Direct Effect Basic Principles Law European Essay


The statement in the title to this essay constitutes a bold and arguably tenuous claim. Can it really be true to assert that the important principles of direct effect, indirect effect and the doctrine of state liability are ‘plagued by incoherent and artificial conditions and restrictions which have only served to deprive individuals without justification, of the ability to enforce their EU rights’?

This paper will proceed to demonstrate that the statement set out in the title is false. It is simply not true to say that the conditions governing the use of these doctrines are incoherent, artificial or unjustified.

Direct Effect: Basic Principles

Established in the early decision of C26/62 Van Gend en Loos [1] , which also saw the European Court of Justice confirmed the fundamental rule of the supremacy of EEC law (as it then was) over all forms of national law [2] , the direct effect doctrine gave those wishing to bring a claim based on EEC law the right to found their action directly on the EEC measure before a national court (rather than being forced to rely on national law or on some impaired national version of the EEC provision). The doctrine of direct effect was thereafter endorsed in the decision of C6/64 Costa v ENEL [3] . The doctrine is based on a Treaty provision that is now contained in Article 288 TFEU.

It is very important to note the content of the provision in Article 288 TFEU. This Article imposes a duty on EU Member States to adhere to all measures of EU law, but does not extend this duty to private individuals, entities or organisations [4] . This point becomes crucial in the following section of this essay.

Returning to the basic conditions necessary to invoke direct effect, over the years the European Court of Justice came to formalise a set of criteria to be fulfilled before the right to utilise the doctrine becomes available. These conditions were laid out in the case of C9/70 Grad v Finanzamt Traunstein [5] . In Grad it was held that in order to found an action on the basis of the doctrine of direct effect the claimant must show that:

(1) the EU provision is clear and specific and capable of judicial enforcement;

(2) the EU provision is certain;

(3) the EU provision is unconditional and imposes a concrete obligation on the Member State [6] .

In regards to the last condition some EU provisions are designed to be implemented within a given time period (Directives typically give Member States approx two years to implement their contents). A provision only becomes unconditional in this sense once the time limit for implementation has expired. Therefore in this context a 2011 Directive with an implementation deadline of December 31 2013 cannot support direct effect on December 28 2013, because its transposition date has not yet expired and the provision has not crystallised as a binding source of law. However, a week later on January 4 2014 the Directive would be able to support direct effect because it has become a binding obligation which should have been fully transposed into national law.

Could it be said that these conditions are either artificial or incoherent? Absolutely not. It is obvious that any measure of law needs to fulfil basic criteria in order to sustain enforceability and these clearly include clarity, certainty, specificity and that it is unconditional and binding in nature. This is a matter of plain commonsense.

The other condition necessarily to be fulfilled in order to invoke direct effect is admittedly harder to justify on the ground of ordinary commonsense, but it is nonetheless essential for reasons that will be explained.

Direct Effect and Directives: Vertical/Horizontal Distinction

The European Court of Justice distinguishes between two different forms of direct effect. The distinction is subject to the nature of the status of the body against whom direct effect is intended to be invoked. These two different forms are vertical direct effect and horizontal direct effect.

Vertical direct effect describes a situation in which a private party or body seeks to bring a claim against a Member State, or against some body or organisation that is so closely associated with the State as to be deemed an ‘emanation of the state’. Horizontal direct effect describes a situation in which one private party endeavours to bring a claim against another private party [7] .

Vertical direct effect is permitted by the European Court of Justice, while horizontal direct effect is flatly refused. At first sight this distinction does seem arbitrary and incoherent. How can it possibly be appropriate to accept or refuse actions based on the same point of law merely on the ground of the status of the target of the litigation?

The European Court drew this distinction most famously in the case of C152/84 Marshall v Southampton and South West Hampshire AHA [8] . In this case the Court of Justice pointed to the wording of Article 249 EC (which is now contained in Article 288 TFEU). This Treaty provision stipulates that a Directive is binding only on ‘each Member State to which it is addressed’ [9] . The Treaty provision does not extend this obligation to private parties. The Court in Marshall proceeded to find:

‘It follows that a Directive may not of itself impose obligations on an individual and that a provision of a Directive may not be relied upon as such against such a person.’ [10] 

The Court proceeded to make the point that those asserting that this distinction is unfair or arbitrary should direct their criticism not to it, but to the Member State that has defaulted in its obligation to transpose a Directive properly. The Court held:

‘Such a distinction may easily be avoided if the Member State concerned has correctly implemented the Directive in national law.’ [11] 

Therefore it seems at first sight that the distinction is illogical, unfair and incoherent, but in fact it is forced by the words of the Treaty itself. Given that the text of the Treaty is the democratic result of political negotiation, compromise and consensus between twenty seven Member States it is clear that it is unlikely to be legally uniform and comprehensive as to its effect.

