Article 226

Discuss the effectiveness of Article 226 procedure in ensuring compliance of Community law on the part of Member States. - Justin Santiago

Article 226 enables the Commission to take action against Member States which the Commission believes to be in breach of Community law and to ensure that Member States comply with their Community law obligations and procedures. Article 226 provides that if the Commission considers that a Member State has failed to fulfill an obligation under the Treaty, it shall deliver a reasoned opinion on the matter after giving the State concerned the opportunity to submit its observations.This will result in a Declaration by the court to that effect. Article 228 was introduced to add a financial penalty to ensure Member States complied with Article 226 judgements. Art 228 is a separate action to impose fines to have a further deterrent effect depending on the seriousness of the breach and duration of the breach.

The advantages of proceedings under Article 226 are that the ECJ will pronounce directly on the compatibility of a Member State’s conduct with Community law compared to a preliminary reference from a national court under Article 234 where the ECJ will only give a ruling on the interpretation of Community law leaving it for the national court to spell out the implications of that ruling in the particular case.

The Commission initiates Article 226 proceedings either in response to a complaint from someone in a Member State or on its own initiative. Complaints are brought on the basis of information gained from diverse sources – through the press, from European Parliament questions or petitions or increasingly through the modern technological sources such as databases indicating when Member States have failed to notify their implementation of a directive. In the last 10 to 15 years complaints from citizens constitute a significant source for the detection of infringements and has suggested that this contributes towards a creating a more participatory Community in which citizens can play a role in law enforcement. However the individual has no say in determining whether or not the Commission actually initiates proceedings against a Member State : Star Fruit v Commission – Commission was not bound to take action but had a discretion also Commission had a right but not a duty to initiate proceedings before the ECJ following non-compliance with the reasoned opinion.

The most common reason for an Art 226 action is the non implementation, faulty implementation or non-application of secondary legislation. Very often it is the non-implementation of a directive within the allotted time limit. Directives need to be implemented by a certain date. The State is liable whichever of its organs is responsible for the breach and regardless of the internal division of powers between constitutional authorities and liable for the conduct of public agencies even if they are constitutionally independent : Commission v Ireland (Buy Irish).

The Commission often refers to the Member State’s obligation of sincere co-operation under Art 10 EC to underpin an action under Art 226. The Commission has absolute discretion on whether to start the Art 226 EC procedure and as to whether to take a case to the ECJ : Commission v Belgium. However the decision not to make a reasoned opinion and the decision not to submit a case to the ECJ have been held to be not reviewable under Art 230 EC as they are not acts that have legal effects : Alfons Lutticke. Additionally the discretion of the Commission to bring proceedings under Article 226 is excessively arbitrary.

The Art 226 procedure is intended to reach a negotiated settlement.Its informal administrative stage without recourse to a court enables many breaches to be resolved by friendly negotiations. This stage ends with the Commission issuing a reasoned opinion which forms the bases of the judicial stage of the proceedings before the ECJ. However this can be a long process and although an application for an interim measure under Article 234 can be made it must be established :-

1. There is a matter of urgency
2. There are factual and legal grounds to raise a prima facie justification for the interim measure

The effectiveness of an Art 226 action is diminished by the length of time the process takes and the lack of a serious penalty. The only result of a finding by the ECJ under Art 226 is that the Member State is in breach is a declaration to that effect. The Member State can continue to avoid complying with Community law obligations. Although documents related to the infringement proceedings is available a major source of frustration is difficulty in obtaining access to documents related to infringement proceedings.

The Commission does not have enough resources to bring enforcement proceedings against member states under Article 226. By introducing the concept of direct effect of EC law as well as indirect effect or in action for damages on the basis of the state liability doctrine, the ECJ enabled individuals and companies throughout the EU to become enforcers of Community law in the Member States without the need for Commission involvement.

There are also limited defences :-

1. Reciprocity

Argument of reciprocity was not applicable in the context of Community law as it was a new legal order which was not limited to creating reciprocal obligations as under international law.

2. Other Member States in breach

Grounds have been pleaded numerous time by Member States without success C266/03 – Commission v Luxembourg

3. Force majeur

Difficulties in parliamentary procedures or problems with the separation of powers within their systems to explain delay in compliance with EC law – rejected by the ECJ. However could be pleased where a bomb attack presented insurmountable difficulties rendering compliance with the Treaty impossible : Case 33/69 Commission v Italy (Re Transport Statistics) – data processing centre had been bombed however ECJ held that “time will erode the validity of the excuse.”

4. Internal difficulties

Internal difficulties not the Commission’s concern : C128/78 Commission v UK (tachographs)

5. Non-applicability of the offending law

C167/73 Commission v France (French Merchant Seamen) – rule in French code maritime was not enforced in practice against EU nationals but was not accepted because it gave rise to uncertainty about legal rights.

6. Community measure is illegal

C226/87 Commission v Greece – defence rejected because the appropriate remedy within the system of remedies set up by the Treaty was an action for judicial review under Art 230 EC.

7. Adequate implementation of the relevant community law by administrative measures

C29/84 Commission v Germany (Re Nursing Directives) – administrative measures widely publicized and not easily subject to alteration

8. Protection of fundamental human rights

Case 112/00 Schmidberger v Austria – freedom of expression and freedom of assemble were fundamental human rights guaranteed by the ECHR which are to be protected by the EC according to the TEU and hence the action by the claimant whose business of transporting goods was hampered by a demonstration failed.

Legislation in the EU and the role of the Institutions

In the European Community, the power to approve new legislation is distributed between the Commission, the Council and the European Parliament. Does this accord with the concept of separation of powers? Discuss.

There is no single body identified as the “legislature” for the Community as a whole. There is also no one single legislative procedure and is dependent on what is specified under any particular Treaty Article.

There are several different procedures :-

1. The Commission acting alone – under Article 86(3) which concerns the role of the State in relations to public undertakings the Commission has the power to promulgate directives or decisions.

2. The Council and Commission acting alone – can take action without the intervention of the Parliament. The Council will act on a proposal from the Commission and take the decision in accordance with the voting requirement in the relevant Treaty article. Used in relation to aspects of free movement of workers and of capital, economic policy and common commercial policy

3. Council and Commission in consultation with Parliament - under the Treaty of Rome legislative power was concentrated in the Commision and the Council. The Commission would propose a measure and the Council would vote upon it. Parliament's only role was to be consulted before the proposal could be legislated in what is known as the consultation procedure. The Council did not have to incorporate the Parliament’s opinion or give reasons for rejecting it. The role of Parliament was strengthened by the ECJ which ruled that the Parliament must be consulted when so required by the Treaty. Failure to observe this essential procedural requirement is a ground for annulment under Article 230 EC : Roquette Freres v Council.

