UBI IUS, IBI REMEDIUM: DO THE UNION COURTS HAVE THE “ FOR JUDGING”

Kieron Beal QC, Blackstone Chambers Bar European Group Conference, Iceland, May 2015

A. Introduction and the obligatory historical anecdote

1. In the Saga of Gudmund the Worthy, a kinsman of Gudmund called Skaering has his hand chopped off by some Norwegian merchants.1 Gudmund is called upon to arbitrate and set an award of compensation for the loss. He pronounces that the sum of “thirty hundreds” should be paid. The Norwegians decline to pay this sum, saying it is too much. After some rather unseemly haggling with the arbitrator, Gudmund amends his award. He determines that he will select one of the Norwegian kinsmen of comparable status and cut off his hand. The Norwegians might then pay such compensation to their own kinsman as they see fit. Forced to recognise the true value of the loss of a hand for one of their own, the Norwegians wisely pay the judgment debt.

2. The common , in keeping with medieval Icelandic law, has long recognised the need for an effective remedy. That is reflected in the common law brocard2 and the Latin title to this paper: “wherever there is a right, there is a remedy.” In Ashby v. White (1703) 92 ER 126, Lord Holt C.J., in his dissenting opinion, would have granted a voter barred from voting a right to claim compensation. He noted that “if the plaintiff has a right, he must of necessity have a means to vindicate and maintain it, and a remedy if he is injured in the exercise or enjoyment of it; and indeed it is a vain thing to imagine a right without a remedy; for want of right and want of remedy are reciprocal.”3 The common law maxim has even been applied by the Court of Appeal in the context of a claim based on EU law. In Ryanair Limited v. Esso Italiana Srl [2013] EWCA Civ 1450, Rix LJ observed that Article 101 TFEU did embody a right, but held it was one which found its remedy in a claim for breach of statutory duty and not in the implication of a term into a commercial agreement for the purchase of aviation fuel.

3. EU law itself requires Member States to provide an effective remedy for the protection of EU . The right to effective judicial protection of EU law rights has long been recognised as a principle of EU law.4 Indeed, in his opinion in Case C-18/94 Barbara Hopkins v. National Power plc [1996] ECR I-2281, at [50], Advocate General Fennelly expressly referred to the maxim ubi ius ibi remedium in support of the general EU law principle of effective protection. Article 19 TEU now states that “Member States shall provide remedies sufficient to ensure effective legal protection in the fields covered by Union law.” Article 47 of the Charter of Fundamental Rights (‘CFR’) provides that everyone whose rights and freedoms guaranteed by EU law are violated has the right to

1 Bloodtaking and peacemaking: Feud, law and society in Saga Iceland, William Ian Miller (1990), Chicago University Press, p. 1-2. 2 See Harding v. Wealands [2006] UKHL 32, [2007] 2 AC 1, per Lord Rodger who at [76] rejected the inverted principle of ubi remedium ibi ius as “unsafe” when it was being applied to the distinction between procedural and substantive legal provisions for the purposes of implementing private international law. 3 The right to compensation for the disgruntled voter was recognised by the House of Lords in the subsequent appeal: (1703) 1 Bro. P.C. 62, 1 E.R. 417. 4 Case 20/88 Roquette Frères v. Commission [1989] ECR 1553, ECJ at [15]. 1

an effective remedy before a tribunal in compliance with the conditions laid down in that article.

4. The Court of Justice of the European Union (‘ECJ’) has adopted a similar approach in the application of Article 47 CFR as the Strasbourg Court has adopted in relation to Article 6 of the Convention. In Case C-279/09 DEB Deutsche Energiehandels- und Beratungsgesellschaft mbH v. Germany [2010] ECR I-13849, the ECJ at [28] reiterated the well-established principle of “effectiveness”, by which the detailed procedural rules governing actions for safeguarding an individual’s rights under EU law must not make it in practice impossible or excessively difficult to exercise rights conferred by EU law. At [29], the Court held that:

“29. The question referred thus concerns the right of a legal person to effective access to justice and, accordingly, in the context of EU law, it concerns the principle of effective judicial protection. That principle is a general principle of EU law stemming from the constitutional traditions common to the Member States, which has been enshrined in Articles 6 and 13 of the . . . ECHR.”

5. In principle, these rights should be equally protected in litigation before the ECJ and the General Court of the European (‘GCEU’). In Opinion 1/2009 [2011] ECR I-1137, the ECJ was invited to rule on a draft proposal for the creation of a unified Patent Court. Having identified (at [65]) that the “essential characteristics” of the EU legal order were founded on the twin principles of primacy and direct effect, the ECJ noted at [66] that the “guardians of that legal order” were the Court of Justice and the courts and tribunals of the Member States. At [70], the Court held that: “The judicial system of the European Union is moreover a complete system of legal remedies and procedures designed to ensure review of the legality of acts of the institutions.” [Emphasis added] More recently, in Opinion 2/13 [2014] ECLI:EU:C:2014:2454, the Court at [174] emphasised that the Treaties have established a judicial system intended to ensure consistency and uniformity in the interpretation of EU law. These Opinions confirm the recognition by the Court of the need for the EU legal system to be based on the . In an EU context, that means that neither the EU Institutions nor the Member States may avoid a review of the conformity of EU measures with the Treaties.5

6. In other words, a combination of judicial review through direct actions under Articles 263 TFEU and 265 TFEU; and the ability of national courts to request a preliminary ruling under Article 267 TFEU, are intended to constitute a coherent and complete system of remedies. They are designed to ensure the effective review of the legality of all measures emanating from the EU institutions. The concern I shall address in this paper is whether the EU legal system in practice gives proper effect to the right to an effective remedy within its own processes and procedures. Does it recognise the principle of ubi ius, ibi remedium? Do the European Courts, in the words of Peter Cook’s miner, have the “Latin for the judging”?

B. The strained hypothetical case

7. As is now customary, in order to answer this question it is convenient to concoct a strained hypothetical case. Chococoins Manufacturing Co (‘CMC’) is a Chinese company

5 See Case 294/83 Les Verts v. Parliament [1986] ECR 1339, ECJ at [23]. 2

that manufactures chocolate coins. Better Together 2016 Limited (‘BTL’) is a company established in England that imports chocolate coins from CMC in China. It imports chocolate coins in each of the currency denominations of the EU. Predicting a surge in demand ahead of the forthcoming referendum on UK membership of the EU, BTL places a large order for a consignment of both chocolate Euros and chocolate pounds from CMC. It proposes to import further consignments in the months up to 2016.

8. At around the same time, the EU Commission receives a complaint from the Association of Chocolate Coin Manufacturers (‘AssocChoc’). It is concerned that chocolate coins from China are being supplied to EU importers at a price which is substantially below the prevailing price for chocolate coins in the EU. A complaint is made that the products are subject to “dumping” which is injurious to EU industry. AssocChoc invites the Commission to impose anti-dumping duties. Following an investigation, the Commission finds that there has been injurious dumping and imposes anti-dumping duties on the import of chocolate coins in a definitive anti-dumping Regulation (‘the ADD Regulation’). An ad valorem duty of 100% is added to the customs duties which are also payable on importation.

9. Furthermore, consumer complaints about the quality of the imported chocolate coins, coupled with fears that they might be mistaken for real currency, prompt the Council and the European Parliament as co-legislators to impose marketing restrictions through the Chocolate Coins Directive (‘the Directive’). The Directive must be implemented by all Member States by May 2016. The Directive imposes strict labelling and packaging requirements on the supply of chocolate Euros, pounds and other currencies in the EU. These include requirements for the packaging to show the following warnings: “Warning: these coins are not real currency” and “Warning: this product is not pure chocolate.” A requirement for a minimum level of cocoa in the chocolate is also imposed. The measure is not preceded by an impact assessment.

10. The combined effect of these measures is to make the ongoing importation of chocolate Euros and pounds from CMC uneconomic. The measures also incense an anti-EU campaigning organisation in the UK, who launch a campaign to save the supply of chocolate pound coins. It will be assumed for the purposes of this paper that there is at least an arguable case that both the ADD Regulation and the Chocolate Coins Directive contravene relevant principles of EU law. That is, a prima facie challenge to their validity can be made. There are accordingly EU rights which might, in principle, be asserted by any of CMC and/or BTL.

C. The remedies available before the Union Courts

11. EU legislative and executive measures cannot be struck down by national courts. In Case 314/85 Firma Foto-Frost v Hauptzollamt Lubeck-Ost [1987] E.C.R. 4199, the ECJ held that national courts were entitled to examine the validity of a Union act, and, if they were of the opinion that the arguments challenging its validity were unfounded, they might conclude the act was valid. However, such courts were not entitled to declare acts of EU Institutions invalid. For the coherence and unity of the Union legal order it was for the ECJ alone to declare that any acts of the EU institutions were invalid.6 This means that

6 That reasoning was endorsed by the ECJ in Case C-344/04 IATA and European Low Fares Airline Association [2006] ECR I-403, ECJ at [29] and [30]. 3

the putative claimants in the chocolate coin case will only be able to have the ADD Regulation and/or the Chocolate Coins Directive struck down in a ruling from the ECJ.

12. The EU legal system permits EU legislative and executive acts to be challenged both directly and indirectly. Direct actions encompass an action for under Article 263 TFEU; and an action against an EU institution in respect of its failure to act under Article 265 TFEU. Article 263 TFEU was amended with the changes brought about by the Lisbon Treaty. The ability of individuals to bring actions for annulment of EU measures was widened, but only in respect of regulatory (i.e. non-legislative) acts. 7 Article 263(4) TFEU provides that any natural or legal person may, under the conditions laid down in the first and second paragraphs of Article 263, institute proceedings against: (a) an act addressed to that person; (b) an act which is of direct and individual concern to them; or (c) a regulatory act which is of direct concern to them and does not entail implementing measures.

