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The Theory and Practice of Legislation

ISSN: 2050-8840 (Print) 2050-8859 (Online) Journal homepage: http://www.tandfonline.com/loi/rtpl20

Competence versus competency: judicial review of


impact assessments by the Court of Justice of the
European Union

Edwin Alblas & José Luis Castro-Montero

To cite this article: Edwin Alblas & José Luis Castro-Montero (2017): Competence versus
competency: judicial review of impact assessments by the Court of Justice of the European Union,
The Theory and Practice of Legislation, DOI: 10.1080/20508840.2017.1408311

To link to this article: https://doi.org/10.1080/20508840.2017.1408311

Published online: 01 Dec 2017.

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THE THEORY AND PRACTICE OF LEGISLATION, 2017
https://doi.org/10.1080/20508840.2017.1408311

Competence versus competency: judicial review of


impact assessments by the Court of Justice of the
European Union
Edwin Alblasa and José Luis Castro-Monterob
a
Sutherland School of Law, University College, Dublin, Ireland; bLaw School, Universidad
Andina Simón Bolívar, Quito, Ecuador
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ABSTRACT
At a time in which regulatory ex ante instruments increasingly fulfil the role of
legitimation of legislative action in the European Union (EU), we analyse why
and how the Court of Justice of the EU (CJEU) should assess regulatory impact
assessments (IAs). Although intra- and inter-institutional checks in order to
secure the quality of IAs have already been instituted, we still identify several
pitfalls of an exclusive non-judicial review system. To effectively engage with
IA review, we argue that it is necessary for the CJEU to amass competence –
i.e. legal capacity – to engage with instruments used to achieve regulatory
quality, as well as gradually enhance its competency – i.e. professional ability
– to decide upon the validity and reliability of scientific evidence underlying
IA reports.

KEYWORDS Court of justice of the European Union; impact assessment; judicialisation; law making;
proportionality

1. Introduction
The choice of regulatory action in the European Union (EU) is inherently linked
to questions of conferral and subsidiarity, essentially asking which agency –
national or supranational – is competent to act in a specific field of policy-
making.1 If the Union policy-maker establishes that it has a legal basis under
which it may act, a follow-up question must be addressed: through what means?
Generally speaking, the principle of proportionality, as one of the core
principles of EU law, requires that measures implemented through policy-
making should be ‘appropriate for attaining the objective pursued and must
not go beyond what is necessary to achieve it’.2 Law is herein not to be

CONTACT Edwin Alblas edwin.alblas@ucdconnect.ie


1
See: Consolidated Version of the Treaty on European Union art. [5], 2010 O.J. C 83/01, at [3] [hereinafter
TEU] and Consolidated Version of the Treaty on the Functioning of the European Union art. [3,4,6], 2008
O.J. C 115/47 [hereinafter TFEU].
2
See: Case C-491/01 British American Tobacco [2002] ECLI-741 par 122 and C-293/12 and C-594/12 Digital
Rights Ireland and Others [2014] ECLI-238 par 46.
© 2017 Informa UK Limited, trading as Taylor & Francis Group
2 E. ALBLAS AND J. L. CASTRO-MONTERO

perceived as a default option of regulatory action, but rather as an ‘instrument


used by the state to achieve the community’s chosen collective goals’, in which
the application of law is a matter of ‘problem-solving’.3 Proportionality then
asks whether law is the instrument that will solve the problems at hand. Why
should legislation be preferred over other regulatory options, including self-
regulation or even de-regulation? If legislation is not the right instrument
to achieve a specific policy goal, other means should be used. In a pragmatist
sense: ‘the metric of a measure’s desirability lies in its results’.4
During the last decades, a wave of reform programmes aiming at the
rationalisation of EU rule-making was witnessed that, amongst other
things, served to justify the proportionality of legislative action. At the heart
of this development, one finds what is known as ‘Impact Assessment’ (IA):
a comprehensive report that accompanies policy proposals, crafted by the
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European Commission, in which a scientific evidence base of action is pro-


vided, different regulatory options are weighed and stakeholder consultations
are considered.5 Over the years, the Commission has implemented a relatively
well-institutionalised system, in which IAs are carried out systematically and
‘are taken seriously’ by the Commission.6 The importance of IA within the
rule-making process has grown tremendously over the last years,7 as also
acknowledged by the Court of Justice of the EU (‘CJEU’ or simply ‘the
Court’).8 Different actors have been established to check upon the quality
of IAs, such as the Commission’s internal Regulatory Scrutiny Board (RSB),
or have conducted quality control on their own initiative, such as Court of
Auditors and the European Ombudsman.9 As these reviewing bodies lack
authoritative power to force the Commission to provide high quality IA
reports, we envisage a stronger role of the Court as regulatory watchdog.
To effectively engage with IAs review, however, it is necessary for the CJEU
to amass competence – i.e. legal capacity – to engage with IA as instrument
used to achieve regulatory quality, as well as gradually enhance its competency

3
B. Morgan and K. Yeung, An Introduction to Law and Regulation (1st edn., Cambridge University Press
2007) 4.
4
See: J. Dewey, Essays in Experimental Logic (1st edn., University of Chicago Press 1916) 1–7.
5
The general denotation of this type of foreseen impact reports is ‘Regulatory Impact Assessment’, but as
in the EU the term ‘Impact Assessment’ is applied, we will stick to this denotation.
6
C. Cecot and others, ‘An Evaluation of the Quality of Impact Assessment in the European Union with
Lessons for the US and the EU’ (2008) 2 Regulation & Governance 405; K. Jacob, ‘Improving the Practice
of Impact Assessment’ (EVIA: Evaluating Integrated Impact Assessments 2008).
7
See: A. Meuwese, Impact Assessment in EU Lawmaking (Kluwer Law International 2008); Cecot and others
(n 6); A. Alemanno, ‘The Better Regulation Initiative at the Judicial Gate: A Trojan Horse within the Com-
mission’s Walls or the Way Forward?’ (2009) 15 European Law Journal 382.
8
See: Case C-55/08 Vodafone v Secretary of State for Business, Enterprise and Regulatory Reform [2010]
ECLI-321; Case C-176/09 Grand Duchy of Luxembourg v European Parliament [2011] ECLI:EU:
C:2011:290 and Case C-508/13 Republic of Estonia v European Parliament [2013] ECLI- 290.
9
For an extensive analysis of different reviewing bodies and their specific roles, see: A. Meuwese, ‘Regu-
latory Review of European Commission Impact Assessments: What Kind for which Better Regulation
Scenario?’ (2017) 1–2 European Journal of Law Reform.
THE THEORY AND PRACTICE OF LEGISLATION 3

– i.e. professional ability – to decide upon the validity and reliability of scien-
tific evidence underlying IA reports.

1.1. Research problem and structure


The question of how the Court should deal with scientific evidence presented
to it is certainly not new and has been widely discussed in the literature.10 The
question of how the Court should assess scientific evidence presented in IAs
specifically is, however, critically understudied.11 This is problematic, since IA
is an ‘instrument at the heart of the European institutional machinery’,12
which increasingly fulfils the role of legitimation of proportionality of legisla-
tive action. This role has been endorsed by the Court without much doubt as
to the quality and validity of the evidence provided in IAs.13 Another assertion
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that has been discussed in the literature is that the institutions that are cur-
rently responsible for reviewing the quality of IAs, either ex-ante or ex-
post, are ‘relatively weak’.14 This article will provide a descriptive analysis
of the functioning of the prime institutions concerned with IA review in
order to demonstrate that there are, indeed, major shortcomings to their
role as quality watchdog. As will be explained, the growing importance of
IAs within the legislative process in combination with its currently fragile
review system provides firm ground for the claim that inter-branch review
by the Court may be needed to secure the quality of these reports. Building
upon the abovementioned, the research question that guides this research
article is as follows: to what extent does the CJEU have the competence as
well as the competency to engage with the quality of IAs?
This research is centred on judicial (ex-post) review by the CJEU of ex-ante
evaluations of legislation by the EU rule-making body.15 IA, as carried out by
the Commission, functions herein as a case study of the rationalisation of
rule-making. The research hypothesises that, if called upon to judge the

