Overview of the EU legal system
Produced in partnership with Laura Bolado of Andes Legal Consulting Ltd

The following Public Law practice note produced in partnership with Laura Bolado of Andes Legal Consulting Ltd provides comprehensive and up to date legal information covering:

  • Overview of the EU legal system
  • Introduction to the EU legal system
  • Conferral
  • Primacy
  • Sincere co-operation
  • Subsidiarity
  • Proportionality
  • Competences of the EU and of its Member States
  • Proportionality Exclusive competence
  • Proportionality Shared competence
  • More...

Overview of the EU legal system

Introduction to the EU legal system

The EU legal system is sui generis—there is no other legal system it can be compared to, though it draws elements from many. The key to understanding how it works is to avoid trying to subsume it into (or compare it to) a national system and observe its behaviour from different angles.

From its inception, the EU (at the time, the EEC) was intended to grow and become more than an economic bloc, which is why the founding Member States agreed to transfer parcels of sovereignty to the newly 'supranational' institutions. Supranational as the word indicates is something placed over a national structure. The term is used to denote the opposite to intergovernmental where decisions are taken by consensus and linked to national government interests.

Upon joining the EU, Member States are no longer able to adopt, independently, legislation in the areas delegated by the EU Treaties ie the Treaty on the European Union (TEU) and Treaty on the Functioning of the European Union (TFEU) and their predecessors to the EU institutions. The Member States created a new system that, according to established case law of the Court of Justice of the European Union, takes precedence over their national law.

For background reading, see Practice Note: Structure and functions of EU institutions and bodies.

The system is built

on several values and principles, some expressly embodied in the EU Treaties, some others developed by the Court of Justice of the European Union through the years. A few of the most important are: conferral, primacy, sincere co-operation, subsidiarity and proportionality.

Conferral

Member States confer/transfer some competences to the EU and agree to refrain from adopting legislation on those areas (or, in other words, to act only in response to a specific instruction from the EU on those subjects). Once the competence is transferred it cannot be recalled—a Member State will infringe the EU Treaties if it adopts legislation in the area. A Member State cannot recall nor redefine their relationship with the EU at will—it is 'in or out' there is no general cherry-picking in EU law save for a few exceptions for some Member States in specific areas. That was the case of the UK in areas such as Schengen when it was a Member State.

Primacy

Logical and necessary to the system, it was established by the Court of Justice in Costa that the provisions of EU law take precedence over national law. This means that where in conflict with EU law, national legislation must be set aside and the EU norm applied. This applies to primary law, as well as secondary and tertiary sources of law:

'By creating a Community of unlimited duration, having its own institutions, its own personality, its own legal capacity of representation on the international plane and, more particularly, real powers stemming from a limitation of sovereignty or a transfer of powers from the States to the Community, the Member States have limited their sovereign rights and have thus created a body of law which binds both their nationals and themselves. The integration into the laws of each Member State of provisions which derive from the Community and more generally the terms and the spirit of the Treaty, make it impossible for the States, as a corollary, to accord precedence to a unilateral and subsequent measure over a legal system accepted by them on a basis of reciprocity, such a measure cannot therefore be inconsistent with the legal system. The law stemming from the Treaty, an independent source of law, could not because of its special and original nature, be overridden by domestic legal provisions, however framed, without being deprived of its characters as Community law and without the legal basis of the Community itself being called into question. The transfer by the States from their domestic legal system to the Community legal system of rights and obligations arising under the Treaty carried with it a permanent limitation of their sovereign rights'

In Garda Síochána, the Court of Justice, reaffirming the principle, stated:

‘It follows from the principle of primacy of EU law, as interpreted by the Court…that bodies called upon, within the exercise of their respective powers, to apply EU law are obliged to adopt all the measures necessary to ensure that EU law is fully effective, disapplying if need be any national provisions or national case-law that are contrary to EU law. EU law, in particular the principle of primacy of EU law, must be interpreted as precluding national legislation…under which a national body established by law in order to ensure enforcement of EU law in a particular area lacks jurisdiction to decide to disapply a rule of national law that is contrary to EU law.’