13. The grounds for annulment of a measure are that the relevant institution:

13.1. lacked competence to adopt the measure in question;8 13.2. infringed an essential procedural requirement in adopting it;9 13.3. infringed the Treaties or any rule of law relating to their application;10 13.4. misused its powers.11

14. The plea of illegality, which is available under Article 277 TFEU, enables the legality of measures which are not directly in issue also to be challenged in the course of a direct action. That plea is parasitic upon there being another challenge to another measure, which separately calls into question the validity of the target of the Article 277 TFEU plea.12 Article 277 TFEU does not establish an independent right of action and recourse may be had to it only as an incidental plea. There is no scope for our chocolate coin claimants to raise an incidental plea here. We shall assume that neither the ADD Regulation nor the Chocolate Coins Directive calls into question the validity of any other EU law instrument.

7 See generally “Judicial review of EU acts after the Treaty of Lisbon”, Peers S. and Costa M., E.C.L. Review 2012, 8(1), 82-104; and for an historical perspective “Ubi ius, ibi remedium? - Locus standi of private applicants under Article 230(4) EC at a European constitutional crossroads”, José Manuel Cortés Martín, Maastricht J. 2004, 11(3), 233-261. 8 See Case T-496/11 United Kingdom v. ECB [2015] ECLI:EU:T:2015:133, GCEU at [104] to [110]. 9 See Case C-247/10 P Zhejiang Aokang Shoes v. Council and Commission [2012] ECLI:EU:C:2012:710, ECJ at [29]-[34], where the ECJ held that the Commission should have examined a substantiated claim for market economy treatment (MET) made by a producer of Chinese shoes. Chinese shoe producers had been subject to an anti-dumping investigation and the imposition of ADD on their products. The decision to take a “sampling” approach - rather than an individualised approach - to the various claims for MET constituted an infringement of an essential procedural requirement found in the Basic Anti-Dumping Regulation. 10 In Case C-293/12 Digital Rights Ireland [2014] ECLI:EU:C:2014:238, the ECJ at [69] struck down the Data Retention Directive on the basis that in adopting it, the Council had failed to comply with the general principle of proportionality, as also to be found enshrined within Articles 7, 8 and 52(1) CFR. 11 The ECJ in Case C-156/93 Parliament v. Commission [1995] ECR I-2019, ECJ at [31] defined “misuse of powers” as “the adoption by a Community institution of a measure with the exclusive or main purpose of achieving an end other than that stated or evading a procedure specifically prescribed by the Treaty for dealing with the circumstances of the case.” 12 See Case T-154/94 CSF v. Commission [1996] ECR II-1377, GCEU at [16]. 4

15. A further way of challenging EU legislation directly before the EU Courts is to bring a claim for damages against the EU Institutions. The ability to claim damages against EU institutions as part of their non-contractual liability is established by Articles 268 and 340(2) TFEU. Article 268 TFEU confers jurisdiction on the ECJ to hear actions for compensation for damage for which the Union is liable to pay under Article 340(2) TFEU. Article 340(2) TFEU governs the Union’s liability in tort. In accordance with the general principles common to the of the Member States, the Union shall make good any damage caused by its institutions or by its servants in the performance of their duties.

16. An action for damages can be brought against legislative measures such as the contested Directive and the ADD Regulation. But the criteria for establishing liability are onerous. The measures must have infringed a provision of EU law intended to confer rights on individuals. The breach must be sufficiently serious. There has to be a direct causal link between the breach and the damage caused.13 The decisive test for finding that a breach of EU law is sufficiently serious is whether the EU institution concerned manifestly and gravely disregarded the limits on its discretion.14 But where the Institution in question has only considerably reduced, or even no, discretion, the mere infringement of EU law may be sufficient to establish the existence of a sufficiently serious breach.15

17. An action for damages can also in certain circumstances lead to a finding of invalidity in respect of an EU legislative measure even where the procedural requirements for bringing an action for annulment are not met. In other words, where, for example, the time limit for bringing a direct action has expired or where the applicant does not have locus standi to challenge a general legislative measure (issues which are addressed below). The ECJ has held that the fact that an application for annulment is inadmissible does not in itself render a claim for damages inadmissible.16 The action for damages is an independent form of action in the system of remedies available in EU law.17

18. However, while an action for damages may secure a finding from the ECJ that a measure is invalid, as infringing a provision of EU law, it cannot be used as a means of circumventing the procedural requirements for bringing a direct action for annulment.18 The ECJ has ruled inadmissible challenges to EU measures which are dressed up as claims for damages but which, in truth, are designed to secure a ruling on the invalidity of the underlying measure. The fact that a claim for annulment is held to be inadmissible renders the claim for damages inadmissible where the action for damages is actually aimed at securing withdrawal of an individual decision which has become definitive and which would, if upheld, have the effect of nullifying the legal effects of that decision.19 Since CMC and BTL actually wish to see the Chocolate Coins Directive and the ADD Regulation annulled, there is a risk that any attempt to do so circuitously through an action for damages would be ruled inadmissible.

13 See Case C-352/98 Laboratoires pharmaceutiques Bergadam SA v. Commission [2000] ECR I-5291, ECJ at [42]. 14 Joined Cases C-178/94, C-179/94, C-188/94, C-189/94, C-190/94 Dillenkofer and Others v Germany [1996] ECR I-4845, ECJ at [25]. 15 Case C-5/94 Hedley Lomas [1996] ECR I-2553, ECJ at [28]. 16 Case 4/69 Lütticke v Commission [1971] ECR 325, ECJ at [5] and [6]. 17 Case C-257/93 Van Parijs and Others v Council and Commission [1993] ECR I-3335, ECJ at [14]. 18 See Case T-514/93 Cobrecaf SA v. Commission [1995] ECR-II 621, GCEU at [59]-[61]. 19 Case 175/84 Krohn v Commission [1986] ECR 753, ECJ at [32] to [33]. The ECJ held at [32] that the purpose of an action for damages is not to set aside an EU measure but to repair the damage caused by an EU institution. 5

19. The indirect way of challenging the contested measures is through the preliminary reference procedure under Article 267 TFEU. The ECJ has been willing to accept references from domestic Courts in which the validity of an EU law measure is called into question by the national Court.20 Furthermore, it seems likely that national legal systems would be obliged to recognise a domestic procedure by which such a challenge could be referred to the ECJ for the requisite determination of a “well-founded” challenge to the legality of the contested EU measure. In Case C-432/05 Unibet (London) Limited [2007] ECR I-2271, at [41], the Court suggested that domestic law might need to create a specific procedure in the event that “no legal remedy existed which made it possible to ensure, even indirectly, respect for an individual’s rights under Community law.”

20. There is no need for such judicial creativity in the UK. English courts have been willing to make references to the ECJ raising the issue of the validity of EU legislation in appropriate cases. This might be in judicial review proceedings21 or in statutory appeals.22 The test which the domestic Court applies when determining whether to make a reference is whether it is reasonably arguable that an EU measure is invalid.23 In practice, the domestic Courts will often be governed by the approach adopted by the parties. Where both sides agree that the challenge in question raises reasonable arguments about the validity of the EU measure, a reference may be largely agreed. Conversely, if the validity of the EU measure is defended by the (typically Governmental) defendant, then the national court or tribunal can decide that the measure in question is valid without the need for a reference.24 A reference is not made simply because the claimant formally contests the validity of a Union measure.

21. It is not uncommon for any concerted assault on the validity of EU measures to involve separate legal challenges involving both direct and indirect challenges. In Joined Cases T- 172/98 and T-175/98 to T-177/98 Salamander AG v. Parliament and Council [2000] ECR II-2487, the GCEU declined to find that a tobacco company had locus standi to challenge

20 See Case C-74/99 Imperial Tobacco and others v. Secretary of State for Health and others [2000] ECR I- 8599, ECJ; and Case C-491/01 R v. Secretary of State for Health, ex p. British American Tobacco [2002] ECR I-11453, ECJ. A reference has also recently been made by Green J in relation to a challenge to the Tobacco Products Directive 2014: Pillbox 38 (UK) Limited v. Secretary of State for Health, assigned as Case C-477/14. 21 See for example OJSC Rosneft Oil v. HM Treasury [2015] EWHC 248 (Admin), per Beatson LJ and Green J. At [43], the Court explained why it had decided to refer inter alia a question concerning the extent to which measures adopted under the Common Foreign and Security Policy provisions of the Treaty were immune from review by the ECJ itself. The Court endorsed the Claimant’s submissions that decisions adopted under the CSFP were, manifestly, measures adopted from within the “fields covered by Union law”, and that the High Court would not be ensuring “effective legal protection” if it were not within its powers to make a reference to the ECJ of issues concerning the scope and effect and legality of the impugned decisions. Equally, it was arguably the obligation of the ECJ to ensure that the law was “observed” and that it would not be able to achieve this end if it lacked jurisdiction over the decisions in question. 22 See, for example, Case C-372/06 Asda Stores Limited v. Commissioners of Customs and Excise [2007] ECR I-11223, ECJ which followed a week long hearing before the VAT Tribunal in London debating the terms of the questions which it was agreed should be referred. 23 See Case 314/85 Firma Foto-Frost v Hauptzollamt Lubeck-Ost [1987] E.C.R. 4199, ECJ at [17]; Case C- 344/04 IATA and European Low Fares Airline Association [2006] ECR I-403, ECJ at [29] and [30]; and R (Telefonica O2 Europe Plc) v Secretary of State for Business Enterprise and Regulatory Reform [2007] EWHC 3018 (Admin), per Mitting J. at [4]. 24 In Targetti (UK) Ltd v. HMRC [2014] UKUT 274 (TCC), Newey J. was invited to make a reference to the ECJ on the issue of the alleged invalidity of an anti-dumping Regulation even though the same Regulation had been the subject of a direct challenge by the manufacturers in Case T-459/07 Hangzhou Duralamp Electronics Co Ltd v. Council [2013] ECLI:EU:T:2013:369, GCEU. After sustained argument, the learned Judge upheld the First-Tier Tribunal’s decision that the contested ADD Regulation was valid. 6

Directive 98/43/EC of the European Parliament and of the Council of 6 July 1998 on the approximation of laws, regulations and administrative provisions of the Member States relating to the advertising and sponsorship of tobacco products.25 But the tobacco industry had chosen two other avenues by which to question the validity of the Tobacco Advertising Directive:

21.1. The first involved seeking a reference from a domestic Court. In Case C-74/99 Imperial Tobacco and others v. Secretary of State for Health and others [2000] ECR I-8599, the ECJ entertained a reference from the English High Court challenging the validity of the same Directive. The ECJ did not ultimately rule on the challenge itself, since by then, the second avenue had borne fruit. 21.2. The second avenue involved persuading a Member State to take up the tobacco industry’s case. The Tobacco Advertising Directive was annulled by the Court in Case C-376/98 Germany v. Parliament and Council [2000] ECR I-2247, on the ground that the Treaty legal base chosen for the measure was inadequate. Germany, as a Member State, had no trouble meeting the standing requirements as a “privileged applicant” before the Union courts.