10
See: E. Barbier de La Serre and A. Sibony, ’Expert Evidence Before The EC Courts’ (2008) 45 Common
Market Law Review; E. Vos, ’EU Risk Regulation Reviewed by the European Courts’, Trade, Health and
the Environment: The European Union Put to the Test (1st edn., Routledge/Earthscan 2014); Joanne
Scott and Susan Sturm, ’Courts as Catalysts: Rethinking The Judicial Role in New Governance’ (2007)
13 Columbia Journal of European Law and, more generally: J.J. Rachlinski, ’Evidence-Based Law’
(2001) 96 Cornell Law Review.
11
For two exceptions, see: R. van Gestel and J. de Poorter, ‘Putting Evidence-Based Law Making to the Test:
Judicial Review of Legislative Rationality’ (2016) 4 The Theory and Practice of Legislation; P. Craig and
G. de Búrca, EU Law: Texts, Cases and Materials (6th edn., Oxford University Press 2015) 92.
12
A. Alemanno and A. Meuwese, ‘Impact Assessment of EU Non-Legislative Rulemaking: The Missing Link
in ‘New Comitology’ (2012) 19 European Law Journal 1.
13
See, inter alia: Joined cases t-424/14 and T-425/15 Client Earth v European Commission [2015] ECLI:EU:
T:2015:848, pars. 87–89.
14
Van Gestel & de Poorter (n 11) 156. Meuwese (n 9) 25.
15
That is composed of the European Commission, the Council of the European Union and the European
Parliament. The legislative procedure as such will not be gone into in much detail. For more information,
see: ’Legislative Powers: Ordinary Legislative Procedure’ (European Parliament) <http://www.europarl.
europa.eu/aboutparliament/en/20150201PVL00004/Legislative-powers> accessed 17 January 2017.
4 E. ALBLAS AND J. L. CASTRO-MONTERO

quality of IAs, the Court should apply a substantive – beyond process-


oriented – review. This in order to both encourage the use of IA as ex ante
method of evaluation and to discipline (where needed) the ex-ante analyses
that legislative agencies provide.
This article unfolds as follows. First, the rise of evidence-based policy-
making in the context of the EU will be linked to the ‘judicialisation’ of ex
ante regulatory instruments. By doing so, different advantages as well as dis-
advantages of courts assuming the role of what an increasing trend of the lit-
erature calls ‘regulatory watchdogs’ will be distinguished. After this theoretical
embedding, Section 3 will elaborate upon the role and function of IA within
EU rule-making. Section 4 promotes the distinction between competence,
meaning legal capacity to engage with IAs, and competency, meaning the pro-
fessional capability to do so. The paper concludes with a brief reflection of the
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main arguments and results.

2. Regulating rule-making: a new role for courts


To our understanding, judicial review of ex ante evaluations relates to a
somewhat new role of courts among governance systems. This role can
be analysed in the light of the theory of judicialisation, denoting the
expansion of the range of activities over which judges exercise significant
authority while deciding and overseeing rule-making procedures. In this
section, we build upon theoretical underpinnings of this relatively
abstract concept of judicialisation of governance that we particularly
associate with a new form of regulating legislation, in the sense that it
constitutes a novel way of ensuring that policy-makers observe certain
legal parameters during the formation of legislative and administrative
rules.

2.1. Judicialisation and judicial review of ex ante evaluations


Judicialisation describes a process through which courts become more active in
counterbalancing institutional powers by restructuring public policies that were
previously designed by legislative and executive agencies, first and foremost via
judicial review.16 In this sense, Stone Sweet indicates that judicialisation takes
place when ‘judges routinely intervene in legislative processes, establishing
limits on law-making behaviour, reconfiguring policy-making environments,
and even drafting the precise terms of legislation.’17 As a consequence, public
and private actors must be more attuned to judicial decisions.

16
N. Tate and T. Vallinder, The Global Expansion of Judicial Power (1st edn., New York University Press 1995)
16.
17
A. Stone Sweet, Governing with Judges (1st edn., Oxford University Press 2000) 1.
THE THEORY AND PRACTICE OF LEGISLATION 5

The theory of judicialisation entails more than the mere articulation and
implementation of norms and guidelines emanating from the judiciary into
non-judicial realms. It also involves the diffusion of legal arguments and pro-
cedures into fields in which they were previously excluded. Morgan, for
instance, notes the spread of proportionality-based analyses of legislation,
which illustrate the expansion of legal discourses into technocratic areas, as
‘legal constraints increasingly apply at a policy-making stage’.18 In a similar
vein, Scott argues that judicialisation is a matter of ‘juridification’, a term
that describes ‘a process by which relations hitherto governed by other
values and expectations come to be subjected to legal values and rules’.19
In the light of what is often denominated as the theory of judicialisation,
courts are called to expand their competences toward overseeing regulatory
action, which is a result of shifting institutional powers between rule-
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making agencies, legislators and private parties.20 In the case of the EU,
Lenaerts has acknowledged that the CJEU has not only striven to develop
guiding principles aimed at improving decision-making in the EU, but also
engaged in what he has denominated as a ‘process-oriented review’, i.e.
reviewing the extent to which EU institutions have regarded procedural
steps established in the Treaties in order to decide about the appropriateness
of policy choices.21 In light of judicialisation, one may wonder if the expan-
sion of judicial authority would gradually require the Court to undertake a
substantive review of EU institutions’ policy outcomes – by referring to ex
ante evaluations, and the evidence underlying these regulatory instruments
– before reaching any conclusion on the conformity of policy proposals to
the principles of conferral, proportionality and subsidiarity. It is worth
noting that this trend of judicialisation of regulatory instruments is gradually
precluding EU institutions’ rule-making discretion.22
The process of judicialisation also requires courts to expand their pro-
fessional competency by getting acquainted with scientific and evidence-
based methods of regulation. In the specific case of judicial review of regulat-
ory IAs in the EU, Alemanno states that the phenomenon of judicialisation
will force judges ‘to leave their “comfort zone” and engage with bodies of

18
B. Morgan, ‘The Internationalization of Economic Review of Legislation: Non-Judicial Legalization?’ in
Tom Ginsburg and Robert A. Kagan (eds.), Institutions & Public Law (1st edn., P Lang 2005), 248
(noting that ‘one important source of such constraints are trade regimes such as the WTO or the internal
market project of the European Union, which are regularly analyzed in terms of the growing “judicializa-
tion” of their trajectories’).
19
C. Scott, ‘The Juridification of Regulatory Relations in the UK Utilities Sector’ in J. Black, P. Muchlinski and
P. Walker (eds.), Commercial Regulation And Judicial Review (1st edn., Hart Publishing 1998) 19.
20
E. Mak, ‘Judicial Review of Regulatory Instruments: The Least Imperfect Alternative?’ (2012) 6 Legispru-
dence 318.
21
K. Lenaerts, ‘The European Court of Justice and Process-Oriented Review’ (2012) 31 Yearbook of Euro-
pean Law 3–16.
22
D. Keyaerts, ‘Ex ante evaluation of EU legislation intertwined with judicial review? Comment on Voda-
fone Ltd v Secretary of State for Business, Enterprise and Regulatory Reform (C-58/08)’ (2010) 6 European
Law Review 871.
6 E. ALBLAS AND J. L. CASTRO-MONTERO

knowledge different than the law, such as statistics, economic analysis, public
surveys, et cetera’.23
Adding to the theory of judicialisation, we also consider globalisation,
along with market liberalisation, as a major force for the judicialisation of
regulatory ex ante evaluations. Regulatory agencies seem increasingly incap-
able of predicting and anticipating major shifts in a worldwide complex
economy. Information and knowledge about regulatory (and deregulatory)
needs are gradually becoming scarcer, which in turn creates pressure to
develop more flexible sorts of regulation: including deregulation and self-
regulation.24 This phenomenon places ex ante evaluations as a pivotal tool,
considering that policy-makers and stake-holders need to evaluate whether
regulation is necessary and, if so, whether positive regulatory effects can be
anticipated. Following a simple principal–agent theory, a straightforward sol-
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ution is to give power to a second agent, to review the decisions and actions of
primary decision makers. This agent must be authoritative as well as indepen-
dent. In this context, the judiciary may be a suited candidate to serve as moni-
toring agent during the regulatory process.

2.2. The pros and cons of judicial review of ex ante evaluations


A separate concern is to understand the potential consequences of the judicia-
lisation of regulatory instruments. The question here is whether courts should
evaluate the quality of regulatory ex ante evaluations or leave this kind of
assessment to the rule-making agencies. Several arguments concerning
favourable and critical positions on the role of courts as regulatory watchdogs
will be briefly analysed.
Those in favour of judicialisation of ex ante evaluations argue that judicial
involvement as a watchdog leads to better regulation.25 Herein, better regulation
entails a more transparent regulatory procedure and an improved evidence-
based approach to policy-making.26 To this end, courts should monitor and
scrutinise substantive and procedural tests of proposed regulation, encouraging
policy-makers to adopt a more reasoned method of decision making. Moreover,
judicial oversight may ensure respect for regulatory procedures, deterring
policy-makers from conducting regulatory instruments only cosmetically.27
Legal scholars also note that judicial review of ex ante evaluations would
constrain regulatory decision-making, ensuring that policy-makers and

