2.1. Simple and Qualified Obligations

The main category of obligations to consult can be divided into two subcategories: simple and qualified obligations. Article 117 TFEU constitutes a simple obligation to consult – an obligation to notify the European Commission – and foresees a consultation procedure. Article 108 TFEU and Articles 5 and 6 of the Directive constitute qualified obligations to consult – they not only contain a duty to notify and conduct a consultation procedure, but also contain a standstill clause, as a qualifying element. Even if these obligations have the element of a standstill clause that other duties do not possess, they are nevertheless comparable, which justifies their belonging to the same main category of obligations to consult EU institutions on national draft laws.

Both the CJEU and the relevant literature on the subject (Prasch Reference Prasch1967, 120)Footnote ³ have drawn comparisons between simple and qualified obligations (Articles 117 and 108 TFEU). The context of Articles 116 and 117 TFEU, just like of Articles 107 and 108 TFEU, supports the same goal of eliminating disruptions of the internal market.Footnote ⁴ Article 108 TFEU is, ‘by virtue of the specific nature of the intervention instrument’, to be viewed as lex specialis to the rules contained in Articles 116 and 117 TFEU.Footnote ⁵

The comparability of another set of simple and qualified obligations to consult – Article 117 TFEU and Article 5 of the Directive, respectively – can be justified by the wording of both provisions.Footnote ⁶ They constitute unconditional obligations that address the law-making Member State. This consultation procedure, according to Article 117 TFEU, serves similar purposes to those prescribed in the Directive: prevention of a disruption of competition. Hence, both primary (Article 117 TFEU) and secondary law (the Directive) take a preventive, rather than harmonizing approach.

Summing up, neither Article 117 TFEU, nor Articles 5 and 6 of the Directive aim at harmonization. Rather, they refer to a preliminary stage of harmonization. Both provisions follow the same aim: to avoid disruptions to the internal market through preventive consultation. This conclusion should be relevant for any other ruling on EU law constituting an obligation to consult.

2.2. Primary and Secondary Obligations

One can distinguish between the primary and secondary elements of an obligation to consult. This is relevant for a discussion about appropriate consequences, which aims to avoid the blanket inapplicability of national law. One can divide whole provisions into single obligations, and decide based on the legal situation, adjusting the consequences of the exact violation in response to the danger or threat it creates for the internal market.

A primary obligation constitutes a duty to communicate, inform (Article 5(1) of the Directive), or notify, and to stand still (Article 6(1) of the Directive). A Member State may not issue the draft; it thus needs to stand still until three months have passed since the Commission was notified. Primary duties of this kind are part of every obligation to consult and are thus anchored in the relevant primary- or secondary-law legal acts.

The duty to take the detailed opinion of the Commission or other Member States into account (Article 6(2) of the Directive), or to follow the Commission’s recommendation (Article 117 TFEU), both constitute secondary duties. A secondary duty is activated by the issuing of a recommendation or a detailed opinion by the Commission. Before this moment, there is no legal act that contains substantive provisions that a Member State must respect and follow in the draft and thus no legal obligation. A secondary duty can arise only after the Member State has fulfilled its primary duty, and only if the national draft has not been approved by the Commission.

Both duties are contained in many obligations to consult. A primary duty contains different obligations for Member States than does a secondary duty. The diverse legal nature of these duties speaks for the difference between them. A primary duty has an abstract character. It obliges every Member State from the moment the EU legal act, foreseeing an obligation to consult, is issued. On the contrary, a secondary duty has a concrete nature, and it only addresses the notifying Member State.

3.1. Case Law on Breaches of Obligations to Consult under Secondary Law

Several judgments deal with the consequences of a Member State violating the obligation to consult under Articles 5 and 6 of the Directive during the national law-making process. The CJEU has ruled in some cases that a Member State’s law issued without prior consultation of an EU institution is inapplicable. On the contrary, in other cases national law was applicable. The most well-known cases in this area include CIA Security International (CIA),Footnote ¹⁰Unilever Footnote ¹¹ and Lemmens,Footnote ¹² which will be discussed briefly.

The company CIA Security International started a procedure against a group of entrepreneurs before a Belgian commercial court. Asking to stop unfair trading practices, CIA argued that Signalson SA and Securitel SPRL, two of its competitors, marketed an alarm system that did not carry the approval required by Belgian legislation. However, Belgian legislation was in breach of the free movement of goods and had not been notified according to the Directive. The national court asked the Court of Justice if the Directive was sufficiently clear and precise to be directly effective, and whether the national court should refuse to apply the unnotified national measures. The Court ruled that Articles 5 and 6 of the Directive should be interpreted as meaning that individuals may rely on them before the national court, which must decline to apply a national technical regulation that has not been notified.

