Direct Effect

The doctrine of direct effect was developed by the ECJ to give greater rights to the individual under EC law. Its application has now been considerably extended with regard to directives. - Justin Santiago

The ECJ developed the doctrine of direct effect through a series of cases to ensure that the body of law provided for in the EC Treaties would have effect in the various member states without the need for any intervening national legislative or executive action and comes into effect in the domestic legal order of member states automatically. The ECJ developed the doctrine of direct effect to make up for the limited avenues available to individuals to bring their case directly to the ECJ. The ECJ’s view was individuals should be allowed to enforce EU law through their national courts to reinforce the purpose and spirit of the EC Treaty and further the ultimate aims of the Community. National courts have an interpretive obligation to interpret as far as possible national legislation in order to achieve the objectives of Community Law.

The ECJ Court developed this doctrine and applied it to articles of the EC Treaties, to EC Regulations and in a more limited way to EC Directives. The point about directives is an interesting one because directives are brought into effect by further implementing measures in the sense that it is left to the national authorities the choice of form and method to achieve the result. This seems to contradict the decision in Van Gend en Loos which stated one of the conditions that would allow an individual to bring a case to the national court is that the operation of the law must not depend on further action by national or EC authorities.

The rationale to overlook this contradiction stems from the decision in VanDuyn v Home Office, where the court held that Ms Van Duyn could rely on a clause in a directive which the UK had not introduced into national law. The reasoning behind this judgement was that the state would be estopped from relying on its own wrongdoing to frustrate the rights of individuals under directives.

The ECJ has also attempted to extend the direct effect of directives beyond vertical effect situations - individuals could rely on directives against the State and emanations of the State – Marshall v Southampton and South West Area Health Authority but not against another individual Faccini Dori v Recreb srl the rationale being that individuals are not to blame for the non implementation of the directives but rather the state is to blame.

The attempt to extend the reach of the vertical effect of directives is based on the inequality that would arise as a result of a difference in an individual’s ability to bring an action based on a directive will depend on whether they are suing the state or a private person or company.

The ECJ has therefor attempted to extended the reach of the vertical direct effect of directives through various means. It has extended the meaning of what is a state to include an emanation of a state : Foster v British Gas to include entities that performed a public service that was pursuant to a measure adopted by the state, was under the control of the state and had special powers going beyond those of normal commercial undertakings.

In Kolpinghuis Nijmegen, the ECJ judgement appears to indicate that the obligation arises as soon as the directive has been adopted at community level regardless of whether or not the time limited provided for its implementation by the states has expired. This broadens the ruling outlined in Pubblico Ministero v Ratti where no action can be initiated because the state has not transposed the directive into national law or because it has done so inaccurately.

Another development which has lessened the impact of the Marshall/Dori no horizontal direct effect of directives rule is the recognition of the ECJ of circumstances in which the directives can have a limited form of horizontal effect when they do not directly impose legal obligations on individuals. The crucial factor in these horizontal cases is that one party suffers a legal detriment and the other party gains a legal advantage form the terms of an unimplemented directive. The case of CIA Security International v Signalson seems to suggest that states have an obligation to put a ruling into effect if the claimant would be more likely to succeed in his action than he would otherwise be. This effect - giving effect to a directive in a dispute between private individuals by imposing a requirement on the state - has become known as the incidental horizontal direct effect.

The case of Von Colson v Land Nordrhein extended the effect of directives to not only governments but on all national authorities including the courts to interpret national law in the light of an inadequately implemented or a non-implemented directive even in a case against an individual. The Spanish case of Marleasing clarified the implicit point that was brought up in Von Colson that the obligation of harmonious interpretation applies even in a case where the national law predates the directive. This point was confirmed in Pfeifer where the ECJ rules that the obligation of interpretation applies to the national legal system as a whole and not only to specific legislation implementing a directive. These cases opened to the back door to the horizontal effect of directives.

However where national courts actively interpret national law in the light of unimplemented Community Directives, interference with the legitimate expectations of private parties may result. Private parties may find themselves bound by obligations drawn by interpretation from Directives of which they are quite unaware. The ECJ has also made it clear that the doctrine is subject to the general principles of law such as legal certainty and non-retroactivity : Kolpinghaus and cannot be applied where it would give rise to or aggravate criminal liability : Criminal Proceedings against Luciano Arcaro.

In summary we can see a general widening of ability of individuals to bring an action to court to enforce directives and the circumventing of the direct horizontal effect rule via indirect effect and member state liability. The underlying threat running through the various cases is that national courts are under a duty to interpret legislation in the light of the wording and purpose of EU law.