Sincere co-operation

Laid down in the TEU, sincere co-operation establishes that the EU and the Member States shall, in full mutual respect, assist each other in carrying out tasks arising from the Treaties. Further, the Member States must take any appropriate measure, general or particular, to ensure fulfilment of the obligations arising from the Treaties or resulting from acts of the EU institutions. It requires Member States to facilitate the achievement of the EU's tasks and refrain from any measure which could jeopardise achievement of the EU's objectives. It is a reinforcement of primacy and the Court of Justice often refers to this principle when ruling on precedence of EU law.

Subsidiarity

Expressed in the TEU, subsidiarity is paramount to the system as it establishes that the EU will act only and in so far as its action has more chance of success than action by the Member States in a particular area. Where the action of the Member States is more likely to be successful this principle is not complied with and the legislation should not be adopted (as it could be annulled later).

Proportionality

Closely linked to subsidiarity, and part of the above-mentioned Article and Protocol, the principle of proportionality establishes that the action of the EU cannot go beyond what is necessary to achieve the objectives set out in the EU Treaties. Should the EU go over that limit the legislation could be annulled. In 2014, Directive 2006/24/EC which allowed national authorities access to retained data on individual EU citizens use of mobile phones was ruled disproportionate interference under Articles 7 and 8 of the Charter of Fundamental Rights of the European Union in the conjoined cases of Digital Rights Ireland and Seitlinger, concluding the Directive was invalid.

In other words, the principle of conferral delimits the competences of the EU and those which remain with the Member States and the principles of subsidiarity and proportionality act as limits to the exercise of those conferred competences. As an umbrella, to ensure the correct functioning of the system, we find primacy (supremacy/precedence) of EU law over national law that judges need to apply and enforce. National judges/courts act as two sides of the same coin—where the case has no EU element they rule solely on national law but where the case before them has an EU connection they need to act as EU judges and apply the principle of primacy. As an extra reinforcement, sincere cooperation requires Member States not to obstruct the achievement of the EU’s objectives (eg in the Treaties, secondary legislation) but most importantly, to cooperate with each other and do the outmost to achieve those goals.

Competences of the EU and of its Member States

The Treaty of Lisbon expressly established the division of competences between the EU and its Member States, though in the form of a non-exhaustive list. According to Title 1 TFEU (Articles 2–7) the EU competences are categorised into exclusive, shared and supporting.

Proportionality Exclusive competence

The EU alone is able to adopt binding acts in these fields. A Member States’ role is limited to applying these acts, unless the EU authorises them to adopt certain acts themselves. These are:

  1. customs union

  2. competition rules for the internal market

  3. common commercial policy

  4. monetary policy for Member States in the Eurozone

  5. conservation of biological marine resources (only that bit of the fisheries policy) and

  6. international agreements (within some parameters)

Proportionality Shared competence

Both the EU and Member States are authorised to adopt binding acts in these fields. However, Member States may exercise their competence only in so far as the EU has not exercised, or has decided not to exercise, its own competence. A large bulk of internal market areas are shared competence:

  1. agriculture and fisheries

  2. environment

  3. consumer protection

  4. transport

  5. energy

  6. trans-European networks

  7. economic and social cohesion

  8. area of freedom

  9. security and justice

  10. social policy and

  11. common safety concerns in public health matters (but only for the aspects defined in the TFEU)

However, in light of Article 4(3)–4(4) TFEU, in areas such as research, technological development and space, development cooperation and humanitarian aid, the exercise of the EU competence does not preclude Member States from acting as well.

