What is direct effect? Explain its limitations and discuss what measures were taken to correct those limitations.
According to ordinary international law principles, treaties are only binding on the states which are party to the agreement. Therefore, a law student may be forgiven for assuming that the authors of the EC Treaty intended that directives bind MS as to outcome, requiring implementation in national law by the national legislature. Nevertheless, the ECJ has been able to divine a more surprising intention. That directives might have direct effect was first recognised in Van Duyn1 as otherwise the effectiveness of EU law would be undermined. Later cases (Ratti2) have also adopted an estoppel argument, reasoning that the state should not be able to rely on its failure to implement a directive (or implement it correctly) as a reason for its breach of EU law. The limits to directives are that unlike regulations, they might only have direct effect after the date of implementation has passed and only in vertical situations i.e. against MS, not individuals ( Faccini Dori3). Yet the Court of Justice (CoJ) has increasingly paid mere lip service to the rule preventing individuals from invoking the DE principle in horizontal disputes.
Firstly, a wide conception of state has been adopted as in British Gas.4 In addition, there has been development of “indirect effect” which was noted in Marleasing5 to mean that a domestic court must take into account provisions of a Directive when deciding cases between individuals. Thus there has been some erosion of the rule against horizontal direct effect of directives.
Perhaps the most significant blow to the “no horizontal direct effect” rule is the decision in Mangold6. In this case, a worker complained about conduct which amounted to discrimination on the basis of age under an EU Directive. The directive was not yet due to be implemented under German law and so such conduct was in fact permissible in Germany. Despite this, the Court of Justice came to Mangold’s rescue by holding that non- discrimination on grounds of age was a general principle of EU law, and such general principles could have direct effect. The directive was merely expressing what was already a binding rule. This decision has been much criticised, e.g. by AG Mazak in Palacios de la Villa7, and by TC Hartley8 on the grounds that general principles of law are “inherently amorphous and uncertain”, as well as the fact that it would not take an ingenious counsel to argue that other rules embodied in directives constitute general principles of law. Directives are usually designed to protect weaker parties in imbalanced relationships by making rules on working time limits or gender discrimination, and it would not be hard to draw an analogy with Mangold, applying it in many different cases. Where would the limit be?
There are limits to what will constitute a general principle e.g. in Sonia Chacon Novas9 the Court held that non-discrimination on the basis of sickness was not a general principle. However it seemed that Mangold would effectively abolish the distinction between horizontal and vertical disputes until the recent case of Dominguez10, where the AG followed what seemed like the pattern of analysis after Mangold/Kucukdeveci and ultimately rejected its application to the case. Thus, Dominguez suggests that there is a limit and the Court is not necessarily totally committed to the Mangold line of reasoning.
Finally, state liability as laid out in Factortame III11 has been suggested a suitable alternative to recognition of horizontal direct effect of directives. However, if a Member State has acted in good faith and has done its best to implement a directive which is not particularly clear or where the mistake is an understandable one, then the State will not be held liable in damages. As a result, state liability does not seem an adequate alternative to horizontal direct effect, since there are situations where a seemingly deserving applicant will fail in their claim due to the breach by the state not being sufficiently serious.
As a result, it is clear that direct effect has been introduced and stretched through the case law, and it seems likely to continue to do so in the future. Yet the reasons for this are unclear, as are the limits to this doctrine. Indeed, Dougan suggests that the search for a “theoretically respectable , watertight descriptive account of the fractured, fumbling case law on the DE of directives, is a task fit only for masochists.12”
1 [1975] Ch. 358 (C-41/74).
2 1980 ECJ (Case 148/78).
3 C-91/92 [1994] ECR I-3325.
4 C-188/89 [1990] ECR I-313.
5 C-106/89 ECR I-7321.
6 (2005) C-144/04.
7 (2007) C-411/05.
8 Hartley Foundations of European Union Law, OUP 2010.
9 Case C-13/05.
10 Case C-282/10.
11 [1996] ECR 1-1034.
12 2000 CLJ ‘The Disguised Vertical Direct Effect of Directives’.
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