23
Alemanno (n 7) 19.
24
See, inter alia: T. Börzel and T. Risse, ‘Governance without a State: Can It Work?’ (2010) 4 Regulation &
Governance 113; R. Baldwin, M. Cave and M. Lodge, Understanding Regulation: Theory, Strategy, and
Practice (Oxford University Press, Oxford 2012) 146.
25
P. Popelier, ‘Governance and Better Regulation: Dealing with the Legitimacy Paradox’ (2011) 3 European
Public Law 555, 565.
26
S. Tombs, ‘Making Better Regulation, Making Regulation Better?’ (2016) 37 Policy Studies 333.
27
Alemanno (n 7) 3.
THE THEORY AND PRACTICE OF LEGISLATION 7

politicians will not benefit from stretching the meaning of soft-law instru-
ments, legal ambiguities and junk scientific evidence in their preferred direc-
tion.28 Unlike administrative and law-making agencies, which are more prone
to political influence, courts may discipline regulators, guaranteeing a more
rational decision-making process.29
Furthermore, if regulatory instruments and the evidence behind them can
be subjected to judicial review, supporters claim, there is more control over
substantive and procedural standards – first and foremost because judicial
review is likely to establish a legal duty on the policy-maker to provide scien-
tific evidence supporting a regulatory decision.30
Critics of the judicialisation of regulatory instruments, on the other hand,
have identified several drawbacks of what is generally portrayed as the ‘over-
judicialisation’ difficulty. Comparative regulatory research repeatedly indi-
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cates that an over-judicialised regulatory process is contentious, inefficient


and costly in achieving policy goals, as judicial conflicts may saturate rule for-
mation and enforcement.31 Relatedly, the European Commission has
expressed that judicial review would make the regulatory process too rigid
and could hinder quick policy reforms. In contrast, the Commission has pro-
posed soft-law instruments, in other words, legal rules neither entirely binding
in nature, nor wholly lacking legal consequences, to guide rule-making
procedures.32
The use of judicial review during regulatory phases has also been criticised
because it boosts adversarialism. Following Kagan’s adversarial legalism
theory, instead of promoting cooperation among regulators and regulatees,
judicialisation may encourage defensive action, one in which parties use
courts to make inflexible demands.33 Critics also point out that judicial
review of ex ante evaluations might be underused because private stakeholders
will prefer to avoid conflict, as they will have to face regulatory agencies more
than once.34
Other scholars have raised concerns about the fact that ‘courts may have no
superior claim over law-making agencies to being able to produce accurate
evaluations of cost–benefit analyses’.35 These views reveal an overarching
tension between the idea that courts should defer to the interpretations
given by the lawmaker and administrative agencies, and another vision of
courts as powerful institutions that must sternly check decisions taken by

28
C. R. Sunstein, ‘Cost-Benefit Analysis, Who’s Your Daddy?’ (2016) 7 Journal of Benefit-Cost Analysis 119.
29
ibid.
30
Mak (n 20) 319.
31
N. K. Komesar, Imperfect Alternatives: Choosing Institutions in Law, Economics, and Public Policy (University
of Chicago Press 1994) 3.
32
European Commission, ‘European Governance’ (White Paper) COM (2001) 428 final, 17.
33
R. A. Kagan, Adversarial Legalism (1st edn., Harvard University Press 2001) 36.
34
Ibid.
35
Sunstein (n 28) 123.
8 E. ALBLAS AND J. L. CASTRO-MONTERO

the elected branches. This point also touches upon the judiciary’s competency
to determine if knowledge held by policy-makers has been wisely used to
produce social benefits.
The question of whether judicial review of regulatory instruments favours
accountability and transparency or pervades the regulatory process remains a
puzzle that we do not aim to answer. However, we do argue that this path of
regulatory judicialisation demands a new role from the judiciary, one in which
courts should be able to execute oversight over records developed by regulat-
ory agencies, including the analysis of facts and scientific evidence underlying
ex ante evaluations. If allowed and willing to set aside capricious and arbitrary
law-making decisions on this basis, courts may effectively discipline regulat-
ory agencies. In the subsequent sections, we particularly elaborate upon the
growing incorporation of IAs into judicially reviewable areas, to evaluate
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how the increasing use of these regulatory instruments during the preparation
of policy proposals by the EU legislator is shaping a new role of the CJEU in
scrutinising regulatory instruments.

3. Evidence-based law-making in the EU: the case of impact


assessment
Craig and de Búrca define IA as a ‘set of steps to be followed when policy pro-
posals are prepared, alerting political decision-makers to the advantages and
disadvantages of policy options by assessing their potential impact’.36 The way
in which these steps have been designed, as will be discussed below, give the
producer of an IA report significant leeway to, amongst others, decide what
these relevant options are, as well as how in-depth the analysis thereof
should be. Below, it will first be explained what the concept of IA embodies
in the context of EU rule-making, after which the work of different insti-
tutions in scrutinising the quality of these documents will be analysed.

3.1. Elaborating upon the concept of impact assessment


An IA enumerates, amongst others stakeholder consultations, the weighing of
different policy options and an estimation of the economic, social and
environmental impact of the envisaged policy. Such ‘integrated IAs’ – in
which the impacts on the economy, society and the environment are all
assessed – have been employed by the European Commission since 2003,
and have since developed as a highly important tool for providing policy
with an evidence-base regarding estimated costs, as well as the potential
risks and benefits involved. These are calculated through different methods
36
Craig and de Búrca (n 11) 107.
THE THEORY AND PRACTICE OF LEGISLATION 9

including cost–benefit analysis (CBA), cost-effectiveness analysis (CEA) or


multi-criteria analysis (MCA)’.37
The IA report ought not to count more than 30 pages,38 but this number
may be exceeded if an IA concerns multiple policy initiatives. IAs should be
written in simple, non-technical language, understandable to non-special-
ists.39 IAs now accompany almost every proposal that is expected to have a
significant impact, and their total number now amounts to more than a thou-
sand reports published.40
Two stages of the process can be distinguished. The first process takes place
for all legislative as well as non-legislative proposals and is known by the name
‘Roadmap’ or ‘Preliminary Impact Assessment’. An in-depth analysis of the
estimated impacts is conducted in stage two: the actual IA. The question
whether a stage two impact assessment is needed used to be essentially up
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to the Commission’s Directorate-General responsible for the proposal,41


which shall:
[C]arry out impact assessments of its legislative and non-legislative initiatives,
delegated acts and implementing measures which are expected to have signifi-
cant economic, environmental or social impacts. The initiatives included in the
Commission Work Programme or in the joint declaration will, as a general rule,
be accompanied by an impact assessment.42

Speaking about the process of drafting an IA, Renda raises an important


methodological consideration by asking: ‘[w]hen should an in-depth quanti-
tative analysis be undertaken, and when is qualitative assessment a propor-
tionate choice with respect to the type of proposal and the magnitude of
expected impact?’43 The Commission’s IA Guideline of 2005 provides that
the IA’s ‘depth and scope will be determined by the likely impacts of the pro-
posed action’, which it refers to as the principle of ‘proportionate analysis’.44
As stated in the Guidelines of 2009, it is the responsibility of the author of the
IA to decide upon the level of analysis.45 In practical terms, this means that
the depth and analysis provided in an IA – conducted to estimate policy

37
Alemanno (n 7) 127.
38
European Commission, ‘Impact Assessment Guidelines’ (2009) 8.
39
Ibid 9.
40
Ex-Ante Impact Assessment Unit Directorate for Impact Assessment and European Added Value Euro-
pean Parliament, ’Briefing Better Law-Making in Action: How Does Ex-Ante Impact Assessment Work
in the EU?’.
41
L. Allio, ‘Better Regulation in the European Commission?’ in C. Kirkpatrick and D. Parker (eds.), Regulatory
Impact Assessment (1st edn., Edward Elgar 2007).
42
European Parliament, Council of the European Union and the European Commission, ‘Interinstitutional
Agreement between the European Parliament, the Council of the European Union and the European
Commission on Better Law-Making’ OJ L 123 (2016) par. 13 (emphasis added). This agreement replaced
the abovementioned one of 2003. For practical details, see: European Commission, ’Impact Assessment
Guidelines’ (2009) 4.
43
A. Renda, Impact Assessment in the EU (1st edn., Centre for European Policy Studies 2006) 94.
44
European Commission, ‘Impact Assessment Guidelines’ (2005) 8.
45
Ibid,14.
10 E. ALBLAS AND J. L. CASTRO-MONTERO

effects – depends on a priori estimated effects. This, most evidently, leaves the
risk that unforeseen (major) consequences remain unseen owing to the
limited time and attention put into the drafting of IAs on proposals that
may not (but might) have great economic, societal or environmental impacts.
The aim of IA is to provide a ‘coherent analysis of the reasoning that lies
behind, and the foreseeable effects of, any proposed measure or policy initiat-
ive’.46 This inherently relates to a question of proportionality, in the sense that
the IA is to show, empirically, that a proposed policy measure is indeed
‘appropriate for attaining the objective pursued and [does] not go beyond
what is necessary to achieve it’.47 Renda describes three features IAs should
live up to in order to justify the proportionality of a proposal. First of all, it
must be shown that the instruments used are suitable for achieving the envi-
saged objective. Secondly, it needs to be proven that the instruments do not go
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beyond what is strictly necessary to achieve the objective at hand. Thirdly, the
IA must consider and compare the different policy instruments available.48
The IA Guideline of 2009 has helped to establish a closer link between IA
and adherence to the proportionality principle by developing a set of
check-box criteria concerning the scope and nature of the instrument
employed.49 Here, the producer of the IA report is also encouraged to be as
open-minded as possible in asserting different policy options (including
non-action) and analyse those as well.
In examining the impact of a proposal, the Commission’s Directorate-
General (DG) responsible for drafting the IA needs to rely on data that are
already available to the DG, or may assign an external expert to produce
new data. A Commission Communication on the assessment of scientific evi-
dence provides that evidence should be assessed on the basis of excellence,
independence and pluralism.50 Elaborating briefly, the research consulted
ought to have been produced by renowned scholars (‘taking account of indi-
cators such as the number and impact of refereed publications’) and these
scholars need to, as much as possible, act independently in order to prevent
risks of vested interests.51 Pluralism denotes the need to include a wide
array of perspectives and contrasting opinions on a manner. This is of
course highly relevant to the case of IA: scientific certainty can exist (at
least to some extent) regarding the factual effects, but never regarding