Proportionality Supporting competence

The EU can only intervene to support, coordinate or complement Member States’ action. Consequently, it has no legislative power in these fields and may not interfere in the exercise of these competences which remain with the Member States. These are:

  1. protection and improvement of human health

  2. industry

  3. culture

  4. tourism

  5. education

  6. vocational training, youth and sport and

  7. civil protection and administrative co-operation

Proportionality Special competence

As mentioned, the list is non-exhaustive, as there are some 'special' competences in the EU Treaties. For instance, the Common Security and Foreign Policy (CSFP) where the EU has competence to define and implement policy (Article 24 TEU) but cannot adopt legislative acts or the fields of economic and employment policies (Article 5 TFEU) where the EU is responsible for coordinating these policies by defining direction and drawing up guidelines to be followed by Member States.

Lastly, there is the so called 'flexibility clause' according to which the EU can act beyond the powers conferred upon it by the EU Treaties if the objective pursued so requires. This clause is framed by a strict procedure and by certain restrictions (eg harmonization is excluded) in terms of its application.

What is EU law?

The concept of EU law comprises primary, secondary and tertiary sources of law and is wider than EU legislation, as the latter refers to provisions adopted by the EU institutions in application of the Treaties. Keeping in mind that the system as such takes precedence over national law it is important to know the elements it comprises.

Primary

Primary sources of EU law covers Treaties, their amendments, protocols and accession Treaties. Here we find the Founding Treaties (European Steel and Coal Community (ESCC), European Atomic Energy Community (EAEC), European Economic Community (EEC), Treaty on European Union (TEU)); their amendments (Single European Act (SEA), Maastricht, Amsterdam, Nice, Lisbon) and protocols attached to them as well as the Accession Treaties of all Member States beyond the 6 founding States.

Main Treaties by year

The Treaty commonly known as Treaty of Maastricht comprises 2 Treaties—the amendment to the ECT and the creation of the EU via TEU. From this Treaty onwards, until the Treaty of Lisbon, the amending Treaties cover modifications to both the ECT and TEU. With the Lisbon Treaty the system was simplified to TEU and Treaty on the Functioning of the EU (TFEU)—the EC ceased to exist.

Secondary

Secondary sources of EU law include the legislation adopted by the EU institutions. According to Article 288 TFEU the different types are: Regulations, Directives, Decisions, Recommendations and Opinions (the last two are known as 'soft law' as they have no binding force but usually are taken into account in EU judgments). The Treaty of Lisbon redefined the concept which now comprises legislative and non-legislative acts—the latter are acts adopted by the Commission as opposed to legislative acts which are adopted by the Council of the EU and European Parliament (the legislators).

Non-legislative acts can be 'delegated' or 'implementing' acts. In both cases, the Commission will adopt new measures as stipulated in a legislative act (eg a Directive adopted by the Council and Parliament may delegate upon the Commission the powers to issue delegated, implementing or both types of acts—when issued those will clearly state in the title they are for instance Commission delegated Directive 2014/25/EU or Commission implementing Regulation (EU) 288/2014).

  1. Regulation—act of general application, binding in its entirety and directly applicable in the whole territory of the EU. No measures are required to incorporate it into national law. It can be of a legislative or non-legislative nature (depending on the institution that adopts it)

  2. Directive—act used to harmonise areas, addressed to Member States, binding as to the result (sometimes also the means are detailed) to be achieved which needs transposition into national law within the timeframe stipulated. It can be of a legislative or non-legislative nature

  3. Decision—act that can be adopted by the Council of the EU (sometimes jointly with the European Parliament) or the Commission, hence, it can be legislative or non-legislative. It is fully binding upon its addressees (authorities, individuals, Member States), requires them to do something or stop doing something by a specific date and can also confer rights on them. It is a hybrid that has elements of both Regulations and Directives—hence, it needs careful consideration

  4. Recommendation—issued by an EU institution it has only interpretative power. It is guidance with no binding force. Commission Recommendations are the most commonly known and have been taken into account in some EU judgments

  5. Opinion—like recommendations an Opinion is an act adopted by an EU institution (or body eg EU agencies, decentralised bodies, etc.) regarding a specific subject. It has no binding power but is to be used as interpretative guidance

Tertiary

Tertiary or supplementary source of law include judgments of the Court of Justice of the European Union and principles of EU law formulated or developed by it. The judgments interpret EU law and as such are to be complied in the whole EU. If the judgments are not complied with the infringing Member States could (most likely will) be fined. Sometimes those judgments formulate principles eg direct and indirect effect, primacy of EU law, State liability, and become landmark cases.

