Remedies for infringements of EU law in legal relationships between private parties (LBF vol. 18) 2019/2.2:2.2 Direct horizontal effect

Remedies for infringements of EU law in legal relationships between private parties (LBF vol. 18) 2019/2.2

2.2 Direct horizontal effect

Documentgegevens:

mr. I.V. Aronstein, datum 01-09-2019

Datum: 01-09-2019
Auteur: mr. I.V. Aronstein
JCDI: JCDI:ADS141353:1
Vakgebied(en): EU-recht / Algemeen
Burgerlijk procesrecht / Algemeen

19. From a private law point of view, it is logical to look at the precise way in which a rule of Union law can be invoked by a private party against another private party and how it exactly influences the horizontal legal relationship when qualifying the specific applicability of a norm of Union law to a horizontal legal relationship.1 From that point of departure, direct horizontal effect means that a rule can directly be invoked by a private party against another private party and that it directly impacts a horizontal legal relationship; a rule with direct horizontal effect creates rights and obligations and can also limit the scope of rights and obligations.2

Whereas the conditions for and the consequences of direct vertical effect are clear,3 such cannot be said in relation to the conditions for direct horizontal effect. Analysing the Court of Justice’s case law, it seems that being “legally complete”4 is not a guarantee for a provision to have direct horizontal effect. A number of Treaty provisions have direct horizontal effect.5 Regulations, if relevant, always have direct horizontal effect.6 Directives never have direct horizontal effect.7 Whether (some of) the general principles of Union law and (some of) the rights and principles in the Charter of Fundamental Rights have direct horizontal effect has been open to debate.8 In Egenberger the Court of Justice seems to have given green light for direct horizontal effect of, at least, Article 21 Charter by stating that:

“The prohibition of all discrimination on grounds of religion or belief is mandatory as a general principle of EU law. That prohibition, which is laid down in Article 21(1) of the Charter, is sufficient in itself to confer on individuals a right which they may rely on as such in disputes between them in a field covered by EU law […]. As regards its mandatory effect, Article 21 Charter is no different, in principle from the various provisions of the founding Treaties prohibiting discrimination on various grounds, even where the discrimination derives from contracts between individuals […].”9

It is striking that the Court of Justice included this consideration in its ruling, because the referring court had not asked anything about the potential direct horizontal effect of Charter provisions; rather the preliminary questions were restricted to the interpretation of Article 4(2) Directive 2000/78 and the disapplication of a national legislative provision that was incompatible with the principle prohibiting discrimination on account of religion and belief.10 In subsequent judgments, namely Bauer and Broûonn and Cresco Investigation,the Court of Justice referred to this consideration in Egenberger and adopted similar conclusions.11 The Court of Justice refers to Defrenne II, Angonese, Ferlini and Viking. Each of these cases concern the direct horizontal effect of Treaty provisions. However, strictly speaking, the technique applied in Egenberger, Bauer and Broûonn and Cresco Investigation is different, which makes it hard to interpret the Court’s words.12 Be that as it may, the Court’s consideration may encourage private parties to directly invoke Charter provisions that comply with the AMS-criterion against another private party, either as a basis for a claim or as a ground of justification for the restriction of a right of the other party.13

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Cf. Hartkamp, Sieburgh & Devroe (eds.), Casebook 2017, pp. 3-22, especially pp. 14-18. Hartkamp 2016/12. Aronstein2011b. Aronstein 2014. Fornasier2015, p. 44.

See Case study I. Cf. Hartkamp, Sieburgh & Devroe (eds.), Casebook 2017, p. 3. Hartkamp 2016/12: “it creates, modifies or extinguishes rights and obligations between the parties”.

See §2.1.1.

