‘Neither end result is already prescribed but the method

‘Neither indirect
effect nor state liability provide an adequate solution to the problems arising
from the inability from the of European Union directives to have horizontal
direct effect’.



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When discussing on the issues of indirect effect, we must
define what is meant by direct effect. Direct effect stems from EU law where it
allows citizens from members of state to call on a European provision before
their own national courts. However, this can only be applied in regard to
regulations, directives, treaty provisions and decisions. Direct effect was
first applied in the case of van Gend en
Loos1 where the Court of Justice of the
European Union (CJEU) specified three elements that must be satisfied in order
to establish direct effect of primary EU law. The three elements are that the
provision must be clear and unambiguous, sufficiently precise and
unconditional. In relation to directives, Article 288
TFEU states that a directive ‘shall be binding as to the result to be achieved upon
each Member State (MS) to which it was addressed, but shall leave to the
national authorities the choice of form and methods.”2 This means that when a union enact a
directive, it is binding on MS as a result for it to be achieved, but it is
left to the MS to decide on how the result is achieved as the end result is
already prescribed but the method on how is not defined.


The case of Becker3
highlighted that if a directive has not been transposed or transposed
accordingly by the MS by the prescribed timeframe, the provision in that
directive which are ‘unconditional and sufficiently precise’4
that satisfies the criteria of the direct effect can create rights for the
individual. Furthermore, the Van Duyn5 case allowed directives to have direct
effect. This case concerns a EU national who was trying to enter into UK to
work for the Church of Scientology, but was refused entry by the Home Office
and because of this, she relied on a provision of Directive 64/221 where Art 3
of the directive states that any decisions by MS on whether or not another EU
national should be allowed in to the state had to be based exclusively on the
personal conduct of the individual concerned. Van Duyn argued that the decision
to deny her entry had not been based exclusively on her personal conduct, but
had been based on the fact that she was associated with the Church of
Scientology. The courts confirmed that the UK was entitled to deny her entry as
the UK was entitled to take into account that she was associated with
Scientology, where the UK government saw as ‘socially harmful’, even though it
was not seen as unlawful. However, it has been highlighted by the court a few
years after the decision of the Van Duyn6 case that a MS are not allowed to deny
someone entry for belonging to a group that is not illegal in their own
country. Ultimately, the key point established from this case is that
directives can have direct effect. Provision in the directive, which satisfies
the criteria of direct effect creates individual rights, as shown in the Van Duyn7 case, which national courts must


The case of Ratti8 highlighted the rationale for
directives to have direct effect. In order for a directive to have direct
effect, the transposition deadline must have expired as in principle, there can
be no direct effect if the directive has not been implemented yet, therefore,
MS cannot be in default. (Cite the case/para) Furthermore, the court also stated
that directives are intended to be binding on MS albeit as to the prescribed
result to be achieved. If direct effect was prohibited from directives, or
prevent provisions in directives to confer enforceable rights on individuals,
which national courts must uphold, it would weaken the useful effect of a
directive. In addition, the case of Faccini
highlighted that directive can only have vertical direct effect (VDE),
where it is only addressed to the state or public bodies of MS. This was
highlighted in the Faccini Dori10
case where the courts confirmed that they could not rely on direct effect
to establish a right of cancellation as she was seeking to rely on directive as
against another private party. This is known as horizontal direct effect (HDE).
The court went on to say if this directive in
question allowed HDE, it would have been blurring the distinction created in
the treaty between regulation and directives, therefore refusing to give
horizontal direct effect to their provisions.11


