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EU Law and Direct Effect PDF Print E-mail

The Community Treaties are the primary source of Community law and include chiefly the Treaty of Rome 1957 (European Community Treaty), the Single European Act 1986, the Treaty of Maastricht 1992 (Treaty on European Union), the Treaty of Amsterdam 1997, the Treaty of Nice 2001 and most recently the Treaty of Lisbon 2007.

Secondary sources of Community law are listed in Article 288 of the Treaty on the Functioning of the European Union (TFEU) formerly Article 249 of the EC Treaty and include Regulations, Directives, Decisions, Recommendations and Opinions.

Let us now discuss the above sources of EU Law with reference to vertical and horizontal direct effect. To begin with, direct effect essentially refers to judicial enforcement. It establishes rights and obligations, as well as, individual private rights enforceable before national courts and tribunals.

The principle of direct effect is not specifically mentioned in any of the EC Treaties but has been developed by the European Court of Justice (ECJ) in a series of cases commencing with Van Gend en Loos v. Netherlande Administratie der Belastingen (1963) which concerned Article 12 of the Treaty of Rome (now replaced by Article 30 of the TFEU). The ECJ stated that a private individual can rely on provisions of the Treaties as against a national government and could enforce rights arising there under in national courts and tribunals providing those Treaty obligations were clear and unconditional (in this case, in the form of a prohibition from introducing any new customs duties) and not subject to intervening action by Member States for their implementation. These criteria were subsequently reaffirmed in Reyners v. Belgium (1974) and apply to both Regulations and Decisions. The position with Directives is slightly different as discussed further below.

In Defrenne v. SABENA (1976) the ECJ held that subject to the above criteria the Treaties had both vertical and horizontal direct effect. In which case, vertical direct effect essentially means that an individual can bring an action against the State or an organ of the State (for example, a government body) for breach of a Community Measure. Horizontal direct effect, on the other hand, refers to the situation where a private individual seeks to rely on the direct effect of a Community Measure against another individual, including companies.

Subject to the criteria laid down in Van Gend en Loos and reaffirmed in Reyners v. Belgium, UK courts regularly give direct effect to EC Treaty provision as illustrated in R v. Secretary of State for Transport exparte, Factortame (No.3) where the House of Lords gave direct effect to Article 6 of the Treaty of Rome (ex Article 12 of EC Treaty, now Article 18 of the TFEU) and held the Merchant Shipping Act 1988 as being incompatible with that Treaty provision.

A Regulation is described by Article 288 of the TFEU as being of general application binding in its entirety and directly applicable in all Member States. Being directly applicable, Regulations are not intended to require national implementing legislation. Regulations are, therefore, by their very nature apt to have direct effect, capable of conferring individual rights that national courts must protect as illustrated in Politi SAS v. Ministero delle Finanze (1971).

Being of general application Regulations have both vertical and horizontal direct effect. Consequently a private individual can rely on the provision of a Regulation before a domestic court, either against the State or against another private individual. The is illustrated in the case of MacMohon v. DES where a declaration was granted by a court by applying Council Regulation 1612/68 in favour of an Irish claimant seeking entitlement to a maintenance grant and low fees on the same basis of a British student. Again the State or an individual may be fined and/or prosecuted for violating a Regulation, without the need for separate domestic legislation as illustrated in Commission v. France (2005). Here the ECJ imposed a fine of twenty million euros payable immediately, plus sixty million euros payable every six months until France implemented the judgement and enforced the Regulation for the preservation of fish stocks for failing to take remedial action on an earlier finding in 1991.

Directives are not directly applicable in that they leave the details of implementation to the Member State. The Member State has discretion in their implementation unlike as with Treaty Articles, Regulations and Decisions. Directives are only binding as to their result. A few examples of domestic (UK) legislation implementing EU Directives include The Consumer Protection Act 1987 and the Unfair Terms in Consumer Contracts Regulations 1999. It should be possible for an individual to rely on the legislation/measure implementing the Directive before the national court. Individuals/legal persons may rely on the rights and duties contained in directives but merely by virtue of the terms of the incorporating legislation. But what if the implementing measure is defective or non-existent? In this context, the ECJ has recognised that in certain circumstances a Directive may have direct effect.

According to Van Duyn v. Home Office (1974) a directive will have direct effect if it was sufficiently clear and unconditional and the deadline for its implementation had passed. In Defrenne v. SABENA (1976) the ECJ accepted that if part of a measure was sufficiently clear, that part could be directly effective, even if other parts of the measure were too uncertain. In Publicco Ministero v. Ratti (1979) the ECJ ruled that where the deadline for implementation had not passed the directive could not become directly effective. Directives were directly effective only if the prescribed date by which Member States should have implemented the Directive had passed.

Additionally, in instances where the Member State has introduced the required legislation, but has done so defectively, the Directive may still be directly effective as in Verbond van Nederlandse Ondernemingen (VNO) Case (1997).

However, in Marshall v. Southampton and South West AHA (1986) the ECJ made it clear that Directives were directly effective only against the State or an emanation of the State. Directives only had vertical direct effect. In Foster v. British Gas (1990), the ECJ ruled that for an organisation to be an emanation of the State, it should be responsible for providing a public service under the control of the State and has special powers to do so (to provide that service).

In Doughty v. Rolls Royce the Court of Appeal indicated that all elements of the test in Foster v. British Gas must be proved. State control of an organisation (even 100% ownership) by itself is not sufficient to make that organisation an emanation of the State liable to direct effect. Upon the facts it was held that Rolls Royce plc was (at the time) involved in a commercial undertaking, and was therefore, not responsible for any public service, and it did not exercise any special powers. This despite the fact that it was 100% owned by the State.

The direct effect of Decisions was recognised by the ECJ in Grad v. Finanzamt Traunstein (1970). The ECJ ruled that since Decisions had binding effect, they must be capable of enforcement by those to whom they are addressed both vertically and horizontally. On the facts, Grad lost because the date for the Decision to come into effect had not yet passed and therefore, could not become directly effective. It also ruled that decisions must be unconditional and sufficiently clear and precise to be capable of creating direct effects.

Recommendations and Opinions are not legally binding but have persuasive authority. European and domestic courts are however, expected to take such recommendations into account in reaching their decisions, requiring to consider matters of policy, as well as, law. For instance, in Woodman v. Carpenter Farrer (1993) the Appeal Tribunal suggested that tribunals could refer to the Commissions Recommendation and annexed Code of Practice for a definition of sexual harassment.

Editors Note: The above article should serve as a revision aid only and should not deter further academic research nor serve as a substitute for textbooks.


  • European Union Law, Second Edition by Elspeth Berry and Sylvia Hargreaves. Published by Oxford
  • Textbook on EEC LAW, Third Edition by Josephine Steiner. Published by Blackstone Press Limited.
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