EU Law: Direct Effect - the basics

Direct effect – where an EU law can be invoked in a national court.

Direct applicability – where EU law becomes part of a member states’ law without any additional legislation being enacted.

Broad definition of direct effect: established in Van Gend en Loos and says that the EU provision may be invoked in a national court.

Narrower definition of direct effect: also known as the classical definition; says that EU provisions confer rights on individuals which they then might invoke in the national courts. The problem with this definition is the ambiguity of the word ‘rights’.

Two initial criteria: Appropriate to confer rights on individuals; integrated into that MS’ law.

Main criteria: Clear and precise; unconditional; not dependent on any further action being taken

Direct effect of Treaties: Treaties can have both vertical and horizontal direct effect, provided that they meet the criteria above. Van Gend en Loos demonstrated vertical direct effect because the complainant successfully sued the Netherlands, relying on Article 12 EC, when they attempted to charge him an import duty on chemicals being imported from Germany into the Netherlands. Defrenne v Sabena demonstrated horizontal direct effect as the complainant successfully sued her employer who was paying her male colleague more than her, relying on the equal treatment directives.

Direct effect of Decisions: Decisions are binding on those to whom they are addressed. Grad demonstrates that decisions can have vertical direct effect, however there is no case law demonstrating horizontal direct effect as of yet. Theoretically we can infer that horizontal direct effect is possible as long as the decision was addressed to the private party rather than the state.

Direct effect of Regulations: Regulations are general in their nature and scope, binding in their entirety and directly applicable in all member states. Politi said that regulations confer rights on individuals which member states are bound to protect; whilst Orsolina (also known as the slaughtered cow case) established that regulations have both direct effect and direct applicability, both vertically and horizontally.

Direct effect of Directives: Directives are EU laws which member states are given a duty to transpose into their national law, but are given a time limit in which to do so. Ratti established that such directives will not have direct effect until the transposition date has passed, or has taken effect. See Member State liability for the consequences of failure to transpose!

Directives can have vertical direct effect, as demonstrated in Van Duyn, who, although unsuccessful in his case, proved that a citizen could rely on a directive against the state (who in this case were denying entry to the country based on being a member of the Church of Scientology). In deciding what constitutes a public or private party, Foster v British Gas established that to be public, the party should be ‘an emanation of the state’. In the Foster case, British Gas were held to be ‘providing a public service under the control of the state’ and therefore the action was seen as vertical. This judgement seems to blur the distinctions between vertical and horizontal direct effect of directives as many of the actions pass over into the horizontal dimension. Leyland and Woods argue that this undermines the arguments against HDE which were put forward in Marshall.

Directives cannot have horizontal direct effect, as demonstrated in Marshall. Attorneys-General have argued that directives should have horizontal direct effect but this has not taken effect, as demonstrated by Dori. One argument for denying the right to horizontal action was based on the fact that it would make the application of regulations and directives too similar when they were intended to be entirely different. It might however be argued that the definition in Foster, alongside the right to ‘indirect effect’ has weakened the denial of horizontal direct effect and thus made directives more similar to regulations anyway!