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( 155 .)


Indeed any recognition that national legislative measures which encroach upon the field
within which the Community exercises its legislative power or which are otherwise incom-
patible with the provisions of Community law had any legal effect would amount to a
corresponding denial of the effectiveness of obligations undertaken unconditionally and
irrevocably by Member States pursuant to the Treaty and would thus imperil the very foun-
dations of the Community . . .
It follows from the foregoing that every national court must, in a case within its jurisdic-
tion, apply Community law in its entirety and protect rights which the latter confers on
individuals and must accordingly set aside any provision of national law which may conflict
with it, whether prior or subsequent to the Community rule.
Accordingly any provision of a national legal system and any legislative, administrative or
judicial practice which might impair the effectiveness of Community law by withholding from
the national court having jurisdiction to apply such law the power to do everything neces-
sary at the moment of its application to set aside national legislative provisions which might
prevent Community rules from having full force and effect are incompatible with those
requirements which are the very essence of Community law.
. . .[A] national court which is called upon, within the limits of its jurisdiction, to apply
provisions of Community law is under a duty to give full effect to those provisions, if neces-
sary refusing of its own motion to apply any conflicting provision of national legislation, even
if adopted subsequently, and it is not necessary for the court to request or await the prior
setting aside of such provision by legislative or other constitutional means.

The challenge posed by the principle of supremacy, as articulated by the
Court of Justice in Costa and Simmenthal, is clear. In the UK context the
challenge is how the principle may be reconciled with the British constitutional
doctrine of the sovereignty of Parliament. This doctrine, discussed in chapter 2,
provides of course that the United Kingdom Parliament may make or unmake
any law whatever, and that no court may override or set aside an Act of
Parliament. The Court of Justice, however, ruled in Simmenthal that it would
308 British Government and the Constitution

be invalid for Member States to adopt measures that are incompatible with
Community provisions. This, then, is the ¬rst challenge posed by the United
Kingdom™s membership of the European Union: does its once cherished notion
of the sovereignty of Parliament survive? Parliament™s and the courts™ responses
to this challenge are discussed in the next section of this chapter.
(It should not be thought that the United Kingdom is the only Member State
of the European Union to have experienced signi¬cant constitutional di¬-
culties in accepting or accommodating the ECJ™s controversial case law on
supremacy. For similar di¬culties experienced by a number of other Member
States, see Chalmers et al (2006), pp 196“209.)

(ii) Direct and indirect effect
While it may be the clash between the principle of supremacy and the sover-
eignty of Parliament that has caught most of the headlines, it is in the doctrine
of direct e¬ect that the true radicalism of Community law lies. If a provision of
Community law has direct e¬ect, this means that it may be invoked and relied
upon by a litigant in proceedings before a national court and that the national
court must give due e¬ect to it. Thus, making Community law directly e¬ective
is a means by which it may be enforced by national courts. Like supremacy,
direct e¬ect is not expressly provided for in the Treaties, but is the creation of
the case law of the Court of Justice. Here it is Van Gend en Loos, arguably the
most important case in the Court™s history, that is central.

Case 26/62 Van Gend en Loos v Nederlandse Administratie der
Belastingen [1963] ECR 1
The question for the Court of Justice was whether as a matter of Community
law an importer (Van Gend en Loos) could plead before a Dutch court that
certain provisions of Community law had been infringed, and more speci¬cally
whether the importer could as a matter of Community law claim the protection
of rights conferred upon it by Community law, rights which the national court
was under a duty to protect. The relevant provision of Community law was
Article 12 EEC (now Article 25 EC), which provides that ˜customs duties on
imports and exports and charges having equivalent e¬ect shall be prohibited
between the Member States™.

European Court of Justice: . . . To ascertain whether the provisions of an international treaty
extend so far in their effects it is necessary to consider the spirit, the general scheme and
the wording of those provisions.
The objective of the EEC Treaty, which is to establish a common market, the functioning
of which is of direct concern to interested parties in the Community, implies that this Treaty
is more than an agreement which merely creates mutual obligations between the contract-
ing states. This view is confirmed by the preamble to the Treaty which refers not only to
309 The European dimensions

