Saturday, 14 May 2011

Supremacy of EU Law

The supremacy principle as formulated by the court of Justice can help to resolve legal problems where there is a conflict between a national rule and a point of Union law by indicating to the national court that of the two rules to be applied, the court should give effect to the union law. The principle of supremacy or primacy of Union law has been developed by the Court of Justice. It is implicit in Case 26/62 von Gend en Loos [1963] ECR I which founded the doctrine of direct effect.

It was stated explicitly in Case 6/64 Costa v ENEL [1964] ECR 585 where the Court said that,

“By crating a community of unlimited duration, having its own institutions, its own personality, its own legal capacity and capacity of representation on the international plane and, more particularly, real powers stemming form a limitation of sovereignty or transfer of powers from the state to the community, the member states have limited their sovereign rights, albeit within limited fields, and have thus created a body of law which binds both their national and themselves.”

In a further step, in Case 11/70 Internationale Handelsgesellschaft GmbH [1970] ECR I-125, the Court held that Community law took precedence even over a fundamental rule in the German national constitution.

The clearest statement of the implications of the supremacy of Community law came in Case 106/77 Simmenthal SpA (No 2) [1978] ECR 629 where the Court held that national courts, even a lowly court of first instance, have a duty to set aside provisions of national law which are incompatible with EC law. There was no need to wait for the national law to be amended in line with national constitutional procedures: the national rule had to be set aside immediately if it conflicted with a directly applicable or directly effective Community provision.

Nor does the obligation to set aside conflicting national rules only apply to national courts: even an administrative agency dealing with a national social insurance scheme was held to be required to do so in Case C-118/00 Larsy v INASTI [2001] ECR I-5063.

Although the national measure is rendered ‘inapplicable’, this does not absolve the Member State from the need formally to repeal it. In the interests of legal certainty, the Court said that Member States must also repeal the offending national rule: Case 167/73 Commission v France (French Merchant Seamen) [1974] ECR 359.

Even if it is not yet clear whether a person actually has a right which they claim under Union law (i.e. it is a ‘putative’ right, not a definite one), the doctrine of supremacy requires a national court to set aside any national procedural rules which might prevent them from getting the full benefit of the Union right if it is eventually found that they have it!

This was laid down in the case C-213/89 R v Secretary of State for Transport, ex parte Factortame Ltd and others [1990] ECR I-2433. Spanish fishermen claimed that the UK’s Merchant Shipping Act breached a number of EC Treaty articles and wrongly prevented them from fishing in British waters. They asked for interim relief (an injunction setting aside the offending clauses of the Act pending the full hearing of the case). The problem was that under English law, courts could not grant an injunction ‘against the Crown’, that is, they could not order the suspension of an Act of Parliament. On the other hand, if the Act continued to be applied, the Spanish fishermen would probably be driven out of business and any subsequent judgment in their favour in the main proceedings would be useless – their Community law right would be rendered ‘ineffective’. The Court ruled that, in order to ensure the ‘full effectiveness’ of Community law, the English rule preventing suspension of the Act must be set aside. The House of Lords went on to grant the injunction.

Moreover, the supremacy principle can also permit to reopen a settled matter if the decision or judgment was based upon the incorrect assumption as to what the requirement of Union law might be. In case C-453/00 Kuhne & Heitz (2004) Dutch citizen authorities had made an administrative decision on the clarification of poultry meat for customs tariff purposes that required Kuhne & Heitz to pay more than it should if the relevant community law provision had been correctly applied. When the community law position was subsequently clarified, Kuhne & Heitz sought a refund. From the Dutch authorities’ perspective this matter had been long settled and general practice was not to reopen administrative decisions. The court noted however that the Dutch administrative bodies are able to reopen final decisions and that the courts, when the matter came before them, had misinterpreted the community law provision without referring the matter to the court for a preliminary ruling. Also taking in to account the promptness with which Kuhne & Heitz could require this settled matter is reopened by the Dutch authority so Kuhne & Heitz could get its money back.

