Supremacy Of EU Law: Seminal Cases Of Van Gend En Loos And Costa V Enel

The European Union is based on the rule of law. The treaties form the primary legislation and have been agreed constitutionally by its members. Secondary legislation has several components. Directives which set out the objective to be achieved usually within a two-year period, and are applicable to all Member States, the legislation is derived however, from the national parliament. Regulations which are binding, have general application and become law in all member states, and Decisions which are binding in their entirety to those individuals to whom it is addressed. Conversely, Recommendations and Opinions are non-binding acts. If member states do not comply with EU law obligations, the commission can initiate proceedings against them. In order to implement more effective enforcement for individual rights, the European Court of Justice developed principles which allows individuals to enforce their EU law rights in national courts of the Member States via direct effect, indirect effect and state liability. There is no allusion within the Treaties as to the supremacy of EU Law, or in relation to its hierarchical position within the national laws of the member states. The principle has primarily developed through the case law of the ECJ and the doctrine of direct effect and supremacy of EU Law was therefore established early in the European Communities history in the seminal cases of Van Gend en Loos [1963] and Costs v ENEL [1964].

Van Gend en loos was a significant case and concerned an action against the state by an individual, and demonstrated that Treaty provisions can create vertical direct effect between individuals and member states in addition to member states themselves. The case concerned Article 12 (now 30) of the Treaty of Rome which prevented any increase occurring in existing custom duties or new duties being created and imposed. Van Gend alleged there was a clear violation of Article 12. The Dutch authorities requested a preliminary ruling from the European Court of Justice as to whether Article 12, bestowed rights upon nationals of member states that could subsequently be enforced in national courts, and had direct applicability within those member states. The Dutch authorities argued that the Treaty was an agreement between member states, and as Van Gen den Loos was not party to the treaty, they had no locus standi. The Advocate General held that although some provisions of the treaty could have direct effect, Article 12 did not. The ECJ controversially argued that Article 12 could assign rights to individuals despite this not being expressly stated in the Treaty and that the Treaty of Rome constituted a new legal order of international law which placed limitations on member states sovereign rights. Significantly this case ascertained that the EEC treaties were legitimate grounds for legal rights which could be enforced before the courts of the Community’s member states and thus created the principle of direct effect which is now recognised as a fundamental component of EU law. The creation of direct effect was undoubtedly a major advance in forming a new legal order which differentiated from the other international treaty legal frameworks. The doctrine however is not without its complications and it remains difficult to ascertain whether a particular provision has direct effect, furthermore the applicability of the criteria can be difficult in practice. The concept however is logical and ensures that the rights of individuals are protected under European Law and following its introduction in Van Gend the principle has expanded and evolved.

The other variant of direct effect is horizontal and whether provisions were horizontally directly effective, was not addressed until the case of Defrenne V Sabena [1976] (no2) when an air stewardess brought a claim against her employer. In Defrenne the court held that treaty articles could be invoked horizontally and the judgement of the ECJ in this case clarified that EU provisions are enforceable by individuals against other individuals, which has subsequently been confirmed in the cases of Walgrave v Koch [1974] and Thieffry v Paris Bar Association [1977]. These cases broadened the scope of direct effect through allowing horizontal direct effect and furthermore the ease at which individuals could rely upon treaty articles.

The direct effect of directly applicable EU Law such as treaty articles and regulations have been relatively uncontroversial, conversely the application of directives has appeared more challenging. Initially Directives were deemed enforceable against a state or public authority and not against individuals, however under Article 288 TFEU, Directives must be implemented by the member state into its own legal system. The ECJ ascertained that for the doctrine to be relied upon, the directive should be clear, unambiguous and its implementation must not be dependent on further member state action. The deadline must also have passed as in Ratti [1979] where the ECJ held that a member states obligation for implementation becomes resolute once the time limit has expired. The reasoning in this case was the Estoppell principle, which delineated that states should not profit from their own failure to implement a directive. The case of Francovich suggested that in order to be sufficiently precise directives must ascertain the contents of the right, who is accountable and who is entitled to the right. Additionally, the date set for implementation must have passed.

In Marshall V Southampton Health Authority [1986], the court elicited a vital distinction between vertical and horizontal direct effect and determined that directives were incapable of horizontal direct effect. The court held that a directive can only be directly effective against the state and not an individual, and this was subsequently confirmed in the case of Faccini Dori v Recreb Sr [1994]

The decision of the ECJ has however been subjected to criticism due to the potential unfairness that may arise in specific areas such as employment, where employees of private employees would be unable to invoke their rights in comparison to state employees who would be able to do so. The ECJ has attempted to rectify this through widening the definition and ensuring the broadest possible application of what constitutes the state, for the purposes of vertical direct effect. In Foster v Gas [1990] the court provided a three limbed test to establish the status of a state body, and determined that a body could constitute an emanation of the state and thus was capable of forming a vertical relationship if it was under the control of the state, delivered a public service and ultimately held special powers that was beyond association with individuals alone. The effect of this approach has ultimately expanded protection of individual rights.

The direct effect of directives was however established in the case of Van Duyn v Home Office [1974] where a Dutch national was refused entry into the UK due to her membership with the Church of Scientology. Van Duyn claimed that the UK was in breach of Article 45 TFEU which allowed the free movement of workers, and subsequently relied upon an earlier directive which the UK had failed to implement, in which the refusal of entry was judged against the conduct of the worker. Van Duyn contested that membership to the church did not constitute personal conduct. The provisions relating to public policy were deemed to be sufficiently precise despite the scope of those terms requiring interpretation by the courts and the case demonstrated that if rights were not enforceable, EC law would lose its efficacy as national courts could simply disregard the directives. Similarly, in Defrenne v Sabena (No 2) equal pay for equal work was considered as sufficiently clear. There is however no assurance that decisions of the ECJ will always be this predictable and until a particular provision is brought before the ECJ there is no way of ascertaining whether it will be considered directly effective. The determination of this is subsequently left to whether an appropriate case comes before the court. The requirement for the provision to be unconditional appears to exclude directives from the scope of direct effect as they rely on member state implementation and only the result is binding.

In addition to the extension of what constitutes a state, the ECJ also developed the principle of indirect effect to enhance an individual’s ability to enforce their specific rights. The principle asserts that national law must be interpreted in unity with European law. Furthermore statutory interpretation is to be utilised in both horizontal and vertical situations where the provision is not adequately precise.

In Van Colson it was identified that member state court must interpret national law in relation to the wording and purpose of the directive. Following this case uncertainty remained as to whether indirect effect could be applicable to national law or if the rule could be applied to provisions predating a directive. These issues were resolved in Marleasing [1991] which confirmed that the principle of indirect effect related to measures predating the provision in question rather than to implementing legislation which wrongly transposes a EUL measure. Under these circumstances’ traditional infringement proceedings under Article 258 TFEU would be brought.

The principle of direct effect assigns rights to individuals which must be recognised and enforced by member states. Case law such as Van Gen den Loos v Netherlands Inland Revenue Administration, and Costa v ENEL [1964] have demonstrated that when conflict occurred between EU law and national, EU law will prevail and the supremacy of EU law would always be upheld through the principle of direct effect. The ECJ has been influential in creating a new legal order which is vertically integrated rather them consisting in a horizontal relationship between member states to an international treaty and the doctrine of direct effect was crucial to this development. Other principles have been developed by the Court including subsidiarity. Proportionality, precedence and state liability, however they have not impacted to the extent that direct law and supremacy have.