6 Division of competence between the
ECJ and national constitutional courts—Fransson and
beyond
124. The impact of the Charter on the division of
competence for the protection of fundamental rights between the
ECJ and the constitutional courts of Member States is, we think,
one of its most significant consequences. In this chapter we assess
the implications.
125. For many years, the ECJ on the one hand and
national constitutional courts on the other have lived under what
one commentator calls "the illusion of unilateral supremacy":[186]
each has been able to find a way to maintain that its constitutional
authority is not undermined by decisions of the other. The Charter
may have put paid to this illusion, if the reaction of the German
Constitutional Court to the ECJ's decision in Fransson
can be considered to be illustrative of wider concern. The Charter,
being a broad and directly effective statement of EU fundamental
rights and principles, among other things renders the ECJ the
ultimate interpreter of fundamental rights in Member States which
come within the scope of EU law. And it does so in a way that
is far more defined, visible, and therefore concrete than was
the case under the pre-existing formula of the application of
general principles of EU law. Conflict arises because the constitutions
of Member States place obligations on the State to respect a broad
range of fundamental (or human) rights—the UK is unusual
in the EU in not having a written constitution; accordingly the
interpretation of those rights is regarded by constitutional courts
as coming within their own preserve, where in the past they have
been willing to criticise EU law; and by some it is an area which
is jealously guarded. Tensions created by the advent of the Charter
have become apparent in the different approaches taken by the
Advocate General and the ECJ in Fransson, and reactions
to the ECJ's decision. Fransson is, we think, of such significance
because it determines what comes within the scope of EU law, and
so where the balance lies between EU and national competence.
Fransson
126. We note what David Anderson QC said:[187]
the significance of Fransson is not so much in concluding
that the test to be applied under Article 51(1) of the Charter
is whether Member State action is within the scope of EU law—that
much is made plain by the Explanations; it is much more the ECJ's
conclusions on the national circumstances in which that test is
met.
Opinion of Advocate-General Cruz
Villalón
127. By the time of the Fransson judgment
there had long been calls for the ECJ to provide guidance on the
division of responsibility between the ECJ and national courts
for guaranteeing fundamental rights under Article 51(1) of the
Charter, according to Advocate-General Cruz Villalón.[188]
He sets out in his Opinion the principles which he thinks should
apply. He explains that the common denominator of the ECJ's case
law on when Member States can be said to implement or act within
the scope of EU law is the requirement that the connection with
EU law must have the capacity to determine or influence the exercise
of public authority in the Member State in question: "Union
law must have a presence at the origin of the exercise of public
authority".[189]
He suggests that, as a rule, the "proper interpretation"
of the constitutional relationship between the EU and its Member
States is that the exercise of public authority within a Member
State should be judicially reviewed by national courts in the
context of their own constitutional settlement.[190]
If, as an exception, this presumption is to be displaced so that
judicial review of the compliance of national action with fundamental
rights should take place at the level of the ECJ, there must be
a "specific interest" of the EU in ensuring consistency
with fundamental rights as interpreted by the EU.[191]
He goes on:
The mere fact that such an exercise of public
authority has its ultimate origin in Union law is not of itself
sufficient for a finding that there is a situation involving the
"implementation of Union law."[192]
Advocate-General Cruz Villalón also argues
that this type of judicial review by the ECJ "must be examined
in terms of a transfer, in the sense that the original responsibility
of the Member States is passed to the Union as far as the right
is concerned."[193]
128. On the facts of Fransson he concludes
that, whilst the exercise of public authority by the Swedish Public
Prosecutor to prosecute Mr Fransson for tax evasion "has
its ultimate origin in Union law",[194]
the connection with EU law is extremely weak and so should not
be considered to amount to implementation of EU law:
It must be recalled that the premise for finding
that the Union has an interest in assuming responsibility for
guaranteeing the fundamental right concerned in this case is the
degree of connection between Union law, which is in principle
being 'implemented', and the exercise of the public authority
of the State. In my opinion, that connection is extremely weak
and is not, in any event, a sufficient basis for a clearly identifiable
interest on the part of the Union in assuming responsibility for
guaranteeing that specific fundamental right vis-à-vis
the Union.[195]
The decision of the ECJ
129. As is clear from the previous chapter, the ECJ
did not follow the Advocate-General's Opinion. It preferred a
more absolutist approach, holding that its case law stated that
EU fundamental rights are applicable "in all situations governed
by EU law";[196]
accordingly, if national action was within this scope, the Charter
invariably became applicable:
Since the fundamental rights guaranteed by the