The supremacy of Union law over national law is now stated in a Declaration attached to the Treaty of Lisbon. This reiterates the doctrine as stated by the Court as follows:

“The Conference recalls that, in accordance with well settled case law of the Court of Justice of the European Union, the Treaties and the law adopted by the Union on the basis of the Treaties have primacy over the law of Member States, under the conditions laid down by the said case law.”

There is also attached the Opinion of the Council Legal Service of 22 June 2007 which states:

It results from the case-law of the Court of Justice that primacy of EC law is a cornerstone principle of Community law. According to the Court, this principle is inherent to the specific nature of the European Community. At the time of the first judgment of this established case law (Costa/ENEL, 15 July 1964, Case 6/64) there was no mention of primacy in the treaty. It is still the case today. The fact that the principle of primacy will not be included in the future treaty shall not in any way change the existence of the principle and the existing case-law of the Court of Justice.

Thus, it is clear that the supremacy of Union law is firmly established by the decisions of the Court of Justice and the deliberations of national courts. The way in which Union law enters into the legal systems of the Member States depends, from a constitutional point of view, on whether the Member State is monist or dualist in its approach to international law.

Under the monist doctrine, domestic and international law constitute a single integrated legal system. As a result, in monist states international law is automatically incorporated into national law which out the need for further transposition.  In addition, while monism does not logically imply the precedence of international over domestic law in the event of conflict, it is commonly associated with that principle. France and Italy are examples of monist states; the Netherlands also has a monist system, albeit a qualified one.

Dualism presupposes the existence of two separate systems of law: international law and national law. These two systems of law have different purposes and occupy different spheres. Under dualism, international law does not become part of national law until, and to the extent that, appropriate national measures so provide. What legislative or administrative from then measures take does not matter, provided the one selected provides for the proper transposition of the international legal measure.

A dualist member state may still acknowledge a privileged status to Union law within its domestic legal order. Thus, both primary and secondary Union law may be entrenched in national law through an express constitutional amendment or other enactment to that effect. Ireland, Poland and the United Kingdom are examples of dualist states.

United Kingdome
Treaties entered into by the UK government do not affect the law applied by the domestic courts and are only binding in international law. As a dualist states, a treaty will only have effect in the domestic legal system if an Act of Parliament incorporates. Thus, when the UK joined the EEC, the European Communities Act 1972 had to be adopted to give effect to directly effective provisions of Community law within the UK. It has been amended, following the adoption of the Single European Act and all the subsequent treaties by the relevant European Communities (Union) (Amendment) Acts.

The ECA 1972 section 2 provides for the application of community (now union) law arising from the treaties, secondary legislation and the case law of the court of justice, in the British courts. Without using the terms, section 2(1) provides for the direct applicability and the direct effect of Union law as determined by Union law. The ECA 1972 sections 1 and 2 are both backward and forward looking in scope, requiring the adoption of existing Union law and providing for the adoption for future Union law.

Lord Denning in Bulmer v Bolinger (1974) said that “Parliament has decreed that the Treaty is henceforward to be part of our law. It is equal in force to any statute.” This view may not have been widely shared at this time, and even if it had been, there remained question as to whether community law could have greater force than a statute, by being able to prevail over any Acts of Parliament in conflict with it. In 129/79 McCarthys Ltd v Smith (1980) Lord Denning again considered the supremacy point and stated that if on close investigation it should appear that our legislation is deficient or is inconsistent with community law by some oversight of our draftsmen then it is out bounded duty to give priority to Community law.

Day by day the courts were interested to establish the supremacy of EC law. The House of Lords accepted in the landmark case: Regina v Secretary of State for Transport, ex parte Factortame Ltd and Others (No 1) [1990] ECR I-2433, that an English court could be obliged to set aside a rule of national law in order to safeguard putative EC law rights. This meant that the application of an English Act of Parliament had to be suspended pending the outcome of a claim that its provisions infringed Community law. Under English rules, courts could not grant an injunction ‘against the Crown’ (i.e. suspend an Act of Parliament) but the House of Lords accepted, following a reference to the ECJ, that such national rules had to be set aside if they interfered with the protection of Community rights.

