Question: The European Court of Justice has established a number of key legal concepts including direct effect and supremacy. Analyze which of these concepts has played the larger role (or have they been equal) in the integration of the EU and why? Date: Jan. 6, 2005 Quality: 9.5 / 10 (Where 10 is best) Introduction The European Court of Justice 1 has been a major force in the integration of the European Union. 2 Specifically, the Court has established legal concepts not enumerated within Community treaties 3 that significantly advanced the European Union from an obscure organization with little importance, to a ever-growing supranational government that already rivals many of the world's most effective governments. 4 One of the most important of these legal concepts created by the ECJ in its 55- year history include the principle that EU law is supreme to the national laws of Member States. Related concepts that have had a similarly significant impact upon the Community are the concepts of direct effect, indirect effect, and state liability. These four legal principles constitute important corner stones of the EU, and, albeit not set forth within a treaty, each concept has been largely accepted by the Member States and the EU institutions. 5 This essay evaluates each of these concepts and weighs their importance in 1 Hereinafter ECJ. 2 Oreste Pollicino, Legal Reasoning of the Court of Justice in the Context of the Principle of Equality Between Judicial Activism and Self-restraint, German Law Journal, at 39 (2004), http://www.germanlawjournal.com/article.php?id=402. The Court has also been described as the most important court in Western Europe. See Mitchel Lasser, Anticipating Three Models of Judicial Control, Debate and Legitimacy: The European Court of Justice, the Court de cassation and the United States Supreme Court, at 38 (January, 2003), http://www.jeanmonnetprogram.org/papers/03/030101.pdf 3 John Fairhurst, LAW OF THE EUROPEAN UNION at 233 (Pearson Education Ltd. ed., 5 th ed. 2006). 4 It appears, perhaps rightly so, that the focus of the European Union is to become a supranational organ different from organizations such as the United Nations or World Trade Organization. Thus stems the need to improve transparency and citizen involvement to create a true Community which does not pass unnoticed by ordinary citizens. See id. at 239 (citing Mancini and Keeling, 1994). 5 One might assume that the Court acted in an activist manner when it created these principles. Vassilios Skouris, the ECJ's president, however, points out that these doctrines were simply logical consequences of the system introduced by the Treaties, and that ECJ judges did nothing more than recognize what the Treaties already set forth. See Daniel Dombey, Courting an Even Higher Profile as things hot up, FINANCIAL TIMES, Jun. 30, 2004.
Page 2 relation to the others. To a large part, the essay will cite findings made by the ECJ in ground-breaking cases. Although the ECJ is not required to follow these case precedents, these concepts have generally been applied in subsequent judgments. Supremacy Community laws are supreme over conflicting national laws in Member States. 6 A similar concept is set forth in the Supremacy Clause of the Constitution of the United States. 7 However, while the concept in the United States is explicitly set out in a treaty the U.S. Constitution, the EU supremacy principle has not been codified and exists only by virtue of past case decisions. 8 One of the most often cited cases pertaining to the supremacy of Community law is Flaminio Costa v. E.N.E.L. 9 In that case, the ECJ held that, by creating a Community, the Member States limited their sovereign rights and created a body of law which binds both their nationals and themselves. 10 The ECJ's reluctance to allow national legislatures to implement conflicting national laws stems from the Court's objective to establish independent and uniform EU laws, that effectively address the concerns of all Member States. 11 Clearly, the concept of supremacy has played a major role in the integration 6 See Case 6/64, Flaminio Costa v. E.N.E.L., 1964 E.C.R. 585 at 593. 7 U.S. CONST. art. VI, 2. 8 Fairhurst, supra note 3, at 233. 9 Id. 10 Id. 11 Franz Mayer, The European Constitution and the Courts: Adjudicating European constitutional law in a multilevel system, at 18 (September, 2003), http://www.jeanmonnetprogram.org/papers/. In Simmenthal, the Court defends the concept of supremacy and explains that Community law is an integral part of... the legal order applicable in the territory of each of the Member States, and that provisions of Community law by their entry into force render automatically inapplicable any conflicting provisions of current national law. Allowing national courts to enforce conflicting national laws would nullify this legal order. See id. (citing Case 106/77, Simmenthal, 1978 E.C.R. 629).
