The Loos. This case illustrates the need to

The doctrines of
direct effect and primacy are the two main pillars of EU’s new legal order,
distinguishing themselves and deviating from classic international law which do
not restrict themselves to merely state obligations, but involving individuals
being subject of the legal order1.
This was enshrined in the Van Gend en
Loos case which laid out famously that the ‘Treaty is more than an
agreement which merely create mutual obligations between contracting states…not
only to governments but to people.’2.
However, despite its unique nature of law, not all member states adhere and
accept the nature of this new legal order. This issue is reflected in the case
of Ajos3.
Hence this essay will analyse the 2 core concepts of the new legal order,
discuss the issues that Ajos raises
and finally discuss the future of the new order beyond Ajos.

Direct
Effect

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The first pillar
of the EU legal order is the principle of direct effect. The key idea of direct
effect lays its foundation in Van Gend en
Loos. This case illustrates the need to have ‘a clear and unconditional
prohibition’ with a negative obligation, and also do not require any further
legislative implementation by member states. The court justified this move as
promoting a legal relationship between member states in the most productive and
effective way.4
Hence, this case is seen as revolutionary in not only restructuring the new
legal order, but is seen as laying the foundations to extend the concept of
direct effect which would raise questions within the EU jurisprudence.

This principle
further expended to indirect Union law, in particular, directives. Despite it
being a more difficult area of law over the certainty of direct effect, the
case of Van Duyn5 gave
certainty for directives to have direct effect on national courts. This case expanded
the nature of direct effect to secondary legislation in order to further allow
individuals to assert their rights to the national courts.

While these
developments from the key cases have proven that direct effect has been a critical
foundation in establishing the ‘new legal order’ and promote harmonisation of
law among member states, however, these are subjected to criticisms.

The key issue concerning
principle of direct effect is legal certainty, in particular the relationship
between directives and the general principles of EU Law. Two cases arises from
this issue, the case of Mangold6 and
Kucukdeveci7. In
Mangold, the court affirms that
despite directive (Directive 2000/78) having to pass its transposition date to
take effect, the principle of non-discrimination as a general principle of EU
Law, will still apply horizontally in favour of national law8,
hence allowing horizontal direct effect to be given indirectly directives as
expression of principles of law. Kucukdeveci
followed the principle laid down in Mangold
and also affirmed horizontal direct effect on general principles of EU Law9.
These rulings proved to be controversial as many critics, commenting that the
decision Mangold in particular, have
expanded the interpretation of directives, allowing it to have effect prior to
implementation and give horizontal effect on directives. This reflects a
creative attempt by the Court of Justice of European Union (CJEU) to give
effect to Union law, by passing the principle of directives and thus questioned
the nature of direct effect10. Furthermore,
the Kucukdeveci case affirms and
clarifies the issues laid down in Mangold,
however, while clarifying that general principles of EU law are giving
expression to the directives11,
it fails to explain the origin of the principle which is unwritten Union law of
any form in justifying its reasoning. Both cases did not address the issue of horizontal
direct effect. As Pernice rightly questions, the court, by merely drawing a
conclusion by asserting the applicability of general principles, solely because
the directive do not have the impact that a general principle have, on top of
the fact that national courts have obligations to follow the CJEU, proves to be
problematic12

Primacy

Primacy is the
second pillar of the new legal order. This principle originated from the case
of Costa, which initiated the
elements of supremacy, by limiting their sovereignty rights, in order to create
a legal body with its own legal personality and capacity13.
This concept was further elaborated and emphasised by Simmenthal, which required member states, to ‘unconditionally and
irrevocably’ adhere to obligations to strengthen the Union14.