22. It is also relatively common to find Regulations imposing anti-dumping duties to be the subject of a direct action for annulment by the affected producers and/or exporters in a third country; and for domestic importers to seek to challenge the validity of the Regulation in domestic proceedings in which the imposition anti-dumping duties is the subject of an appeal. 26 In practice, many such references come from a handful of countries, principally Germany, the Netherlands and the United Kingdom.27

D. Obstacles to the pursuit of a direct action for annulment

23. The Lisbon Treaty has brought greater democratic legitimacy to a number of aspects of the European project, such as the express incorporation of general principles of EU law; and a greater role for the European Parliament through the extension of areas covered by the ordinary legislative procedure (under Article 289 TFEU). But as Dr Albertina Albors- Llorens said in an article in the 2012 Cambridge Law Journal:28

“. . . the EU system of governance remains one where neither a clear separation of powers nor a traditional system of checks and balances exists and where the decision-making process still seems excessively complex, lacking transparency and somewhat detached from ordinary citizens. Given these circumstances, the accountability of the Union institutions through the judicial scrutiny of their acts becomes a particularly important issue in EU law.”

25 OJ [1998] L No. 213, p. 9. 26 See Case C-143/14 TMK Europe Ltd v. Hauptzollamt Oder [2015] ECLI:EU:C:2015:236, ECJ which concerned a challenge to Regulation No 2320/97 and the imposition of duties thereunder. That Regulation had already been annulled by the ECJ in so far as it concerned the particular applicants in Case C-76/00 Petrotub et al. v. Commission [2003] ECR I-79, ECJ. The ECJ in TMK ruled that there was nothing which had been disclosed which would affect the validity of the Regulation more generally. 27 These countries unsurprisingly harbour a number of the major ports in the EU carrying international cargo of goods by sea. It is through the customs authorities of such large ports that a significant volume of international trade is cleared. 28 “Remedies against the EU institutions after Lisbon: an era of opportunity?” Albors-Llorens, A., C.L.J. 2012, 71(3), 507-536 at p. 507. 7

24. It is not uncommon to find that key legislative amendments to EU legislation are made in the “trilogue” procedure. The European Parliament will frequently suggest legislative amendments or insertions which have not previously featured in the Commission’s proposals.29 This also means that particular measures will not have had the benefit of any consultation process or any impact assessment. The ECJ has ruled that the co-legislative procedure does not require amendments introduced in this way to go back to the EU Commission for a formal impact assessment.30 But equally, the presence of a detailed analysis of the likely consequences of a legislative measure on a commercial sector will provide a degree of reassurance for a Court considering the proportionality of that measure.31

25. There are other features of the EU legislative procedure which suggest that judicial scrutiny of legislative measures is an important constitutional check and balance. For example, the EU legislature is increasingly empowering the EU Commission to adopt delegated acts under Article 290 TFEU. These are “non-legislative” acts, but they are of general application. Recent examples include the adoption of Regulatory Technical Standards for financial institutions as part of the CRD-IV package of measures. Where these supplement or amend existing legislation, they are meant to relate only to “non- essential elements” of a measure. It is easy to understand a concern that increasing recourse to delegated law-making by the Commission is not consistent with a move towards a greater degree of democratic accountability for EU measures.32

26. While judicial scrutiny of EU legislative measures is therefore more important than ever, numerous obstacles are in fact put in the way of an applicant seeking to challenge EU legislation. The obstacles to effective judicial scrutiny are significant. They risk representing a real impediment to effective practical justice in the EU legal system.

(1) Standing

27. The most widely-recognised obstacle to effective judicial scrutiny of EU legislation is to be found in the restrictive rules on standing for private litigants. These have been closely circumscribed since Case 25/62 Plaumann v. Commission [1963] ECR 95, ECJ. The lack of legal interest in bringing proceedings constitutes an absolute bar to an action for annulment, which the EU Courts may raise of their own motion. 33 The well-known attempt by Advocate General Jacobs to liberalise the rules on standing through a broader construction of Article 263 TFEU was rejected by the Court in Case C-50/00 P Unión de Pequeños Agricultores v Council [2002] E.C.R. I-6677, ECJ (‘UPA’) and Case C-263/02 P Commission v. Jégo-Quéré & Cie SA [2004] ECR I-3425, ECJ (‘Jégo-Quéré’).

29 Recent examples include Directive 2014/40/EU of the European Parliament and of the Council of 3 April 2014 on the approximation of the laws, regulations and administrative provisions of the Member States concerning the manufacture, presentation and sale of tobacco and related products and repealing Directive 2001/37/EC, OJ [2014] L No 127, 29.4.2014, p. 1; and the introduction of a cap on bankers’ variable remuneration under Directive 2013/36/EU of the European Parliament and of the Council of 26 June 2013 on access to the activity of credit institutions and the prudential supervision of credit institutions and investment firms, amending Directive 2002/87/EC and repealing Directives 2006/48/EC and 2006/49/EC,OJ [2013] L No 176, 27.6.2013, p. 338. 30 See Case C-343/09 Afton Chemical [2010] ECR I-7027, ECJ at [30]. 31 See Case C-58/08 Vodafone [2010] ECR I-4999, ECJ at [55]. 32 See Case C-270/12 United Kingdom v. Council [2014] ECLI:EU:C:2014:18 and [2013] ECL:EU:C:2013:562, per Advocate General Jääskinen at [58]. 33 See Case T-310/00 MCI v Commission [2004] ECR II-3253, GCEU at [45]. 8

28. In the UPA case, the applicants sought to challenge a Regulation which reformed the common organisation of the market for olive oil. The UPA was a trade association. The ECJ found at [32] to [35] that the Regulation was a general measure of legislation. It could not be challenged by the UPA under Article 263 TFEU, since the measure was not of direct and individual concern to it. The test that had to be met was whether “the measure in question affects specific natural or legal persons by reason of certain attributes peculiar to them, or by reason of a factual situation which differentiates them from all other persons and distinguishes them individually in the same way as the addressee [of a decision].”34 These criteria were not met by UPA. The application for annulment of the Regulation was therefore inadmissible. This was the case even though, as was submitted to be the position, the UPA had no possibility of seeking to challenge the validity of the Regulation indirectly under Spanish law. The ECJ essentially ruled that it was for the Member States to establish a system of legal remedies and procedures which ensured respect for the right to effective judicial protection.35 The Court made clear that if the Member States did not like the existing rules on standing, they should amend the Treaties to substitute a different approach.

29. The ECJ in Jégo-Quéré robustly rejected an attempt to broaden the restrictions on standing. In that case, the applicant fishing company sought to challenge an EU Regulation governing minimum mesh sizes for fishing nets. It claimed that it was unable to challenge the Regulation in France, since France was not obliged to adopt any implementing measures. The Regulation was directly applicable. The GCEU recognised that the applicant would be denied any potential remedy if the application for annulment were ruled inadmissible and allowed the challenge to be heard. On appeal, the ECJ restored the status quo ante. It ruled at [33] that even if it were established that the relevant domestic procedure would not permit a reference to be made addressing the validity of the Regulation, the ECJ could not widen the rules on standing to make up for that deficiency. It would be for national law to recognise the ability of an affected party to challenge the Regulation, if necessary by taking a decision or adopting a measure which would provide a target for a domestic challenge.36

30. The legislative changes made to Article 263 TFEU by the Lisbon Treaty prompted litigants to contend that the Member States had implicitly sanctioned a broader approach to standing in relation to general legislative measures. In Case C-583/11 P Inuit Tapiriit Kanatami v. European Parliament and Council [2013] ECLI:EU:C:2013:625 (‘Inuit (1)’), the applicant sought to challenge the validity of a Regulation imposing marketing restrictions on seal products. The applicant contended that the broadening of the wording of Article 263 TFEU to permit challenges to regulatory acts by persons who were directly (but not individually) concerned enabled challenges to be brought to general legislative measures by private litigants. The ECJ disagreed. At [55] and [56], the Court re-stated the test of direct and individual concern as a pre-condition for standing in respect of a challenge to EU acts in general. That encompassed any measure which produced binding legal effects. At [57], the ECJ noted that the test for standing had been liberalised in respect of regulatory acts. But it declined to construe “regulatory acts” to include legislative acts. At [59] and [60], relying on the travaux préparatoires for the Treaty

34 See [36] of the judgment in UPA. 35 See [40] and [41] of the judgment. 36 See [35] of the Court’s judgment in Jégo-Quéré. 9

amendments, the ECJ held that the less arduous standing requirements only applied to acts of general application other than legislative acts.

31. The Court also rejected (at [71]) the suggestion that there had been any change to the established Plaumann criteria governing locus standi under Article 263 TFEU. Since the restrictions on marketing seal products were laid down in a general legislative measure which applied indiscriminately, the applicant did not satisfy the standing requirements. The application was ruled inadmissible. The Court found that this result did not infringe Article 47 CFR or the principles found under Article 6 ECHR. The suggested remedy was for the applicant to challenge the Regulation in domestic proceedings and seek a reference under Article 267 TFEU.37 The Court acknowledged (at [103]) that nothing in the TFEU or in Article 19 TEU required a Member State to create new remedies to ensure the observance of EU law, other than those already laid down in national law. However, it added at [104] the following caveat:

“The position would be otherwise only if the structure of the domestic legal system concerned were such that there was no remedy making it possible, even indirectly, to ensure respect for the rights which individuals derive from European Union law, or again if the sole means of access to a court was available to parties who were compelled to act unlawfully.”

