EU Law (Global Law) 2024/2025 Direct Effect PDF

The direct effect of EU law EU LAW (Global Law) a. a. 2024/2025 PROF. AVV. LUCA CALZOLARI, PH.D, LL.M 0  Preliminary remarks  The issue of direct effect is related to the essence of EU law, to the analysis of how EU law is and wo...

The direct effect of EU law EU LAW (Global Law) a. a. 2024/2025 PROF. AVV. LUCA CALZOLARI, PH.D, LL.M 0  Preliminary remarks  The issue of direct effect is related to the essence of EU law, to the analysis of how EU law is and works and relates to national law and national legal orders  Two of the most important issues to be dealt with when discussing the direct effect of EU law concern:  the capability of EU law of affecting the position of specific individuals (natural and legal persons);  the relation between EU and national law.  Saying that a disposition of EU law has direct effect means that such disposition can be invoked before national judges by individuals and that that disposition shall be applied by national authorities  If a national judge has a doubt about the capacity of a specific disposition of EU law of having direct effect, than the judge may submit a preliminary question to the ECJ pursuant to Article 267 TFEU asking the ECJ 1 to establish whether such disposition has or does not have direct effect  Preliminary remarks (2)  If a national judge believes that there is a clash between a disposition of national law and a disposition of EU law which enjoys direct effect, than the national Court is obliged to apply the EU disposition (and, therefore, to disapply national law) in order to solve the case pending before him/her  Joint application of the principles of direct effect and primacy of EU law (on which see next class)  The EU disposition having direct effect shall be applied (also in the place of national law) not only by national judges but also by all the other national authorities and public administrations  «the reason for which an individual may, in the circumstances described above, rely on the provisions of a directive in proceedings before the national courts is that the obligations arising under those provisions are binding upon all the authorities of the Member States. t would, moreover, be contradictory to rule that an individual may rely upon the provisions of a directive which fulfil the conditions defined above in proceedings before the national courts seeking an order against the administrative authorities, and yet to hold that those authorities are under no obligation to apply the provisions of the directive and refrain from applying provisions of national law which conflict with them. It follows that when the conditions under which the Court has held that individuals may rely on the provisions of a directive before the national courts are met, all organs of the administration, including decentralized authorities such as municipalities, are obliged to apply those provisions » (Fratelli Costanzo, causa 103/88, sentenza 2 22 giugno 1989)  Direct applicability vs. direct effect Is a quality of a specific Is the capacity of a specific category of EU secondary law, disposition of EU law to affects Direct applicability whose disposition does not the position of individuals (as a need to be implemented at the matter of principle, to confer national level in order to rights to individuals) even without having been transposed produce their legal effects at the national level Is the capacity of a piece of EU It allows individuals to rely on a secondary law to produce its specific disposition of EU law legal effect directly within the before national judges, who shall Direct effect national legal orders of the ensure that individuals can enjoy Member States without the the rights conferred upon them necessity of any activity of the by EU dispositions having direct national legislators effect The Treaties explicitly provide that only regulations are directly applicable (article 288, par. 2, TFEU “A regulation […] is […] directly applicable in all Member States” 3  The origin of the notion of direct effect = the Van Gend en Loos case (1963)  The (then EEC and now) EU legal order is a new kind of international legal order, different from ordinary international law  Unlike traditional international legal systems, the (then EEC and now) EU legal order recognizes as legal subjects not only the Member states, but also those who are legal subjects within the domestic legal systems of the Member States, i.e., private individuals  In certain cases, the rules of EU law can have direct effect vis-à-vis the subjects of domestic legal systems (natural or legal persons)  The theory of direct effect arises as a corollary of the obligations assumed by the Member States, given that the infringement procedure (a remedy of public law) is not sufficient to adequately guarantee the 4 position of individuals  Different kinds of direct effect EU law provisions can be invoked before a national Court by a Upwards vertical direct private individual against a Member State Necessary to protect the effectivity of rights conferred by EU effect (or ascending) law on individuals Sanctioning logic vis-à-vis Member States of direct effect EU law provisions can be invoked before a national court by a Member Downward vertical State against a private individual Ability of the provision of EU law (not only to confer rights but also) to effect (or descending) impose on individuals passive legal situations (i.e., obligations) Preservation of the effectiveness of EU law EU law provisions can be invoked before a national Court by a private individual against another private Horizontal direct effect individual 5  In order to have direct effect, a disposition of EU law must be... the prescriptive content of the disposition must be sufficiently defined CLEAR the addressees must be able to understand its scope the national court must be able to apply it in order to solve actual cases it is necessary for the disposition invoked to specify (a) the holder of the PRECISE obligation; (b) the holder of the right; and (c) the content of the right/obligation created by it The rule must contain the elements necessary for its application in practice The disposition must be capable of being immediately applied, without the UNCONDITIONAL need for further activity Positive obligations (obligations to do) vs. negative obligations (obligations not to do) + CONFERRAL OF RIGHTS The rule must be intended to confer a right (substantive or procedural) on the party seeking to invoke it UPON INDIVIDUALS The right may also be the counterpart for an obligation imposed on another 6 person  What sources of EU law can have direct effect? The treaties?  