Direct and Individual Concern

European Union Law (Basic) Seminar Course

The Requirement for ‘Direct and Individual concern’ under A. 230(4) and The Right To Judicial Review

Introduction

In this paper I seek to prove that, natural and legal persons have in effect very limited standing for bringing an action for annulment under A. 230(4) of an act adopted pursuant to a regulation or directed at another person, when required to demonstrate that the measure “is of direct and individual concern to the former”, resulting in the “most controversial and least transparent” caselaw of the ECJ. Thus, they are denied the right to judicial review even when their interests are directly affected, if there is an absence of a national implementing measure for such a self-executing act.

For the purpose of proving the above proposition, we will employ relevant primary sources in the form of case law and treaty provisions and secondary sources in the form of treatises and articles, enumerated in detail in the index of authorities.

Judicial review is regarded an important constitutional right guaranteed in most democratic systems. The extent to which judicial review is granted and effectively exercised is a key element in the evaluation of any modern legal system. The principle of judicial review serves a twin purpose: to provide basic protection to individuals, and to guard against arbitrary actions of power-wielding institutions of the State. Increasingly, most modern legal systems regard judicial review as a fundamental right. In fact, in India the right to judicial review is viewed as a part of the basic structure of the Constitution, which means this right cannot be abrogated even by an amendment to the Constitution.

The importance of this right cannot be underestimated especially in a supra-national setup such as the European Union that has undemocratic institutions at the policy making level. In such context, the absence of a wide right of the citizen to question the actions of the Community institutions further compounds the problem of democratic deficit. In the EC Treaty only the Community institutions and the member States are allowed to impugn any measure, denying individuals of a right of the same amplitude. The narrow right to judicial review available to individuals under the EC Treaty is antithetical to accountability and transparency – the ideals of democracy. This paper proceeds on the assumption (well-founded in the age of democracy) that a wide locus standi for private parties is desirable.

The structure adopted in this paper is as follows. Part 1 deals with the meaning of Article 230(4) and its import and its interpretation by the ECJ and Court of First Instance. Part 2 will explore the meaning of effective judicial protection as a fundamental principle of EC law and highlight its inconsistency with Article 230(4). Part 3 will examine the viability of invoking alternate mechanisms available under the EC Treaty. Part 4 identify the basic fallacy with the prevalent ruling on A. 230(4) which rejected the requirement of judicial reform of the same. Finally, in Part 5 the paper will conclude with a comprehensive argument in favour of the need to reform the interpretation of Article 230(4).

Part 1: Article 230(4) & Locus Standi(Concern) of Private Parties

• • The discriminatory heirarchy:

Judicial Review of the actions of Community institutions is provided in Article 230 of the EC Treaty. While the subject matter of challenge is wide, the problem lies in the persons allowed to challenge these acts. The EC Treaty frames elaborate rules on locus standi to challenge Community action, creating a hierarchy of applicants. Accordingly, the Community institutions and member States are placed on a supreme pedestal with unlimited locus standi, the ECB and Court of Auditors come a close second with the unfettered right to protect their own prerogatives, but the law leaves much to be desired with regard to the private parties, owing to a restrictive formulation. The rationale behind Article 230 seems clearly to allow decision-making institutions complete freedom in impeaching the acts of their co-organs, but disable private parties from generally applying for annulment.

1.2 Article 230(4):

According to Article 230(4), action for annulment can be brought by private persons only in three types of cases:

• • Where a decision is addressed to the applicant;

• • Where a decision is addressed to third parties and applicant claims that it is of ‘direct and individual concern’ to him;

• • Where a decision is ‘in the form of’ a regulation and is of a ‘direct and individual concern’ to the applicant.

Though not mentioned in A. 230(4), it seems that directives can also be challenged, provided the applicant can prove that the particular directive has direct effect and it individually concerns him. It has been held that the choice of a legal instrument by the Community institutions does not deprive the applicant of the judicial protection afforded by the Treaties.

