The Law To Know

Union law in national courts · European Union · about 4 minutes

Indirect effect and conforming interpretation

The tailor’s alterations

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In one breath

National courts must interpret national law, as far as they can, in the light of the wording and purpose of Union law, especially directives, so as to achieve the result the directive requires. The duty applies to all national law, whenever made, but it stops short of reading the national text in a way that contradicts it.

The picture

The tailor’s alterations

A man owns a suit that is slightly too tight. A good tailor does not throw it away. She lets out a seam, moves a button and adjusts the sleeve until it fits, using the cloth that is already there. She will go to considerable lengths to make the old suit fit the new body, and she is expected to try every adjustment the fabric allows before saying it cannot be done.

A national court is asked to do the same with a national statute and a Union directive. It must try every reading the words can reasonably bear that would make the statute produce the result the directive requires. But a tailor cannot make a jacket out of a hat. If the text is so plain that fitting the directive would mean reversing its sense, the court has reached the limit of alteration, and other remedies must be found.

Where the picture stops working

A tailor serves a customer, whereas a court serves the law. Judges are bound by principles of legal certainty and non-retroactivity, which limit how far they may stretch a text, particularly when the effect would be to impose or increase criminal liability on an individual. And the duty belongs to national courts, so the way a legal system describes “a possible reading” differs from State to State.

How it really works

  1. 1Know where the rule comes from. The duty is a creation of the Court’s case law, flowing from the Member States’ obligation to achieve the result a directive requires and from the duty of sincere cooperation.
  2. 2Start with the national text. In applying national law, whether adopted before or after the directive, the court must interpret it, as far as possible, in the light of the directive’s wording and purpose (Von Colson; Marleasing).
  3. 3Use all the court’s methods. The court must consider the whole body of national law and apply its recognised interpretive methods to reach a result consistent with the directive (Pfeiffer).
  4. 4Observe the limits. The court is not required to read national law contra legem, against its clear meaning, and general principles such as legal certainty and non-retroactivity apply.
  5. 5If conforming interpretation fails, look to the other remedies: direct effect against the State where available, and state liability for loss.

Why people get it wrong

  • Thinking the duty applies only to laws made to implement a directive. It applies to national law generally.
  • Treating it as optional where an alternative exists. The court must make the effort first.
  • Reading it as a power to rewrite statutes. A reading that goes against the plain meaning of the text is not required.
  • Assuming that it can be used to make an individual criminally liable under an unimplemented directive. The general principles of legal certainty and non-retroactivity restrict that use.
  • Confusing it with direct effect. Indirect effect works through the interpretation of national law, so it can operate between private parties, while a directive itself cannot.

A worked example

The facts are invented

A directive says that a business must compensate a consumer for loss caused by a defective product, whoever sold it. The national statute says only that “the seller” is liable, and the State never amended it. Dana buys a faulty heater from a retailer who has gone out of business, and she wants to sue the importer.

The statute, read literally, covers only the seller. But the court must ask whether “seller” can reasonably be read to include an importer who placed the product on the market, because that would give effect to the directive’s result. If the words allow it, the court should adopt that reading. If the statute clearly limits liability to the person who sold to the consumer, the court cannot contradict it, and Dana may turn to a claim against the State for failing to implement the directive properly.

Try it

A directive’s deadline has passed. A statute’s wording can reasonably bear two readings, one of which matches the directive and one of which does not. Which must the national court prefer, in a dispute between private parties?

Landmark authorities

Read the sources themselves; this list is a starting point.

  • Von Colson and Kamann v Land Nordrhein-Westfalen, Case 14/83, 1984
  • Marleasing v La Comercial Internacional de Alimentación, Case C-106/89, 1990
  • Pfeiffer and others v Deutsches Rotes Kreuz, Joined Cases C-397/01 to C-403/01, 2004

Where to go next

More hard concepts in European Union law

This page is an educational overview. It is not legal advice and not a substitute for the sources: the statute, the rule, the case itself. EU law is made by the Union’s institutions under powers that the Member States have conferred on it in the Treaties, and it is applied by national courts and the Court of Justice together. The national law of each Member State still governs most of private and criminal law. Each page says whether the idea comes from the Treaties, from regulations and directives, or from the Court of Justice’s case law. Each page states the usual formulation of the rule and names landmark decisions; check the primary sources, and the law of your own Member State, before relying on any rule.