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DIRECT EFFECT Direct Effect: refers to the content of the Community provisions and describes its capacity to give

rights to individuals which they can enforce in their domestic courts. Directly effective principles can be enforced by individuals in their domestic courts and therefore they are known as direct effect. VARIETIES OF DIRECT EFFECT In Van Gend en Loos it was decided that a citizen was able to enforce a right granted by European Community legislation against the state - the question of whether rights could be enforced against another citizen was not addressed. In Defrenne v. SABENA, the European Court of Justice decided that there were two varieties of direct effect: vertical direct effect and horizontal direct effect, the distinction drawn being based on against whom the right is to be enforced. Vertical direct effect concerns the relationship between EU law and national law - specifically, the state's obligation to ensure its observance and its compatibility with EU law, thereby enabling citizens to rely on it in actions against the state (or against an "emanation of the state" as defined in Foster v. British Gas plc). Horizontal direct effect concerns the relationship between individuals (including companies). If a certain provision of EU law is horizontally directly effective, then citizens are able to rely on it in actions against each other. Directives are usually incapable of being horizontally directly effective due to the fact that they are only enforceable against the state. Certain provisions of the treaties and legislative acts such as regulations are capable of being directly enforced horizontally. VEN GEND EN LOOS The case of Van Gend en Loos created the principle of direct effect. Van Gend en Loos Facts: This case involved an individual who was trying to bring chemicals from Germany to the Netherlands. However the Netherlands wanted to charge a tax on the products simply because they crossed the border. Van Gend sought to rely on Article 25 EC which states that customs duties on imports and exports and charges having equivalent effect shall be prohibited between Member States. The Courts held in this case that in order for there to be direct effect certain conditions must be met. These conditions were the following: 1. The wording of the Article had to be Clear and Precise; 2. It must be unconditional; 3. It must not be dependent on further action by a Member State or the EU If these conditions were met, direct effect could be relied upon. In the case of Van Gend en Loos, Article 25 was clear and precise, it was unconditional and it was not dependent on further action by a Member State or the EU and therefore direct effect applied and the charges were removed. In Van Gend the ECJ created the principle of direct effect and held that TREATY ARTICLES are capable of direct effect. However, in order to be directly effective, a Treaty article must be sufficiently clear, precise, and unconditional. In Van Gend it was noted that direct effect can happen vertically. However in Defrenne the issue of horizontal direct effect was also looked at.

The legal instruments that can have direct effect are the following: 1. Treaty Articles 2. Regulations 3. Decisions The following case showed that it was not unconditional and therefore direct effect could not be pursued. Petrie v Commission Facts: This was a case involving nationality discrimination. They sought access to case documents but were refused. They sought to rely on Article 255 EC which states that every citizen of the Union shall have a right of accesssubject to the principles and conditions to be defined. Held: This was not unconditional and therefore did not fulfil the Van Gend en Loos conditions for direct effect to occur. VAN GEND EN LOOS PRINCIPLES The ECJ first articulated the doctrine of direct effect in the case of Van Gend en Loos, the European Court of Justice laid down the criteria (commonly referred to as the "Van Gend criteria") for establishing direct effect. The provision must: Be clear, precise Unconditional, Not dependent on any national or EU implementing measure If these criteria are satisfied, then the right or rights in question can be enforced before national courts. Of course whether or not any particular measure satisfies the criteria is a matter of EU law to be determined by the EU Courts. What is meant by Clear, Precise, and Unconditional? Defrenne v Sabena Facts: The individual was a female stewardess who complained that she was getting fewer wage as compared to the men who were baggage handlers. She sought to rely on Article 141 TEU which indicates that there should be equal payment for men and women for work of equal value. This case is significant because Article 141 is not clear as to how equal pay for men and women are to be achieved however, this is what it stipulates. From a black letter point of view this would not allow for direct effect, however, the courts in this case held that the article was clear and precise due to its objective of removing discrimination between men and women. Therefore for policy reasons (as people would hire more women as compared to men) the courts held that Article 141 was clear and precise and was capable of direct effect. Following Defrenne the principle of Horizontal direct effect was established. As previously stated, with vertical direct effect individuals can claim against Member States whereas thanks to Defrenne, individuals can now rely upon horizontal direct effect to claim against individuals. Carbonari and others Facts: This case related to trainee doctors and the right to appropriate remuneration. Held: The ECJ stated that the obligation was clear and precise however it was not unconditional as it did not indicate what level or how much to pay. It was stated that directives needed to transpose the law correctly so that they can have direct effect.

