimant

Besides that, court the adopted wider scope for the word “state” by clear enunciation
in (Foster v British Gas). ECJ laid down four limb criteria to establish emanation of
state 1) does it perform a public service? 2) pursuant to a measure adopted by a
state (act of parliament) 3) under control of state 4) possess and exercise powers
beyond that of normal understanding.

It emerges as an extension by incorporating “emanation of a state” within the

preamble of vertical direct effect, which means an aggrieved party cannot only sue
the state but also emanation of a state. Emanation of a state was subject to
consideration in (Farrell case) where it clarified that any one condition of the four-
limb-criterion will suffice. (AG Slynn in Faccini Dori) also advocated the pursuance
of horizontal effect and stated that it should be allowed if a public body is involved,
however the position of private individual was still untouched, and directive still does
not have horizontal direct effect but the effect of such wider definition is similar to
what horizontal direct effect would have had.

To fill the vacuum of horizontal direct effect of directives, settle the prolonged
controversies, two alternatives to horizontal direct effect were introduced.

First, incidental horizontal direct effect created in which discriminatory measure of an

employer towards employee would be compensated by state relying on the
justification by employer that it is failure of state for non-implementation of directive
(Ruiz). Academic commentary typically refers to it as cases involving “incidental
effects” of directives against private parties instead of full-brown horizontal direct
effect

Indirect effect

Furthermore, indirect effect was introduced (Von Colson) for the individuals who
cannot rely on Directive as the conditions were not met. The doctrine traces its
development from (Article 4(3) TEU) which is based on rules of interpretation
“Pursuant to the principle of sincere cooperation, the union and member
states shall, in full mutual respect assist each other in carrying out tasks
which flow from the treaties”. A line of reasoning was put, namely indirect effect.
This is also referred to as direct effect by “backdoor” based on the rules of
interpretation. Since it is enrooted in the treaty, it cannot be said to be a product of
judicial activism. However, the rationale behind this was for the member states to
interpret national law in light of EU law in order to make it compatible with EU law
which seems quite opposite of what conditions of direct effect suggest. Direct effect
is only established if the law is unconditional. It was a way to invoke the directive for
protection during its implementation period. However further courts extended the
principle and demonstrated that the duty to interpret the national legislation with
subject to EU law will uphold whether the legislation is passed before or after
Directive (Mar leasing). The decision was highly criticized as the retrospective effect
challenged the parliamentary supremacy. It was complex for dualist states
specifically and denial was visible in (Webb v Emo)

Another controversy surrounded, and it directed towards the limitations of the

doctrine. the aspect where there is no relevant national law in light of the Directive
passed. It was concluded that the doctrine of indirect effect pre-supposes the
existence of some relevant national law that is capable of being interpreted in
respect to the Directive, to carry out the duty “so far as possible” (Konstantinos). In
absence of any national law, this doctrine will be inapplicable as in (Wagner Miret)
Spanish law only had one interpretation, hence doctrine denied.

Another limitation was that it is subject to general principles such as certainty of law.
If it created uncertainty to national law doctrine will not apply (Kolpinghuis). It will
also not apply where it aggravates or gives rise to criminal liability (Arcaro case), but
such limitation does not exist in civil cases (Centrosteal v Adipol)