4. Council, Commission in cooperation with Parliament - the Single European Act (SEA) 1986 introduced the cooperation procedure under Article 252 EC increased Parliament’s role which reflected Parliament’s enhanced status after the initiation of direct elections in 1979. Now there was a second reading for the Parliament and if the Parliament vetoed the proposal, it could only be enacted by the Council acting unanimously. So a combination of the Parliament and one Member State acting together could defeat a proposal for legislation

5. Council, Commission in codecision with Parliament - further powers were given to Parliament on the basis of its directly elected nature. Parliament has increasingly be seen as providing a measure of democratic accountability to the EU. The codecisionmethod of legislation has become the method for making much important Community legislation except agriculture, fisheries, taxation, trade policies, competition and EMU.

In the codecision procedure the Council and Parliament must both agree on the wording of the legislation. After the first reading of the legislation by both of the bodies, the Parliament can propose amendments. The Council then adopts a common position accepting, rejecting or making further amendments to the bill. If Parliament does not accept the common position, then the Commission can either withdraw the legislation or a Conciliation Committee is convened between the Parliament and Council to try to adopt a joint text that they both agree on. If this is successful, the law is passed, if not then it is rejected.

6. Council in comitology with Commission and Parliament - once legislation has been passed into law, it needs to be implemented by the Council. The Council through a parent regulation would authorize the Commission to enact more specific regulations within a particular area. The Council has passed a lot of responsibility for this phase of the legislative process to the Commission but it is not carte blanche and subject to institutional constraints - a series of committees formed of national experts that work with the Commission during the implementation process and who can refer measures that they disagree with back to the Council for review.

This procedure is known as comitology laid down by the SEA and modified under Art 202 and has been highly criticised by the European Parliament because of its non-involvement and undermines the gains that Parliament has made through codecision. The comitology committees’ work is also not transparent and there are complaints that comitology gives the Council and national Governments too much control over the Commission, which interferes with the relationship between these different institutions.

Member State Liability

The signficance of Francovich and the provisions of Article 226 - Justin Santiago

The Francovich judgement established the principle of state liability to pay compensation for failure to transpose Community obligations into national law as outlined by Article 10. Francovich signaled the beginning of member state liability where member states can be held liable for non-implementation of a directive. This decision has paved the way for individuals to outflank the no horizontal direct effect ruling and to sue the State in damages where the state has failed to implement a directive. Three conditions were required to be fulfilled :-

1. Objective sought by the directive must include the creation of individual rights
2. The content of the rights must be ascertainable from the provision of the directive
3. There must be a causal link between breach of duty on the part of the State and the losses incurred by individuals

De Burca has additionally suggested that the case for direct enforcement against the state appears to be based on a concept of estoppel thereby the state may not rely upon its own failure to implement a directive properly.

However it has also been argued that the State should not be held liable as the State did no wrong to the claimants and the decision has blurred the distinction between private law rights and public law rights.

The correct course of action should have been by way of Article 226 which allows the Commission to take action against Member States which the Commission believes to be in breach of Community law and to ensure that Member States comply with their Community law obligations and procedure which includes implementing a directive. If the Commission considers that a Member State has failed to fulfill an obligation under the Treaty, it shall deliver a reasoned opinion on the matter after giving the State concerned the opportunity to submit its observations.This will result in a Declaration by the court to that effect. This stage ends with the Commission issuing a reasoned opinion which forms the bases of the judicial stage of the proceedings before the ECJ. Art 228 was introduced by Treaty of the European Union in order to add a financial penalty to ensure Member States complied with Art 226 judgements. Art 228 is a separate action to impose fines to have a further deterrent effect depending on the seriousness of the breach and duration of the breach.

However Francovich was deemed necessary in light of the fact an action under Art 226 can be a long process. There are also limits to the effectiveness of Article 226 in ensuring compliance of Community law on the part of Member States :-

1 .The Commission has absolute discretion on whether to start the Art 226 EC procedure and as to whether to take a case to the ECJ : Commission v Belgium. The decision not to make a reasoned opinion and the decision not to submit a case to the ECJ have been held to be not reviewable under Art 230 EC as they are not acts that have legal effects : Alfons Lutticke. The discretion of the Commission to bring proceedings under Article 226 is excessively arbitrary.

2. The process is ineffective. The process is delicate, secret and often protracted - the effectiveness of an Art 226 action is diminished by the length of time the process takes and the lack of a serious penalty.

3. There is no genuine sanction against a member state which refuses to abide by the court’s ruling. The only result of a finding by the ECJ under Art 226 is that the Member State is in breach is a declaration to that effect. The Member State can continue to avoid complying with Community law obligations. The individual has no say in determining whether or not the Commission actually initiates proceedings against a Member State : Star Fruit v Commission – Commission was not bound to take action but had a discretion also Commission had a right but not a duty to initiate proceedings before the ECJ following non-compliance with the reasoned opinion. Although documents related to the infringement proceedings is available a major source of frustration is difficulty in obtaining access to documents related to infringement proceedings.

4. The Commission does not have enough resources to bring enforcement proceedings against member states under Article 226. By introducing the concept of direct effect of EC law as well as indirect effect or in action for damages on the basis of the state liability doctrine, the ECJ enabled individuals and companies throughout the EU to become enforcers of Community law in the Member States without the need for Commission involvement. An Art 226 declaration that a member state in breach will facilitate a state liability action by an individual.

There are also limited defences :-

1. Reciprocity

Argument of reciprocity was not applicable in the context of Community law as it was a new legal order which was not limited to creating reciprocal obligations as under international law.

2. Other Member States in breach

Grounds have been pleaded numerous time by Member States without success C266/03 Commission v Luxembourg

3. Force majeur

Difficulties in parliamentary procedures or problems with the separation of powers within their systems to explain delay in compliance with EC law – rejected by the ECJ. However could be pleased where a bomb attack presented insurmountable difficulties rendering compliance with the Treaty impossible : Case 33/69 Commission v Italy (Re Transport Statistics) – data processing centre had been bombed however ECJ held that “time will erode the validity of the excuse.”

