Note: To read about this case in greater depth, and with the benefit of full OSCOLA referencing, simply purchase a copy of ‘The Case Law Compendium: English & European Law’ at Amazon, Waterstones or Barnes & Noble (or go here for a full list of international outlets)
The successful transposition of EU Directives requires delicate application when ensuring the overriding objective of the Directive remains intact. On this occasion, the rules of Directive (90/531/EEC) while specific in their construction, caused immediate conflict between the domestic government and a dominant telecommunications provider.
Basing their argument on principles examined in Francovich and others v Italy, British Telecom (or BT as they are commonly known) took issue with Parliament’s decision to edit the transposed Directive in a way that precluded them from perceived equal rights in a highly competitive industry. In fact by all accounts, the telecommunications giant was already bound to cap its tariff rates, provide connection services irrespective of national geography and publish its commercial intentions for all to see. However, when put in its proper context, the domestic market was disparagingly divided in such a way that afforded BT a ninety-percent share, while those new to the field were limited to only a collective three-percent stake.
This extended enormous advantage to the applicants, and yet they still felt that under the prescribed terms of the Directive the EU Commission had intended that any exclusions to the benefit of Community law were decidable between those contracting, and not to the discretion of the Member State. It was understood that in circumstances providing a balanced economic market, the Directive required no degree of intervention as the playing field would, in many events, present itself fairly, yet the UK government, having enjoyed the monopoly of British Telecoms as a state funded enterprise, were only too aware that without marshalling of the transposition, the essence of equality would be lost in translation and the integrity of domestic contract law held to account.
By exercising its discretion, the applicants were (rightly or wrongly) denied access to the terms of the Directive and therefore unable to determine for themselves which services they felt were excludable and why; a process that would have inevitably relied upon the wisdom of the EU Commission to decide, and so was not in any way affected by those preventative measures.
When transposing Directives, it is the duty of Member States to incorporate the relevant terms ‘as far as possible’, whereby on this occasion it was deemed that the steps taken reflected that ethos. This resulted in the Court of Justice reserving the rights of the legislature to act where appropriate, and that despite any sufferance on the part of the applicants, there were no grounds for either ‘direct effect’ damages nor compensatory award for economic loss, as the ends ultimately justified the means.
“[T]he operation of the system envisaged by the Directive, as interpreted herein, is sufficiently guaranteed by the supervisory role which the Directive itself entrusts to the Commission, also and above all as regards the possible abuses to which the United Kingdom refers.”
“[M]ember States are in a much better position than the Commission to assess whether competition exists in the telecommunications market as regards a specific service and, consequently, that the determination by those States of the matters covered by Article 8(1) will permit the exercise of more effective control than that exercised by the Commission…”
“[A] breach is sufficiently serious where, in the exercise of its legislative powers, an institution or a Member State has manifestly and gravely disregarded the limits on the exercise of its powers.”
“Community law does not require a Member State which, in transposing the Directive into national law, has itself determined which services of a contracting entity are to be excluded from its scope in implementation of Article 8, to compensate that entity for any loss suffered by it as a result of the error committed by the state.”
Note: To read about this case in greater detail and with full OSCOLA referencing, simply purchase a copy of ‘The Case Law Compendium: English & European Law’ at Amazon, Waterstones or Barnes & Noble (or go here for a full list of international outlets)