Saturday, April 9, 2011

EU/EC v UK Law etc Comparison Lecture 16


State Liability in Damages

Non-implementation of directives is a community wide problem. Member states have often failed to implement directives or they have implemented them in an incomplete or haphazard manner, or not at all. Recalcitrant member states may be brought to heel if they are made the subject of proceedings under Article 226 of the Maastricht Treaty. Even where the ECJ ruled against a member state, there was no direct benefit to the individual for state’s failure to comply with an EC obligation. This is a void that has been filled by the ECJ.

In Francovich and Bonifaci v Italy (1993), an EC Directive had made provision for the payment of compensation to workers in the event that their employers became insolvent. Italy failed to implement the directive and was the subject of an adverse ruling under Article 226. The court held that while the directive did not meet the test for direct effect, the full effectiveness of the community would be weakened if and the protection of rights granted would be impaired if individuals were unable to obtain redress when such rights had been infringed due to a breach of EC Law for which the state was responsible. Therefore damages for the infringement of rights could be inferred from the treaty itself. The ECJ also stated some basic principles to be followed in determining whether or not compensation should be paid:
-          The purpose of the directive should be to grant rights to individuals
-          The contents of those rights should be capable of being identified on the basis of the provisions of the directive, and
-          There must be a causal link between the breach by the state and the loss and damage suffered by the individual.
-           
In the case of Ex Parte Factortame, an addition was made to the second directive – i.e. that it must be a serious breach. See quote in Burnett for what is meant by serious. Read the quote to class from Burnett.

It should be noted however that even though the violations are going to be for breaches of community law, criteria for compensation will be paid under national law rules and principles.  Also it was held in the case of Ex Parte Factortame held that the principle can be applied to not only to circumstances where there had been a failure to comply with EC laws, but also where a member state passes legislation contrary to EU law. In this case, it was held that the requirements of the UK’s Merchant Shipping Act relating to nationality and domicile, and residence of the shareholders of fishing vessels for the purpose of the Act were clearly in breach of EU law and that “If damages were not to be held recoverable from this case, it would be hard to envisage any case, short of one involving bad faith, where damages would be recoverable.”
It should also be pointed out that EU law allows damages to be recovered from both the state and from the emanations of the state.

EU Law and the English Courts
The principle of supremacy of Community law over national law in the Member States has never been enshrined in the Treaties. None of the Treaties explicitly expressed that Community law should take precedence over national law nor was the principle endorsed by subsequent Treaty revisions. The Treaties are therefore said to be silent on the issue of the relationship between conflicting national law and Community law. Nonetheless, it is an essential part of the legal order of the EC. The doctrine has evolved only through the jurisprudence of the ECJ. This has, on the whole, been an evolutionary rather than revolutionary process. It is evident that there will be clashes between Community law and national law. In the event of conflict there must be a set of rules that indicate what legal norm shall prevail over the other. The ECJ has created a system whereby the laws of the Community take precedence over conflicting laws in the Member States. Consequently, the national courts are obliged to ensure the practical effectiveness of supremacy by upholding Community law. Naturally, the reception of the doctrine of supremacy in the Member States has been varied.
The first case where the Court made a statement on the nature of European law is the famous case of Van Gend en Loos v. Netherlands (1963)[1] dealing with the principle of direct effect of EC Treaty provisions and the degree to which individuals can rely on such terms to challenge measures of national law.
In that case, the ECJ stated that:
“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 contracting states…
The Community constitutes a new legal order of international law for the benefit of which the states have limited their sovereign rights, albeit within limited fields, and the subjects of which comprise not only Member States but also their nationals”.
It was in a second important case, two years later, however, that the ECJ expanded on its constitutional theory of the Community, declaring again that the states had created a sovereign Community by limiting their own sovereign rights.

In Internationale Handelsgesellschaft v. Einfuhr (1970)[2] the Court made clear that the legal status of a conflicting national measure was not relevant to the question whether Community law should take precedence: not even a fundamental rule of national constitutional law could, of itself, be invoked to challenge the supremacy of a directly applicable EC law:
“Recourse to the legal rules or concepts of national law in order to judge the validity of measures adopted by the institutions of the Community would have an adverse effect on the uniformity and efficacy of Community law. The validity of such measures can only be judged in the light of Community law…….
The validity of a Community measure or its effect within a Member State cannot be affected by allegations that it runs counter to either fundamental rights as formulated by the constitution of that state or the principles of a national constitutional structure”.

Under Public International Law (PIL),   there are 2 conceptions regarding the transfer or delegation of sovereign powers to international organisations:

Monism
Dualism

PIL+ national law ® part of one single system with PIL taking precedence.
ie Dutch + French constitutions provide that duly ratified international obligations preside over municipal law.
Also, Belgian courts achieved the same result in absence of explicit constitutional provision by proclaiming that international obligations have effect superior to domestic law.
              ¯
directly speak of transfer powers.
   PIL + national law ® separate systems,    
   each supreme within its own spheres.
   ie UK ® here you need incorporation of
   PIL into national law by national Act of
   Parliament in the form of a statute
   BA v. Laker and Blackburn case ®  
   European Communities Act, 1972.



¯
always seeking statutes to conform to EC law.
In France, there was not any particular constitutional problem since the constitution provides that international treaties have a direct effect and are accorded supremacy.