4. Internal difficulties

Internal difficulties not the Commission’s concern : C128/78 Commission v UK (tachographs)

5. Non-applicability of the offending law

C167/73 Commission v France (French Merchant Seamen) – rule in French code maritime was not enforced in practice against EU nationals but was not accepted because it gave rise to uncertainty about legal rights.

6. Community measure is illegal

C226/87 Commission v Greece – defence rejected because the appropriate remedy within the system of remedies set up by the Treaty was an action for judicial review under Art 230 EC.

7. Adequate implementation of the relevant community law by administrative measures

C29/84 Commission v Germany (Re Nursing Directives) – administrative measures widely publicized and not easily subject to alteration

8. Protection of fundamental human rights

Case 112/00 Schmidberger v Austria – freedom of expression and freedom of assemble were fundamental human rights guaranteed by the ECHR which are to be protected by the EC according to the TEU and hence the action by the claimant whose business of transporting goods was hampered by a demonstration failed.

Advantages of proceedings under Article 226 are that the ECJ will pronounce directly on the compatibility of a Member State’s conduct with Community law compared to a preliminary reference from a national court under Article 234 where the ECJ will only give a ruling on the interpretation of Community law leaving it for the national court to spell out the implications of that ruling in the particular case.

Direct action

Direct action provides an inadequate remedy against the protection of the individual. - Justin Santiago

Direct action comes under the broad area of judicial review of Community legislation. Specifically it means the ability to challenge the legality of a particular legislation directly to the European Court of Justice. The relevant law is Article 230 which states that the ECJ has the power to review the legality of acts intended to produce legal affects vis-à-vis third parties.

There are several constraints to Article 230. The reviewable acts must have legal effect for it to be subject to judicial review. Although the ERTA case held that the meaning of 'acts' was not restricted to the secondary legislation of the Community under Art 249 - Regulations, Directives and Decisions - but could include any act which had legal effects, Recommendations and Opinions as well as statements of objections raised by the Commission : Case 60/81 IBM.

Additionally for the action to succeed, the petitioner must show three things. First, the petitioner must have standing to bring the action. Second, the action must be against some institution over which the Court has jurisdiction. Third, the petitioner must show that the provision falls within one of the defined grounds for annullment. In addition, the action must be brought inside the strict time limit of two months.

Individuals come under the category of "non privileged applicants" distinct from privileged applicants such as Member States, the Council and the Commission. Under Article 230 as “non privileged applicants”, individuals can challenge an act where :-

1. the decision is addressed to the applicant
2. the decision is in the form of a Regulation
3. the decision is addressed to another person

In situation 1 where the decision is directly addressed to the applicant there is usually no problem. In situation 2 and 3 the applicant must show that the contested measure is of direct and individual concern to him or her.

Direct concern - it is necessary to show that there has been no exercise of discretion on the part of national authorities : Toepfer cases

Individual concern – Plaumann & Co v Commission – certain attributes which are peculiar and the number of persons identified are fixed. Class of people is closed on the date of adoption, identity of its members are unalterably fixed and therefore ascertainable : Piraiki- Patraiki.

However there have been criticisms which have led to AG Jacobs' opinion in UPA v Council which proposed a new test for individual concern - an applicant is individually concerned by a measure where by reason of his particular circumstances, the measure has, or is liable to have, a substantially adverse effect on his interests

The CFI suggested a new test in Jego-Quere et Cie SA v Commission a person is individually concerned if the measure affects his legal position in a manner which is both definite and immediate, by restricting his rights or be imposing obligations on him.

Enforcement of community law by the ECJ

To what extent is the ECJ prepared to mandate the remedies that are available to victims of breaches of substantive EC law. - Justin Santiago

Enforcement of Community law rights by individuals or legal persons (companies) mainly takes place at the national level in the national court. Initially, under the principle of national procedural autonomy the ECJ contended that the national legal system determines the primary conditions under which rights granted by EC law are to be protected. The remedies obtained in respect of Community laws are those available under national law, there is no uniform set of Community law remedies with the exception of state liability. In Rewe v Hauptzollamt Kiel it was stated that “Community law …was not intended to create any new remedies in the national courts to ensure the observance of Community law other than those already laid down by national law.”

ECJ has changed its position on victims of breaches of EC law from refusing to rule on compensation or interest Rewe-Zentralfinanz (1976)), to ruling that compensation was payable (Von Colson (1984)) but not stipulating the amount, to Marshall v Southhampton and South West Area Health Authority No. II (1993) in which it was prepared to rule on amount and interest.

The ECJ's original standpoint was that it is for the national courts to decide what remedies would be available, by applying the Community's substantive law under their own procedures. It was not in the interests of the ECJ to be seen to undermine the authority of the national courts by defining remedies as well as interpreting the law.

For the first twenty years or so of the Communities, the issue of remedies was not particularly prominent. At that time, litigants in the ECJ were primarily member states and institutions of the Communities. Whether or not the ECJ would mandate a remedy became a more pressing question in the 1970s, with the emergence of the doctrine direct effect enunciated by the ECJ in cases such as Van Gend en Loos1963 and many others, makes it clear that an individual may rely on his rights under EU law in actions against the state in the national courts.

When it became apparent that Community law created rights and duties which could be invoked in domestic courts by private individuals, it was only a matter of time before those individuals began to expect particular remedies to be available. The ECJ has expanded its jurisdiction in this area to fulfill its duty under Art. 200 to see that “the law is observed”. Thus there has been a gradual and incremental increase in the ECJ's willingness to oversee judicial remedies away from an initial refusal to grant a particular remedy to claimants.

The ECJ laid down two principles in the case of Rewe Zentralfinanz and Comet BV v Productchap namely :-

1. The principle of equivalence - remedy for the EC law right should be no less favourable than those relating to similar domestic claims

2. The principle of practical possibility – the remedy should not be rendered impossible to practice or excessively difficult

Subject to these two requirements, the procedures and remedies for breach of Community law were primarily a matter for the Member States. States were not required to provide remedies which would not be available under national law. New national remedies did not therefor have to be created although existing national remedies must not render the exercise of the right impossible in practice.

Subsequently in later cases the ECJ insisted that the remedies provided by national law must be proportionate, adequate and should have a deterrent effect in order to be effective in guaranteeing real and effective protection.