In endorsing vertical direct effect but refusing horizontal direct effect the Court of Justice is not creating an arbitrary condition and restriction, it is merely acting in compliance with the words of the Treaty, to which it is bound hand and foot in its interpretation of EU law. The Court has been called upon on numerous occasions to shift its position and permit horizontal direct effect, as in C80/06 Carp v Ecorad [12] , C168/95 Arcaro [13] , C192/94 El Corte Ingles SA v Rivero [14] , C91/92 Dori (Faccini) v Recreb Srl [15] . In Dori no less a figure than Advocate General Lenz (the influential AG who was responsible for advising on the landmark Bosman [16] ruling) attempted to persuade the Court to reconsider the refusal of horizontal direct effect

There is one further condition to be met in the case of vertical direct effect where the action is directed not against the Member State itself but against some body that is said to be an emanation of the State. It is necessary to prove that the body is sufficiently connected to the State as to render it liable to fulfil the Article 288 TFEU obligation. It is necessary to point to public control or funding, some special authority or power exercised by the body that would typically be exercised by the State, or some special relationship between the body and the State that affords the body a special advantage or attribute. Authority on this final condition is derived from C188/89 Foster v British Gas plc [17] .

This condition is not arbitrary either. It is important to determine that a body is close enough to the State to be able to identify it as part of the State for the purposes of the imposition of the Article 288 TFEU duty.

In sum, none of the conditions necessary to be satisfied before the direct effect doctrine can be invoked are arbitrary, artificial or incoherent. It is true that it is a complex area, but analysed individually each condition has its place and can be justified logically. Even the vertical/horizontal distinction can be justified, given the express words of the Treaty itself.

The Doctrine of Indirect Effect

Thankfully this is much more straightforward. This doctrine, derived from C14/83 Von Colson [18] and C79/83 Harz [19] , encourages domestic courts to interpret national legal provisions in line with the aims of EU law in so far as is possible given the respective terms of each measure [20] .

This is a very loose doctrine in comparison to direct effect itself, given that it relies on a degree of similarity between existing national law and an EU provision. If no such similarity exists, the indirect effect doctrine cannot be applied. This is because the doctrine does not justify a national court (or seek to force that court) to contradict a domestic legal provision directly. So-called ‘contra legem’ interpretations, which clearly contradict (and not just sympathetically tilt) national law are not permitted under the doctrine: C268/06 Impact v Minister for Agriculture and Food [21] .

Again these conditions are a matter of commonsense and neither artificial nor incoherent. If a national measure can be stretched to accommodate an EU objective, so much the better, if not EU law will not intervene to compel a national court to transgress its fundamental obligation to enforce national law.

The Doctrine of State Liability

The doctrine was established primarily to provide those claimants denied action due to the vertical/horizontal effect distinction with a route of claim. Established in C9/90 Francovich v Italy [22] , and refined by C-46 & C-48/93 Brasserie du Pêcheur v Federal Republic of Germany and R v Secretary of State for Transport ex parte Factortame Ltd [23] , this doctrine permits individuals who have suffered loss as a result of a Member States failure to live up to its EU obligations to sue the State responsible for compensation.

It is necessary to prove: (1) that the breach in question contravenes a legal measure designed to attribute rights to individuals (including the claimant); (2) that the breach is sufficiently serious to warrant action (and not merely a trivial matter); (3) that a causal connection can be established between the State’s breach in question and the claimant’s loss.

These conditions are also well founded. There is nothing artificial or incoherent here. Each point can be justified as an essential and apposite element of an enforceable action at law. Indeed these conditions broadly represent the duty-breach-damage-causation matrix that is tried and trusted in the common law of negligence [24] .


In conclusion, the statement under discussion is misleading. The conditions permitting access to the doctrines of direct effect, indirect effect and state liability appear fairly complex at first sight, and sometimes arbitrary (in the case of the vertical/horizontal issue in particular), however they are all necessary and logical on close examination.

The Court of Justice is making the best it can of a very difficult job. The relationship between the EU and the Member States is in a hybrid state of evolution. This half-way house generates numerous issues and hurdles that have to be overcome by legal rights of action. The conditions governing access to the stated doctrines are essential to underpin and justify those actions under the prevailing Treaty matrix and in the wider context of national legal sovereignty.



Question text, case table and bibliography excluded from the count.


C26/62 Van Gend en Loos

C6/64 Costa v ENEL

C9/70 Grad v Finanzamt Traunstein

C14/83 Von Colson

C79/83 Harz

C152/84 Marshall v Southampton and South West Hampshire AHA

C188/89 Foster v British Gas plc

C9/90 Francovich v Italy

C91/92 Dori (Faccini) v Recreb Srl

C-46 & C-48/93 Brasserie du Pêcheur v Federal Republic of Germany and R v Secretary of State for Transport ex parte Factortame Ltd

C-415/93 URBSFA v Jean-Marc Bosman

C192/94 El Corte Ingles SA v Rivero

C168/95 Arcaro

C80/06 Carp v Ecorad

C268/06 Impact v Minister for Agriculture and Food