Droit de l'Union européenne, dissertation anglaise

EU Coursework - Question 3

The principle of direct effect is a fundamental principle of EU law, allowing EU nationals to invoke a European provision before a national or European court. This principle has two limbs: vertical and horizontal direct effect. The latter, which describes a situation where an individual brings an EU law claim against another individual, is the subject of issue in this essay. Horizontal direct effect, especially regarding directives, is a controversial area of EU law. The long debate will be discussed, highlighted by the case of Faccini Dori and Attorney-General Lenz’s opinion in order to determine whether a case can be made for horizontal direct effect of some directives.

Unsatisfactory results of the case law preceding Faccini Dori

The 1994 case of Faccini Dori v Recreb Srl1 is a famous example of the controversy surrounding horizontal direct effect of directives. Interdiffusion Srl concluded a contract with Miss Faccini Dori in Milan for an English language course. She cancelled her order but was told Interdiffusion had assigned a claim against her to Recreb Srl. Miss Dori asserted she had a right of cancellation within 7 days under the Directive 85/577/EEC2. However, Italy had not taken steps to transpose the directive into national law. Two main questions were raised by the courts. The first, whether the provision was unconditional and sufficiently precise3. The second, which is of most importance here, was whether a directive implemented by a Member State can be enforced against a private entity.

In order to answer the second question, emphasis was put on previous case law. The main case was Marshall4, stating clearly that a directive ‘cannot impose obligations on an individual

1 C-91/92 Faccini Dori v Recreb Srl (1994)

2 Directive 85/577/EEC of 20 December 1985

3 C-26/52 Van Gend & Loos v Netherlands Inland Revenue Administration (1963) 4 C-152/84 Marshall v Southampton (1986)

and cannot therefore be relied upon as such against an individual’. The Court nevertheless gave some criticism about the consensus, pointing out that allowing a directive to only be horizontally applicable against the state would be discriminatory against private parties, as it would equal to a ‘penalty for failure to adopt legislative measures of transposition’5. However, the judgment mentions the mitigating remedies developed by subsequent case law in order to compensate the lack of horizontal applicability of directives. The court referred to the introduction of emanations of state6, the obligation of the courts to interpret national law in the light of the directive called indirect effect, as well as state liability7. While the decision confirms the use of directives solely for vertical direct effect, it nonetheless explains the negative results of prohibition of horizontal direct effect. The criticism was picked up by Attorney General Lenz in his opinion8.

A-G Lenz’s case for horizontal direct effect of directives: it’s relevance today

Attorney General Lenz published an opinion using Faccini Dori to make a case for horizontal direct effect of directives. He considers the case and assesses the court’s response to Ms Dori’s claim against the other individual with reliance to the directive. He reviews the two questions, and focuses his attention on the second one; whether or not a directive can be used in a horizontal relationship. Lenz starts by affirming that the European union context of internal market is a welcoming environment and justifies for the elaboration of horizontal direct effect. He explains that considering the development of an area without national borders governing relationships between individuals, and reconsideration of the place and applicability of directives is needed. Indeed, the preamble of the Directive 85/577/EEC makes a clear reference to approximation of legislation, process under which Member States must align their

5 Ibid, 1

6 C-188/89 Foster v British Gas Plc (1990)

7 C-6/90 Francovich and Danila Bonifaci and other v Italian Republic (1991) 8 Opinion of Mr Lenz, Case 91/92

national law to Community law. Placing the context seems like a convincing argument - its relevance today easily assessed. Approximation of legislation in order to fulfil the objective of the internal market appears to remain pertinent today. While some could argue that the deadline for completing the internal market was 19929, it was never fully completed. Hence, AG Lenz’s analysis appears to remain relevant today.

Attorney General Lenz also emphasizes the criticism brought by the court in Faccini Dori about discrimination. In light of this, he argues that the prohibition of discrimination, a fundamental principle of EU law, would rule in favour of horizontal direct effect. He goes further by claiming that individuals complying with Community law are frequently put at a disadvantage, creating inequality of the conditions of competition. Imposing horizontal applicability of directives would remedy such imbalance. He then submits two other main arguments: the first, that the lack of horizontal direct effect of directives in certain circumstances compromises ‘effet utile’, requiring all national institutions to give full force and effect to Community law. This argument concerns directives who are aimed at relations between private parties, particularly directives designed to protect weaker side. If parties cannot rely on directives designed for them, then the basic principle of implementation of EU law is violated. The directive is intended by the Union to be binding to Member States, and therefore, according to AG Lenz, should have effect on parties through horizontal applicability. His third argument is based on the need of uniform application of EU law. He explains that allowing horizontal direct effect of directives would mean that the provision is given effect “erga omnes”10, as a result contributing to the uniform application of European union law, as well as its primacy. Precedence of Community law is also an important objective of the Union, and horizontal direct effect would enforce it further. These arguments are not just those of the Attorney-General; academic debate continues to reiterate the issues related to the prohibition of horizontal direct effect. Walter van

9 The Single European Act of 19986 10 Ibid, 8

Gerven11 agreed with AG Lenz, following his points and arguing that lack

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