With regard to proportionality Sagulo concerned fines imposed by France and Germany on workers from other states for not applying for the appropriate residence permits, in breach of EC legislation. The ECJ held that these fines were so excessive as to amount to a barrier to free movement workers. In Von Colson a worker was found by the German courts to be a victim of gender discrimination that was unlawful under EC law. The ECJ held that the remedy offered must be adequate and must also have a deterrent effect. A nominal or token remedy would not have that effect.

While no problems existed with the priciples of proportionality and adequacy the effectiveness requirement has provided the most tension between national procedural responsibility and autonomy and the requirement that national remedies must secure the effectiveness of Community rights.

Dekker involved a discriminatory case by a company who refused to hire a pregnant woman against Directive 26/207. It was held that Dutch law required proof of not only discrimination but unjustified discrimination. It was deemed not to be effective.

The effectiveness requirement was highlighted in Factortame I in which the ECJ drawing on its earlier Simmenthal ruling based on the principle of cooperation laid down in Article 5 of the EEC Treaty ruled that any provision of a national legal system which might impair the effectiveness of Community law by withholding from the national court having jurisdiction to do everything necessary would be incompatible. The ECJ left it to the House of Lords to specify the conditions under which interim relief should be granted in a given case but made clear that a rule which prohibited absolutely the grant of interim relief would be unacceptable.

In subsequent cases, the ECJ used the principle of effectiveness not only to dictate the form of the remedy, but also to make detailed pronouncements on the amount of compensation payable. In Marshall v Southhampton and South West Area Health Authority No. II (1993) the ECJ was prepared to rule on amount and interest.

Here the ECJ was not merely mandating an effective compensation, it was involving itself in determination of whether a particular amount was effective or not and marks a high point of the ECJ’s interventionist approach to the amount of compensation awarded by national courts, a striking departure from earlier cases.

However note the case of R v Secretary Of State For Social Security Ex Parte Sutton, where the ECJ appears to confine the Marshall II decision almost to its particular facts and the case of Steenhorst-Neerings which was justified on the basis of satisfying the twin conditions of equivalence and practical possibility (one year time bar was within limits) denying the claimant an action for retrospective payment of several years of disability benefits during the period when the Directive on sex discrimination in social security had not been properly implemented into Dutch law although the facts of the case was similar to Emmot where the ECJ ruled that where an individual sought to rely on the provisions of an unimplemented directive, the time limit for bringing proceedings should not start to run until the Directive had been properly implemented otherwise it would be impossible to make the claim.

Over time the ECJ has developed a detailed balancing approach which requires the importance of the Community right to be weighed against the scoep and purpose of the national rule taking into account all the circumstances of the case. The ECJ generally acknowledges the legitimacy of diverse national rules and the primary role of the national court in assessing these.

The requirement of “effectiveness” additionally forced the member state to create an entirely new remedy despite the no new remedies rule in Rewe-Handelgesellschaft. In Francovitch the claimants had suffered financial losses when their employer became insolvent, which they would not have suffered had the Italian state implemented a directive intended to protect employees against this occurence.

In this case the ECJ recognized a specific liability in damages on the part of the state for breaches of Community law and held the Member State liable for those losses for non-implementation of the directive. In Francovitch, the ECJ stated three conditions that had to be satisfied for the state to be held liabile for losses following from non-implementation of a directive:-

- the directive had to create rights for individuals
- those rights had to be ascertainable from the text of the directive
- there had to be a causal link between the non-implementation and the claimant's loss

In fact, the decision is potentially wider than this, as it describes any breach of EC law by the state as creating a cause of action including implementing a directive improperly, although only non-implementation is discussed in detail.

The rationale behind this decision was that member states liability was inherent in the scheme of the EC Treaty and in the member states’ obligations under Article 10. In addition to ruling that an individual could take action against the state for non-implementation, the ECJ stipulated that the successful litigant should be awarded damages.

The principle was clarified and extend in the joined cases of Brasserie du Pecheur and Factortame III. In these two cases the ECJ located the principle of state liability in the context of the Treaty provisions on the Community’s liability under Article 288 – the Coummunity shall in accordance with the general principles common to the laws of the Member States make good any damage caused by its institutions or by its servants in the performance of their duties – intended to legitimize the development of the principle of state liability.

Drawing on international law principles and on its case law under Art 226, the ECJ ruled that the State is liable whichever of its organs is responsible for the breach and regardless of the internal division of powers between consititutional authorities. In Kobler the principle of state liability applies even to violations of EC law by national courts of last instance.

In neither Factortame III or Brasserie du Pecheur, decided at the same time, did the ECJ attempt to quantify the damages that would be awarded. It refered instead to its earlier decisions on remedies, indicating that the award must be equivalent to one that would be obtained if there were a similar breach of national law, and effective to ensure that EU law was observed. There was no objection, in principle, to member states' imposing limitations on damages, or rules about mitigation of losses, or time limits within which actions should be started. The member states’ argument is that there should be procedural autonomy of national legal systems and it ought to be for the national courts to determine the remedy.

ECJ and the national courts and the preliminary reference procedure under Art 234

The relationship between the ECJ and the national courts as it was originally envisaged, as “bilateral and horizontal” but is increasingly becoming more “multilateral and vertical.” - Justin Santiago

The relationship between national courts and the ECJ was originally set out under Art 234 which allowed a preliminary reference by a national courts to the ECJ for an interpretation of a point of EC law and it was up to the national court to apply the interpretation to the facts of the particular case and make a decision. Before an application for an interim measure under Article 234 can be made but it must be established :-

1. There is a matter of urgency
2. There are factual and legal grounds to raise a prima facie justification
for the interim measure

Purpose of Art 234

1. To ensure the unity of interpretation
2. To ensure that community law is uniformly applied
3. To complement other actions against member states and community institutions – Art 230, member state liability, direct, indirect effect
4. To prevent a body of national not in accord with the rules of community law from coming into existence
5. What is most importance is the cooperation of the national courts and the willingness to make references

The relationship was horizontal in the sense that the ECJ and the national courts were separate but equal. It was for the national court to decide whether to refer a matter to the ECJ which the ECJ would then interpret. It was bilateral in the sense that the interpretation would be delivered to the particular national court that made the request.

However, the ECJ has become increasingly influential in the hierarchy of courts and there is a move to go beyond interpretation and to decide on actual cases and for national courts to follow precedents set by the ECJ.

