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Summary Direct Effect Notes
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Summary of 18 pages for the course EU Law at EHU (Direct Effect Notes)
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Direct effectCentral issues
The doctrine of direct effect applies in principle to all binding EU law
including treaties, secondary legislation and international
agreements.
The meaning on direct effect remains contested.
o In a broad sense it means that provisions of binding EU law
which are sufficiently clear, precise and unconditional to
be considered justiciable can be invoked and relied on by
individuals before national courts.
o There is a narrower or classical concept of direct effect which
is defined in terms of the capacity of a provision of union law
to confer rights on individuals.
While directives can be enforced directly by individuals against the
state after the time limit for their implementation has expired
(vertical direct effect) resulting where necessary in the
disapplication of conflicting domestic law the CJEU has ruled that
they cannot of themselves impose obligations on individuals (no
horizontal direct effect). The rationale for this limitation on direct
effect of directives is however contestable.
This is more especially so given that other legal mechanisms have
been developed by the court to give effect to directives which have
not been properly implemented or are not being properly applied.
o First, there is a broad obligation on domestic courts to
interpret domestic law as far as possible in conformity with
directives (indirect effect) after the time limit for their
implementation has expired.
o Secondly, during the period after adoption of a directive but
before the time limit for implementation has expired, all
organs of the state, including the courts, must refrain from
adopting any measures or interpretation liable seriously to
compromise the result prescribed by the directive.
o Thirdly, a directive can in certain cases be legally invoked in
proceedings between private parties (incidental effect) so long
as the directive does not in itself impose a legal obligation on
one of the parties
o Fourthly, a general principle of EU law that covers the same
ground as a directive can bind private parties.
, o Finally, where a regulation refers to a directive and makes
compliance with the directive conditional on receipt of
benefits under the regulation can bind private parties.
The number of qualifications to the rule that directives do not have
horizontal direct effect, and the difficulties of each exception, has
made this area of law increasingly complex and difficult to
understand, even for experts, let alone ordinary private parties.
Direct effect: A guide
From the outset there has been uncertainty about the exact
meaning of the term direct effect. It is possible on the basis of the
CJEU’s case law to adopt either a broad or narrower definition.
o The broader definition, which can arguably be derived from
Van Gend en Loos can be expressed as the capacity of EU law
to be invoked before a national court. This is sometimes
referred to as objective direct effect. The normal consequence
of a legal provision being invoked as in Van Gend en Loos, is
that it confers a legal right on the individual who invokes it but
this is not on the broader definition an essential component of
direct effect.
o The narrower classical definition of direct effect is usually
expressed in terms of the capacity of a provision of EU law to
confer rights on individuals which they may enforce before
national courts. This is sometimes referred to as subjective
direct effect. The degree of difference between these
formulations depends however on the definition of ‘right’
being used. If what is meant is simply the right to invoke EU
law in national court, then there is little difference between
the narrow and broad definition. In many other cases,
however, the CJEU has gone beyond the simply reference to a
right to invoke and has indicated that an individual litigant can
rely before a national court on the substantive right, such as
the right to be free from discrimination based on nationality.
Moreover, if the conferral of rights in the content of direct
effect in several different senses. Thus even the narrow
definition of direct effect in subjective terms as the conferral
of individual rights is not particularly precise, given the
ambiguity of the notion of ‘rights’. The ambiguity in the
meaning of direct effect is not however of purely academic
interest. It has, as will be seen below, important practical
implications.
The vertical/horizontal distinctions applied to directives has
generated a complex jurisprudence. This is so for two reasons.
, o Firstly, the vertical/horizontal distinction required to CJEU and
national courts to differentiate between state entities and non-
state entities.
o Secondly, the CJEU has fashioned numerous ways in which,
even though directives do not have horizontal effect, they can
impact on national law.
Thus the CJEU created the doctrine of ‘indirect effect’ which means
that even if directives do not have horizontal effect, national courts
have an obligation to interpret national law to be in conformity with
directives.
it has also fashioned what has been termed the concept of
‘incidental horizontal effect’, whereby a directive can preclude
reliance on a provision of national law that is inconsistent with the
provisions of the directive even in an action between private parties.
This is premised on the primacy of EU law and entails a distinction
between a directive having an ‘exclusionary’ impact, which in effect
connotes the idea that the directive knocks out or excludes
inconsistent national law; and a directive having a substitution
effect, which connotes the idea that the directive will in itself
mandate certain novel EU legal consequences within the national
legal order.
The CJEU has more recently held that a general principle of law can
bind private parties and that the content of the general principle can
bind private parties and that the content of the general principle can
be drawn from a directive.
It has also decided that directives can be enforced horizontally when
they are referred to in regulations. The net result of all this has been
an increasingly complex case law that is difficult for litigants and
national courts.
Direct effect: Treat provisions
Van gend en Loos (Case 26/62 NV Algemene Transporten Expeditie
Onderneming van Gend en Loos v Nederlandse Administratie der
Belastingen [1963] ECR 1)
VGL imported a quantity of chemicals from Germany into the
Netherlands. It was charged with an import duty which had allegedly
increased (by changing the tariff classifications from a lower to a
higher tariff heading) since the coming into force of the EEC Treaty,
contrary to Article 12.
On appeal against payment before the Dutch Tariefcommissie,
Article 12 was raised in argument and two questions were referred
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