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The concept of indirect effect on state sovereignty
Question: The concept of indirect effect on state sovereignty
Indirect effect has created an atmosphere that is conducive to the perpetuation of national laws being construed in a way that ostensibly complies with Community law. If it is to be determined whether or not the mandatory obligation imposed on them constitutes an encroachment on the fundamental concept of state sovereignty, we need to look further than the national courts because the doctrine of consistent interpretation goes further than a general reconciliation with Community law.
Craig and De Burca agreed with this assertion and further added that since the British Constitution is largely unwritten, it is difficult to speak of amending it so as to ensure its compliance with Community law. Chalmers agreed with this assertion but he added that De Burca failed to consider the fact that the EEC Treaty created its own legal system which permeated the legal infrastructure of member states, thus binding them to apply it. Upon closer examination Chalmers is right because the nature of this assimilation is not mutual but one that is of unquestioned intercession. The purposive nature of a Community apparatus like indirect effect does make total sovereignty impossible to retain. But what Chalmers failed to consider was the fact that the ECJ can legitimately, in principle, assert that Community law is sovereign but this requires the accession of the national courts from the respective member states. Van Gend en Loos irrefutably confirmed by this by illustrating that states had of their own accord ‘limited their sovereign rights’
Steiner asserted that the obligations undertaken under the Treaty are not absolute but merely contingent. Despite the fact that this obligation is described as contingent, it can only be refuted wherever the Treaty extends this right. States can act unilaterally but this is subject to a special authorisation procedure. Drake agreed with this assertion and further added that member states cannot repudiate their obligations through ordinary laws; which illustrates that Community laws have induced the fragmentation of state sovereignty on a judicial level.
Steiner and Woods substantiated this and further asserted that the nature of the Community legal order and the mechanism by which this legal order was created permanently limits member states’ sovereign rights. This limitation finds justification in the fact that the ECJ cannot afford to vary the obligation of consistent interpretation from state to state, this can be attributed to the fact that it would induce forensic and legal uncertainty. Chalmers substantiates this assertion and further postulated that this would jeopardise the ascertainment of the objects set out in Article 10 (2) EC , thus giving rise to the proscribed discrimination in Article (12) EC. This legitimates and justifies the system of consistent interpretation. Article (249) EC commensurates this, states cannot unilaterally repudiate the effects of Community law by enacting domestic legislation.
The extent to which the sovereignty of member states is being encroached
It could be argued that it is to this extent that the sovereignty of member states is encroached. A consideration of apt fundamental significance is the fact that in Article 249 EC, the ECJ ‘expressly identified national courts as organs of the state that are responsible for the fulfilment of community of obligations.’ But paragraph  of the Von Colson judgement does not confine the nature of this obligation to the interpretation of national laws and EC legislation, however, the Doctrine of Parliamentary Sovereignty clearly confines the nature of this obligation imposed on national courts to an interpretive one. This could be interpreted as the ECJ providing the legal stimulus for national courts to usurp Parliamentary sovereignty by encouraging them to supplement domestic legislation which generically fails to comply with the requirement of a Directive. This unquestionably contravenes the Doctrine of Parliamentary sovereignty because special resolutions or legislative pieces, initiated by Parliament, would not be an essential prerequisite in order to give efficacy to Community constructs. It is particularly of fundamental significance to realise that this tacitly encourages the infringement of the Doctrine of Parliamentary Sovereignty by creating a legal mechanism that detracts from Parliament in its capacity as the ultimate law making power. The ECJ has forensically developed the Community legal order in a way that ostensibly encroaches on state sovereignty; this can be attributed to the fact that it legitimately allows national courts to usurp parliamentary sovereignty. In essence, parliament, and the laws that it creates, is no longer sovereign.
An overt usurpation of this nature could not even be challenged in Internationale Handelsgesellschaft, the fact that there was no provision in the constitution dictating that the constitution could be overridden by Community law and the requisite article governing obligations of this nature merely addressed matters falling under the spectrum of transferring sovereign powers to intergovernmental institutions (article 24 GG) was deemed to be irrelevant. Community law was able to permeate a sovereign sphere that was previously perceived as untouchable. What was interesting about this judgement was that many of the provisions that were to be repudiated were regarded as fundamental rights by the German constitution. Not even the judgment in Costa where the court held that the reception of Community law into the legal system made it impossible for member states to give priority to a unilateral subsequent national measure over EC Law could have prepared Germany for this.