Charter must therefore be complied with where national legislation
falls within the scope of European Union law, situations cannot
exist which are covered in that way by European Union law without
those fundamental rights being applicable. The applicability of
European Union law entails applicability of the fundamental rights
guaranteed by the Charter.[197]
130. Applying this test to the facts of the case,
the ECJ found that the administrative and criminal proceedings
against Mr Fransson were connected in part to breaches of his
obligations to pay VAT, and this link rendered them within the
scope of EU law: every Member State is under a duty under EU law
to take all measures for the collection of VAT on its territory.[198]
In addition, Article 325 TFEU obliges Member States to take measures
to counter fraud against the EU budget. Given that part of the
EU budget is derived from VAT revenue determined by EU rules,
there was thus a further link between the proceedings and EU law.[199]
131. As if conscious of concern within Member States
that its ruling might cause, the ECJ added that, in a situation
where Member State action is not entirely determined by EU law,
national courts could apply national fundamental rights standards,
subject to two conditions:
That said, where a court of a Member State is
called upon to review whether fundamental rights are complied
with by a national provision or measure which, in a situation
where action of the Member States is not entirely determined by
European Union law, implements the latter for the purposes of
Article 51(1) of the Charter, national authorities and courts
remain free to apply national standards of protection of fundamental
rights, provided that the level of protection provided for by
the Charter, as interpreted by the Court, and the primacy, unity
and effectiveness of European Union law are not thereby compromised
(see, in relation to the latter aspect, Case C-399/11 Melloni
[2013] ECR I-0000, paragraph 60).
For this purpose, where national courts find
it necessary to interpret the Charter they may, and in some cases
must, make a reference to the Court of Justice for a preliminary
ruling under Article 267 TFEU.[200]
132. The ECJ's judgment lays down two scenarios,
therefore:
i. in a situation where Member State action is
completely determined by EU law, the Charter provisions displace
national fundamental rights. In these cases, the Charter is the
sole instrument applicable, and there is no national margin of
manoeuvre. The case of Melloni is an example of this; and
ii. in a situation where Member State action
is not entirely determined by EU law, national courts can apply
national fundamental rights standards, subject to two conditions:
a) the level of protection under national law
must be as high as in the Charter; and
b) the primacy and autonomy of EU law is not
affected if, by inference, national standards are higher.
Judicial reaction to Fransson
THE GERMAN CONSTITUTIONAL COURT
133. The German Constitutional Court commented on
the scope of the Fransson decision in a case concerning
the compatibility of the German counter-terrorism database with
its Basic Law.[201]
In what would appear to be a warning shot, it stated that the
database, and any actions based on it, were purely an internal
matter of domestic jurisdiction and did not constitute implementation
of EU law pursuant to Article 51 of the Charter, a conclusion
which was not altered by the Fransson ruling:
As part of a cooperative relationship, this decision
must not be read in a way that would view it as an apparent ultra
vires act or as if it endangered the protection and enforcement
of the fundamental rights in the member states in a way that questioned
the identity of the Basic Law's constitutional order. The Senate
acts on the assumption that the statements in the ECJ's decision
are based on the distinctive features of the law on value-added
tax, and express no general view.
134. In a similar vein of asserting its own autonomy,[202]
(albeit not concerning fundamental rights) the German Constitutional
Court has recently questioned whether the European Central Bank
has power to buy bonds on the secondary market, under the provisions
of the Outright Monetary Transactions (OMT) Decision. It held
that the decision was an ultra vires act (so going beyond
the competences of the EU), but also that it amounted to a usurpation
of the budgetary responsibility of German legislators. Although
it has in past held that it is competent to rule that an ultra
vires act of the EU is unconstitutional—the illusion
of unilateral supremacy[203]—it
has referred the question of the OMT Decision's conformity with
EU law to the ECJ.
RECENT COMMENTS OF JUSTICES OF THE
SUPREME COURT IN THE UK
135. During recent months there has, unusually, been
increased comment from senior members of the British judiciary—Lord
Judge, the former Lord Chief Justice, and Lords Sumption and Mance,
both Justices of the Supreme Court—voicing concern about
the relationship principally between the Supreme Court and the
European Court of Human Rights in Strasbourg. However, Lord Mance[204]
was also critical of the ECJ decision in Fransson, commenting
approvingly of the German Constitutional Court, which:
reacted speedily and vigorously, in a decision
of 24 April 2013, and in out of court speeches by its President
and Vice President. The latter made clear that the Constitutional
Court would regard it as beyond the European Court's powers -
ultra vires - if the European Court were to apply the Charter
to any legal relationship not "determined" by European
law by "a legally-binding instruction for the specific case".