32. Undeterred by this response, the Inuit applicants subsequently brought both a direct challenge to Commission implementing provisions and also sought in that challenge to raise the invalidity of the underlying Regulation by invoking Article 277 TFEU. In Case T-526/10 Inuit Tapiriit Kanatami v. Commission [2013] ECLI:EU:T:2013:215 (‘Inuit (2)’), the same applicants challenged the Commission implementing Regulation which gave effect to the underlying basic regulation. The GCEU chose not to rule formally on the question of admissibility. It chose instead to reject the challenge to the EU measures as being unfounded in substance. The GCEU’s judgment is under appeal to the ECJ. In her opinion delivered on 19 March 2015, Advocate General Kokott has described the decision of the GCEU not to address the issue of admissibility as ‘remarkable.’ Advocate General Kokott chose to address the admissibility issue. She concluded that the applicants were directly concerned by the implementing legislation. That legislation did not itself require any implementing measures. It could be classified as a “regulatory act” which meant the new post-Lisbon test for standing was met.

33. Advocate General Kokott did not cite any post-Lisbon case law to support her analysis. But the broader approach to standing requirements in the context of regulatory acts can be seen in the judgment of the GCEU in Case T-262/10 Microban International Ltd v. Commission [2011] ECR II-7697, GCEU. The applicant challenged a Decision adopted by the Commission by which it declined to include the anti-bacterial agent triclosan in a ‘positive’ list of additives which were permitted to be used in the manufacture of plastics intended to come into contact with foodstuffs. The GCEU found (at [22]) that the contested Decision was adopted by the Commission in exercise of its implementing powers under the legislative regime. It was not an exercise of its legislative powers. Accordingly the applicant needed only to show that the contested decision was of direct concern to it. The GCEU rehearsed the test for direct concern at [27] as requiring:

37 See [89] to [107] of the Inuit (1) judgment. 10

“. . . firstly, the contested Community measure must directly affect the legal situation of the individual and, secondly, it must leave no discretion to its addressees, who are entrusted with the task of implementing it, such implementation being purely automatic and resulting from Community rules without the application of other intermediate rules.”

34. The Commission Decision effectively prohibited the use of triclosan in plastic packaging for foodstuffs. Since the applicant as a business marketed products with anti-bacterial properties which would be prohibited, it met the test for direct concern. This test was also applied to the meaning of “directly concerned” in the fourth paragraph of Article 263 TFEU, as introduced by the Lisbon Treaty. The GCEU considered it was appropriate to apply the same test as that applied for the purposes of Article 263(2) TFEU, since the Treaty amendment had been aimed at opening up the conditions for bringing direct actions.38

35. The liberalised rules on standing are, unfortunately, not likely to be of much assistance to CMC or BTL in relation to the Chocolate Coins Directive. The Directive is a legislative measure. The Plaumann criteria for standing will continue to apply. Any challenge to the Directive would be ruled inadmissible. In the challenge to the Tobacco Advertising Directive in Joined Cases T-172/98 and T-175/98 to T-177/98 Salamander AG v. Parliament and Council [2000] ECR II-2487, the GCEU held at [54]:

“It must be recalled here that a directive cannot of itself impose obligations on an individual and may therefore not be relied on as such against him (Marshall, paragraph 48, Case 80/86 Kolpinghuis Nijmegen [1987] ECR 3969, paragraph 9, Faccini Dori, paragraph 25, and Case C-192/94 El Corte Inglés v Blázquez Rivero [1996] ECR I-1281, paragraph 15). It follows that a directive which, as in the present case, requires the Member States to impose obligations on economic operators is not of itself, before the adoption of the national transposition measures and independently of them, such as to affect directly the legal situation of those economic operators within the meaning of the fourth paragraph of Article 173 of the Treaty.”

36. What about the ADD Regulation? That too is a legislative act, adopted by the Council pursuant to the Basic ADD Regulation.39 But here CMC at least may have more luck in bringing an action for annulment. Certain categories of private litigants have standing to challenge an anti-dumping Regulation directly before the GCEU by way of an action for annulment. Measures imposing anti-dumping duties may, without losing their legislative nature, be of individual concern to traders who prove the existence of certain attributes which are peculiar to them and which distinguish them from all other traders.40 These include exporters and the complainants in any anti-dumping proceeding. They also include “related importers”, that is, importers who have a relevant connection with an exporter. In Case T-598/97 British Shoe Corporation Footwear Supplies Ltd v. Council [2002] ECR II-1155, the GCEU at [45] recognised that manufacturers and exporters of products upon which ADD was imposed which had been involved in the investigation

38 See [32] of the judgment of the GCEU. 39 Council Regulation (EC) No. 1225/2009 of 30 November 2009 on protection against dumped imports from countries not members of the European Community, OJ [2009] L No 343, 22.12.2009, p. 51. 40 See Case 25/62 Plaumann v. Commission [1963] E.C.R. 95, ECJ at p. 107; Case C-358/89 Extramet Industrie v. Council [1991] E.C.R. I-2501, ECJ at [13]; Case T-597/97 Euromin v. Council [2000] E.C.R. II-2410, GCEU at [44]; Case C-239/99 Nachi Europe GmbH v. Hauptzollamt Krefeld [2001] E.C.R. I-1197, ECJ at [21]; British Shoe [2002] ECR II-1155, GCEU at [44]. 11

would having standing to challenge a Regulation imposing definitive ADD. In addition, at [47], the GCEU held that:

“The Court of Justice has also held that importers associated with exporters in non- member countries on whose products anti-dumping duties are imposed may challenge the regulations imposing such duties, particularly where the export price has been calculated on the basis of their selling prices on the Community market.”41

37. Applying those principles to the strained hypothetical given above, CMC would clearly have standing to challenge the ADD Regulation. BTL is not a related importer. So it could not bring an action for annulment. Instead, it would have to seek a reference for a preliminary ruling in the course of a statutory appeal before the First-Tier Tribunal. It would be obliged to appeal against the assessment to dumping duty and then invite the Tribunal to make a reference if it wished to challenge the imposition of anti-dumping duty on products which it imports into the UK.42

(2) Failure to challenge in time

38. There are strict time limits for bringing an action for annulment. Time limits for the application for annulment run from two months following from the publication of the measure, its notification to the plaintiff or from the date of knowledge if the measure is not notified: Article 263(6) TFEU. The Rules of Procedure of the Court of Justice, under Article 81(1), state that time begins to run in relation to challenges against measures that have been published from the end of the fourteenth day after the publication in the Journal. Article 101(1) of the GCEU’s Rules of Procedure is to like effect. In addition, Article 102(2) of the GCEU’s Rules of Procedure grants an additional 10 days to file a direct action against an EU measure, on account of distance. Any measure which is not challenged within these time limits will become definitive against any individual who would have had standing to challenge it. That means it cannot then be challenged by that party in domestic proceedings either.43

(3) Other objections to admissibility

39. Another impediment to securing an effective remedy in a direct action is the litany of admissibility objections that are routinely raised by the EU Institutions. In Case T-496/11 United Kingdom v. ECB [2015] ECLI:EU:T:2015:133, GCEU, the target of the challenge was a statement of a “location policy” which purported to require certain central counterparties (‘CCPs’) with daily transactions in high value of Euros to relocate to the Eurozone. The European Central Bank (‘ECB’) argued simultaneously that the challenge was both: (a) inadmissible because no formal, binding decision had in fact been taken; and (b) inadmissible because the decision merely re-stated a prior location policy which had not been the subject of any challenge. Both arguments were rejected by the GCEU:

41 The GCEU referred to a judgment of the ECJ in Case 277/85 Inc v. Council [1988] E.C.R. 5731, where the ECJ at [8] held that “importers associated with exporters may challenge a regulation imposing an anti- dumping duty, particularly where, as in the present case, the export price has been calculated on the basis of their selling prices on the Community market.” 42 See, for example, the reference made by Lightman J in Ikea Wholesale v. HMRC [2004] EWHC 1758 (Ch) which led to the annulment of the Regulation in issue in Case C-351/04 Ikea Wholesale [2007] ECR I-7723, ECJ. 43 Case C-239/99 Nachi Europe GmbH v. Hauptzollamt Krefeld [2001] E.C.R. I-1197, ECJ at [31] to [39]. 12

39.1. As to the first, the Court held (at [31] to [39]) that the location policy was stated in mandatory and unambiguous terms. It was published outside of the ECB, on its website, to the world at large. It was likely to be perceived as setting down a requirement that CCPs should adhere to. It was sufficient that CCPs themselves and the national regulatory authorities in the Euro area Member States might consider that the policy imposed a location requirement for CCPs whose Euro transactions exceeded the daily threshold. 39.2. As for the second argument, the GCEU recognised at [59] that an action for the annulment of a decision which merely confirms a previous decision not contested within the time-limit for bringing proceedings is inadmissible. A decision is a mere confirmation of an earlier decision where it contains no new factors as compared with the earlier measure and is not preceded by any re-examination of the situation of the person to whom the earlier measure was addressed (see [60]). Nonetheless, by analogy with challenges to an amended Regulation (which are admissible even if no challenge is brought against the earlier Regulation), a challenge to a re-statement of a location policy was admissible provided that the policy had been amended. Here, the re-statement contained new features which meant it was not merely confirmatory of the previous statements of policy.44

40. As well as contending that a challenge is too early and/or too late, the EU institutions may well challenge the admissibility of a direct action on the basis that a subsequent legislative act (if it is not challenged) deprives the challenge to the earlier measure of any utility. This plea of inadmissibility was raised in Case T-45/06 Reliance Industries v. Commission and Council [2008] ECR II-2399, GCEU. Reliance, an Indian company manufacturing PET, a form of plastic, sought to challenge the continued imposition of anti-dumping duty on imports of PET originating inter alia in India. The essential thrust of the challenge was that notices of initiation of a “sunset” review of the ADD measures in place had been issued a day too late, so that the underlying ADD Regulation had by then expired and could not lawfully be maintained in effect until the review was concluded. By the time of the hearing, a replacement ADD Regulation had been promulgated by the Council. The EU Institutions accordingly argued that the application for annulment of the notices of initiation lacked utility. The GCEU acknowledged at [35] and [36] that the applicant’s interest in the proceedings had to continue through to judgment, otherwise the judgment would bring no benefit. So if a supervening event caused the applicant to lose that interest in the outcome, the application would be ruled to be inadmissible. On the facts, the Court found the applicant maintained an interest in the proceedings, since there remained a window during which the legality of the notices of initiation would produce tangible legal effects on whether anti-dumping duties could be charged.

