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Direct effect should not be confused with Vertical effect and debates over the Horizontal effect of the British Human Rights Act

Direct effect is the principle of European Union law according to which provisions of Community law may, if appropriately framed, confer rights and impose obligations on individuals which the courts of European Union member states are bound to recognise and enforce. Not explicitly mentioned in any of the EU Treaties, the principle of direct effect was first established in relation to provisions of those treaties European Court of Justice in Van Gend en Loos v. Nederlandse Administratie der Belastingen,[1]. Direct effect has subsequently been loosened in its application to treaty articles and the ECJ has expanded the principle, holding that it is capable of applying to virtually all of the possible forms of EU legislation, the most important of which are regulations and in certain circumstances to directives.

Contents

The Principle

The ECJ first articulated the doctrine of direct effect in the case of Van Gend en Loos,[1] 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 sufficiently clear and precisely stated,
  • be unconditional or non-dependent, and
  • confer a specific right for the citizen to base his or her claim on.

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.

Varieties of direct effect

In Van Gend en Loos[1] 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,[2] 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.[3]

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.

Application of 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 can also be subject to direct effect. As under Article 288 TFEU (ex Art 249 TEC) 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 Community law, regulations operate to confer rights on individuals which the national courts have a duty to protect"[4] If a specific right is conferred therefore a regulation can be both vertically and horizontally directly effective. The ECJ in

Decisions

Decisions are directly effective against whomever they are addressed, 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

In Grad v Finanzamt Traunstein,[5] 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 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 insofar as the provisions define rights which individuals are able to assert against the State."

In Pubblico Ministero v. Ratti,[6] 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.

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 (1986)). 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").

Direct effect on procedural law

In Comet v. Produktschap,[7] the European Court of Justice established that the procedural rules of each member state generally apply to cases of EU law. However, two basic principles must be adhered to: "equivalence" (the procedure for EU cases must be equivalent to the procedure for domestic cases) and "effectiveness" (the procedure cannot render the law functionally ineffective).

Footnotes

  1. ^ a b c (Case 26/62); [1963] ECR 1; [1970] CMLR 1
  2. ^ (Case 2/74) [1974] ECR 631
  3. ^ (Case C-188/89) [1990] ECR I-3313).
  4. ^ Case C-253/00 Munoz [20002] ECR I-7289 para.27
  5. ^ (Case 9/70) [1970] ECR 825
  6. ^ (Case 148/78) [1979] ECR 1629
  7. ^ (Case 45/76) [1976] ECR 2043

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