Decisions however, are only binding on parties that they are directly addressed to. As in the case of Franz Frad v Finanzamt Traunstein 1970, this was concerned with new Article 234 on transport taxes and VAT. The ECJ said that the decision was directly effective on German authorities, as tax rates were incompatible, hence making them invalid. Therefore in this case as the decision meet all the conditions laid down, the ECJ gave it direct effect.
In the case of Marshall v Southampton and South West Hampshire Area Health Authority,  ECR 723,  1 CMLR 688, the ECJ distinction between vertical and horizontal direct effect. Directives, unlike regulations, do not become law straight away. Directives usually therefore have a time limit, usually 2-3 years to be implemented into national law. A good example of this is the case of Van Duyn v Home Office. Van Duya a Dutch national come to the UK to take up employment with the church of Scientology.
She was refused entry, under directives - 64/221, the question here was could this directive be enforced. The ECJ held that it could be directly effective against the UK, and the UK could use it to restrict nationalist movement by use of public policy. This case concluded by the ECJ holding that the directive could be enforced, but the UK would have to recognise the binding effect upon them. Vertical direct effect occurs when a provision is enforceable by a citizen against a member state.
This contrasts with the horizontal direct effect that a regulation has. The case that illustrates this is the case of Marshall v Southamption AHA. Here Miss Marshall could not use national law as she was suing her employer (private firm). However by using the EU Directive 76/207, this stated that the directive would only have a direct effect if it was held against a member of the state. The ECJ held that she could appeal against the health authority (HA), as the HA was part of the state, thus having a vertical effect.
The ECJ adopted this broad version of the state again in the case of Foster v British Gas plc 1990, which involved retirement ages within a nationalised industry. The ECJ held that this article was vertically effective, as British Gas was part of the state or an organ of the state. The conclusion this case made therefore was that it leaves a gap of remedy as no definition of what an organ of the state was given. In Van Den en Loos v Nederlandse Adminis traitie der Bertastingen the court of Justice stated that member states had: "limited their sovereign rights, albeit with limited fields".
In Costa v ENEL, the ECJ made its first pronouncement of the principle of supremacy: "The transfer by the states from their domestic legal system to the community legal system of the rights and obligations arising under the Treaty carries with a permanent limitation of their sovereign rights, against which a subsequent unilateral act incompatible with the concept of the community cannot prevail". (Simmenthal SpA ).
This principle was applied and extended by the ECJ in the case of Factortame (No.2) , which concerned, amongst other things, the granting by the UK Courts of an interim injunction against the Crown, something which national law did not permit. The ECJ held that national courts had to protect the rights laid down by Community law, and if that required that a national law be set aside, the national court was obliged to do so. The House of Lords went on to grant the injunction. (EC Manual 02/03 Extract Unit C) The concept of supremacy of community law has been held to extend to the enforcement of community rights even if national courts are required to override national legislation.
(Walker & Ward 1994, p. 100). Referring to the original question above, the doctrine of direct effect can be seen as essential to community legal system in that individuals have been empowered and thus gained rights in opposition to national practices that are incompatible with EU law. Private parties have also enjoyed empowerment, treaty article 12, was ruled directly effective in the customs duties between member states in the Van Gend En Loos case, a ruling arising out of a challenge at national level to obstruction the movement of goods into Netherlands from Germany.
Article 30 (free movements of goods), Articles 48 and 52 (free movement of workers) and Article 59 (free movement of services) have all been found to have a direct effect. Along with treaty articles being capable of direct effect against the state, vertical direct effect, as seen in the Marshall case, with vertical and horizontal direct effect being clear in the Defrenne v Sabena case.
In this essay I have attempted to highlight that the ECJ looks at each individual case on its own, with one of the aims, in the past, to fill in the gaps and use the Purposive approach. Therefore the direct effect doctrine has been significant in determining individual legal rights, but the ECJ have in the past tended to depart from the conditions laid down on direct effect and seems to be flexible and willing to enhance individual legal rights wherever possible.
The Francovich principle represents an important additional move in the direction of enhancing individuals rights, as it was where new initiative will make the direct effect doctrine even more effective by viewing this as such a wide implication, more importantly the Francovich principle shows that the member states need to implement directives properly and within the time limit otherwise face the threat of being sued for damages by individuals, who have rights.
Weathrill, 1996, Cases & Materials on ECC Law, (3rd edition), Blackstone Craig & Burca, 1998, EU Law Text, Case, and Materials (2nd edition), New York, Oxford University Press 198 Steiner J, 1994, Textbook on EC Law - Law and integrations in the European Union Hartley T. The Foundations of European Community Law, (4th edition), Oxford University Press EC Manual 02/03 Extract Unit C, The College of Law