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The relationship between community and national law was established in one the earliest cases to come before the European court of justice. In Costa v Enel , an action was brought in Italy against the nationalized national electricity board (ENEL) over a bill of 1950 lire which then amounted to less than £1. Mr. Costa claimed that he was not obliged to pay the bill as the nationalization legislation had infringed Italian and EC law. A reference was made by the Italian court under Art. 234 EC. The Italian government argued that such a reference was absolutely admissible because the national court had to apply national law. The ECJ rejected and stated
“The EEC treaty has created its own legal system which became an integral part of the legal system of the member states and which their courts are bound to apply”.
Therefore, where there is a conflict between community law and national law. It is community law which is to prevail. If it was otherwise “the obligations under the treaty could be called into question” by any subsequent national legislation. Costa v ENEL developed this basic principle which had been set down in Van Gend en Loos one year earlier.
Although the treaties do not expressly mention the principle of supremacy, a number of provisions require it. For the ECJ the position is unequivocal. However, by creating the community the member states consented to transfer to it certain of their powers and to restrict their sovereign rights. The ECJ case law is directed at the national courts who apply the law and as stated in Simmenthal, the provisions of community law are an integral part of, and take precedence in the legal order applicable in the territory of each of the member states.
A good example that gives a full recognition to the principle of supremacy is the case of Factor tame. This case gave us a clear view that community law will prevail over UK legislation, even where that legislation has been enacted by the parliament subsequent to the entry into force of the community rule.
Moving on to the incorporation of community law into national law, when a state join the European community it is obliged to reconcile its constitution with the community membership. How will the states achieve this will depend upon its conception of international law as there are two possibilities, namely monist and dualist. Firstly, the monist conception is that the international law and national law are both part of one legal structure even though they operate in different spheres. However, incase where there is a conflict with national law, monist countries usually recognize the supremacy of treaty provisions, as for example happens in France and Netherlands. Secondly, the dualist conception is that international law and national law are two fundamentally different structures. The UK is a dualist country and therefore the European communities Act 1972 was specifically enacted to make provisions for UK membership of the community. Without this Act, the EC treaty and community legislation would have been binding on the UK in international law but would have had no effect internally. Section 2 and 3 of the European communities Act 1972 achieve this purpose.
Direct effect is an important principle that was created by the ECJ and follows on from the principle of supremacy of community law. If a legal provision is said to be directly effective, it means that it grants individuals rights that must be upheld by national courts. However, there are two initials requirement that have to be satisfied as the provisions must be part of the legal order and its terms must be appropriate to confer rights on individuals. In the important case of Van Gend en Loos, Van Gend imported chemicals from Germany. In 1959, a Dutch law was passed which imposed a duty on some imported chemicals. This was seen contrary to Art.25 EC (ex 12 EC) which required member states to refrain from introducing new duties or arising existing ones on imports between the states. Van Gend objected to paying he duty and a reference was made under Art 234, to the ECJ to ascertain whether the duty on the chemicals was prohibited. The conclusion reached by the ECJ that the duty on the chemicals was prohibited.
If there was a breach of a community obligation, the treaty provided for action to be taken by the commission under Art.226 or by another member state under Art.227.
Moving on to the conditions and limitation for direct effect. The principle of direct effect is very powerful and the ECJ has taken the view that it has to be limited. However, the court did this by establishing the conditions which must apply if direct effect if to be enforced. These are (the criteria for direct effect or Van Gend criteria) 1- the provision must be clear and unambiguous.
2- It must be unconditional, and
3- Its operation must not be dependant on further action.
Moving on to the direct effect of treaty provisions, the ECJ established in Van Gend that treaty articles have direct effect. In Firma Alfonse a preliminary reference was made asking id Art.90, which deals with taxation, had direct effect. The court stated that the first paragraph of Art.90 contains prohibitions against discrimination, constituting a clear and unconditional obligation. It then went on to conclude that Art.90 produced direct effect and creates individual rights of which national courts must take account. (Defrenne v. Sabena).
Moving on to the direct effect of regulations, Regulations under Art.249 have general application and are binding in their entirety and directly applicable in all member states. Direct applicability means that the national courts must apply a regulation whenever their contents grants rights to individuals or impose obligations on them (Potiti). In Orsolina Leonesion, an Italian farmer claimed a subsidy for slaughtering a cow under community regulations. The Italian government refused on the basis that under the Italian constitution, national legislation had to be enacted before they could do so. The ECJ held that regulations become part of the national legal system and the direct applicability under 249 cannot be hindered by national practices.