46
See: Ex-Ante Impact Assessment Unit Directorate for Impact Assessment and European Added Value
European Parliament, ’Briefing Better Law-Making in Action: How Does Ex-Ante Impact Assessment
Work in the EU?’ (2015).
47
See: Case C-491/01 British American Tobacco [2002] ECLI-741 par 122 and C-293/12 and C-594/12 Digital
Rights Ireland and Others [2014] ECLI-238 par 46.
48
A. Renda, Impact Assessment in the EU (1st edn., Centre for European Policy Studies 2006) 94.
49
See: European Commission, ‘Impact Assessment Guidelines’ (2009) 29ff.
50
European Commission, ‘Communication from the Commission in the Collection and use of Expert Evi-
dence: Principles and Guidelines: Improving the Knowledge Base for Better Polices’ (2002) 9.
51
Ibid.
THE THEORY AND PRACTICE OF LEGISLATION 11

projected ones. Hence it is worthwhile to examine different possible outcomes


of a policy.
Whilst the abovementioned Communication provides some direction on
how to assess the quality of evidence, it cannot be seen as a sufficient safe-
guard for the quality of evidence produced. Excellent and independent scho-
lars may, at times, produce junk science. The need for plurality may help to
limit the potential downscale of quality of evidence in IAs, but it remains
possible that the individuals responsible for drafting the IA will choose to pre-
dominantly highlight evidence that matches the policy proposal and goals at
hand. Confirmation bias in this regard is probably one of the most pervasive
as well as destructive flaws that threaten the quality of IAs and research as a
whole.52 As philosopher Francis Bacon (1561–1626) so expressively put it:
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The human understanding when it has once adopted an opinion draws all
things else to support and agree with it. And though there be a greater
number and weight of instances to be found on the other side, yet these it
either neglects and despises, or else by some distinction sets aside and rejects,
in order that by this great and pernicious predetermination the authority of
its former conclusion may remain inviolate.53

Torriti raises a fundamental point in this regard, in asking whether IA consti-


tutes a form of evidence-based policy-making or rather policy-based evi-
dence-making.54 This question remains highly relevant today and will
continue to do so as evidence-based regulation increases importance within
the policy-making field. In answering the question at hand, more (empirical)
research is definitely needed. Below, it will be explained that different actors
already seek to, one way or another, advance the IA process and put IAs to the
test.

3.2. Scrutinising the quality of IAs


Draft IAs are scrutinised by the Commission’s internal Regulatory Scrutiny
Board (RSB), which is the successor of the Impact Assessment Board
(IAB).55 The RSB’s core tasks include the ex-ante reviewing of IAs and pro-
viding ‘fitness checks’ of currently existing legislation. The composition of
this board is relatively small and comprises three members from within the
52
See: M. Rabin and J. L. Schrag, ‘First Impressions Matter: A Model of Confirmatory Bias’ (1999) 114 The
Quarterly Journal of Economics 1077.
53
R. Ariew and E. Watkins, Readings in Modern Philosophy (1st edn., Hackett 2000) 7.
54
J. Torriti, ‘Impact Assessment and the Liberalization of the EU Energy Markets: Evidence-Based Policy-
Making or Policy-Based Evidence-Making?’ (2010) 48 Journal of Common Market Studies. See also:
Stijn Smismans and Rachel Minto, ’Are Integrated Impact Assessments the Way Forward For Mainstream-
ing in the European Union?’ [2016] Regulation & Governance; Manuel Souto-Otero, ’Is ’Better Regulation’
Possible? Formal and Substantive Quality in the Impact Assessments in Education and Culture of the
European Commission’ (2013) 9 Evidence & Policy: A Journal of Research, Debate and Practice.
55
Decision of the President of the European Commission on the establishment of an independent Regu-
latory Scrutiny Board (C(2015) 3263 of 19 May 2015 art. 2.
12 E. ALBLAS AND J. L. CASTRO-MONTERO

Commission, three external members and a chair. Following the rules of pro-
cedure of the RSB, the members of the Board ‘shall act independently … [and]
act in their personal capacity’.56 The Commission has mandated the RSB to
‘issue an opinion on each report that has been submitted to it’, however,
the RSB cannot exercise reviews on its own initiative.57 In other words: the
RSB is dependent on the Commission for the IAs it may review. Once sub-
mitted, the RSB has about four weeks to scrutinise the quality of the IA,
both examining procedural requirements as well as the quality of evidence
provided in the IA.58 Subsequently, the RSB is to issue an opinion to the Com-
mission accompanied by possible points for improvement. In 2015, the RSB
issued opinions on 30 IAs. Hereof, the RSB provided 47% with a negative
opinion,59 again contributing to the notion that the quality of an IA should
not be presupposed. The RSB’s report for the year 2016 showed a slight
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decrease in negative opinions issued, namely 40% for the 60 IAs examined.60
When a negative opinion is issued, the IA is to be revised by the DG
responsible for the IA, after which the revised report should again be sub-
mitted for review by the RSB. In the case of policy proposals that are likely
to have substantial impact, the Commission can formally only proceed with
the proposal – i.e. initiating the ordinary legislative procedure that involves
the Council of the EU and the European Parliament – once the proposal is
accompanied by a finalised IA and a positive opinion of the RSB.61 As a
report by the European Parliament shows however, the Commission does
not always take this requirement too seriously and has tabled several propo-
sals without receiving a positive opinion on the respective IA.62
The European Parliament has also mandated an internal agency to exercise
quality controls of IAs by the Commission, called ‘IMPA’.63 IAs are scruti-
nised on the basis of the criteria of the Impact Assessment Guidelines of
the Commission, as well as the Parliament’s own qualitative assessment
56
Rules of Procedure of the Regulatory Scrutiny Board, Adopted pursuant to Article 5(3) of the Decision of
the President of the European Commission on the establishment of an independent Regulatory Scrutiny
Board (C(2015)) 3263 of 19 May 2015.
57
Decision of the President of the European Commission on the establishment of an independent Regu-
latory Scrutiny Board (2015) 3263 of 19 May 2015 art. 2.
58
Ex-Ante Impact Assessment Unit Directorate for Impact Assessment and European Added Value Euro-
pean Parliament, ‘Briefing Better Law-Making in Action: How Does Ex-Ante Impact Assessment Work
in the EU?’ (2015) 3.
59
Regulatory Scrutiny Board, ‘Impact Assessment Board/Regulatory Scrutiny Board 2015 Activity Statistics’
(2016) <http://ec.europa.eu/smart-regulation/impact/key_docs/docs/iab_rsb_stats_2015.pdf> accessed
21 January 2017.
60
Regulatory Scrutiny Board, ‘Annual Report 2016’ (2017) <https://ec.europa.eu/info/sites/info/files/2016-
rsb-report_en.pdf> accessed 12 October 2017.
61
See: European Commission, ‘Communication from the President to the Commission: The Working
Methods of the European Commission 2014–2019’ (2014) 7.
62
Ex-Ante Impact Assessment Unit Directorate for Impact Assessment and European Added Value Euro-
pean Parliament, ‘Briefing Better Law-Making in Action: How Does Ex-Ante Impact Assessment Work
in the EU?’ (2015) 3.
63
See ‘IMPA’ (European Parliamentary Research Service Blog) <https://epthinktank.eu/author/eprsimpa/>
accessed 10 January 2017.
THE THEORY AND PRACTICE OF LEGISLATION 13

criteria as detailed in its IA Handbook.64 IMPA provides short appraisals of


IAs, which are used to inform the Parliament on the quality of the evi-
dence-base of the Commission’s legislative proposal. They do not serve to
bind the Commission in any way.65
An example of an inter-institutional actor that carries out reviews of IA is
the European Ombudsman; the ‘independent and impartial body that holds
the EU administration to account’.66 It has previously assessed the practice
of IA-making by the Commission in a generic fashion, as well as specific
cases such as its 2006 ‘Decision on the failure of European Commission to
conduct a prior human rights impact assessment of the EU Vietnam free
trade agreement’.67 In this latter example, two human rights NGOs had
filed a complaint to the Ombudsman in which it held that the European Com-
mission was wrong not to carry out an IA on the EU/Vietnam Free Trade
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Agreement, on which negotiations started in 2012. The Commission,


however, thought it unnecessary to conduct an IA in that specific case,
since it had already carried out an integrated IA on a proposed EU/ASEAN
Free Trade Agreement in 2009. Vietnam, as part of the ASEAN partnership,
had already been examined in the context of that particular IA. The Ombuds-
man found the absence of an IA specifically devoted to the Vietnam Trade
Agreement, along with a consideration of potential implications for human
rights, a case of maladministration. The Commission refuted and held that
the ‘non-trade policy instruments’ alongside the human rights clauses in
the agreement achieved the same purpose as an IA would. In the meantime,
the agreement had been struck (yet without revisited IA) and the Ombuds-
man closed the case with a critical remark towards the Commission.
The European Court of Auditors (ECA), ‘Guardian of the European
Finances’, is another example of an inter-institutional body that has reviewed
IAs. Overall the ECA endorsed IAs as ‘one of the cornerstones of the Commis-
sion’s better regulation policy for the improvement and simplification of new
and existing legislation’.68 In a 2014 report on Preferential Trade Agreements,
however, the ECA criticised the way in which the Commission had failed to

