Chapter 1 Introdution

1. European Union law1 confers rights and imposes obligations upon private parties. The effective judicial protection of those rights is a matter of shared responsibility of the Union and its Member States.2 In this decentralized system of justice, national courts are the prominent venues for private parties to seek effective judicial protection of their rights under Union law.3 In this context, the Court of Justice comes to the scene when national courts seek clarification on how to interpret or apply Union law. In relation to the infringement of a Union right conferred upon a private party the Court of Justice held:

With these words the Court of Justice heralded the liability of Member States for infringements of Union law that confers rights on private parties.6 According to the Court of Justice, the full effectiveness of rules of Union law would be impaired and the protection of the rights granted to private parties would be weakened if private parties were unable to obtain redress when their rights are infringed by a breach of Union law for which a Member State can be held liable.7

2. Yet, Union law does not only confer rights upon private parties; as stated, it imposes obligations upon private parties too. These rights and obligations become part of their legal assets.8 It follows naturally that not only Member States but also private parties can fail to comply with their obligations under Union law. Such a failure of a private party to comply with its obligations under Union law may result in the infringement of another private party’s right under Union law.

In harmony with what the Court held in Francovich and in correspondence with the universal maxim ubi ius ibi remedium, anyinfringement of a right stemming from Union law in principle requires a remedy.9 The right to an effective remedy is a fundamental principle of Union law, currently entrenched in Article 47 of the Charter of Fundamental Rights and Principles.10 In the absence of remedies provided by Union law, remedies for infringements of Union law in the context of legal relationships between private parties (horizontal relationships) are in principle governed by national law11, be it that the principles of effectiveness and equivalence must be respected12. This dual character of effective judicial protection of Union law dovetails with Article 19 TEU, which states that Member States “shall provide remedies sufficient to ensure effective legal protection in the fields covered by Union law”.13 In that sense, it is assumed that the principle of effective judicial protection complements the principle of effectiveness.14 Also it complies with the principle of sincere cooperation, which is codified in Article 4(3) TEU.15 The Court clarified that the duty of sincere cooperation inter alia means that where Union legislation does not provide for a remedy for infringement it is for national law to take all measures necessary to ensure the effectiveness of Union law.16 Yet, the Court of Justice has injected standards – in various degrees of accuracy – for effective judicial protection into the national legal orders.17 For example, the Court of Justice has consistently held that an infringement of Union law must be remedied under conditions, both procedural and substantive, which are analogous to those applicable to infringements of national law of a similar nature and importance and which, in any event, make the remedy effective, proportionate and dissuasive.18 As regards the latter element it should be noted that in Camacho the Court of Justice confirmed that, in relation to remedies consisting of the payment of damages, it is not required that a national court imposes punitive damages which go beyond full compensation for the loss and damage actually sustained.19 All in all, the fact that national remedies are infused with Union standards entails that these remedies are hybrid in nature.20

3. When specific remedies for infringements of rights stemming from Union law are absent in national law too, effective judicial protection has to be sought in general remedies. In this regard, the Court has held “that the national courts whose task it is to apply the provisions of [Union] law in areas within their jurisdiction must ensure that those rules take full effect and must protect the rights which they confer on individuals”.21 It is not uncommon that the legislative framework of civil remedies leaves judicial discretionary power. For that reason, national courts bear a considerable responsibility for giving effect to the rights that Union law confers on private parties; they must provide for a remedy when such a Union right was infringed by either a Member State or a private party.22 At the same time, national courts are to a great extent dependent on what parties to a case bring forward.23 Hence, it is imperative that civil law practice in a broad sense becomes (more) acquainted with the rights that Union law confers upon private parties, with the various ways in which these rights can be invoked by private parties in a horizontal legal relationship, and with the instruments in national law that can be invoked to remedy infringements of rights stemming from Union law in the context of horizontal legal relationships.