The relationship has become more vertical and multilateral through the doctrine of direct effect where the body of law provided by the EC treaties and even extended to directives can have effect without the need for national legislation and the rulings of the ECJ are increasingly having either a de jure or de facto impact on all other national courts.

The ECJ has held that it was not always mandatory for a court of last appeal to refer : Da Costa en Schaake NV v Nederlandse Belastingadiministratie. Guidance on referal was provided in CILFIT, a national court need not refer if :-

- the interpretation of EC law is so clear that only one outcome is reasonable – similar to the concept of acte claire in French administrative law, by which the ECJ was no doubt influenced.
- a case with similar facts has already been decided by the ECJ
- the interpetation of EC law would have no relevance to the outcome of the case.

CILFIT is interesting in that it suggests that a national court need not refer if the issue of EC law has similar facts to those of issue on which the ECJ has previously ruled. It does not require that the facts be identical. This suggests that the ECJ expects its decisions to have precedential value which is binding on national courts. If this view is correct, then it represents a significant departure from the relationship between the ECJ and national courts as it was originally envisaged, as “bilateral and horizontal” but is increasingly becoming more “multilateral and vertical”. If the decisions of the ECJ have the status of binding precedent, then this makes the ECJ more like an appellate court that an advisory body, for better or worse.

ECJ and remedies

To what extent is the ECJ is prepared to mandate the remedies that are available to victims of breaches of substantive EC law. - Justin Santiago

ECJ has changed its position e to victims of breaches of EC law from refusing to rule on whether compensation or interest was payable : Rewe-Zentralfinanz , to ruling that compensation was payable: Von Colson but not stipulating the amount, to Marshall v Southhampton and South West Area Health Authority No. IIin which it was prepared to rule on amount and interest.

The ECJ's original standpoint was that it is for the national courts to decide what remedies would be available, by applying the Communities' substantive law under their own procedures under the principle of national procedural autonomy. It was not in the interests of the ECJ to be seen to undermine the authority of the national courts by defining remedies as well as interpreting the law. The remedies obtained in respect of Community laws are those available under national law, there is no uniform set of Community law remedies with the exception of state liability. In Rewe v Hauptzollamt Kiel it was stated that “Community law …was not intended to create any new remedies in the national courts to ensure the observance of Community law other than those already laid down by national law.”

For the first twenty years or so of what is now the EU, the issue of remedies was not particularly prominent. At that time, litigants in the ECJ were primarily member states and institutions of the Communities. Whether or not the ECJ would mandate a remedy became a more pressing question in the 1970s, with the emergence of the doctrine direct effect enunciated by the ECJ in cases such as Van Gend EnLoos1963 and many others, makes it clear that an individual may rely on his rights under EU law in actions against the state in the national courts.

When it became apparent that EU law created rights and duties which could be invoked in domestic courts by private individuals, it was only a matter of time before those individuals began to expect particular remedies to be available.

The ECJ has expanded its jurisdiction in this area to fulfill its duty under Art. 200 to see that “the law is observed”. Thus there has thus been a gradual and incremental increase in the ECJ's willingness to oversee judicial remedies away from an initial refusal to grant a particular remedy to claimants.

The ECJ laid down two principles in the case of Rewe Zentralfinanz and Comet BV c Productchap namely :-

1. The principle of equivalence - remedy for the EC law right should be no less favourable than those relating to similar domestic claims

2. The principle of practical possibility – the remedy should not be rendered impossible to practice or excessively difficult

Subject to these two requirements, the procedures and remedies for breach of Community law were primarily a matter for the Member States. States were not required to provide remedies which would not be available under national law. New national remedies did not therefor have to be created although existing national remedies must not render the exercise of the right impossible in practice.

Subsequently in later cases the ECJ insisted that the remedies provided by national law must be proportionate, adequate and should have a deterrent effect in order to be effective in guaranteeing real and effective protection.

With regard to proportionality Sagulo concerned fines imposed by France and Germany on workers from other states for not applying for the appropriate residence permits, in breach of EC legislation. The ECJ held that these fines were so excessive as to amount to a barrier to free movement workers. In Von Colson a worker was found by the German courts to be a victim of gender discrimination that was unlawful under EC law. The ECJ held that the remedy offered must be adequate and must also have a deterrent effect. A nominal or token remedy would not have that effect.

While no problems existed with the priciples of proportionality and adequacy, the effectiveness requirement has provided the most tension between national procedural responsibility and autonomy and the requirement that national remedies must secure the effectiveness of Community rights.

In Dekker which involved a discriminatory case by a company who refused to hire a pregnant woman against Directive 26/207. It was held that Dutch law which required proof of not only discrimination but unjustified discrimination could not be applied. It was deemed not to be effective.

The effectiveness requirement was highlighted in Factortame I in which the ECJ drawing on its earlier Simmenthal ruling based on the principle of cooperation laid down in Article 5 of the EEC Treaty ruled that any provision of a national legal system which might impair the effectiveness of Community law by withholding from the national court having jurisdiction to do everything necessary would be incompatible. The ECJ left it to the House of Lords to specify the conditions under which interim relief should be granted in a given case but made clear that a rule which prohibited absolutely the grant of interim relief would be unacceptable.

In subsequent cases, the ECJ used the principle of effectiveness not only to dictate the form of the remedy, but also to make detailed pronouncements on the amount of compensation payable. In Marshall v Southhampton and South West Area Health Authority No. II (1993) the ECJ was prepared to rule on amount and interest.

Here the ECJ was not merely mandating an effective compensation, it was involving itself in determination of whether a particular amount was effective or not and marks a high point of the ECJ’s interventionist approach to the amount of compensation awarded by national courts, a striking departure from earlier cases.

However note the case of R v Secretary Of State For Social Security Ex Parte Sutton, where the ECJ appears to confine the Marshall II decision almost to its particular facts and the case of Steenhorst-Neerings which was justified on the basis of satisfying the twin conditions of equivalence and practical possibility (one year time bar was within limits) denying the claimant an action for retrospective payment of several years of disability benefits during the period when the Directive on sex discrimination in social security had not been properly implemented into Dutch law although the facts of the case was similar to Emmot where the ECJ ruled that where an individual sought to rely on the provisions of an unimplemented directive, the time limit for bringing proceedings should not start to run until the Directive had been properly implemented otherwise it would be impossible to make the claim.

