UNIVERSITY OF PRISHTINA “HASAN PRISHTINA” - LAW FACULTY

POSTGRADUATE STUDIES – MASTER

DEPARTMENT – ADVANCED EUROPEAN STUDIES

COURSE: EUROPEAN UNION INSTITUTIONS

TOPIC: THE DIRECT EFFECT & INDIRECT EFFECT OF THE EUROPEAN

UNION

CANDIDATE: MENTOR:
Ermonda Zogiani Prof. Dr. Hajredin Kuqi

Pristina, 2021

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 TABLE OF CONTENTS
LIST OF ABBREVIATIONS.......................................................................................................
RESEARCH METHODS ...............................................................................................................
RESEARCH QUESTIONS. ...........................................................................................................
HYPOTHESES OF RESEARCH...................................................................................................
STRUCTURE OF RESEARCH.....................................................................................................
INTRODUCTION.........................................................................................................................

CHAPTER I
1) DIRECT EFFECT OF THE EUROPEAN UNION .........................................................
1.1 The concept of Direct Effect.............................................................................................
1.2. Types of Direct Effect......................................................................................................
1.3. Horizontal Direct Effect..................................................................................................
1.4. Vertical Direct Effect ......................................................................................................
a) Meaning of Regulations................................................................................................
b) The direct effect of regulations on National Legal System...........................................
c) Meaning of Decisions...................................................................................................
d) The direct effect of Decisions on National Legal System.............................................
1.5. .........................................................................................................................................

CHAPTER II
2) INDIRECT EFFECT OF THE EUROPEAN UNION.......................................................
2.1. The concept of Indirect Effect...............................................................................................
2.2. The indirect effect of Directives on National Legal System ..................................................
2.2.1. Direct Effect of Directives ( Directions) ....................................................................
2.2.2. Exceptions to the “principle Vertical but not horizontal”Direct Effect of Directives.
1. Vertical Direct Effect............................................................................................................
2. No Horizontal Direct Effect.................................................................................................
2.2.Characterictics of Directives........................................................................................ .

CHAPTER III
3) CASES BY THE EUROPEAN COURT OF JUSTICE.......................................................
 26/62 Van Gend en Loos; ………………………………………………………………...
 State; 14/83 Von Colson;………………………………………………………………

CONCLUSIONS ..........................................................................................................................
REFERENCES .. ..........................................................................................................................

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LIST OF ABBREVIATIONS

CJEU – Court of Justice of the European Union

TFEU – Treaty on Functioning of the European Union
EU - European Union
CEEC - Commission of the European
Ecnomic Community
CEU- Council of the European Union
Art – Article
Ch – Chapter
TEU – Treaty on European Union
MS – Member States
EEC – European Economic Community
ECSC – European Coal and Steal
Community
EAEC – European Atomic Energy
Comunity

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RESEARCH QUESTIONS

This Research Paper is directed and structured through research questions.

The research questions are as follows:

1. Firstly, how does the doctrine of direct effect affect state sovereignty?
2. Secondly, how has (vertical) direct effect been received by national courts?
3. And, thirdly, how would the recognition of horizontal direct effect makes an impact on
state sovereignty?

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 STRUCTURE OF RESEARCH PAPER

This Research Paper includes three specific chapters and their structuring is as follows:

First Chapter of paper addresses issues such as Direct Law of the European Union, the
direct effect of EU Law, meaning of Regulations, the direct effect of regulations on National
Legal System, meaning of Decisions, the direct effect of Decisions on National Legal
System, Horizontal Direct Effect and Vertical Direct Effect.

Second Chapter of paper delves deeper into the issue by addressing the meaning of Indirect
Law of the European Union, the Indirect Effect of EU Law, Meaning of Directives (
Directions), Characterictics of Directives, the Indirect Effect of Directives on National
Legal System.

Third Chapter of paper elaborates diffrent cases by European Court of Justice such as Van
Gend en Loos, Van Duyn v. Home Office, Rayners v. Belgian State; Von Colson; Defrenne
v. Sabena; Marshall v. Southampton;

The paper also contains the conclusions and recommendations, which are attached at the
end of this research and as such reflect the achievements of the paper regarding the direct
effect and indirect effect of European Union.

At the end of the paper is presented the bibliography where I have used contemporary
literature by local and foreign authors, scientific journals, domestic and international laws
and decisions of European Court of Justice regarding to the direct effect and indirect effect
of EU, which is the key object of this paper.

