The impact of the EU on UK law

This article describes the development of the institutions of the EU, and the effect that membership of the EU has on the UK legal system. Comments welcome, as always: kb@kevinboone.com.

A brief history

As is so often the case, it is almost impossible to appreciate the goals and conflicts of the modern European Union (EU), without knowing something about its history.
      The EU has its origin in the political turmoil of the late 1940s and early 1950s. Ravaged by war, the countries of Europe strove to put into place supra-national bodies that would prevent such calamitous events in future. Many such bodies came and went in the period 1945-1955. They had lofty goals - political unity, protection of human rights, free trade, and a common defence strategy. Many agreements fell by the wayside, victims of the discovery that it is much easier to agree on policies than on practicalities. The states of Europe had, and still have, different political and social perspectives, and different views on what a `united Europe' should look like. Even in the 1940s there was disagreement on whether a united Europe should be `unionist' or `federalist'.
      Of the organizations that came and went in this period, four are particularly important for our purposes.
      The Council of Europe, formed in 1947, included the UK, France, Holland, Luxembourg, and Belgium. One of its original goals included political unification, but this did not come to fruition. What did succeed, however, was the creation of the European Convention on Human Rights and Fundamental Freedoms, ratified in 1950. This convention established a European Court of Human Rights and a consultative Assembly at Strasbourg.
      At about the same time, France and Germany led a move to pool coal and steel production across Europe. They were supported by the Council of Europe, and eventually joined by the other Council of Europe countries and Italy, but notably not the UK. The six countries signed the Treaty of Paris in 1951, establishing the first of the `communities': the European Coal and Steel Community (ECSC). This is the second of the supra-national bodies that is important for this discussion. The ECSC was governed by a `High Authority', and an Assembly. The ECSC Court of Justice was instituted to hear cases arising out the Treaty of Paris. Notably the first president of the Assembly of the ECSC, Paul-Henri Spaak, had resigned only six months ago from the the Assembly of the Council of Europe, in protest at the UK's lack of enthusiasm for its political program. Spaak was very active in encouraging political union and, in 1953, published a draft treaty that would establish the European Community (note the singular `Community'). The Community was to be charged with development of a common defence policy, safeguarding human rights, development of a common foreign policy. It would also establish a general Common Market. A Common Market was, and is, an agreement to lift restrictions on trade and customs duties on certain products. The first Common Market arose from the ECSC, and covered coal and iron ore.
      The other two important organizations, for our purposes, were the European Economic Community (EEC), and the European Atomic Energy Community (Euratom). These were established by the Treaty of Rome in 1957, by the same six countries that had formed the ECSC. The EEC was concerned with free trade and the removal of customs duties, while the Euratom was concerned with the regulation of production of nuclear materials.
      So there were now three European Communities (note the plural), each with its own executives, but (after a bit of to-ing and fro-ing) a common Parliamentary Assembly in Luxemberg. All were made subject to the jurisdiction of a new European Court of Justice, formed out of the earlier ECSC Court. Ad-hoc Councils of Ministers formed the legislative bodies of the Communities. The Communities soon developed a particularly European perspective, and became more than summits. This is evidenced by the fact that by 1958, members of the Parliamentary Assembly were sitting in political, rather than national, groupings,
      The UK applied to join the European Communities in 1961, but was not formally accepted until 1972.
      In 1962, the first Common Agricultural Policy was put into place, and the Parliamentary Assembly of the European Comunities renamed itself the `European Parliament'.
      Almost immediately after the ratification of Treaty of Rome, it was clear that having three separate Communities with partially overlapping, partially distinct, administration was not very efficient. However, it was not for another ten years, in 1967, that the Merger Treaty was signed, creating a Council of Ministers (the supreme decision making body, representing national interestes), and the Commission of the European Communities (the executive, representing the interests of the Communities). The Merger Treaty effectively created the European Community out of the European Communities.
      The UK joined the Community in 1972, along with Denmark and Ireland.
      The European Council met for the first time in 1975. The European Council - not connected in any way with the Council of Europe - is a summit meeting of the heads of government of the members states of the Community, and sets broad policy objectives for the Community.
      Greece joined the Community in 1981, followed by Spain and portugal in 1986. 1986 also saw the ratification of the Single Europe Act, which put into place legislation for implementing a general single market within the Community.
      The European Communities were concerned mostly with trade, but there remained an interest in developing the Treaties to include greater political union. After several years of difficult negotiations, the Maastricht Treaty came into force 1993, establishing the European Union. The Union is not an organization or, strictly speaing, a group of states; it is a political agenda. Membership of the Union includes membership of the the European Communities, but it also means suscribing to the political goals of the Union. These goals include development of a common foreign and defence policy, and a common internal security policy. These three policy areas are often referred to as the `three pillars' of the Union, and in EU documentation you'll often see the term `first pillar' used as a synonym for the European Communities. The Maastricht treaty also introduces the notion of European citizenship.
      Austria, Finland, and Sweden joined the Union in 1995.
      The Union was strengthened by the ratification of the Amsterdam Treaty in 1999, which also increases the legislative power of the European Parliament.
      Economic and monetary union has always been on the European agenda, particularly since the ecomonic uncertainties of the 1970s. It is probably fair to say the the UK has never wholeheartedly endorsed the idea of a monetary union, and is decidedly against a common currency. However, this is a relatively unsual position within the Union and, in 2002, the first Euro coins entered circulation in the 12 participating states.
      The other issue of the day is that of expansion. There are those that see expansion of the union as a good thing, but it will undoubtedly require some reorganization of the Union's administrative procedures. Following ratification of the Treaty of Nice in 2002, it is expected that Cyprus, the Czech Republic, Estonia, Hungary, Latvia, Lithuania, Malta, Poland, the Slovak Republic, and Slovenia will join in 2004.