Over time the ECJ has developed a detailed balancing approach which requires the importance of the Community right to be weighed against the scoep and purpose of the national rule taking into account all the circumstances of the case. The ECJ generally acknowledges the legitimacy of diverse national rules and the primary role of the national court in assessing these.

The requirement of “effectiveness” additionally forced the member state to create an entirely new remedy despite the no new remedies rule in Rewe-Handelgesellschaft.

In Francovitch the claimants had suffered financial losses when their employer became insolvent, which they would not have suffered had the Italian state implemented a directive intended to protect employees against this occurence. In this case the ECJ recognized a specific liability in damages on the part of the state for breaches of Community law and held the Member State liable for those losses for non-implementation of the directive. In Francovitch, the ECJ stated three conditions that had to be satisfied for the state to be held liabile for losses following from non-implementation of a directive:-

- the directive had to create rights for individuals
- those rights had to be ascertainable from the text of the directive
- there had to be a causal link between the non-implementation and the claimant's loss

In fact, the decision is potentially wider than this, as it describes any breach of EC law by the state as creating a cause of action including implementing a directive improperly, although only non-implementation is discussed in detail.

The rationale behind this decision was that member states liability was inherent in thescheme of the EC Treaty and in the member states’ obligations under Article 10. In addition to ruling that an individual could take action against the state for non-implementation, the ECJ stipulated that the successful litigant should be awarded damages.

The principle was clarified and extend in the joined cases of Brasserie du Pecheur and Factortame III. In these two cases the ECJ located the principle of state liability in the context of the Treaty provisions on the Community’s liability under Article 288 – the Coummunity shall in accordance with the general principles common to the laws of the Member States make good any damage caused by its institutions or by its servants in the performance of their duties – intended to legitimize the development of the principle of state liability.

Drawing on international law principles and on its case law under Art 226, the ECJ ruled that the State is liable whichever of its organs is responsible for the breach and regardless of the internal division of powers between consititutional authorities. In Kobler the principle of state liability applies even to violations of EC law by national courts of last instance.

In neither Factortame III nor Brasserie du Pecheur, decided at the same time, did the ECJ attempt to quantify the damages that would be awarded. It refered instead to its earlier decisions on remedies, indicating that the award must be equivalent to one that would be obtained if there were a similar breach of national law, and effective to ensure that EU law was observed. There was no objection, in principle, to member states' imposing limitations on damages, or rules about mitigation of losses, or time limits within which actions should be started. The member states’ argument is that there should be procedural autonomy of national legal systems and it ought to be for the national courts to determine the remedy.

General Principles of EU Law

The general principles of EU Law that the ECJ has recognised and incorporated into the Community legal order are summarized as :-

- fundamental human rights
- proportionality – limit on Community powers
- legal certainty
- equality
- subsidiarity – limit on Community powers
- principles of procedural propriety
- equivalence
- practical possibility
- effectiveness

Fundamental human rights

The ECJ has changed its stance with regard to recognizing fundamental human rights and this has changed with the increase in emphasis on the protection of human rights and fundamental freedoms.

In early cases such as Stork v Higher the ECJ explicitly denied that human rights were part of EC law or that secondary legislation of the EC could be challenged with reference to such rights. In the case of Stauder v City of Ulm the courts took a more positive attitude and referred to the fundamental human rights enshrined in the general principles of Community law and protected by the court. In the case of International Handelsgesselshaft the ECJ ensured that the rights although based on national constitutions were part of the Community general principles. In the case of Nold the courts declared a further source of inspiration for fundamental rights which were international treaties such as the European Convention on Human Rights (ECHR).

However cases like Frontini v Ministero dell Finanze brought to light the reservations of the local constitutional courts in giving up protection of fundamental rights protected by the Italian constitution. In the UK where the ECHR was incorporated into UK law via the HRA it is not mandatory that an Act of Parliament needs to be compatible with ECHR rights. Section 19 of the HRA 1998 allows for a minister responsible for the passage of a Bill through Parliament to make a statement that the bill does not comply with ECHR rights. While allowing for greater scrutiny of that particular bill it still means that Parliament is free to enact legislation that may run counter to any of the articles of the ECHR such as the Anti-Terrorism Crime and Security Act 2001.

The ECJ will also often recognize the existence of a right but then balance it against the Community interest : Hauer v Land Rheinland-Pfalz – rights to property and trade – to plant vines and to trade in wine balanced against producing a balanced wine maket and to limit excess production of inferior wine from Germany. The ECJ also ruled that although it had no jurisdiction to examine the compatibility of national rules with the ECHR where national rules fall within the scope of Community law they may be reviewed by the ECJ to ensure their compatibility with the fundamental rights protected by Community law.

The ECJ will also not rule on the compatibility of national rules with the ECHR however where national rules wall within the scope of Community law they may be reviewed by the ECJ to ensure their compatibility with the fundamental rights protected by Community law. ERT v Dimotiki Etaira Pliroforissis – national rules fall under the combined provisions of Article 46 and 55 (then Art 56 and 66) – freedom of movement and claimants were relying on derogations granted b the Treaty and therefor ECJ had power to review.

The fundamental rights are now recognised in Art 6 Treaty on the European Unition - TEU and have been codified in the Charter of Fundamental Rights although this is not legally binding. It has been cited by Advocate Generals in their opinions but has not been relied on by the ECJ itself.

Proportionality

The third paragraph of Art 5 EC sets out the principle of proportionality which states that action by the Community should not go beyond what is necessary to achieve the objectives of the treaty.

R v Intervention Board ex p. Man Sugar Ltd – in this case Man had been late in applying for a export licence. The short delay of only four hours resulted in their losing all their bank securities in accordance with Community law. The ECJ concluded that the penalty imposed was disproportionate and too drastic

The Court has however set a low standard of scrutiny of measures in the light of the proportionality principle. It has held that the Community legislature must be allowed a broad discretion in an area such as the protection of public health which means that it must make complex political, economic and social choices. Consequently, the legality of a measure adopted to protect public health can be affected only if the measure is manifestly inappropriate having regard to the objective pursued by the competent institutions. As a consequence, it is only relatively seldom that measures are found by the Court to be disproportionate.

Subsequently in later cases the ECJ insisted that the remedies provided by national law must be proportionate, adequate and should have a deterrent effect in order to be effective in guaranteeing real and effective protection.

With regard to proportionality Sagulo concerned fines imposed by France and Germany on workers from other states for not applying for the appropriate residence permits, in breach of EC legislation. The ECJ held that these fines were so excessive as to amount to a barrier to free movement workers.