The degree of encroachment also depends on the state because Germany had no problem in accepting the primacy of Community laws over matters relating to fundamental rights in Wunsche Handelsgesellschaft. ‘The German constitutional court subsequently abandoned it reservations about the supremacy of Community law but only in the field of fundamental rights. In Wunsche Handelsgesellschaft, the German court decided that it would no longer examine the compatibility of Community legislation with German fundamental rights.’ This could probably be attributed to the direct elections in 1979. However, they reminded the ECJ in Kloppenburg that if they failed to protect the German fundamental rights properly they would do it for them. ‘The German Constitutional court also asserted the right to review the legal instruments of the European institution and agencies to see whether they remain within the limits of the sovereign rights conferred to them.’ The nature of this postulation indicates a re-assertion of their sovereignty. Overtly asserting ‘a right to constrain the competence of the Union’s institutions,’ clearly undermines ‘the supremacy of Community law and the sole competence of the European court to determine the legality of the acts of the institutions within the framework of the European Communities.’ This surface erosion was further precipitated by the fact that the German Constitutional Court asserted that it would scrutinise the use of Article 308 (ex 235) of the EC Treaty as a legal basis for measures. According to Weatherill encapsulated in the content of this assertion is the meaning that ‘legislation passed under that Article would not be binding in Germany if it is used as a basis for harmonisation within areas of new Community competence under Articles 149 to 152 (ex 126 to 129) or if it constituted a de facto amendment to the Treaty.’
This is just a theoretical rebellion and Weatherill’s assertion only becomes legitimately relevant when it is no longer mandatory for incompatible national laws to be repudiated and be made to reconcile with EC law. This was confirmed in Albako, the courts were penchantly reminded that any provision which distorted the primacy of Community law should be disapplied.
This does not invalidate the entire national law. But it is a possibility, as was seen in the Factortame and Simmenthal case. In Factortame the Merchant Shipping Act, which was enacted by a sovereign body, was suspended and the UK was required to re-pay charges levied for breaching community law; in accordance with the re-iterations of Francovich and Simmenthal. There are clear limits to a state’s sovereign rights in that EC Law may not be invalidated by national laws. If the UK had a Constitutional court like Italy and Germany then the possibility of a theoretical rebellion would exist [Brunner]. Despite the fact that Factortame does not indicate this, the UK has a slight advantage over member states like France because the national court is free to ignore questions of Community law that were not raised by the parties; the content of this assertion reveals that the doctrine of consistent interpretation becomes difficult to enforce in the absence of a conducive climate.
It is between these intricate spheres that a degree of sovereignty is retained and a degree of sovereignty is lost. The interpretative obligation that was imposed in Factortame is materially relevant when assessing the degree of encroachment that interpretative obligations inculcate. It is particularly of fundamental significance to acknowledge the fact that despite Factortame , the British parliament could re-assert its sovereignty only by repealing s. 2(4) of the European Communities Act or ‘by inserting a clause in a subsequent Act saying that the provision of the Act must be given effect notwithstanding s.2 (4) of the 1972 Act.’ While the United Kingdom is still a member state it is difficult to construe the surreptitious circumstances under which they might do this.
Chalmers’ observation suggest that Marleasing has made the previous postulation redundant because Marleasing created a skilful balance between flexible rules and fixed rules by creating an obligation not to totally disapply the conflicting national law but to apply the national law ‘as far as possible’ in light of the wording and objective of the indirectly effective Community provision. But Von Colson showed that there was some forensic uncertainty in the stipulations of Marleasing because construing national legislation ‘as far as possible’ so that it is commensurate with Community law may not coincide with what the ECJ regards as ‘as far as possible.’ In Von Colson, reimbursing the claimant’s travel expenses was not perceived to be interpreting the national law as far as possible in light of the wording and objective of the Community provision.
The fact that Pupino has now extended indirect effect to the third pillar of the European Union and the development of state liability has put national courts in an awkward position, encroachment on state sovereignty becomes an imperative issue. In Factortame, the UK was being asked ‘to give primacy to a putative Community right over an allegedly conflicting national law and to grant an interim judgement against the Crown, something they were not permitted to do under national law.’ Brasserie du Pecheur and Factortame III have undoubtedly created an atmosphere that is conducive to the depletion of state sovereignty, even if the breach of community law resulted from a statute enacted by the British Parliament in its capacity as a sovereign body; it still has to relinquish its legal sovereignty to EC Law.
In this context, the doctrine of consistent interpretation does erode state sovereignty. However, a consideration of fundamental significance is the degree of erosion, the nature of it and the austerity of the obligation imposed on national courts to interpret domestic law in light of EU legislation. Upon a clear assessment of the matter in question the ECJ has shown a departure from the mandatory obligation of consistent interpretation in cases after Von Colson and Marleasing .
Drake agreed with this assertion and further added that the judgement in Wagner Miret signalled the commencement of a less interventionist approach and a disinclination to interfere with national legislation relating to remedies, the ECJ seemed to be moving away from the mandatory obligation of consistent interpretation to a more flexible approach; which indicates that it might be dissolving its grip on national courts and subsequently its grip on their member states.