TREATY ARTICLES Direct effect is applicable when the particular provision relied on fulfils the Van Gend en Loos criteria. It is therefore applicable in the case of treaty articles (Van Gend en Loos was a claim based on a treaty article), in which case it can be both vertically and horizontally directly effective. REGULATIONS Regulations are also subject to direct effect. As Article 288 TFEU (ex Art 249 TEC) explicitly provides that regulations "Shall be binding in its entirety and directly applicable in all Member States" the ECJ has confirmed that they are therefore in principle directly effective stating that "Owing to the their very nature and their place in the system of sources of Union law, regulations operate to confer rights on individuals which the national courts have a duty to protect If a specific right is conferred therefore a regulation can be both vertically and horizontally directly effective. However, whilst it is generally true that Regulations are capable of direct effects, all provisions still have to satisfy the criteria laid down by the court in order to create direct effect - and as a result there can be exceptions where regulations will not give rise to direct effects capable of enforcement by an individual, for example Eridania v Ministry of Agriculture and Forestry. DECISIONS Decisions are directly effective against whomever they are addressed to, as under Article 288 TFEU (ex Article 249 TEC) of the EC Treaty "they are binding in their entirety on the party to whom they are addressed". DIRECTIVES The principle that DIRECTIVES are capable of direct effect and need to be clear, precise, and unconditional was established through the case of Van Duyn and confirmed in Grad v Finanzamt. Leading case law for the direct effect of Directives is Van Duyn v UK which established vertical direct effect of Directives and also Marshall v Southampton & South West Health Authority which established that there is no horizontal direct effect of Directives. Van Duyn Facts: Van Duyn was a member of the Church of Scientology and wished to come to the UK to work for them however was refused entry by the home office. However, under Directive 64/221 any refusal for freedom of movement based on public policy must be due to the individuals personal conduct. She argued that being a member of the church of scientology did not constitute grounds for refusal on personal conduct and she sought to rely on the directive even though the UK had not implemented it yet. Held: The ECJ held that Van Duyn could invoke the directive before the national court, thus establishing the principle that directives are capable of direct effect. Grad v Finanzamt Traunstein In Grad v Finanzamt Traunstein,[6] a case involving VAT, the ECJ ruled that a directive could be directly effective, as they imposed an obligation to achieve a required result. As the ECJ held in Becker, another case involving VAT, "wherever the provisions of a directive 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 insofar as the provisions define rights which individuals are able to assert against the State." The case of Ratti confirmed the Van Duyn principle but added one more condition. This condition stated that a member states obligation to implement becomes absolute only when the time-limit for implementation has EXPIRED. Therefore a directive cannot be directly effective until its implementation deadline has passed.

