Basic Principles of European Law applying to National Courts

 

"As the usages of society alter, the law must adapt itself to the various situations of mankind"

 

Lord Mansfield, Johnson v.
Spiller, (1784) 3 Doug. 371 at
373

 

“The success of the ECJ in constructing the edifice of European law and attaining the constitutionalisation of the Treaties owes much to the approval, encouragement and cooperation of national courts”

 

Tridimas, The General Principles of EU Law (2nd ed., 2006)

 

Av jur. dr JOHN TEMPLE LANG1

Artikeln belyser ett antal grundläggande EU-rättsliga principer som nationella domstolar är skyldiga att tillämpa. Principerna nämndes inte i de ursprungliga fördragen utan fastslogs i EU-domstolens rättspraxis. Det har sagtsatt EU-domstolen härigenom ägnat sig åt judicielllagstiftning och överskridit sina befogenheter. Enligt artikelförfattaren är denna uppfattning inte korrekt. I nästkommande nummer av Svensk Juristtidning publiceras en fortsättning på artikeln. I den artikeln diskuteras bland annat när EU-domstolen bör "lagstifta" för att åtgärda brister i EU-lagstiftningen.

 

Introduction
This paper, discusses a number of principles of law, which concern the obligations of national courts under European Union law and which were:

 

a) established by the case law of the European Court of Justice; b) controversial initially, and said to be “judicial legislation”; c) never reversed when the Treaties amended, and some of which were expressly confirmed, and d) which are now generally accepted.

 

1 Consultant at Cleary Gottlieb Steen and Hamilton, Brussels and London; Professor, Trinity College, Dublin; Visiting Senior Research Fellow, Oxford.

All of these principles are important. Many of these were the result of references from national courts. They have many significant implications in European Union law.
    In Part I of this paper it is argued that most of the decisions establishing these principles were logical implications of Treaty provisions and were not judicial legislation. They were the right results. Part II of this paper discusses some judgments in which the Court of Justice went beyond the literal words of the Treaty to fill gaps in the law. This was done to make European law effective, in the sense that the judgments were necessary to make sure that “the law is observed”, in the words of Article 19 of the Treaty on European Union.
    National courts are courts of general jurisdiction to apply EU law within the areas of their competences under national law, whenever EU law issues are raised (or if a national court itself should raise them). The Court of Justice has built a structure based on the application of EU law by national courts, which is the only way it could have been built. Above all, these judgments have established a ‘European’ rule of law in the EU and a set of values to which we can all honourably subscribe. The Court created it, the draftsmen of the Treaties did not. Judicial review is comprehensive, there are no gaps in it. This judicial construction of judicial duties has now been completed by the Charter of Fundamental Rights, which makes reliance on the European Convention on Human Rights less necessary (but it is still essential outside the sphere of EU law).
    The whole of the European legal order depends on national courts, and on all national courts, not only Supreme Courts.2 This is completely different from e.g., the USA, which has separate systems of federal and state courts. The case law described here has grown up in stages, over many years. It has been often considered and applied by successive judges. It is mature and well-established, not the result of a single promulgation or flash of brilliance. The Court of Justice has always allowed lengthy written and oral submissions, even on long-settled issues. Precisely because these judgments were initially controversial, they have been subjected to intensive scrutiny and criticism. They have been misunderstood and misrepresented, but they have not been proved wrong. The main failure has been omitting to cite Art. 4 TEU (ex-10) on the duty of national courts to cooperate to achieve EU objectives, as often as it could have been cited. This is regrettable, because the Article is the legal basis for many of the judgments summarised here. One aim of this paper is to try to put an end to any suspicions or fears that may remain about the soundness of the principal judgments.

 

2 Case 106/77, Simmenthal, [1978] ECR 629. See The Opinion of Advocate General Léger in Case C-224/01, Köbler, [2003] ECR I-10239 at paras. 53–76; Lenaerts, The Rule of Law and the Coherence of the Judicial System of the European Union, 44 Common Market Law Review (2007) 1625–1659.

Because none of these principles were initially stated in the Treaties, and because there are no travaux préparatoires, it is more important to understand the underlying explanations and justifications for them. These are principles that originated in national courts, and they are to be applied by national courts. They are not foreign rules of law. National judges have discussed them, agreed on the limits to them, and accepted them. It was national courts that brought most of these questions to the Court of Justice.
    Since the Court adopted the main judgments summarised here, the European Treaties have been revised on a number of occasions. None of the judgments have been overridden by amendments to the Treaties. They were seen to be both necessary and correct.

 

I. Direct application of EU law rules
The original Treaty establishing the European Community contained two important provisions:

 

- Article 177 (now Article 267 TFEU) made it clear that questions of the interpretation of the Treaty, and the validity and interpretation of acts of the institutions would come before national courts, and that national courts would be entitled or obliged to refer such questions to the Court of Justice.
- Article 189 (now Article 288 TFEU) said that, “A regulation shall have general application. It shall be binding in its entirety and directly applicable in all Member States.”

These two Articles made it natural and inevitable that the Court would determine that substantive Articles of the Treaty would also be directly applicable in national law without any national implementing measures. Since regulations, which might be adopted by qualified majority vote, would be directly applicable, there was no reason why Treaty provisions, which had been adopted unanimously, should not be also. It would have been anomalous if they could not be.
    The Court’s judgment in Van Gend & Loos3 therefore should not have been a surprise. It can now be seen that any other ruling would have made European law ineffective. If every rule of European law had to be implemented at national level before it created rights and duties for companies and individuals, there would have been long delays, much controversy, and much inadequate and incorrect application, and no doubt more procedures against Member States for infringement. The effect of the judgment was to make national courts the allies of the Court of Justice in enforcing EU law. The principle of direct application is of course necessary for the principle of primacy of European law over national law in case of conflict, discussed below.
    In retrospect, the judgment in Van Gend & Loos is not striking because of the conclusion, which was to be expected in any hierarchy of

 

3 Case 26/62, [1963] ECR 1.

rules, but because of, firstly, the broad and sweeping language used by the Court about the novelty and far-reaching effects of the Treaties; secondly, the Court’s use of the “teleological” approach to interpretation; and finally, the implications for the body of law created by the Treaty of Rome. The judgment made it clear, perhaps for the first time, that the institutions of the European Community were very different from all previous international organisations, and, in particular, that the body of law created by the Treaty of Rome was based upon the voluntary limitation of Member States’ sovereignty.4 It will be seen that Van Gend & Loos was a case that began in a national court.

