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EC Law - directly applicable and the doctrine of direct effect

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Direct Effect

EC Law does not usually impose a duty on citizens, but creates a framework within which the State operates. This means that the advantages for an individual are restricted.

The concept of "Direct Effect" is a device used by the ECJ to enable a citizen to use EC law for his personal advantage.


Direct Applicability

"Direct Applicability" means that EC law becomes part of the national law without intervention of Parliament. This is the case for all EC regulations. This is NOT the case for the Treaties.  For example, the Treaty of Lisbon 2007 has to be ratified according to the national practices of the 27 Member States (i.e. either referenda or votes by the legislator).


So, Treaties are NOT "directly applicable" in the UK. When the UK joined the EU, the existing Treaties became applicable on passing of the European Communities Act 1972.


Thereafter, Treaty obligations take effect by domestic legislation. This is because the UK has a 'dualist' system legal system (a system which separates national and international law) which means treaty law has to be enacted explicitly (by the UK Parliament) into national law in order to have effect. Otherwise, it only has interpretative value which means the courts will presume that the legislature does not wish to violate international obligations undertaken by the executive.


An Example of UK giving effect to Treaty provisions

The European Union (Accessions) Act 2003 relates to the Treaty concerning the accession of 10 additional countries joining the EU. To ratify the Treaty the Act of Parliament was necessary.

S12 of the European Parliamentary Elections Act 2002 specifically declares that no treaty which provides for any increase in the powers of the European Parliament is to be ratified by the United Kingdom unless it has been approved by an Act of Parliament.

Not every Treaty article is capable of creating "direct effects", only a Treaty article (either vertical or horizontal) if it is clear, precise and unconditional can have direct effect.


What is the difference between Direct Effect and Direct Applicability?

Direct effect relates to specific rights (e.g. equality between men and women). Direct applicability relates to an entire legislative act e.g. a Regulation. So, direct effect does not mean that the provision becomes part of national law, whereas direct applicability does.

Direct effect means that the rights created by a provision are capable of being relied upon in UK courts.


What is 'Effect'?

Effect means a provision is applicable, directly or otherwise.


What is 'Applicable'?

Means the provision is part of UK law; it can either be directly applicable, requiring no action by Parliament, or made applicable by Parliament enacting legislation to make it so.


What is 'Directly Applicable'?

Means the UK Parliament need do nothing to implement the law, for example a Regulation is automatically the law of the UK, see above.


What is 'Direct Effect'?

Direct effect means that a provisions can create rights which individuals may rely on before their domestic courts.


What is a provision?

It is a piece of legislation creating rights.


Is the expression 'Direct Effect' relevant to anything other than Treaty provisions?

Regulations have direct effect and are capable of being invoked either vertically or horizontally, and are directly applicable.

Directives have vertical direct effect after the date they should be made part of UK law. They are not directly applicable. They do not have Horizontal Direct Effect.


What is 'Vertical Direct Effect'?

The provision has effect between citizen and state (or emanation of the state).


What is 'Horizontal Direct Effect'?

The provision has effect between citizen and citizen


Is there such a thing as 'Vertical Effect'?

It is now called Vertical Direct Effect.


Is there such a thing as 'Horizontal Effect'?

It is now called Horizontal Direct Effect, or Horizontal Indirect Effect.


The Doctrine of Direct Effect

An example of how direct effect can be used by a citizen.

Article 39 EC (the Treaty of Rome as amended) allows the freedom of movement of workers, and it has direct effect. Because it has direct effect it means that Article 39 can be relied upon by an individual in the UK courts.

Another example, Article 141 EC was relied on in Defrenne v SABENA (No 2) [1976] ECJ article 141 provides:

"Each Member State shall ensure that the principle of equal pay for male and female workers for equal work or work of equal value is applied"

The concept of direct effect is not contained within the Treaties

It is a concept of direct effect was developed by the European Court of Justice in the case of Van Gend en Loos [1963] ECJ. The ECJ indicated that the concept of direct effect was essential to ensure that citizens of the Community could enforce Treaty obligations against Member States and thereby ensure that Community law was made effective in their national legal systems.

The reasoning in the case makes it clear that the European Court of Justice considered that effective remedies were paramount in this new legal order. The case of Van Gend en Loos was also important in establishing the criteria for defining when a particular provision should be directly effective. Such a provision should be

  • Clear and precise

  • Unconditional; and

  • Capable of producing rights for individuals

'Vertical direct effect' and 'Horizontal direct effect'

These two expressions simply indicates whether the citizen can invoke EC laws against the state (vertically) or against another individual (horizontally).


Treaty provisions create horizontal & vertical direct effect


Defrenne v SABENA (No 2) [1976] ECJ

An individual can rely on some Treaty articles to enforce rights against another individual in the national courts.

"The prohibition on discrimination between men and women applies not only to the action of public authorities, but also extends to all agreements which are intended to regulate paid labour collectively, as well as to contracts between individuals."

Some Treaty provisions can produce vertical direct effect if, they are "clear, precise and unconditional" leaving no discretion to Member State as to implementation. The following case demonstrates this principle.

Macarthys Ltd v Smith, [1979] ECJ and CA

Wendy Smith was able to rely on a treaty provision together with a Directive to sue her former employer for equal pay. What happened was there was conflict with the UK legislation, the Equal Pay Act 1970 and the Directive which covered the same issue, that of equal pay for men and women.