64
European Parliament Conference of Committee Chairs, ‘Impact Assessment Handbook: Guidelines for
Committees’ (2013).
65
See: J. Dunne and W. Hiller, ‘European Parliament Work in the Fields of Impact Assessment and European
Added Value’ (Directorate for Impact Assessment and European Added Value 2016) 7.
66
European Ombudsman, ‘Problems with the EU? Who can help you?’ (2015) <http://www.ombudsman.
europa.eu/showResource?resourceId=1457445736660_Whocanhelpyou_2015_EN.pdf&type=
pdf&download=true&lang=en>.
67
European Ombudsman, ‘European Ombudsman’s Decision on the Failure of European Commission to
Conduct a Prior Human Rights Impact Assessment of the EU Vietnam Free Trade Agreement’ (Ombuds-
man.europa.eu, 2016). Two other examples that are worthwhile are: ‘Decision of the European Ombuds-
man closing his inquiry into complaint 1047/2013/BEH against the European Commission’ (2013) and
‘Decision of the European Ombudsman closing his inquiry into complaint 875/2011/JF against the Euro-
pean Commission’ (2013).
68
European Court of Auditors, ‘Impact Assessments in the EU Institutions: Do They Support Decision
Making?’ (2010) 6.
14 E. ALBLAS AND J. L. CASTRO-MONTERO

conduct IAs for seven out of 13 such agreements, where there was actually a
legal and/or formal obligation to conduct one. Furthermore, where the Com-
mission had conducted an IA, the ECA’s conclusion was that the IAs often did
not appropriately assess the economic implications at stake.69
Besides review from intra-EU bodies, the quality of IAs also gains more and
more attention from both scholars as well as external review bodies, the latter
of which the ‘Impact Assessment Institute’ is a key example. This institution
was established in 2015 as an independent agency, aimed at scrutinising the
quality of the evidence provided for legislation, either ex-ante or ex-post.
As it states, its goal is to provide ‘impartial scientific and factual analysis on
policy and legislative proposals’.70 Although it may be desirable to have an
agency checking the quality of evidence produced in IAs that is fully detached
from the Commission itself, it is difficult to say to what extent such an insti-
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tution may have an impact on the Commission’s work in this area.


In the academic arena, more and more scholars are paying attention to the
quality of IAs. In general, authors choose to assess the topic of IA from a
meta-level, focusing on the topic of IA rather theoretically.71 Torriti presents
a more in-depth examination of the quality of evidence of an IA and hereby
shows the great difficulty of reviewing the large sums of evidence presented in
as much as one IA.72 Although the sample is too small for deductive purposes,
Torriti does raise an important concern: should the sheer amount of numbers,
graphs and calculations presented in an IA persuade us to take the evidence
presented therein to be correct as well as representative of the actual policy
options that may exist in the field? The work of academic researchers is
herein at least as important as that of, for instance, the Impact Assessment
Institute: although non-binding, it may serve to make the Commission
aware that the evidence provided will not be automatically accepted as ‘the
truth’.

3.3. A need for inter-branch review?


Although intra- and inter-institutional checks to secure the quality of IAs
have already been instituted, different pitfalls of an exclusive non-judicial
IA review model can still be distinguished. With regard to an ex-ante
review of IA, only the RSB and the IMPA have the possibility to review IAs

69
European Court of Auditors, ‘Are Preferential Trade Arrangements Appropriately Managed?’ (2014).
70
As stated on: <http://www.impactassessmentinstitute.org/about> accessed 12 October 2017.
71
Cecot and others (n 8); N. Lee and C. Kirkpatrick, ‘Evidence-Based Policy-Making in Europe: An Evaluation
of European Commission Integrated Impact Assessments’ (2006) 24 Impact Assessment and Project
Appraisal; A. Renda, Impact Assessment in the EU (1st edn., Centre for European Policy Studies 2006);
A. Meuwese, Impact Assessment in EU Lawmaking (1st edn., Kluwer Law International 2008).
72
J. Torriti, ’Impact Assessment and the Liberalization of the EU Energy Markets: Evidence-Based Policy-
Making or Policy-Based Evidence-Making?’ (2010) 48 Journal of Common Market Studies.
THE THEORY AND PRACTICE OF LEGISLATION 15

before publication. The IMPA serves herein solely to inform the European
Parliament on the quality of work provided by the Commission. The RSB
functions to ex-ante review the quality of IA reports, but is heavily set back
by (i) the fact that it depends on the Commission to submit IAs to it for
review and (ii) the fact that it cannot force the Commission into changing
its course after a negative opinion has been issued. This because there are
no legally enforceable means for the RSB to make the Commission reconsider
and revise the IA.
Several inter-institutional bodies have also paid attention to the quality of
IA, hereby reviewing them in an ex-post fashion. Examples described are the
European Court of Auditors and the European Ombudsman. Although these
bodies may put political pressure on the Commission’s dealing with IA, they
again cannot force the Commission to live up to the goals set for carrying out
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IA on the basis of scientifically sound evidence.73 The same counts for extra-
institutional bodies such as the Impact Assessment Institute or the academic
community.
Following the path of judicialisation, expanded judicial power may thrust
the CJEU to ex-post review IAs. This expanded power will come at the
expense of that of EU policy-makers, through the establishment of a more vig-
orous system of inter-branch review of administrative and legislative action.
In this line, the CJEU may increasingly demand more record keeping from
the Commission and other supervisory bodies, as well as the provision of
sound evidence backing regulatory decisions. The next logical step for the
Court would be to scrutinise IA reports with more rigour – in respect of
both its methodology and scientific evidence. This will lead the Commission
to consider all relevant actors and information, while assessing regulatory
options.
Judicial authority may also come at the expense of EU political bodies so
that democratic decision-making processes would be shaped according to a
higher order of principles structured and articulated by the Court. As for
the moment, we already notice an example of this judicial expansion in the
use of new regulatory judicial review standards, namely the assessment of a
contested measure in the light of proportionality analysis.74 In this regard,
Meuwese and Gomstian underscore that intra-institutional bodies, such as
the IA Board, are increasingly developing non-judicial procedural interpret-
ations of the principle of proportionality.75 Following the theory of

73
See, in this vein: Case C-167/06 P Komninou and Others v Commission [2007] EU:C:2007:633, par. 4;
Joined cases t-424/14 and T-425/15 Client Earth v European Commission [2015] ECLI:EU:T:2015:848,
par. 122
74
A. Meuwese and S. Gomstian, ‘Regulatory Scrutiny of Subsidiarity and Proportionality’, (2015) 4 Maas-
tricht Journal of European and Comparative Law 504.
75
Ibid.
16 E. ALBLAS AND J. L. CASTRO-MONTERO

judicialisation, this illustrates how legal arguments are being adapted into
fields in which they were previously excluded or insignificant.
In the absence of a rigorous judicial review of ex ante evaluations, policy-
makers would easily succumb to interpreting regulatory requirements in their
preferred direction. Due to the fact that the EU system of governance is largely
dependent on the role of the judiciary, the CJEU would be suited to control for
potential arbitrary decisions of unconstrained legal interpretations. In sum,
the increasing use of IAs by EU regulators calls for a more active role on
the part of the CJEU. This may lead to the emergence of a particular type
of judicial review of ex ante regulatory instruments. This type of ex-post
review would be incomplete if it only focused on procedural safeguards, but
could also favour better ways of decision-making if substantively conducted.
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4. Ex-post review of ex-ante evaluations: IAs before courts


In Section 2, a theoretical description for the new role of courts as regulatory
disciplining agencies in an era of new governance and rational rule-making
was provided. Subsequently, it was explained that IA serves an important
role within the EU rule-making process, that the scrutiny hereof is wanting
and that the potential of the involvement of the Court should be considered
as form of judicialisation of this ex-ante instrument. To effectively engage into
IAs review, we argue, it is necessary for the CJEU to amass competence – i.e.
legal capacity – to engage with instruments used to achieve regulatory quality,
as well as gradually enhance its competency – i.e. professional ability – to
decide upon the validity and reliability of scientific evidence underlying IA
reports. This section builds upon a detailed account of competence and com-
petency issues.

