Sources of EU Law

Treaties

The primary sources of law are the Treaties – the TEU and TFEU. Each in turn has been negotiated between the member states through an intergovernmental conference (IGC). The latest IGC led to the Lisbon Treaty, which in turn provided for a quite radical rewriting and reordering of the existing treaties. This reminds us that the EU is ultimately an association of sovereign states, collaborating for specific purposes. Of course these purposes are now so extensive that it is easy to think that the EU has general competence to deal with all aspects of law and policy. This is, however, not the case. The EU has only the competences conferred on it by the Treaties. This is laid down in Art 5 TEU

1. The limits of Union competences are governed by the principle of conferral. The use of Union competences is governed by the principles of subsidiarity and proportionality.

2. Under the principle of conferral, the Union shall act only within the limits of the competences conferred upon it by the Member States in the Treaties to attain the objectives set out therein. Competences not conferred upon the Union in the Treaties remain with the Member States.

3. Under the principle of subsidiarity, in areas which do not fall within its exclusive competence, the Union shall act only if and in so far as the objectives of the proposed action cannot be sufficiently achieved by the Member States, either at central level or at regional and local level, but can rather, by reason of the scale or effects of the proposed action, be better achieved at Union level.

The institutions of the Union shall apply the principle of subsidiarity as laid down in the Protocol on the application of the principles of subsidiarity and proportionality. National Parliaments ensure compliance with the principle of subsidiarity in accordance with the procedure set out in that Protocol.

4. Under the principle of proportionality, the content and form of Union action shall not exceed what is necessary to achieve the objectives of the Treaties.

The institutions of the Union shall apply the principle of proportionality as laid down in the Protocol on the application of the principles of subsidiarity and proportionality.

Art 4 TEU makes clear that competences not conferred on the EU remain with the member states. It is not always the case that the principles set out in Art 5 are fully respected in practice. One complaint is that the EU has over legislated and over-regulated; in other words the relevant institutions have not had sufficient regard to subsidiarity and proportionality. This is one reason why the Protocol (Protocol No2) referred to above was introduced. It is also one motivation behind the attempt by the UK government to open a debate on the repatriation of powers.

The TFEU sets out the forms of competence, and defines the areas of competence. Art 2 TFEU deals, inter alia, with exclusive, shared and supplementary competence:

1. When the Treaties confer on the Union exclusive competence in a specific area, only the Union may legislate and adopt legally binding acts, the Member States being able to do so themselves only if so empowered by the Union or for the implementation of Union acts.

2. When the Treaties confer on the Union a competence shared with the Member States in a specific area, the Union and the Member States may legislate and adopt legally binding acts in that area. The Member States shall exercise their competence to the extent that the Union has not exercised its competence. The Member States shall again exercise their competence to the extent that the Union has decided to cease exercising its competence. …

5. In certain areas and under the conditions laid down in the Treaties, the Union shall have competence to carry out actions to support, coordinate or supplement the actions of the Member States, without thereby superseding their competence in these areas.

Legally binding acts of the Union adopted on the basis of the provisions of the Treaties relating to these areas shall not entail harmonisation of Member States' laws or regulations.

There is a short list of areas where the EU has exclusive competence, set out in Art 3 TFEU:

The Union shall have exclusive competence in the following areas:

(a) customs union;

(b) the establishing of the competition rules necessary for the functioning of the internal market;

(d) the conservation of marine biological resources under the common fisheries policy;

(e) common commercial policy.

There is also a similar short list of areas of supplementary competence, set out in Art 6 TFEU:

(a) protection and improvement of human health; (b) industry;

(d) tourism;

(e) education, vocational training, youth and sport;

(f) civil protection;

(g) administrative cooperation.

While all other relevant areas are therefore areas of shared competence, it must be recalled that this does not relate to all areas, but merely those within the scope of the treaties. The indicative list in Art 4 TFEU of the principal such areas gives a good idea of the range covered:

(a) internal market;

(b) social policy, for the aspects defined in this Treaty;

(d) agriculture and fisheries, excluding the conservation of marine biological resources;

(e) environment;

(f) consumer protection;

(g) transport;

(h) trans-European networks;

(i) energy;

(j) area of freedom, security and justice;

(k) common safety concerns in public health matters, for the aspects defined in this Treaty.

Art 4 also defines two special areas:

In the areas of research, technological development and space, the Union shall have competence to carry out activities, in particular to define and implement programmes; however, the exercise of that competence shall not result in Member States being prevented from exercising theirs.