The institutions

The institutions of the Union are now well established. This section describes the most significant ones.

The European Council

The European Council (not to be confused with the Council of the European Union (!), or the Council of Europe), is a summit meeting of the heads of government of the Union states. It is hosted twice a year by the country that currently holds the presidency of the Union. This summit is where broad policy objectives are set. These objectives are published in the form of Presidency concusions, a brief document couched in very general terms.

The Council of the European Union

The Council of the European Union (also called the Council of Ministers, but not to be confused with all the other Councils) is the legislative body of the Union. It draws its powers to legislate on economic and trade matters from the Merger Treaty, and on foreign and internal security policy from the Maastricht Treaty. On some matters it exercises its legislative functions in collaboration with the Parliament. The Council is also empowered to create international agreements with states outside the Union.
The Council is staffed by senior government ministers of the Union states. The selection of ministers varies according to the issue being decided. The Council is, therefore, an elected body in the sense that everyone who sits on it will have been elected to some political office. However, all members of the Council from the UK are, by definition, members of the Government of the day; there is no opposition representation at this level. In addition, it may be a cause for concern that, although the UK's representatives are elected, they are not elected for that role, but for national government. It probably has to be this way, because the Council is making decisions that have immense national impact, and no-one except Government ministers will have sufficient standing to represent the country at that level.

The European Commission

The Commission is both the executive and the `civil service' of the EU and, as such, is vast organization. It is presided over by 20 commissioners, selected by the member states and subject to approval by the Parliament. While the Council of the EU represents memeber states, commissioners are expected to become `Europeans' on appointment. The commission has two main areas of responsibility. First, it drafts legislation which - in general - must be approved by the Coucil or the Parliament. Second, it enforces EU legislation in the member states. The Commission is, therefore, extremely powerful, and some have argued that it has only the most tenuous democratic accountability. Recent developments of the constitution of the EU - in particular the Treaty of Amsterdam - have strengthened the Parliament's control over the work of the Commission.

The European Court of Justice

The European Court of Justice (ECJ) is the main judicial body of the EU, although it is now supported by the Court of First Instance in an attempt to manage the huge workload. The ECJ deals with four judicial matters:

Preliminary rulings -- Courts of the member states can ask the ECJ for a ruling on some point of EU law, as an aid to deciding a national case in line with EU legislation.
Proceedings for anullment -- The ECJ has the power to declare that legislation produced by the EU institutions is ultra vires, that is, beyond the scope of the powers conferred by the treaties. If it does so, then the legislation will be anulled.
Proceedings for failure to fulfil an obligation -- These are mostly raised by the Commission, and determine whether a member state has correctly implemented an EC Directive (see below).
Proceedings for failure to act -- These are mostly raised by member states against the Council or the Commission, for failing to take a decision required by the Treaties

In practice, the ECJ consists of one judge from each member state, and eight advocates-general, who present an opinion to the judges on the facts of the case before it is formally heard. Judements are made by a majority and, unlike in UK courts, dissenting judgements are not published.

The European Parliament

Since 1979 the Parliament has been directly elected, and is expected to be representative of the citizens of the EU. However, until recently the Parliament was a consultative body (cynically, a `talking shop') with little direct authority. This led to complaints about the `democratic deficit' within the EU. However, the Amsterdam Treaty significantly extends to role of the Parliament.
Parliament now has a joint role with the Council of the EU in approving legislation initiated by the Commission. It can also put forward to the Commission proposals for new legislation. Approval of the Parliament is required for international agreements, admission of new members, and changes to the electoral procedure. Parliament exercises a supervisory role over the Commission and can, in principle, dismiss it. The approval of the Parliament is required for Commission budgetary procedures.
In short, while the Parliament does not make decisions, it does exercise `democratic supervision' of the other institutions of the EU.