There is therefore a potential for direct conflict between the
national constitutional and European legal orders. But it will
probably be avoided if, as both the President and Vice-President
counsel, the European Court of Justice engages in the constructive
dialogue which they invite.
136. He said the British position was strikingly
different:
Parliament by the European Communities Act 1972
stipulated that all rights, powers, liabilities, obligations and
restrictions arising by or under the European Treaties "are
without further enactment to be given legal effect or used in"
the UK. This gives rise to a paradox. Having so stipulated, no
explicit constitutional buttress remains against any incursion
by EU law whatever. Indeed, the 1972 Act has itself been given
a constitutional status lifting it above ordinary statutes. The
ordinary rule that a subsequent inconsistent statute impliedly
overrules an earlier has no application to it: Thoburn v Sunderland
C. C. (the "Metric Martyrs" case).
137. Lord Mance concluded that in the UK "there
are therefore few limits to the dominance of EU law".
138. In a speech in February,[205]
Lord Neuberger, President of the Supreme Court, noted what he
perceived to be the incapacity of the Supreme Court to "fight
off" ECJ decisions, as compared with other national courts
in the EU such as the German Constitutional Court. He referred
to the UK's unwritten constitution as one of the main reasons
for UK judicial submission:
A third consequence of not having a constitution
is that one way of fighting off some EU decisions, or decisions
of the Strasbourg court, which is available to many other European
judges is not open to us. The point may be graphically illustrated
by the decision last week of the German Constitutional Court,
the Bundesverfassunsgericht, which was considering the legality
of an essential aspect of the European Central Bank's scheme for
supporting the Euro, the so-called outright monetary transactions
programme. While the German Constitutional Court has played for
time by referring to the ECJ the question whether the programme
infringes EU law, it has left open the possibility that it, the
German Court, may decide that the programme infringes German law,
which would, according to some commentators, throw the future
of the Euro into doubt. More centrally for present purposes, the
fact that Germany has a Constitution enables a German court to
say that German law sometimes trumps EU law. This is an option
which is much more rarely, if at all, open to a UK court as we
have no constitution to invoke.
139. In its recent judgment on the HS2 Hybrid Bill,[206]
approximately two weeks after Lord Neuberger's speech, the Supreme
Court suggested, to our knowledge for the first time, that the
constitutional settlement of the UK, albeit unwritten, may act
as a restraint on the supremacy of EU law. The unanimous view
of the Court was that EU law should not be interpreted:
· either to require UK courts to adjudicate
on, with the corollary of being able to strike down, national
parliamentary procedures; or
· to require the abrogation of fundamental
constitutional principles, in the UK, notwithstanding the European
Communities Act 1972.[207]
140. It may not be coincidental that Lord Neuberger
and Lord Mance gave the leading judgment in this aspect of the
case.
186 Daniel Sarmiento, Who's afraid of the Charter?
The Court of Justice, national courts and the new framework of
fundamental rights protection in Europe, CMLR, Volume 50,
Number 5, October 2013. Back
187
Q36 Back
188
See Advocate-General's Opinion, paras 39 and 43. Back
189
As above, para 33 Back
190
As above, para 35 Back
191
As above, para 40 Back
192
As above Back
193
As above, para 37 Back
194
As above, para 51 Back
195
As above, para 57 Back
196
Case C-617/10, para 19 Back
197
As above, para 21 Back
198
As above, para 25 Back
199
As above para 26 Back
200
As above, paras 29 and 30. Back
201
1 BvR 1215/07, Judgment of 24 April 2013 Back
202
7 February 2014. See Press Release No 9/2014 of the German Constitutional
Court. Back
203
See para 125 of this Report Back
204
In a speech to the World Policy Conference, 14 December 2013 Back
205
Cambridge Freshfields Annual Law Lecture, 12 February 2014 Back
206
R (on the application of HS2 Action Alliance Limited) (Appellant)
v The Secretary of State for Transport and another (Respondents),
[2014] UKSC 3, 22 January 2013 Back
207
See paras 110, 111, 202, 203, and 205-208 Back
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