Page 3 efforts of the EU and has increased the importance and power of EU institutions. Most importantly, the concept mandates that national courts look towards EU laws when considering new legislation. 12 The EU therefore becomes a type of yardstick by which Member States must measure their domestic laws. This promotes uniform and consistent laws across all member states. Still, supremacy cannot be considered the ECJ's most important legal concept. This is true especially considering the concept's key shortcoming: 13 Supremacy of EU laws does not by itself provide effective remedies to individuals who are harmed by national legislation that is found to contradict Community law. 14 As a result, the concept of supremacy of EU law must be accompanied by a grant of specific rights that individuals may rely on. The Court addressed this problem when it created the concepts of direct effect, indirect effect, and Francovich-style state liability. Direct Effect, Indirect Effect, State Liability To complement the concept of supremacy, and to address the problem of ineffective individual rights, the Court established several related key principles that may now be considered equally important to the concept of supremacy. Each of these principles, including direct effect, indirect effect, and Francovich-type state liability, 12 Id. 13 Fairhurst, supra note 3, at 234. There is also considerable criticism of the concept of supremacy that goes beyond the scope of this essay. For instance, critics claim that the concept is too simplistic and does not allow for exceptional circumstances. These critics also lament that supremacy is not set forth within any Community treaty, and that the ECJ-created principle does not rest on any other sufficient basis. See Mayer, supra note 11, at 19. 14 The EU's Working Time Directive illustrates this problem. The directive was created in 1993 but was not implemented by the UK on time. If a case had been brought by individuals harmed by this delay, the ECJ would not have been able to provide compensation. Therefore, [t]he fact that Community law is considered by the Court of Justice to be supreme means nothing to these individuals. It does not repair the possible damage suffered by them, unless they are provided with rights which they can enforce in the courts of Member States. See Fairhurst, supra note 3, at 234.
Page 4 contributes to the now commonly-held view that the Court has constitutionalized the Community treaties to create rights that individuals may rely on in court proceedings against Member States and even private parties. 15 The ECJ developed the concept of direct effect in Van Gend en Loos v. Nederlandse Administratie der Belastingen. 16 In that case, the Court found that Community law confers rights upon individuals. 17 Moreover, it held that these rights do not arise merely when expressly granted, but also whenever a provision imposes obligations in a clearly defined way upon individuals as well as upon Member States. 18 In later cases, the Court clarified that a provision or law has direct effect only where it is sufficiently precise and unconditional. 19 The concept of direct effect has found application in situations involving Treaty articles, regulations, and even directives. 20 Generally, treaties do not create rights upon which individuals may rely on in courts of their own state. 21 When the ECJ considered Van Gend en Loos, however, it expressly decided that Community laws can have direct effect even though these laws are established in treaties. 22 For instance, in Van Gend en Loss the Court found that EC Treaty article 25 committed Member States not only to one 15 Mary L. Volsansek, Judicially Crafted Federalism: EU and USA, European Union Studies Association Ninth Biennial Conference, at 9 (March 31-April 2, 2005), http://aei.pitt.edu/archive/00003019/02/judicially_crafted_federalism-1.doc. 16 Case 26/62, Van Gend en Loos v. Nederlandse Administratie der Belastingen, 1963 E.C.R. 1. 17 See Fairhurst, supra note 3, at 235. 18 Van Gend Loos, 1963 E.C.R. at 1, Sec. B, 4. 19 Fairhurst, supra note 3, at 236. The Court in Van Duyn v. Home Office (Case 41/74) found that a provision was sufficiently precise where it required that certain actions be taken on the grounds of public policy or public security. In Costa v. E.N.E.L. (Case 6/64), the Court found that EC Treaty article 97 was not unconditional, because it was subject to additional measures in the form of prior consultation. See id. at 237. 20 Id. at 236. 21 Id. at 237. 22 Id. However, despite direct effect, vague and broad provisions that do not clearly create rights will never be found to confer rights upon individuals. See EC TREATY art. 191 (this is a very broad provision that does not set forth any specific rights or obligations, but rather expresses an aspiration of the Community).
Page 5 another, but also to their own citizens as actual or potential beneficiaries of the Treaty (vertically effective provision). 23 In other cases, the ECJ also found that provisions could obligate individuals amongst themselves (horizontally effective provisions). 24 Regulations by the European Union are vertically and horizontally directly effective by virtue of EC Treaty article 249(2). 25 Directives, on the other hand, have vertical direct effect only in limited circumstances and are ordinarily not held to be horizontally effective at all. 26 Similar to treaty provisions, directives must be sufficiently precise and unconditional to acquire direct effect. 27 However, in Van Duyn, the Court also held that the effet utile of a directive and considerations of estoppel determine whether a directive may be held to have direct effect. 28 Another concept related to direct effect is the legal principle of indirect effect. The Court created this concept in light of the fairness-related problems that arise when individuals seek to enforce directives in actions against other private parties. 29 The Court addressed these problems by finding that national courts, like Member States themselves, 23 Id. 24 This type of direct effect is horizontally effective (i.e. it is effective between individuals) and was established by the Court in Defrenne v. SABENA (Case 43/75). In that case, a stewardess brought claims against her employer which were based on the obligations created in EC Treaty article 119. See id. at 238. 25 The EC Treaty provision establishes that a regulation shall have general application. It shall be binding in its entirety and directly applicable (emphasis added). Thus, Member States do not need to pass legislation to give effect to the regulation. Rather, the provisions of the regulation apply without further implementation. See EC TREATY art. 249(2). 26 However, on occasion, the Court has allowed horizontal direct enforcement. See Fairhurst, supra note 3, at 250 (citing Case C-194/94, CIA Security International v. Signalson and Securitel, 1996 E.C.R. I- 2201). 27 Fairhurst, supra note 3, at 242. 28 When the Court looks to the effet utile of a directive, it tries to determine the useful effect of a directive and whether it is suited for providing direct effect. See Fairhurst, supra note 3, at 242. 29 The Court created this concept in two 1983 cases, Von Colson (Case 14/83) and Harz v. Deutsche Tradax (Case 79/83). In both cases, the claimants were in similar situations. In Von Colson, the claimant obtained full compensation because the defendant was an institution of the Member State (the directive had vertical direct effect. However, because directives ordinarily do not have horizontal direct effect, the claimant in Harz would not have received any compensation against the defendant private party. See Fairhurst, supra note 3, at 250.
