A criticism of the CJEU’s ruling that allowing London taxis to use bus lanes while prohibiting private hire vehicles from doing so does not appear to involve State aid (Eventech, C-518/13)

Dr Albert Sanchez Graells, School of Law, University of Leicester

In its judgment of 14 January 2015 in Eventech (C-518/13, EU:C:2015:9), the Court of Justice of the EU (CJEU) ruled on the preliminary question referred by the Court of Appeal (England and Wales) in the Addison Lee “taxis in bus lanes” case [as part of the challenge of the High Court’s decision in Eventech Ltd (R on the application of) v Parking Adjudicator (2012) [2012] EWHC 1903 (Admin)]. The CJEU decided that allowing London taxis (black cabs) to use bus lanes while prohibiting private hire vehicles (PHVs) from doing so does not appear to involve State aid. While the Eventech judgment leaves a minimum scope for the Court of Appeals to find differently in view of the specific facts of the case and the parts of the file not referred to the CJEU, this is most likely the end of the dispute.

The decision comes at a time when the regulation of the taxi sector is under significant pressure due to the political and economic waves that sharing economy initiatives (such as Uber) create – or, in the words of AG Wahl in the Eventech Opinion, “taxis and PHVs are engaged in fierce competition with each other across Europe, and London is not the only city where conflicts have arisen” (EU:C:2014:2239, para 2). This is a sector where competition rules have always been difficult to enforce due to the heavy regulation to which it is subjected (OECD, Competition Roundtable on ‘Taxi Services: Competition and Regulation’, 2007). Some claim that it is a sector ripe for proper deregulation and liberalisation, while others claim the opposite [for recent discussion, see L Eskenazi, ‘The French Taxi Case: Where Competition Meets—and Overrides—Regulation’ (2014) Journal of European Competition Law & Practice, and Publicpolicy.ie, The Taxi Market in Ireland: To Regulate or Deregulate? (2014)]. The discussion on the State aid implications of certain privileges derived from such regulation in crisis, and particularly the privileged use of bus lanes, added one layer of complication that the CJEU seems to have been keen on taking off the table.

The legal dispute in front of the CJEU can be condensed to opposing views on whether allowing black cabs to use bus lanes while prohibiting PHVs from doing so infringed the prohibition in Article 107(1) TFEU. It can be further narrowed down to the two key issues of whether this policy involves a commitment of State resources and whether it confers on taxis a selective economic advantage. Both elements need to be present for the prohibition of Article 107(1) TFEU to apply. The CJEU found in the negative on both aspects and determined that the practice of permitting, “in order to establish a safe and efficient transport system, black cabs to use bus lanes on public roads during the hours when the traffic restrictions relating to those lanes are operational, while prohibiting minicabs from using those lanes, except in order to pick up and set down passengers who have pre-booked such vehicles, does not appear, though it is for the referring court to determine, to be such as to involve a commitment of State resources or to confer on black cabs a selective economic advantage for the purpose of Article 107(1) TFEU” (C-518/13, para 63).

In my view, the Eventech judgment is criticisable in both areas. It fails to address the issues of economic advantage and selectivity in a functional manner—not least because the analysis of the selectivity of the measure ultimately relies on an assessment of ‘equality’ or ‘comparability’ of the legal position of black cabs vis-à-vis PHVs that falls into a logic trap derived from the pre-existing regulation of black cabs. Moreover, the analysis of the element of transfer of State resources is very counterintuitive and seems to contradict both economic theory (particularly as the use of public goods is concerned) and the case law on access to essential facilities under private ownership.

The finding that State resources are not involved is partial and flawed

Following the Opinion of AG Wahl, the CJEU engages in a rather counterintuitive approach to the issue of the transfer of State resources, which focusses on whether the State is forfeiting revenue by not charging black cabs for access to the bus lanes or by not imposing fines on them when they use the bus lanes, as it does with PHVs (judgment, paras 36-46). This approach comes from the AG Opinion, where he had decided to assess the question from the perspective of the regulatory powers of the Member State and fundamentally concluded that, in the exercise of those regulatory powers, there is no obligation to impose a charge for access to public infrastructure (Opinion, paras 24-35). Continue reading

Case Comment: McCarthy (C-202/13) (Grand Chamber), 18th December 2014

Catherine Taroni

Context

This case was referred from the High Court R (on the application of McCarthy and ors.) v the Secretary of State for the Home Department [2012] EWHC 3368 (Admin), and considered the applicability of Directive 2004/38 to situations not traditionally falling within the concept of a Union citizen moving to another Member State, and derivative rights for third-country family members.

The O and B decision of the CJEU had addressed some issues in relation to the rights of TCN family members of EU citizens residing in their home Member State, and this case sought to address the issue of what can be required of third-country national family members of EU citizens entering the UK.

Facts

Mr McCarthy is a dual UK/Irish national, his wife is a Colombian national, and their daughter is also a dual UK/Irish national. Mr McCarthy has lived in Ireland for 52 years, only residing in the UK for six years, from 1967 – 1973. The family has lived in Marbella, Spain since May 2010 where they own a property; they also own a house in the UK, to which they regularly travel. Mrs McCarthy has to travel to Madrid to renew her family permit every time she wishes to travel to the UK with her family. She has been refused permission to board flights to the UK when she has presented her residence card without the family permit.

The Secretary of State for the Home Department issued guidance to carriers to discourage them from transporting TCNs who are not in possession of a residence permit issued by the UK authorities. Under section 40 of the Immigration and Asylum Act 1999, a carrier who fails to meet that requirement is required to pay a ‘charge’.

The Advocate General’s Opinion

AG Szpunar gave his Opinion on 20th May 2014, and argued that the provisions of Directive 2004/38 should apply by analogy to the current situation, which involved visits to the UK, where Mr McCarthy is a national, rather than to a Member State of which he was not a national. The Advocate General advised the Grand Chamber that the UK is in breach of free movement law in relation to the requirement of the family visa In addition to residence card, and that the UK’s Frontier Protocol did not give it an opt out in relation to restricting fundamental free movement principles. Continue reading

After Opinion 2/13: how to move on in Strasbourg and Brussels?