• • “Direct concern”:

Private persons can apply for annulment of a Community decision only if it is of direct concern to them. The Courts have interpreted direct concern to mean that the impugned Community act should be directly applicable without any discretion on part of the member States. Direct concern simply requires that the contested Community act directly affect the individual’s legal situation and that it leaves no discretion to the addressees entrusted with the act’s implementation, such implementation being purely automatic and resulting exclusively from Community regulations without the application of any intermediate rules. The rationale behind requiring direct effect of the community act for judicial level being that if the member States have a role in the implementation of the Community act, then the same can be subject to challenge in the national Courts. To a great extent, the object behind restrictive wording of Article 230 is to avoid multiplicity of litigation and strain to the ECJ.

1.4 “Individual concern”:

The requirement of individual concern is more complex, and has been the bone of contention in many cases before the ECJ. Their objective is to restrict access to the judicial review in the Court of Justice only to measures which are individual and not general, and in which applicants have personal interest.

1.4.1 The Plaumann Rule & its Implications

Regarding when a decision can be said to be of ‘individual’ concern to the private person, the ECJ has traditionally attributed very stringent interpretations. One of the most important decisions in this regard that set a trend is Plaumann v. Commission. In this case, Germany was refused authorization by the Commission to reduce import duty on clementines. The applicant, a German importer of clementines, challenged this decision of the Commission. The ECJ refused to entertain this plea holding that, claimants to be individually concerned should prove that the decision “affects them by reason of certain attributes which are peculiar to them or by reason of circumstances in which they are differentiated from all other persons and by virtue of these factors distinguishes them individually”. Though Plaumann was directly affected by the decision, he stood as yet another importer of clementines, and there was nothing that distinguished him from the rest of the importers, and hence was not “individually concerned”. The interpretation of the Court thus excluded the possibility of challenge by a member of an affected class/group, the rationale being that parties are competent only to challenge decisions of the Community institutions and not generally applicable orders/regulations though the individual may be directly affected, leaving the affected The Plaumann test is very difficult to meet and requires the applicants to belong to a closed, fixed group ascertainable on the date of adoption of the measure.

The dictum of Plaumann has been consistently followed through the subsequent decades. However, there have been departures such as, in Codornui,the Court held that the applicant who possessed a trademark that would have been overruled by a regulation (found to be of legislative character) was individually concerned, and also in anti-dumping cases where Courts have been more inclined in finding individual concern of the claimants, rather than in general policy areas.

1.4.2 The lacuna:

Thus there is a legal lacuna with regard to self-executing acts of general application which have direct legal effects without the adoption of national legal measures or Community legal measures. Such an act may concern an individual directly and if individual alleges its illegality, he is refused access to the Courts directly. The only recourse available to him is to breach the Community law and then appeal against the sanction which the national courts could impose on him by reason of that breach, in order to contest the validity of an allegedly illegal measure before the national court.

1.5 A Varied Stance: CFI in Jégo-Quéré:

In Jégo-Quéré,dealing with a self-executing Community act of general application, the CFI took a teleological approach to ‘individual concern’ and held that there was no compelling reason to adhere to the Plaumann test and , in keeping with the guarantee of effective judicial protection, held:

“…a person is individually concerned by a Community measure of general application that concerns him directly if the measure in question affects his legal position, in a manner which is both definite and immediate, by restricting his rights or by imposing obligations on him. The number and position of other persons who are likewise affected by the measure, or who may be so, are of no relevance in that regard.”