The concept of
primacy of EU law have a direct relationship with the principle of direct
effect in establishing the new legal order. Primacy serves as a key concept to
maintain consistency to give effectiveness to the ‘unconditional’ element of the
application of direct effect to individuals, in order to enforce the
application of Union Law and to disapply incompatible Union Law15.
This unconditional element can only apply if there is a conflict with national
law and the EU law is capable of direct effect16.
Hence, this model illustrates the broadening of the scope and competences of
the direct effect principle. De Burca and Craig analyses this with reference to
Dougan’s view between the relationship and how these two principles complement
each other17,
illustrating how primacy will put direct effect in ‘the driving seat’ with the
‘trigger model’, allowing EU law to be more effective in asserting supremacy,
and allowing Union ‘norms to produce independent effects within national legal
systems’, in contrast to direct effect solely allowing a ‘substitution effect’18.  

Due to the
nature of EU Law, the key issue arising from supremacy is the general
acceptance of this principle in the courts of the member states, as this causes
tensions between national courts and the Court of Justice of the European Union
(CJEU), with member states often questioning the decisions of the CJEU. Many
have argued that the conflicting tensions is an issue which would not have a
clear ‘legal conclusion’, with Schilling arguing for  the side of Member State competences adhering
to standard international law ‘autointepretation by contracting states’ and
should not lie with the CJEU as per Article 2 of the Treaty19.
On the other side of the argument, both the courts and academics believes that
CJEU is he final arbitrator of EU Law. For the courts, the case of Foto-frost makes it clear that the CJEU
should be the final arbitrator of EU law, be it legality of institutional
actions and rectifying Community Law to ensure uniformity in application of law20.

The conflict is
illustrated in various case laws. In the Solange
I case, it reflected the conflict between the German Basic Law arrangement
and EU Law21.
This case reflects how national courts can question primacy of EU law, and reject
it especially in a situation where national law have greater protection of
rights than EU law, reflecting the tension between courts and at times,
national courts will refuse to adhere to EU jurisdiction in order to assert
their own constitutional rights, a situation similar to the subsequent case in Ajos.

Ajos
Case in CJEU and Danish Court response  

The Ajos22 case
is a recent case that reflects the continuous critiques of the new legal order.
The CJEU ruled that following the rulings in Mangold and Kucukdeveci, the
general principles of prohibition of discrimination on grounds of age will
apply horizontally according to Directive 2000/78 as it provides expression to
the general principle and hence the employee in question is entitled to the
severance allowance23.
The court also, in addressing the whether the principles of legal certainty
overrules the general principle of non-discrimination of age, ruled that the
Danish court and all other member state courts will have to apply the law
consistent to the directive and if need be, disapply national law in order to
uphold the application of general principles and take precedence over principle
of legal certainty24

However, when
the case returned to the Danish Supreme Court, the court rejected the ruling of
the CJEU citing the following reasoning: First, it ruled that this situation is
a contra legum, that Danish Law
cannot be interpreted to give effect the EU Directive25.
The second and most crucial reasoning is the rejection of the use of general
principles to enforce direct effect on individuals. The court first addressed
that in following the principles laid down in Mangold and Kucukdeveci, the
CJEU has involved an unwritten general principle which are found outside EU
treaties and constitutional practices of member states and that itself is not
compatible in the Danish law of accession into the EU26.

The court,
further elaborating on their law of accession by stating that despite CJEU
affirming that these general principles are capable of direct effect, it does
not directly apply to Danish law, given the fact that the law of accession was
solely a consequence from the Lisbon Treaty and have no legal basis for
allowing horizontal direct effect to be applied to general principles, and
questioned its principle of legal certainty with regards to that27,
and hence rejecting the CJEU ruling as it will be acting outside its
jurisdiction for allowing a principle with questionable legal certainty to take
precedence over its own law28.

This rejection
of the CJEU decision have drawn numerous legal discussions with regards to the
principle of direct effect and primacy of EU law.

First, this case resurfaces the question on the use
of direct effect of horizontal situations. This case once again reflects how
general principles are indirectly given horizontal direct effect by passing
directives in order for the CJEU to achieve consistent interpretation of the
law. This attempt to correlate these two sources of EU law is a controversial
one, given that the scope of application of a general principle may differ from
the actual directive itself. The CJEU, in affirming the reasoning on the use of
general principle of law to give horizontal direct effect to directives in Mangold and Kucukdeveci cases is a confirmation to these highly controversial
legal principles29,
and an extension of the problematic fundamental concept as it continues to question
the legal certainty of direct effect.