John Morijn

In its recent Opinion 2/13 the Luxembourg Court found that plans for the EU to accede to the ECHR are not compatible with Union law as it currently stands. This ruling has been critically received, including on this blog (see here (Lock), here (Besselink), here (Michl), here (Douglas-Scott), here (Peers) and here (O’Neill)). The immediate focus has been on how the Opinion should be evaluated as a matter of Union law and followed up inside the EU. To that effect it has been suggested that the draft accession treaty would need renegotiation, or that a text with Treaty status (a Protocol) should be added to the existing EU Treaty texts which would themselves be left intact. Are other options available too in Brussels, for example freezing accession ambitions for a while or changing existing Treaty texts?

Clearly, no matter what solution is eventually found, it will (once again) take years. This raises another important prior question: what is the Strasbourg Court likely to do until an EU accession solution 2.0, or any EU-internal alternative is in place? In particular, will Opinion 2/13, and its revealing reasoning for how the Luxembourg Court currently views the place of human rights protection in Union law and the leeway that Member States have in diverting from Union law if their ECHR obligations so require, have implications for the Strasbourg Court’s “EU approach” (see here and here for its own factsheets regarding its general approach and that in Dublin cases)? This contribution offers some first reflections on moving on in Strasbourg and Brussels.

The Opinion: first a step back

It is quite understandable that the Luxembourg Court’s ruling has met with considerable disappointment. It has been suggested that it has prioritised the protection of its own position over EU human rights protection. But, taking a step back, perhaps this time there was actually (also) a veritable case for “blaming Brussels” too. For were the instructions laid out in the Treaty and the Protocols sufficiently clear to begin with? Is it at heart at all possible to establish independent external judicial review, apparently for reason that human rights protection was felt not to be properly safeguarded in the existing set-up (article 6 TEU), without redistributing competences to the disadvantage of the Luxembourg Court (Protocol 8)? In other words, if the whole point of accession actually was to change something in the institutional design of the EU, the make-up of legal remedies and even the way in which Union law had been interpreted so far by the Luxembourg Court, why not state that more clearly from the outset? From that perspective the Opinion by the Court may be a reflection of the convoluted drafting of the EU accession instructions by the Herren der Verträge.

Looking at the state of affairs from another perspective, perhaps the fact that it is now “back to the drawing board” is also a unique second (or third) chance to ask the basic prior question of the Lisbon Treaty text: quite how can the application of an EU internal human rights document (the Charter) that the Luxembourg Court is under an obligation to apply, be combined with external judicial review by the Strasbourg Court of the EU’s (including the Luxembourg Court’s) performance with regard to the ECHR, if that ECHR and the way in which it is interpreted are themselves part (but only part) of the normative content of the Charter? This is not an easy one. A binding Charter and EU accession, it should be remembered in this context, were initially alternative solutions to “fill the EU human rights gap”. Only later did they become cumulative elements in the EU treaties, as a “solution” without a prior problem analysis justifying this double-headed approach. Yet, curiously, given the great stress accorded to EU accession so far their development has somehow remained unconnected. Additional instructions on how to dovetail their two separate logics may be unavoidable.

Then Opinion 2/13 itself. In fact, by the standards of any Court ruling, it offers a surprisingly candid, concise and (mostly) clear analysis. Some of us may not like what we read, and some cross-translation from Union law to human rights law expertise may be required to clarify its full significance, but it is extremely helpful for considering future directions in Strasbourg and Brussels. In particular the reasoning under the headings “preliminary considerations” (par. 153-177) and “the specific characteristics and the autonomy of EU law” (par. 179-200) is revealing in a number of different respects, including with regard to

  • the Court’s extension of its Melloni-reasoning to ECHR Member States’ freedom to go beyond what is required by ECHR minimum norms, as well as further (unstated) implications of this reasoning with regard to interpreting the Charter and the ECHR side-by-side, and
  • the Full Court’s approach to mutual trust in the EU in the light of EU Member States’ parallel ECHR commitments, and its reference to the 2011 Luxembourg Grand Chamber ruling in NS.

These two elements will be briefly highlighted below. I agree with Scheinin that in thinking about responses to the Court’s Opinion it seems more fruitful to consider these (and many other relevant) elements of the analysis rationally, in the light of the broader questions of post-Lisbon Union human rights protection architecture, rather than being stuck in disappointment for too long. Continue reading

Kaltoft – a step (in the wrong direction?) towards protection from weight discrimination under EU law

Dr Iyiola Solanke

Over the last two to three decades the prevalence of overweight and obese[1] people has become a major public health issue across countries, age-groups, class, race and ethnicity. As long ago as 2003, research estimated that 61% of Americans were overweight, and 20% were obese. In 2006, the OECD ranked Britain’s overweight and obesity rate (62%) as the worst in Europe and the third-worst in the world, behind Mexico (69.5%) and the U.S (67.3%). In 2008, more than 1.4 billion adults were overweight, including over 200 million obese men and nearly 300 obese million women. More than 40 million children under the age of five were overweight in 2011. Children and adults are getting fatter.

The rise in body size is a public health issue because of its cost: medical experts link numerous ailments to excess weight, such as diabetes, angina, osteoarthritis, stroke, gout, gall bladder disease, breast cancer, cancer of the colon and ovarian cancer. Overweight and obese people are said to be more prone to heart disease, stroke, high blood pressure, diabetes, chronic depression and many other life threatening conditions. An overweight child is likely to become an overweight adult. The cost to the public purse could be billions of pounds.

The CJEU has now confirmed that obesity is also a matter for equality law. EU law does not formally prohibit fattism – like other public health issues, this remains within the competence of the member states[2] – but in the first case of its kind, the CJEU decided that discrimination on the grounds of obesity can fall within the disability strand of the Equal Treatment Directive 2000/78. This was stated in answer to questions arising before a Danish court during a case concerning the weight of a childminder.