4. This book comprises an analysis of a wide range of case law and legal literature to explore the legal consequences of infringements of Union law in horizontal legal relationships (Part I), the extent to which the concrete legal consequences of infringements of Union law comply with the right to a proportionate remedy (Part II), and the challenges, subjects for debate, and prospects of the impact of Union law on private law relationships (Part III). The present study aims at establishing the following premises: (a) that Union law interferes in private law matters and horizontal legal relationships; (b) that (as a result) Union law increasingly becomes integrated in civil law practice and vice versa; (c) that the legal consequences of infringements of Union law which are determined on the basis of private law of national origin reflect expressions of proportionality; (d) that particularly proportionality stricto sensu plays a role in the determination of legal consequences of infringements of Union law in the context of a horizontal legal relationship; (e) that national private law of the Member States is not necessarily tailored to remedying infringements of Union law and sometimes needs refinement; (f) that if national private law is not tailored to remedy infringements of Union law, that can be detrimental to the effectiveness of Union law; (g) that for the time being the Court of Justice seems to have a blind spot for the impact that its preliminary rulings may have on legal relationships between private parties; (h) that, considering the origin, nature and ‘lifespan’ of both fields of law, the structure of ways in which Union law has influence on legal relationships between private parties in some respects is incoherent and comparable to an unfinished patchwork.24

5. In order to advance this patchwork, those concerned with (horizontal) legal relationships and disputes falling within the scope of Union law must be informed about the diverse ways in which Union law interferes in horizontal legal relationships. National judiciaries are the gatekeepers of the preliminary reference procedures. In turn, practicing lawyers as well as legal scholars may inspire national courts to actually refer a question to the Court of Justice. The preliminary rulings by the Court of Justice have to be implemented by national courts and other actors to gain their effect. Interestingly, judgments delivered by national courts building on preliminary rulings by the Court of Justice tend to stay within national borders, whilst much can be learned by analysing (foreign) case law in which infringements of Union rights are remedied by the application of national private law.25

6. The study at hand builds upon eight landmark cases delivered by the Court of Justice that reflect the various ways in which diverse sources of Union law have an impact on horizontal legal relationships. These specific eight cases have been selected for a number of reasons: they clearly illustrate the actual and potential impact of diverse sources of Union law in legal relationships between private parties; the combination of these cases demonstrates the wide range of private law matters in which Union law interferes26; the national judgments in most of these cases reflect a) the remedies and legal consequences that are connected to infringements of Union law, and b) the difficulties that national courts are confronted with in making this connection; and c) the mutual dependence of Union law and private law. Considering the material focus of this study, the research is restricted to case law of the Court of Justice and does not include case law of the General Court.

7. The study covers multiple illustrations of how Union law interferes in the determination of remedies of private law in horizontal legal relationships in which a right stemming from Union law was infringed. It does however not at all aim to be exhaustive. The study does not comprise questions of international private law and procedural law. Neither does it comprise evaluative questions of whether the European Union should interfere in private law matters as much as it does and the way it does so27; rather it focuses on the legal reality that Union law has an impact on private law and horizontal legal relationships. As regards the principle of effective judicial protection, this study particularly focuses on the right to a proportionate remedy. The study does not include separate analyses relating to the effectiveness and the dissuasiveness of remedies. However, as proportionality is an open norm, the elements of effectiveness and dissuasiveness inevitably play a role in the context of the right to a proportionate remedy. Therefore, whenever relevant, these elements are discussed in the context of the right to a proportionate remedy.

