Social Chapter - Conflict of Laws - Effect of EU Law

Effect of EU Law

In Van Gend en Loos v Nederlandse Administratie der Belastingen, the European Court of Justice (ECJ) ruled that the provisions of the then EEC treaty were capable of having direct effect before the national courts of EEC member states. The result was to create an alternative manner of enforcing the obligations undertook by member states in the treaties, to the more traditional method of state enforcement in the form of enforcement actions taken by the European Commission at a supranational level. Individuals could now use national courts to invoke EU treaty provisions against member state governments. The pre-conditions for direct effect are that the provisions on which an individual wishes to rely are sufficiently clear and unconditional, and that there is no scope for member states to exercise discretion in implementation. Thus, a regulation that allows member states to privatise roads would not have direct effect and could not be enforced in the courts, because it provides that states may privatise roads, not must privatise roads. While direct effect was first developed in relation to treaty articles, the ECJ subsequently ruled that regulations and decisions could also have direct effect as well. In Marshall v Southampton and South West Area Health Authority (Teaching) (No 1), the ECJ ruled that while directives could also have direct effect, they could only do so in respect of public bodies. However, the ECJ has taken a broad view of what constitutes a public body and has found that a state-owned gas company was a public body subject to direct effect. In contrast treaty articles, regulations and decisions can have direct effect against private entities. Recommendations and opinions were held to not have direct effect, as they were not intended to be binding, though they should be taken into consideration when interpreting the European Union law they supplement or the national law they implement.

Indirect effect describes a situation where the courts in member states use European Union law to interpret national laws, as oppose to direct effect where European Union law is applied directly. Treaty articles, Regulations and Decisions can all have direct effect except where they are unclear or conditional. In such cases they may have indirect effect, but are unlikely to be of much use for interpreting national laws. Recommendations and Opinions cannot have direct effect, but may have indirect effect, when interpreting the European Union law they supplement or national laws, as established in Grimaldi v Fonds des Maladies Professionnelles ECR 4407 Case C-322/88. Von Colson and Kamann v Land Nordrhein-Westfalen ECR 1891 Case 14/83 established that Directives can have indirect effect in where an individual takes action in a national court against another individual, where a Directive can never have direct effect, or where the provision of the directive is not sufficiently clear and unconditional to have direct effect.

Francovich v Italy requires that the state pays compensation to individuals if it fails to properly implement a Directive.