 

The primacy of European law over national law in cases of conflict
The next fundamental question that arose was whether European law, when directly applicable, would prevail over national law in case of conflict. This issue, of course, could only arise before a national court. The Court5 said that for Community law to be uniform in all Member States the force of Community law cannot vary from one Member State to another, in response to subsequent national law. Member States could not be allowed to avoid their obligations merely by adopting later national laws. The definition of EU regulations as being directly applicable would be meaningless if Member States could nullify their effects by adopting national legislation. A few years later the Court went further, and said that in case of conflict European law prevails over even a national constitutional rule.6 Still later, in Simmenthal,7 the Court ruled that all national courts have not only the duty but also the power, under European law, to declare a rule of national law inconsistent with a directly applicable rule of European law. All national courts have this power, even if they would not have power under national law to declare the national rule in question to be invalid, e.g., because it was contrary to the constitution of the Member State in question.
    The principle that European law prevails in case of conflict is essential to make the European legal order effective. If the Court had come to the opposite conclusion, national legislation contrary to Community law would remain in force until the Member State in question was held to be in breach of its obligations, in proceedings against it under what is now Article 226 or 227 TFEU. In the meanwhile, private parties would be deprived of their rights. It will be seen, from the Court’s reference to the Treaty provisions on the direct ap-

 

4 Ordinarily, the conclusion of a treaty is an exercise of (not a derogation from) state sovereignty, because “the right of entering into international engagements is an attribute of State sovereignty”: The Wimbledon, PCIJ Series A, No. 1, 1923, p. 25. 5 Case 6/64, Costa v. ENEL [1964] ECR 585. 6 Case 11/70, Internationale Handelsgesellschaft [1970] ECR 1125. 7 Case 106/77, Simmenthal (1978) ECR 629: see also Case C-198/01, Fiammiferi, [2003] ECR I-8055; Case C-187/00 Kutz-Bauer, [2003] ECR I-2741 paras. 69–75 (duty to set aside collective agreement contrary to EU law).

plication of regulations, that the Court was doing no more than drawing the logical consequences of the Treaty text, and reinforcing the conclusion by pointing out how ineffective and meaningless European law would be if any other result was arrived at. The logic was impeccable, but the far-reaching consequences were clear, and lawyers and others who were reluctant to see Member States made to carry out their Treaty obligations were concerned.
    Again, all these cases arose in national courts.

 

Human rights principles in Community law
It has now been said often in successive European Community and EU Treaties that human rights are part of European law. It is therefore difficult to go back to the time when the Court of Justice first suggested that this was so, although at that time the Treaties said nothing about it. At the time, that looked at first sight like “judicial legislation”, even if it was legislation with which almost everyone could agree.8 In retrospect, it was not “judicial legislation”. All of the Member States were parties to the European Convention on Human Rights. They therefore were not free, individually or collectively, to set up any institution which would not be bound by the obligations resulting from the Convention. The fact that this had not been said explicitly in the Community Treaties did not alter this in any way.
    Of course this was not the only reason in the mind of the Court. Strong arguments had been made, in particular in Germany, that national courts would need to act against any Community measures that might be contrary to national rules on fundamental rights. Since the national rules of Member States were clearly not uniform, this would have created chaos, because Community law rules would have been treated as valid in some Member States and not in others. To prevent this possibility from arising, the Court needed to make it clear that Community law did include fundamental rights principles, and that these principles were based on the European Convention on Human Rights and on the constitutional principles of Member States. Logically, although the Court never had to spell out the implications fully, Community law would need to comply with the highest standard of protection of human rights anywhere in the Community. Ultimately, in 1986, in the Solange II9 judgment, the German Constitutional Court accepted that the protection of fundamental rights in the Community was substantially similar to that given by German constitutional law.
    These cases also arose in national courts.

 

 

8 Case 29/69, Stauder v. Ulm, [1969] ECR 419; Case 11/70 Internationale Handelsgesellschaft [1970] ECR 1125. 9 Bundesverfassungsgericht, 22nd October 1986.

The duty of national courts to protect rights given by European law
Having decided that some rules of European law created rights for companies and individuals, it was inevitable that the Court would be obliged to say what that meant in practice, and how these rights should be protected by national courts. This case law developed gradually. The cases in which it developed primarily involved claims by private parties against Member States. Many of these claims were for repayment of taxes which had been imposed, contrary to Community law, on the parties making the claims. The first of these cases, Humblet v. Belgium,10 made it clear that such claims could be brought, but on the basis of national procedures, since the claims had to be brought in national courts. This implied, or appeared to imply, that it was not necessary for the national courts to use or invent any procedure that did not already exist.
    However, two constraints were needed, and the Court in due course pointed them out. The first constraint was that the procedural and substantive rights of a claimant relying on Community law must not be less favourable than those of a claimant with a corresponding claim under national law. This is the principle of “equivalence”. There would be no justification for treating rights under Community law as less important or less in need of protection than similar rights under national law. The second constraint was potentially more important. The conditions for making claims must not make it impossible or excessively difficult in practice to make claims based on Community law, even if the conditions were the same as those for national law claims. This was, and is, the principle of “effectiveness”,11 which is now written into the Charter of Fundamental Rights of the EU.
    One of the first big tests of the principle of effectiveness came in the Factortame case.12 In that case the compatibility of UK fisheries legislation with Community law was being challenged in the Court of Justice. It was argued on behalf of Spanish fishermen that while the case was before the Court, the UK courts should suspend the UK legislation. The House of Lords said that UK law gave the national courts no power to suspend an Act of Parliament, but referred to the Court of Justice the question whether the lack of such protection was permitted under Community law. The House of Lords had implied that there was a positive rule of UK law preventing suspension of an Act, and the Court said that such a rule was contrary to Community law because it prevented effective interim protection being given. The effect, of course, was that the UK courts were obliged to give what was for them a wholly new kind of remedy. This went further than Simmenthal, because in that case the novelty lay only in the fact that a lower

 

10 Case 6/60, [1960] ECR 559. 11 Case 199/82, San Giorgio [1983] ECR 3595. 12 Case C-213/89, [1990] ECR I-2433.

court was obliged to give a remedy that, under Italian law, only the Italian Constitutional Court had power to give.

