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Direct Effect of Directives - an Instrument for Uniformity Or the Cause of Incoherence?

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Direct Effect of Directives - an Instrument for Uniformity Or the Cause of Incoherence? J U R I D I C U M Direct Effect of Directives - An Instrument for Uniformity or the Cause of Incoherence? Josefin Johansson & Lisa Lindström VT 2017 RV600G Rättsvetenskaplig kandidatkurs med examensarbete (C-uppsats), 15 högskolepoäng Examinatorer: Annina H Persson & Eleonor Kristoffersson Handledare: Senem Eken Abstract Over 40 years have past since the Court of Justice (the Court) established direct effect (of directives). Direct effect enables individuals to invoke – rely on a European Union (EU) directive provision(s) before a national court, presupposed that the directive has direct effect and the national rule(s) is in conflict with this directive. However, the Court has limited direct effect to vertical situations, meaning that an individual can invoke a directive against a Member State (vertical situations), but directives cannot be invoked between two individuals (horizontal situations). The Court has relied on different legal reasoning to exclude horizontal direct effect. However, despite the rule of no-horizontal direct effect, the Court has adopted a broad definition of state and has introduced the doctrines of incidental direct effect and consistent interpretation. Furthermore, the concept of state liability has been established as a form of remedy. One argument for these developments is to maintain (full) effectiveness of EU law. Consequently, the evolutions of the Court is a controversial issue, which has been subject to discussions in the doctrine and is facing criticism/challenges due to the emerged tension between the rule of no-horizontal direct effect and the doctrines created by the Court that impinge this rule. The purpose of the thesis is to examine whether the ‘exceptions’ restraining on the rule of no-horizontal direct effect in fact amounts to horizontal direct effect and consequently affects state sovereignty adversely. According to the Treaty (Art 288 TFEU), the Member States (MS) of the EU enjoy certain amount of discretion as to how they will implement directives, since directives are only binding upon the MS as to the result to be achieved. The thesis examines the legal problem stated above by presenting and analyzing the relevant groundbreaking case law of the Court, in order to show the inconsistent pattern of the Court’s case law, which results in a middle way between effectiveness of EU law and the estoppel argument. The conclusion would be that the Court must create consistent application in this particular field of law. Thus, the Court can head in two directions: either to accept horizontal direct effect and thus aim for a more coherent application of EU law or to preserve the constitutional hierarchical order, and thereby uphold state sovereignty and discretion. Table of Contents 1 INTRODUCTION ................................................................................................................................. 1 1.1 BACKGROUND ................................................................................................................................. 1 1.2 AIM AND RESEARCH QUESTIONS .................................................................................................... 3 1.3 DELIMITATIONS .............................................................................................................................. 4 1.4 RESEARCH METHOD AND MATERIALS ........................................................................................... 4 1.5 DISPOSITION .................................................................................................................................... 6 2 DIRECT EFFECT OF DIRECTIVES ................................................................................................... 7 2.1 THE CONCEPT OF DIRECT EFFECT .................................................................................................. 7 2.2 VERTICAL DIRECT EFFECT ............................................................................................................. 8 2.3 NO HORIZONTAL DIRECT EFFECT ................................................................................................ 12 3 EXCEPTIONS TO THE PRINCIPLE ‘VERTICAL BUT NOT HORIZONTAL DIRECT EFFECT’ ................................................................................................................................................................ 15 3.1 INCIDENTAL DIRECT EFFECT ........................................................................................................ 15 3.2 CONSISTENT INTERPRETATION ..................................................................................................... 19 3.2.1 The Development since case Von Colson .............................................................................. 19 3.2.1 General Principles of EU Law .............................................................................................. 22 3.3 HORIZONTAL DIRECT EFFECT? ..................................................................................................... 27 4 RELATION BETWEEN DIRECT EFFECT AND SUPREMACY ................................................... 28 4.1 THE CONCEPT OF SUPREMACY ..................................................................................................... 28 4.2 EXCLUSION OR SUBSTITUTION? ................................................................................................... 30 5 STATE SOVEREIGNTY .................................................................................................................... 35 5.1 STATE LIABILITY FOR INADEQUATE IMPLEMENTATION OF DIRECTIVES ..................................... 35 5.2 DISCRETION .................................................................................................................................. 39 5.2.1 Discretion in General ............................................................................................................ 39 5.2.2 Discretion in relation Direct Effect ....................................................................................... 40 6 CONCLUSION ................................................................................................................................... 42 6.1 AN INSTRUMENT FOR UNIFORMITY OR THE CAUSE OF INCOHERENCE? ...................................... 42 6.2 COHERENCE OF EU LAW - IRRESPECTIVE OF THE CONSEQUENCES? ........................................... 47 6.3 FINAL REMARKS ........................................................................................................................... 49 TABLE OF CASES ................................................................................................................................ 50 TABLE OF LEGISLATION .................................................................................................................. 51 EU TREATIES ...................................................................................................................................... 51 EU DIRECTIVES .................................................................................................................................. 51 INTERNATIONAL CONVENTIONS ......................................................................................................... 51 BIBLIOGRAPHY .................................................................................................................................. 52 BOOKS ................................................................................................................................................ 52 ARTICLES ............................................................................................................................................ 53 List of Abbreviations AG Advocate General Art Article Ch Chapter ECHR European Convention on Human Rights ECtHR European Court of Human Rights EU or Union European Union MS or state All or a Member States of the European Union OJ Official Journal of the European Union P Page Para Paragraph EC Treaty Establishing the European Community TEU Treaty on European Union TFEU Treaty on the Functioning of the European Union The Court The Court of Justice (Formerly known as the ‘European Court of Justice’/’ECJ’) UN United Nations UK United Kingdom 1 Introduction 1.1 Background The European Union (EU or the Union) is a supranational organization. The Member States (MS) have agreed, as a result of their membership, to ‘confer competences to attain objectives they have in common’.1 However, the transfer of competence from the MS to the EU is limited with the principle of conferral, the principle of subsidiarity and the principle of proportionality. In other words, those three principles govern the EU’s competence,2 and 3 relate to the questions of when the EU can act and how the EU should act. Thus, the EU institutions, by complying with those principles, can adopt binding EU acts and conclude international agreements (with third countries) to reach the objectives of the EU. Directives are one of the EU acts that can be adopted by the EU institutions.4 With regards to EU acts, directives differ from the other EU acts because the MS must implement the directives and they are binding upon each MS as to the result to be achieved. However, the method and/or form to be used by the MS to reach that result envisaged in a directive has been left to the national authorities to choose.5 As a result, directives leave, in principle, a certain degree of discretion to the MS, which enable them to decide on their implementing
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