governments but to peoples. It is also confirmed more specifically by the establishment of
institutions endowed with sovereign rights, the exercise of which affects Member States and
also their citizens. Furthermore, it must be noted that the nationals of the states brought
together in the Community are called upon to cooperate in the functioning of this Community
through the intermediary of the European Parliament and the Economic and Social
In addition the task assigned to the Court of Justice under [Article 234 EC, the prelimi-
nary reference procedure], the object of which is to secure uniform interpretation of the
Treaty by national courts and tribunals, confirms that the states have acknowledged that
Community law has an authority which can be invoked by their nationals before those courts
and tribunals. The conclusion to be drawn from this is that the Community constitutes a new
legal order of international law for the benefit of which the states have limited their sov-
ereign rights, albeit within limited fields, and the subjects of which comprise not only
Member States but also their nationals. Independently of the legislation of Member States,
Community law therefore not only imposes obligations on individuals but is also intended
to confer upon them rights which become part of their legal heritage. These rights arise not
only where they are expressly granted by the Treaty, but also by reason of obligations which
the Treaty imposes in a clearly defined way upon individuals as well as upon the Member
States and upon the institutions of the Community.
With regard to the general scheme of the Treaty as it relates to customs duties and charges
having equivalent effect it must be emphasized that [the Treaty], which bases the Community
upon a customs union, includes as an essential provision the prohibition of these customs
duties and charges. This provision is found at the beginning of the part of the Treaty which
defines the ˜foundations of the Community™. It is applied and explained by [Article 25].
The wording of [Article 25] contains a clear and unconditional prohibition which is not
a positive but a negative obligation. This obligation, moreover, is not qualified by any reser-
vation on the part of states which would make its implementation conditional upon a posi-
tive legislative measure enacted under national law. The very nature of this prohibition
makes it ideally adapted to produce direct effects in the legal relationship between Member
States and their subjects.
The implementation of [Article 25] does not require any legislative intervention on the
part of the states. The fact that under this Article it is the Member States who are made the
subject of the negative obligation does not imply that their nationals cannot benefit from
this obligation . . .
It follows from the foregoing considerations that, according to the spirit, the general
scheme and the wording of the Treaty, [Article 25] must be interpreted as producing direct
effects and creating individual rights which national courts must protect.

In the view of the Court of Justice, then, Community law is not simply a
supranational body of law but is to enter the legal orders of the Member States
and be enforced by the national courts as well as by the Court of Justice itself.
The English Court of Appeal judge, Lord Denning, was quick to see the radi-
calism of this as he gave typically vivid expression of the impact of direct e¬ect
310 British Government and the Constitution

in the course of his judgment in Bulmer v Bollinger [1974] Ch 401, 418“19, a
case decided soon after the United Kingdom™s accession to the Communities:

[W]hen we come to matters with a European element, the Treaty is like an incoming tide. It
flows into the estuaries and up the rivers. It cannot be held back. Parliament has decreed
that the Treaty is henceforward to be part of our law. It is equal in force to any statute. . . .
Any rights or obligations created by the Treaty are to be given legal effect in England [sic]
without more ado. Any remedies or procedures provided by the Treaty are to be made avail-
able here without being open to question. In future, in transactions which cross the frontiers,
we must no longer speak or think of English law as something on its own. We must speak
and think of Community law, of Community rights and obligations, and we must give effect
to them.

It is to be noted that, according to Van Gend en Loos, not all provisions of
Community law are directly e¬ective. On the contrary, only those provisions
which are clear, unconditional and negative may have direct e¬ect. These condi-
tions have been substantially liberalised in subsequent case law, however. The
requirement that the provision be negative was dropped in Case 2/74 Reyners
v Belgium [1974] ECR 631 and the requirement that the provision must be
unconditional and not in need of national implementing legislation was dropped
in Case 43/75 Defrenne v Sabena [1976] ECR 455. Most controversial has been the
(partial) extension of the doctrine of direct e¬ect to Directives. In Case 41/74 Van
Duyn v Home O¬ce [1974] ECR 1337, the Court of Justice ruled as follows:

It would be incompatible with the binding effect attributed to a Directive by Article [249 EC]
to exclude, in principle, the possibility that the obligation which it imposes may be invoked
by those concerned. In particular, where the Community authorities have, by Directive,
imposed on Member States the obligation to pursue a particular course of conduct, the useful
effect of such an act would be weakened if individuals were prevented from relying on it
before their national courts and if the latter were prevented from taking it into consideration
as an element of Community law. Article [234 EC], which empowers national courts to refer
to the Court questions concerning the validity and interpretation of all acts of the Community
institutions, without distinction, implies furthermore that these acts may be invoked by indi-
viduals in the national courts. It is necessary to examine, in every case, whether the nature,
general scheme and wording of the provisions in question are capable of having direct effects
on the relations between Member States and individuals.

The reasoning employed here is neither particularly full nor convincing, and
the judgment in Van Duyn was greeted with such hostility that the Court of
Justice had to rethink its justi¬cation for extending direct e¬ect to Directives.
This it did in Case 148/78 Ratti [1979] ECR 1629, where the Court constructed
an ˜estoppel™ argument as the basis for allowing Directives, in certain circum-
stances, to have direct e¬ect. The argument runs as follows: Directives impose
a duty on Member States to adopt the appropriate implementing measures by
311 The European dimensions

