Remedies for infringements of EU law in legal relationships between private parties (LBF vol. 18) 2019/8.2.1:8.2.1 Rulings of the Court of Justice date back in time

Remedies for infringements of EU law in legal relationships between private parties (LBF vol. 18) 2019/8.2.1

8.2.1 Rulings of the Court of Justice date back in time

Deze functie is alleen te gebruiken als je bent ingelogd.Deze functie is alleen te gebruiken als je bent ingelogd.Deze functie is alleen te gebruiken als je bent ingelogd.

348. In nos. 80 and 119 it is indicated that the Court’s preliminary rulings date back to the moment the rule of Union law interpreted entered into force.1 In Dansk Industri the Court recalls:

“According to settled case-law, the interpretation which the Court, in the exercise of the jurisdiction conferred upon it by Article 267 TFEU, gives to EU law clarifies and, where necessary, defines the meaning and scope of that law as it must be, or ought to have been, understood and applied from the time of its coming into force. It follows that, unlessthere aretruly exceptional circumstances, which is not claimed to be the case here, EU law as thus interpreted must be applied by the courts even to legal relationships whicharose and were established before the judgmentruling on the request for interpretation, provided that in other respects the conditions for bringing a dispute relating to the application of that law before the courts having jurisdiction are satisfied.”2 [Emphasis added: I.A.]

The interpretation of Union law by the Court of Justice may include the clarification of the effect of a provision of Union law – like in Laval and Angonese. Also, the interpretation of Union law by the Court of Justice may result in the conclusion that a particular legislative provision is in conflict with a provision of Union law and therefore has to be set aside – like in Mangold, Kücükdeveci and Dansk Industri.3 The case studies show that rulings of the Court of Justice can have serious implications for private parties that were not aware of the direct effect of a rule of Union law, as well as for parties that were confronted with the disapplication of a national provision incompatible with Union law, upon which they had relied in good faith. The consequences of the effect of Union law and, for example, the disapplication of a national provision may be at odds with their legitimate expectations.4

349. According to Article 264(2) TFEU the Court of Justice of the European Union can, when they have declared a rule of Union law to be invalid, decide to restrict the effects of the invalidity.5 This provision applies, by analogy, to preliminary rulings under Article 267 TFEU in which the Court of Justice was asked to interpret Union law, or in which the Court has declared the invalidity of a rule of Union law.6 The Court of Justice can decide to restrict the effect of an interpretation or of the invalidity of a rule of Union law by restricting the temporal effect of a ruling as well as by adopting a transitional period for the ruling to take effect.7 However, the Court hardly ever applies either of these methods. The following sections discuss the Court’s intransparant and incoherent approach to restricting the effect of its rulings, and highlights the ways in which that approach can affect private parties.

a) A restriction of the temporal effect of a ruling

350. The restriction of the temporal effect of a ruling answers the question to which legal situations a ruling applies. The Court of Justice restricts the temporal effect of a ruling when it wants to exclude legal situations in the period prior to the ruling from the scope of application of the ruling. It is for the Court – and for the Court alone8 – to decide upon the restriction of the temporal effects of an interpretation of a rule of Union law. Only in exceptional circumstances does the Court find reasons to restrict the temporal effect of a ruling.9 An example of such an exceptional case is Defrenne II, in which the Court decided that for reasons of legal certainty the direct horizontal effect of (now) Article 157 TFEU on equal pay for men and women could not be relied on in order to support claims concerning periods prior to the date of its judgment, except as regards the parties that had already brought proceedings or made an equivalent claim.10 In Barber11 the Court of Justice added that “overriding considerations of legal certainty preclude legal situations which have exhausted all their effects in the past from being called in question where that might upset retroactively the financial balance” of many legal relationships.12 This specific legal certainty formula, which thus applies to legal situations that exhausted their effects in the past, has been used in many cases ever since Barber – however, seldom actually resulting in a restriction of the temporal effect.13

351. The criterion of overriding considerations of legal certainty can include the protection of legitimate expectations. For instance in Bosman, the Court restricted the temporal effect of the direct effect of (now) Article 45 TFEU on the free movement of workers, but only in relation to compensation fees for transfer, training and development of football players.14 The Court of Justice held that such a temporal restriction would not be justified with regard to nationality clauses that restricted the transfer options for players based on their nationality:

“With regard to nationality clauses, however, there are no grounds for a temporal limitation of the effects of this judgment. In the light of the Walrave and Donà judgments, it was not reasonable for those concerned to consider that the discrimination resulting from those clauses was compatible with [Article 45 TFEU].”15 [Emphasis added: I.A.]