In the areas of development cooperation and humanitarian aid, the Union shall have competence to carry out activities and conduct a common policy; however, the exercise of that competence shall not result in Member States being prevented from exercising theirs.

It is also necessary to look at the specific treaty provisions regulating a particular area. These will specify both the extent of the relevant competence and the means by which it can be exercised. If these are not respected an application may be made to the ECJ for annulment under Art 263 TFEU.

Acts of the Institutions

While the Treaties delimit the scope of EU competence, even the more detailed chapters of the TFEU can only set out the broad outlines. Provision is therefore specifically made for five types of ‘act’ by the EU institutions. These are intended to allow the necessary detailed provisions to be incorporated. The ECJ has also treated instruments as acts if they are intended to have legal effect, even if they do not meet the description given. The ‘official’ acts are described in Art 288 TFEU:

To exercise the Union's competences, the institutions shall adopt regulations, directives, decisions, recommendations and opinions.

A regulation shall have general application. It shall be binding in its entirety and directly applicable in all Member States.

A directive shall be binding, as to the result to be achieved, upon each Member State to which it is addressed, but shall leave to the national authorities the choice of form and methods.

A decision shall be binding in its entirety. A decision which specifies those to whom it is addressed shall be binding only on them.

Recommendations and opinions shall have no binding force.

The treaties can be loosely compared to primary legislation in the national context. This is supplemented by detailed secondary legislation, made within specific areas and by defined procedures. The same applies at EU level. Regulations and Directives represent this secondary legislation. They are quite different in their intended scope.

Regulations are intended to state legal rules which apply throughout the EU, as the rules made at EU level are intended to directly govern a particular area. For example, in the field of road transport, as vehicles and drivers can readily cross frontiers, it was decided at an early stage to lay down a single set of rules regulating maximum driving periods and also minimum rest periods. These rules directly applied to drivers and vehicle operators. There was also a single system of recording duty, using a device called a tachograph. National regulators carried out inspections, but contraventions are prosecuted as a breach of the relevant regulation. National legislation deals with the level of penalty and procedural issues.

Directives have a different function. There are some areas where harmonisation or approximation of the law is desirable, but it is not practicable to do so by a regulation. This is often because these are areas where the member states already have their own legal rules, and the harmonisation affects only one element. One example is company law. All the original EU states developed company law in the nineteenth century. While the underlying objective was the same – to create a business entity which had its own identity and legal personality, independent of the investors and entrepreneurs involved – the detail varied considerably. It was felt that some aspects should be harmonised in the interests of transparency, for example the minimum capital requirement for a public company (plc); this would mean that a business dealing with a public company anywhere in the EU would know that it had a minimum share capital in cash or assets. The best way of doing this is to set the objective, and then leave member states to work out whether, and if so, how, they need to modify existing legislation. That is why Art 288 defines Directives as it does. This also explains why most directives provide for a fairly lengthy implementation period; this is to give member states time to draft and enact the necessary measures. In theory at least, once it has been implemented, the directive will melt into the background. Those affected are expected to rely on the national implementing legislation as the source of the legal rights and liabilities. However, it is often not as simple as that. Unless the implementing legislation is simply a word for word adoption of the directive there can be arguments over whether the directive has been faithfully transposed.

Decisions may be purely executive, administrative (i.e. taken in accordance with established principles of consultation etc.), quasi-judicial (e.g. Commission decisions on competition infringements) or judicial (i.e. decisions of the Staff Tribunal, General Court or ECJ). Strictly they produce legal effects for those directly affected, but they may have a wider impact – a court decision, for example, may be seen as a precedent. Non-judicial decisions are open to an action for annulment under Art 263 TFEU, while judicial decisions may be appealed.

We do not need to consider recommendations and opinions to any extent, as they do not give rise to legal effects – although they may be important in policy terms.

Supremacy

EU law is supreme over national law. This was laid down by the Court in Case 6/64 Costa v ENEL. It was however a controversial ruling, and it took some time before the national authorities, in particular the German Constitutional Court, accepted it. Indeed, the German court still maintains that its ultimate source of law remains the German Basic Law, and EU legal supremacy operates in this context. In the UK, this principle was given effect to by s 2 of the European Communities Act 1972. There has been considerable debate over the impact of EU legal supremacy on the constitutional doctrine of parliamentary sovereignty. You will cover this in your Public Law module.