This case has far-reaching constitutional implications in the United Kingdom. It takes it clear that any Act of Parliament must be read as subject to directly enforceable rights under Union law.

On the application of the principle of indirect effect in the UK, courts show how the English judiciary has traditionally based its application of Union law on the rules laid down in this English statute rather than on any abstract notion of supremacy stemming from the Union Treaties. For the ways in which English courts have dealt with the interpretation of national law in accordance with Community law. Litster v Forth Dry Dock and Engineering Co Ltd [1990] 1 AC 546 HL is the case where a claim against a private employer, which prevented any question of direct effect arising, was based on the “Transfer of Takeovers” directive. The statutory instrument in question had been introduced in order to implement the directive and therefore, the House of Lords were prepared to interpret the regulation contrary to its prima facie meaning in order to comply with the directive.

The cases Thoburn v Sunderland County Council, Hunt v London Borough of Hackney, Harman and Dove v Cornwall County Council and Collins v London Borough of Sutton [2003] QB 51 are also interesting on this issue. They concerned the so-called ‘metric martyrs’ who refused to use metric weights as well as imperial weights as required under EC law. They were convicted under the Weights and Measures Act 1985 and a number of other statutory instruments and appealed to the High Court. The case was heard by Sir John Laws, who dismissed the appeals. He reiterated the traditional view about the basis of the supremacy of EC law in the UK, basing it on the constitutional law of the UK rather than on principles of EU law. He stated that the European Communities Act 1972 is a constitutional statute which means that it cannot be impliedly repealed by a later inconsistent statute. Hence it would prevail over later statutes which were inconsistent. However, he went on to comment that: In the event, which no doubt would never happen in the real world, that European measure was seen to be repugnant to a fundamental or constitutional right guaranteed by the law of England, a question would arise whether the general words of the ECA were sufficient to incorporate the measure and give it overriding effect in domestic law.

Moreover, the House of Lords seemed to have concluded that the duty arising under community law to interpret British Legislation in a manner securing consistency with community law is confined to legislation that was passed to give effect to community obligation. The question arise in Case C-32/93 Webb v EMO Cargo (UK) Ltd [1994] ECRI-356, where the dismissal of a woman employed to cover a period of maternity absence had been prompted when the woman providing the cover notified her employer of her own pregnancy. British court felt that UK law on this point was clear: the situation was not prohibited act of sex discrimination within the meaning of relevant employment legislation. Relevant points of community law came to a different result, one which classed the treatment of Ms Webb as direct discrimination since she had been dismissed for a reason related to her pregnancy.

In Case 11/70 Internationale Handelsgesellschaft [1970] ECR 1125, the ECJ had stated that the validity of Community measures could only be judged according to Community criteria, not according to principles enshrined in the German constitution. The German Administrative court did not agree and referred the matter to the German Federal Constitutional Court.

This ruling was not accepted by the German Federal Constitutional Court (FCC) in Internationale Handelsgesellschaft (Solange I) [1974] 2 CMLR 540. It noted that the protection of fundamental human rights was an essential element of the Basic law, and that this power could not automatically be restricted by transferring sovereignty to a supranational organization under Article 24 of the Basic law. In the opinion of the FCC, the fundamental rights guaranteed by the basic law were insufficiently protected under community law, as the community lacked a democratically legitimated and directly elected parliament as well as a codified catalogue of human rights. The protection of fundamental rights by the court of justice was considered insufficient as the case law of courts could not fully guaranteed legal certainty. FCC confirmed that it would not rule on the validity or invalidity of a rule of Community law, but it held that the German authorities or courts should not apply rules of Community law which infringed a rule of the Basic law relation to basic rights as long as the Community did not itself provide adequate protection of fundamental rights. In cases of doubt the FCC would rule on the existence of such an infringement.