41. More prosaically, the EU institutions may object to the nature and style of a written pleading and seek to have the application rejected on that basis. It is, fortunately, rare for such pleas of inadmissibility to succeed. Excessively lengthy written pleadings that disregard the page limits set by the GCEU and/or ECJ are at risk of receiving a direction from the Court Registry that they be “regularised.” That is, brought down to the length stipulated in the relevant Court’s practice direction.45

44 See [61] and [62] of the Court’s judgment. 45 The practice direction for the General Court is at http://eur- lex.europa.eu/LexUriServ/LexUriServ.do?uri=OJ:L:2012:068:0023:0041:EN:PDF 13

(4) The margin of discretion afforded to the EU legislature

42. Assuming the challenge to the EU measure gets through the door and is ruled admissible, there are considerable hurdles to be overcome on the substantive challenge. In respect of challenges to EU legislation, this is perhaps not entirely surprising. The ECJ as a “constitutional court” for the EU stands in a comparable position to the UK’s Supreme Court in relation to domestic legislation enacted by Parliament. Just as the Supreme Court recognises that the legislature is in a better position than the judiciary to evaluate, balance and determine issues touching upon public policy,46 so the ECJ affords the EU legislature a wide margin of discretion in its response to matters of complex economic or social assessment.47

43. Under Article 5(1) TEU, the EU competences are limited by the principles of proportionality and subsidiarity. The appropriate test for a proportionality challenge to an EU measure is now well settled.48 In short, it must be ascertained whether the means which the EU legislation employs are suitable for the purpose of achieving the desired objective and whether they do not go beyond what is necessary to achieve it. 49 The greater the degree of interference with the rights of individuals and companies, the higher the degree of justification which will be required. 50 Where, as in our hypothetical example, the EU measure imposes limitations on fundamental rights recognised by the CFR, such as Articles 11 (freedom of commercial expression), 16 (right to conduct a business) and 17 (right to property), the proportionality assessment is conducted with greater stringency. 51

44. While the test for intervention by the Court respects the broad discretion that is conferred on the EU legislature, the substantive principle of proportionality requires that acts adopted by EU institutions should not exceed the limits of what is appropriate and necessary in order to attain the legitimate objectives of the legislation in question.52 Where there is a choice between several appropriate measures, recourse must be had to the least onerous. Disadvantages caused must not be disproportionate to the aims pursued. Furthermore, in Case C-310/04 Spain v. Council [2006] ECR I-7285, ECJ at [122] the Court added: “However, even though such judicial review is of limited scope, it requires that the Community institutions which have adopted the act in question must be able to show before the Court that in adopting the act they actually exercised their discretion,

46 R (on the application of Rotherham MBC) v Secretary of State for Business, Innovation and Skills [2015] UKSC 6 per Lord Sumption at [22]-[23]; and R (Sinclair Collis Ltd) v Secretary of State for Health [2011] EWCA Civ 437, CA per Arden LJ at [153]-[155], [181] and Lord Neuberger MR at [203]. 47 There is now a comprehensive account of the principles lying behind proportionality challenges (at least in a domestic context) in Gibraltar Betting & Gaming Association Ltd v Secretary of State for Culture, Media and Sport [2014] EWHC 3236 (Admin), per Green J. 48 It has been set out in Case C-84/94 UK v. Council [1996] ECR I-5755, ECJ at [57]; Case C-426/93 Germany v Council [1995] ECR I-3723, ECJ at [42]; and Case C-293/12 Digital Rights Ireland [2014] ECLI:EU:C:2014:238, ECJ at [46]. 49 See also the judgment of the ECJ in Case C-491/01 R v. Secretary of State for Health, ex p. British American Tobacco [2002] ECR I-11453 at [122]. 50 See Case C-293/12 Digital Rights Ireland (supra) at [47] to [48]. 51 See the Opinion of Advocate General Cruz-Villalón in Case C-293/12 Digital Rights Ireland v Attorney General [Opinion dated 12 December 2013] at [89] and [133]. 52 Case C-310/04 Spain v. Council [2006] ECR I-7285, ECJ at [97]. 14

which presupposes the taking into consideration of all the relevant factors and circumstances of the situation the act was intended to regulate.”53

45. It is nonetheless worth bearing in mind that the EU institutions will be afforded a significant margin of discretion in this area. In Case C-491/01 R v. Secretary of State for Health, ex p. British American Tobacco [2002] ECR I-11453 at [123], the ECJ stated:

“With regard to judicial review of the conditions referred to in the previous paragraph, the Community legislature must be allowed a broad discretion in an area such as that involved in the present case, which entails political, economic and social choices on its part, and in which it is called upon to undertake complex assessments. Consequently, the legality of a measure adopted in that sphere can be affected only if the measure is manifestly inappropriate having regard to the objective which the competent institution is seeking to pursue (see, to that effect, Case C-84/94 United Kingdom v Council [1996] ECR I-5755, paragraph 58; Case C-233/94 Germany v Parliament and Council [1997] ECR I-2405, paragraphs 55 and 56, and Case C-157/96 National Farmers' Union and Others [1998] ECR I-2211, paragraph 61).”

46. Similarly, the Court has made clear that it cannot substitute its assessment of scientific and technical facts for that of the legislature on which the Treaty has placed that task.54

47. In practice, very few challenges to EU legislation on proportionality grounds have succeeded. The fact that the measures in our hypothetical example were not the subject of any impact assessment will not be determinative. In Case C-343/09 Afton Chemical [2010] ECR I-7027, the ECJ at [30] found that the findings of an impact assessment conducted by the Commission did not curtail the co-legislators’ freedom of manoeuvre. The Parliament and Council were accordingly free to legislate to restrict the use of metallic additives in fuel, even if the Commission’s impact assessment did not call for it.

(5) Litigation pitfalls

48. There are further hurdles to clear at the oral hearing of a direct action. The advocates acting for CMC and/or BTL will need to be aware of certain tactical pitfalls which exist in direct actions before the EU Courts which are not frequently encountered in domestic proceedings. First, it is not uncommon to find cases cited by opponents without any forewarning of an intention to rely upon them. The Court will generally expect advocates to be familiar with the Court’s recent case law. Secondly, in certain factually “heavy” cases before the GCEU, the EU institutions are likely to bring their extensive files of papers. They may accordingly cite from their own internal documents in response to questions from the Court. The advocates for an applicant will not have received any disclosure beyond that annexed to the written pleadings. If the point being developed is a significant one, a request for disclosure can be made, albeit any delay to the GCEU’s hearing is unlikely to be viewed favourably. It is more common for the Court to give the parties the opportunity to submit short further written submissions dealing with any points raised which cannot be immediately addressed at the hearing.

53 Thus while there is no formal requirement for the EU legislature to abide by the terms of an impact assessment conducted by the Commission (see Case C-343/09 Afton Chemical [2010] ECR I-7027, ECJ at [30]), that does not mean that relevant findings contained in an impact assessment can simply be ignored without good reason. See [34]. 54 Case C-343/09 Afton Chemical (supra) at [28]. 15

(6) Limited nature of declaratory relief

49. CMC and BTL will also need to be aware that any annulment of the ADD Regulation is likely to be restricted to an annulment of the Regulation in so far as it affects the individual applicant only. 55 Where that is CMC alone (since only CMC would have standing to challenge the Regulation), the anti-dumping duties will be maintained in respect of other exporters of chocolate buttons who have not themselves challenged the measure. The ADD Regulation will continue to be binding and definitive against those interested persons who have not brought a challenge to it.56

50. The EU Courts also have the power to make an order suspending the effect of the judgment to enable replacement legislation to be promulgated by the EU legislature.57 This is derived from the ability conferred by Article 264(2) TFEU for the Court to state which parts of an act declared to be void should be considered to be definitive. It may grant a temporal limitation on its judgment, so as to make the effects of its judgment prospective in effect only, thus departing from the usual position whereby judgments of the Court operate ex tunc and ex nunc.58 In the recent judgment in Case T-496/11 United Kingdom v. ECB (supra), the GCEU even recommended to the institutions how they might adopt a legislative procedure to cure the defect in the powers of the ECB which it had found.59

(7) Difficulties in securing interim relief may make the challenge academic

51. From a practical perspective, it is important also to consider the limited availability of interim relief in a direct action. Clearly if CMC considers that the ADD Regulation imperils its very commercial existence, then it will need to consider whether it can have the application of the Regulation suspended while its challenge is considered by the GCEU. Article 278 TFEU empowers the EU Courts to suspend the application of a contested act if it considers the circumstances warrant it. The principal aim of the interim measures procedure is to guarantee the full effectiveness of the definitive judgment of the Court, in order to ensure that there is no lacuna in the legal protection provided by the Court of Justice.60 There is not much point recognising a right to an effective remedy before the GCEU (or CJEU) if the practical consequences of the interim application of the contested measure would preclude the applicant from pursuing the challenge to a final judgment. The Court has exceptionally recognised that if an applicant is highly likely to be driven to insolvency by the immediate application of the contested measures, then interim relief may well be needed to ensure that a judgment of practical value can still be given.61 This may even include the imposition of rather novel conditions, such as the payment of damages “on account”, if the circumstances warrant it. Those circumstances