            In accordance, Article 55 of the French Constitution of 1958 states that:

            “Treaties or agreements duly ratified or approved shall…..have an authority superior to that of Laws.”

In the United Kingdom, the acceptance of the supremacy of Community law has certainly not been unproblematic. Since the British Constitution is largely unwritten, it is difficult to speak of “amending” it. The central obstacle to acceptance by the U.K. of supremacy of EC law is the fundamental constitutional principle of the sovereignty of Parliament. According to this principle, Parliament has the power to do anything other than to bind itself for the future. According to Dicey,

 “Parliament has, under the English Constitution, the right to make or unmake any law whatever and no person or body….has the right to override or set aside the legislation of Parliament”.

            Furthermore, the doctrine of implied repeal means that no Parliament can bind its successor, and no Parliament can be bound by its predecessor. Any Act is thus vulnerable to change by a future Parliament.

            With those problems in mind, it was nevertheless decided to give internal legal effect to Community law by means of an Act of Parliament (dualist state): the European Communities Act, 1972.
Section 2(1) establishes a legal basis within domestic law for directly applicable EC laws

 “as in accordance with the Treaties and without further legal enactment to be given legal effect or use in the U.K… and… shall be recognised and available in law”.

The section aims to make the concept of direct effect a part of the U.K. legal system. It states that law which under the EC Treaties is to be given immediate legal effect, is to be directly enforceable in the UK.

Section 2(4) accords existing and future priority to EC laws.

            “Any enactment passed or to be passed….shall be construed and shall have effect subject to the foregoing provisions of this section”

However, the dualist nature of the UK constitution is confirmed by the cases of Blackburn v Attorney-General (1971) and R v Home Secretary, Ex Parte McWhirter (1969).
In the Blackburn Case, the plaintiff  had sought declarations that on entry into the Common Market, by signing the Treaty of Rome there would be a breach of the law because the government would be surrendering, in part, the sovereignty of the Crown in Parliament for ever. It was accepted by the court that signature of the treaty would be irreversible and would limit the sovereignty of the United Kingdom. It was accepted EC regulations and ECJ decisions would automatically become binding on the United Kingdom.
Held:  Treaty-making powers rest in the Crown, acting on the advice of its Ministers and their actions can not be challenged or questioned in the courts.  No Parliament could bind its successor, so the Treaty of Rome (which once signed was irrevocable), could be reversed by a subsequent Parliament.

Lord Salmon said of Parliament's legislative powers that
"...it can enact, amend and repeal any legislation it pleases." And Lord Denning pointed out that under English Law, even if the Treaty is signed, it is elementary that the courts would take no notice of it until embodied in an Act of parliament.

In McWhirter, lord Denning further stated that the Treaty of Rome has no effect as far as the courts are concerned until implemented by Act of Parliament. Until that day, we take no notice of it.”

So how does EU law get applied in England – by the English Courts interpretation of the European Community Act of 1972.

In Mcarthys v Smith (1979), a case in which the court considered the wording of Britains sex discrimination laws against those provided by the EU, Lord Denning held that “ in construing our statute, we are entitled to look at the treaty as an aid to construction; and even more not only an aid but as an overriding force. If on close investigation it should appear that our legislation is deficient or in inconsistent with EU law, by some oversight of our draftsmen, then it is our duty to give priority to EU law. Such is the result of section 2(1) and section 2 (4) of the European Commnities Act of 1972.”

In other words, the courts have viewed the ECAct 1972 as something of a compromise which allows the UK to maintain its principle of parliamentary sovereignty while still recognizing EU law. Since the decision in the Macarthy’s case, it is possible to identify a number of instances where English Courts have taken into account EU law in interpreting UK statutes. Some of these cases have included:

Disapplying an Act of Parliament which was inconsistent with EU law – as happened in the Factortame case R v Secretary of State for Transport, Ex Parte Factortame. The most important case outlining the relationship between British Law and European Law is the case of In this case, a Spanish Company brought an action challenging the validity of an act of parliament which they purported contradicted EU laws. A divisional court granted an interim injunction against the government stopping it from implementing the law until a final judgment from the ECJ. The ECJ ultimately held that “the full effectiveness of community law would be impaired if a rule of national law could prevent a court seised of dispute governed by Community Law from granting interim relief in order to ensure the full effectiveness of the judicial decision to be given on the existence of rights claimed under community law. When the case was returned to the House of Lords, they accepted the ruling of the ECJ and granted the relief.


·         Reading words into a domestic law passed to give effect to EU law. Garland v British Rail Engineering where it was held that the words of the English Sex Discrimination Act of 1975 should be construed in light of the EC treaty – even if the means straining the literal words used in the Act. Lord Diplock said that “it is a principle of construction of UK statutes now too well established to call for citation of authority, that the words of statute passed after the Treaty has been signed and dealing with the subject matter of the international obligations of the UK are to be construed if they are reasonably capable of bearing such a meaning, as intended to carry out that obligation. This principle was also applied in Pickstones v freemans (1989) and in Lister v Forth Dry Dock and Engineering in both cases, the HL was prepared to adopt the interpretive obligation formulated by the ECJ in the von Colson case to interpret domestic laws.




[1] Case 26/62 (1963) ECR 1, (1963) CMLR 105.
[2] Case 11/70 (1970) ECR 1125; (1970) CMLR 255.

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