General Principles of EU Law

General Principles of EU Law

• EU Law sources include both written and unwritten sources
• Written sources: primary law (foundational treaties) and secondary law (regulations, directives under Article 288 TFEU)
• Unwritten sources: general principles that are not explicitly defined
• The Court of Justice uses general principles to assess the legality and appropriateness of Union actions
• The Court of Justice also utilizes general principles when assessing the implementation, transposition, and derogation of EU law by member states
• These principles have constitutional status, according to the Audiolux case
• They constitute a set of rules for administrative justice and good governance within the EU legal order

Functions and Sources

• The Court of Justice relies on functions and sources to assess the legality and appropriateness of Union actions
• The Court of Justice looks at member states' implementation, transposition of EU law, and derogations from it
• Functions guide the interpretation of treaty provisions and legislative enactments
• They serve as a benchmark against which EU law is judged
• They measure the assessment of national implementation of EU law

Primary/Supremacy of EU Law

• Foundational treaties lack clarity regarding the relationship between EU and national legislation
• The Costa v ENEL case clarified that member states submit a permanent limitation of their sovereign rights when transferring from their domestic systems to the EU one
• EU law prevails over incompatible national systems
• States take different approaches to incorporating international law into their national systems (monist/dualist)
• Achievement of EU objectives under Article 4(3)TEU would be undermined if member states could legislate against them
• Member states must take appropriate measures to ensure treaty obligation fulfillment
• They should also facilitate the achievement of the Union's tasks and refrain from jeopardizing these tasks
• The Simmenthal case confirmed that EU law prevails in national courts against all incompatible member state law, regardless of timing, as seen in the Internationale Handelsgesellschaft case
• EU law prevails, regardless of the status of conflicting national law, even if the national law is part of a country's constitution
• Incompatible national legislation that should be disapplied or overridden does not automatically disappear
• Disallowing EU law to take precedence undermines the effectiveness of EU law

Direct Effect

• Sources of secondary law fall under Article 288 TFEU
• Regulations have general application, are binding in their entirety, and are directly applicable in all member states
• Normal dualist states must incorporate international law into national law by legislature
• Regulations do not require national incorporation and are binding upon adoption
• Directives are binding regarding the result to be achieved, upon each member state to which it is addressed
• National authorities get to choose the form and methods of implementation
• There are deadlines for transposition within directives
• Directives are binding only after the transposition deadline
• Decisions are binding in their entirety
• Recommendations and opinions have no legal force
• Recommendations and opinions may include commission communication, detailing proposed legislation and providing information on commission interpretation of legislation
• Direct applicability is synonymous with direct effect
• It allows individuals to enforce provisions of EU law directly in their national courts
• Applies to regulations automatically and it extends to treaty articles and directives post-implementation deadline

Criteria for Direct Effect

• Provisions must be sufficiently clear and precise
• Provisions must be unconditional
• Provisions must not entail member states exercising their discretion in implementing them
• Both vertical and horizontal application are possible, based on circumstances

Subsidiarity and Competence

• Distinctions exist between areas where the EU has exclusive competence and those where competence is shared
• EU exclusive competence includes: customs union, competition rules for the internal market, EURO monetary policy, common fisheries policy (under Article 3 TFEU Lisbon treaty)
• Shared competence is linked to sovereignty
• Article 2(2) of the TFEU states that member states can exercise competence to the extent that the Union has not, and again when the Union ceases to exercise its competence
• Article 4(2) of the TFEU details areas of shared competence, like the internal market, social policy, economic and territorial cohesion, agriculture and fisheries, environment, consumer protection, transport, trans-European networks, energy, area of freedom, security, justice, and common safety concerns
• Problematic areas should be minimized
• Subsidiarity addresses when the EU can exercise legal powers in areas of shared competence, as defined in Article 5(3) TEU
• EU acts only if and insofar as the objectives of the proposed action cannot be sufficiently achieved by the member state, but can be better achieved at a union level