While in CIA the omission to notify the national draft was the reason for the procedure, in Unilever it was the breach of the standstill obligation contained in Article 6 of the Directive. In Unilever, two parties agreed on the delivery of olive oil. However, the delivered product was labelled in a way that, whilst complying with EU law, did not comply with Italian law. The parties argued about the applicability of the national labelling legislation. The relevant national law had been notified, but it had been adopted in breach of the standstill clause. One party argued that the Directive would disapply national law. The Court of Justice ruled that the national court could ‘refuse to apply a national technical regulation which was adopted during the period of postponement’.

Analogous to CIA Security International, in Lemmens, the national law in question had not been notified. Nevertheless, in contrast to the CIA judgment, the Court ruled that the national law was applicable. This case, contrary to the cases previously mentioned, did not concern civil law, nor the obligations arising from a civil-law contract. Rather, it concerned a matter of criminal law and questions surrounding the criminal liability of a citizen. The accused was driving under the influence of alcohol. In the criminal proceedings, he stated that the evidence against him was invalid since his breath had been checked with an alcoholometer according to a new law that had not been notified to the Commission.

In the first two cases CIA Security International and Unilever, the Court decided that the national law was not applicable due to certain failures during the consultation procedure. In Lemmens, the national law was ruled applicable, despite the Court finding a breach of the same obligation to consult as in CIA. In both CIA and Lemmens, the duty to notify the national draft was violated, while in Unilever, the duty to stand still with the national legislative procedure was not respected.

These cases show that with regard to the Directive, the Court applies different criteria of inapplicability than it does for ‘typical’ harmonizing directives. The Court examines the breach of the obligation to notify under the Directive, particularly if the criterion constituting a ‘substantial procedural defect’ renders such technical rules inapplicable so that they may not be enforced against individuals.Footnote ¹³ It refers to the character of Articles 5 and 6 of the Directive and to the goals of the procedural duty to consult in a particular case. If Articles 5 and 6 of the Directive aim to protect the internal market from disruptions, the unnotified national law under review is inapplicable. However, if the factual circumstances of the case are not related to matters covered by the Directive, such as criminal law matters, as seen in the Lemmens case, then the national law is applicable.

A further problem of this jurisprudence is that the Court rules on the inapplicability of unnotified national law, which is thus unenforceable in some cases. However, since obligations to consult (EU law) are of a solely procedural nature and thus do not have any substantive content, one could argue that the unenforceability of national law causes legal uncertainty (Scherzberg Reference Scherzberg1993, 225–232).Footnote ¹⁴ The unnotified national law would contain substantive provisions (agreed upon during the consultation process) that practitioners could apply. If the unnotified law is unenforceable, then none of the legal orders contains substantive provisions. Practitioners, therefore, find themselves missing a provision that they could apply when reviewing the rights or obligations in question.

What is certain in the case law discussed above is that the formal consultation procedure is not an end in itself for the Court. It is not merely a formal requirement, but it actually serves the protection of the internal market. A negative aspect of the referred jurisprudence is, however, the ambiguity of the judgments. For national legislatures, this jurisprudence creates legal uncertainty. An answer to the question as to whether a provision of EU law is a substantial procedural requirement for national law cannot be given in advance and thus cannot be defined in an abstract way. A substantial defect would require that, in a particular case, a fundamental freedom is protected, and that the drafted law of the notifying Member State threatens the uniformity of EU law. Moreover, the meaning of the obligation can change depending on the circumstances of a case. National legal orders do not know this kind of reasoning, which can raise doubts regarding the handling of obligations to consult during legislative procedures.

3.2. Case Law on Breaches of Obligations to Consult under Primary Law

The Court seems to be inconsistent in its jurisprudence, and the aforementioned inaccuracies are not the only instances worth mentioning. In Costa v E.N.E.L.,Footnote ¹⁵ the CJEU ruled on an Italian law that nationalized the production and distribution of electricity and created an organization (ENEL). Mr Costa requested the national court to apply Article 267 TFEUFootnote ¹⁶ and asked the Court for a preliminary ruling on (amongst others) Articles 108 and 117 TFEU.Footnote ¹⁷ Costa argued that the nationalization of the electricity industry violated the EEC Treaty.

Here, in contrast to the judgments regarding secondary law referred to previously, the Court did not rule on the direct applicability of formal obligations to consult – Articles 108 and 117 TFEU – as a whole. Moreover, it stated that because of the formal nature of the consultation procedure, national provisions that were not notified could still be applicable.