Vertical direct effect: certainly, as already pointed out by the Van Gend en Loos (1963) judgment, repeatedly discussed  indeed, the notion of direct effect has been established by the ECJ for the very first time precisely with respect to a Treaty provision, i.e., the then Article 12 EEC on the standstill obligation, during the transitional period, with respect to intra-EU duties) Direct horizontal effect =  Defrenne case (1976) - EU law establishes the principle of equal pay regardless of the gender of the workers : this is a rule that can also be invoked by employees against private employers;  SABAM case (1974) - Articles 81(1) EC and 82 EC (what are now Articles 101 and 102 TFEU) produce direct effects also in the context of relations between private individuals and confer rights on them that national courts must protect  Courage (2001) and Manfredi (2006) cases - competition rules can have direct horizontal effects, so that individuals (natural or legal persons) have the right to be compensated (i.e. can claim damages before national courts) from other private individuals (i.e. companies) who have violated Articles 101 and/or 102 TFEU 7  The Charter?  Case Egenberger (C-414/16) = Article 47 of the Charter on the right to an effective judicial remedy and to an impartial judge has direct vertical effect, while Article 21 of the Charter, i.e., the general prohibition of non-discrimination, can also have direct horizontal effect (indeed, a national court in the context of a dispute between two private parties is obliged, where it is not possible for it to interpret existing national law in a manner consistent with Article 4(2) of Directive 2000/78, to ensure the legal protection to which individuals are entitled under Articles 21 and 47 of the Charter and to ensure the full effectiveness of those articles, disapplying where necessary any contrary national provisions.)  Case Cresco Investigation (C-193/17) = Article 21 of the Charter can have direct horizontal effect (indeed, as long as the Member State concerned has not amended, in order to restore equal treatment, its legislation granting the right to a holiday on Good Friday only to workers who are members of certain Christian churches, a private employer subject to that legislation is obliged to also grant its other workers the right to a holiday "  Case Bauer (C-569/16) and case MaxPlank (C-684/16) = Art. 31(2) of the Charter on the right to fair terms and conditions of employment has direct horizontal effect (indeed, where it is impossible to interpret national legislation n such a way as to ensure its conformity with Article 7 of Directive 2003/88 and Article 31(2) of the Charter, it follows from the latter provision that a national court hearing a dispute between a worker and his former employer having the status of a private individual must disapply that national legislation and ensure that, where that employer is unable to prove that it exercised all due diligence to ensure that the worker was actually in a position to take the paid annual leave to which he was entitled under Union law the worker himself may not be deprived of his accrued entitlement to such paid annual leave, nor, correlatively, and in the event of termination of the employment relationship, be deprived of the financial allowance for leave not taken, the payment of which shall be borne directly, in such case, by the employer concerned). 8  Regulations and decisions?  With regard to regulations, direct effect is a direct consequence of their direct applicability (as well as of the fact that they are general in scope)  Horizontal direct effects = Regulations are also enforceable in relations between private parties  Decisions can also have direct effects  According to the ECJ, it would be contrary to the mandatory force attributed by Article 288 TFEU to the decision to exclude, in general, the possibility that the obligation it imposes can be enforced by any interested parties. In particular, in cases where the Community Institutions have, by decision, obligated a Member State or all Member States to adopt a particular course of action, the scope of the act would be restricted if individuals could not rely on its effectiveness in court and if national courts could not take it into account as a rule of Community law (Grad, case 9/70, judgement9 6 October 1970)  … and what about the Directives? Due to the biphasic structure that characterizes this regulatory instrument and the related Member States’ obligation to transpose the content of the directive within the national legal order, the dispositions of directives cannot, by definition, meet the requirements for a provision of EU law to have direct effect set by the Court of Justice  Upon their entry into force at the EU level, directives, among other things, are not unconditional, as they explicitly require an activity on the part of the Member States Problem = what happens if a Member State fails to fulfill its obligation to transpose a directive?  Treaty solution = the infringement procedure (ex art. 258 ff. TFEU) Problem 2 = does the infringement procedure sufficiently protect the position of individuals who could have benefited from the content of the directive had it been properly transposed? 10  Directives: vertical direct effect  In order to safeguard the position of individuals, the ECJ has ruled that, in the event of failure, incorrect or untimely transposition within the prescribed time limit or with the prescribed national measures, directives may also have direct effect (only vertical), insofar as they incorporate provisions that are clear, precise and unconditional and can be applied regardless of any implementing action by national authorities  Ratio = sanctioning intent = a Member State cannot benefit (moreover, to the detriment of individuals) from its own failure to fulfill its obligation under Article 288 TFEU and the principle of sincere cooperation to transpose a directive correctly and in a timely manner  Only upward vertical direct effect = This explains why the direct effect of directives is only vertical and applies only in the ascending way = it was created by the ECJ to remedy the negligence and delays of Member States in fulfilling the obligations imposed by the directive, giving the national Court the task of achieving the purpose of the directive in accordance with the protection of individual legal positions, regardless of the failure of the Member States  Directives never have direct descending or reversed 11 effect  Directives: vertical direct effect (2)  Temporal requirement = the deadline for transposition of the directive must have expired and