Legislation with Shared Competence

• For the EU to legislate in areas where competence is shared, it must demonstrate:
• National insufficiency, meaning the objectives cannot be sufficiently achieved at the member state level
• Comparative efficiency, proving the objectives are better achieved at the EU scale
• Subsidiarity and proportionality are codified in Protocol 2 to the Lisbon Treaty

Proportionality

• Proportionality dictates how the EU can act when establishing legislative powers
• It defines how member states can act when adopting measures falling within EU law
• Article 5(4) of the TEU says the content and form of union action shall not exceed what is necessary to achieve the objectives of the treaties

Necessity

• The Fedesa Case regarding the ban on livestock hormones established requirements for EU legislation
• Action must be suitable to achieve the objective
• Action must be the least invasive intervention
• Action must not be disproportionate to aims pursued
• Courts interpret Article 5(4) as legislation being 'manifestly inappropriate' to strike down EU legislation
• The Vodafone case expands upon Fedesa, considering proportionality of law and the importance of aims pursued
• Proportionality ensures administrative and legislative actions respect fundamental rights without being overly intrusive

Legal Certainty

• Legal certainty is linked to the concepts of legitimate expectation, non-retroactivity, and res judicata
• Union measures must not violate the legitimate expectations of parties, absent an overriding matter of public interest
• Legitimate expectation is what a reasonable person expects in the normal course of affairs
• The principle requires encouragement of reasonable behavior, and some loss resulting from that breach

Non-Retroactivity

• Non-retroactivity applies to secondary legislation, ensuring measures cannot take effect before publication
• Retroactivity may be allowed in exceptional circumstances, such as if it puts a person in a better position, as seen in the Road Air BV case
• The Von Colson Principle obligates national courts to interpret domestic legislation to comply with EU law when it is not directly effective
• Köpinghuis Nijmegen limits the obligation to interpret, emphasizing legal certainty and non-retroactivity, even if EU law is directly effective and criminal proceedings are at issue

Non-Retroactivity in Secondary Legislation

• Secondary legislation from EU institutions cannot apply retroactively, affecting situations before official publication and enforcement
• Retroactivity is possible in exceptional cases, benefiting individuals rather than harming them, as indicated in the Road Air BV case

Von Colson Principle & National Court

• The 1984 Von Colson case established that national courts should interpret domestic law in line with EU law when it lacks direct effect
• This ensures EU law remains influential even without direct effect

Limits to Interpretation (Köpinghuis Nijmegen Case)

• Köpinghuis Nijmegen clarified limits to interpreting national law in line with EU law, regarding legal certainty and non-retroactivity
• Legal certainty requires individuals to know legal consequences in advance
• Non-retroactivity prevents laws from retroactively applying unless there is an exception
• This limitation extends to directly effective EU law and criminal cases, preventing courts from unfairly reinterpreting criminal laws

Equality/Non-Discrimination

• Similar situations should be treated the same, unless there is an objectively justifiable reason
• Discrimination is broadly prohibited on primary grounds such as nationality, race, religion, sexual orientation, and disability (Articles 18/19 TFEU)
• Discrimination is prohibited on secondary EU law such as Directive 2000/78 on employment law
• Non-discrimination is considered a general principle, as seen in the Dansk Industrie Case

State Liability

• State liability: an individual can seek remedy from a member state for losses suffered due to the state's failure to implement or properly apply EU law
• The principle applies regardless of whether the individual is from the member state in question
• The R v Ministry of Agriculture Fisheries and Food, ex parte Hedley Lomas (Ireland) case highlights this
• State liability is seen as a last resort compared to direct effect being preferred

Hedley Lomas Case

• Hedley Lomas (Ireland) case (1996) established state liability in EU law
• Hedley Lomas, an Irish livestock exporter, sought to export sheep from the UK to Spain
• The UK refused an export license due to concerns over Spanish slaughterhouse compliance with EU animal welfare regulations
• Hedley Lomas argued that the restriction was unlawful since only the EU Commission decides compliance, not individual member states
• Hedley Lomas suffered financial losses due to the UK's restriction and sought damages