Legal Certainty

The principle which is a very wide one has been applied in more specific terms as :

- the principle of legitimate expectations
- the principle of non-retroactivity

The ECJ equates the protection of legitimate expectation with the provision of a fair process. There is limitation to the scope of this principle in that it may not be relied upon if the result is to fetter the Community’s freedom to act. The ECJ will need to undertake a balancing of interests in which the Community’s freedom of action may prevail : O’Dwyer and Others v Council.

Equality

The principle of equality means in its broadest sense that persons in similar situations are not to be treated differently unless difference in treatment is objectively justified. The EC Treaty expressly prohibits discrimination on the grounds of nationality : Art 12, on the grounds of sex with reference to pay : Art 141, between producers or consumers within the Community : Art 34(2). The Treaty of Amsterdam included a new Art 13 (Art 13 EC) which gives a legal base for the Community to take action to combat discrimination. Two Directives have been legislated on this legal base : Directive 2000/78 and Directive 2000/43.

Subsidiarity

The principle of subsidiarity was added to the European Community legal order by Treaty of the European Union and is contained in Art 5 EC and states that decisions should be taken at the lowest level possible as close to the individual as possible :-

Tests to be applied to see if the principle of subsidiarity is complied with

1. The sufficient attainment test Article 5(2) – Community shall act only if and in so far as the objectives of the proposed action cannot be sufficiently achieved by the member states – if the member state cannot achieve the aim, it should be achieved by the Community (negative test)

2. The better attainment test – should onoy be preferred to member state action if this will bring demonstrable advantages (positive test)

ECJ has been reluctant to interfere with Community action – C-84/94 UK v Council – community action was necessary in order to achieve the health and safety objectives set in the directive

The idea of subsidiarity has been familiar for decades in the Community :-

1. The division of function between national and Community courts under the Article 234 preliminary reference procedure
2. The distinction between the Regulation and the Directive under Article 249
3. The scope of Article 28 – Torfaen v B&Q plc
4. The scope of Article 81 – Glaxo Smith Kline judgement
5. The enforcement of competition law envisaged by Regulation 1/2003

Equivalence and Practical Possibility

The ECJ laid down two principles in the cases of Rewe Zentralfinanz and Comet BV c Productchap namely :-

1. The principle of equivalence - remedy for the EC law right should be no less favourable than those relating to similar domestic claims

2. The principle of practical possibility – the remedy should not be rendered impossible to practice or excessively difficult

Subject to these two requirements, the procedures and remedies for breach of Community law were primarily a matter for the Member States. States were not required to provide remedies which would not be available under national law. New national remedies did not therefor have to be created although existing national remedies must not render the exercise of the right impossible in practice.

Effectiveness

While no problems existed with the priciples of proportionality and adequacy the effectiveness requirement has provided the most tension between national procedural responsibility and autonomy and the requirement that national remedies must secure the effectiveness of Community rights.

In Dekker which involved a discriminatory case by a company who refused to hire a pregnant woman against Directive 26/207. It was held that Dutch law which required proof of not only discrimination but unjustified discrimination could not be applied. It was deemed not to be effective.

The effectiveness requirement was highlighted in Factortame I in which the ECJ drawing on its earlier Simmenthal ruling based on the principle of cooperation laid down in Article 5 of the EEC Treaty ruled that any provision of a national legal system which might impair the effectiveness of Community law by withholding from the national court having jurisdiction to do everything necessary would be incompatible. The ECJ left it to the House of Lords to specify the conditions under which interim relief should be granted in a given case but made clear that a rule which prohibited absolutely the grant of interim relief would be unacceptable.

In subsequent cases, the ECJ used the principle of effectiveness not only to dictate the form of the remedy, but also to make detailed pronouncements on the amount of compensation payable. In Marshall v Southhampton and South West Area Health Authority No. II (1993) the ECJ was prepared to rule on amount and interest. In Von Colson a worker was found by the German courts to be a victim of gender discrimination that was unlawful under EC law. The ECJ held that the remedy offered must be adequate and must also have a deterrent effect. A nominal or token remedy would not have that effect.

Here the ECJ was not merely mandating an effective compensation, it was involving itself in determination of whether a particular amount was effective or not and marks a high point of the ECJ’s interventionist approach to the amount of compensation awarded by national courts, a striking departure from earlier cases.

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.

Supremacy of EC Law over National Law

The view of supremacy adopted by the ECJ has differed radically from that adopted by most of the member states. Explain with reference to the reaction in at least two of the member states to the ECJ’s interpretation of the principle of supremacy. - Justin Santiago

The concept of supremacy of EU law where EU law takes precedence over national law was never expressly stated in any of the treaties. The supremacy of Community law stems from the condition of membership of the EU that member states give priority to EU legislation over their own law. Additionally the creation and development of the supremacy of EU law was developed by the ECJ through a series of important rulings.

The concept of direct applicability states that certain provisions of EU law become national law without further enactment.
Directly applicable EC legislation overrides inconsistent domestic legislation – Factortame (No 2). Per Lord Denning in MacCarthy v Smith – we are entitled to look to the Treaty not only an aid but as an overriding force (Art 119). This principle was further developed in the case of Costa v Enel in which the case set out that community law had been integrated into the member states’ legal systems and was binding on them. It also declared the effect of unlimited duration of the application of EC law meaning, in the words of the ECJ “…it is impossible for a member state to set up a subsequent unilateral measure against a legal order they have accepted on a reciprocal basis.”


The ECJ touched on supremacy in the case of Van Gend en Loos v Netherlands ‘…the community constitutes a new legal order of international law for the benefit of which the states have limited their sovereign rights…that member states have voluntarily transferred sovereignty to the institutions of the community.” The ECJ also laid down conditions of justiciability (capable of being applied by a national court) namely that articles of the treaty could be pleaded in the national court provided the provision was clear and precise, it must be unconditional, its operation must not depend on further action by national or EC authorities and it must lay down a negative prohibition rather than a positive obligation has been whittled down .



The ECJ deployed a number of arguments to justify its conclusion that EU law should be accorded supremacy over national laws :-

1. The EC Treaty created its own legal order which immediately became an integral part of the legal systems of the member states.

2. The member states had transferred to the new community institutions real powers stemming from a limitation of sovereignty although this was not in reference to the constitution of any particular member state but simply by being a member of the EU.