The greater issue to be highlighted is the clash
between the principle of legal certainty and legitimate expectations
highlighted by the Danish courts and horizontal direct effect. Gualco and
Lourenco highlights that the CJEU, in attempting to ensure a certain general
principles to protect fundamental rights, in this case non-discrimination, will
forgo the legal certainty principle which ironically, many individuals depend
on. In addressing legal expectations, the Danish court highlighted that in
attempt to enforce a horizontal direct effect for individuals as a result of an
unwritten principle, would in turn question validity and applicability of the
provision30.
Similarly, Neergaard and Sorensen highlighted that this case may potentially
raise questions on whether direct effect is applicable on other similar general
principles that are not derived from Treaties31.
Hence, these issues reflect the fundamental problem of direct effect, the key
issue of legal certainty, especially the relationship between general
principles of law and directives, and compromises to legal certainty of the
CJEU in favour of an unwritten principle results in unclear and questionable
principles. Ajos have continued to
prove that Mangold and Kucukdeveci is potentially setting the
new legal order on a different and uncertain course, an explanation of the
rejection by the Danish Supreme Court.

The second issue is the impact on primacy of EU law.
The rejection by the Danish Supreme court reflects disregard for the primacy of
EU law, in particular its reference to their law of accession. Academics call
this ‘selective supremacy’. Gualco once again addressed this against the
backdrop on the general consensus of horizontal direct effect with general
principles of EU law. Amidst the controversial use of general principles in
direct effect, there is clear recognition that the reference to
non-discrimination as a general principle is classified as a primary source of
EU law and would take effect under Article 6 of the Treaty of the European
Union (TEU) and established case laws32.
In contrast to the reasoning that the Danish Supreme Court, which reject the
fact that Article 6 do not apply to Denmark as it does not fit into their
constitutional arrangements33,
and hence reflect the disregard for the ‘unconditional’ acceptance of primacy
laid down in Costa, as well as
rejecting any attempts of duty of cooperation34expected
from them.

Academics have suggested numerous reasons for the
rejection of CJEU’s reasoning. One of them is the low tolerance towards
international courts and their legal approaches, affirming the more pragmatic,
‘sovereignty’ approached principle of legal certainty in Scandinavian legal
culture rather than the CJEU approach on emphasis on general principles, which
would explain why the Danish courts would outright reject unwritten legal
principles and declaring it unconstitutional for them to exercise the stand of
the CJEU35.

These two key issues are a good example of the
intimate relationship between direct effect and supremacy of EU Law. As
mentioned, the supremacy of EU law puts the principle of direct effect in the
driving seat, creating a ‘triggering model’. These explanations illustrated
from academics have shown how the legal uncertainty of using general principles
to give horizontal direct effect ‘triggers’ the ‘selective supremacy’ resulting
in the Danish Supreme court’s rejection of CJEU’s reasoning.

Impact of the Ajos
Case on the new legal order

The Ajos case
have suggested a number of legal issues that may question the future of the new
legal order. However, the question is how far this case will pose a problem to
the fundamental nature of the legal order going forward.

While there has been clear acknowledgement of flaws
in this legal order, many academics have identified the claim that the Danish
Supreme Court have narrowed their interpretation to reject the ruling the CJEU.
Neergard and Sorensen have gone to suggest that general principles are indeed
clear and should have been applied to Danish Law. They suggested that by
acceding to the European Economic Community, it should be noted that their
constitutional arrangement have pre-empted for future applications of general
principles of EU law. Secondly, in rejecting the argument that the amendments
to the Law of Accession is sole the result of the ratification of the Lisbon
Treaty and not the decision in Mangold36,
they believed instead that the principle laid down in Mangold is reflected in the Lisbon Treaty and hence, would fit the
interpretation in Danish Law37.
These views are also echoed in the dissenting judgment delivered by Jytte
Scharling who believes that Denmark in applying their law of accession have
accepted that general principles of EU Law, whether or not derived from Treaty
obligation and will be directly applicable to Denmark. Hence, primacy must be
adhered to and meets the requirement in the Danish Constitution38.
These opinions clearly reflect that the Danish Courts are merely outright
rejecting the EU legal order on their own accord due to the lack of trust
between the two systems and in reality, do not reflect severe structural or key
fundamental legal issues that may pose a threat to the legal order.