When discussing on the issues on indirect effect and state
liability, we must define what is meant by this. Indirect effect is the
interpretation of national law in national courts alongside an unimplemented
legislative act of the EU. This was shown in the Silhouette12
case where A-G Jacob highlighted the doctrine of indirect effect where he
stated that ‘the national courts are under a duty to
ensure, wherever possible, that the result prescribed by the directive is
attained.’13 In
addition to this, Article 4(3) of the TEU also states that national courts are
under a duty to interpret national law consistently with EU law, so far as it
is possible to do so, whether or not the directive has direct effect. (Rephrase
and reference actual Art) This
was illustrated in the Von Colson14
case where it is for the national court to interpret and apply the
legislation adopted for implementation of the directives in conformity with the
requirements of union law, in so far it has discretion to do so under domestic
law. This means that the court has a duty of consistent interpretation, so that
when a national court is interpreting and applying national law, it has a duty
so far as possible to interpret that national law consistently with the relevant
directives. This was also mentioned in the Dominguez15
case where the Court of Justice stated that there is an obligation to
interpret national law in conformity with EU law as it was built within the
system of the Treaty on the functioning of the European union to ensure that
within their jurisdiction, MS must ensure that there is full effectiveness of
EU law when handling and determining disputes before them.16
The Marleasing17
case was also very important when
discussing indirect effect as it furthered the doctrine of indirect effect to
where the directive has not been implemented at all. The court held that the
doctrine of indirect effect applies to national legislation that was not
adopted to give effect to a directive, plus even national law adopted prior it
had been enacted prior to the adoption of the directive. Adding to this, this
case involves the litigation of two private parties, making it a horizontal
litigation, there was still a duty on the national court so far as possible to
interpret Spanish law consistently with the relevant directive.


In relation
to whether indirect effect provides an adequate solution to the Union not
having horizontal effect, I believe that through case law, the ECJ has
developed loopholes in allowing directives to have direct effect when the
individual concerned is involved in a dispute between two private parties,
making indirect effect an additional adequate solution to directives not being
able to have horizontal direct effect. An example of the is incidental
horizontal effect, which has proven to be as powerful as horizontal direct
effect. This can be illustrated in the case of CIA Security18
where the case involved two private parties where the claimant accuses CIA of
marketing alarm systems that did not comply with the requirements of Belgian
law. CIA claimed that they had libelled it and that they are guilty of unfair trading
practices. The Belgian law that they accused CIA of breaching had not been
notified to the European Commission, as required in Art 8 of the Technical
Standards Directive as it was important that it was adopted by the Union to
help ensure the proper function of the internal market. The court said that if MS
could simply enact and apply their own technical standards, MS could
effectively be discriminating other companies in their favour of benefitting
their own manufacturers, resulting in unfair trading practices. Therefore, with
the failure to notify the Commission of the law that CIA have breached, it
rendered the claim against CIA groundless. Ultimately, gathering from this
case, it can be said that the courts finally shed light on directives having
horizontal direct effect as the case involves two private parties where,
incidentally, one benefitted and the other lost. However, it has pointed out
that the article concerning this case was on the one hand, conferring rights on
CIA, or, imposing obligations on the claimant, meaning it is not an example of
horizontal direct effect, but incidental horizontal effect. This was then later
explained by the AG Saggio in Oceano
where he introduced something that is similar to horizontal direct effect
known as the ‘exclusionary effect’ where he states, ‘in order to be able to
achieve its results, this ‘exclusionary’ effect must occur whenever the
national rule comes into consideration for the purpose of resolving a dispute, irrespective
of the public or private status of the parties concerned.’20
This reinforces the point of how individuals disputing between two private
parties can somewhat rely on doctrines that are similar to horizontal direct effect,
such as incidental horizontal effect, to resolve their issues.


There are
limits to indirect effect which can leave to question whether it is an adequate
solution to directives not having horizontal direct effect. One of the limits to
indirect effect is that indirect effect is the duty to interpret national law
consistently with union law, it presupposes that there is national law to
interpret. The second limitation of indirect effect is that it is not an
absolute duty to achieve consistency as it states for the MS to interpret
national law ‘so far as it is possible to do so,’21
which means that to the extent that the national law allows the national court
to interpret the relevant consistency with EU law.




para 25



7 41/74
Van Duyn v Home Office 1974 ECR 1337

148/78 Pubblico Ministero v Ratti 1979 ECR 1629



c-91/92 Faccini Dori, 1994 ECR I-03325





c-282/10 Dominguez, 2012, unreported (para 24)


c-194/94 CIA Security 1996 ECR I-2201

c-240/98 Oceano Grup 2000 ECR I-4491

20 AG
Saggio in Case C-240/98 Oceano Grupo 200 ECR I-4491

Article 4(3) TEU