3. The spirit of the community required that EU law was uniform and effective among all members in order to achieve the objectives of a common market

4. Obligations undertaken by member state in the Treaty would be merely contingent rather than unconditional if they were to be subject to later legislative acts on the part of member states

However members of the EU have varying levels of resistance towards this encroachment into national constitutional law and their courts have experienced particular difficulties in this respect. The question naturally arises whether there are areas in which the member states are no longer competent to legislate, and must defer to the EU. Areas of EU exclusive competence are generally held to exist, but it is by no means clear what they are

National courts have generally accorded supremacy to directly effective EC law, but frequently basing that supremacy on provision of national law rather than on the ECJ’s rulings and have expressed particular reservations in relation to fundamental rights recognised in national constitutions. Most of the courts of the member states regard themselves as possessing the ultimate Kompetenz-Kompetenz.

Germany

The German response to supremacy of EU Law has developed from one of outright rejection to one of acceptance based on the sovereignty of the German constitution. In the case of International Handelsgessellschaft GmbH v EVGF (Solange I) the Federal Constitutional Court held that although Article 24 (now Article 25) of the constitution allowed for the transfer of legislative power to international organizations but the question raised was whether Article 24 permitted the transfer to an organization such as the EC, of a power to contravene certain basic principles protected under the constitution itself. It was held that so long as the Community had not removed the possible conflict of norms between EC law and national constitutional rights the German court would ensure that those rights took precedence.

The rational was that in this present case, the constitution provided sufficient protection of fundamental human rights and that these rights were insufficiently protected under Community law as it was felt the Community lacked a democratically legitimated and directly elected parliament as well as a codified catalogue of human rights. As long as the recognition of human rights in the community had not progressed as far as those provided by the constitution, Community law could be ignored. There was therefor no redress for parties wronged to see whether Community law would have affected the outcome of the case.

This position was revised in Application of Wunsche Handelsgesellschaft (Solange II) in which the FCC would no longer exercise its jurisdiction to decide on the applicability of EU law as the legal basis for any acts of German courts or authorities and it will no longer review such legislation by the standard of the fundamental rights contained in the constitution.

However Solange II did not surrender jurisdiction over fundamental rights but only stated that the FCC would not exercise that jurisdiction as long as the present conditions as to the protection of fundamental rights by the ECJ prevailed. The FCC still preserved its final authority to intervene if real problems concerning the protection of fundamental rights in Community laws arose.

In the Brunner case it was decided that Germany’s acceptance of the supremacy of EU law was conditional and the FCC asserted its jurisdiction to review the actions of European institutions and agencies which included the ECJ to ensure that they remained within the limits of their powers and did not transgress the basic constitutional rights of German inhabitants.

Italy

Article 11 of the Italian Constitution permits limitations of sovereignty as are necessary to an organization which ensures peace and justice between nations. This has formed the basis of the Italian courts’ acceptance of the supremacy of EU law although this acceptance has not been unconditional. In Frontini v Minisetero dell Finanze the Constitutional Court stated that it reserved the right to hold fundamental rights protected by the Italian constitution to be supreme over EU law. The case of Fragd considered that a Community measure would not be applied in Italy if it contravened a fundamental principle of the Italian constitution concerning human rights protection.

UK

The central obstacle to acceptance by the UK of the supremacy of EU law is the constitutional principle of parliamentary sovereignty which in its traditional formulation holds that Parliament has the power to do anything other than to bind itself for the future.

Membership of the EU has not pushed parliamentary sovereignty of its pedestal. There is an increasing trend of the ECJ having a bigger bark in judicial decisions but whether that translates into a bigger bite is questionable. Supremacy of EU law over the domestic law of the UK is questionable.

The dualist approach taken by the UK to incorporating extra territorial legislation means that EU law had to be incorporated by the European Communities Act 1972 (ECA 1972). The extension of the interpretation of the supremacy of EU law by the ECJ has been thwarted by the following provisions and is aptly demonstrated in case law:-

S1(4) states that Parliament would enact all future legislation in conformance with EU policies

S2(1) states that all provisions of EU law which are intended to be directly applicable in the UK are given the force of law.

S2(4) states that Acts of Parliament passed after 1972 shall be construed and have effect subject to the provisions of the ECA 1972.

Per Lord Denning in Macarthys v Smith– we are entitled to look to the Treaty not only an aid but as an overriding force. However there was some pulling back in the case of Duke v GEC Reliance Systems where Macharthy is not applicable to domestic legislation which pre-dates the incompatible provision of EU law. It was felt in Duke that the Van Colson principle which required domestic law to be interpreted as far as possible in the light of EU law was no authority for the proposition that a court of a member state must distort the meaning of a domestic statute so as to conform with EU law.

The later cases of Lister v Forth Dry Dock, Pickstone v Freeman and Webb all point to the courts treading gently on domestic legislation and using the purposive approach to ensure compatibility with EU law. In Pickstone v Freeman the direct applicability rule was softened to accommodate domestic laws which was specifically designed to implement EC law. Lister v Forth Dry Dock took this further in that an extra clause was read in in order for domestic regulation to comply with the directive if a literal reading would not achieve the purpose. This is an example of the UK courts adopting a purposive approach, recognizing that Parliament’s specific purpose in passing a particular measure was to implement a provision of EC law.

There was a further acceptance of EU law in the case of Factortame II which culminated in the House of Lords granting interim relief the effect which would suspend the operation of an Act of Parliament. The acceptance by UK courts of the supremacy of EU law was further evidenced by the EOC Case where the HOL stated that there was no constitutional barrier to an applicant before any UK court and not only the HOL seeking judicial review of primary legislation which was alleged to be in breach of EU law.

The effect of these cases was that the courts would not actually invalidate the act which went to show that UK law was still supreme.

The case of Thoburn v Sunderland City Council and Others introduced the element of ECA being a constitutional statute that could be expressly repealed. In other words parliamentary sovereignty had created the ECA 1972 and parliamentary sovereignty dictated that parliament be the one to expressly repeal it. Purists have also have argued that the doctrine of parliamentary sovereignty has been untouched since the UK needed Parliament to pass the ECA 1972 before EU law became law in the UK. And it will be within the sovereignty of Parliament to repeal the ECA 1972 and prevent the continued operation of Community law within the UK.

All of these cases point to UK parliamentary sovereignty being firmly in the drivers seat nothwithstanding the ECJ notions of supremacy of EU law.