a certain date; it would be wrong for Member States to be able to rely on and
gain advantage through their failure to carry out this obligation; they are thus
˜estopped™ or prevented from denying the direct e¬ect of Directives once the
time limit for their implementation into national law has expired.
This reasoning has had an extremely important consequence: namely that
Directives may have direct e¬ect and may be relied on by litigants in proceed-
ings in national courts where those proceedings are brought against a public
authority of a Member State, but not otherwise. It is the Member State that is
estopped from gaining an advantage by failing to implement a Directive, not
anyone else. Thus, an important di¬erence has emerged between the direct
e¬ect of Directives and the direct e¬ect of Treaty provisions and Regulations.
Whereas the latter may be directly e¬ective notwithstanding the identity of the
party against whom legal proceedings are brought in the national court,
Directives may be relied upon only where the party proceeded against is a public
authority. This is called ˜vertical™ direct e¬ect. Treaty provisions and Regulations
may be both vertically and horizontally directly e¬ective, but Directives may be
only vertically directly e¬ective. Thus, in Case 152/84 Marshall v Southampton
and SW Hampshire Area Health Authority [1986] ECR 723 Marshall sought to
rely on and enforce a provision of the Equal Treatment Directive (76/207/EEC)
against her employer. She was successful on the basis that her employer
(the health authority) was a public authority. But had her employer been a
private sector employer, she would have been unsuccessful. This distinction
has been repeatedly and roundly criticised, but it remains the law (see Case
C-91/92 Faccini Dori v Recreb [1994] ECR I-3325; see further Chalmers et al
(2006), pp 371“9).
Ever since Marshall the Court of Justice has tried to ¬nd a number of other
ways of giving greater e¬ect to Directives in the legal orders of the Member States,
without overruling its decisions that Directives are incapable of having full (hor-
izontal) direct e¬ect. Several of these alternative means have had profound
constitutional consequences. Here we shall consider three: the extension of the
notion of the state, the doctrine of indirect e¬ect and the development of state
liability. If Directives can have direct e¬ect against the state, or against public
authorities, it clearly becomes critical to know what is and what is not a public
authority. The Court of Justice showed that, for the purposes of Community law,
˜public authority™ could have a very broad meaning. In Case C-188/89 Foster
v British Gas [1990] ECR I-3313, for example, the Court ruled that the pre-
privatised British Gas could be regarded as a public authority. Rather than
attempting to construct a pan-European de¬nition, the Court ruled that this was
a matter best left for national courts to determine. Subsequently, in Doughty
v Rolls Royce [1992] 1 CMLR 1045 the Court of Appeal ruled that Rolls Royce was
not a public authority for these purposes despite being (at that time) wholly
owned by the Crown; in Gri¬n v South West Water Services [1995] IRLR 15 it was
held that a Directive could be enforced against a privatised utility operating under
conditions imposed by the state; and in NUT v St Mary™s Church of England Junior
312 British Government and the Constitution

School [1997] 3 CMLR 630 it was held that a Church of England aided school
could be regarded as an emanation of the state and that, as such, the terms of a
Directive could be enforced against it.
More important, perhaps, is the doctrine of indirect e¬ect, otherwise known
as the ˜duty of consistent interpretation™. This doctrine amounts to a duty,
imposed by the Court of Justice on national courts, in certain circumstances
to interpret national law in a particular way. In Case 14/83 Von Colson and
Kamann v Land Nordrhein-Westfalen [1984] ECR 1891 the Court of Justice
ruled, using Article 10 EC as a key part of its reasoning (see above, p 283), that:

in applying national law and in particular the provisions of national law specifically intro-
duced in order to implement [a] Directive, national courts are required to interpret their
national law in the light of the wording and purpose of the Directive.

Von Colson concerned the interpretation of a piece of German law that had been
passed in order to give e¬ect to a Directive. To start with it appeared that the
duty of consistent interpretation applied only in the context of interpreting
national law whose purpose was the implementation of a Directive, but in Case
C-106/89 Marleasing v La Comercial Internacionale de Alimentacion [1990] ECR
I-4135 the Court of Justice broadened the reach of the duty, ruling that:

in applying national law, whether the provisions in question were adopted before or after
the Directive, the national court called upon to interpret it is required to do so, as far as
possible, in the light of the wording and purpose of the Directive in order to achieve the
result pursued by the latter (emphasis added).

As we shall see in more detail in the next section of this chapter, courts in the
United Kingdom have had to grapple with this duty on a number of occasions.
Like the (rather similar) duty of consistent interpretation now imposed by
section 3 of the Human Rights Act 1998, the operation of this duty has caused
the courts to reconsider the ways in which Parliament™s legislation should be
interpreted and applied, leading to results that Parliament would not perhaps
have intended, and leading also to a number of commentators raising further
questions about the future of parliamentary sovereignty (see above, pp 62“6,
and see further below, pp 335“9).

(iii) State liability
The third and arguably most radical way in which the Court of Justice has sought
to give greater e¬ect to Directives is through the doctrine of state liability.
According to this doctrine Member States will in certain circumstances be liable
in damages to individuals who su¬er loss as a result of the Member State™s failure
properly to implement a Directive into national law. The leading authority on
state liability in the context of Directives remains the Francovich case.
313 The European dimensions

Joined Cases C-6 and 9/90 Francovich and Bonifaci v Italy [1991]
ECR I-5357 (ECJ)
European Court of Justice: . . . It should be borne in mind at the outset that the EEC Treaty


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( 155 .)