 

Directives and their direct effects
What is now Article 288 TFEU reads:

 

“A directive shall be binding, as to the result to be achieved, upon each Member State to which it is addressed, but shall leave to the national authorities the choice of form and methods.”

In a number of cases, the question has arisen whether a private party may rely on the terms of a directive, against the authorities of a Member State. The Court decided, in Van Duyn,13 that a private party can do this, and so to this extent a directive, even if it has not been implemented, can produce direct effects in national courts. The Court at first based this conclusion on the “useful effect” of the directive, and said that what is now Article 267 TFEU empowered national courts to refer questions to the Court of Justice about directives, as well as other Community measures. That implied that directives must have some effects which national courts should act on.
    The Court in a later case14 used another, stronger, argument. The State, it was said, should not be allowed to take advantage of its own failure to implement a directive, in litigation between a private party and a national authority, after the directive should have been implemented. However, a directive that has not been implemented cannot impose legal obligations on private parties. The Court’s finding that directives could be relied on against the State continued to be controversial, and in Moorman15 a national court asked a pointed question: what was the legal basis of the Court’s judgments? The Court, rather late, recalled that the original Van Duyn judgment had been based, among other things, on what was then Article 10 EC (now Article 4 TEU), which stated that:

 

“Member States shall take all appropriate measures, whether general or particular, to ensure fulfilment of the obligations arising out of this Treaty or resulting from action taken by institutions of the Community. They shall facilitate the achievement of the Community’s tasks. They shall abstain from any measure which could jeopardise the attainment of the objectives of the Treaty”.

The duty to interpret national legislation as far as possible in accordance with
EU law
The Court has declared that national courts have another legal duty in connection with directives. When interpreting national legislation that is said to implement a directive, they must interpret it “as far as

 

13 Case 41/74, Van Duyn, [1974] ECR 1337. 14 Case 148/78 Ratti [1979] ECR 1629; Case 152/84, Marshall v. Southampton Health
Authority, [1986] ECR 723. 15 Case 190/87, [1988] ECR 4689.

possible” so as to comply with the directive, even if that interpretation is not the one which would otherwise be adopted.16 Again the Court relied on Article 10 EC (now Article 4 TEU). This duty applies to all legislation, even if the legislation was not adopted to give effect to the directive in question, and even if that national legislation is not ambiguous. The duty to try to interpret national legislation as far as possible in accordance with EU law applies in litigation between private parties, and not only against the State.17 However, the obligation of the national court to interpret national legislation in this way may not, in the absence of a law implementing the directive, have the effect of determining or aggravating the liability in criminal law of anyone acting contrary to the directive. In addition, the Court said the obligation of the national court may not lead to the imposition on an individual of an obligation laid down by a directive that has not been transposed. This means, it seems, that an existing obligation may be modified, unless it leads to an increased criminal penalty, but a new obligation can be imposed only by legislation implementing the directive. In Pupino18 the Court went further, and held that this principle was not limited to directives, even before the new Treaties came into force in 2009, and that it applied to Framework Decisions, which were not intended to have direct legal effect.
    In Marleasing the Court of Justice said that national courts should as far as possible interpret existing national legislation so that it is consistent with EU directives, even if the State has not formally implemented the directive in question.19 National courts are not obliged to interpret the national legislation in a way that is clearly contrary to its clear terms. But they should adopt any interpretation of it which is reasonable, if that interpretation would make the legislation consistent with EU law.
    It must be remembered that, in accordance with the Francovich principle, if a national court decides that national legislation is not consistent with EU law, the State may have to pay compensation to individuals or companies for its breach of their rights. So national courts should try to avoid allowing that situation to arise. Their duty both helps to ensure that rights intended to be given by EU law are protected when this can reasonably be done, and that claims against States for compensation are avoided as far as possible.
    The Marleasing principle applies where the directive is intended to give private parties rights against other private parties. If therefore the

 

16 Case C-106/89, Marleasing [1990] ECR I-4135. In the EEA, see Case E-4/01, Karlsson, [2002] EFTA Court Report 240: Case E-1/07, Criminal Proceeding against
A, [2007] EFTA Court Report 245; Case C-397/01 Pfeiffer, [2004] ECR I-8835, paras. 110–120. 17 Case C-168/95, Arcaro [1996] ECR I-4705. 18 Case C-105/03, [2005] ECR I-5285. 19 Case C-106/89, [1990] ECR I-4135.