Steiner and Woods agreed with Drake and postulated that any austerity in Marleasing was mitigated by Wagner Miret. Citing Marleasing, there was a tacit acknowledgement in Wagner that it was not always possible to interpret national laws in light of EC legislation. This was later confirmed in Arcaro. However, Lord Jacobs in Centrosteel rejected the idea that Arcaro ‘placed a limit on the interpretive obligations of national courts.’
Lord Jacobs made a very valid point because it is mandatory for courts to presume that their respective state intended to comply with Community law. This presumption, by default, erodes state sovereignty. However, it is of immense significance to consider whether or not judgements like Wagner create a balance between mandatory compliance and state sovereignty, this can only be assessed in light of subsequent cases like Pfeiffer and Pupino ; both of which strongly inculcate consistent interpretation. What both cases failed to identify is when the duty of consistent interpretation arises; which is vital if the extent to which the obligation imposed on national courts dissolves state sovereignty is to be established. Kolpinghuis laid down the prerequisites that inculcate such a duty and ‘the limitation of the interpretive obligation imposed on the national court, prohibiting it from interpreting pre-existing national law to comply with a non-implemented Directive, especially where it would have a detrimental effect on the criminal liability of an individual.’ This is the first sign of an express limitation being placed on the doctrine of consistent interpretation but this is minuscule in relation to mandatory obligation it has already imposed. However, ‘the Court has failed to indicate at which point this mandatory duty takes effect.’
There is an overwhelming degree of evidence which suggest that this duty depends on the subject matter in question. The pre-emption and allocation of competencies enunciates that it is a ‘matter for EU Law to determine over which field it governs and what legal effect it has in those areas’ not national courts or their member states. It could be inferred that different subject matters will attract the imposition of varying degrees of obligation .The ECJ has taken a harder line when it comes to Directive 76/207 , which relates to equal treatment, but whether this infringes on state sovereignty is a question of law not one of fact. Von Colson illustrated this by showing the extent to which the austerity of the obligation to comply with Community law constituted an encroachment. Article 6 of Directive 76/207 only requires member states to create a judicial atmosphere that is conducive to the legitimate pursuit of claims by victims of discrimination within the confines of their own legal system. This is the only mandatory obligation because the ‘directive did not prescribe a specific sanction; it leaves member states free to choose between the different solutions suitable for achieving its objective.’ This contingent obligation meant that this Directive was not directly effective on matters falling under the spectrum of sanctions for discrimination. This means that it was not mandatory in Von Colson for Germany to choose compensation as the requisite remedy necessary to ascertain the legitimate objective of Directive 76/207.
This clearly showed signs of the ECJ giving national courts some room to manoeuvre. But the ECJ seems less generous with issues falling under the spectrum of equality. Unlike Webb, the House of Lords in Pickstone was induced to interpret regulations in a way that amended the Equal Pay Act of 1970 contrary to its literal meaning in order to give efficacy to EC Law. Litster also gave efficacy to the intentions of Community law and not the intentions of Parliament from which the legislative piece in question was initially drafted.
This could be inferred as an encroachment on state sovereignty because national courts should be giving efficacy to the intentions of Parliament and not the EC. Given the fact that Kobler extended the ‘scope of the principle of state liability to cover breaches of Community law committed by national courts,’ national courts have no choice but to render efficacy to EC law.
Community legislation is likely to remain a potent source of authority. By virtue of being signatory to the EEC Treaty, legitimacy is given to the transfer of legislative power to the Community and the subsequent permeation of state autonomy; which permanently limits state sovereignty and unilateral acts that are incompatible with the concept of Community. Sovereignty is a not an immutable concept and a reflexive relationship exists between national courts, their member states and the Community, in that the Community can only exercise the power that states relinquish and national courts and their member states are only obliged to comply with areas that EC legislative pieces underpin.
- Beaumont P & Weatherill S 1999: EU Law, the Essential Guides to the Working of the European Union, 3rd Edition, Penguin.
- Chalmers, Hadjiemmanuil, Monti, Tomkins 2006: European Union Law, Cambridge University Press
- Craig, & De Burca 2003: EU Law, Text, Cases and Materials, 3rd edition, Oxford University Press
- Steiner J & Woods L 2006: EU Law, 9th edition, Oxford University Press
- Betlem G: ‘The Doctrine of Consistent Interpretation-Managing Legal Uncertainty,’ 2002, Oxford Journal Legal Studies
- Corthaut T & Lenaerts K: ‘The role of Primacy in invoking UK norms,’2006, ELR, Vol. 31 No.3
- Drake S: ‘Twenty Years after Von Colson: the impact of indirect effect on the protection of the individual’s Community rights,’ 2005, 30 ELR
- Steiner J: ‘From Direct Effects to Francovich: shifting means of enforcement of Community Law,’ , ELJ
Kloppenburg v Finanzamt Leer  ECR [70/83], Weatherill explains the discrepancy with Article 101: Beaumont P & Weatherill S 1999: EU Law, The Essential Guides to the Working of the European Union, 3rd Edition, p 444