See footnote 5. I recall that the Court of Justice has repeatedly denied the direct horizontal effect of the free movement of goods (Sapod Audic), although some authors see an opening in CJ 12 July 2012, Case C-171/11 (Fra.bo). Van Leuken 2017/116-120. Hartkamp 2016/57-57a. Hartkamp, Sieburgh & Devroe (eds.), Casebook 2017, p. 10. Ebers 2016, pp. 501-505. Nuanced: Lenaerts & Van Nuffel 2017/181. Verbruggen 2017, pp. 50-70. However, with an eye on the broad interpretation of ‘emanation of the State’ – which makes the legal relationship a vertical one – I hesitate to endorse their approach. On the broad interpretation of ‘emanation of the State’ CJ 10 October 2017, C-413/15 (Farrell II), paras. 32-35. See further §3.1.

Thus far, the provisions in the TFEU that are awarded direct horizontal effect are Articles 18 (non-discrimination on account of nationality), 157 (equal pay; Defrenne II), 45 (free movement of workers; Bosman, Walrave and Koch, Olympique Lyonnaise, Angonese), 49 (freedom of establishment; Viking), 56 (freedom of services; Laval), 101 (prohibition of anticompetitive conduct: Courage/Crehan, Manfredi) and 102 (prohibition of abuse of dominance). See Chapter 3. Although the Court of Justice has not unambiguously confirmed this, it has been argued that Articles 34 and 35 TFEU on the free movement of goods also have direct horizontal effect. See for example Van Leuken 2017, Chapter 7. Hartkamp 2016/57-57a. Hartkamp, Sieburgh & Devroe (eds.), Casebook 2017, p. 10. Ebers 2016, pp. 501-505.

This follows from Article 288 TFEU. However, this relates only to the provisions in Regulations that are addressed to private parties and create subjective rights; provisions that are addressed only to Member States and that do not create subjective rights as such obviously lack direct horizontal effect. CJ 20 May 2003, Case C-108/01 (Prosciutto di Parma), paras. 87-89. See Winter 1972, pp. 435-437.

According to Article 288 TFEU directives are directed to Member States, which have to implement them in their domestic legislation. Therefore they cannot directly impose obligations upon private parties. CJ 26 February 1986, Case 152/84 (Marshall I), para. 48.CJ 14 July 1994, Case C-91/92 (Faccini Dori), para. 20.CJ 5 October 2004, Joined Cases C-397/01 to C-403/01 (Pfeiffer), paras. 108-109. CJ 26 September 2000, Case C-443/98 (Unilever Italia), para. 35. CJ 7 August 2018, Case C-122/17 (Smith), paras. 42-43. Lenaerts & Van Nuffel 2017/781-782. Hartkamp 2016/156. Ebers 2016, pp. 89-90. Lenaerts & Van Nuffel 2011b, pp. 904-905. Wilman 2015, pp. 8-10.

Cf. Hartkamp 2016/12, 109-110 (effectiveness), 132 (proportionality), 147 (general principles), and 231c-231j (Charter of Fundamental Rights). Asser/Hartkamp 3-I 2018/231h-j. Barents 2008, p. 549.

CJ 17 April 2018, Case C‑‑414/16 (Egenberger), paras. 76-77, with reference to CJ 8 April 1976, Case 43/75 (Defrenne II), para. 39; CJ 6 June 2000, Case C-281/98 (Angonese), paras. 33-36; CJ 3 October 2000, Case C-411/98 (Ferlini), para. 50; and CJ 11 December 2007, Case C-438/05 (Viking), paras. 57-61. Cf. Hartkamp 2019.

10.

Cf. CJ 17 April 2018, Case C‑‑414/16 (Egenberger), para. 41.

11.

CJ 6 November 2018, Joined Cases C-569/16 and C-570/16 (Bauerand Broûonn). CJ 22 January 2019, Case C-193/17 (Cresco Investigation), paras. 77-78.

12.

See §2.3.2.1 and §4.1 for the technique applied in Egenberger, Bauer and Broûonn and Cresco Investigation and §8.3.1.2 for a brief discussion on this matter.

13.

See §8.3.