1.6 Back to Square One: ECJ in UPA & Jégo-Quéré:

The ECJ in Unión de Pequeños Agricultores v Council (hereafter called UPA) disregarded the CFI interpretation in Jégo-Quéré and favoured the Plaumann approach. Relying on its UPA decision, the ECJ allowed the appeal to Jégo-Quéré, thereby overruling the decision of the CFI in that matter. According to the ECJ, the doctrine of effective judicial protection is not rendered futile by a restricted interpretation of Article 230(4).The ECJ recognized the legal lacuna and the inadequacy of Article 230(4) in protecting the rights of the individuals; however it refrained from taking the route of the CFI as it held that this would have amounted to deviation from legislative intent, and a virtual amendment to the EC Treaty. By these ECJ decisions, the long trend of restrictive interpretation to “individually concerned” stood vindicated, confirming a limited and unsatisfactory judicial protection to private persons.

Part 2: The Principle of Effective Judicial Protection and an examination of incompatibility

2.1. The principle itself:

The principle of effective judicial protection is an important contribution of the ECJ to the European Community law. It justifies directly or indirectly the principle of primacy and direct effect of EC law, the obligations imposed on the national courts to interpret the law in accordance with EC law and to apply the interim measures not provided by national legal systems, the non-contractual liability of Member States and the obligation to ensure the judicial means of protection of the rights of individuals.

This “fundamental” right was first recognized by the ECJ in Johnston. In this case, the ECJ decided on whether a domestic order of the United Kingdom that excluded judicial review was compatible with Community law. The ECJ in this context held that all persons have the right to obtain an effective remedy in a competent court against measures which they consider to be contrary to the principle of equal treatment for men and women laid down in the Directive. It is for the member states to ensure effective judicial control as regards compliance with the applicable provisions of community law and of national legislation intended to give effect to the rights for which the Directive provides. It held that the principle of effective judicial control underlies the constitutional traditions common to the member states and is laid down in Articles 6 and 13 of the European Convention for the Protection of Human Rights and Fundamental Freedoms. By stating that the principle is derived from shared constitutional values of the member states, it is implied that it is applicable irrespective of specific Directive obligations. The Johnston dictum elevated the principle of effective judicial protection to the status of a fundamental right.

In express terms, Johnston only vests the member States with the obligation to ensure effective judicial control to safeguard the rights of the individuals. But unless the ECJ intended to apply double standards all the institutions applying EC law should take into account this principle with regard to individuals, especially the national Courts and the ECJ that are involved in reviewing the acts of the other Community institutions.

2.2. Examination of Incompatibility:

2.2.1 The Teleological View: Court of First Instance in Jégo-Quéré

On facts, this case concerned a fisheries regulation of the Council that imposed restrictions on fishing nets of particular size. This claim for annulment was defended on the ground that the applicant was not individually concerned by the Regulation. The applicant claimed that he was the only fishing operator in that area who regularly uses nets of the restricted size, and thus he was individually affected. The Court found using the Plaumann test that the applicant was not individually affected by the impugned Regulation. At this juncture, Jégo-Quéré claimed that the inadmissibility under Article 230(4) would violate his right to judicial protection.

The CFI in light of the fact that the Treaty has set out a complete system of legal remedies and procedures designed to permit the Courts to review the legality of acts of the institutions, held that issues of admissibility should be decided with care so as not to violate effective judicial protection available to every person. In this regard the Court found that the applicant was left with two other procedural remedies: non-contractual liability and appeal from a national court upon punishment imposed owing to violation of the Regulation. The CFI pondering on these options held that individuals cannot be required to infringe the law in order to obtain a remedy. Moreover an action for damages is unsatisfactory as it does not annul the Community action, though necessarily holding it illegal. Thus the CFI concluded that in the given circumstances, depriving the applicant remedy under Article 230 would amount to denial of the right to judicial review.

2.2.2 The Inspiration: Opinion of Advocate General

The decision of the CFI was much inspired by the opinion of the Advocate General delivered in the UPA case. He acknowledged a severe lacuna in the law relating to judicial review and identified the problem to be sourced in the strict interpretation given to “individual concern”. He thus proposed a lenient test, as adopted by the CFI and believed that a broad interpretation of “individual concern” is not inconsistent with the Treaty since the Plaumann approach is not a settled one, and the Courts have been carving out exceptions as evident from cases like Codornui. Interestingly he notes that the ECJ that was so lenient in allowing the Parliament to approach the Court for annulment of a Community action, has consistently denied wide standing to individuals. In the interest of institutional balance the Chernobyl case permitted standing to the Parliament, thereby blatantly disregarding the wordings of the Treaty.