Kaltoft

Mr Kaltoft was hired by the Municipality of Billund in 1998 on a permanent contract as a childminder. He was obese at the time of his initial employment and, despite periods of weight loss, remained such throughout his 15 years in this post. From March 2010, he appeared to be under informal review, being visited by his boss and asked about his weight. During 2010, when the number of children in Billund fell, he was given fewer children to look after. That same year, he was chosen to be dismissed. When Kaltoft asked why he was the only childminder to be dismissed, he was told it was due to his decreased workload. Kaltoft was convinced that it had something to do with his weight.

His trade union brought an action before the District Court seeking compensation for him, arguing that he had been subjected to weight discrimination. The Danish court stayed proceedings to ask the CJ four questions, of which only the first and fourth were answered: whether it is contrary to EU law (for example Article 6 TEU on fundamental rights) for a public-sector employer to discriminate on grounds of obesity in the labour market; and whether obesity could be deemed to be a disability covered by Directive 2000/78/EC.

The first question was dealt with relatively swiftly: the Fourth Chamber of the Court of Justice did not emulate the boldness of the Grand Chamber in Mangold but citing Chacon Navas and Coleman declared that ‘EU law must be interpreted as not laying down a general principle of non-discrimination on grounds of obesity as such…’[40]. The Fourth Chamber then considered whether obesity is a disability. Its reasoning began from the purpose of Directive 2000/78: to set out a ‘general framework for combating discrimination, as regards employment and occupation, on any of the grounds referred to in that article, which include disability.’ It then noted the meaning of direct discrimination in this Directive and its scope of application – per Article 3(1)(c) it covers all persons in the public and private sectors, and all phases of employment including dismissals. Citing HK Danmark and Glatzel, where the CJ – taking inspiration from the EU ratification of the United Nations Convention on the Rights of Persons with Disabilities – stated that

53…the concept of ‘disability’ must be understood as referring to a limitation which results in particular from long-term physical, mental or psychological impairments which in interaction with various barriers may hinder the full and effective participation of the person concerned in professional life on an equal basis with other workers

It concluded that in order to be compatible with Directive 2000/78, the concept of ‘disability’ a)‘must be understood as referring not only to the impossibility of exercising a professional activity, but also to a hindrance to the exercise of such an activity’ [54] and moreover that b) the concept had to be open-ended in relation to the ‘origin of the disability’ [55] – it could not be dependent upon ‘the extent to which the person may or may not have contributed to the onset of his disability.’ [56] Thus while obesity itself is not a ‘disability’ within the meaning of Directive 2000/78 [58], it decided that obesity could be covered by the concept of ‘disability’ in that Directive where

  1. ‘the obesity of the worker concerned entails a limitation which results in particular from physical, mental or psychological impairments that in interaction with various barriers may hinder the full and effective participation of that person in professional life on an equal basis with other workers, and the limitation is a long-term one, obesity can be covered by the concept of ‘disability’ within the meaning of Directive 2000/78.
  2. Such would be the case, in particular, if the obesity of the worker hindered his full and effective participation in professional life on an equal basis with other workers on account of reduced mobility or the onset, in that person, of medical conditions preventing him from carrying out his work or causing discomfort when carrying out his professional activity.

It was left for the Danish court to decide whether, despite the fact that he was able to work effectively for 15 years as a childminder, his obesity during his term of employment nonetheless limited Kaltoft in the way envisaged by the EU concept of ‘disability’. He would then have to prove that his dismissal was because of his obesity. Continue reading

Case C-364/13 – Patentability of embryonic stem cells and parthenotes: Inherently Uncertain?

plomerAurora Plomer

On 18th December 2014, the Grand Chamber of the CJEU revisited the scope of the moral exclusion on industrial and commercial uses of “human embryos” in Article 6(2) (c) in Directive 98/44/EC on the legal protection of biotechnological inventions (Biotech Directive) and held that the exclusion does not cover unfertilized human eggs produced by parthenogenesis (parthenotes).

The referral followed the refusal of the UKIPO to grant two national patents to International Stem Cell Corporation (‘ISCO’) [2013] EWHC 807 (Ch) on the ground that the patents fell within the definition of the term ‘human embryo’ adopted by the Grand Chamber in Brüstle (EU:C:2011:669) .     The first patent, GB0621068.6, entitled “Parthenogenetic activation of oocytes for the production of human embryonic stem cells” covered both the methods for producing pluripotent human stem cell lines from parthenogenetically-activated oocytes and the stem cell lines themselves.   The second application GB0621069.4 , entitled “Synthetic cornea from retinal stem cells” similarly included claims to methods and ‘product-by-process’. The UKIPO applied the Grand Chamber’s reasoning in Brustle that parthenotes were ‘capable of commencing the process of development of a human being just as an embryo created by fertilisation of an ovum can do so’ and therefore fell within the meaning of paragraph 36 of the judgment in Brüstle (C‑34/10, EU:C:2011:669). ISCO appealed on the grounds that, according to current scientific knowledge, mammalian parthenotes can never develop to term because, in contrast to a fertilised ovum they do not contain any paternal DNA, which is required for the development of extra-embryonic tissue (para 17). In this light, the High Court of Justice (England & Wales), Chancery Division (Patents Court), decided that the appeal “raised a question of considerable importance. What is meant by the term “human embryos” in Article 6(2)(c) of the Biotech Directive? In particular, what was meant by the CJEU in Brüstle by the expression “capable of commencing the process of development of a human being”? Does that contemplate the commencement of a process which must be capable of leading to a human being? Or does it contemplate the commencement of a process of development, even though the process cannot be completed, so that it is incapable of leading to a human being?” (At para. 3).

Continue reading

Opinion 2/13 on EU Accession to the ECHR: The CJEU as Humpty Dumpty

Aidan O’Neill QC

‘When I use a word,’ Humpty Dumpty said, in rather a scornful tone, ‘it means just what I choose it to mean, neither more nor less.’

