The application of the EU Charter of Fundamental Rights in the UK: a state of confusion - European Scrutiny Committee Contents

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.


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


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.


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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Prepared 2 April 2014