55 See Case C-247/10 P Zhejiang Aokang Shoes v. Council and Commission (supra) at [39] and in the reasoned order. 56 See, by analogy, the reasoning of the ECJ in Case C-310/97 P Commission v AssiDoman Kraft Products AB [1999] ECR I-5363, ECJ at [53] to [55] and [57] to [61]. 57 See Case C-360/93 Parliament v. Council [1996] ECR I-1195, ECJ at [36], where the Court ruled that the effects of two contested Decisions should be “conserved” even though they had been annulled. 58 See Case 262/88 Barber v. Guardian Royal Exchange [1990] ECR 1889, ECJ at [40] to [45]. 59 See [108] and [109] of the judgment. 60 Case C-7/04 R Akzo Nobel v. Commission [2004] ECR I-8739, President of the ECJ at [36]. 61 Case C-393/96 P (R) Antonissen v. Council [1997] ECR I-441, Order of the President at [6]. 16

would be where the prima facie case appears particularly strong and the urgency of the measures sought is “undeniable”.62

52. Nonetheless, the conditions for suspending the application of a contested measure are strict.63 The conditions for interim measures to be awarded by the GCEU are spelled out in Article 104 of the GCEU’s Rules of Procedure:

52.1. The applicant must be challenging the measure which it wishes to have the Court suspend in proceedings before the General Court; 52.2. It must be made by the party to a case before the General Court and be in relation to that case; 52.3. The written application must set out the circumstances of the case, the reasons for urgency and the pleas of fact and law establishing a prima facie case for interim measures to be granted.

53. The Court has emphasised that the urgency of an application for interim measures must be assessed in relation to the necessity for an order granting interim relief in order to prevent serious and irreparable damage to the party requesting the interim measure. The applicant must therefore adduce adequate evidence that he could not await the outcome of the main proceedings without personally suffering serious and irreparable damage.64 But the Court has also held that damage of a pecuniary nature cannot, other than in exceptional circumstances, be regarded as irreparable since, “as a general rule, pecuniary compensation is capable of restoring the aggrieved person to the situation that obtained before he suffered the damage.”65

54. The application is served on the other side, but the President of the GCEU is permitted by Article 105 of the Rules of Procedure to make an order without waiting for the other side’s response. By Article 107, the order may be made by reasoned order. An applicant might be required to provide a security. The interim measures will only last until final judgment, although the other side may make an application to vary or cancel it, pursuant to Article 108 of the Rules of Procedure.

55. As far as BTL is concerned, the more pressing issue is likely to be the Chocolate Coins Directive. It seems highly unlikely that either CMC or BTL would have standing to challenge the Directive in a direct action. So the question of interim relief would be moot. As for the potential challenge by BTL to the ADD Regulation, it is true that it will be obliged in principle to pay the anti-dumping duty on imports of chocolate coins from China until any substantive challenge is heard. But, depending on the factual circumstances, it may be able to appeal against a decision of the UK customs authorities and raise the issue of validity indirectly in a reference to the ECJ. It may then be able to obtain a hardship ruling so that ultimately no duty is payable until such time as the ECJ has pronounced on the validity of the ADD Regulation. That would represent a more

62 Case C-393/96 P (R) Antonissen v. Council (supra) at [6]. 63 In Case C-21/14 P-R Commission v. Rusal Armenal ZAO [2014] ECLI:EU:C:2014:1749, the Vice President of the Court declined to grant interim relief in respect of a contested Regulation even though the applicant had successfully obtained an order from the GCEU that the Regulation should be annulled. The effect of the GCEU’s judgment was suspended pending an appeal. The applicant could not establish irreparable harm. 64 Case C-213/91 R Albertal SAT Ltda v. Commission [1991] ECR I-5109, Order of the President of the Court at [18]; and Order of the President of the Court in Case C-404/04 P-R Technische Glaswerke Ilmenau v Commission [2005] ECR I-3539, ECJ at [10] and [11]. 65 Case C-213/91 R Albertal SAT Ltda v. Commission (supra) at [24]. 17

sensible course of action than seeking to rely upon the exceptional decision in Case C- 358/89 Extramet Industrie v. Council [1991] E.C.R. I-2501, ECJ in order to establish locus standi. Even if the standing hurdle could be overcome, there is little or no prospect of BTL securing interim relief in respect of the ADD Regulation. Its loss would be financial only.

(8) Difficulties in securing satisfactory awards of damages and costs

56. Finally, if either CMC or BTL were somehow to achieve the annulment of either the ADD Regulation or the Chocolate Coins Directive, the EU Courts would also need to determine any claim for damages that had been brought; and deal with the question of costs. A detailed examination of claims for damages against the EU Institutions is beyond the scope of this paper. But CMC and BTL should certainly be advised that the EU Courts’ approach to the calculation of loss is rather niggardly. An application seeking compensation for damage allegedly caused by an EU institution must state the evidence from which the conduct alleged against the institution may be identified, the reasons why it considers that a causal link exists between that conduct and the damage which it claims to have suffered, and the nature and extent of that damage. A claim for any unspecified form of damages, however, is not sufficiently concrete. Such a claim would be treated as inadmissible. Only specific loss may be claimed and the quantum must usually be fully particularised.66 The Court will, however, occasionally be prepared to hold the EU liable for imminent damage foreseeable with sufficient certainty, even if the damage cannot yet be precisely assessed.67

57. Costs are not found by the EU Courts to be payable at anything approaching commercial rates payable in the UK. In Case T-243/01 DEP Sony Entertainment Europe Ltd v. Commission [2005] ECR II-1107, the GCEU was invited to award costs in favour of Sony following its successful annulment of a customs classification Regulation classifying the Sony PlayStation 2 as a games console. With rounding, Sony claimed €158,000. Since the Commission was only prepared to pay €51,000, the matter went for a costs assessment by the GCEU. According to the GCEU’s Rules of Procedure, recoverable costs are limited to those incurred for the purpose of the proceedings before the GCEU and which were necessary for that purpose. In the absence of Union provisions laying down fee scales, the GCEU identified its task at [22] as being to “make an unfettered assessment of the facts of the case, taking into account the purpose and nature of the proceedings, their significance from the point of view of Community law, as well as the difficulties presented by the case, the amount of work generated by the case for the agents or advisers involved and the financial interest which the parties had in the proceedings.” At [23], the GCEU observed (significantly for that case) it was not obliged to take account of any national scales of lawyers’ fees or any agreement in relation to fees concluded between the party concerned and his agents or advisers. The GCEU reached an “equitable assessment” of the amount of the costs at €66,100. It fixed the number of recoverable hours of work at 250 for the entire proceeding.

E. Obstacles to obtaining a successful remedy on a Reference

66 Case 5/71 Aktien-Zuckerfabrik Schöppenstedt v Council [1971] ECR 975, ECJ at [9]; Case T-64/89 Automec v Commission [1990] ECR II-367, GCEU at [73]; and Joined Cases T-79/96, 260/97 and 117/98 Camar and Tico v. Commission [2000] ECR-II 2193, GCEU at [181]. 67 Joined Cases 56/74 to 60/74 Kampffmeyer and Others v Commission and Council [1976] ECR 711, ECJ at [6]. 18

58. Faced with such impediments to the successful prosecution of a direct action, one could be forgiven for thinking that any litigant would be well advised to challenge any EU legal measure indirectly through the preliminary reference procedure. It is certainly true that it is a tried and tested route for challenging the validity of EU legislation. In Case C-74/99 Imperial Tobacco (supra), the Court entertained a reference from the English High Court challenging the validity of the Tobacco Advertising Directive. The ECJ did not ultimately rule on the challenge itself, since that Directive was annulled by the Court in Case C- 376/98 Germany v. Parliament and Council [2000] ECR I-2247, on the ground that the Treaty legal base chosen for the measure was inadequate. In Case C-491/01 R v. Secretary of State for Health, ex p. British American Tobacco [2002] ECR I-11453, the High Court again referred to the ECJ certain questions, this time concerning the validity of replacement Directive 2001/37/EC. That Directive was based on Articles 95 EC (now Article 114 TFEU) and 133 EC (now Article 207 TFEU). The reference was made in the course of judicial review proceedings in which the Claimants challenged the intention and/or obligation of the UK Government to transpose the Directive into UK law on the basis that the Directive had an invalid Treaty basis. The ECJ in due course rejected that challenge.

59. Compared with the stringent conditions for a direct action, the threshold for a reference is refreshingly uncomplicated. The test for a national court has been expressed by Mitting J in R (Telefonica O2 Europe Plc) v Secretary of State for Business Enterprise and Regulatory Reform [2007] EWHC 3018 (Admin) at [4]:

“The underlying question therefore is the validity or otherwise of the Roaming Regulation. There is no doubt that it has a significant direct and indirect effect on the business activities of the claimants. If satisfied that the challenge to its validity is reasonably arguable or, put negatively, not unfounded, I should refer the issue to the European Court and grant permission for the domestic challenge to the UK regulations.”

60. Indeed, the EU Courts have been willing to entertain references concerning the validity of EU measures even where there is no domestic implementing measure.68 The importance of this facility is all the greater given the stringent conditions that apply to judicial review of EU measures through direct actions. Were the position otherwise, there is a real risk that interested persons with good arguable claims against the validity of EU legislative measures would be left without a remedy. The ECJ confirmed in Opinion 1/2009 (supra) the importance of the preliminary reference procedure in ensuring effective judicial protection of EU rights. It held at [85] that “the tasks attributed to the national courts and to the Court of Justice respectively are indispensable to the preservation of the very nature of the law established by the Treaties.” Similarly, in Opinion 2/13 (supra), the Article 267 TFEU reference procedure was described as the “keystone” in the EU judicial system.