Marleasing principle would create a situation in which private parties would have obligations that they could not reasonably be expected to know, presumably the national court should decide that the interpretation imposing those obligations would be unreasonable and unjustified.20 Rules of EU law are not all on the same level as principles of fundamental rights. But it is much more likely that they may unintentionally be infringed by national legislation in some way “unnoticed in the democratic process”. It is therefore reasonable for EU law to require national courts, where reasonably possible, to interpret national legislation in such a way as to avoid conflict with EU law. The Marleasing rule is just an additional rule of interpretation.21 The duty to protect rights given by EU law against private parties
Most rights given to private parties by EU law are rights against the State. Where EU law imposes duties on private parties, this is usually done very clearly, whether by Regulation or by directives that need to be implemented by clear national legislation. However, there are several circumstances in which rules of EU law give private parties rights against other private parties, where this is not said clearly in the Treaty.
    One such case is the French Farmers situation. The rights of private parties to move their goods freely within the EU are protected against interference by the State.22 However, the Treaty does not say whether these rights are also protected against interference by other private parties. In the Farmers case, the Court ruled that national authorities have a duty under Article 4(3) TEU (as it now is) to protect the right to move goods against interference by farmers blocking roads to protest against imported agricultural products. The farmers had, in effect, a legal duty not to block the roads, although the rules on free movement of goods are expressed to bind Member States rather than private persons. The right not to be interfered with is not an absolute

 

20 Ex parte Simms [2000] A.C. 115 at 131. 21 The principle that a statute is if possible to be interpreted as not having overridden some basic rule of law is well-known in English law. As Lord Hoffmann stated judicially in 2000: “Parliamentary sovereignty means that Parliament can, if it chooses, legislate contrary to fundamental principles of human rights. ... The constraints upon its exercise by Parliament are ultimately political, not legal. But the principle of legality means that Parliament must squarely confront what it is doing and accept the political cost. Fundamental rights cannot be overridden by general or ambiguous words. This is because there is too great a risk that the full implications of their unqualified meaning may have passed unnoticed in the democratic process. In the absence of express language or necessary implication to the contrary, the courts therefore presume that even the most general words were intended to be subject to the basic rights of the individual. In this way the courts of the United Kingdom, though acknowledging the sovereignty of Parliament, apply principles of constitutionality little different from those which exist in countries where the power of the legislature is expressly limited by a constitutional document.” 22 Case C-265/95 [1997] ECR I-6959.

right, and it may have to be reconciled with the fundamental rights of freedom of speech and freedom to assemble. It is not hard to see that a State must have some obligations to maintain public order, so as not to allow rights given by EU law to be interfered with.
    In Crehan v. Courage the Court ruled that national courts must award compensation to any private party who has suffered loss as a result of infringement by other private parties of EU competition law (now Articles 101 and 102). A party injured may claim compensation for the amount of its loss, provided that the loss was caused by the infringement.23 In this kind of case, the duties imposed on the companies which infringe EU law are reasonably clear, and the Court has said that although these duties are imposed primarily in the interests of consumers in general, they also protect private interests directly harmed by infringements.

 

Claims for compensation from Member States for breach of Community law
The case law of the Court on recovery of taxes unlawfully imposed was well-established, but it was a surprisingly long time before an apparently straightforward question came before the Court: has a private party a right under Community law to recover compensation for loss caused by a Member State infringing Community law? Logically the answer was clear. National courts have a duty to protect private rights under Community law, and if they have been infringed, compensation should be paid. The duty of the Member State to pay compensation is essentially the same, whether the amount to be recovered is precisely known in advance, or has to be determined by the national court. This had already been said in Humblet v. Belgium,24 but that case had been largely forgotten. The protection given for rights under Community law would be ineffective and meaningless if compensation could not be recovered when an infringement had not been stopped quickly enough to prevent loss being caused.
    Ultimately, when the issue came before the Court in the Francovich case,25 it involved a less clear issue: could a private party recover compensation for breach by a Member State of a directive, a rule of Community law that is not directly applicable, and which is intended normally to create private rights only when it has been implemented? The Court, as is well known, held that compensation must be paid, provided that three conditions are fulfilled. The directive must create rights for individuals; it must be possible to identify the content of those rights from the directive (and not merely from national legislation implementing it); and there must be a causal link between the

 

23 Case C-453/99 [2001] ECR I-6297 joined cases C-295/04 to C-298/04, Manfredi [2006] ECR I-6619. See also Case C-253/00, Fruiticola [2002] ECR I-7289. 24 Case 6/60, [1960] ECR 559. 25 Cases C-6 and C-9/90, [1991] ECR I-5357. See, in the EEA, Case E-7/97, Steinbjörønsdottir [1998] EFTA Court Report 95: Baudenbacher, The EFTA Court in Action (20120), pp.39–46.

breach of the State’s obligations and the loss suffered by the injured parties. If these conditions are fulfilled there is a right to compensation, “a right founded directly on Community law”.
    Once again, without State liability the full effectiveness of Community law would be reduced. But the Francovich judgment provoked a very large amount of comment, and some criticism. Most of the criticism was essentially on the grounds that States would have to pay a lot of money if they had to compensate for losses caused by their breaches of Community law.26 Another criticism was that the Court engaged “in an undisguised exercise in legislation”,27 but this criticism is based on the three conditions, rather than the principle of State liability itself.
    The first condition is that the directive must have been intended to create rights for individuals. This is obvious, and it is certainly not “judicial legislation” to point it out. If the directive were not written in this way, no claim could be based on it. The second condition is that it must be possible to identify the content of the rights from the directive itself. This again is obviously necessary: if the directive has not been implemented at all, or if it has been implemented incompletely or in a defective way, the only standard to apply is the directive itself. The third condition is that the loss must have resulted from the infringement. This is surely obvious. No other rule would be possible. The conclusion is clear. Once the Court had said that national courts should protect rights given by Community law, it was logical that compensation should be payable when those rights are infringed. The Court in Francovich was probably shocked by the idea that a State, by delaying implementing a directive, could deprive individual of their rights with impunity. No doubt the Court was also aware that States were more likely to fulfil their obligations if they would have to pay compensation when they did not.
    In theory, the Court in Francovich might have decided that no claim could be made for breach of a directive, even when the three conditions were fulfilled, and that claims could be made only for breach of directly applicable rules. That would have created a big difference in the economic and financial result on the basis of a technical legal distinction. It would also have left many private parties without a remedy, even when they had suffered loss due to breach of a directive intended to create rights for them. It would have been contrary to the underlying principle that EU law is intended to protect individuals’ rights effectively, since it would not have protected them at all. It

 