The Court of Auditors

The Court of Auditors was established in 1977, and became an independent body in the Maastricht Treaty of 1993. Its role is to scrutinise, and report on, the legality and effectiveness of the EU's spending. Since it employs about 500 staff, one could comment that the Court of Auditors is, itself, a significant source of expenditure. However, it fades into the background against the overwhelming vasteness of EU spending as a whole. The Auditors are necessary to exercise control over fraudulent and inappropriate spending, which is - sadly - almost inevitable in an organization the size of the EU.

Community legislation and UK law

While you will see the terms `EU law' and `EU legislation' widely used, the powers of the Council of the EU to legislate are derived from the Merger Treaty that established the Community, not really from the EU Treaty. I therefore prefer the term `EC legislation' or `Community legislation'. Be that as it may, there are two main forms of legislation that issue forth from the institutions of the EU: regulations and directives.
      Regulations are completed law; they take immediate effect and can be enforced between individuals wherever they create rights and obligations.
      Directives are instructions to legislate. A Directive sets out the goal that legislation should achieve, then leaves it to the member states to implement accordingly. The UK has not always been that keen to implement Directives that go against the political objectives of the government of the day. Citizens can take action against the state in the ECJ for non-implementation but, more commonly, these matters come to the attention of the Commission, which then proceeds in the ECJ.
      To understand how EC legislation integrates with UK law, we need to consider the means by which EC legislation has any effect in the UK at all. The first thing to note is that the Treaties by themselves have no direct legal effect in the UK, even after ratification. While the courts will use treaty obligations for guidance on how to read UK legislation, a treaty alone creates no rights or duties in the UK.
      Normally a treaty receives legal force by being enacted as an Act of Parliament. Since it is the Government that has entered into the treaty, and the Government will usually be able to command a majority in Parliament, the enactment of a treaty should be a forgone conclusion. This was not the case for the Maastricht Treaty, which fell to be enacted when the Government had a small majority in the Commons, and had to turn the enactment into a vote of confidence to get its own back-benchers to toe the line. Be that as it may, the enactment of the European Communities Act (1972) and the European Communities (Ammendment) Act (1993) incorporates EC law, en bloc into the UK. These Acts give Government ministers powers to modify existing legislation where it is necessary to remove incompatibilities with EC legislation, thus providing a `fast-track' method for keeping our law coordinated with EC law. They also state that courts are to give priority to EC legislation over UK law.
      There was some uncertainty about these provisions in the 1970s. It has long been the tradition in England that Parliament is in charge; Parliament can enact whatever it likes, and it is the duty of the courts to give effect to these enactments. A consequence of this is that a particular Parliament cannot bind its successors; if Parliament is supreme, then it can undo anything that its predecessors have done. Various legal challenges were raised against accession to the EC; perhaps the most interesting is Blackburn v Attorney General (1971), which sought a declaration from the court that entering the EC was unconstitutional, because it would fetter Parliamentary supremacy. The court declined to get involved, on the ground that - as discussed above - ratification of the Treaty itself would not create any legal duties, and therefore was not a matter for the courts. Blackburn was right, at least in part, as we shall see.
      So the earliest cases involving EC law tended to see obligations under the European Communities Act as interpretative, that is, providing guidance for the courts. However, there came a point when this approach didn't cut the mustard, because EC obligations could not be satisfied by creative interpretation of existing UK law. The courts then had to decide whether the European Communities Act gave them powers to decide on the basis of EC law, rather than UK law. The most famous case of this sort is probably MacArthys v Smith (1980), which concerned the gender discrimination provisions of EC law. The existing domestic legislation could not be interpreted in such a way as to give effect to the EC provisions. Lord Denning said, in effect, that it was the duty of the courts to give effect to the intentions of Parliament, and Parliament had clearly signalled - in the European Communities Act - that it intended our obligations to the EC to take priority of national law. And that's what happened. Denning also said that Parliament could, if it wished, repudiate these obligations, by repealing the Act; but until it did so, the intentions of Parliament were plain. It was the duty of the courts to apply EC Regulations, and Treaty provisions, just like ordinary UK law.
      It soon became clear, therefore, that Regulations had `direct horizontal effect' -- they created legally enforceable obligations between individuals, as well as between individuals and the state.
      But that wasn't the end of the matter, because it did not deal with the most troublesome aspect of the interaction between EC and UK law -- what should a court do if the laws are in irreconilable conflict? There is no doubt that the EC administration takes the view that EC law takes precedence. This was first expressed clearly in the Van Gend en Loos (1963) case. The ECJ held that creation of the Communities had created a new legal order. Member states had surrendered their sovereignty in return for the benefits of membership. In effect, not only did membership of the Communities create a power of the courts to decide on the basis of Community law, it created a duty to do so. This was expressed even more starkly in Costa v ENEL (1964), to the dismay of the Italian government. While member states had begun to realize that courts should give priority to Community law, it was quite a blow to the government to realize that this was so even where there were express national provisions to the contrary. The other important case of this nature is Internationale Handelsgesellschaft (1970) where the ECJ held, in effect, that EC law took precedence even over the constitutions of member states.
      The UK got its turn to be put in its place when the Factortame cases were heard by the ECJ (Factortame v Secretary of State for the Environment, Transport, and the Regions (1989), etc). The Factortame saga started when the Merchant Shipping Act (1989) was enacted, requiring vessels that fished in British waters to be registered in the UK, and be owned at least 60% by UK firms. The Act was intended to prevent EC countries with large fishing quotas, but no fish, filling their quotas from UK stocks (this is a simpliciation, of course). Factortame and about a hundred other firms brought an action against the Secretary of State for an injuction to prevent the register being implemented, on the grounds that it was incompatible with EC law. The High Court initially granted the injunction, but it was set aside by the Court of Appeal on the grounds that it did not lay in the power of any court to take decisions that were directly at odds with a statute. On appeal to the House of Lords, and following a reference to the ECJ, it was held that the courts could, and should, grant interim relief to a claimant, if he could show that he had been the victim of breach of EC law. This was despite the fact that the breach was specifically authorized by statute. In effect, this decision said no more than had been said in Costa twenty years earlier, but it was a shock to the Government, and to constitutional lawyers.
      The ramifications of Factortame have been argued extensively in the last ten years. The problem is that it's difficult to see how a decision of this sort can be accomodated in the UK's general constitutional framework. If Parliament is `supreme' and `cannot bind its successors', as has been assumed for the past 300 years, then the 1989 Merchant Shipping Act should take priority over the European Communities Act, simply on the basis that it was enacted later, by a different Parliament. On one view, this matter was decided conclusively in Ellen Street Estates v Minister of Health (1934). In that case, it was ruled that a statutory provision that said, in effect, `all later enactments must be read in accordance with this one' was simply void. What is different about the European Communities Act? Well, there are certain political differences. It would have been politically disastrous for the UK to take the view that an enactment to regulate shipping would take priority over our treaty obligations to Europe. Moreover, the blood, sweat, and tears of our twelve-year struggle to join the EC should not come to nought over fishing quotas. But these are matters of practicality, not logic. So, despite the UK constitutional aversion to `entrenchment' of legislation - that is, enacting legislation that cannot be modified - it appears that the European Communities Act has become entrenched, in so far as it has been accorded a special status by the courts. The same has happened with other statutes, notably the Human Rights Act (1988): the courts will not lightly allow later legislation to supercede them, despite theorectically being obliged to do so. This was acknowledged explicitly in the case of Thoburn DC v Sunderland (2003), in which Lord Justice Laws indicated that there had developed certain `constitutional statutes' that were not subject to implied repeal. That is, although Parliament could repeal them by direct action, they could not be overridden by later enactments.
      While this argument resolves the logical conflict between Factortame decision and the traditional constitutional position, it does so by introducing a propostion that is not entirely in keeping with UK constitutional history, to say the least.