Page 6 are bound by EC Treaty article 10 to take all appropriate measures to give effect to Community law. 30 The Court's concept of indirect effect of EU directives is thus a key legal principle because it requires national courts to interpret national law in light of the wording and purpose of EU directives even in cases involving merely private parties. 31 Francovich-type state liability ties together the ECJ's legal concepts of supremacy, direct effect, and indirect effect. Specifically, it provides the tools with which individuals, who have rights provided via direct and indirect effect, can seek redress against Member States that fail to implement or adhere to Community laws. 32 This concept is a key principle and of significant importance to EU integration, because it enforces the rights conferred upon individuals via direct and indirect effect. If the ECJ hadn't found in Francovich that states could be liable for breaching Community law, the rights created by direct and indirect effect would have been meaningless. Accordingly, the objectives sought through the concept of supremacy of EU laws would have failed. 33 Conclusion Supremacy, direct effect, indirect effect, and Francovich-type state liability are among the most important legal concepts of the European Union. Each has become a significant tool to enable effective integration of the EU. 30 Id. at 251 (citing EC TREATY art. 10). 31 It appears that these directives must still be sufficiently precise and unconditional to be appropriate subjects of direct effect. See Fairhurst, supra note 3, at 251. 32 The concept was created in Francovich and Bonifaci v. Republic of Italy (Cases C-6 & 9/90) and refined in several subsequent cases including Brasserie du Pêcheur v. Germany; R v. Secretary of State for Transport, ex parte Factortame (Cases C-46 & 48/93). In Francovich, the Court decided that the Republic of Italy could be liable for failing to implement EU Directive 80/987. In Brasserie du Pêcheur and Factortame, the Court further established that a Member State could be liable for harm caused by any type of breach of Community law. See Fairhurst, supra note 3, at 252. 33 The objectives of the supremacy concept were discussed above and include uniform and independent Community laws. See Mayer, supra note 11, at 18.
Page 7 While the concept of supremacy of Community laws is perhaps the most fundamental EU legal principle, it cannot be considered the most important of the four concepts discussed in this essay. Rather, the concepts appear to stand on equal footing and play similarly large roles in the EU system. Without EU laws that are supreme to national laws, Member States can easily pass national legislation to circumvent disadvantageous EU treaty provisions, regulations, and directives that have direct or indirect effect. Conversely, without the concepts of direct and indirect effect, remedies provided by virtue of the supremacy clause would be ineffective to protect the rights and expectations of individuals. Finally, without state liability, Member States would be less motivated to adhere to Community laws and therefore jeopardize efforts to create a Union in which individual citizens are motivated to participate.
Page 8 TABLE OF AUTHORITIES CITED Page TREATY ESTABLISHING THE EUROPEAN COMMUNITY EC Treaty art. 10 6 EC Treaty art. 191 4 EC Treaty art. 249(2) 5 UNITED STATES CONSTITUTION US Const. art. VI, 2 2 CASES Brasserie du Pêcheur v. Germany; R v. Secretary of State for Transport, ex parte Factortame (Cases C-46 & 48/93) E.C.R. I-1029 [1996] 6 Costa v. E.N.E.L. (Case 6/64) E.C.R. 585 [1964] 2, 4 Defrenne v. SABENA (Case 43/75) E.C.R. 455 [1976] 5 Francovich and Bonifaci v. Republic of Italy (Cases C-6 & 9/90) E.C.R. I-5357 [1991] 6 Harz v. Deutsche Tradax (Case 79/83) E.C.R. 1921 [1984] 5 Simmenthal (Case 106/77) E.C.R. 629 [1978] 2 Von Colson (Case 14/83) E.C.R. 1891 [1984] 5 Van Duyn v. Home Office (Case 41/74) E.C.R. 1337 [1975] 4 Van Gend en Loos v. Nederlandse Administratie der Belastingen (Case 26/62) E.C.R. 1 [1963] 4 BOOKS John Fairhurst, Law of the European Union (Pearson Education Ltd. ed., 5 th ed. 2006) 1-6 PERIODICALS Daniel Dombey, Courting an Even Higher Profile as Things Hot Up, Financial Times, (June 30, 2004) 1 Mitchel Lasser, Anticipating Three Models of Judicial Control, Debate and Legitimacy: The European Court of Justice, the Court de cassation and the United States Supreme Court (January, 2003) 1 Franz Mayer, The European Constitution and the Courts: Adjudicating European Constitutional Law in a Multilevel System (September, 2003) 2, 3, 6 Orest Pollicino, Legal Reasoning of the Court of Justice in the Context of the Principle of Equality Between Judicial Activism and Self-restrain (2004) 1 Mary L. Volsansek, Judicially Crafted Federalism: EU and USA (March 31-April 2, 2005) 4