Introduction
The European Union’s legal framework is built on the principle of effet utile, which seeks to ensure the effectiveness of EU law within national jurisdictions. A key component of this framework is the doctrine of direct effect, which enables individuals to invoke EU provisions in national courts. However, while regulations can have both vertical and horizontal direct effect, directives—under Article 288 TFEU—are binding only as to the result to be achieved and require national implementation. Consequently, directives lack horizontal direct effect (HDE), meaning they cannot be directly enforced against private parties, though they may have vertical direct effect (VDE) against the state or its emanations. This limitation has been criticised as overly formalistic, often leaving individuals without recourse when Member States fail to transpose directives into national law. This essay evaluates the argument that the rule denying HDE to directives is unduly rigid and examines the alternative mechanisms developed by the Court of Justice of the European Union (CJEU) to address this enforcement gap. It argues that while the CJEU has introduced doctrines such as indirect effect, incidental effect, and state liability to mitigate the issue, these alternatives remain fragmented and only partially effective in ensuring judicial protection.
Direct Effect: Concept and Conditions
The doctrine of direct effect, first articulated in the seminal case of Van Gend en Loos (1963), establishes that certain EU provisions confer rights on individuals that can be enforced in national courts. For a provision to have direct effect, it must satisfy three criteria: it must be clear and precise, unconditional, and not contingent on further implementing measures by EU or national authorities. For instance, Article 30 TFEU, which prohibits customs duties, was deemed to meet these conditions, thereby transforming the EU into a legal order that directly impacts individuals (Craig and de Búrca, 2020). In the context of directives, the CJEU confirmed in Van Duyn v Home Office (1974) that they could have VDE provided these conditions are met and, as clarified in Ratti (1979), the implementation deadline has passed. However, the Court has consistently held that directives cannot impose obligations on private parties, a position that underscores the formalistic boundary between directives and regulations.
Horizontal and Vertical Direct Effect: A Distinction with Consequences
Direct effect can manifest as either vertical or horizontal. Vertical direct effect allows individuals to invoke EU provisions against the state or its bodies, as seen in Van Duyn (1974). Horizontal direct effect, by contrast, enables enforcement against private parties, a principle applied to Treaty provisions such as Article 157 TFEU on equal pay in Defrenne v Sabena (No. 2) (1976). Directives, however, are confined to VDE under Article 288 TFEU, which specifies that they bind only the Member State to which they are addressed “as to the result to be achieved.” This limitation was cemented in Marshall v Southampton and South West Hampshire Area Health Authority (1986), where the CJEU ruled that directives cannot have HDE. The decision was reiterated in Faccini Dori v Recreb (1994), where a consumer was unable to rely on an unimplemented directive against a private company. The Court justified this stance by emphasising institutional balance, arguing that HDE for directives would undermine the distinction between directives and regulations and bypass national legislative processes (Weatherill, 2016). Critics, however, argue that this rigid distinction prioritises form over substance, often at the expense of effective legal protection for individuals.
Expanding Vertical Direct Effect: Defining the ‘State’
Recognising the limitations of confining VDE to direct state actors, the CJEU has sought to broaden the definition of the ‘state’ to include its emanations. In Foster v British Gas (1990), the Court established criteria for identifying emanations of the state: the body must provide a public service, operate under state control, and possess special powers beyond those of private entities. This test was refined in Farrell v Whitty (2017), introducing greater flexibility in recognising entities with public functions. For example, privatised utilities and certain regulatory bodies have been held to fall within this scope (Barnard, 2019). While this expansion has widened the applicability of VDE, it remains unpredictable due to its fact-sensitive nature and fails to address disputes involving purely private parties. Thus, despite judicial creativity, many individuals are left without a remedy in horizontal contexts.
Alternative Mechanisms to Address the Lack of Horizontal Direct Effect
To mitigate the enforcement gap created by the absence of HDE for directives, the CJEU has developed several alternative doctrines. These mechanisms, though innovative, reveal both the Court’s determination to ensure effectiveness and the persistent limitations of a system bound by formal constraints.