8. It is noted that the requirement that a remedy for an infringement of Union law has deterrent effect is not entirely fit for civil remedies. Contrary to administrative law and criminal law, private law primarily aims at protecting the rights and interests of private parties in the specific private context rather than in a public context. When a right of a private party is infringed by another private party, the remedies in private law, especially in patrimonial law, primarily aim at restoring a proper equilibrium between both parties to the horizontal legal relationship and, if need be, at compensating the damage suffered by the party who saw its right being infringed. Remedies in private law thus have a restorative character, rather than a punitive character.28 Nonetheless, it is safe to say that even restorative systems are to some extent infused with punitive elements, in particular in relation to the compensation for non-pecuniary damages.29 The Court of Justice’s case law supports the idea that in relation to remedies governed by private law, the requirement that a remedy has deterrent effect is either entirely dropped, or it is interpreted as meaning that a real and adequate, compensatory remedy suffices to meet this requirement and that it does not require a punitivesurplus added to the compensation.30 At the same time, in a case on gender discrimination in a job competition the Court of Justice held that a purely nominal compensation – e.g. exclusively compensation for postage of the letter of application or travel expenses – is ineffective and lacks deterrent effect.31 With those rulings the Court however touched upon a question that is more related to the recoverable damages than to the nature of the damages awarded. Lastly, from Åkerberg Fransson it has become clear that, if any of the remedies alone are not effective, proportionate and dissuasive, a combination of restorative and punitive remedies is not necessarily in conflict with the principle of ne bis in idem as laid down in Article 50 Charter.32 Consequently, a Member State can choo to adopt an administrative or criminal remedy in addition to the civil remedies available in case the latter do lack deterrent effect.33

9. After Chapter 2, which briefly explains the use of the terms direct horizontal effect and indirect horizontal effect, the book is divided into three parts. Part I consists of the analyses of the cases selected and is divided into three chapters, each of which focuses on a particular source of Union law. Chapter 3 focuses on the effect of Treaty provisions, in particular on the free movement of workers (Angonese) and the freedom to provide services (Laval) in relationships between private parties. In Chapter 4 the general principles and the provisions in the Charter of Fundamental Rights and Principles in the context of horizontal legal relationships are at the forefront, illustrated primarily by Mangold, Kücükdeveci, AMS and Dansk Industri. Chapter 3 and Chapter 4 are identical in structure: First, the relevant judgment of the Court of Justice is discussed, with a focus on the specific part relevant to the horizontal effect of the rule of Union law in question. Then, the concrete legal consequences in the cases selected are, as far as possible, analysed on the basis of the judgments of the relevant national courts. Finally, for each case it is examined what the hypothetical outcome would have been if Dutch law would have been applicable. The aim of the sections on Dutch law is to demonstrate and illustrate in detail to all actors involved the impact of Union law on the determination of civil remedies in cases that fall under the scope of Union law. The decision to include the analyses of remedies under Dutch law is explained by the author’s background and legal knowledge.

As such the various analyses of national law give insight into how private parties can invoke rights stemming from Union law in horizontal legal relationships, and how national law is employed to give effect to rights stemming from Union law. In addition, in the analyses it is also illustrated under which circumstances no effect can be given to a right stemming from Union law in the context of a horizontal legal relationship, either because the particular right cannot be invoked by a private party in a horizontal legal relationship, or because neither Union law nor national law can bring solace to the horizontal legal relationship. Chapter 5 highlights the various ways in which directives that impose rights upon private parties have an impact on horizontal legal relationships on the basis of Dominguez and Test-Achats. The concrete outcomes in these cases are of a different character than the other cases, which justifies a different setup than the other case studies.

10. In Part II the right to a proportionate remedy takes centre stage. Proportionality is a basic value that aims at reaching a proper equilibrium between clashing interests, including rights, objectives and consequences of particular – and potential – acts, and between the means and the purpose of acts.34 The fundamental idea of proportionality35 and its general applicability allow that it is considered to be a principle of law, too. In this respect, Aristotle notes that “the just is the proportionate” and that “what is unjust, therefore, is either too much or too little”.36 The principle gives direction to and restricts the freedom of the exercise of competences and rights of various actors in society.37 The concretization of the concept of proportionality in a specific juridical context requires a concrete palette of facts, legal norms and interests.38 Seen in that light, the concept of proportionality is an empty, open norm, a Leerformel39, and the term proportionality is insignificant. It indicates what it ultimately strives for rather than what steps need to be taken to reach a proper equilibrium in a concrete case. The norm is not autonomous since it predominantly requires the articulation of interests and other norms in order to be concretised.40