the State must have failed to implement the directive at the national level or must have done so incorrectly  Before the deadline for transposition surely the directive has no direct effect, but only imposes on member states the aforementioned standstill obligation  Subjective requirement = the counterpart of the individual invoking the unimplemented directive must be a Member State  Qualitative requirement = the specific disposition of a directive which is relied upon by the individual must meet the well-known requirements for direct effect, i.e., it must be a clear, precise and unconditional and shall be intended to confer rights 12  Directives: Horizontal direct effect? Faccini Dori case (C-91/92, 1994)  A natural person executes a contract for the purchase of a distance learning English course while at the Milan Central Station  She regrets the decision and tries to withdraw from the contract under the terms of the Directive on contracts concluded away from the business premise  However, this is a directive that, at the time, had not yet been transposed by Italy  Domestic legislation (i.e., the Italian Civil Code) did not provide for the right of withdrawal  Question = Can a non-transposed directive be invoked against another private individual?  Answer of the ECJ = NO, NEVER  in the absence of measures transposing the directive within the prescribed time-limit, consumers cannot derive from the directive itself a right of cancellation as against traders with whom they have concluded a contract or enforce such a right in a national court (§ 25) 13  Directives: Horizontal direct effect? What is the rationale for the explicit and sharp exclusion by the ECJ of the possibility of directives having horizontal effect?  “Sanctioning” rationale = directive not transposed can be invoked against the Member States because the failure to transpose a directive constitutes a failure of the Member States to comply with their obligation under EU law  The private party is not “guilty” if a directive has not been transposed  Legal Certainty = Private parties cannot be required to know rules that must have transposed but have not been transposed into domestic law, as this would undermine the principle of legal certainty  Art. 288 TFEU = Risk of turning directives into “regulations with delayed effect”, in violation of the text of Art. 288 TFEU (and the principle of attribution) 14  What about the principle of principle of equal treatment?  The fact that directives only have direct vertical effects produces obvious discrimination, as the level of protection offered to individuals dramatically changes depending on the nature of the counterparty (State or private) in the individual case  One of the typical example that can be one in order to understand this issue is that of am employment relationship:  an employee of a public entity is favored over one employed in a private company, since a directive that has not been transposed can only be enforced against the public employer  Nevertheless, the Court has always held firm in its case law, and thus it is always valid that directives (i) have direct vertical effect and (ii) do not have direct horizontal effect 15  The (partial) remedies developed by the case law: the – very broad – notion of the state  Although it has always held firm in its case law, the ECJ has of course soon realized the problems created by this duplicity in the effects of directives and has sought to create alternative remedies to the directives' lack of horizontal direct effect  Do you remember what we said when discussing the revirement of the ECJ with regard to the role of fundamental rights in the EU legal order?  The simplest and most immediate way to mitigate these discriminatory profiles has been to extend the notion of "State" as far as possible in order to recognize the right of individuals to invoke the directives in an increasing number of cases  For example, the following entities are also considered as part of the "State" for the purposes of the direct vertical effect of directives:  territorial authorities;  authorities charged with maintaining public order even if they are independent of the state;  authorities providing public health services  Companies whose share capital is held by a Member State 16  Directives as expressions of general principles of EU law  A second theory developed by the ECJ concerns directives that are the concrete expression of a general principle of Union law  Like all sources of EU law other than directives, general principles of EU law can also have direct horizontal effects  In the event that a directive (even if not yet transposed) is an expression of a general principle, the national Court is obliged to recognize the direct effect of the general principle and, consequently, to disapply the relevant national legislation that conflicts with that general principle, as concretely expressed in the directive, and this also in the event that the legislation comes into play in the context of a dispute between private parties.  Even in private relationships, therefore, the content of a not-transposed directive may somehow end up filling the content of the general principle (a rule that is elastic by nature) and being able to become relevant in some way even in disputes between private individuals  Examples = general principle of nondiscrimination on grounds of age and Directive 2000/78 establishing a general framework for equal treatment in employment and occupation (Mangold case; Kücükdeveci case) 17  Relationship between (the ratio of) the rule and the remedies  How does the broad notion of State compare with the ratio that led the court to establish vertical direct effect, namely, the sanctioning intent vis-à-vis Member States?  What can a public enterprise do if a State has not transposed a directive?  How does the theory of directives as an expression of general principles stand in relation to the possible prejudice to legal certainty?  Is it really more difficult for an individual to be aware of the content of a not-transposed directive than to imagine which no-transposed directives could (or could not) be an expression of a general principle?  The Court has recently clarified that the disapplication of the domestic rule that is incompatible with the general principle of non-discrimination on the basis of age cannot be prevented by other general principles of European Union law, such as the principle of legitimate expectations and legal certainty ((CJ, April 19, 2016, Dansk Industri (DI) v. Estate of Karsten Eigil Rasmussen, Case C-441/14).) 18  Thank you! – questions? PROF. AVV. LUCA CALZOLARI, LL.M, PH.D [email protected] 19