The Courts of the European Union (the Court of Justice and the General Court) have the competence to review the legality of legislative acts of the Union institutions and acts intended to produce legal effects vis-à-vis third parties. The question of who can trigger the jurisdiction of the Court, by seeking the annulment of an act, is set out in Article 263 of the Treaty of the Functioning of the European Union (TFEU).
EU Member States, the European Parliament, the Council and the Commission always have the right to bring actions before the Court of Justice. The Court of Auditors, the European Central Bank and the Committee of the Regions have rights to bring actions to protect their prerogatives.
The rights of natural or legal persons are set out in the fourth paragraph of Article 263 which provides:
Any natural or legal person may, under the conditions laid down in the first and second paragraphs, institute proceedings against an act addressed to that person or which is of direct and individual concern to them and against a regulatory act which is of direct concern to them and does not entail implementing measures.
Therefore, to seek the annulment of an act within the meaning of Article 263(4) TFEU, i) the act must be addressed to that person or ii) where the contested act is of general application the plaintiff must prove direct and individual concern or iii) a natural or legal person can challenge a regulatory act when it is of direct concern to them and does not entail other implementing measures.
The provisions in relation to challenging regulatory acts which are of direct concern only (and not of individual concern) and do no entail implementing measures is new. This article addresses how the EU Courts have interpreted this new provision.
In the most recent case from April 2015, the General Court has given an interpretation of this new rule which can be considered restrictive and continues its policy of restricting the right of natural and legal persons to challenge acts of the EU directly before the EU Courts.
In practice the Court of Justice has reinforced its long-term view that natural and legal persons must challenge the legality of EU measures via national courts and not directly in the EU Courts in Luxembourg.
Before the Lisbon Treaty
Before Lisbon, the relevant Article (then Article 230(4) EC) provided:
Any natural or legal person may, under the same conditions, institute proceedings against a decision addressed to that person or against a decision which, although in the form of a regulation or a decision addressed to another person, is of direct and individual concern to the former.
The article did not distinguish between regulatory and non-regulatory acts and required in all cases for the applicant to prove direct and individual concern.
With regard to direct concern, the Court of Justice has held that there is direct concern when there is a direct link between the challenged measure and the loss or damage that the applicant has suffered. Furthermore, the Court of Justice has stated that there is direct concern when the challenged act constitutes “a complete set of rules which are sufficient in themselves and require no implementing provisions.”1
As for individual concern, the test to be applied was set out in the Court’s judgment in Plaumann & Co v. Commission2 as follows:
Persons other than those to whom a decision is addressed may only claim to be individually concerned if that decision affects them by reason of certain attributes which are peculiar to them or by reason of circumstances in which they are differentiated from all other persons and by virtue of these factors distinguishes them individually just as in the case of the person addressed.
The Court of Justice has consistently applied a restrictive interpretation to the Plaumann test formulating the so-called “closed class test”. According to this test in order to be awarded individual concern the applicant must prove that he belongs to a group that could not be expanded after the EU act has entered into force.
This presented problems for applicants seeking to contest a Regulation. Challenges against a regulation could be allowed only if the applicant was able to prove that the EU measure was not a regulation but rather a decision of individual concern. To determine what was a Regulation, the ECJ applied the stricter “abstract terminology test”. A regulation is a regulation in form and substance if it applies to “objectively determined situations and produces legal effects with regard to categories of persons described in a generalised and abstract manner.”
That being said in Codorniu3 the Court of Justice found that even when the regulation is in fact a “true” regulation, a non-privileged applicant can still challenge it if he proves the it concerns him individually.
After the Lisbon Treaty
The restrictive approach taken by the EU Courts came in for considerable criticism. As a result, the provision relating to the standing of private parties was reviewed in the Treaty of Lisbon and a new possibility was added to the text: a natural or legal person may challenge “a regulatory act which is of direct concern to them and does not entail implementing measures.”
In other words, an act (irrespectively of its nature) must always be of direct concern to potential plaintiffs for them to be able to seek its annulment before the EU Courts.
As for the other requirements: a) in case of nonregulatory acts, the plaintiffs must also be able to prove individual concern, and b) in case of a regulatory act, the act must not entail implementing measures.
In Inuit4 the meaning of the revised article was discussed for the first time. The Court of Justice concluded that a ‘regulatory act’ should be defined as “an act of general application which is not a legislative act”. In Microban5 the Court of Justice confirmed this approach.
The most recent case is that of Sugars Ltd and Sidul Acuzares, Unipessoal Lda v European Commission6. In this case the applicants were two cane sugar refiners who brought an action before the General Court seeking the annulment of two Regulations the aim of which was to authorise EU producers to market a limited quantity of sugar and isoglucose in excess of the domestic production quota and creating a tariff quota allowing any economic operator concerned to import a limited quantity of sugar.
As regards the concept of ‘implementing measures’ the General Court found that Article 263(4) TFEU must be interpreted in light of the objective of the provision which is to “ensure that individuals do not have to break the law in order to have access to a court” 7 . When the responsibility for the implementation of the act lies with the Member States, individuals can contest the measure before the national courts (by pleading the invalidity of the basic act at issue and requesting a preliminary ruling from the Court of Justice pursuant to Article 267 TFEU) and when the responsibility lies with the institutions of the EU, individuals can bring a direct action before the EU Courts under the conditions stated in the fourth paragraph of Article 263 TFEU.
The General Court held that whether a regulatory act entails implementing measures should be assessed by reference to the position of the person pleading the right to bring proceeding.8
The essence of the General Court’s ruling is that if the Regulation affected the potential plaintiffs only through the intermediary of acts taken by national authorities, in the Sugars case the decision of the authorities granting or refusing the necessary certificates, these constitute implementing measures and the new provisions of the fourth paragraph of Article 263 TFEU do not apply.
This case is of interest because it clarifies that even if the national authority does not have discretion to grant or not to grant the relevant certificates, in other words where the implementation by the national authorities is mechanical, that still counts as an implementing measure. The mechanical nature of the measure “is irrelevant is irrelevant in ascertaining whether those regulations entail implementing measures within the meaning of the final limb of the fourth paragraph of Article 263”.9
As for the requirement of individual concern, the General Court found that the appellants were not individually concern because the Regulation was adopted taking into account the fact that the quantities covered by the applications for import licences lodged between certain dates exceeded the available quantity and without taking into account particular qualities of the appellants.
The ruling in Sugars is not without problems, however. In paragraph 62 of the judgement, the General Court found that “under the fourth paragraph of Article 263 TFEU, natural or legal persons may institute proceedings against an act which is not addressed to them and entails implementing measures only if that act is of direct and individual concern to them”. The General Court in this paragraph seems to confuse the different provisions for admissibility for acts and regulatory acts.
In Sugars, the General Court does not contest that the Regulations at issue were regulatory acts within the meaning of Article 263(4). The literal interpretation of Article 263(4) is that a regulatory act addressed to a person other than the plaintiff may be challenged if it is of direct concern to him and does not entail implementing measures. This means that when dealing with a regulatory act, the provision seems to clearly state that the individual concern requirement is not applicable.
To rule on whether or not the applicants were individually concerned was unclear because individual concern has not been a requirement for regulatory acts since the Lisbon Treaty.
That being said, the intent of the General Court is clear. In most circumstances natural and legal persons can only challenge the legality of EU law via the national courts and references from those national courts to the EU Court of Justice via the preliminary ruling procedure provided for in Article 267 TFEU.
The question now to be addressed is how the national courts will apply the provisions of Article 267 TFEU and their willingness to refer questions to the Court of Justice.