‘The question is,’ said Alice, ‘whether you can make words mean so many different things.’

‘The question is,’ said Humpty Dumpty, ‘which is to be master – that’s all.’

Lewis Carroll: Chapter 6 of Through the Looking Glass and what Alice found there (1871)


 

The Human Rights Gap in the EU

The European Court of Human Rights noted in Cooperatieve Producentenorganisatie van de Nederlandse Kokkelvisserij UA v Netherlands (2009) 48 EHRR SE18 (non-admissibility decision of the ECtHR, 20 January 2009):

“The European Community has separate legal personality as an international intergovernmental organisation (see Article 281 of the EC Treaty, quoted above). At present, the European Community is not a party to the Convention … The application is therefore incompatible with the provisions of the Convention ratione personae within the meaning of Article 35 § 3 of the Convention in so far as the applicant association’s complaints must be understood as directed against the European Community itself (see Confédération française démocratique du travail v The European Communities, alternatively: their Member States a) jointly and b) severally, no 8030/77, Commission decision of 10 July 1978, Decisions and Reports (DR) 13, p 235) and must be rejected pursuant to Article 35 § 4.

Although the European Court of Human Rights is thus prevented from deciding issues of EU law (Jeunesse v. France [2014] ECHR 12738/10 (Grand Chamber, 3 October 2014) at para 110) or from examining the procedure of the CJEU directly in the light of the requirements of the ECHR (notably Article 6(1) ECHR), the possibility for an indirect Strasbourg review of the Convention compatibility of the CJEU’s procedures arises from the degree to which the Strasbourg Court considers that the events complained of in any application engage the responsibility of all or any of the individual Member States which are also all contracting parties to the Council of Europe. This is, perhaps, a less than satisfactory solution, certainly for the Member States who might find themselves saddled with responsibility by the European Court of Human Rights for procedures and proceedings before the CJEU over which, as individual States, they have no direct control and little influence (see Boivin v France and 33 other Member States of the Council of Europe [2008] ECtHR 73250/01 (Fifth Section, 9 September 2008) and Connolly v 15 Member States of the European Union [2008] ECtHR 73274/01 (9 December 2008)) should the Strasbourg Court come to the view that the procedures of the CJEU did not provide ‘equivalent protection’ to that directly guaranteed under the Convention.

The Agreement on the Accession of the EU to the ECHR

After largely secret negotiations (see Case T-331/11 Besselink v. Council of the European Union 12 September [2013] ECR II-nyr [2014] 1 CMLR 28) negotiations between the two European (EU and Council of Europe) institutions on the accession of the EU to the ECHR successfully ended on 5 April 2013 and a concluded agreement was reached on how the EU – and EU law – could be integrated within the Strasbourg system for the protection of European human rights (See the Fifth Negotiation Meeting between the CDDH Ad Hoc Negotiation Group and the European Commission on the Accession of the European Union to the European Convention on Human Rights, Final Report to the CDDH, April 5, 2013, 47+1(2013)008, available here.

This agreement made provision to allow for the involvement of the EU institutions in all cases where an application to the Strasbourg court alleged that a provision of EU law is incompatible with the ECHR. In effect, the agreement setting up of some kind of “preliminary reference downward” from the Strasbourg Court to the CJEU, in applications from individuals complaining of an incompatibility between EU law and the ECHR, so as to allow the CJEU to exercise an “internal review” on the issue before the European Court of Human Rights exercises its “external review” under the Convention. Article 3(6) of Draft revised agreement on the accession of the European Union to the Convention for the Protection of Human Rights and Fundamental Freedoms (June 2013) provided as follows:

“6. In proceedings to which the European Union is a co-respondent, if the Court of Justice of the European Union has not yet assessed the compatibility with the rights at issue defined in the Convention or in the protocols to which the European Union has acceded of the provision of European Union law as under paragraph 2 of this article, sufficient time shall be afforded for the Court of Justice of the European Union to make such an assessment, and thereafter for the parties to make observations to the Court. The European Union shall ensure that such assessment is made quickly so that the proceedings before the Court are not unduly delayed. The provisions of this paragraph shall not affect the powers of the Court.”

 In such proceedings contracting States to the ECHR were to have the same opportunity as member State of the EU to submit written observations to the Court of Justice on the proper disposal of the matter by the Luxembourg Court. The Draft declaration by the European Union to be made at the time of signature of the Accession Agreement.

“Upon its accession to the Convention, the European Union will ensure that:

a) it will request to become a co-respondent to the proceedings before the European Court of Human Rights or accept an invitation by the Court to that effect, where the conditions set out in Article 3, paragraph 2, of the Accession Agreement are met;

b) the High Contracting Parties to the Convention other than the member States of the European Union, which in a procedure under Article 267 of the Treaty on the Functioning of the European Union are entitled to submit statements of case or written observations to the Court of Justice of the European Union, be entitled, under the same conditions, to do so also in a procedure in which the Court of Justice of the European Union assesses the compatibility with the Convention of a provision of European Union law, in accordance with Article 3, paragraph 6, of the Accession Agreement.”

The subordination of the Court of Justice to the European Court of Human Rights?

It is clear that the intention of the parties to this agreement was to give the European Court of Human Rights jurisdiction in cases to which the EU is party so as to close the perceived human rights gap.   This means, of course, that the decision of the Strasbourg Court would become binding as a matter of international law on EU institutions, including the CJEU.