The Courts’ continued insistence on the necessity of effective judicial protection at the national level amounts to a double standard when they refuse to change their own interpretation of Article 230(4) in the same light.

2.2.3 Upholding the Sanctity of the Treaty: ECJ in UPA & Jégo-Quéré

The ECJ took a drastically different view from the CFI, in both UPAand in the appeal in Jégo-Quéré. The ECJ first disposed of UPA which dealt with discontinuance of certain subsidies in olive oil trade.

UPA, a group representing small Spanish traders, challenged the Council Regulation that discontinued the subsidy. The CFI faced with the issue of admissibility under Article 230(4), was of the opinion that the applicant had not established that its members are affected by the impugned regulation by reason of certain attributes which are peculiar to them or by reason of factual circumstances in which they are differentiated from all other persons, since the regulation concerned the applicant’s members only on the basis of their objective capacity as operators trading in those markets, in the same way as all the other operators who trade in them. UP contended that the Community Courts may, declare an action for annulment inadmissible only where an examination of the relevant provisions of national law reveal that there are procedures under which the applicant may bring the alleged illegality of the impugned measure before the Court of Justice through a request for a preliminary ruling from a national court. The ECJ held that it cannot be expected to look into the adequacy of national procedures for every case which would take the ECJ beyond its competence and jurisdiction which only extends to review of Community measures.

The ECJ, fully conceding that effective judicial protection is an important part of the EC jurisprudence, emphasized the role of the member States in guaranteeing judicial review in accordance with the principle of sincere co-operation. In effect it stated that if both the national rules and EC Treaty do not allow for judicial redressal, then it is the national laws which should bend to accommodate the rights of the individual to obtain judicial review.

Effective judicial protection was considered to have lesser sanctity than the wordings of the EC Treaty.

Later in the appeal of Jégo-Quéré, the ECJ followed the UPA case, overruling the CFI decision that caused many ripples. These two decisions of the ECJ effectively negated the liberal understanding of “individual concern” espoused by the Advocate General Jacobs. The AG championed the same approach in his opinion in the later Jégo-Quéré case as well, despite the ECJ having rejected it in the UPA.

2.2.4 Explaining the varied views

The essential difference of opinion between the CFI and the ECJ stemmed from the treatment of the principle of effective judicial protection. The CFI held out this principle as a peremptory norm that can be used in interpretation of a provision (albeit unambiguous) of the EC Treaty.

It is true that the right to effective judicial remedy has been gaining more prominence in the recent years, and it is even incorporated in the draft Constitution of Europe. However the ECJ in UPA, viewed the Treaty as an exhaustive document regarding the conferment of rights on individuals against the Community institutions, and applied double standards by shifting the burden of ensuring effective judicial protection to the national courts.

To the ECJ, adopting a liberal view so as to render “individual concern” redundant amounts to usurping the legislative and policymaking powers exclusively vested in the member States.

Part 3: Alternatives to Judicial Review under Article 230(4)

Inadmissibility under Article 230(4) can be justified only if there are other viable alternative remedies so as not to detract from the right to effective judicial protection.

3.1 Preliminary Rulings:

According to this procedure, when the Community act is challenged before the national Courts a preliminary ruling can be obtained from the ECJ on its validity. Under this provision the national Courts have a wide scope to refer questions to the ECJ, including instances where there are no satisfactory national rules. As pointed out by Advocate General Jacobs in his opinion, national courts may refuse to refer questions, and although courts of last instance are obliged to refer under the third paragraph of Article 234 EC, appeals within the national judicial systems are liable to entail long delays which may themselves be incompatible with the principle of effective judicial protection and with the need for legal certainty. National courts might also err in their preliminary assessment of the validity of general Community measures and decline to refer questions of validity to the Court of Justice on that basis. Moreover, where a reference is made, it is in principle for the national court to formulate the questions to be answered by the Court of Justice. Individual applicants might thus find their claims redefined by the questions referred.

