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The principle of proportionality in EU law – Part 2

In R (on the application of Lumsdon and others) (Appellants) v Legal Services Board (Respondent) [2015] UKSC 41, [2015] 3 WLR 121, the Supreme Court (Lord Reed and Lord Toulson with whom Lord Neuberger, Lady Hale and Lord Clarke agreed) delivered a helpful analysis of how the principle of proportionality applies in EU law.   In this second part of a two part series, we continue to summarise their findings:

8. In the context of measures adopted by the member states within the sphere of application of EU law, issues of proportionality have arisen most often in relation to national measures taken in reliance upon provisions in the Treaties or other EU legislation recognising permissible limitations to the “fundamental freedoms”: the free movement of goods, the free movement of workers, freedom of establishment, freedom to provide services, and the free movement of capital. Compliance with the principle of proportionality is also a requirement of the justification of other national measures falling within the scope of EU law, including those which derogate from other rights protected by the Treaties, such as the right to equal treatment or non-discrimination, or fundamental rights such as the right to family life. The Treaty on the Functioning of the European Union (“TFEU”) recognises permissible limitations to those rights which are justified upon grounds of public policy, public security or public health (articles 52(1) and 62), concepts which have undergone considerable analysis in the case law of the CJEU. The court’s general approach in this context was explained in the case of Gebhard, concerned with the provision of legal services:

“National measures liable to make less attractive the exercise of fundamental freedoms guaranteed by the Treaty must fulfil four conditions: they must be applied in a non-discriminatory manner; they must be justified by imperative requirements in the general interest; they must be suitable for securing the attainment of the objective which they pursue; and they must not go beyond what is necessary in order to attain it.” (para 37)

The last two of these requirements correspond to the two limbs of the proportionality principle. In some more recent cases, the court has also emphasised other general principles of EU law, by requiring that procedures under the national measure should be compatible with principles of sound administration, such as being completed within a reasonable time and without undue cost, and also compatible with legal certainty, including the right to judicial protection. The first of the conditions listed in Gebhard is relatively straightforward. In relation to the second condition, the court must identify the objective of the measure in question and determine whether it is a lawful objective which is capable of justifying a restriction upon the exercise of a fundamental freedom. The Court of Justice has recognised a wide range of public interest grounds capable of justifying restrictions on the exercise of fundamental freedoms. Specifically in relation to legal services, the court has accepted that restrictions on freedom of establishment or the provision of services can be justified by the need to protect the interests of the recipients of those services, and by the public interest in the administration of justice. In relation to the third and fourth conditions, the court must determine whether the measure is suitable to achieve the legitimate aim in question, and must then determine whether it is no more onerous than is required to achieve that aim, if there is a choice of equally effective measures. The position was summarised by Advocate-General Sharpston at para 89 of her opinion in Commission of the European Communities v Kingdom of Spain (Case C-400/08) [2011] ECR I-1915, a case concerned with the right of establishment:

“Whilst it is true that a member state seeking to justify a restriction on a fundamental Treaty freedom must establish both its appropriateness and its proportionality, that cannot mean, as regards appropriateness, that the member state must establish that the restriction is the most appropriate of all possible measures to ensure achievement of the aim pursued, but simply that it is not inappropriate for that purpose. As regards proportionality, however, it is necessary to establish that no other measures could have been equally effective but less restrictive of the freedom in question.”

10. The justification for the restriction tends to be examined in detail, although much may depend upon the nature of the justification, and the extent to which it requires evidence to support it. For example, justifications based on moral or political considerations may not be capable of being established by evidence. The same may be true of justifications based on intuitive common sense. An economic or social justification, on the other hand, may well be expected to be supported by evidence. The point is illustrated by Commission of the European Communities v Grand Duchy Luxembourg (Case C-319/06) [2008] ECR I-4323, concerned with legislation which imposed on providers of services in Luxembourg, who were based in other member states, the mandatory requirements of Luxembourg’s employment law. In addressing an argument that the measure ensured good labour relations in Luxembourg, the court stated:

“51. It has to be remembered that the reasons which may be invoked by a member state in order to justify a derogation from the principle of freedom to provide services must be accompanied by appropriate evidence or by an analysis of the expediency and proportionality of the restrictive measure adopted by that State, and precise evidence enabling its arguments to be substantiated …

52. Therefore, in order to enable the court to determine whether the measures at issue are necessary and proportionate to the objective of safeguarding public policy, the Grand Duchy of Luxembourg should have submitted evidence to establish whether and to what extent the [contested measure] is capable of contributing to the achievement of that objective.”

