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Direct Effect

EU law (University of London)

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Direct Effect

Doctrine of direct effect is not formed under a treaty but is a creation of CJEU in (Ven Gend). Broadly,
this doctrine enables individuals to enforce rights and obligations created by union law in national
courts.

(Van Gend En Loos): The courts enforced Art.12 of EEC treaty directly, although there was a national
provision in conflict with it. The courts stated that the community constitutes a new legal order and it’s
intended that states sovereignty should be limited and the rights available under the union law should
be available to all national subjects.

Conditions for Direct Effect:

 Clear and precise

 Unconditional
 No further interference needed on the part of member state (legislation implementing measure)

In (Van Gend) the treaty article was creating a negative effect i: e not requiring the state to do anything.
There was an argument that direct effect is only available when treaty is creating a negative effect
however, in the case of (Alfons) the treaty article required states to abolish tax i: e a positive obligation
and direct effect in this regard was recognized.

The three conditions mentioned above have been relaxed as:

1. If there is some lack of clarity, national courts under Art.267 TFEU refer the matter to CJEU.
2. If an article is conditional on some objective factor the courts can see whether such factor has
been met or not.
3. If there are further implementation measures required within a prescribed time under treaty,
upon expiry of such a time, the article becomes directly effective regardless whether national
legislature matters are enacted.

In Van Gend, the matter was with regards to vertical direct effect in other words, a right was being
claimed against a state. In (Defrenne v Sabena), a right was enforced against another individual thereby
creating horizontal direct effect.

Direct effect of International Agreements: Any treaty which eu signs with an international body will
generally not fall under the ambit of doctrine of direct effect. The rational for this is given in the case of
(International Fruit Company) which stated that although the GATT agreement (which was subject
matter of the case) was binding on the community however on the other hand member states had the
choice and flexibility of varying or not implementing such treaty terms and hence due to this flexibility
direct effect should not apply. Further, it was held in the case of (Polydor) that free trade agreements
don’t create a single market and therefore cannot benefit from direct effect. By way of contrast, it was
held by courts in the case of (Germany v Council) that provisions of GATT can, in limited circumstances,
prevail over EC provisions but only where EC provisions expressly refers to GATT provision.

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It will be relevant to mention that in recent case of (Yassin Abdullah Kadi) it was held that EU is an
autonomous legal system and not prejudice by an international agreement.

Direct effect of regulation: Article 288 of TFEU states that all regulations are directly applicable however
subject to the three conditions.

Decisions: It was held in (Grad case) that decision will have direct effect – both HDE and VDE.

Direct Effect of Directives: Article 288 TFEU states that directive shall be binding as to the result to be
achieved by member state. Directives require further local legislative implementation. In (Van Duyn) it
was held that even directives will have direct effect.

It was held in the case of (Becker) that whenever the provision of a directive appears as unconditional
and precise, it can be implemented without any local legislative measures provided the prescribed time
for implementation has expired and the right is such that an individual can assert against the state. In
(Pubblico) it was held that direct effect only applies in directives upon expiry of prescribed time.

Horizontal Direct Effect of Directives: - Generally, directives don’t have horizontal direct effect however;
the courts have construed and interpreted the term public/government body widely. Hence, any entity
which directly or indirectly is controlled by the government can be sued by virtue of directive. In the
(Marshall Case) it was held that a directive may not of itself impose an obligation on an individual. As
regards, what constitutes a public body, the case of (Foster v British Gas) is relevant and states that the
courts will look at the following points related to the entity

1. Does it perform a public function?

2. Is it created pursuant to a measure adopted by the state?
3. Is it controlled by the estate?
4. Does it have special powers which normal commercial undertakings don’t have?

Whilst, it was argued in the (Faccini Dori) that directives should have Horizontal Direct Effect, the courts
didn’t subscribe to this view. The rational for this was that the distinction between a directive and
regulation would be blurred.

The courts in (Beinhard) held that national courts should interpret national laws as in such a way that
the objective laid down in a directive is achieved.

Indirect Effect

It was held in the case of (Von Colson) that national courts should interpret existing law in light of the
wording and purpose of eu law. Article 4(3) TEU states that member state takes appropriate measures
to ensure fulfillment of their obligations under the treaties. Hence, notwithstanding the absence of
horizontal effect in relation to directives, the national courts would, depending on the circumstances,
indirectly give horizontal effect through the rules of interpretation.

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In (Von Colson) state had passed local legislation to give effect to a directive but such legislation was
ambiguous and therefore the courts through interpretation removed the ambiguity. This is also
applicable where the national law is passed before or after the directives (Marleasing).

However there are some exceptions to the rule of indirect effect

 Not applicable when no local legislation or such legislation has one interpretation only.
 General principles of law like retro-activity and certainty apply.
 Cannot be used to aggravate criminal liability.

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