This results in another key explanation on the issues
surfaced in the Ajos case could
reflect the functions of the new legal order. As Madsen points out, the
hardening of stance by the Danish courts to adhere to national principles of
legal certainty against the inherent dynamism of European Law will cause an
inevitable tension between the two courts39.
Like preceding cases such as Solange cases, the nature of such tensions as Walker
would suggest, stems from the development of EU law which encroaches into
Member States jurisdictions and constitutions and they respond by attempting to
restrict this development40,
resulting in constitutional pluralism. Constitutional pluralism can be
described as the attempt to diffuse conflict between the two courts through
mutual deference, allowing both systems to co-exist, overlap and interlock
without a hierarchy and to find alternative ways to resolve legal conflicts to reconcile
between the two legal systems41,
suggesting that the interaction between the legal order are interactive rather
than hierarchal, hence any Supreme Court of any nature holds their own sovereignty
power and concessions on the use of this power reflects pluralism42,
maintaining the key element of constitutionalism of a central authoritative
figure and the diversity of multiple authority43.
Walker further developed the concept in the light of reconciling sovereignty in
the modern and the European context, first suggests in one of the three
dimensions of pluralism, in particular the normative claim of pluralism, is accepting
the ‘respect and mutual recognition’ between the supranational and national
level44.
He subsequently also suggested by answering ‘how’ to ease the conflict rather
than finding a solution to the conflict45,
provides the best answer to the conflict between the two entities. Hence, fitting
the analysis of the Ajos case, the
conflicting objectives of the two courts resulted in the rejection of supremacy
of EU law is in reality, an affirmation that set a precedent legal norm,
providing an impetus for the new legal order to work rather than a conceptual
problem.

Conclusion

In conclusion, the Ajos case have shown the development of the new legal order EU have
established. The analysis of the Ajos case
have shown clear issues with the unclear legal principles of direct effect and
this affected the acceptance of primacy in the Danish Court, posing a potential
problem for the legal order, which many academics have criticised and
questioned prior to the Ajos case.
However in reality, like many cases prior to this, the tensions between the two
legal orders reflects a positive development of the legal order in a form of
constitutional pluralism. While the analysis of constitutional pluralism have
proven to be the best explanation to the workings of the new legal order,
however, the development in Ajos cannot
be the sole explanation but an affirmation of a new legal norm that is
reflected from preceding cases which will add to the continuous evolving new
legal order.

1
Robert Shuzte, European Constitutional
Law (Cambridge University Press, 2012) 308.

2
Case 26/62, Van Gend en Loos v
Netherlands Inland Revenue Administration, 1963 ECR (Special English
Edition) 12.

3
Case 441/14, Dansk Industri (DI), on
behalf of Ajos A/S v Estate of Karsten Eigil Rasmussen 2016, General
Court Reports.

4
Case 26/62, Van Gend en Loos v
Netherlands Inland Revenue Administration, 1963 ECR (Special English
Edition) 12.

5
Case 41/74, Van Duyn v Home Office 1974
European Court Reports 1974 1338.

6
Case 114/04, Mangold v Helm 2005,
European Court Reports 2005 I-10013.

7
Case 555/07, Kücükdeveci v Swedex GmbH & Co KG 2010 I-00365.

8
Case 114/04, Mangold v Helm 2005,
European Court Reports 2005 I-10013 at para.78.

9
Case 555/07, Kücükdeveci
v Swedex GmbH & Co KG 2010
I-00365 at para. 51.

10
Thomas Papadopoulos, ‘Criticising the
horizontal effect of the general EU principle of equality’ 2011 European Human Rights Law Review Issue 4, 442.