The CJEU divided primary-law obligations to consult into elementsFootnote ¹⁸ and held that only the standstill clause (the prohibition under Article 108 TFEU to put measures into effect) is directly applicable and thus makes conflicting national law inapplicable. This is a contradiction to the aforementioned judgments regarding secondary law, where all elements of an obligation to consult under the Directive are directly applicable.

3.3. Comparison of both Jurisprudence Lines

Both lines of jurisprudence should be compared with respect to the criterion of inapplicability and the assessment of a single element of the duty to consult. The first review of the obligation to consult occurred in the well-known case Costa v E.N.E.L. Later, in another case regarding the Directive and thus secondary law, the Court changed the course of its review and started to examine a further condition for inapplicability – the goal of the notification procedure.Footnote ¹⁹ Concerning provisions of primary law, the CJEU continues to apply different conditions of inapplicability: it does not mention the purpose of the consultation provision here. In Costa v E.N.E.L., the Court also attached different values to the same elements of the obligation to consult as compared to its case law on secondary law. In its judgments on secondary law, it directly applies all elements of the obligation to consult. With respect to primary law, only the standstill clause is directly applicable. Considering that the provisions have a similar legal nature, this contradiction cannot be explained or justified, especially because the Court even issued some of the judgments in parallel.Footnote ²⁰

Summing up, there are two lines of jurisprudence in which the CJEU contradicts itself with respect to the assessment of elements of obligations to consult, the criterion of inapplicability and the consequence of inapplicability itself. The comparison of both lines of jurisprudence shows that the standstill clause is always directly applicable. However, the aforementioned contradiction is only relevant in the case of simple obligations to consult. Article 117 TFEU constitutes such an obligation: it contains a duty to consult and a procedure of consultation, but not the standstill clause.

Table 1 shows how jurisprudence varies concerning the direct applicability of simple obligations to consult. Obligations, such as the ex-ante control of national budgetary laws, which (for now) do not contain a standstill clause, could in some cases be directly applicable, and in others not. The direct applicability of a national budgetary law would depend on the Court and the line of case law it would choose to apply.

Table 1. Jurisprudence concerning the direct applicability of obligations to consult EU institutions on national draft laws.

4.1. Deviation According to a Single Element of a Qualified Obligation to Consult

Despite the similar character of the obligations, the CJEU decides differently in respect to each provision. If we compare the Costa v E.N.E.L. line of jurisprudence with judgments regarding the Directive, the Court seems to be inconsistent. We can compare both lines of jurisprudence, since the Court reviews the obligations from the Directive and provisions of primary law by applying the same criteria of inapplicability.

When the Court examines the provisions of the Directive, it states that both the obligation to notify and the procedure of consultation, together with the standstill clause, are directly applicable.Footnote ²² It does not differentiate between the elements of an obligation to consult in secondary law jurisprudence line: it reads Articles 5 and 6 of the Directive as constituting one obligation. The criteria of the Court regarding the obligation to consult from the Directive can be applied to Article 108(3) TFEU. The first two sentences of Article 108(3) TFEU are directly applicable to cases of a violation by a Member State. They contain both the duty to inform the Commission and to conduct a consultation procedure. If a concrete case was to be subsumed under this purpose, Article 108 TFEU would be directly applicable as a whole.Footnote ²³ In contrast, in Costa/E.N.E.L. the Court has rejected the direct applicability of the first two sentences of Article 108(3) TFEU, a qualified obligation to consult, in settled case law and confirms it solely for the third sentence – the standstill clause. Applying case law from the Directive to the primary-law provision thus shows a further discrepancy within the case law regarding two qualified obligations to consult.

4.2. A Comparison of Simple and Qualified Obligations to Consult

Since Article 117 TFEU and Article 5 and 6 of the Directive are comparable in respect to their wording and purpose,Footnote ²⁴ both lines of jurisprudence may be compared. This constitutes a further step to finding a suitable solution for violations of obligations to consult and their respective elements.

The primary-law provision of Article 117 TFEU fulfils the criteria that the Court established for Articles 5 and 6 of the Directive.Footnote ²⁵ If we were to apply the criteria developed for secondary law (the Directive) to Article 117 TFEU, its procedure would constitute a substantial part of national legislation and any violation thereof would lead to a national draft being considered defective. Article 117 TFEU would be directly applicable. However, the Court has ruled that this provision cannot be directly applicable. The transfer of criteria from a secondary-law to a primary-law provision would thus run counter to the CJEU’s understanding of Article 117 TFEU.Footnote ²⁶

These different results are astonishing, since the Court applies the same criteria once it has reviewed the secondary law – the Directive – and a provision of primary law. It does not refer to the legal act in which the provision in question is anchored. Moreover, it reviews the nature of the law. With respect to a provision of the same nature (procedural unconditional obligations to consult), the Court’s rules still arrive at a different conclusion.