Going by its past case law, it was always clear that the Court of Justice would have a problem with any agreement which results in it being subordinated to any other court.   In its Opinion 1/91 Re a Draft Treaty on a European Economic Area [1991] ECR I-6079, the Court of Justice vetoed the establishment of an EEA court hierarchy to provide a system of judicial supervision over the whole EEA beyond the EU. The proposed new court structure consisted of an independent EEA Court, functionally integrated with the ECJ, and an EEA Court of First Instance. The new EEA courts were to consist of a number of judges from the ECJ and the CFI sitting together, with judges appointed from the various EFTA Member States. The Court of Justice found that such a system of judicial supervision proposed under the draft EEA Treaty was not lawful on the grounds, inter alia, that the proposed system of EEA courts might undermine the autonomy of the EU legal order in pursuing its own particular objectives, going so far as to claim (at paras 70–71):

“Article 238 of the EEC Treaty [now, after amendment, Art 218 TFEU] does not provide any basis for setting up a system of courts which conflicts with Article 164 of the EEC Treaty [now, after amendment, Art 19(1) TEU] and, more generally, with the very foundations of Community law. For the same reasons, an amendment of Article 238 in the way indicated by the Commission could not cure the incompatibility with Community law of the system of courts to be set up by the agreement.” (emphasis added).

 And in its Opinion 1/09 Re draft agreement on the European and Community Patents Court [2011] ECR I-1137 the Court of Justice states (at para 89):

“[T]he envisaged agreement, by conferring on an international court which is outside the institutional and judicial framework of the European Union an exclusive jurisdiction to hear a significant number of actions brought by individuals in the field of the Community patent and to interpret and apply European Union law in that field, would deprive courts of Member States of their powers in relation to the interpretation and application of European Union law and the Court of its powers to reply, by preliminary ruling, to questions referred by those courts and, consequently, would alter the essential character of the powers which the Treaties confer on the institutions of the European Union and on the Member States and which are indispensable to the preservation of the very nature of European Union law.   Consequently, the CJEU (Full Court) gives the following Opinion: the envisaged agreement creating a unified patent litigation system (currently called “European and Community Patents Court”) is not compatible with the provisions of the EU Treaty and the FEU Treaty.”

The decision in Opinion 2/13

A hearing before the CJEU seeking its Opinion on the compatibility of this draft agreement with the requirements of EU law was heard in Luxembourg in the first half of 2014.   In its Opinion 2/13 which was issued on 18 December 2014 the EU Court of Justice sitting as a Full Court has rejected the legal submissions of the Commission, the Council, the European Parliament and the 24 Member States who submitted observations to it (only Croatia, Luxembourg Malta Slovenia failed to take part in this procedure) and has ruled that

“the agreement on the accession of the European Union to the European Convention for the Protection of Human Rights and Fundamental Freedoms is not compatible with Article 6(2) TEU or with Protocol (No 8) of the Treaty on European Union on the accession of the Union to the European Convention on the Protection of Human Rights and Fundamental Freedoms.”

The relevant Treaty provisions

The relevant Treaty provisions to this Opinion 2/13 are as follows:

Article 6(2) TEU

2. The Union shall accede to the European Convention for the Protection of Human Rights and Fundamental Freedoms. Such accession shall not affect the Union’s competences as defined in the Treaties.

This provision was inserted into the Treaties by the Member States after the Court of Justice declared in its Opinion 2/94 Re Accession by the EU to the European Convention for the Protection of Human Rights and Fundamental Freedoms [1996] ECR I-1759 that it was not competent for the EU to accede to the ECHR without specific Treaty provision to this effect.

Against that background, Article 6(2) TEU might have been understood as a provision intended by the Member States, as Masters of the Treaties, to alter the constitutional law of the EU and to stipulate as a matter of law, contrary to the Court of Justice’s expressed concerns, that the accession of the EU to the ECHR (which all the Member States wished for) would not affect EU competences as defined in the Treaties.   Instead the Court of Justice appear to have interpreted Article 6(20 TEU more along the following lines:

“If, in the opinion of the Court of Justice, the accession of the Union to the European Convention for the Protection of Human Rights and Fundamental Freedoms shall affect the Union’s competences as defined in the Treaties, then the EU cannot accede to the ECHR.”

Article 51 TEU states that “The Protocols and Annexes to the Treaties shall form an integral part thereof.”   Protocol (No. 8) TEU on the EU’’s accession to the ECHR provides as follows

Article 1

The agreement relating to the accession of the Union to the European Convention on the Protection of Human Rights and Fundamental Freedoms (hereinafter referred to as the ‘European Convention’) provided for in Article 6(2) of the Treaty on European Union shall make provision for preserving the specific characteristics of the Union and Union law, in particular with regard to:

(a) the specific arrangements for the Union’s possible participation in the control bodies of the European Convention;

(b) the mechanisms necessary to ensure that proceedings by non-Member States and individual applications are correctly addressed to Member States and/or the Union as appropriate.

 Article 2

The agreement referred to in Article 1 shall ensure that accession of the Union shall not affect the competences of the Union or the powers of its institutions. It shall ensure that nothing therein affects the situation of Member States in relation to the European Convention, in particular in relation to the Protocols thereto, measures taken by Member States derogating from the European Convention in accordance with Article 15 thereof and reservations to the European Convention made by Member States in accordance with Article 57 thereof.

Article 3

Nothing in the agreement referred to in Article 1 shall affect Article 344 of the Treaty on the Functioning of the European Union.

 Article 344 TFEU states:

“Member States undertake not to submit a dispute concerning the interpretation or application of the Treaties to any method of settlement other than those provided for therein.”

Again the Court of Justice in its Opinion 2/13 appears to have interpreted these provisions of Protocol No. 8 to mean that:

“If, in the opinion of the Court of Justice, any agreement relating to the accession of the Union to the European Convention for the Protection of Human Rights and Fundamental Freedoms authorises Member States to submit a dispute concerning the interpretation or application of the Treaties to any method of settlement other than its final resolution by the “Court of Justice, then this does not provide a lawful basis for the EU to accede to the ECHR.

Conclusion

Effectively what we have in this Opinion 2/13 is a claim by the Court of Justice that it is Master of the Treaties and a declaration that it will refuse to recognise the lawfulness of any agreement among the Member States which might be threaten to displace the Court of Justice as the apex Court for the European Union.

The Opinion appears to be more about the Court of Justice’s fears about its constitutional position rather than about the closing of any gap in human rights protection in the EU.