26 See however for a more thoughtful criticism Harlow, Francovich and the Problem of the Disobedient State, 2 European Law Journal (1996) 204. See also Case C-194/94, CIA Security International [1996] ECR I-2201 (technical regulations are not enforceable unless duly notified to the Commissioni): Weatherill, A case study in judicial activism in the 1990s, in O’Keeffe & Bavasso, Liber Amicorum in Honour of Lord Slynn of Hadley (2000) Vol.I, 481–504: Tallberg, Supranational influence in EU Enforcement: The ECJ and the Principle of State Liability, 7 Journal of European Public Policy (2000) 104. 27 Chalmers et al., European Union Law (2006), p. 397.

would also have been contrary to the principle that a Member State should not be allowed to take advantage of its own wrongful act or omission, the principle that had already been accepted in the Van
Duyn/Moorman judgments. The distinction between a regulation and a directive is not intended to give very different degrees of protection to beneficiaries, but to distinguish between situations in which a uniform rule or a self-contained rule is appropriate, and situations in which the EU rule does not need to be uniform and does need to be fitted into existing national law rules. In short, there was no valid argument for denying a right to compensation for breach of a directive, if the three conditions are fulfilled.

 

The application of the “General Principles of Law” to national authorities28
The Charter of Fundamental Rights of the EU says (Article 51):

 

“The provisions of this Charter are addressed to the institutions, bodies, offices and agencies of the Union with due regard for the principle of subsidiarity and to the Member States only when they are implementing Union law.”

 

This statement clearly confirms and summarises previous case law. Member States are “implementing” EU law when they act as agents of the EU. However, the Court has held that fundamental rights principles apply to Member States in some other circumstances, so it would be odd if the Charter did not do so. The memorandum on the Charter said that the requirement to respect fundamental rights is binding on Member States only “when they act in the scope of Union law”. This means that the Charter applies when Member States are taking advantage of a derogation allowed by EU law, as in the ERT case,29 or regulating a fundamental freedom. It must also apply to measures implementing a directive.
    When a Member State is implementing EU law, it must respect the principle of equality and equal treatment, principles of fundamental rights (in particular those set out in the Charter), proportionality and respect for legitimate expectations. When applying EU competition law in accordance with Regulation 1/2003, national competition authorities and national courts must respect the rights of the defence. Article 41(2) of the Charter says that the right to good administration includes:

 

28 See Bernitz, Nergelius & Cardner, General Principles of EC Law in a Process of Development (2008,Kluwer): Tridimas, The General Principles of EU Law (2nd ed., 2006, Oxford U.P.). 29 Case C-260/89, [1991] ECR I-2925. Case 5/88, Wachauf [1989] ECR 2609: Case C-2/92 Bostock [1994] ECR I-955 para. 16. See the opinion of Advocate General Sharpston in Case C-34/09, Zambrano v ONEM, opinion dated September 30, 2010 (not yet decided).

“The right of every person to be heard before any individual measure which would affect him or her adversely is taken.” and “The obligation of the administration to give reasons for its decisions.”

It seems that general principles must be respected if the legal basis or source of the national measure is EU law, even if the EU measure is merely a non-binding recommendation, or if the national measure pursues the same aims as a directive, even if it goes further than the directive requires.30 This means that fines and penalties for breach of EU law, but specified by national law, e.g., for breach of EU fisheries regulations, must respect General Principles.

 

Why General Principles apply to national authorities acting within the scope of
EU and EEA law
General Principles must apply to the actions of national authorities within the scope of EU law, for several reasons. It would be irrational and anomalous if safeguards for individuals’ rights that apply to the EU institutions were not applicable when the same or related rules of EU law were applied by national authorities. Member States that have agreed to safeguards in connection with the EU institutions could not give themselves freedom to disregard those safeguards by delegating implementation to national authorities. EU law is applied, directly or indirectly, much more and more frequently by national authorities than by the EU institutions. So safeguards that applied only to those institutions would have little value. Any other result would make EU law ineffective. It would be absurd if national authorities were free to disregard general principles in their everyday activities but were obliged to comply with them when cases came before the Court of Justice.
    Because they are necessary for homogeneity, general principles of law must also apply to all national authorities in the EEA States. These principles include, in the EEA, the duty to cooperate, under Article 3 EEA, and that includes the duty to ensure a homogeneous application of EU/EEA law.31 General Principles of Law and Police and Judicial Cooperation
Since the general principles of law apply when national authorities are implementing EU laws, they also apply when the implementation is in the sphere of police and judicial cooperation.
    The most important principles in this context will probably be:

 

30 Joined Cases C-20/00 and C-64/00, Booker Aquaculture v. Scottish Minister, [2003] ECR I-7411: “It is settled case-law…that the requirements flowing from the protection of fundamental rights in the Community legal order are also binding on Member States when they implement Community rules” (para. 88) and Opinion of Advocate General Mischo at pp.7423–7425. 31 See Baudenbacher, The EFTA Court in Action (2010) pp.33–35, 53–55.

- proportionality: penalties must not be out of proportion to the seriousness of the offence;32
- the right to be heard before official action is taken;
- legal certainty: national authorities must not act on the basis of unpublished arrangements between Ministries of Justice; and
- the right not to be tried twice for the same acts.

 

The right to judicial review of all measures in the sphere of EU law
Article 47 of the Charter of Fundamental Rights of the EU begins:

 

“Everyone whose rights and freedoms guaranteed by the law of the Union are violated has the right to an effective remedy before a tribunal in compliance with the conditions laid down in this Article.”

Even before the Charter was made part of EU law by the new Treaties that came into force in 2009, the Court had repeated in many judgments that there is always a right to judicial review of measures of both national and EU institutions, in the sphere of EU law. If the private party has no right to go directly before the General Court, national courts must provide judicial review.33 The extensive case law was based on the Treaty Article, now Article 19(1) TEU, which says that the Court of Justice:

 

“… shall ensure that in the interpretation and application of the Treaties the law is observed”.