11. Due to the prevalent applicability of the principle of proportionality, its manifestations are as diverse as its potential interpretations. First of all, the principle of proportionality is recognised on multiple levels – i.e. in national legal orders, in the European Union and in the context of the European Court of Human Rights as well as in international law.41 Secondly, within these legal orders various actors are subject to the principle: the legislative42 and administrative43 bodies, the judiciary44 as well as private parties45. The balancing of rights and interests should give insight to the actor into what is proportionate in that particular case and why and this insight should guide the actor’s action in the right – i.e. fairest, most just and least onerous – direction.46 Thirdly, as a result of the diverse actors and relationships that are subject to the principle of proportionality, the principle itself is subject to diverse interpretations, applications, functions and consequently, its conditions vary to a similar extent.47 All in all, the versatility of the principle of proportionality leads to an abundance of relationships, applications and conditions available for analysis.48 Whereas in Part I the principle of proportionality is reflected primarily as a mechanism for 1) the determination of whether a private party has infringed a rule of Union law49, and 2) the review of the compatibility of national legislation with Union law50, Part II focuses on the right to a proportionate remedy and assesses the proportionality of the remedies and the legal consequences found in the case studies in Part I.

At Member State level, the balancing of rights and interests of parties to a horizontal legal relationship is a very common phenomenon when legal consequences of an infringement of a right or interest of either one of those parties have to be determined. The question arises whether the remedies available in national private law and the balancing practices of national courts correspond to what Union law requires in the context of effective and proportionate judicial protection. Neither from EU legislation nor from the case law of the Court of Justice can it be clearly derived how the requirement of proportionality should be applied to civil remedies. The polymorphous principle of proportionality in Union law is applied primarily in vertical legal relationships and not in a very consistent way.51 Chapter 6 explores the essence of the right to a proportionate remedy according to Union law. The Chapter demonstrates that the Court of Justice has infused the right to an effective remedy with a number of standards that national courts have to respect when determining a remedy for an infringement of Union law in a horizontal legal relationship. The exploration in Chapter 6 forms the framework for the subsequent chapter. Chapter 7 provides for a synopsis of the remedies and legal consequences discussed in Part I and evaluates whether and to what extent these remedies and concrete outcomes comply with the standards laid down by the Court in relation to the requirement that remedies for infringements of Union law in horizontal legal relationships are proportionate.

12. The course of events as regards remedying infringements of Union law may be labelled as the ultimate symbiosis of Union law and private law of national origin. Yet, at the same time this entwining is not without challenges and subjects for debate. Part III provides for a comprehensive and critical overview of a selection of challenges and subjects for debate that are revealed by the analyses in Part I and Part II. This Part serves as a prospect and an encouragement for further research in this field of law where Union law and private law meet each other and blend. As Chapter 7 and Chapter 8 are, to a large extent, concluding chapters, Chapter 9 closes the study with a brief epilogue.

13. Last but not least, as this book may be consulted by readers with diverse legal backgrounds and varying levels of knowledge on the topics discussed, a short reader’s guide is provided. For a proper understanding of the terminology used and concepts and techniques discussed in this book, Chapter 2 as well as the sections analysing the judgments delivered by the Court of Justice provide information about basic concepts and rules in European Union law. Those who are acquainted with such concepts may choose to give their attention to subsequent sections. Those who are particularly interested in the right to a proportionate remedy in European Union law may wish to focus their attention on Chapters 6 and 7 and give less attention to the case studies in Part I. Those who turn to this book primarily to gain insight into the challenges and subjects for debate concerning the current state of play as regards remedying infringements of rights stemming from European Union law in horizontal legal relationships, may directly head for Chapter 8. Lastly, as the case studies are the backbone of this study, certain aspects of the case studies, in particular the judgments and outcomes analysed, will return throughout the book as a prelude to the discussion of a related topic. In this way, the parts can be read separately from each other, be it that the in-depth analysis of the cases as such is, of course, is provided in Part I.