Legal Issue & Ruling

• Was the UK government's refusal to grant an export license a breach of EU law?
• Could Hedley Lomas claim compensation from the UK government under state liability?
• The European Court of Justice (ECJ) ruled that the UK had wrongfully restricted trade, breaching Article 34 TFEU
• The UK could not unilaterally decide on the non-compliance of Spanish slaughterhouses as that power belongs to EU institutions
• Hedley Lomas was entitled to damages from the UK government under the state liability principle (Francovich doctrine) due to the clear breach of EU law

Francovich Case & State Liability

• Ex-employees claimed unpaid wages when Italy failed to implement a directly effective directive
• The claimants succeeded because certain criteria had been fulfilled

Francovich Rule

• The directive involved conferred rights on individuals
• The content of such rights could be identified through the directive provisions
• The breach must be sufficiently serious (Brasserie de Pêcheur case) with consideration of the institution's discretion limits
• A causal link must exist between the state's failure and the damage suffered (Schmidberger v Austria)

State Liability Post-Francovich

• The Factortame and Brasserie de Pêcheur cases expanded state liability beyond failure to implement directives
• Brasserie case extended liability to 'all domestic acts and omissions, legislative, executive and judicial, in breach of Union law'
• All state organs are bound (Commission v Belgium case 77/69)
• This principle is of EU law supremacy
• Vereinigung Nordrhein (Case c-424/97) extended liability to legal independent bodies
• AGM-COS MET Srl v Suomen Valtio and Tarmo Lehtinen (Case c-470/03) extended liability to potentially include individual officials
• There can be general difficulties due to court interpretation because liability is inconsistent and potentially dangerous for individual officials

What State Liability Is

• State liability allows individuals to claim compensation from a member state for losses due to the state's failure to implement or properly apply EU law
• It has broad scope as it can apply to any member state, not just the individual's own state.
• R v Ministry of Agriculture, ex parte Hedley Lomas, showed the UK was liable for restricting exports to Ireland, even for non-Irish individuals

State Liability Fits

• Direct Effect allows individuals to directly invoke EU law in national courts if the law is clear, precise, and unconditional
• State Liability serves as a last resort when direct effect is unavailable, as when EU law is non-directly effective (like with certain directives)

Francovich Case

• Ex-employees claimed unpaid wages in Italy as Directive 80/297 regarding a wage guarantee fund was not implemented
• Initially, the directive effectiveness was argued directly, but it didn't meet those criteria
• They succeeded because Italy didn't properly implement the directive under EU obligations

Francovich Criteria

• Directive must confer rights on individuals according to the law in question (example: the directive in this case required Italy to protect worker's wages, conferring a right to employees)
• The content of those rights must be identifiable (example: the directive in this case required a wage guarantee fund)
• There must be a causal link between the state’s failure and the individual’s loss (example: Italy’s failure to create the fund caused the employees’ unpaid wages)

Post-Francovich Developments

• Brasserie du Pêcheur and Factortame Cases expanded state liability to cover all EU breaches, not just failure to implement directives
• Brasserie du Pêcheur: brewery challenged German beer purity laws for breaching free trade principles
• Factortame: Spanish company claimed damages for UK's discriminatory fishing laws

Key Additions

• State liability requires the breach be sufficiently serious
• A breach is serious if the state has manifestly and gravely exceeded discretion limits
• Courts assess the clarity of the breached rule
• Courts will assess whether there was discretion in applying the rule and whether the breach was intentional
• Commission v Belgium: Liability applies to all state organs including judicial, legislative, and executive
• Vereinigung Nordrhein liability extends to independent legal bodies
• AGM-COS MET Srl v Finland means even individual officials can be liable but this raises concerns about legal certainty