Where goods or services present known and serious risks to the public, the precautionary principle permits member states to forestall anticipated harm, without having to wait until actual harm is demonstrated. Although, in accordance with the precautionary principle, a member state could take protective measures without having to wait until the existence and gravity of the risks became fully apparent, the risk assessment could not be based on purely hypothetical considerations. It is not, however, necessary to establish that the measure was adopted on the basis of studies which justified its adoption. Particularly in situations where a measure is introduced on a precautionary basis, with correspondingly less by way of an evidential base to support the particular restrictions imposed, it may well be relevant to its proportionality to consider whether it is subject to review in the light of experience.

11. The court has tended to examine closely (again, depending to some extent on the context) the question whether other measures could have been equally effective but less restrictive of the freedom in question. The “less restrictive alternative” test is not however applied mechanically. In the first place, the court has made it clear that the burden of proof placed upon the member state to establish that a measure is necessary does not require it to exclude hypothetical alternatives. The court has also accepted that, where a relevant public interest is engaged in an area where EU law has not imposed complete harmonisation, the member state possesses “discretion” (or, as it has sometimes said, a “margin of appreciation”) not only in choosing an appropriate measure but also in deciding on the level of protection to be given to the public interest in question. The court is therefore unimpressed, in areas of activity where member states enjoy this kind of discretion, by arguments to the effect that one member state’s regulatory scheme is disproportionate because another’s is less restrictive. Its focus is upon the objectives pursued by the competent authorities of the member state concerned and the level of protection which they seek to ensure. This margin of appreciation applies to the member state’s decision as to the level of protection of the public interest in question which it considers appropriate, and to its selection of an appropriate means by which that protection can be provided. Having exercised its discretion, however, the member state must act proportionately within the confines of its choice. A national measure will not, therefore, be proportionate if it is clear that the desired level of protection could be attained equally well by measures which were less restrictive of a fundamental freedom. In applying the “less restrictive alternative” test it is necessary to have regard to all the circumstances bearing on the question whether a less restrictive measure could equally well have been used. These will generally include such matters as the conditions prevailing in the national market, the circumstances which led to the adoption of the measure in question, and the reasons why less restrictive alternatives were rejected. The court will be heavily reliant on the submissions of the parties for an explanation of the factual and policy context.

12. Member states must also comply with the requirement of proportionality, and with other aspects of EU law, when applying EU measures such as directives. As when assessing the proportionality of EU measures, to the extent that the directive requires the national authority to exercise a discretion involving political, economic or social choices, especially where a complex assessment is required, the court will in general be slow to interfere with that evaluation. In applying the proportionality test in circumstances of that nature, the court has applied a “manifestly disproportionate” test: see, for example, R v Minister of Agriculture, Fisheries and Food, Ex p National Federation of Fishermen's Organisations and Others (Case C- 44/94) [1995] ECR I-3115, para 58. The court may nevertheless examine the underlying facts and reasoning: see, for example,Upjohn Ltd v Licensing Authority established by the Medicines Act 1968 (Case C-120/97) [1999] ECR I-223, paras 34-35. Where, on the other hand, the member state relies on a reservation or derogation in a directive in order to introduce a measure which is restrictive of one of the fundamental freedoms guaranteed by the Treaties, the measure is likely to be scrutinised in the same way as other national measures which are restrictive of those freedoms.

As in the case of other principles of public law, the way in which the principle of proportionality is applied in EU law depends to a significant extent upon the context. The Supreme Court acknowledge that the Court of Justice is the only authoritative interpreter of the principle of proportionality in EU law and recognise that any attempt to identify general principles risks giving the impression that the CJEU’s approach is less nuanced and fact-sensitive than is actually the case. Nonetheless, the clarification that the Supreme Court give in its summary of the principle of proportionality as it applies in EU law draws upon a wide range of examples from the case law of the Court of Justice which illustrates how the principle is applied in practice. This will no doubt prove useful to lower courts and tribunals applying the principle in different contexts.


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