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Judicial review and the European Union

Previous: Effect of European Union law

Judicial review is a framework which allows the Court of Justice of the European Union (CJEU) to examine the legality of acts and decisions of EU institutions, in a similar vain to judicial review in the UK. Judicial review claims may be made between institutions, by Member States or by private parties.

Article 263 – action for annulment

Article 263 TFEU lays out one of three ways a judicial review claim may be made. It is known as an action for annulment. Legislative acts of the Council, Commission, Parliament, European Council and European Central Bank (ECB) may be reviewed under Article 263. Just at in judicial review in the UK, there are a number of preconditions which a claimant must satisfy before his claim will be reviewed substantively: the act must be reviewable, it must be bought within 2 months and the claimant must have the required standing. Only then will the grounds for his review be considered by the CJEU.

Reviewable act

According to ERTA [1971], an act of an EU institution is only reviewable if it was intended to produce legal effects. Further, in IBM [1981], it was said that a distinct change in the claimant’s legal position must have occurred before a claim may be made. In Commission v Council [2004], the CJEU expressed its dislike of inter-institutional challenges.

The CJEU may only review acts within its jurisdiction. The only exception to this is that it can review Common Foreign Security Policy measures, as highlighted by Kadi I [2008], which it usually has no jurisdiction over. In the Bangladesh Aid case [1993], it was found that aid was given as part of a collective act of Member States and not within the context of the EU, therefore the decision to give aid was not reviewable by the CJEU.

Time limit

Under Article 263, claims will be dismissed if they are not made within 2 months of the publication, notification or knowledge of the claimant.

Standing

Standing is only relevant to claimants who are not Member States or EU institutions. Assuming that an act is reviewable and a claim is bought within 2 months, that claim is automatically forwarded to substantive consideration. Similarly, standing is not required of the Court of Auditors, ECB or Committee of Regions if in making their claim, they are protecting their own prerogatives.

Standing refers to the position of a claimant in relation to the act or decision in review. Without standing, a claim will not be considered. According to Article 263, a natural or legal person (individual or business) will have standing if:

  • The act or decision in review is directly addressed to them
  • The act in review is of both direct and individual concern to them
  • The regulatory act in review is both of direct concern to them and requires no implementation

Acts and regulatory acts

A regulatory act can be referred to as an act of delegated legislation. Inuit [2013] referred to a regulatory act as a non-legislative act – one not mentioned as created by the processes in Article 289 TFEU. This usually means that it is the Commission’s act in supplementing legislative acts (‘acts’) with non-necessary additions.

Direct concern

Direct concern is required of all claimants where the act or decision in question is not directly addressed to them. Dreyfus [1998] provides the test for direct concern as where a claimant’s legal situation is directly affected without discretion. This means that there must be a direct link between the act in review and the damage caused. In Front National v European Parliament [2004], no direct concern was found where the claimant wanted to form a political party within the European Parliament, as only Members of European Parliament had the right to do this. Rather inconsistently, it was found that Sicily was not directly concerned with the removal of a right to funding for a dam in Regione Siciliana [2006].

Individual concern

Where the act in question is a legislative act, it has gone through a legislative process involving multiple EU institutions, therefore it is correct that it should be more difficult to challenge than a regulatory act. However, the test for individual concern as laid out in Plaumann [1963], is an an incredibly difficult test to pass. The Plaumann test requires a claimant reviewing an act to be able to distinguish himself by way of some peculiar attribute. As such, unless a claimant is in a small, closed group of people as was the case in Piraiki-Patraiki [1982], standing will not be present. In Sofrimport [1990], the EU had banned certain types of desert apples. Sofrimport would not have had standing if they were simply a producer of this particular type of apple as this would not be distinguishing themselves from any other producer or possible producer of that type of apple; however, standing was found as Sofrimport had some of these apples in transit, so were part of a closed group of producers who could have had this type of apple in transit. In Japanese Ball Bearings [1979], it was easier to establish individual concern where importers of ball bearing were specifically named in a regulation affecting their import.

As the Plaumann test is extremely difficult to pass, Advocate General Jacobs in UPA v Council [2002] suggested replacing the test with the requirement of a ‘substantial adverse effect’, however the CJEU rejected this on the ‘clear meaning’ of the Treat[ies], such that UPA could not require the continuance of aid towards its olive oil production business, despite the fact that they were deprives of a national remedy.