Ratti Facts: This case involved illegal labelling on solvents that needed to conform the Italian standard which was higher than the EC standard. Ratti had not complied with the Italian standards and sought to rely on the directive as a defence. The time limit for implementation had expired and therefore Ratti was able to rely on one directive. This however created the principle that DIRECTIVES needed to past the time of implementation for them to have direct effect. In Pubblico Ministero v. Ratti, however, it was held that if the time limit given for the implementation of the directive has not expired, it cannot have direct effect. Directives were directly effective only if the prescribed date, by which the Member State should have implemented it, had passed. Additionally, in instances where the Member State has introduced the required legislation, but has done so defectively, the directive may still be directly effective, as in the Verbond van Nederlandse Ondernemingen (VNO) case. The case of Inter-environmental highlighted the need for Member states to refrain from taking any actions that may compromise the result prescribed from the directive during its implementation period. National courts must also determine whether the type of transposition required by the directive. If the directive is implemented correctly, individuals can rely on it directly before their national courts. Where it to be incorrectly implemented or the transposition period has elapsed then you can rely on the directive itself. Inter-Environmental Facts: This case involved a directive on waste disposal. There was a directive regulating waste disposal however its deadline for implementation was April 1, 1993, however the Belgian government introduced a law on June 1, 1992 which is contrary to the directive. Principle: The ECJ held that yes the directive did not have direct effect as the implementation deadline had not occurred but that Member states must also refrain from doing anything to counter act the directive during this period. Article 249 EC stipulates that Directives are aimed at Member States and not individuals and for that reason it is not the individuals fault for any incorrect implementation but rather Member states must comply with the instructions of the directive. Article 10 EC states that national courts must implement the directive so far as possible to give the directive compatibility which is a sort of teleological technique of indirect effect. However, as vertical and horizontal direct effect are permitted for Treaty Articles (Van Gend en Loos) it has been questioned whether or not to allow horizontal direct effect for directives. Therefore we question whether or not horizontal direct effect should be allowed for directives: Argument Against: It is difficult for individuals to know their obligations Directives are addressed and meant for states Individuals cannot know faults in the national implementing legislation Arguments For: There is no difference in practice from other EC instruments Citizens expect to be able to rely upon Directives Rights should not vary between public & private bodies (e.g. employment rights) NOTE: Unlike Treaty provisions and regulations, directives cannot have horizontal effect (against another private individual or company), as this is adjudged contrary to the principles of equality (see Marshall v Southampton and South

West Hampshire AHA). As such, Directives are currently only vertically directly effective (i.e. against the state, a concept interpreted broadly by the ECJ, including state schools and other "emanations of the state"). The case of Marshall v Southampton highlighted the issue of horizontal direct effect. Marshall v Southampton Facts: In this case the claimant was a 60 year old woman who was dismissed from her position at the hospital because of retirement age. However, for men the age of retirement was 65 and this was seen as discriminatory. She sought to rely on the Equal treatment directive however the directive had not been fully implemented in the UK. Principle: The ECJ held the Directive was sufficiently clear and imposed obligations on the member state. This applied because she worked for an arm of the state and could thus rely directly upon the directive. In the case of Foster v British Gas a directive was used against a company which indicated that horizontal direct effect did occur however, the company; British Gas was an emanation of the state and therefore it was not held to be a private company. Foster v British Gas Facts: In this case the female employees of British Gas were dismissed at the retirement age of 60 whereas men were dismissed at 65. This was again seen to be discriminatory but the defendants claimed they were not under the directive as they were not a member state. Principle: The ECJ held that British Gas was an emanation of the state as is a monopoly by the state and subject to direction by the relevant minister. Therefore this constituted an emanation of the state As directives can only be relied upon in a vertical relation if one was to claim against a company they must be an emanation of the state outlined in Foster v British Gas. Foster provides a three-limbed test for public body, or emanation of the state: A body made responsible by the state for providing a public service Under state control With special powers for that purpose, beyond those normally applicable between individuals The case of Foster v British Gas demonstrates the court's willingness to confer the rights of a directive unto individuals, for the purpose of this case the court purported that any government organisation, nationalised company or company working in the public sector can be considered as a public body for the purpose of implementing vertical direct effect when a more narrow reading of the case might infer that horizontal direct effect would need to require for application. This is demonstrated in the case of Van Colson where the court established the practice of 'reading in' a directive into existing national law to realise the directive's effect - despite it not actually being a part of the legislation. Further case law to demonstrate this practice is Francovich v Italy where action could be taken against the government by an individual for their failure to implement a directive and the subsequent loss of rights suffered in court. The case of Doughty v Rolls Royce cast doubt upon the Foster test but the Court of Justice continues to use Foster. The Case of Reiser also affirmed that a directive could only be used in a vertical relationship and once the time of implementation has expired then an individual would be able to rely upon the direct effect of it.