Direct Effect, Indirect Effect and State Liability
Direct effect: when a provision of EU Law confers rights on individuals which can be enforced in national courts.
Direct applicability: doctrine by which treaty articles or regulations are automatically implemented in member states
legal systems.
Directives: these are not directly applicable but may have direct effect (or indirect effect or state liability). Directives
are left to MS to choose how to implement them and are only binding “as a result to be achieved” (Art. 288 TFEU)
(Intro) When will Treaty Articles & Regulations have direct effect?
Treaty Articles & Regulations: these will have direct effect if they meet the Van Gend criteria:
• sufficiently clear and precise: the provision gives rise to identifiable rights, and the obligation must be set in
unequivocal terms
• unconditional: the provision does not depend on other measures and the state has no discretion in implementation
Criteria is applied generously by ECJ, and has vertical effect (Van Gend case) and used horizontal effect (Defrenne v
SABENA)
(a) When will directives have direct effect?
Directives are different because their implementation is left to MSs.
• Under s.2(1) ECA 1972 UK courts must give effect to directly effective rights arising under EU Law. Directives will
only be direct effective if they meet the Van Duyn criteria (based on Van Gend) : clear, precise and unconditional
and the implementation date has passed without any proper implementation (Ratti):
◦ Improper implementation variants:
a. Has not been implemented at all (Ratti)
b. Has been implemented partially or incorrectly (VNO v Inspecteur)
c. Has been correctly implemented but incorrectly applied by national authorities such that it fails to
achieve its purpose (Marks and Spencer v Commission)
• Directives can only have vertical direct effect against a state or emanation of a state (Van Duyn, Marshall v
Southampton)
◦ to determine ‘emanation of a state’ use Foster criteria (tripartite test) (Foster v British Gas):
a. ‘Public Service’ condition: statutory duty to carry out a public service
b. ‘Control’ condition: service is under state control
c. ‘Special Powers’ condition: special powers for carrying out its service
• Clarifications:
◦ Rolls Royce: public ownership alone is not sufficient for ‘control’ condition
◦ Griffin v South West Water: body does not have to be state controlled to satisfy emanation of
state, i.e. privatised bodies with public service and special powers count
◦ NUT v St Mary’s Church School: a body does not need to satisfy all three criteria, in this case a
bipartite test was used
◦ Farrel v Whitty [2017]: a body will be an emanation of the state if the state has delegated a public
interest task and is EITHER under state control or has special powers = flexible approach
[Facicini Dori case: AG Lenz argued that all directives after Nov 1993 (EU’s official journal published in public domains)
should be vertically and horizontally effective as it is reasonable to expect people to know of the directive.]
Ways CJEU has attempted to solve limitations of DE of directives:
1. By expanding the definition of an emanation of the state
2. By creating the principles of Indirect Effect
3. By creating the doctrine of State Liability
Direct effect: when a provision of EU Law confers rights on individuals which can be enforced in national courts.
Direct applicability: doctrine by which treaty articles or regulations are automatically implemented in member states
legal systems.
Directives: these are not directly applicable but may have direct effect (or indirect effect or state liability). Directives
are left to MS to choose how to implement them and are only binding “as a result to be achieved” (Art. 288 TFEU)
(Intro) When will Treaty Articles & Regulations have direct effect?
Treaty Articles & Regulations: these will have direct effect if they meet the Van Gend criteria:
• sufficiently clear and precise: the provision gives rise to identifiable rights, and the obligation must be set in
unequivocal terms
• unconditional: the provision does not depend on other measures and the state has no discretion in implementation
Criteria is applied generously by ECJ, and has vertical effect (Van Gend case) and used horizontal effect (Defrenne v
SABENA)
(a) When will directives have direct effect?
Directives are different because their implementation is left to MSs.
• Under s.2(1) ECA 1972 UK courts must give effect to directly effective rights arising under EU Law. Directives will
only be direct effective if they meet the Van Duyn criteria (based on Van Gend) : clear, precise and unconditional
and the implementation date has passed without any proper implementation (Ratti):
◦ Improper implementation variants:
a. Has not been implemented at all (Ratti)
b. Has been implemented partially or incorrectly (VNO v Inspecteur)
c. Has been correctly implemented but incorrectly applied by national authorities such that it fails to
achieve its purpose (Marks and Spencer v Commission)
• Directives can only have vertical direct effect against a state or emanation of a state (Van Duyn, Marshall v
Southampton)
◦ to determine ‘emanation of a state’ use Foster criteria (tripartite test) (Foster v British Gas):
a. ‘Public Service’ condition: statutory duty to carry out a public service
b. ‘Control’ condition: service is under state control
c. ‘Special Powers’ condition: special powers for carrying out its service
• Clarifications:
◦ Rolls Royce: public ownership alone is not sufficient for ‘control’ condition
◦ Griffin v South West Water: body does not have to be state controlled to satisfy emanation of
state, i.e. privatised bodies with public service and special powers count
◦ NUT v St Mary’s Church School: a body does not need to satisfy all three criteria, in this case a
bipartite test was used
◦ Farrel v Whitty [2017]: a body will be an emanation of the state if the state has delegated a public
interest task and is EITHER under state control or has special powers = flexible approach
[Facicini Dori case: AG Lenz argued that all directives after Nov 1993 (EU’s official journal published in public domains)
should be vertically and horizontally effective as it is reasonable to expect people to know of the directive.]
Ways CJEU has attempted to solve limitations of DE of directives:
1. By expanding the definition of an emanation of the state
2. By creating the principles of Indirect Effect
3. By creating the doctrine of State Liability