 

 

32 See e.g., Case C-58/95, Gallotti [1996] ECR I-4345. 33 The first cases were Case 222/84 Johnston v. RUC [1986] ECR 1651, para. 18; Case 222/86 Heylans [1987] ECR 4097, para. 14. Since then the duty to provide judicial review of national measures and Community acts has been referred to in numerous cases. See Case 294/83, Parti écologiste “Les Verts”, [1986] ECR 1339 at para. 23; Case 302/87, Parliament v. Council, [1988] ECR 5615 para. 20; Case C249/88, Commission v. Belgium, 1991 ECR I 1275 para. 25; Case C-87/90, Verholen, [1991] ECR I-3757 para. 24; Case C-340/89, Vlassopoulou, [1991] ECR I-2357 para. 22; Case C-97/91 Borelli [1992] ECR I-6313; Case C-465/93, Atlanta Fruchthandelsgesellschaft [1995] ECR I-3761; Case C-393/96P (R) Antonissen, [1997] ECR I441, para. 36; Case C-185/97 Coote v. Grenada [1998] ECR I-5199; Case C-12/97 Upjohn [1999] ECR I-223; Case C-7/98 Krombach [2000] ECR I-1935; Case C228/98, Dounias [2000] ECR I-577; Case C-174/98P Van der Wal [2000] ECR I-1; Case C-1/99 Kofisa, [2001] ECR I-207; Case C-239/99 Nachi, [2001] ECR I-1197; Case C-424/99, Commission v. Austria, [2001] ECR I-9285 para. 45; Case C-459/99, MRAX, [2002] ECR I-6591 para. 101; Case C-141/02P, Max-Mobil [2005] ECR I1283; Case T-116/01 P&O Ferries, [2003] ECR II-2957, para. 209; Case C-50/00P, Union de Pequeños, [2002] ECR I-6677; Case C-1/99, Kofisa, [2001] ECR I-207; Case C-205/99, Empresas Navieras, [2001] ECR I-1271; Case T-231/99, Joynson, [2002] ECR II-2085 paras. 32–34; Case C-314/01, Siemens, [2004] ECR I-2549, para. 50; Case C-167/02P, Rothley v. Parliament, [2004] ECR I-3149 at para. 46; Case C-13/01, Salifero, [2003] ECR I-8679 para. 50; Case C-461/03, Gaston Schul, [2005] ECR I10513 para. 22; Case C-173/03, Traghetti del Mediterraneo, June 13, 2006, especially para. 33; Case C-131/03P, Reynolds Tobacco, [2006] ECR I-7795 para. 79 et seq.; Case T-306/01, Yusuf, [2005] ECR II-3533 at para. 261; Case C-232/05, Commission v.
France (recovery of State aid), [2006] ECR I-10071 at para. 57; Case C-506/04 Wilson [2006] ECR I-8613; Case C-432/05, Unibet, [2007] ECR I at para. 37; Case T170/06, Alrosa v. Commission, [2006] ECR II-2601 para. 194 et seq.; Case C-55/06, Arcor, Opinion of Advocate General Maduro of July 18, 2007, at paras. 96–99.

The Court does this, when questions of EU law come before national courts, by means of rulings under Article 267 TFEU. But this means, among other things, that national courts must allow private parties to challenge actions of national authorities, because only a national court can refer questions to the Court under Article 267.
    What is an “effective” remedy? In Unibet,34 a leading case on the principle of effectiveness under Article 10 EC (now Article 4 TEU), the Court said that it is for Member States to ensure judicial protection of an individual’s rights under Community law. It is for the domestic legal system in each Member State to lay down the detailed procedural rules safeguarding these rights. But Community law requires that national law does not undermine the right to effective judicial protection. The Member State must establish a system of legal remedies and procedures that ensure respect for that right. It is for national courts to interpret their procedural rules to enable those rules, wherever possible, to be implemented so as to contribute to ensuring effective judicial protection. If a private party was forced to subject itself to administrative or criminal proceedings and penalties as the only way to get an opportunity to dispute the compatibility of a national rule with Community law, that would not be effective judicial protection. Some form of declaratory action that can be initiated by the private party without risking prosecution or punishment must be available.35 The duty of national courts to raise questions of EU law on their own initiative
In some cases a national court in an EU or EEA member State has a duty to raise a question of EU or EEA law on its own initiative, even if the parties had not raised the question.36 It must do so if it would be obliged to raise a similar question under national law or if the relevant rule of EU law is a rule of “public policy” such as competition law37 or consumer protection38.

 

II. Effective judicial protection
On effective judicial protection, some important conclusions can be drawn from Alassini.39 National legislation implementing the telecommunications Universal Service directive made it mandatory to attempt to settle disputes before bringing them before a court. The question was whether this interfered with the right to effective judicial

 

34 Case C-432/05, Unibet [2007] ECT I-2271. 35 Joined Cases C-27/00 and C-122/00, Omega, [2002] ECR I-2569; see now Article 263(4), TFEU. 36 Joined Cases C-430 and 431/93, Van Schijndel [1995] ECR I-4705: Case C-312/93 Peterbroeck [1995] ECR I-4599. The procedural rules for applying EU law must be no less favourable than for national law rules, and must not make it excessively difficult to raise questions of EU law. 37 Case C-126/97, Eco Swiss China Time v.Benetton, [1999] ECR I-3055. 38 Case C-241/98, Oceano Grupo [2000] ECR I-4941. 39 Cases C-317/08, 318/08, 319/08 and 320/08, 18 March 2010.