The Court of Justice places great stress on the autonomy of EU law, but nowhere explains why that autonomy is threatened by the possibility of direct human rights review by the European Court of Human Rights of the action and inaction of all the EU institutions (including the CJEU) any more than the autonomy of the legal systems and constitutions of the existing contracting States of the Council of Europe is threatened or called into question by the fact that they operate under the ultimate jurisdiction supervision of the Strasbourg Court as the relevant regional international human rights court for Europe.

 Notoriously, Humpty Dumpty – after re-defining the questions asked of him as meaning essentially that they were about “which is to be master – that’s all” – had a great fall and could not be put back together again.     The Court of Justice, too, should remember that with hubris comes nemesis.

EU Free Movement as a Legal Construction – not as Social Imagination

Daniel Thym

Monetary union demonstrates that some EU projects are realised without preparation for all eventualities. In the case of the euro, the financial crisis revealed lacunae in the field of economic and budgetary supervision, which the euro countries had to bridge through the introduction of new instruments. In the case of Union citizenship the legal gaps are less dramatic, but nonetheless visible – in particular with regard to access to social benefits for persons who do not work. It was these uncertainties that the European Court of Justice (ECJ) had to confront in the Dano judgment of last Tuesday. It opts for a surprisingly conventional solution, which abandons earlier attempts to conceive of Union citizenship as a projection sphere for political visions of a good life and just society.

The European Court of Justice as Legal Technician

A reminder of the debate about the Free Movement Directive demonstrates the absence of clear political guidance. Initially, the EU Commission had suggested to lay down explicitly that Union citizens who do not work should not have access to social benefits during the first five years of their stay in another EU country (Art. 21.2). It later abandoned the project after the ECJ had ruled in Grzelczyk that similar provisions on study grants do not pre-empt recourse to the Treaty guarantee of non-discrimination. As a result, the final version of the Free Movement Directive reiterated existing Treaty rules, whose precise bearing for people like Ms Dano remained unclear. Otherwise put, there was never a positive political agreement at EU level on the status of Union citizens who do not work. This shifted the responsibility upon judges to resolve open questions.

Judges in Luxembourg used this room for manoeuvre for progressive decisions on various occasions. Judgments such as Grzelczyk, Martínez Sala, Collins, Trojani, Bidar, Vatsouras and Ruiz Zambrano constitute the most ambitious and tantalising line of case law in recent memory. They are characterised by an attempt to breathe life into the abstract Treaty provisions on Union citizenship by granting equal access to social benefits for various categories of economically inactive citizens irrespective of the limits laid down in secondary legislation. It would have been possible for the Court to decide the Dano case differently under recourse to the argumentative arsenal of these judgments.

That did not happen. For more than a decade, the ECJ had ignored the arguments put forward by his most outspoken academic critic, Kay Hailbronner – but they now dominate its reasoning on why citizens like Ms Dano cannot claim social benefits. This presents us with a noteworthy shift of emphasis from a promise of equality inherent in EU citizenship towards the ‘limitations and conditions’, which primary law had always provided for (Art. 21.1 TFEU). Judges abandon the aspirational underpinning of the citizenship concept to the benefit of conventional doctrinal arguments such as the wording or the systematic structure. In short, the Court turns into a legal technician.

Anuscheh Farahat criticises the Court’s outcome and, yet, she follows a similar path as the ECJ, when she argues that the technical rules on inter-state social security coordination mandated a different outcome. It is not convincing to maintain that this specialised field of secondary law should have defined the answer, not least since doing so would have required the Court to disconnect the interpretation of the non-discrimination principle in Article 4 of Regulation (EC) Nr. 883/2004 from primary law. A fundamental question, such as this one, should be answered primarily on the basis of the EU Treaties and the citizenship concept – even by those who disagree with the Court’s conclusion.

It seems to me that the outcome of the Dano case is no coincidence. Judges in Luxembourg are not autistic and listen to the general political context. The Pringle judgment on the compatibility of the ESM Treaty with the rules on monetary union was a case in point – and the same held for the Förster ruling, in which the Court shied away from open conflict with the EU legislator, when it accepted a five-year waiting period for access to study grants for incoming EU students in line with the Free Movement Directive. The Grand Chamber deciding the Dano case will have considered potential implications of its judgment for the overall support for the integration project at a time, when eurosceptic political parties are on rise across the continent, not only in the United Kingdom. Continue reading

The End of Free Movement of persons? The CJEU Decision in Dano

Dr Iyiola Solanke

In January 2014, I wrote a post discussing the plans of the UK Coalition government to withhold some benefits from ‘jobless’ EU migrants. I suggested that this group would be hard to define and that the most obvious persons to fall into this category would be those who are not only unemployed but also for some reason unemployable, such as Wadi Samin, an Austrian army veteran deemed permanently unable to work due to ill health. In Dano, the Grand Chamber of the CJEU seems to have confirmed that this is indeed the case. This decision has been welcomed by leaders including but not limited to David Cameron. However, it does not place major new restrictions on the right of free movement – rather it provides a welcome affirmation of the existing restrictions in the Treaties and secondary legislation. It does this by establishing that ‘sufficient resources’ in Article 7 of the Citizenship Directive refers to ‘own’ resources.

Ms Dano grew up in Romania but migrated to Germany where her 2-year old son, Florin, was born in 2009. Both are Romanian nationals. She settled in Leipzig with her sister and was issued with a permanent residence card in July 2011. She received no support from the child’s father but in addition to help provided by her sister, Dano received child benefit for her son, as well as an additional amount in maintenance payments. (totalling around EUR 317 per month). In 2011 she applied for a series of basic provision benefits (‘Grundsicherung’) provided under German legislation to jobseekers – subsistence benefit (‘existenzsichernde Regelleistung’) for herself, social allowance (‘Sozialgeld’) for her son as well as a contribution to accommodation and heating costs. This application was refused, as was a second application in 2012. An administrative challenge to the 2012 decision, based on Article 18 and 45 TFEU, failed. It was held that she was not eligible to receive these benefits under the relevant German legislation (Paragraph 7(1) of SGB II and Paragraph 23(3) of SGB XII).

