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L3 - Indirect effect + State Liability - Coggle Diagram
L3 - Indirect effect + State Liability
State Liability
Direct and indirect effect have been seen to create gaps in the law, as if there is no horizontal direct effect how are individuals protected. Gaps between the intentions of Eu directives and member state national law.
State liability is the principle that the state should be able to benefit from the lack of implementation of an EU directive. So, individuals should not suffer due to the legal uncertainty of indirect effect, as their rights should be protected by their national courts.
Principe of state liability was developed in FRANCOVICH 1991.
FRANCOVICH
Italy had not implemented this difective. So, it lain court requested preliminary ruling. The directive was sufficiently vague so did not meet 3 step criteria for direct effect.
CJEU, found the lack of implementation of the directive had created a gap in the law.
Concerns an EU directive 80/987 which ensured when a company went involvement there is law in the MS to ensure employees who's salaries weren't payed were compensated.
So, even though the directive didn't have direct effect any loss suffered as the result of failure by MS to implement EU law must be compensated. Art 10
However, lack of detail and clarity for scope of state liability. Non implementation is clearly state failure but what about inaccurate implementation.
Indirect Effect
AKA the principle of consistent interpretation
VON COLSON
Issues surrounding principles of vertical and horizontal direct effect. CJEU relied on Article 4(3) TEU to avoid issues of horizontal/verticle direct effect
CJEU held member states were capable of providing an effective legal remedy such as damages or order for specific performance, such as an order top ring about a change in the law. The change in national law should be in the spirit of the EU directive.
Established indirect effect
Raises questions over the CJEU eatsblshing principle to counteract their limitations. - counteracts that directive can't establish horizontal direct effective. Democratic deficit?
Aims ot ensure all MS law is linking with EU objectives.
CJEU had to interpret treaty provision to create principle of indirect effect. They relied on
Article 4(3) TEU
: widely interpreting provision to place obligation on national courts to
interpret national law to insure the objective of all EU law directives
are obtained.
MARLEASING
Involved an action between 2 private companies. (Don't need to know facts just impact).
Further established scope of indirect effect.
Legal issue for CJEU was does article 11 of directive have direct effect. Directives don't have direct effect when you apply MARSHALL. But the principle of indirect effect, of VON COLSON applies.
In MARLEASING the CJEU go further, and say that national courts are required to interpret national law in a way to ensure objectives of the directive are achieved - para 13 of judgemnet.
This is a signicat expansion of indirect effect from VON COLSON. Yet, they still allow MS courts an option as to how they do this.
Is indirect effect ultimately a backdoor option of the the CJEU to achieve direct effect of directives .
Limitations of indirect effect
Limit of natural legal language - contra legume principle
non-imposition of criminal sanctions
MARLEASING was met with some resistance by national courts.
non-retroactivity
CASE C-333/92 WAGNER
A claim against a private party based on an EU employee protection directive.
Modifies MARLEASING
WAGNER represents an acknowledgement of the CJEU that national courts will not always be able to interpret national law to comply with an EU directive. Especially if the national law is clearly at odds with the directive and that there is no evidence that the national legislature ever intended for national law to comply with the EU directive.
As it is against an individual the directive does not have direct effect.
So, indirect effect does not have the same effect as direct effect and national courts can only comply 'as far as possible' regarding directives.
PFEIFFER
CJEU, reinstate taht the claimants can't rely on the directive gassing their employer as directives don't have direct effect but that national law needs to be interpreted in a way which gives effect to the objectives of an EU directive. Aka indirect effect.
Involved an interpertation of the working time directive. Emegerncey workers argued German law which only classed on duty time as working time, extended their working time in breach of the EU directive.
The court go further and say that national courts has to do whatever lies within their jursidaitcion to ensure compliance with EU law, obligation is not restricted to the legal provisions but to the body of national law as a whole.
National court can not ask for preliminary ruling on direct effect
Limitation is that member states are not forces to comply with indirect effect
In areas where the legislative competence of the ue does not extent, so even if national law runs counter to the objectives of a directive, indirect effect does not apply as the EU would not have legislative competence in that area anyway.
Scope of state liability
CJEU clarify the principle of state liability is not only confined to failure to implement directive, rather all domestic acts and omissions in breach of union law can give rise to liability.
This is essentially an enforcement mechanism by the EU to ensure compliance of EU law.
FACTORTAME + BRASSERIE : highlight the types of action that can cause state liability
Paras 50 +51 set out requirements for state liability. (a) the rule of law infringed must be intended to confer rights on individuals. (b) the breach must be sufficiently serious. (c) there must be a direct causal link between the breach of the obligation resting on the state and the damage sustained by the injured parties.
This is widening the scope of state liability, even if there is no direct effect.
This creates a 'decisive' test for whether a breach is sufficnelty serious is whether the institution concerned has 'manifestly and gravely exceesed the limits of its discretion'. Para 56 of judgement. So its essentially on a case by case basis as to whether there is state liability and if the breach is serious enough.