protection. The Court held that it did not, on certain conditions. The legislation must not result in a decision binding on the parties, and it must not cause substantial delay before legal proceedings can be brought. The period for time-barring of claims must be suspended during the mandatory settlement procedure, and the procedure must lead at most to only very low costs. Electronic means for gaining access to the settlement procedure must not be necessary (poor people do not necessarily have access to electronic communications), and interim measures must be possible when necessary.
    It might be thought, at first sight, that the Court was indulging in judicial legislation, since these requirements were not found in the directive. That suggestion would be wrong. EU law imposes a positive obligation to provide effective judicial protection. Therefore any substantial obstacle to obtaining effective protection is illegal. What the Court was doing was merely listing various possible obstacles and describing the circumstances in which they would, or would not, be considered serious enough to make judicial protection ineffective. Where the relevant principle of EU law is one which imposes a positive obligation to bring about a particular result, then it is natural and inevitable that the Court will be obliged to describe or decide whether particular facts, if they arise, are inconsistent with that result.
    At least some of the criticism of the Court for “judicial legislation” seems to have been due to failure to understand the difference between the implications of a positive legal obligation to achieve a substantive result and a legal rule prohibiting certain actions. The Court should not add to or modify a prohibition, but it is bound to decide whether particular features of national law are compatible with a positive obligation to provide effective protection for rights given or guaranteed by EU law. As there might be a very large number of features that might constitute obstacles to effective protection, they could not be listed exhaustively, even if legislation had tried to list them. The Court is obliged to decide, in detail if necessary, how far rights given by EU law extend. But in doing so it is not “legislating”, but applying an existing principle to a wide variety of facts. Some at least of the criticisms of “judicial legislation” have been caused by the failure to see the implications of a positive obligation to achieve certain substantive results (an “obligation de résultat” in French legal terminology). Effective judicial protection of a right given or guaranteed by European law may oblige the Court to say what would be incompatible with “effective” protection, and in doing so to clarify the scope or nature of the EU law right to be protected. This is clarification, not legislation.
    Another case that illustrates this is Commission v. Italy.40 In that case the Court held that legislation on repayment of indirect taxes levied in breach of EU rules was itself contrary to EU law, if it had been in-

 

40 Case C-129/00, [2003] ECR I-14, 637.

terpreted by the national courts as having one or more features which concerned, essentially, the burden of proof on companies making repayment claims. The legislation in question was illegal if the rejection of repayment claims by the national courts was based on a mere presumption that indirect taxes are usually passed on to buyers, and so not repayable. A second illegal feature was that a claimant’s failure to produce its accounts was considered by the courts to be enough, by itself, to prevent a claim for repayment succeeding. The third illegal feature was that the taxes were treated as having been passed on if the company’s accounts did not show the sum being claimed as a debt due to the company and as an asset in the company’s balance sheet.
    It will be seen that the effect of the principle of effective judicial protection is to oblige the Court to say when national procedural autonomy has been exercised in a way that denies effective judicial protection to claimants. Again, this is not “judicial legislation”. It is drawing out the implications, in a wide variety of different circumstances, of generally applicable and well-established principles. If a question is asked about the legal basis in the Treaties of the duty to give effective legal protection, the answer lies in what is now Article 4 TEU, previously Article 10 EC.
    The Unibet judgment41 contemplated the possibility that the “overall scheme” of a national legal system might fail to provide any legal remedy making it possible to ensure, even indirectly, an individual’s rights under EU law. However, even if that situation were to arise, the Court would presumably make a finding to that effect, but would not say precisely what the national courts or the national legislature would need to do. The Member State’s obligation would be to create a situation in which judicial protection would be effective, but the State would have discretion as to how that result should be achieved. In the Factortame judgment, discussed above, the Court expressed its ruling as a prohibition on applying a national law rule preventing suspension of an Act of Parliament, and did not say that it was requiring the UK courts to create a new kind of remedy. The distinction is important. If a national court is asked to give a remedy of an unfamiliar or unprecedented kind, and if it rules that under national law no such remedy can be given, it is stating, correctly or incorrectly, that there is a national rule that prohibits the remedy being given.
    Reference should also be made to Impact.42 In that case, Irish legislation implementing Directive 1999/70/EC on fixed-term work had given the Irish Labour Court jurisdiction to deal with claims. Some claims were based on contracts made after the directive came into force but before the implementing legislation took effect. Those claims therefore were partly based on the direct effects of the

 

41 Case C-432/05, Unibet 2007 ECT I-2271, 13th March, paras. 40–41. 42 Case C-268/06, 2008 ECR I- 2483, April 15th.

directive, and would normally have been made before the ordinary courts, but on less favourable terms. The Court of Justice decided that the procedural complications of two sets of proceedings in different courts were likely to make it excessively difficult to assert rights given by EU law, because of cost, duration and representation, and that if this was correct the Labour Court should exercise jurisdiction over claims based on the directive, as well as claims based on the implementing legislation. This judgment is similar to the Simmenthal judgment insofar as both judgments held that under Article 4 (as it now is) national courts have in certain circumstances a duty to exercise powers in additional to those given to them by national law. Article 4 gives national courts both additional duties and additional powers. These judgments show how far national courts may be obliged to consider how national rules work in practice, to see if they interfere with “effective” judicial protection. Cost, delay, inconvenience and burden of proof may all be relevant.
    In comments on these judgments, President Skouris has said that they should not be interpreted as “judicial activism”, and pointed out that almost all of the judgments concerned with the duties of national courts arose from references under Article 267 (as it is now).43 These references, made by national courts, show that the courts in question considered that they were probably bound to have duties of the kinds confirmed by the Court. The national judges already understood what it was likely that EU law required them to do.
    The situation is rather different when effective judicial protection does not require the removal of an obstacle, but obliges the national court to take a positive step to enable protection to be given. The most interesting example is probably Laboratoires Boiron,44 In that case a pharmaceutical laboratory argued that it should not have to pay social security contributions, because some of its competitors were exempt from them. The exemption was said to be justified by their public service obligations, but the claimant argued that the benefit of the exemption was greater than the cost of the obligations, and was therefore a State aid. The Court decided that the national court had a positive obligation to order the competitors to disclose the cost of fulfilling their public service obligations, as otherwise the claimant would be unable to prove its case:

 

“The national court is required to use all procedures available to it under national law, including that of ordering all the necessary measures of enquiry, in particular the production by one of the parties or by a third

 

43 President Vassilios Skouris, ‘The Principle of Procedural Autonomy and the Duty of Loyal Cooperation of National Judges under Article 10 EC,’ in Andenas and Fairgrieve (eds.), Tom Bingham and the Transformation of the Law, (Oxford, OUP, 2009), 493–507. 44 Case C-526/04, [2006] ECR 1-7529.

party of documents, if otherwise it would be impossibly or excessively difficult for the evidence to be produced by the claimant”.