With this statement, the Court of Justice implies that, on the basis of former case law, the football unions could have anticipated that Article 45 TFEU would preclude a discriminatory provision in a private law instrument like the one in question.16 As a result, the football unions expectations that the nationality clauses were allowed were not legitimate and could therefore not justify a restriction of the temporal effect of the interpretation of Article 45 TFEU.

352. In addition to legal certainty and legitimate expectations, also the good faith of the actors as well as the number of legal situations and all interests potentially affected by the ruling play a prominent role in the Court of Justice’s appraisal.17 In that respect, in Grzelczyk – a vertical case – the Court of Justice stated:

“It is also settled in case-law that the financial consequences which might ensue for a Member State from a preliminary ruling do not in themselves justify limiting the temporal effect of the ruling (see, in particular, Buchner and Others, paragraph 41).

The Court has taken that step only in quite specific circumstances, where there was a risk of serious economic repercussions owing in particular to the large number of legal relationships entered into in good faith on the basis of rules considered to be validly in force and where it appeared that both individuals and national authorities had been led into adopting practices which did not comply with Community law by reason of objective, significant uncertainty regarding the implications of Community provisions, to which the conduct of other Member States or the Commission may even have contributed.”18 [Emphasis added: I.A.]

353. In Gmina Wroclaw I – another vertical case – the Court of Justice abridged the issue on temporal effect:

“It is only quite exceptionally that the Court may, in application of the general principle of legal certainty inherent in the EU legal order, be moved to restrict for any person concerned the opportunity of relying on a provision which it has interpreted with a view to calling into question legal relationships established in good faith. Two essential criteria must be fulfilled before such a limitation can be imposed, namely that those concerned should have acted in good faith and that there should be a risk of serious difficulties.”19 [Emphasis added: I.A.]

Considering the fact that all interests have to be taken into account it is presumed that not only the (financial) consequences for the Member State play a role, but also those of private parties.20 The same holds true for the nature of the number of legal relationships affected: it should not matter whether that concerns vertical or horizontal legal relationships.21 Lastly it is noted that the temporal effect of rulings of the Court of Justice is distinguished from the questions concerning limitation periods (verjaring; Verjährung). This topic goes beyond the scope of this study.22

b) A transitional period to defer the effect of a ruling

354. The limited temporal effect of a ruling of the Court of Justice thus relates to the question to which legal situations the ruling applies – i.e. whether or not it applies to legal relationships and legal situations existing prior to the date of the ruling. The restriction of the temporal effect of a ruling is distinguished from the adoption of a transitional period, which solely defers the effect of a ruling and thus relates to the question from when a ruling has effect.23 A transitional period does not as such answer the question to which legal relationships the ruling applies after the transitional period has expired. In Winner Wetten, a case in which a national court had adopted a transitional period during which the effects of national legislation that was in conflict with Articles 49 and 56 TFEU24 were maintained, the Court of Justice puts the effectiveness of Union law first. It emphasizes with reference to Simmenthal II that rules of Union law “which are an immediate source of rights and obligations for all concerned, whether Member States or individuals who are parties to legal relationships under Union law, must deploy their full effects, in a uniform manner in all Member States, as from their entry into force and throughout the duration of their validity”.25 If national courts that deemed certain national legislation incompatible with Union law were allowed to adopt a transitional period during which the effects of that legislation are maintained, the primacy and the effectiveness of Union law and the right to effective judicial protection would be undermined.26 In the particular case, a considerable number of Member States had submitted observations in which they, in essence, argued that provisionally maintaining the effects of national legislation that is incompatible with Union law is justified in exceptional circumstances. The Court agrees that truly exceptional circumstances27 can justify provisionally maintining the effects of legislation that is incompatible with Union law, namely where there are overriding considerations of legal certainty involving all – public and private – interests at stake. The Court however wards off the suggestion that national courts have the power to decide upon this issue: as a rule, solely the Court itself can decide upon this.28

355. In this book, the ruling in Test-Achats serves as an example of a case in which the Court of Justice adopted a transitional period.In line with the ruling of the Court of Justice, the Cour constitutionnelle adopted a transitional period for the invalidity of the Belgian law to take effect.29 The dubious issue in Test-Achats is that the transitional period was adopted by the Court without any reasoning. Not a single word was stated about the existence of truly exceptional circumstances or overriding reasons of legal certainty that would justify the transitional period.30 The lack of insights into its considerations to adopt a transitional period is disappointing because it remains unclear how the Court of Justice concretises the condition that the circumstances must be exceptional.

Deze functie is alleen te gebruiken als je bent ingelogd.