What happens if EU Law is not complied with?

Even though the principle of primacy of EU law over national law was established 60 years ago and should be respected by Member States, reality seems to indicate that in some aspects it is not yet complied with to its full extent. The term non-compliance can refer to the non-implementation of Directives or EU judgments and the non-application, misapplication or circumvention of Treaties.

What do the EU institutions do when they face non-compliance?

The European Commission’s role as 'Guardian of the Treaties' is to control the correct application of EU law, whilst upholding the interests of the EU in every action it takes. The Court of Justice of the European Union interprets EU law in the cases submitted by the Commission.

If a Member State is not fulfilling its obligations under the EU Treaties for instance by not implementing a Directive (or transposing it incorrectly) or applying its own legislation in detriment of EU law (in the areas where the latter is applicable) the Commission will most likely commence an 'infringement procedure' with the goal of correcting the situation as soon as possible. The infringement procedure consists of two phases: the administrative phase and the litigation phase.

The aim is to close the matter before the litigation phase starts at the Court of Justice of the European Union and to that end the Commission gives the Member States concerned a few opportunities to provide reasons and, if necessary, rectify their behaviour. Failing that, the Commission will refer the case to the Court of Justice of the European Union and sometimes ask for a hefty fine from the start in order to send the Member States concerned (and all the other Member States) the message that it will not tolerate the situation as sometimes the infringement is too obvious eg non-implementation of Directive or non-application of an EU treaty article.

The option of requesting fines from the moment the case is referred to the Court of Justice of the European Union was introduced by the Lisbon Treaty as previously the infringing Member States used the procedure to delay compliance as their only liability was a fine on judgment. The fines imposed by the Court of Justice of the European Union in the past years have been quite high (millions plus daily fines of several thousand euros) and may be considered as deterrents by some Member States.

It is unlikely that the Commission, faced with non-compliance with EU law, will remain impassive but it could occur that the focus is placed on certain areas eg financial services or competition law and that infringements in areas like environment or energy are relegated to a lower position in the priorities’ list or vice versa. This policy is well-known and could be the reason why Member States tend to comply more with legislation in certain areas and delay some other in the hope that the infringement/delay will go unnoticed (or at least to gain some time).

What can individuals do if faced with non-compliance?

In order for an individual to face a non-compliance situation a Member State must have not fulfilled its obligations under the EU Treaties. This means that an EU norm is not applied, not transposed or incorrectly/incompletely implemented. To remedy those types of situations principles such as direct effect, indirect effect and state liability were developed by the Court of Justice of the European Union.

But for any of those remedies to take effect the individual must commence legal proceedings before a national court (from the infringing Member State). In other words, citizens can rely directly on EU law rules before their national courts. National judges will (or should), if the requirements are met, apply any of the above-mentioned principles.

Direct effect

The principle, which allows individuals to enforce rights to them conferred by EU law at national courts, was established by the Court of Justice in Van Gend en Loos. The case related to a Treaty article, not a Directive as direct effect is usually linked to. The action raised the question of the conflict between national legislation and the provisions of the EEC Treaty. The Court decided the question referred by stating the doctrine of direct effect.

'…the Community constitutes a new legal order of international law for the benefit of which the states have limited their sovereign rights, albeit within limited fields, and the subjects of which comprise not only Member States but also their nationals. Independently of the legislation of member states, Community law therefore not only imposes obligations on individuals but is also intended to confer upon them rights which become part of their legal heritage. These rights arise not only where they are expressly granted by the Treaty, but also by reason of obligations which the Treaty imposes in a clearly defined way upon individuals as well as upon the Member States and upon the institutions of the Community.'.

The EU provision must confer rights upon the individuals in a clearly

 

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