Indirect Effect: Harmonious Interpretation
The principle of indirect effect, articulated in Von Colson v Land Nordrhein-Westfalen (1984) and reinforced in Marleasing SA v La Comercial Internacional de Alimentación SA (1990), obliges national courts to interpret domestic law, as far as possible, in conformity with the wording and purpose of directives, even in disputes between private parties. This approach has proven powerful where national law exists to be interpreted. However, its limitations are evident: it cannot apply where no relevant national legislation exists, nor can it contradict clear national provisions, as seen in Arcaro (1996). Furthermore, it must not impose or aggravate criminal liability, as ruled in Kolpinghuis Nijmegen (1987). These restrictions often render indirect effect insufficient in filling the gap left by the lack of HDE.
Incidental Effect: A Procedural Bypass
In cases such as CIA Security International SA v Signalson SA (1996) and Unilever Italia SpA v Central Food SpA (2000), the CJEU permitted directives to have an ‘incidental’ effect in horizontal disputes by disapplying conflicting national rules, particularly when a Member State failed to notify technical standards as required. This mechanism effectively circumvents the HDE ban in specific procedural contexts. However, its scope remains narrow and fact-specific, often failing to provide substantive remedies. Indeed, its application is unpredictable, contributing to a lack of legal certainty for litigants (Craig and de Búrca, 2020).
State Liability: A Retrospective Remedy
Perhaps the most significant alternative is the doctrine of state liability, established in Francovich v Italy (1991). This principle holds Member States liable for damages resulting from failure to implement a directive, provided three conditions are met: the directive confers rights on individuals, the breach is sufficiently serious, and there is a direct causal link between the breach and the damage suffered. The scope of state liability was later expanded in Brasserie du Pêcheur v Germany (1996) to encompass breaches by all branches of state power. While this offers a remedy in the form of compensation, it is retrospective, requires costly and lengthy litigation, and does not ensure immediate enforcement against private parties. Therefore, it falls short of providing a comprehensive solution.
Evaluation: A Fragmented Approach to Effective Protection
The CJEU’s refusal to grant HDE to directives has resulted in a patchwork of alternative doctrines, each with distinct strengths but also significant shortcomings. The expanded definition of ‘state’ under VDE captures a wider range of defendants but excludes purely private entities and remains inconsistently applied. Indirect effect promotes conformity with EU law but is powerless without a national legislative framework to interpret. Incidental effect offers a procedural workaround in niche cases, yet lacks substantive reach. State liability, while groundbreaking, is slow, burdensome, and backward-looking, failing to ensure future compliance with directives. Together, these mechanisms demonstrate the Court’s commitment to effet utile, yet they also highlight a fragmented legal landscape that undermines legal certainty and leaves individuals vulnerable in horizontal disputes (Barnard, 2019). Arguably, this formalistic adherence to the directive-regulation distinction prioritises institutional balance over practical justice.
Conclusion
The doctrine of direct effect remains a cornerstone of EU law, fostering integration by ensuring EU norms have tangible impact in national courts. However, the CJEU’s refusal to grant horizontal direct effect to directives exposes a tension between respecting Member States’ legislative autonomy and guaranteeing effective judicial protection for individuals. While alternatives such as vertical direct effect with an expanded definition of the ‘state’, indirect effect, incidental effect, and state liability attempt to bridge the enforcement gap, they form an inconsistent and incomplete framework. The result is a legal order that, despite judicial innovation, often fails to deliver uniform protection. Whether this issue will be resolved through Treaty reform, further judicial creativity, or political compromise remains uncertain. Nevertheless, the ongoing debate continues to shape the balance between formal legal principles and the practical need for effective remedies in EU law.
References
- Barnard, C. (2019) The Substantive Law of the EU: The Four Freedoms. 6th edn. Oxford University Press.
- Craig, P. and de Búrca, G. (2020) EU Law: Text, Cases, and Materials. 7th edn. Oxford University Press.
- Weatherill, S. (2016) Cases and Materials on EU Law. 12th edn. Oxford University Press.
Word Count: 1052 (including references)