4.1. Competence
Article 263 TFEU governs the promotion of the rule of law across the Union
by providing the possibility to bring EU acts to the Court for judicial review.
Rule of law entails that public institutions can only act on the basis, according
to procedures prescribed by, and within the limits of, the law. In Parti Ecolo-
giste, the Court iterated this principle by stating that both the Member States
as well as the European institutions shall be subject to judicial review in order
to make sure that measures adopted by these instances are in line with the
Treaties.76 Alemanno distinguishes between two possibilities in which IAs
may come to Court: the direct encounter and the indirect encounter. In the
first case, the IA itself is challenged before a court, on the ground that it
does not satisfy the requirements set for it in applicable guidelines or
76
Case 294/83 Parti écologiste ‘Les Verts’ v European Parliament [1986] ECLI-166.
THE THEORY AND PRACTICE OF LEGISLATION 17

procedures.77 The second possible scenario entails that a legal act is chal-
lenged on the basis of the underlying IA report.78 A question that first
needs to be addressed, however, is what exactly is the legal status of an IA?
To start off, it is disputable whether IAs constitute judicially reviewable
acts, since they essentially are ‘preliminary acts’ that precede legislation.79
In this respect, the Commission stresses that IAs should be seen as a tool to
aid the policy-making process and not as a substitute for it.80 Article 263 pro-
vides that not only legislative acts, but also acts that are intended to produce
legal effects, may be subject to review. The Commission appears to take the
stance that only policies produce legal effects, not IAs preceding hem. Yet,
as Alemanno states: ‘while IA is not itself a procedural mechanism (like a
vote or asking for advice) for making decisions, it provides – regardless of
its formal legal status – substantive, and in some jurisdictions determinative,
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input into the legal process to the point of transforming it.’81 As article 296
TFEU states that ‘[l]egal acts shall state the reasons on which they are
based’, it may be understood that IA, even as mere ‘aid’ to policy-making,
serves a key role in providing detailed explications of the reasons underpin-
ning legislative action.
This seminal role of IA within the legislative procedure is further under-
pinned by the recent Client Earth case of 2015.82 In this case, the applicant
(an environmental NGO) contested two decisions of the Commission that
provided its refusal to grant access to draft IAs related to a regulation on
access to information in environmental matters. The Commission, however,
held that these draft IAs fell under exceptions provided in article 4(3) of Regu-
lation 1049/2001 on public access to documents of, inter alia, the Commis-
sion. This provision provides that public access to internal documents may
be refused if ‘disclosure of the document would seriously undermine the insti-
tution’s decision-making process, unless there is an overriding public interest
in disclosure’.83 In the case proceedings, the Commission went at length to
explain how the disclosure of the draft IAs in question could adversely
affect its ability to conduct its work as policy-maker in an independent

77
Alemanno (n 7) 129.
78
Ibid., 130.
79
A. Alemanno, ‘Courts and Regulatory Impact Assessment’, Handbook of Regulatory Impact Assessment
(1st edn., Elgar 2016) 129.
80
European Commission, ‘Guidelines on Impact Assessment – European Commission’ (Ec.europa.eu, 2015)
<http://ec.europa.eu/smart-regulation/guidelines/ug_chap3_en.htm> accessed 11 January 2017.
81
Alemanno (n 7) 128. Nonetheless, as the Afton Chemical case iterates, ‘it must be borne in mind that the
Commission’s impact assessment [is] not binding on either the Parliament or the Council’. Its role in the
legislative process may thus be significant, but not to the extent that it provides legally binding rules of
obligations. See: Case C-343/09 Afton Chemical Limited v Secretary of State [2010] ECLI:EU:C:2010:419,
par. 57.
82
Joined cases t-424/14 and T-425/15 Client Earth v European Commission [2015] ECLI:EU:T:2015:848.
83
Regulation (EC) No 1049/2001 of the European Parliament and of the Council of 30 May 2001 regarding
public access to European Parliament, Council and Commission documents, article 4(3). See also: Case T-
189/14 Deza v European Chemicals Agency (ECHA) [2017] par. 35.
18 E. ALBLAS AND J. L. CASTRO-MONTERO

manner, not influenced by external parties or Member States.84 The Court, in


turn, concluded that in order for the Commission to be able to exercise its
right of legislative initiative, it needs to be able to draft its IAs completely
free from ‘all forms of external pressure or influence’.85 It further affirmed
the function of IA as tool for the Commission to assess, inter alia, ‘the appro-
priateness, the necessity, the nature and the content of such proposals’, to
which end an IA is to incorporate ‘sections on “Policy options”, “Analysis
of impacts” and “Comparing the options”’.86
Protocol 2 of the TFEU, on the application of the principles of subsidiarity
and proportionality, provides an additional Treaty basis for the role IA plays
in EU policy-making. As article 5 of this Protocol states:
Draft legislative acts shall be justified with regard to the principles of subsidiar-
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ity and proportionality. Any draft legislative act should contain a detailed state-
ment making it possible to appraise compliance with the principles of
subsidiarity and proportionality. This statement should contain some assess-
ment of the proposal’s financial impact … The reasons for concluding that a
Union objective can be better achieved at Union level shall be substantiated
by qualitative and, wherever possible, quantitative indicators.87

Although this provision does not refer to IA as the means for the EU legislator
to comply with this provision, the place and use of IA within the current
process of legislative drafting make this the suited forum for appraisal of sub-
sidiarity and proportionality compliance, along with the financial impacts of a
specific proposal. In this vein, one could say that although the Treaties do not
contain a specific reference to IA, the legal basis and obligation for the apprai-
sal IA provides does exist.
It is further important to place the competence of the Court in light of the
evolving importance attached to IAs in practice. On this matter, Craig and de
Búrca hold that the increased significance of IA in EU rule-making ‘facilitates
scrutiny of the justificatory arguments and their adequacy’, which in turn
should encourage judicial review thereof.88 Going further, they argue that
the CJEU should substantively assess the arguments provided in the IA and
the quality of reasoning provided herein. What is further noteworthy is that
Craig and de Búrca find a legal requirement for conducting IAs in article
114 TFEU, which states that EU law should be aimed at the establishment
and functioning of the internal market.89 If the IA fails to provide evidence

84
Joined cases t-424/14 and T-425/15 Client Earth v European Commission [2015] ECLI:EU:T:2015:848, pars.
50–51.
85
Ibid., par. 96.
86
Ibid., pars. 86–87.
87
Consolidated version of the Treaty on the Functioning of the European Union – PROTOCOLS – Protocol
(No 2) on the application of the principles of subsidiarity and proportionality (Official Journal 115 , 09/05/
2008 P. 0206–0209)
88
Craig and de Búrca (n 11) 92.
89
Ibid.
THE THEORY AND PRACTICE OF LEGISLATION 19

for the anticipated successful attainment of this goal, the policy proposal
should be invalidated.90
A similar understanding of IA was endorsed by Advocate-General (AG)
Sharpston in 2006, who held that, even though the Treaties impose the Com-
mission with no obligation to carry out IAs, the absence of an IA makes the
regulatory choices ‘appear arbitrary’.91
In the proceedings, the Court considered whether the Commission’s
actions – that the Court explicitly held to be based on an IA – infringed the
principle of proportionality.92 The IA can be reviewed, as the Court held,
but only ‘if it appears manifestly incorrect in the light of the information avail-
able to it at the time of adoption of the legislation in question.93 The Court
continued by stating that the Commission’s broad legislative discretion
should be respected, which also means it can only review the evidence-base
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of legislative action to very limited extent.94 Nonetheless, the Court held


that the Commission must be able to show it has not misused its discretion
by providing a distorted view of the evidence available. The Court then
held that the Commission had neglected to provide and consider all relevant
facts, which it did ‘[w]ithout it being necessary to take a decision on the cor-
rectness of the figures produced by the various parties’.95 It can be concluded
that, where AG Sharpston endorsed the procedural requirement of having IA
accompany significant proposals, the Court actually (without acknowledging
it) went a step further by also assessing the evidence provided herein.
A fairly different approach was taken in the Vodafone case of 2010.96 When
the Court had to deal with an alleged infringement of the proportionality
principle of the EU Roaming Regulation, it specifically relied on the IA that
backed the Regulation in order to decide upon the proportionality question.
In its assessment, the Court held that from the fact that ‘the Commission
carried out an exhaustive study, the result of which is summarised in the
impact assessment … It follows that the Commission examined various
options’.97 Thus, from the mere fact that an IA had been carried out, the
Court concluded that the Regulation had in fact been proportional.98 Lenaerts
described this case as an example of how the Court applies proportionality in

90
Ibid.
91
Ibid., pars. 82, 94–96.
92
Ibid., par. 119.
93
Ibid., par. 120. See also: Case C-189/01 Jippes v Minister van Landbouw, Natuurbeheer en Visserij [2001]
ECLI-420 par. 80.
94
Ibid., par. 121. See also: Case C-120/99 Italy v Council [2001] ECLI-567 par. 44.
95
Case C-310/04 Spain v Council [2006] ECLI-521 par. 126.
96
Case C-55/08 Vodafone v Secretary of State for Business, Enterprise and Regulatory Reform [2010] ECLI-
321.
97
Case C-55/08 Vodafone v Secretary of State for Business, Enterprise and Regulatory Reform [2010] par.
55.
98
Ibid., par. 65.
20 E. ALBLAS AND J. L. CASTRO-MONTERO

a purely procedural fashion;99 the mere existence of an IA here provides the


source and validation of the principle of proportionality. A similar situation
arose in the Luxembourg case of 2011, where the Grand Duchy of Luxem-
bourg challenged the legality of Directive 2009/12/EC on the grounds of the
principles of equal treatment, proportionality and subsidiarity.100 In order
to disprove the alleged breach of proportionality, the Commission brought
forward the claim that the IA showed the weighing of different regulatory
options, of which the conclusive Directive proved the most proportional
measure.101 In its response, the Court held that the IA indeed shows that
the Commission has assessed different regulatory options, which it appears
to effectively equate with a justification of proportionality.102
The Estonia case of 2013 seems to fit within Alemanno’s description of a
‘direct’ encounter, which he himself deemed a type of situation ‘quite unlikely
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to occur’.103 Here, the Republic of Estonia held that:


[T]he Commission committed an error of assessment in the criteria used at the
stage of the impact assessment, in that the Commission used as a basis mainly
quantitative indicators regarding the number of small undertakings, instead of
relying on qualitative indicators such as the market share of sales of those small
undertakings in the national economy … It claims that Articles 4(6) and (8),
and 16(3) of that Directive thus disregard Article 5 of Protocol (No 2) on the
application of the principles of the subsidiarity and proportionality[.]104

The Court responded to this argument by stating that the ‘EU legislature must
be allowed broad discretion in an area … which entails political, economic
and social choices on its part, and in which it is called upon to undertake
complex assessments.’105 Here, neither the procedural nor the substance of
the IA was explicitly assessed. It is further important to note that, in this
case, the Parliament and Council stressed that the principle of proportionality
does not apply to IA but only to the legislative acts themselves.106 The case law
described above, however, seems to suggest that the Court does not share this
perspective.
In conclusion, an explicit Treaty reference to IA does not exist, but IAs are
strongly linked to several Treaty provisions, most notably article 296 TFEU
and article 5 of Protocol 2. The Commission is not legally obliged to carry
out IAs,107 but the Treaties do impose an obligation upon the Union legislator
to provide appraisals of subsidiarity and proportionality, as well as financial

99
See: Lenaerts (n 21) 3–16.
100
Case C-176/09 Grand Duchy of Luxembourg v European Parliament [2011] ECLI:EU:C:2011:290.
101
Case C-176/09 Grand Duchy of Luxembourg v European Parliament [2011] ECLI-290 par. 60.
102
Ibid., par. 61–72.
103
Alemanno (n 7) 128.
104
Case C-508/13 Republic of Estonia v European Parliament [2013] ECLI-403, par. 20.
105
Ibid., par. 29.
106
Ibid., par. 27.
107
See: Case C-310/04 Spain v Council [2006] ECLI-521 opinion of AG Sharpston pars. 82.
THE THEORY AND PRACTICE OF LEGISLATION 21

impacts. IAs have been held in this paper to be intrinsically linked with the
notion of proportionality, hereby effectively functioning inter alia as the Com-
mission’s justification of the proportionality of legislative action.108 The case
law, although recognising (implicitly) the importance of IA within the rule-
making process, provides a mixed view of whether IAs constitute a judicially
reviewable act. The Spain case of 2006 provided a rare view of the Court
hinting towards a substantive scrutiny of evidence provided in IA, which it
did however without mentioning the word ‘IA’ a single time in the case.
Still, the case stands in firm contrast with the Estonia case of 2013, where
the Court remained far from scrutinising even the contours of the IA in ques-
tion. Overall, it remains unclear whether the Court sees fit to judge upon IA
reports. Cases such as Vodafone and Luxembourg, in which the Court treats
IA as a source of proportionality legitimation, effectively do increase the
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extent to which IAs have legal effect. Even though it remains disputable
whether IAs as such constitute judicially reviewable acts, the strong relation
between IAs and legislation on the one hand, and the legislative procedure
and article 296 TFEU and article 5 of Protocol 2 on the other, does provide
ground for the notion that the Commission has a Treaty obligation to
produce IA reports where they fulfil the function of subsidiarity, proportion-
ality and financial impact appraisal. This, in turn, brings IA closer and closer
towards the ‘hard’ legal domain, where the Court is competent to judge.

4.2. Competency
In spite of being out of reach for the majority of lawyers, scientific evidence,
statistical regressions, and econometric models are but essential inputs of
regulation and ex ante evaluations. If this type of evidence is challenged
before courts, judges face an apparently insurmountable problem, as they
usually lack sufficient expertise to check the science underlying regulation.
This is not to say that all judges lack skills to assess scientific evidence. In
fact, 30% of the CJEU members have graduate degrees in areas other than
law, such as economics, public administration, political science and inter-
national relations.109 However, judicial knowledge can never be omniscient
and policy-makers often hold highly specialised information with respect to
regulation and its methods. This poses a major problem as to whether the
CJEU has the competency – i.e. professional abilities and skills – to determine
whether IAs have been adequately or only cosmetically conducted.
108
It should be noted that although this is definitely not the only broader function of IA. Other examples
are its strong relation to the principle of subsidiarity, as well as that of citizen involvement in the leg-
islative process following art. 11 TEU. See, on the two themes respectively: Werner Vandenbruwaene,
‘Multi-Tiered Political Questions: The ECJ’s Mandate in Enforcing Subsidiarity’ (2012) 6 Legisprudence
321; Joined cases t-424/14 and T-425/15 Client Earth v European Commission [2015] ECLI:EU:
T:2015:848, par. 90.
109
See <https://curia.europa.eu/jcms/jcms/Jo2_7026/en/>
22 E. ALBLAS AND J. L. CASTRO-MONTERO

In order to improve the CJEU’s competency to assess scientific evidence


underlying ex ante evaluations and expert evidence in general, scholars
have suggested a number of solutions, including (i) the appointment of
neutral experts and partisan rapporteurs to assess the methodological robust-
ness and the drafting of the IA;110 (ii) the use of admissibility standards;111
(iii) the use of the RSB reports and IA Guidelines as methodological stan-
dards;112 and (iv) the application of a regulatory Daubert-test based criteria
to check IA reliability, completeness, coherency and consistency.113 Although
these alternatives are suggested competency-enhancing tools, some shortcom-
ings should be noted.
Concerning the appointment of external experts, the CJEU has proven to
be reluctant to entrust external authorities with the task of giving an expert
opinion, even though clear rules governing these procedures are defined in
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the CJEU Statute.114 Barbier de la Serre and Siboney report that until 2008,
the Court commissioned experts’ reports only in 25 cases. The fact that the
Court rarely commissions experts’ reports might be explained by the costs
and length of such procedures and the CJEU’s reliance on its own expertise,
among other factors.115 The question then becomes how to improve the
Court’s expertise to assess expert evidence presented in an IA, considering
that members of the Court do not require any experience or technical skills
beyond the abilities ‘required for appointment to high judicial office’.116
Another strand of the literature suggests the use of admissibility standards
on the evidence underlying IAs presented before the Court.117 This triggers
the question on how the CJEU has dealt with the admissibility of complex
evaluations on scientific matters in its jurisprudence. In Consten SaRL, the
Court established a limited scope of review when dealing with complex evalu-
ations on scientific matters:
[T]he exercise of the Commission’s powers necessarily implies complex evalu-
ations on economic matters. A judicial review of these evaluations must take
account of their nature by confining itself to an examination of the relevance
of the facts and of the legal consequences which the Commission deduces there-
from. This review must in the first place be carried out in respect of the reasons
given for the decisions which must set out the facts and considerations on
which the said evaluations are based.118

110
Barbier de La Serre and Sibony (n 10).
111
Keyaerts (n 22); Alemanno (n 7).
112
Vandenbruwaene (n 108).
113
van Gestel and de Poorter (n 11) 155
114
Art. 25, Protocol (no 3) on the Statute of the Court of Justice of the European Union.
115
Barbier de La Serre and Sibony (n 10).
116
Article 254 TFEU.
117
Vandenbruwaene (n 108); Keyaerts (n 22); Alemanno (n 7).
118
Joined Cases 56/64 and 58/64 Établissements Consten S.à.R.L. and Grundig-Verkaufs-GmbH v Commis-
sion of the European Economic Community [1966] ECR 299. This type of limited scope of review has also
been repeated in cases such as C-194/99 Thyssen Stahl AG v Commission of the European Communities
[2003], the Court held: ‘it should be borne in mind that, although as a general rule the Community
THE THEORY AND PRACTICE OF LEGISLATION 23

This limited scope of review does not imply that the Court should avoid the
assessment of scientific evidence. On the contrary, the CJEU has held that the
‘limited standard of review of complex economic matters does not mean the
Community Courts must refrain from reviewing the Commission’s interpret-
ation of information of an economic nature’.119 Following this argument, in
Tetra Laval, the Court claimed:
Not only must the Community Courts […] establish whether the evidence
relied on is factually accurate, reliable and consistent but also whether that evi-
dence contains all the information which must be taken into account in order to
assess a complex situation and whether it is capable of substantiating the con-
clusions drawn from it.120