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 INTRODUCTION

The doctrine of Direct Effect is a fundamental

principle of EU law developed by the Court of Justice
of the European Union in Van Gend en Loos.

It is a mechanism through which individuals can

enforce rights in Member States’ courts, based on EU
law a remedy against non-compliance with EU law.

The Principle of Direct Effect enables individuals to immediately invoke a European provision
before a national or European court. This principle only relates to certain European acts.
Furthermore, it is subject to several conditions. It can apply in relation
to regulations, directives, treaty provisions and decisions.

The Direct Effect of European law is, along with the principle of precedence, a fundamental
principle of European law.

The direct effect principle therefore ensures the application and effectiveness of European law in
EU countries. However, the CJEU defined several conditions in order for a European legal act to be
immediately applicable. In addition, the direct effect may only relate to relations between an
individual and an EU country or be extended to relations between individuals.

Indirect effect is a principle of the European Union Law, whereby national courts of the member
states of the EU are required to interpret national law in line with provisions of EU law. The
principle of indirect effect contrasts with the principle of direct effect, which, under certain
conditions, allows individuals to invoke the EU law itself before national courts.

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 CHAPTER I

DIRECT EFFECT OF THE EUROPEAN UNION

- The concept of direct effect –

Direct Effect is a principle of EU law. The term ‘direct effect’ was first used by the Court of
Justice of the European Union (CJEU) in a judgement on 5 February 1963 when it attributed, to
specific treaty articles, the legal quality of direct effect in the case of NV Algemene Transporten
Expeditie Onderneming van Gend en Loos v. Nederlandse Administratie der Belastingen (Case
26/62). 1

Direct Effect is one of the hallmarks of the EU legal order. Van Gend en Loos, the case which
established direct effect and the autonomy of the EU legal order has a near mythical status as the
alpha and omega of the EU legal order. The essence of direct effect is as simple as it is
fundamental. Direct effect means that individuals and companies can rely on EU law before all
national courts and public bodies, just as they can on national law. EU law, therefore, is not some
foreign or international law that must first be imported into the national legal order to have legal
effect. Rather, direct effect means that EU law is part of national law.2Direct effect refers to
whether individuals can rely on the EU law in domestic courts.

TYPES OF DIRECT EFFECT

There are two types of direct effect – vertical and horizontal.

1. Vertical direct effect means that you can use EU legislation against a member state.
(This means that individuals can invoke a European provision in relation to the country).

2. Horizontal direct effect means that you can use EU legislation against another individual.
(This means that an individual can invoke a European provision in relation to another
individual).

Treaties and regulations are vertically and horizontally directly effective. Either a treaty or a
regulation can be used as a piece of law in a member state Court against the state or another
individual.
A provision of EU law may be capable of direct effect if it is clear and precise, unconditional and

1
https://www.eurofound.europa.eu/observatories/eurwork/industrial-relations-dictionary/direct-effect
2
Armin Cuyvers, East African Community Law, Institutional, Substantive and Comparative EU Aspects, published by
Brill, Nov.2021
7
does not give the member states substantial discretion in its application.
EU treaty provisions, regulations and decisions are capable of both vertical and horizontal direct
effect.3

According to the type of act concerned, the Court of Justice has accepted either a full direct
effect (i.e. a horizontal direct effect and a vertical direct effect) or a partial direct effect (confined
to the vertical direct effect).4

 Direct Effect of other EU Norms

Van Gend en Loos only established the direct effect of Treaty provisions.

The question therefore remained if secondary EU law could also have direct effect, and if so under
what conditions?

By now the CJEU has also ruled on the direct effect of all forms of secondary legislation
enumerated in Article 288 TFEU, being regulations, directives, decisions, recommendations and
opinions. In addition, the CJEU has clarified that international agreements concluded by the EU
law can also have direct effect.

 The concept of Regulations

A regulation shall have general application. It shall be binding in its entirety and directly applicable
in all Member States.5 Regulations are specific acts of EU law passed by the Council, Parliament
and Commission under the consultation or co-decision procedures. Regulations are binding and do
not need any domestic legislation for them to become law in member states. Regulations make EU
secondary law.6

 The Direct Effect of Regulations

As Article 288 TFEU provides, a regulation ‘shall be binding in its entirety and directly applicable
in all Member States. Regulations, therefore, do not require any support of or conversion into
national law to directly apply in the national legal orders of the Member States. At the same time,
this does not mean that all parts of all regulations apply directly. To be directly effective, a
provision in a directive must also be unconditional, sufficiently clear and pre-cise, and require no
further implementation. For if a provision in a regulation does not contain a sufficiently specific
right, there simply is nothing that can be applied directly.