Moving to the direct effect of decisions, the ECJ in the case of Franz Grad held that decisions could have vertical direct effect. Basically, decisions are binding in their entirety on those to whom they are addressed. Thus, the court concluded that anyone with an interest should have the right. (Art.249)
Direct effect of directives.
In contrast to the direct applicability of regulations, Art.249 states that directives are addressed to member states and are binding as to the result to e achieved, but leave to the national authorities the choice of form and method. In this way, directives cannot in themselves automatically create substantive rights that citizens are then able to enforce. So, they are not directly applicable and since they fail one part of the Van Gend criteria, that they are conditional and are not non-dependant, then they are entirely dependant on implementation by the member states. In Van Duyn v. Home office, the issue discussed was whether the UK could make use of the derogations from free movement of workers under both Art. 39 (3) and directive 64/221. On the preliminary reference under Art.234, the ECJ held that the directive was directly effective because it imposes on a member state a precise obligation which does not require the adoption of any further measure of either the community institutions or of the member states.
In the case of criminal proceedings against Tullio Ratti, the ECJ took the opportunity to refine its arguments for direct effect of directives. If it was the government which had not fulfilled its obligations arising from the directive, it is against the government that rights arising from the directive can be enforced. In the important case of Marshall v. Southampton and South West Hampshire, the UK government had failed to properly implement the Equal Treatment directive 76/207, which was held to be directly effective.
Moving on to the different types of direct effect, the court identified that there are two types of direct effect, namely vertical direct effect and horizontal direct effect. This was necessary because otherwise citizens would be denied effective remedies where they were granted rights under EC law. Vertical effect means that an individual can invoke the obligation arising from the provision against the member state before a national court. Horizontal effect mean that an individual can invoke the obligation arising from the provision against another individual before the national court. It was also made clear in the Marshall judgement that there was no question of a directive having horizontal direct effect. Mrs Marshall was employed by the Southampton area health authority when she was dismissed because she had reached the age of 62. The ECJ accepted that this was contrary to equal treatment directive 76/207. As the area health authority was an “emanation of the state”, Mrs Marshall succeeded in her action.
In the case of Foster v. British Gas, the employer was the pre-privatized gas board. In contrast Mrs. Duke who was employed by a public company, GEC Reliance Ltd, did not succeed because she was requesting horizontal effect to enforce the directive against another individual, albeit a company. The principle is therefore, that unless the individual is able to show that there is some relationship with the state, the principle of direct effect will not apply even if all three conditions are fulfilled.
Every directive involves a time scale for implementation. This period, normally two years, is to give the government of the member state time to formulate and pass the appropriate domestic measure. Until this period has elapsed the directive cannot, as was confirmed in Ratin, have direct effect.
Moving on to Von Colson principle, if a community act cannot satisfy the three conditions for direct effect, the individual cannot seek to have any right arising from it enforced in the national courts. In Von Colson and Marz, women sough remedies in the German courts for unlawful discrimination. They claimed that this was contrary to the equal treatment directive 1976. On a preliminary reference, the ECJ was asked whether Art 6 of the directives had direct effect. The court did not restrict itself and instead it used Art.5 which requires member states to “take all appropriate measure to ensure fulfillment of their community obligation. Therefore, if the principle of direct effect does not apply, the courts in the member states are required to interpret national legislation specifically passed to implement the community act to comply with community law (Lister and Morleasing).
Direct effect and claims for damages.
In Francovich, the ECJ extended the impact of the law regarding directives. “Community law lays down a principle according to which a member state is liable to make good according to which a member state is liable to make good damage to individual caused by a breach of community law for which it is responsible. In the above case, the ECJ held that damages are available against the state for failure to implement EC directives if three conditions are met. The conditions are:
- that the result required by the directive includes the conferring of rights for the benefits of individuals.
- The content of those rights is identifiable by reference to the directive, and
- There exists a casual link between the breach of the state’s obligations and the damage suffered by the person affected.
In both cases Brasserie and Factortame, the ECJ stated that the principle in Francovich applied whether it was an act or omission by the organ of the state which caused the breach. If the three conditions were met, the national court could award damages if such damages could be awarded in similar claims founded on domestic law. The three conditions are:-
- The rule of law infringed must be intended to confer rights on individuals.
- The breach must be sufficiently serious, and
- There must be a casual link between the breach of the obligation resting on the state and the damage sustained by the injured parties.
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