Under this limited review of scientific evidence, the CJEU is restricted to


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evaluate whether the methods and evidence used by lawmakers are reliable,
consistent, complete and coherent. These four standards have been reiterated
in the Microsoft case.121
In the same line, another group of scholars suggest applying a Daubert-test
based criteria to check IA reliability, completeness, coherency and consist-
ency.122 In brief terms, Daubert establishes four standards of review,
namely, ‘(a) testability or falsifiability; (b) peer review and publication; (c)
the known or potential rate of error; and (d) the degree of acceptance in
the scientific community in a certain field’.123 Bernstein, on his part, is critical
with the high standards of such a regulatory Daubert test, to the extent that he
claims a more lenient review requiring agencies to: (a) rely on scientific evi-
dence only when required by statutes, (b) separate policy and scientific judg-
ments, and (c) rely on public consultations.124
Even though the literature has described several possible solutions for
improving the CJEU’s competency, the Court is still reluctant to engage in
substantive review of facts and scientific data provided by regulators. Van
Gestel and de Poorter suggest that one of the reasons for this kind of judicial
behaviour might be uncertainty about the way in which scientific evidence
should be assessed by the judiciary.125 In the same vein, Alemanno believes
that the CJEU would struggle to review the extent to which the Commission

judicature undertakes a comprehensive review of the question whether or not the conditions for apply-
ing the competition provisions of the EC and ECSC Treaties are met, its review of complex economic
appraisals made by the Commission is necessarily limited to verifying whether the relevant rules on pro-
cedure and on the statement of reasons have been complied with, whether the facts have been accu-
rately stated and whether there has been any manifest error of appraisal or misuse of powers.’
119
Ibid.
120
Case C-12/03 Commission v Tetra Laval [2005] ECLI-87.
121
Case T-201/04 Microsoft Corp v Commission [2007] ECLI 289, para. 89
122
van Gestel and de Poorter (n 11) 178.
123
Ibid., 179.
124
D. Bernstein, ‘What to do about Federal Agency Science: Some Doubts about Regulatory Daubert’,
(2014) 22 George Mason Law Review 549.
125
van Gestel and de Poorter (n 11) 178.
24 E. ALBLAS AND J. L. CASTRO-MONTERO

followed IA methodologies, as the IA Guidelines are not readily ‘usable


benchmarks’: ‘[l]argely due to their methodological vagueness, the IA tools
and procedures (as laid down in the Guidelines) do not seem easily applicable
for the purposes of verifying whether the Commission services have applied
them correctly’.126
Mirroring Daubert, we propose four standards that may enhance the
Court’s competency when engaging into a substantive review of IA, namely,
(i) checking for clarity and transparency of both methods and scientific evi-
dence presented in IA reports; (ii) checking whether methods used by
policy-makers are in fact scientifically accepted methods; (iii) checking for
procedural safeguards; and (iv) checking parsimonious and coherent
inferences.
These standards pose several issues in terms of judicial competency. In the
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case of clarity and transparency, it is worth considering that some methods are
not inherently transparent, mainly due to their complexity or implicit
assumptions. For instance, strategies such as law and economics and, in par-
ticular, game theory might not appear clear enough at first glance due to their
rational-choice assumptions. This requires the Court to determine whether
methods used by policy-makers are in fact scientifically accepted, but also
to assess the appropriateness of research methods, in regards to a particular
regulatory problem.
A second step for improving judicial competency is checking whether
methods used by policy-makers are scientifically accepted methods. As with
a Daubert-based test, peer review and publication may serve to signal meth-
odological reliability. The problem then is determining the relevance of the
usage of each methodology. Classical OLS linear regression, for instance, is
considered the workhorse of quantitative analysis. Nonetheless, statisticians
are increasingly questioning models in which OLS simple linear regression
provides a poor fit between independent and dependent variables or, on the
other hand, ends up by providing non-testable relations.
Concerning procedural safeguards, the probability of less reliable controls
rises in the case of exclusive non-judicial review systems. Even though judges
lack competency to assess expert models, the CJEU can still control for biases
influencing ex ante regulatory components as public consultations and notice-
and-comment. As concluded in the previous section of this article, when pro-
cedural requirements are only controlled intra-institutionally, the probability
of less reliable control rises. In this regard, even though judges lack enough
expertise to assess expert models, the CJEU can still control for biases influ-
encing procedural regulatory stages.

126
A. Alemanno ‘A Meeting of Minds on Impact Assessment: When Ex Anta Evaluation Meets Ex Post Judi-
cial Control’, (2013) 17 European Public Law 11.
THE THEORY AND PRACTICE OF LEGISLATION 25

An additional requirement of IA review consists of the supervision of


inferences and conclusions. Crucial to inferential analysis, ex post review
should focus on parsimony and coherence of explanations provided by
policy-makers. Parsimony and coherence require causal relations to be
drawn with as few explanatory variables as possible.127 Yet, the efficacy of
the four standards we propose, as well as the usage of other tools for
improving the Court’s competency, should be further advanced by empirical
scholarship.

5. Conclusion
In this article, we analysed why and how the Court of Justice of the EU
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(CJEU) should assess regulatory impact assessments (IA). On theoretical


grounds, we framed judicial review of IA as a form of judicialisation of gov-
ernance, in the sense that it constitutes a new way of ensuring that policy-
makers observe certain standards (e.g. proportionality) during the formation
of legislative and administrative rules. We further held that the emergence
of this role played by courts, as so-called ‘regulatory watchdogs’ by an
increasing trend of the literature, becomes necessary in a context of new
governance, which demands highly complex solutions, but is also pervaded
by the disbelief of policy-makers always implementing measures on their
own.
Advancing current literature, which mostly advocates for a process-
oriented review, we assert that this path of regulatory judicialisation
demands from the judiciary the conducting of substantive reviews of
regulatory instruments, being able to oversee records developed by regu-
latory agencies, including the analysis of facts and scientific evidence
and methodology underlying ex ante evaluations. Substantive judicial
review of regulatory instruments will allow courts to discipline regulat-
ory agencies, by setting aside capricious and arbitrary rule-making
decisions.
Focusing particularly on the case of EU rule-making, we evaluated how the
increasing use of IAs during the preparation of policy proposals by the EU
legislator is shaping a new role for the CJEU in scrutinising regulatory instru-
ments. A key feature of how IAs function in the regulatory process that was
distinguished concerns the aim of providing an evidence base for showing
that the specific type of action taken, particularly legislation, is proportionate
to the respective policy goal. We then analysed several intra-institutional
bodies scrutinising IAs’ drafting processes, hereby identifying several pitfalls

127
J. C. Coates, IV, ‘Cost-Benefit Analysis of Financial Regulation: Case Studies and Implications’ (2014) 124
Harvard Law Journal 889.
26 E. ALBLAS AND J. L. CASTRO-MONTERO

of an exclusive non-judicial review model of IAs. First of all, there are no


legally enforceable means for the RSB. The Commission’s internal IA review-
ing body (the RSB), for instance, depends on the Commission to refer IAs to it
and possesses no legally enforceable means to make the Commission recon-
sider and/or revise IAs. Although intra-institutional bodies, such as the Euro-
pean Court of Auditors or the European Ombudsman put political pressure
into the Commission’s dealing with IA, these bodies again cannot force the
Commission to live up to the goals set for carrying out IAs on the basis of
scientifically sound evidence.
Several scholars already note that IAs rarely lead to different choices
than legislation. Rule makers, perhaps because of their own views, or
perhaps influenced by external pressures, might choose standards that
would be quite different from those that citizens, if fully informed,
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would choose. The increasing use of IAs by EU regulators calls for a


more active role on the part of ex post custodians, particularly the
CJEU. This may lead to the emergence of a particular type of judicial
review of regulatory instruments. This type of ex-post review would not
only be incomplete if only focused on procedural safeguards, but could
also favour democratic and deliberative ways of decision-making if sub-
stantively conducted.
In the final section, we synthesised theory and practice by sketching this
role of the Court with a close watch on current developments in the case-
law. Here, we argued that the emergence of substantive judicial review – a
review that will look beyond process-oriented review and thus assess the
quality of scientific evidence on which regulations are based through IAs
– entails two fundamental conditions. The first relates to competence –
i.e. legal capacity – to engage with the empirical instruments used to
achieve regulatory quality. As was held, the competence of the Court to
scrutinise the IA behind a policy is not self-evident, but rather taken by
the Court in practice.
The second condition is linked to competency – i.e. professional ability –
to decide upon the validity and reliability of scientific evidence presented in
IA reports. As explained, competency relates to whether the CJEU has the
expertise to determine whether IAs have been adequately conducted, and
hereby use the evidence behind these instruments to evaluate the overall
quality of regulation. Mirroring Daubert, we formulate four standards that
would enhance the Court’s competency while engaging in a substantive
review of IA: (a) checking for clarity and transparency of both methods
and scientific evidence presented in IA reports; (b) checking whether
methods used by policy-makers are in fact scientifically accepted methods;
(c) checking for procedural safeguards; and (d) checking parsimonious
and coherent inferences.
THE THEORY AND PRACTICE OF LEGISLATION 27

Acknowledgements
This article has benefited from the insightful comments and suggestions of Rob van
Gestel, Anne Meuwese, two anonymous reviewers and the editors of the Theory and
Practice of Legislation. Any mistakes remain the responsibility of the authors.

Disclosure statement
No potential conflict of interest was reported by the authors.
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