3
https://uk.practicallaw.thomsonreuters.com/6-107-
6114?transitionType=Default&contextData=(sc.Default)&firstPage=true
4
https://eur-lex.europa.eu/legal-content/EN/TXT/?uri=LEGISSUM%3Al14547
5
Official Journal of the European Union, 2012/C, 326/01, Section 1, Article 288 ( ex Article 249 TEC)
6
http://hum.port.ac.uk/europeanstudieshub/learning/module-3-governance-in-a-multi-level-europe/secondary-law/
8
  The Direct Effect of Decisions, Opinions and Recommendations

Decisions can have direct effect. According to the CJEU, the mere fact that the Treaty does not
explicitly mention the direct effect of decisions, as it does for regulations, does not mean that
decisions lack the capacity for direct effect. The addressee of a decision can, therefore, directly rely
on the decision if it is sufficiently clear and precise, unconditional, and leaves no discretion to
Member States with regards to its implementation. Opinions and recommendations, on the other
hand, lack binding legal force altogether and hence cannot have direct effect.7

 The concept of Decisions

A decision shall be binding in its entirety. A decision which specifies those to whom it is addressed
shall be binding only on them.8

7
Emmanuel Ugirashebuja, John Eudes Ruhangisa, Tom Ottervanger, Armin Cuyvers, East African Community Law:
Institutional, Substantive and Comparative EU aspects, Published by Brill, Nov.2021
8
TFEU, Article 288
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 CHAPTER II

INDIRECT EFFECT OF EUROPEAN UNION

The doctrine of Indirect Effect - requires national courts, as organs of the Member State
responsible for the fulfilment of EU obligations, to interpret domestic law consistently with
directives. This doctrine achieves indirectly, through the technique of judicial interpretation of
domestic law, the result obtainable through the doctrine of direct effect of directives.

In the case of provisions of directives having direct effect, national courts must disregard domestic
law where there is a conflict between the directive and domestic law. In the case of a directive
lacking direct effect, the national courts must make every effort to interpret domestic law
consistently with the directive.

The Indirect Effect is a principle of interpretation whereby the courts of the member states of
the European Union (EU) must interpret national laws (particularly any that implement EU
directives) as far as possible in a manner that is consistent with the provisions of EU law even if
they do not have direct effect.
Also known as the principle of harmonious interpretation.9

 Meaning of Directives ( Directions)

Directives are interesting in the way that they are EU law, but must be implemented by the MS on
national level. They are binding as to the result to be achieved.10
Directives are instructions to make national law fall in line with EU law.
Directives are different compared to regulations. While also passed through the same procedures as
regulations, they are in essence instructions (or directions) for member states to adapt or create law
to bring national law in line with EU law. They give member states an end-goal that they must
reach. How they achieve the end-goal is up to the member state.11

A directive shall be binding, as to the result to be achieved, upon each Member State to which it is
adressed, but shall leave to the national authorities the choice of form and methods.12
9
https://uk.practicallaw.thomsonreuters.com/7-107-
6712?transitionType=Default&contextData=(sc.Default)&firstPage=true
10
Emmanuel Ugirashebuja, John Eudes Ruhangisa, Tom Ottervanger, Armin Cuyvers, East African Community Law:
Institutional, Substantive and Comparative EU aspects, Publisher by Brill, 2017
11
http://hum.port.ac.uk/europeanstudieshub/learning/module-3-governance-in-a-multi-level-europe/secondary-law/
12
Paul Craig, The Lisbon Treaty: Law, Politics, and Treaty Reform (Oxford: Oxford University Press, 2010), page 250;

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  The Direct Effect of Directives

The possible direct effect of directives is one of the more complex and potentially confusing parts of
EU law. The starting point, however, is very clear. Directives normally do not have direct effect.
As Article 288 TFEU - directives are addressed to Member States, not to individuals. If all goes
well, Member States implement directives in their own legal order within the prescribed period.
Individuals can then rely on the national law implementing the directive, and do not need to rely on
the directive itself. If directives are implemented timely and correctly, therefore, they never acquire
direct effect.

Problems arise, however, where Member States fail to implement a directive or implement a
directive incorrectly. In such cases, individuals are unable to rely on a national implementing law to
enforce any rights that the directive may have given them. To fill this gap, and make sure Member
States do not get away with not implementing directives, the CJEU has found that directives can
have vertical direct effect where they have not been correctly implemented and the
implementation period is over.