While Regulations are accepted as having horizontal effect, and creating directly enforceable rights and duties, does the same apply to directives? It is not entirely clear whether Directives have horizontal effect. It is widely assumed that they do not, at least once they have been implemented into UK law. After implementation, it is the relevant UK law that is at issue. This was accepted by the Court of Appeal in Marshall v Southampton and South West Hampshire Health Authority (1986). However, in R v Employment Secretary ex parte Seymour-Smith (1999) the ECJ and the House of Lords side-stepped the issue, by ruling that a Directive was an `aid to construction' after it had been implemented. That is, a UK court could look to the Directive to see what the UK law was supposed to accomplish. This gives the Directive a measure of horizontal effect. The principle that an action would lie against the state for failing to implement a Directive properly has led to the notion of `indirect horizontal effect'. Although Directives don't create legal obligations between individuals, they do create an obligation on the courts to give effect to obligations between individuals.
What happens if the state fails to implement the directive, or implements it wrongly? It is generally accepted that any action will lie against the state; the ECJ decided in Frankovich v Italy (1995) that a member state had a duty to compensate its citizens who had suffered loss as a result of improper implementation.

Summary

The entry of the UK into the EC (now EU) has made considerable changes to the the substantive law. It has also forced UK lawyers to cope with unformfortable constitutional change, the extent of which still remains to be fully understood.