Regulations produce both horizontal and vertical direct effects

The Regulation must be clear, precise and unconditional.


Directives produce vertical direct effects if it is clear, precise and unconditional

Van Duyn v Home Office [1974] ECJ

This was the first case to be referred to the European Court of Justice by an English court. The Home Office refused Miss Van Duyn leave to enter the UK on the grounds of her undesirability. She was a Dutch national and a practising Scientologist.

Miss Van Duyn attempted to rely on article 48 of the Treaty, and Art 3 of Directive 64/221, which allowed free movement of workers in the EU.


It was held that the useful effect of directives would be weakened if individuals were prevented from relying on them before national courts.


Since the directive laid down an obligation, which was not subject to any exception or condition, and by its nature did not require intervention on the part of the Community or Member State, it was to be regarded as directly effective conferring enforceable individual rights, which national courts must protect. However, a member state could refuse leave to enter its territory on the ground of association with an organisation whose activities were deemed to be contrary to the public good. It was immaterial that the organisation is not actually unlawful and that nationals of member state are permitted to work for it. So, Miss Van Duyn was refused entry.


An unimplemented Directive can only become effective after the date for implementation has past

Publico Ministerio v Ratti [1979] ECJ

A Directive must be clear, precise and unconditional. A Directive can only become directly effective after time limit for its implementation has passed. Directives have to be implemented by the state within the timescale laid down in the Directive An individual cannot invoke a Directive against another individual – it cannot have horizontal direct effect


A Directive can be used vertically against a public body

Marshall v Southampton & SW Hampshire AHA [1986] ECJ

ECJ held that a Directive could be invoked vertically against a public body but

"a Directive may not of itself impose obligations on an individual and…a provision of a Directive may not be relied upon as such against a person."

Mrs Marshall wanted to continue working at Southampton Teaching Hospital (a public body) and complained that women were required to retire at 60, whereas men, could retire at 65.

There was no breach of UK law, but Mrs Marshall could rely on an unimplemented Directive on equal treatment of men and women.

This decision confirmed that a directive could only be used against a state or a public body - vertically - and not against another private individual or private body - horizontally.


An emanation of the state

A Directive has no horizontal direct effect, but it could have vertical effect against a public body. So the definition of a "public body" was crucial. The meaning of a public body was decided in the following case.

Foster v British Gas [1990] ECJ

"a Directive might be relied on against organisation or bodies which were subject to the authority or control of the State or had special powers beyond those which result from the normal relations between individuals."

A Directive might be invoked against "a body whatever its legal form, which has been made responsible pursuant to a measure adopted by the State for providing a public service under the control of the State and has for that purpose special powers beyond those which result from the normal rules applicable in relations between individuals."

So, British Gas a recently privatised company was held to be an emanation of the state.


Duke v GEC Reliance Ltd (1988) HL

Mrs Duke was not able to rely on an equal treatment directive because her employer was a private company. She could not use the principle of horizontal effect. Of course, Mrs Marshall was able to succeed against her employer because they were controlled by the state.


The Doctrine of Indirect Effect

Where a Directive has not been implemented by Member State or has been inadequately implemented an individual can take action against another individual by using the concept of “indirect effect”


Von Colson v Land Nordrhein-Westfahlen [1984] ECJ

Article 5 EC requires Member States to "take all appropriate measures" to ensure fulfilment of Community obligations. And this means that courts must interpret national law so as to ensure the objectives of Directive are achieved. This requires an effective remedy that has a deterrent effect and is adequate in relation to the damage sustained.


A Directive cannot of itself impose obligations on private parties

Marleasing SA v La Comercial Internacional de Alimentacion SA [1990] ECJ

Therefore, national courts must as far as possible interpret national law in the light of the wording and purpose of the Directive in order to achieve the result pursued by the Directive. This obligation applies whether the national provisions in question were adopted before or after the Directive;

national courts were 'required' to interpret domestic law in such a way as to ensure that the objectives of the Directive were achieved. So, courts must do everything possible to interpret domestic law to comply with Community law.


State Liability when there is no domestic law on a matter to which a Directive relates or domestic law is totally contrary to EC law

Francovich v Italy [1991] ECJ

Sometimes referred to as the 'Francovich Doctrine' or the 'Francovich Principle'. Francovich focused on the primary liability of Member State for a failure to fulfil a Community obligation. Although the Directive was not sufficiently clear and precise to be directly effective against the State, Italy was under an obligation to implement it under Article 5 EC. And since Italy had failed to do so, it was under a duty to compensate individuals for damage suffered as a result of its failure if

  1. it is possible to identify the content of these rights from the Directive; and

  2. there is a causal link between the State's failure to implement the Directive and the damage suffered by the individual.

Therefore the state was liable to compensate for loss as a result of the state’s failure to implement an EU directive within the required time limit.


Faccini Dori v Recreb [1995] ECJ

The Francovich principle was used by Ms Dori who relied on a Council Directive (that had not become part of Italian law) to withdraw from an English language course. The Directive allowed consumers to cancel contracts within seven days if the contract had been made away from business premises - in this case at railway station. Mss Dori could not rely on the Directive against a private body but that she should be able to gain compensation from the Italian state.


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