Also preliminary rulings do not satisfy the lacuna inherent in self-executing general acts, as highlighted throughout the paper. It may be difficult or even impossible for individual applicants to challenge Community measures which do not require any acts of implementation by national authorities since there may be no measure which is capable of forming the basis of an action before national courts. The fact that an individual affected by a Community measure might, in some instances, be able to bring the validity of a Community measure before the national courts by violating the rules laid down by the measures and rely on the invalidity of those rules as a defence in criminal or civil proceedings directed against him does not offer the individual an adequate means of judicial protection. Individuals clearly cannot be required to breach the law in order to gain access to justice.

3.2 Action for non-contractual liability:

Article 288 states that the non-contractual liability of the Community shall be dealt in accordance with the general principles common to the laws of the Member States to make good any damage caused by its institutions or by its servants in the performance of their duties. Under Article 235, the ECJ has jurisdiction over such claims for damages. Since Article 288 does not provide for any limitation on standing unlike Article 230(4), any person who is affected by an unlawful Community measure, irrespective of his individual concern or otherwise, can claim for damages under this mechanism.

Article 288 is not an effective alternate remedy as it does not serve to annul the unlawful Community measure, despite the fact that damages will be granted only if the measure is found unlawful.

Thus it can be seen that none of the other “remedies” available under the Treaty can qualify as effective judicial remedy when the applicant seeks annulment of a self-executing Community act he is affected by.

Part 4: The Basic fallacy

The basic fallacy of the argument of the ECJ is that requests for reform referred to the test for the textual requirement of individual concern and not to EC Treaty requirement of ‘individual concern’ per se. Consequently, there was no issue of judicial amendment of the Treaty, but rather a change of the judicial test in Plaumann. An ECJ predisposed and determined to reform the area would have surely made that point, which was also made by AG Jacobs.

Part 5: Conclusion: The Way Ahead

The EC has always been accused of democratic deficit due to the insignificant control exercised by the European Parliament over the other policy making Community institutions. Given the difficulties citizens and enterprises experience in making their voices heard by the EC political institutions (Council, Commission, and Parliament) and national governments, sometimes the only feasible channel for effectively pursuing their interests is the judicial one. At the same time, the increasing “juridification” of society has turned judicial processes into sites of policymaking within the Community as well. As a result, the functional representation of individual interests before the courts plays a crucial role in the EC.

The amplitude of the right of judicial review conferred on the individuals is a policy choice to be exercised by the member States. The ECJ is no stranger to the phenomenon of judicial activism, and the Community Courts have at various points seized the opportunity to create new jurisprudence reading in meanings to the Treaty that were never intended by the drafters. Seen in this light, the failure of the ECJ in expanding the import of “individual concern” in UPA & Jégo-Quéré reveals its attitude towards judicial review and rights of individuals and its conviction that expansion of standing of private persons should be decided by the member States and not by judicial interpretation. This failure is further emphasized by the basic fallacy pointed out above in the reason used by the ECJ to justify its refusal to change its interpretation of the requirement. Thus there remains no reason why there should not be a much needed liberalization in the test applied at the next possible opportunity.

Index of Authorities

Primary Sources

• • Caselaw

• • Bock v. Commission, Case 62/70, [1971] ECR 897.

• • Codornui SA v. Commission, Case C-309/89, [1994] ECR I – 1853.

• • Commission v. Jégo-Quéré & Cie, C-263/02 (ECJ).

• • Gibraltar v. Council, Case C-298/89.

• • Jégo-Quéré & Cie v. Commission, Case T-177/01 (CFI),

• • Marguerite Johnston v Chief Constable of the Royal Ulster Constabulary, Case-222/86.

