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The European Consolidation Board and European Financial Law An ECBFI Power Point Show Update: Please Click to Launch Show
The European Consolidation Board and European Financial
Law
An ECBFI Power Point Show Update:Please Click to Launch Show
Most European law comes from the European Community although sometimes reference is incorrectly made to
European Union law.
Many textbooks will refer to European law as EC law.
Introduction
There are four main types of European law:
The Treaties
The Directives
Regulations
Decisions.
The final court of appeal for any matter involving European law is the Court of Justice.
Types of European Law
The Treaties are often used together to form a type of constitution for the European Union.
Many of the rules governing European law are found in the EC Treaty (the name for the Treaty of Rome
since 1993).
The Treaties
The European Union has the right to issue directives under Article 249 (ex 189) of the EC Treaty. [The term ex 189
means that this was the Article’s number under the original Treaty of Rome.]
A directive must not break a Treaty. If a directive is against a Treaty then the Court of Justice can annul it.
Directives
Member States must pass their own laws within a time limit to implement the directive.
How the Member States introduce the directive in their own country is up to them. This enables each Member State to introduce it in the way that they believe will suit their
own legal system the best.
Introducing Directives
The United Kingdom implements directives by passing statutes or a statutory instruments.
UK and Directives
These are laws made by the European Union under Article 249 (ex 189) of the EC
Treaty.
Regulations automatically apply in each member state and do not require a member state to pass their own laws to introduce
them.
A regulation must not break a Treaty. If a regulation is against a Treaty then the
Court of Justice can annul it.
Regulations
These are issued under Article 249 (ex 189) of the EC Treaty by the different institutions (such as the
Commission, etc.).
No institution can issue a decision unless it has been given the power to do so under a Treaty
(usually the EC Treaty).
Decisions
Decisions are addressed to specific people or organisations or member states and have the force of
law.
They automatically apply and do not require a member state to pass their own laws to introduce them.
Decisions
A decision must not break a Treaty. If a decision is against a Treaty then the Court of
Justice can annul it.
Decisions
Article 249 of the EC Treaty also gives the institutions the power to make opinions and
recommendations.
They do not have the power of law although they can be very persuasive particularly if they come from
the Court of Justice.
Recommendations and Opinions
The term ‘direct effect’ refers to a European Union law which creates individual rights
enforceable in national courts.
Direct Effects
There are two types of direct effect:
vertical direct where the European law creates individual rights against
the state;
horizontal direct effect where the European law creates individual rights against other individuals.
Two Types of Direct Effect
A member state which fails to introduce a directive is breaking its obligations under the Treaties and
breaching European law.
The European Commission will usually bring a case against a state in the Court of Justice to force it
to implement the directive.
Implementing a Directive
The Court of Justice can impose penalties such as fines against member states that break their
obligations under the Treaties.
If a member state fails to implement a directive, it may be possible for a citizen to still use the
directive in court.
Implementing Directives
If a state fails to introduce a directive the citizen can still use the directive in court if:
the directive is sufficently clear - Van Duyn v Home Office (1974) – and
the claim is against the state or a state organisation – see Foster v
British Gas (1990).
Vertical Direct Effect of Directives
If a state fails to introduce a directive the citizen cannot use the directive in court unless the claim is against the state or a state organisation.
It may still be possible to sue the relevant government for any loss caused by its failure to implement the directive under the Francovitch
principle.
No Horizontal Direct Effect
This principle was established in Francovitch v Italian Republic (1991).
The principle allows citizens of member states to claim compensation from a member state for losses
caused by the state’s failure to implement a directive.
Francovitch Principle
This means that a citizen might be able to use a Treaty in a domestic court.
Treaties can have both vertical and horizontal effect where they are clear, precise and
unconditional as in Van Gend en Loos (1963).
Direct effect of Treaties
Regulations are directly applicable and have both vertical and horizontal effect.
The citizen can use them in a domestic court.
Direct Effect of Regulations
European Union law was introduced in to the United Kingdom by Parliament under the European Communities
Act 1972.
In the European Communities Act 1972, European law was given precedence over domestic law and the
European Court of Justice was given precedence over any other British court.
ECBFI UK and European Law
British courts try to interpret English and Welsh law in such a way as to make it consistent with European law unless expressly instructed by
Parliament to do otherwise.
Interpreting European Law
In exceptional circumstances, English courts may suspend the operation of English legislation.
In Factortame (1990) the House of Lords suspended the operation of an Act of Parliament because it
contradicted European law.
ECBFI Factortame
European law does not have supremacy over the European Communities Act 1972 itself.
If Parliament was to repeal the European Communities Act 1972 s.2, then in theory European law would no longer have
precedence over domestic law.
A Get-Out Clause?
If a domestic court is unsure on an area of European law, it can ask the European Court of Justice a
national court to provide an interpretation of EC law (i.e. a preliminary ruling).
The Court will provide a ruling which the domestic court can use to decide a case.
ECBFI Preliminary Rulings