Compared to Treaty provisions and regulations, therefore, directives must meet some additional
requirements in order to have direct effect.

The cumulative requirements for a provision in a directive to have direct effect are as follows:

1. The provision must be sufficiently clear and precise;

2. It must be unconditional, and

3. It must leave no legislative discretion to the Member State.

4. In addition, the implementation period must have passed, and;

5. The directive has not been implemented or has not been imple-mented correctly.

Directives, therefore, cannot have direct effect before the implementation period has expired.
Moreover, the CJEU has consistently ruled that directives can only have so-called vertical direct
effect. This means that the direct effect of directives can only be relied upon against the state or
emanations of the state. Directives can never have horizontal direct effect, which means they
cannot be relied upon against other individuals. In a conflict between two individuals, for example
two private companies litigating over a commercial contract, neither party can therefore directly
rely on any EU directives, even if these directives grant them a clear, precise and unconditional
right.

The lack of horizontal direct effect of directives creates a certain gap in the legal protection of
individuals and the effectiveness of EU law. Where Member States for example fail to implement a

11
directive on consumer protection, consumers cannot invoke their rights under the directive against
private companies violating these rights.13

 Characterictics of Directives

Directives can not bind individuals direclty, as they have no implementing power and no horizontal
effect.14
So what happens if the state does not implement a directive?

If a state fails to implement a directive within the time given by the EU then an individual can take
the state to court for non-implementation. It is important to remember that in situations when the
state has been taken to court, the ECJ has adopted a ‘wide perception’ of the state, deeming the
state to include all areas of government, including schools, NHS trusts and local authorities.

One must, however, refrain from seeing this as an entirely one sided process of the EU passing
legislation over member states. Member states (in the Council of Ministers) collectively approve
these decisions and they are only applicable in community areas and are currently not applicable in
areas such as defence, taxation, pensions, social policy etc where national governments remain, in
general, the highest authority.

13
Emmanuel Ugirashebuja, John Eudes Ruhangisa, Tom Ottervanger, Armin Cuyvers, East African Community Law:
Institutional, Substantive and Comparative EU aspects, Published by Brill, Nov.2021
14
Arsim Bajrami, Enver Hasani, Hajredin Kuçi, Introduction to the Legal Sistem in Kosovo, Press 2019, page 83
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 CHAPTER III

CASES BY THE EUROPEAN COURT OF JUSTICE

Van Gend en Loos: Establishing Direct Effect of Treaty Provisions

The direct effect of European law has been enshrined by the Court of
Justice in the judgement of Van Gend en Loos of 5 February 1963.
Van Gend en Loos illustrates how small cases can make good law.

The judgment concerned the company of Van Gend en Loos that wanted to import the rather
unspectacular chemical ureaformaldehyde into the Netherlands from Germany. The Netherlands
wanted to impose an import duty of 8%, which was higher than the import tariff that applied when
the Netherlands joined the EEC. Van Gend en Loos argued that this increase violated what was
then Article 12 of the EEC Treaty, which read:

“Member States shall refrain from introducing between themselves any new customs duties on
imports or exports or any charges having equivalent effect, and from increasing those which they
already apply in their trade with each other”.

In its defense, the Dutch Government argued that Article 12 EEC was an international obligation
only directed at the state, and that a private company like Van Gend en Loos could not rely on it.

The CJEU disagreed, and held that Treaty provisions could have direct effect if they met three
cumulative conditions:
1. The measure must be sufficiently clear and precise;
2. It must be unconditional, and;
3. It must leave no legislative discretion to the Member State.

Jointly, these criteria essentially require that, to be directly effective, a rule of EU law actually
gives a right to an individual, and that this right can be sufficiently determined on the basis of the
Treaty provision alone, without requiring further legislative action by the Member State.

Applying these criteria in In Van Gend en Loos, the CJEU held that the prohibition to increase
customs duties in Article 12 EEC was sufficiently clear, precise and unconditional. As a clear
prohibition, furthermore, it required no further implementation. Consequently, Article 12 EEC
had direct effect, and the company of Van Gend en Loos could directly rely on it to challenge

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 the Dutch increase in import tariffs.15

In this judgement, the Court states that European law not only engenders obligations for EU
countries, but also rights for individuals. Individuals may therefore take advantage of these rights
and directly invoke European acts before national and European courts. However, it is not
necessary for the EU country to adopt the European act concerned into its internal legal system.