• • Plaumann v. Commission, Case 25/62.

• • Spijker Kwasten v. Commission, Case 231/82, [1983] ECR 2559.

• • UEAPME v. Council, Case T-135/96.

• • Unión de Pequeños Agricultores v Council, Case 50/00.

• • Conventions, Treaties, Statutes

• • Treaty establishing the European Community.

• • Draft Constitutional Treaty of Europe.

• • European Charter of Human Rights and Fundamental Freedoms.

Secondary Sources

• • Articles

• • Adam Cygan, “Protecting the interests of civil society in Community decision-making–the limits of article 230 EC”, 52 ICLQ 995.

• • Alison Peck, “Standing For Protection of Collective Rights In The European Communities”, 32 Geo. Wash. J. Int’l L. & Econ. 367.

• • Bo Vesterdorf, “The Community Court System Ten Years from Now And Beyond: Challenges And Possibilities”, E.L. Rev. 2003, 28(3), 303-323.

• • Constantin C. Kombos, ““The Recent Case Law on Locus Standi of Private Applicants under Art. 230(4) EC: A Missed opportunity or a Velvet Revolution?”, European Integration online Papers (EIoP) Vol. 9 (2005) No. 17, sourced from, http://eiop.or.at/eiop/texte/2005-017a.htm, visited on 15. 05.2005

• • Cornelia Koch, “Commission of European Communities v. Jégo-Quéré & Cie, C-263/02”, 98 Am. J. Int’l L. 814.

• • Cornelia Koch, “Locus standi of private applicants under the EU Constitution: Preserving gaps in the protection of individuals’ right to an effective remedy”, E.L. Rev. 2005, 30(4), 511-527.

• • Elspeth Berry & Simon Boyes, “Access to Justice in the Community Courts, A limited right”, C.J.Q. 2005, 24(APR), 224-245.

• • Ewa Biernat, “The Locus Standi of Private Applicants under Article 230 (4) EC And the Principle of Judicial Protection in the European Community”, Jean Monnet Working Paper 12/03.

• • Filip Ragolle, “Access to justice for private applicants in the Community legal order: Recent (R)evolutions”, E.L. Rev. 2003, 28(1), 90-101.

• • John A. Usher, “Direct And Individual Concern – An Effective Remedy Or A Conventional Solution”, E.L. Rev. 2003, 28(5), 575-600.

• • Jose Manuel Cortes Martin, “At The European Constitutional Crossroads: Easing The Conditions For Standing Of Individuals Seeking Judicial Review Of Community Acts”, 12 Mich. St. J. Int’l L 121.

• • Jurgen Schwarze, “Judicial Review in EC law – Some reflections on the origins and the actual legal situation”, 2002 ICLQ 17 – 34.

• • Luigi Malferrari, “The functional representation of the individual’s interests before the EC Courts: The evolution of the remedies system and the pluralistic deficit in the EC”, 12 Ind. J. Global Legal Stud. 667.

• • Nanette A. Neuwahl, “Article 173 Paragraph 4 EC: Past, Present And Possible Future”, E.L. Rev. 1996, 21(1), 17-31.

• • Noemi Gal-Or, “Private party direct access: A comparison of the NAFTA and the EU Disciplines”, 21 B.C. Int’l & Comp. L. Rev. 1.

• • Tim Corthaut, “Case CFI May 3, 2002, Jégo-Quéré v. Commission, T-177/01 and C-50/00, ECJ July 25, 2002, Unión de Pequeños Agricultores v. Council”, 9 Colum. J. Eur. L. 141.

II. Books

• • James Hanlon, European Community Law, 2003, Sweet & Maxwell.

• • Paul Craig, et al, EU Law: Text, Cases and Materials, 3^rd Ed., 2003, OUP.

• • T.C.Hartley, The Foundations of European Community law, 3^rd edition, 1994, Clarendon Press.