22 Chapter 1The legal system
In Francovich and BonifacivRepublic of Italy (1993)the ECJ held that an individual
could be compensated on account of a Directive not having been implemented if certain
criteria were satisfied. Brasserie du Pêcheur SAvGermany (1996)subsequently established
that the three necessary criteria are as follows. First, the rule of law in question must confer
rights upon individuals. Second, the breach must be sufficiently serious. Third, there must
be a direct causal link between the breach and the damage.
The legal effect of the Treaties, Regulations and Directives is shown in Figure 1.2.Decisions
Decisions are addressed to one or more Member States, to individuals or to institutions.
They are binding in their entirety, without the need for implementation by Member States,
but only on those to whom they were addressed. In practice, decisions are of little practical
importance.Recommendations and opinions
The Commission has the power to make recommendations and opinions. These have no
binding legal force. However, where a Member State passes legislation to comply with a
decision or an opinion, a national court may refer a case to the ECJ to see whether or not the
decision or opinion applies and how it should be interpreted.Supremacy of EU law
EU law can only be effective if it overrides national law. If every Member State were free to
pass legislation which conflicted with EU legislation, the EU would be rendered ineffective.
In CostavENEL (1964)the ECJ stated that the Treaty on Rome, as amended, had become
an integral part of the legal systems of Member States and that the courts of Member States
were bound to apply the Treaty. It also stated that Member States had, by signing the Treaty,
limited their sovereign rights, within limited areas, and created a body of law which bound
both their citizens and themselves. The case specifically decided that Italian legislation
which was incompatible with Community law, and which had been passed after Italy had
signed the Treaty, could have no effect.
In RvSecretary of State for Transport, ex parte Factortame (No. 2) (1991), Spanish
companies sought judicial review of the Merchant Shipping Act 1988, which they claimed
breached two Articles of the EC Treaty. The companies asked for an injunction to suspend
that part of the Act which was in breach of the relevant Treaty Article. The House of Lords
held that injunctions could not be effective against the Crown and refused to grant the
injunction. However, the case was referred to the ECJ, which held that UK limitations on the
availability of remedies should be overruled and that the injunctions should be available.
Subsequently, the House of Lords immediately suspended the operation of the offending
part of the Act. A few years after Factortame,inEqual Opportunities Commissionv
Secretary of State for Employment (1994), the House of Lords suspended the operation of
a section of employment legislation on the grounds that it was in breach of the EU Equal
Treatment legislation. However, it should be noted that this power of UK courts to suspend
conflicting domestic legislation will only be used sparingly in cases involving serious
breaches of directly effective EU legislation.
Whilst the United Kingdom remains a member of the EU, it is arguable that it has
surrendered parliamentary sovereignty. However, two points should be noted. First, other
Treaties such as those which provided that the United States had direct command over
US soldiers based in the United Kingdom, have at some time or other meant that the