61. Does the reference procedure enable either CMC or BTL to obtain redress where otherwise none might be available? Certainly the prospects of both of CMC and BTL obtaining a review of the validity of the Chocolate Coins Directive are much higher if they can persuade a national court to refer the question of validity to the ECJ. Similarly, BTL may well find that an Article 267 TFEU reference is the only practical means of

68 See generally “Ubi ius, ibi remedium? - Locus standi of private applicants under Article 230(4) EC at a European constitutional crossroads”, José Manuel Cortés Martín, Maastricht J. 2004, 11(3), 233-261. 19

challenging the validity of the ADD Regulation. Nonetheless, here again a number of obstacles or pitfalls lie in store.

(1) Inadmissibility

62. The EU institutions do not seem enamoured of the references which have been made by the Administrative Court challenging indirectly the validity of EU legislative measures. In Case C-343/09 Afton Chemical [2010] ECR I-7027, the High Court referred to the ECJ a series of questions exploring the validity of a Directive which limited the amount of metallic additives in diesel fuel and petrol. The Directive also imposed labelling requirements on the products. The Parliament and the Commission challenged the admissibility of the reference. They noted that the Secretary of State had not contested the making of an order for reference. That submission was probably also assisted by the fact that the UK Government did not then participate in the reference itself. Furthermore, they observed that the sole aim of the national procedure was to procure a declaration that the relevant provision of the Directive was invalid.

63. But the Court rejected the plea of inadmissibility. It held at [14] that the ECJ might only refuse to give a preliminary ruling on a question submitted by a national court where, inter alia, it is quite obvious that the ruling sought by that court on the interpretation or validity of EU law bears no relation to the actual facts of the main action or its purpose or where the problem is hypothetical. The Court observed at [15]-[16] that although the due date for implementation of the Directive had not yet passed, the Secretary of State had indicated his intention to transpose the Directive into domestic law. This was sufficient to establish a lis between the parties at the domestic level.

64. It is not every reference that will be treated so leniently. The ECJ has set its stall against deciding questions of EU law in the abstract.69 This doctrine can be applied with vigour. In Case C-318/00 Bacardi-Martini and another v. Newcastle United F.C. Limited [2003] ECR I-905, the ECJ ruled inadmissible a reference from Gray J in circumstances where it could not understand how the legality of French legislation would be relevant to an English contractual dispute. It declined to accept that there might be an implied contractual term for the parties to comply with French law.

65. Naturally CMC’s and BTL’s challenges are entirely hypothetical. But if they reflected real (and more sensible) facts, it seems unlikely that a reference challenging the validity of the Directive or the ADD Regulation would be rejected as inadmissible.

(2) Failure to have brought a direct action for annulment

66. Another basis for a ruling of inadmissibility has been developed in the case law of the Court. The ECJ has concluded that references are not admissible if they seek to go behind a measure which has become definitive against a party. To do otherwise would constitute an abuse of process.70 The line of case law following Case C-188/92 TWD Textilwerke v. Germany [1994] E.C.R. I-833 establishes that a reference will be ruled inadmissible

69 See Case C-83/91 Meilicke [1992] E.C.R. I-4871, ECJ at [25] to [32]. 70 The Commercial Court has made it clear that such an action is equivalent to an abuse of process in domestic terms. See Coal Authority v HJ Banks Co Ltd [1997] Eu L.R. 610, Commercial Court, per Tuckey J. Although the case went on an appeal to the Court of Appeal and then on a reference to the ECJ, this point was not dealt with. 20

where it represents a collateral attack on a measure which has already become definitive against a party to the reference.71 This is subject to a qualification. This qualification has been applied by the ECJ in Case C-241/95 Accrington Beef [1996] E.C.R. I-6699. The Court (at [15]) found that the TWD principle did not render the reference from the English High Court inadmissible because “it is not obvious that an action by the applicants challenging that regulation under Article [263] of the Treaty would have been admissible.”

67. So the question is whether it is obvious that CMC and/or BTL could have challenged the Directive and the ADD Regulation directly before the General Court? The answer to that is “no”, with one exception. The exception relates to the ability of CMC to challenge the validity of the ADD Regulation. The GCEU would have recognised the standing of CMC to bring a direct action for annulment. Its failure to do so would almost certainly lead to the Commission and/or Council objecting to the admissibility of a subsequent reference. It is for this reason that concerted attempts by exporters of products subject to ADD to challenge the ADD Regulation frequently involve a joint effort by an unrelated importer to secure a coterminous reference to the ECJ under Article 267 TFEU.

68. Challenges to the admissibility of a reference should be considered by the national court or tribunal, since there is no point referring a case that will be ruled inadmissible.72 Further, the national referring court or tribunal has a duty to consider the admissibility of any proposed reference, in the light of the duty of sincere co-operation owed by national courts in this context.73 It is also the course adopted by the domestic UK Courts in considering whether a reference should be made challenging the validity of an anti- dumping Regulation.74 Any attempt by CMC to seek to challenge the ADD Regulation on a reference should not, in principle, get past the filter of the national Court.

(3) The margin of discretion afforded to the EU legislature

69. The same robust warning must be given for those seeking a reference as applies for applicants initiating a direct action. The ECJ affords the EU legislature a healthy margin of discretion in its legislative choices. The success rate for claimants striking down EU legislation under the preliminary reference procedure is not high.

(4) Tactical issues

70. There are certain tactical difficulties for claimants such as CMC or BTL on a reference. First, the written pleadings are filed with the Court simultaneously. There is no provision for the claimant to respond to the written pleadings of the EU institutions once filed. This puts private litigants at a significant disadvantage, especially if the institutions’ written observations annex evidence or documentary material which the claimants have not previously seen. If, for example, BTL is unaware of the underlying scientific basis for the

71 See Case C-188/92 TWD Textilwerke v. Germany [1994] E.C.R. I-833, at [13] to [18]; Case C-178/95 Wiljo v. Belgium [1997] E.C.R. I-585, at [19]; and Case C-239/99 Nachi Europe GmbH v. Hauptzollamt Krefeld [2001] E.C.R. I-1197 at [31] to [39]. 72 See Case 408/95 Eurotunnel v. Sea France [1997] E.C.R. I-6315, ECJ at [20]. 73 See Article 4(3) TEU and the recognition of the separate nature of the EU and domestic procedural rules on the issue of references and direct actions in the judgment of the ECJ in Case C-50/00 P Unión de Pequeños Agricultores v. Council [2003] Q.B. 893, [2002] ECR I-6677, ECJ at [42] to [45]. 74 See Ikea Wholesale v. HMRC [2004] EWHC 1758 (Ch) per Lightman J, overturning a finding of the Tribunal to the contrary. 21

decision to legislate in respect of chocolate coins, it may not have previously seen evidence which the EU institutions have relied upon internally to support their decision. Secondly, it is common for more than one of the EU institutions to intervene in challenges to EU legislation. This means that the “defendants” to the challenge to the legislation are able to spread their submissions over the course of several written pleadings. They may also appear “mob handed” at the oral hearing. This confers a particular advantage now that written observations in references are restricted to twenty pages; and oral submissions are restricted to twenty minutes per party. Institutional defendants can allocate particular issues among themselves.

(5) Limitations in the grant of interim remedies may make the matter moot

71. It is open to each of CMC and BTL to request the national court making a reference to suspend the implementation of the Directive in the relevant national legal system. In Joined Cases C-143/88 and C-92/89 Zuckerfabrik [1991] ECR 415, the ECJ recognised at [18] that “the coherence of the system of interim legal protection” required a national court to be able to order of enforcement of a national administrative measure based on a Union Regulation, in circumstances where the validity of that Regulation was under challenge. The Court in Zuckerfabrik went on to set down the conditions which should be applied by any national court when deciding whether to order interim relief in this way.75 The ECJ considered at [26] that setting the common standards to be applied was necessary to maintain uniformity of approach between the different Member States. The conditions at [23] to [33] were as follows:

71.1. The national court must be persuaded on the basis of the factual and legal circumstances that serious doubts exist about the validity of the EU Regulation. There must be a possibility of the ECJ ruling the legislative measure invalid [23]; 71.2. The relief is interim only. It endures only to the release of the ECJ’s judgment. The national court must refer the question of validity if it has not yet been referred [24]; 71.3. Procedural matters governing the making and determination of the application were for national law [26]. However, the national court was obliged to apply the same test as was found under Article 278 TFEU in respect of applications for interim measures in the course of direct actions. This meant that interim relief should be granted only in the event of urgency, in other words, if it is necessary for them to be adopted and to take effect before the decision on the substance of a case, in order to avoid serious and irreparable damage to the party seeking them [27]-[28]; 71.4. That irreparable damage must be liable to materialise before the ECJ has ruled on the validity of the measure. Purely financial damage was not irreparable. But the national court should determine whether “immediate enforcement of the measure which is the subject of the application for interim relief would be likely to result in irreversible damage to the applicant which could not be made good if the Community act were to be declared invalid”: [29]; 71.5. Nonetheless the national court should also take account of the interest of the Union, namely that such regulations should not be set aside without proper guarantees [30]. This requires it to examine whether the EU measure would be deprived of all effectiveness if not implemented immediately. [31] The national court

75 See also Case C-465/93 Atlanta Fruchthandelsgesellschaft mbH [1995] ECR I-3761, ECJ. 22

might need to require the applicant to provide adequate guarantees, such as the deposit of money or other security if there were a financial risk to the EU. [32]

72. There remains a dispute within UK domestic law as to the extent to which the Zuckerfabrik principles establish an EU law test to be applied for interim relief applications; or whether the UK domestic law principles governing the grant of interim injunctions76 are to be applied instead. Lord Slynn for the majority of their Lordships in R v Secretary of State for Health, ex parte Imperial Tobacco [2001] 1 WLR 127, HL thought it “at the least arguable that, if a Directive is implemented in national law before the prescribed final date, any application for interim relief to suspend the operation of the Directive would be a matter for Community law, and that the position should be the same on an application for interim relief to prevent the Directive being adopted.” He therefore would have referred the question to the ECJ for a further ruling, had it been necessary to do so.