She subsequently brought an action before the Social Court in Leipzig, challenging the refusal to grant these basic benefits. The Leipzig Court, although it agreed with the decision under appeal, was unsure that the German provisions were compatible with EU law, in particular the general principle of non-discrimination resulting from Article 18 TFEU, the general right of residence resulting from Article 20 TFEU and Article 4 of Regulation No 883/2004. It therefore referred four questions to the CJEU.

Question 1: the scope ratione personae of Article 4 Regulation No 883/2004

The first question concerned the scope ratione personae of Article 4 Regulation No 883/2004, which replaced Regulation No 1408/71 from 1 May 2010.  Article 4, headed ‘Equality of treatment’, provides:

‘Unless otherwise provided for by this Regulation, persons to whom this Regulation applies shall enjoy the same benefits and be subject to the same obligations under the legislation of any Member State as the nationals thereof.’

Having decided that the basic provision benefits sought were ‘special non-contributory cash benefits’ (within the meaning of Article 70(2) of Regulation No 883/2004) the Leipzig Court asked whether such benefits were covered by Article 4. The Grand Chamber confirmed that they did. Continue reading

Very private lives: “acceptable questioning” in sexual orientation asylum cases

Anita Davies

The CJEU’s judgment in the case of A, B and C is due by the end of the year. Ahead of the expected judgment, this post recaps the opinion handed down by Advocate General Sharpston in July.

In February 2014 The Guardian published details of the lines of questioning used by the UK Home Office in questioning gay and lesbian asylum seekers. The questions considered appropriate to ask vulnerable asylum seekers were shocking; including queries such as “what is it about men’s backsides that attracts you?”.

The Home Office’s prurient interest in the very private lives of asylum seekers has been attributed in part to the Supreme Court judgment in HJ (Iran) and HT (Cameroon) v Secretary of State for the Home Department [2010] UKSC 31, where the Court found that asylum could not be refused on the basis that an individual would not face persecution due to their sexuality if they behaved with discretion when returned. The onus in questioning therefore shifted from conditions facing gay communities in the country of return to proving sexual orientation, resulting in the Home Office seeking to verify sexual orientation via intrusive questioning. Verifying sexual orientation in asylum claims is an issue that a number of EU states have sought to deal with, and Advocate General Sharpston’s opinion in ABC constitutes guidance as to what is considered acceptable questioning. However, as will be seen below, Sharpston’s opinion has to grapple with the central problem: how do you legally “verify” human sexuality? By its very nature sexuality is impossible to “prove” by reference to anything other than what an individual considers their sexuality to be.

  1. B and C were individuals who submitted asylum claims to the Netherlands authorities on the grounds of a well founded fear of being persecuted in their respective countries of origin because they were gay men. All were refused on the basis that their claims of sexual orientation were not “credible”. Two of the applicants had gone to some lengths to prove their sexual orientation: C had submitted a video depicting him performing sexual acts with a man, and A had been willing to submit to a test to prove that he was gay.

In her opinion, Advocate General Sharpston sought to set out some guidelines as to what was an appropriate method for assessing declared sexual orientation, and if the limits were different from the limits applied to an assessment of the credibility of other grounds of persecution. Sharpston recognised that an “individual’s sexual orientation is a complex matter, entwined inseparably with his identity, that falls within the private sphere of his life” [38], therefore, an applicant’s averred sexual orientation must always be the starting point in assessing a claim, however:

The competent national authorities are entitled to examine that element of his claim together with all other elements in order to assess whether he has a well-founded fear of persecution within the meaning of the Qualification Directive and the Geneva Convention.

It therefore follows ineluctably that applications for refugee status on the grounds of sexual orientation, like any other applications for refugee status, are subject to a process of assessment as required by Article 4 of the Qualification Directive. That assessment must, however, be carried out in a way that respects the individual’s rights as guaranteed by the Charter.” [48 -49]

Continue reading

The Price is Not Right: Italian Troubles with Road Haulage and Tobacco Pricing

Angus MacCulloch, Lancaster University Law School

Two recent judgments handed down by the CJEU show how difficult it can be for a Member State to involve itself in fixing minimum prices for products. Given the ongoing challenge to minimum alcohol pricing in Scotland it is interesting that in both these cases the Court ruled against the fixing of prices, but for very different reasons. Neither case is directly analogous to the Scots alcohol MUP referred to the Court in Case C-333/14, but there are perhaps lessons that can be learnt.

Road Haulage

The first of the Italian cases is the least similar to the ongoing UK dispute, but it does indicate an important aspect of the wider problem with Member States interfering in markets. Cases C-184, 187, 194, 195 & 208/13 API and Others (ECLI:EU:C:2014:2147) concern a request for a preliminary ruling regarding the Italian Ministry for Infrastructure and Transport’s measures which fix minimum operating costs for carriage of goods by road. Charges payable by road haulage customers in Italy could not be lower than the minimum operating costs, and they therefore operated as a minimum price for services. The legislative provisions delegated the setting of the minimum operating costs to the Osservatorio; a group drawn from State, industry and stakeholder representatives. Its role was to ‘ensure the protection of road safety and the proper functioning of the market in the road haulage of goods’. The question the Court addressed was whether the fixing of prices by the Osservatorio could be compatible with EU law on the ground that it ensured road safety standards.

The Court first considered the nature of the measure itself – was it a public law measure, or a private arrangement? This is central to the applicability of EU competition law to the measure in question. Art 101 TFEU, when read in conjunction with Art 4(3) TFEU, applies where a Member State ‘requires or encourages’ anti-competitive agreements, or where it ‘divests its own rules of the character of legislation by delegating to private operators responsibility for taking decisions affecting the economic sphere’ [29]. Competition law does not apply to the legislative action of a Member State, as the Court makes clear in para [30]:

“where legislation of a Member State provides for road-haulage tariffs to be approved and brought into force by the State on the basis of proposals submitted by a committee, where that committee is composed of a majority of representatives of the public authorities and a minority of representatives of the economic operators concerned and in its proposals must observe certain public interest criteria, the fixing of those tariffs cannot be regarded as an agreement, decision or concerted practice between private economic operators”.