For an association is to have standing, it must be directly addressed, have standing itself or have member who have standing, according to ANB v Council [1998].

Grounds of review

Assuming that the mentioned preconditions of standing, time limits and ‘reviewability’ are present, the CJEU will consider whether the claimant has a substantive claim to annul an act or decision. To do this, the claimant must justify why the act or decision should be annulled using one of the grounds for review set out in Article 263:

“a lack of competence, infringement of an essential procedural requirement, infringement of the Treaties or of any rule of law relating to their application, or misuse of powers.”

Lack of competence

The ground of a lack of competence is rarely litigated. However, in Tobacco Advertising I [2000], it was successfully argued that Article 114 TFEU did not provide the adequate level of competence to justify an outright ban on products advertising Tobacco. In Boyle [2006], it was also successfully argued that the Commission was not authorised to introduce a set of criteria upon which it could be judged whether funding would be provided to fishermen.

Infringement of an essential procedural requirement

Infringing upon an essential procedural requirement is a ground which helps ensure both good administration, as stated in Article 41 TEU and effective judicial protection. Other possibilities of infringement could include breaching Article 11 TEU’s consultation requirements and Article 296 TFEU’s duty to give reasons. In Kadi I [2008], it was found that all evidence did not need to be disclosed, as long as evidence was well founded.

Within this ground, included is where there is a manifest error as assessment. As such, in Tetra-Laval [2005], a claim succeeded where the Commission had obtained insufficient evidence to prevent the merger of two large companies. Where an EU institution is granted discretion, a wide limit to this discretion must be granted, especially in agricultural matters, according to Pfizer [2002]. Fritzsche (commentator) said in 2010 that weight should be given to the Commission’s methodology in determining whether the bounds of its discretion had been exceeded.

Treaty or rule of law infringement

This ground encompasses a wide variety of possible claims. Examples include where an EU institution has breached the principle of non-discrimination, such as in Test-Achats [2009]; breaches of proportionality and breaches of legitimate expectations. Legitimate expectations, according to Branco [2005], are created only where a precise and unconditional assurance is made which is sufficiently strong and which complies with any relevant rules or laws.

Consequences

If a ground is found to justify the annulment of an act or decision, that act or decision will be nullified, at least in part. The CJEU may not substitute its own substantive alternative act or decision. Article 278 and 279 provides for interim measures and suspension, and Article 266 TFEU requires that institutions must comply with the CJEU’s judgments.

Article 265 – failure to act

Article 265 TFEU provides for a different type of claim for judicial review: where there is a failure to act of an EU institution. Only Member States or EU institutions may make claims under Article 265 TFEU. Required is an unlawful failure to act, where there is then 2 months within which a claim may be made, and a further 2 months to substantiate that claim. Societa Eridania [1969] confirmed that this Article does not provide a parallel claim to one under Article 263 TFEU – Article 263 is relevant where action has occurred. In Factortame, an Article 265 claim was rejected as the Commission is not obliged to be aware of all breaches of EU law that take place. Where there is no clear obligation to act, an Art 265 claim will fail, as it did in the Transport Policy case [1985].

Article 277 – illegality

Article 277 TFEU provides a supplementary claim to any Article 263 TFEU claim for annulment, and is explained in the case of Simmenthal [1979].

Articles 268 and 340 – contractual and non-contractual damages

Wherever damage is caused, this damage should be made good. Therefore, where an EU institution acts both illegally and causes loss as a result, it will be liable under these Articles, with no standing requirements.

According to Schoppenstedt [1971], concerning economic policy, only a ‘sufficiently flagrant’ violation of EU law will justify recourse to these Articles. Bergaderm [2000] altered the requirements for these Articles, providing that there must be an infringement of rights, which is sufficiently serious and causes loss. This loss need only be imminent or highly likely. Finally, according to Adams v Commission [1983], the number of claimants under the Articles in any particular case is irrelevant.

Indirect challenges under Art 263 TFEU

It is possible that a party can have an act reviewed by way of preliminary reference if the issue arises in a national court, without having to worry about the strict time limits imposed on the direct actions discussed above. However, the Court of Justice of the European Union will not rule on such a reference if it is both clear that the benefiting party would have had standing and was aware of any relevant time limits.

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