This opinion will argue that the statement is false. The doctrine of indirect effect, also known as the principle of consistent interpretation, was developed by the Court of Justice of the European Union (CJEU) precisely to ensure that EU Directives can have legal consequences in disputes between private parties (horizontal situations). While the Court has refused to grant Directives horizontal direct effect, it has firmly established that national courts have a duty to interpret national law in conformity with EU Directives, including in cases involving only private individuals.
The Principle of Indirect Effect
Under Article 288 of the Treaty on the Functioning of the European Union (TFEU), a Directive is binding on the Member State to which it is addressed concerning the result to be achieved, but leaves the choice of form and methods to the national authorities. The CJEU has held that Directives, unlike Treaty Articles or Regulations, cannot have horizontal direct effect. This means a private individual cannot directly rely on an unimplemented Directive to bring a claim against another private individual (Case 152/84 Marshall v Southampton Health Authority). The Court reasoned that to hold otherwise would be to impose obligations on individuals where the Directive was only addressed to the Member State.
To overcome this limitation and ensure the effectiveness of EU law, the CJEU developed the doctrine of indirect effect in Von Colson and Kamann v Land Nordrhein-Westfalen (Case 14/83). The Court ruled that national courts are required to interpret their national law, "in the light of the wording and the purpose of the Directive in order to achieve the result" pursued by it. This obligation is derived from the duty of loyal cooperation found in Article 4(3) of the Treaty on European Union (TEU), which requires Member States (including their courts) to take all appropriate measures to ensure fulfilment of their EU law obligations.
Horizontal Application of Indirect Effect
The crucial point is that this interpretive duty is not confined to cases where an individual sues the state (vertical situations). The CJEU confirmed that the principle also applies in horizontal disputes. In Harz v Deutsche Tradax GmbH (Case 79/83), a case heard at the same time as Von Colson involving a claim of sex discrimination against a private employer, the Court affirmed that the obligation of consistent interpretation applies irrespective of whether the parties are public or private.
The leading authority is Marleasing SA v La Comercial Internacional de Alimentación SA (Case C-106/89). This case involved a dispute between two private companies regarding the validity of a company's formation. The CJEU held that a national court, when hearing a case between private individuals, must interpret its national law, whether passed before or after the Directive, as far as possible in line with that Directive. The obligation is placed on the national court as an organ of the state. Therefore, it is the court fulfilling the state’s duty under the Treaties, rather than an EU obligation being directly imposed on a private party. This provides a clear basis for the horizontal application of indirect effect.
However, the duty of consistent interpretation is not without limits. The Marleasing judgment itself stated the duty applies only "so far as possible". This means it does not require a national court to adopt an interpretation that is contra legem, or directly contrary to the clear wording of the national statute (Wagner Miret v Fondo de Garantía Salarial, Case C-334/92). Furthermore, the principle cannot be used to create or aggravate criminal liability in the absence of clear implementing legislation (Case C-168/95 Arcaro).
Conclusion
In conclusion, the statement that EU Directives can never enjoy horizontal indirect effect is false. The doctrine of indirect effect, created in Von Colson and confirmed for horizontal situations in Harz and Marleasing, is a fundamental principle of EU law. It obliges national courts to interpret domestic legislation consistently with the aims of a relevant Directive in disputes between private parties. While this interpretive duty has recognised limits, its existence and application in horizontal claims are firmly established in the case law of the CJEU, ensuring that Directives have a significant legal impact even in the private sphere.
References
Cases
- Arcaro (Case C-168/95) [1996] ECR I-4705.
- Harz v Deutsche Tradax GmbH (Case 79/83) [1984] ECR 1921.
- Marleasing SA v La Comercial Internacional de Alimentación SA (Case C-106/89) [1990] ECR I-4135.
- Marshall v Southampton and South-West Hampshire Area Health Authority (Case 152/84) [1986] ECR 723.
- Von Colson and Kamann v Land Nordrhein-Westfalen (Case 14/83) [1984] ECR 1891.
- Wagner Miret v Fondo de Garantía Salarial (Case C-334/92) [1993] ECR I-6911.
Legislation
- Consolidated Version of the Treaty on European Union [2012] OJ C326/13.
- Consolidated Version of the Treaty on the Functioning of the European Union [2012] OJ C326/47.