Once again, this is not judicial legislation, but merely pointing out that effective judicial protection sometimes obliges the national court to take positive action to achieve the result required by EU law. The facts of the case were unusual, but the principle stated by the Court is a broad and important one, and it is perhaps surprising that little use has been made of it so far.
    It will be seen that important judgments of the kinds that have been described as “judicial legislation” have become rare. The foundation stones were laid, and the gaps in the Treaties were filled, long ago. In recent years, it is the implications, in particular of the principle of effective judicial protection that are being worked out. However, this may not prove to be the case in the area of police and judicial cooperation, where important and unresolved new questions seem certain to arise.

 

State aid
In Lorenz45 the Court had to decide on the legal consequences of the Commission’s failure to decide whether to open a procedure on a new State aid notified to it. The Court said that the Commission “could not be regarded as acting with proper diligence if it omitted to define its attitude within a reasonable period. It is appropriate in this respect to be guided by Articles 173 and 175 of the Treaty [now Articles 263 and 265 TFEU] which, in dealing with comparable situations, provide for a period of two months… Aid implemented, during the Commission’s silence, after a period necessary for its preliminary examination, is thus subject, as an existing aid, to the provisions of Article 93”.
    This use of the analogy of the time limit for Court proceedings, and the more relevant time limit for calling on the Commission to act, probably should be considered judicial legislation.

 

Filling gaps in EU law
Like most, probably all, courts, the Court of Justice is sometimes obliged to decide whether it will give a judgment the result of which is to fill a gap in EU law, when the relevant Treaty provisions do not apply to the specific situation before the Court, but when effective legal protection can be given only if the gap is filled.
    One striking example of this type of case arose in Parliament v.
Council (Chernobyl).46 The Court had previously held that the European Parliament had not got standing to bring proceedings to challenge

 

45 Case 120/73, [1973] ECR 1471 page 1481–1482. Another example of judicial legislation from the same period was the Court’s judgment declaring “old” restriction agreements duly notified to the Commission to be “provisionally valid”; Case 48/72, Brasserie de Haecht [1973] ECR 77. 46 Case C-70/88, [1990] ECR I-2041.

the validity of EU legislation, on the grounds that the Parliament was not one of the institutions then mentioned in the Treaty as having that right. However, in the Chernobyl judgment the Court accepted that the Parliament should be regarded as having standing to challenge legislation when it had not been given an opportunity to consider the legislation in draft. In other words, it must have the right to bring proceedings in the Court in order to defend its own powers and prerogatives. The Treaty clearly and expressly intended that the Parliament should be consulted on various measures, and it was important that there should be an effective remedy if this was not done.
    A more technical example of filling a gap in the Treaty concerned Article 66 of the European Coal and Steel Community Treaty. That Article dealt primarily with control of mergers between coal and steel enterprises, and for that purpose gave express power to adopt interim measures to halt a merger if it had not been notified. The Article also prohibited abuse by a coal or steel enterprise of a dominant position, but in that context said nothing about interim measures. However, in National Carbonising47 the President made an interim measures order stating that the Commission had power under Article 66 ECSC to adopt interim measures also in connection with possible abuses of dominant positions, and that this included a power to order a dominant enterprise to supply a customer on certain terms (and not merely to halt existing behaviour).
    Regulation 17, the basic Regulation under the Economic Community Treaty giving the Commission powers to enforce European competition law from 1962 until it was superseded by Regulation 1/2003, said nothing about any power for the Commission to adopt interim measures. However, in Camera Care48 the Court held that the Commission should be regarded as having this power, in effect as an intermediate step in a case in which the Commission believed that it would be appropriate to adopt a decision prohibiting certain conduct. Again, the Court can be said to have filled a gap left by Regulation 17.
    In these two interim measures cases, the only indication that the Commission should be regarded as having power to adopt decisions ordering interim measures was in connection with mergers under the ECSC Treaty. The Court clearly considered that this power should be understood as being wider than the express words of Article 66, because this was necessary to provide effective legal protection for competition under both Treaties. Express powers to adopt interim measures were given to the Commission in Regulation 1/2003, (though they have been rarely used). This shows that Member States believed that the Court had reached the right result.

 

47 Case C-109/75, C-114/75 1975 ECR 1193. 48 [1980] ECR 119.

In Portugal v. Commission49 the Court ruled that the Commission had power to prevent national measures prohibiting a merger on grounds other than competition law, although there is no express power to do this in Reg.4064/89 An important recent example of filling a gap concerns the Treaty provision allowing proceedings against the Commission (and other institutions) for failure to act, now Article 265 TFEU. The Article expressly applies only when the institution fails to address an act to the applicant. But in a “comitology” procedure the Commission’s first step is to address a proposal to another institution. The Court has however accepted on several occasions, in the Intervet and CEVA judgments (2002 and 2003)50, that the Article allows an applicant to object to the Commission’s failure to take the first step, although that step is not addressed to the applicant, when the procedure is designed to lead to a decision addressed to the applicant.

 

49 Case C-42/01, Portugal v. Commission [2004] ECRI-6089 paras 55–60 and Advocate General Tizzano (atp.6095) said that the purpose of Art.21 of Reg. 4064/89 is “to ensure for reasons of legal certainty and in the interests of the undertakings concerned rapid and effective monitoring by the Commission of the compatibility with Community law of the interests…that are protected by national measures relating to concentrations with a Community dimension”. See also p.6096. 50 Case T-212/99 Intervet, [2002] ECR II 1445; T-345/00, CEVA, [2003] ECR II-229.