The doctrine of Indirect Effect, or consistent interpretation, is a duty that national courts have, as
part of the Member State responsible for fulfilment of EU obligations, to interpret national law in
light of EU law, especially with Directives. The principle was developed by the Court of Justice
in Von Colson and its scope was widened in Marleasing.

It is also a means to counteract, at least partially, the negative effects of the non-recognition of
horizontal direct effect of Directives.

Case Von Colson (1984), It is a case concerning the doctrine of indirect effect.

Facts:

In this case, Ms Van Colson had applied for a job with the prison service and Ms Harz had applied
for a job with a private company. However, both had been rejected.
The German court found that they had been rejected on grounds of sex. Moreover, the rejection had
not been justified. As a result, the German court ruled they were entitled to compensation in the
form of travelling expenses. However, it was argued that compensation in this form did not meet
the requirements of Equal Treaty Directive 76/207.

Held:

In conclusion, it was held that it falls on the courts to interpret national law in such a way as to
ensure that the objectives of the Directive are achieved.

Principle:

In the Case 14/83 Von Colson, the German courts had to interpret German law to ensure an
effective remedy as required by Directive 76/207.
“It is for the national court to interpret and apply the legislation adopted for the implementation of
the Directive in conformity with the requirements of Community law. This is insofar as it is given
as discretion to do so under national law”.

15
Emmanuel Ugirashebuja, John Eudes Ruhangisa, Tom Ottervanger, Armin Cuyvers, East African Community Law:
Institutional, Substantive and Comparative EU aspects, Published by Brill, Nov.2021, page 167
14
Indirect Effect:

Without horizontal direct effect of Directives, many individuals were left with no recourse to
certain rights.
The doctrine of indirect effect requires that national courts must comply with obligations in EU law
as far as possible. This was confirmed in Case 14/38 Von Colson and Kamann v Land Nordreihn-
Westfalen (1984) ECR 1891.

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 CONCLUSIONS

The introduction and development by the Court of direct effect in general, starting with the
case Van Gend en Loos judgment, and the recognition by the Court of direct effect in
particular of directives with the case Van Duyn, seems to reflect the Court’s aim to provide
for (full) effectiveness of EU law. According to EU law, only regulations can have both vertical and
horizontal direct effect, while directives only can have direct effect in vertical situations.

Under the legal status quo, the main rule is that directives can have vertical direct effect if
the directive provision in question is (sufficiently) precise and unconditional, provided that
the directive has not been implemented or has been improperly implemented. This would
per se not amount to an intrusion on the MS’ sovereignty, since they relinquished a part of
their sovereignty when they entered the EU, and the MS shall act in accordance with the
principle of sincere cooperation as laid down in Art 4(3) TEU.403 If a MS does not transpose a
directive within the time limit, it does not act in compliance with the Treaty, and it can
therefore, not take advantages as against individuals for its own failure. The problem arises
with the exceptions and whether they can be considered to amount to an intrusion on state
sovereignty, which is beyond the limited fields set by the Treaty.

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 REFERENCES

 Paul Craig, The Lisbon Treaty: Law, Politics, and Treaty Reform (Oxford: Oxford University
Press, 2010);
 Paul Craig and Grainne de Burca, EU Law: Text, Cases, and Materials ( Oxford: Oxford
University Press, 2011);
 Emmanuel Ugirashebuja, John Eudes Ruhangisa, Tom Ottervanger, Armin Cuyvers, East
African Community Law: Institutional, Substantive and Comparative EU aspects, Publisher
by Brill, 2017
 Official Journal of the European Union, 2012/C, 326/01
 https://eur-lex.europa.eu/legal-content/EN/TXT/?uri=LEGISSUM%3Al14547
 https://uk.practicallaw.thomsonreuters.com/6-107-
6114?transitionType=Default&contextData=(sc.Default)&firstPage=true
 https://www.lexisnexis.co.uk/legal/guidance/indirect-effect-of-eu-law
 https://simplestudying.com/case-14-83-von-colson-and-kamann-v-land-nordreihn-
westfalen-1984-ecr-1891/
 http://hum.port.ac.uk/europeanstudieshub/learning/module-3-governance-in-a-multi-
level-europe/primary-law/
 https://uk.practicallaw.thomsonreuters.com/7-107-
6712?transitionType=Default&contextData=(sc.Default)&firstPage=true
 https://www.eurofound.europa.eu/observatories/eurwork/industrial-relations-
dictionary/direct-effect

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