Even if the private parties were a majority on such a committee it would not affect the public nature of a measure ‘provided that the tariffs are fixed with due regard or the public-interest criteria defined by law’ [31]. However, on the evidence, it was clear that the Osservatorio was, in effect, a type of trade association. Eight of the ten members were industry representatives taking decisions by majority of its members; the State having no right of veto or casting vote [32-33]. The criteria upon which the Osservatorio operated were also problematic; its ‘guiding principles’ didn’t feature ‘any provision such as to prevent the representatives of the professional organisations from acting in the exclusive interest of the profession’ [35]. As to the road safety justification, the Court noted the legislation, ‘makes vague reference to the protection of road safety and, moreover, leaves a very large margin of discretion and independence to the members of the Osservatorio’ [37]. It therefore concluded, at para [38], that:

“In those circumstances, the national legislation at issue in the main proceedings does not contain either procedural arrangements or substantive requirements capable of ensuring, that, when establishing minimum operating costs, the Osservatorio conducts itself like an arm of the State working in the public interest”.

Having established that Art 101 TFEU applied to the measure, the Court turned to its potential for justification under Art 101(3). It rejected application of the Art 101(3) exception on the basis that while road safety may be a legitimate objective the fixing of costs was not ‘appropriate, either directly or indirectly, for ensuring that the objective is attained’ [51]. The measures also went beyond what was necessary as they did not allow carriers to prove that, although they charged lower prices, they fully complied with safety provisions [55]. The fixing of minimum costs could therefore not be justified.

Tobacco

The second case turns away from direct price fixing to a more indirect route: the taxation of tobacco products. In Case C-428/13 Yesmoke Tobacco (ECLI:EU:C:2014:2263) the Court considered the compatibility of the Italian rules setting excise duty on cigarettes. Those cigarettes with a lower retail price lower than brands in the most popular price category were charged a duty at 115% of the basic amount. This meant that the cheapest cigarettes, when compared with the most popular brands, were charged a slightly higher level of excise duty. With this higher level of duty their comparative price advantage was, at least partially, removed. It will not be a surprise to anyone that tobacco products are highly regulated in the EU, and that the protection of public health plays a significant role in that regulation. The relevant EU law is found in Directive 2011/64/EU which governs excise duty on tobacco products. The purpose of that Directive is to ensure the proper functioning of the internal market and neutral conditions of competition [23]. This reference to ensuring ‘neutral competition’ on the tobacco market became crucial to the rest of the judgment. The Directive draws a distinction between different types of tobacco product, for instance cigars and cigarettes, but treats all cigarettes as a single category without distinction. The Court made it clear, at para [31], that Member States, when imposing an excise duty, should not act in way which ran ‘counter to the objectives of that directive’:

“The establishment of different minimum tax thresholds according to the characteristics or price of cigarettes would lead to distortions of competition as between different cigarettes and would therefore be contrary to the objective pursued by Directive 2011/64 of ensuring the proper functioning of the internal market and neutral conditions of competition”.

Italy tried to rely on the public health objective to justify the imposition of the duty. The Court noted that the Directive already takes into account public health, at recitals 2, 14, and 16, and that the framework put in place by the Directive ‘does not prevent the Member States from taking measures to combat smoking and to ensure a high level of protection for public health by levying excise duties’ [36]. In that light the Court therefore ruled that the Directive precluded the setting of a differential rate of excise for a class of cigarettes based on their retail price.

It was clear in this case that the EU legislation took into account the health concerns in relation to tobacco and allowed the imposition of excise duty likely to discourage the consumption of tobacco; the Directive therefore did ‘not prevent’ health protection. But the Directive was also designed to ensure ‘neutral competition’ within the remaining market for tobacco products. The differential tax rate, which attempted to subvert normal price competition, was clearly then contrary to the purpose of the Directive.

Lessons for Minimum Alcohol Pricing

It is clear that the Scots MUP measure is not a disguised cartel, where the drinks industry’s attempts to set prices is given the protection by the State through legislation. But that does not mean that the API & Others is irrelevant to the ongoing SWA case. There is a clear connection between all three cases.

One of the questions raised in SWA regards the compatibility of MUP with Regulation 1308/2013 which governs, inter alia, the common market in wines. Art 167(1)(b) of the Regulation is particularly relevant as it prohibits Member States from laying down market rules which ‘allow for price-fixing’. On the face it of this could mean that the Scottish Parliament are constrained from introducing a minimum price for wine, in the same way as the Italian State was in relation to the imposition of a differential excise duty in Yesmoke. But if one considers Art 167 in context there is an argument that the apparently stark prohibition is more nuanced. The Regulations recitals make it clear that Producers Organisations and Interbranch Organisations (made up of producers and other industry stakeholders), as recognised in the Regulation, are to play a role in the organisation of the market; much as the Osservatorio did in Italian road haulage. It is not a surprise that the Regulation is clear that the rules in the common market, perhaps promulgated by way of a decision taken by an interbranch organisation (see Art 167(1)), should not relate to pricing. When read in this context it is not clear that the Regulation intends a bar on Member States adopting pricing controls unrelated to the common market organisation rules; i.e. where they are put in place for an entirely separate purpose.

Another interesting distinction between the Yesmoke and the SWA case is the fact that the tobacco Directive clearly has public health concerns at its forefront, and as the Directive had taken those concerns into account Italy was required to stay clearly within the terms of Directive. That is not the case in relation to the common market in wines. Health is mentioned in the Regulation, but only in relation of the production of foodstuffs, not in the wider public health concern that stems from the ‘hazardous and harmful’ consumption of alcohol. It would appear therefore that the Scottish Government may be able to argue that their separate concern for public health is outwith the terms of the Regulation and should be handled under the free movement provisions of the TFEU.