73. The practice seems to have developed in the English courts of considering the issue from the perspective of both the Zuckerfabrik and American Cyanamid principles. In the recent judgment of the Divisional Court in R (OJSC Rosneft) v. HM Treasury [2014] EWHC 4002 (Admin) Beatson LJ and Simon J considered the test under both sets of principles, but declined to grant a stay of the UK implementation of an EU sanctions regime. The Court concentrated on the perceived merits of the challenge. But a significant part of the Court’s reasoning also turned on the recognition that interim relief would cut against the interests of the EU. In particular, a grant of a stay on implementation “would inevitably risk lessening the effectiveness of the EU sanctions, particularly if . . . the cumulative effect which could arise if other Member States adopt interim measures for similar reasons is taken into account.”77

F. Overall conclusion on the merits of a direct action for CMC and BTL

74. How then do matters stand for CMC and BTL in the light of this? The short answer is that CMC would be well advised to seek to bring a direct action to the ADD Regulation. If it waits and tries to join BTL in a challenge via domestic proceedings, it jeopardises the admissibility of the reference. But CMC will be very unlikely to secure any form of interim relief against the imposition of the duties, even if they drastically affect its export markets. BTL, on the other hand, should concentrate on seeking to initiate a proceeding in domestic law and invite the domestic court to make a reference to the ECJ on the validity of the ADD Regulation and the Chocolate Coins Directive. It is, however, unlikely to be able to secure interim relief suspending the application or implementation of the measures in the meantime. The best it might hope for is a “hardship” ruling from HM Revenue & Customs which suspends the duty to pay the ADD until the appeal against the imposition of the duties is finally determined. It can ask for the reference procedure concerning the challenge to the Directive to be expedited, but this procedure is usually reserved for particularly urgent cases. It is easy to see why hypothetical claimants such as CMC and

76 Following American Cyanamid Co v Ethicon Ltd [1975] AC 396, as applied, for example, in R v Secretary of State for Transport, Ex p Factortame Ltd (No 2) [1991] 1 AC 603, HL. 77 See also the rather novel attempt to spike the guns of the Secretary of State for Foreign and Commonwealth Affairs which was rejected in R (National Iranian Tanker Co) v. Secretary of State for Foreign and Commonwealth Affairs [2015] EWHC 282 (Admin), per Green J. The applicant sought interim relief to prevent the Secretary of State either proposing or voting on the listing of the claimant company on an EU sanctions list. 23

BTL would not endorse the suggestion that their putative rights would receive adequate judicial protection.

75. Judged by the ECJ’s own criteria set out above, there is a real risk that direct actions are not compliant with principle of effective judicial protection of EU rights. Writing in the aftermath of the UPA decision, Dr. Albors-Llorens stated that “most actions for annulment continued to be dismissed as inadmissible because of the immovably stringent interpretation of the standing conditions, and challenges to the legality of EU measures continued to be diverted to the preliminary ruling procedure.”78 This remains the case in respect of legislative measures even following the Lisbon Treaty amendments. The majority of private litigants cannot invoke the EU’s system of judicial review in order to challenge secondary EU legislation. Given that the scheme of judicial review more generally could have been amended by the Lisbon Treaty, but was not, we can only assume that this reflects a conscious decision on the part of the Member States and the EU institutions to limit the scope for direct actions challenging the EU legislature’s legislative acts or omissions.

76. There are three major consequences arising from this state of affairs. First, it places a heavy burden on the Article 267 TFEU reference procedure as a “safety valve” for the protection of EU rights. If, as the ECJ has repeatedly stated, the EU scheme as a whole is intended to ensure the complete and full judicial protection of EU rights, this means that the reference procedure is more of a “keystone” in the judicial architecture than ever. It also means that impediments to references raising legitimate questions concerning the validity of EU legislation should be kept to an absolute minimum. In particular, attempts by the EU institutions to question the admissibility of such references (as happened in Afton) should be given short shrift. To accede to any suggestion that legitimate references raising questions about the invalidity of EU legislation should be ruled inadmissible (on the basis that it is a challenge to EU legislation that is not implemented domestically) would leave private litigants with no judicial remedy at all against EU Regulations that are not subject to any implementing measures. It would render a raft of EU legislation immune from judicial review of any kind. It would also only aggravate deficiencies that are already present in the system as it stands. In particular, as Peers and Costa have argued,79 by reference to the Opinion of Advocate General Jacobs in the UPA case, proceedings under Article 267 TFEU are not a complete substitute for the direct actions, since interim relief cannot be given against directly applicable Regulations; and relief against national implementation can take place only on a Member State by Member State basis.

77. Secondly, while the margin of discretion afforded to the EU legislature is understandable (and broadly accords with an equivalent respect given by our domestic courts to the Parliamentary process), the proper rationale for that margin of discretion must be understood. The margin is afforded because the system of democratic accountability means that difficult decisions in complex areas of social and economic management are a matter for the legislature. But this places an onus on the EU legislature to take all relevant matters into account when legislating in a way which significantly impacts on the rights of businesses and private citizens.

78 “Remedies against the EU institutions after Lisbon: an era of opportunity?” Albors-Llorens, A, op cit note 28 at p. 515-516. 79 “Judicial review of EU acts after the Treaty of Lisbon”, Peers S. and Costa M., op cit note 7 at p. 101. 24

78. In circumstances where there is no legal requirement for an impact assessment to be carried out; or for interested parties to be consulted; and where significant amendments to Commission proposals are routinely taking place in the trilogue procedure, it remains critically important for the Court not to give too wide an ambit to the margin of discretion. It is respectfully suggested that the EU Courts should be mindful of the guidance from the EU’s Inter-Institutional Agreement on better law making at [25] to [30].80 Those provisions recognise the importance of: (a) the use of impact assessments; (b) the need to ensure that the EU Institutions take due account of the administrative and financial implications of their legislation; and (c) the need to take into account the results of any public consultations. Furthermore, paragraph 30 of that guidance also recognises the desirability of an impact assessment if a substantive amendment of significance is proposed during the course of the Co-Decision procedure.

79. It is also important to bear in mind the degree of democratic accountability to which the EU institutions are subject. In the UK legal system, the electorate always has the opportunity to “vote them out” if it does not like a particular suite of legislative measures adopted by Parliament during a given parliamentary term. The electorate can also makes its dissatisfaction known directly to its Members of Parliament. The EU legislative system is more complicated and more opaque. There is less visibility to the legislature procedures, particularly where negotiations in trilogue procedures take place between the Council, the Parliament and the Commission and lead to substantial legislative amendments.

80. Thirdly and finally, the EU legislature, in keeping with most other Western democracies, must grapple with the tension between giving effect to the democratic will of elected bodies; and protecting the fundamental rights of individuals. In one sense, judicial review of legislation has an inherently anti-democratic streak. Why should the rights of one litigant or class of litigants be given the sole focus and attention when considering the effects of a legislative measure? A Court (national or EU) does not have before it the numerous other affected interests whose rights the legislature more broadly has been obliged to take into account when making legislation. There is always a risk that the Court will look solely at the player carrying the ball for a given team, rather than the interactions of the two sides as a whole.

81. But against this must be weighed the fact that legislation is capable of having a significant impact on the fundamental rights of individuals and businesses. The essence of fundamental rights’ protection is that even democratically supported legislative measures may need to be modified or struck down in the light of their significant impact on certain rights. Those rights will be ones which society as a whole has judged to be worthy of special protection. The ECJ has rightly recognised that where there is a significant degree of intrusion with fundamental rights, a higher degree of scrutiny may be required. 81 Furthermore, Article 6(1) TEU now provides that the CFR has the “same legal value as the Treaties.” It is true that the second sub-paragraph of Article 6(1) makes clear that the provisions of the CFR shall not, however, “extend in any way the competences of the Union as defined in the Treaties.”82 But the express legal effect given to the Charter and

80 OJ [2003] C No 321, 31.12.2003, p. 1. 81 In cases such as Digital Rights Ireland and Vodafone referred to above. 82 Article 51(2) of the Charter similarly confirms that it does not extend the “field of application of Union law beyond the powers of the Union or establish any new power or task for the Union, or modify powers and tasks as defined in the Treaties.” The point is re-emphasised in the “Declaration Concerning the Charter of 25

the recognition given to the general principles of law is of practical significance. First, the provisions give a clear and direct route to EU human rights principles, without the need for citation of the ECJ’s case law in support. Secondly, there is a more solid and legitimate legal basis for invoking such rights.83 Thirdly, all of the rights set out in the Charter are afforded equivalent constitutional status, regardless of their provenance or nature. Finally, the Lisbon Treaty (building on the Treaty of Nice) has expressly endorsed the development of the Court’s case law. It has removed the criticism that the development lacks democratic legitimacy (at least from the viewpoint of EU law).

82. The way is therefore clear for the ECJ to discharge the functions of a true constitutional Court. It can adjudicate upon the validity of EU legislation by reference to clearly established principles. But in order for it to do so, some of the impediments to challenges to EU legislation surely need to be removed. Otherwise what has been described as the “symbiotic relationship” 84 between rights and remedies will be undermined, to the detriment of the democratic legitimacy of the Union.

Fundamental Rights of the European Union” attached to the Lisbon Treaty. The Declaration states: “The Charter of Fundamental Rights of the European Union, which has legally binding force, confirms the fundamental rights guaranteed by the European Convention for the Protection of Human Rights and Fundamental Freedoms and as they result from the constitutional traditions common to the Member States. The Charter does not extend the field of application of Union law beyond the powers of the Union or establish any new power or task for the Union, or modify powers and tasks as defined by the Treaties.” 83 The contents of the rights themselves are, for the most part, unexceptionable and derived from pre-existing constitutional norms. With the exception perhaps of some of the solidarity provisions, the core rights are not dissimilar from those which would be derived from the “thought experiment” of the “original position” advocated by John Rawls in A Theory of Justice, 1971. 84 See “The relationship between rights and remedies in EC law: in search of the missing link,” Thomas Eilmansberger, C.M.L. Rev. 2004, 41(5), 1199-1246 at p. 1237. 26