However, FCC changed its position in W√ľnsche Handelsgesellschaft (Solange II) [1987] 3 CMLR 225. The FCC acknowledged that Community law now had its own equivalent standard of human rights protection. On this basis it ruled that it would no longer exercise its jurisdiction to review secondary community law by the standard of the fundamental rights guaranteed by the Basic law.

Nonetheless, in Brunner v The European Union Treaty [1994] 1 CMLR 57, when considering whether the Maastricht Treaty on European Union unduly extended the competences of the European Community and made too many inroads on German sovereignty, the Federal Constitutional Court again re-affirmed German constitutional sovereignty and its right to review the scope of Community competence.

In its judgment after various constitutional complaints had been brought before it by private citizens as well as by a political party in respect of the ratification of the Lisbon Treaty, the FCC ruled in June 2009 that the Treaty was in accordance with the German Basic Law and simply objected to the domestic law which implemented the Treaty and annulled the law. As regards the Lisbon Treaty itself, it spelt out in a lengthy judgment the limits to which integration could go and emphasized the safeguards under the German Basic law which must be respected. It did not, however, consider that the Treaty as such exceeded the boundaries of what was acceptable under the Basic Law. A new implementing law was then passed in September 2009 and ratification duly followed.

There are two main separate court systems in France. The judicial courts which deal with civil and criminal matters and administrative courts review the legality of administrative action. The highest court in judicial order us the Council de cassation while the Council d’Etat is the supreme administrative court.

The Cour de Cassation (Highest civil court) accepted the primacy of directly effective EC law, on the basis of Article 55 of the French constitution which states that Treaties or agreement which have been duly ratified or approved shall, on publication, have higher authority than that of statutes: Vabre and Weigel [1975] 2 CMLR 336.

The Conseil d’Etat (Highest administrative court) has shown reluctance to accept the primacy of Union law. In Chemins de Fer Francais (1962) the court d’etat ruled that, on the basis of Article 55 of the French Constitution, the EEC treary had similar status to that of French statutes.

Moreover, the Conseil d’etat has refused to accept that Directives can have direct effect (in the French Court’s view, only a French implementing measure can give effect to a Directive according to Article 249 EC (now Article 288 TFEU): Minister of the Interior v Cohn-Bendit [1980] 1 CMLR 543. Here, the Commissaire du Governement, who has a similar function to that of the Advocate General in the Court of Justice of the European Union, argued by citing all the relevant cases decided by the court and had come to a directly different conclusion.

The court adopted a more positive attitude towards the doctrine of supremacy of Community law in its decision in Nicolo (1990). In its judgment, the Conseil d’etat impliedly recognized that the EC treaty would prevail over a French statute in case of conflict. The Conseil d’etat took a further step in Boisdet [1991] 1 CMLR 3 where, for the first time, it recognized the primacy of EC regulation over a France statute, even though this was enacted after the EC regulation concerned. Then, in case concerning directive: Rothmans and Arizona Tobacco [1993] 1 CMLR 253 the Conseil d’etat acknowledged that a directive would prevail over a subsequently adopted statute. It also awarded damages under the Factortame principle, for loss caused by a Ministerial order which conflicted with an EC Directive.

While, in practice, therefore, the French courts accept the primacy of directly effective of Union law, their reasoning is frequently based on the French constitution, rather than on the European Court’s doctrine of supremacy. This is a similar view to that expressed in UK and German courts that it is the national constitution which is at the head of the legal order and that Union law supremacy exists only in so far as it is provided for under national law.

The Italian Constitutional Court has accepted the supremacy of Union law, based on Article 11 of the Italian constitution: Frontini v Ministero delle Finanze [1974] 2 CMLR 372. However it reserved the right to ensure that the fundamental principles of the Italian constitution were not infringed by Union law. It reaffirmed this position in Fragd [1990] CML Rev 94, stating that if it found that a Community measure infringed those fundamental rights, it would declare it inapplicable – thereby giving precedence to the Italian constitution.

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