11
Case 555/07, Kücükdeveci v Swedex GmbH & Co KG 2010 I-00365 at para. 53.

12
Ingolf Pernice, ‘Mangold v Helm- ECJ Case C-144/04- Did the Courts get it
wrong?’ (European University institute Florence, 9th ECLN Conference
2013).

13
Case 6/64, Costa v ENEL 1964 ECH
585.

14
Case 106/77, Amministrazione delle
Finanze dello Strato v Simmenthal SpA 1978 ECR 630.

15
Paul Craig & Grainne De Burca, EU
Law: Text, Cases and Materials (6th edn, OUP 2011) 277.

16
Matej Avbelj, ‘Supremacy or Primacy of EU Law- (Why) Does it Matter?’ 2011
European Law Journal Vol 17(6), 751.

17
Michael Dougan, ‘When Worlds Collide! Competing Visions of the Relationship
between Direct Effect and Supremacy’ 2007
44 CML Rev 931, 932-5.

18
Paul Craig & Grainne de Burca (n17) 277.

19
Paul Craig, ‘The ECJ, National Courts and the Supremacy of Community Law’ (European
Constitutional Law Network Rome 2002 Conference).

20 Case
314/85, Foto-Frost v Hauptzollant
Lubeck-Ost 1987 ECR 1987 4225 at para.15-6.

21 Solange I, BVerfGE 37, 271 1974 CMLR
at 550 & 562.

22
Case 441/14, Dansk Industri (DI), on
behalf of Ajos A/S v Estate of Karsten Eigil Rasmussen 2016, General Court
Reports.

23
Ibid para 22 and 27.

24
Ibid para 43.

25
Case 15/2014, DI, acting on behald of
Ajos A/S v Estate of A at 44.

26
Ibid at 45.

27
Ibid at 47.

28
Ibid at 48.

29
Elena Gualco & Luisa Lourenco, ‘Clash of Titans: General Principles of EU
Law: Balancing and Horizontal Direct Effect’
2016 European Papers Vol 1 No
2, 648-9.

30
Ibid 650-2.

31
Ulla Neergaard & Karsten Engsig Sorensen, ‘Activist Fighting among Courts
and Breakdown of Mutual Trust? The Danish Supreme Court, the CJEU, and the Ajos
Case’ 2017 Yearbook of European Law,
28-9.

32
Elena Gualco, ‘Clash of Titans 2.0. From Conflicting EU General Principles to
Conflicting Jurisdictional Authorities: The Court of Justice and the Danish
Supreme Court in the Dansk Industri Case’
(European Forum, 26th March 2017).

33
Case 15/2014, DI, acting on behald of
Ajos A/S v Estate of A at 47.

34
Elena Gualco (n32) at 6.

35
Mikael Rask Madsen, Henrik Palmer Olsen & Urska Sadl, ‘Competing
Supremacies and Clashing Institutional Rationalities: The Danish Supreme
Court’s Decision in the Ajos Case and the National Limits of Judicial Coorperation’ 2017 University of Copenhagen Faculty of Law, Legal Studies
Research Paper Series 2017-32, 14.

36
Case 15/2014, DI, acting on behald of
Ajos A/S v Estate of A at 47.

37
Ulla Neergaard & Karsten Engsig Sorensen (n31) 30-1.

38
Case 15/2014, DI, acting on behald of
Ajos A/S v Estate of A at 49-50, dissenting judgment by Judge Jytte
Scharling.

39
Mikael Rask Madsen, Henrik Palmer Olsen & Urska Sadl (n35) 12-3.

40
Neil Walker, ‘Constitutionalism & Pluralism in Global Context,
Constitutional Pluralism in the European Union and Beyond’2012  Studies of the Oxford Institute of European
and Comparative Law, 21.

41
Tomi Tuominen, ‘The European Constitution and the Eurozone Crisis: A Critique
of European Constitutional Pluralism’
2017 University of Lapland, 62-3.

42
Ibid 66.

43
Ibid 70.

44
Ibid 69.

45
Ibid 71.