A comparison of the CJEU’s jurisprudence regarding obligations to consult stemming from Article 117 TFEU and Articles 5 and 6 of the Directive demonstrates the existence of certain contradictions. The Court affirms the direct applicability of a procedural duty from secondary law. It denies, however, the direct applicability of a procedural obligation following from primary law. This contradiction in the interpretation of a procedural obligation to consult may have an important effect on the review of direct applicability of a simple obligation that does not have a standstill clause. Depending on the applicable line of jurisprudence, an obligation of this kind may or may not be directly applicable.

4.3. A Comparison Concerning Consequences of a Violation

A comparison between the consequences of the direct applicability of either category brings to light further contradictions. The Court rules differently depending on which element of an obligation to consult is in play.

Next, I will apply the consequences decided on by the Court in one case to the other. The current research compares the consequences decided upon with regards to Article 117 TFEU and Articles 5 and 6 of the Directive. This comparison is meaningful because Article 117 TFEU foresees the consequences of a failure to follow the recommendation in the wording. In contrast to this explicit regulation, the wording of the Directive does not refer to the consequences of a breach.

Both provisions contain similar duties. The present comparison will first deal with the jurisprudence regarding a primary duty (to notify), before turning to contradictions in relation to secondary duty (to take a detailed opinion into account or to follow a recommendation).

With regards to violations of a primary duty stemming from the Directive, the Court has ruled that the obligation to consult on national drafts is directly applicable. It rules differently regarding the obligation to notify under Article 117 TFEU. This is the first difference.

A review of the case law regarding secondary duties shows yet another difference. Both the recommendation contained in Article 117 TFEU and the detailed opinion based on the Directive are relevant as secondary duties. According to the Court, the secondary duty stemming from the DirectiveFootnote ²⁷ is directly applicable. In contrast, a violation of Article 117 TFEU has no direct consequences, since it results in a possibility to start an infringement procedure. However, according to Article 117(2) TFEU, if the Member State which has ignored the recommendation of the Commission causes disruption of the internal market, a harmonizing measure may be issued.

The contradiction between the consequences of violations of different obligations to consult is particularly evident once we understand that Article 117 TFEU – as the only obligation to consult – regulates the question of a violation of a secondary duty in its wording. A harmonizing measure can be issued if a distortion of competition occurs. The omission to follow a recommendation does not have any direct consequences for the notifying Member State. The harmonizing measure takes a future-oriented concrete approach.

In the case of Article 117 TFEU, the harmonization measure foresees detailed requirements for new national laws. In addition, Article 117 TFEU grants the Commission the discretionary power to decide if and how a harmonizing measure should be issued. Only then may the notifying Member State be compelled to change its national law, so as to not further distort competition. To do so, the state has time until the end of the implementation period. Moreover, the harmonizing measure – a directive – grants discretion to Member States regarding its transformation into national law. The wording of Article 117 TFEU foresees the enforcement of the harmonizing measure as a sanction for the omission to follow a recommendation. This somewhat radical measure has its roots in the wording of the provision that foresees the violation of duties.

Conversely, Articles 5 and 6 of the Directive do not regulate the consequences of a failure to take a detailed opinion into account.Footnote ²⁸ The Court applies the concept of the direct applicability of Union law provisions to these cases of unregulated consequences. This consequence does not refer to a future harmonization measure, as is the case in Article 117 TFEU. Moreover, the unnotified law itself is inapplicable. The national legislature does not have the discretion regarding the transposition of an objective, neither regarding the ‘if’ nor the ‘how’ of a harmonization measure, nor its transposition. The Court rules upon the grave consequenceFootnote ²⁹ of direct applicability without any further criterion – such as, for example, the disruption of competition.

The contradiction results here from the comparison between a regulated consequence and an unregulated one. The wording of Article 117 TFEU contains references regarding sanctions against Member States that violate Union law. In this case, a disruption of competition must take place, and only then may the EU issue a harmonization measure. That is why the consequences following from a violation of this element are not grave. However, when the consequences of a violation of an obligation to consult are not regulated in the wording of the provision, the Court rules the provision directly applicable – a harsh consequence. This contradiction may violate the principle of proportionality. If the wording does not cover the consequences of a violation, the Member State cannot know which consequences to expect.

The comparison in Table 2 shows how the direct applicability of procedural EU law can be disproportional, based on a comparison of regulated and unregulated consequences in the wording of obligations to consult.

Table 2. Comparison of regulated and unregulated consequences of violations.