Free Movement of Services Act 2008

We have been asked to rede Xana on the likeliness of her being able to convey a successful claim against Yvette under EC jurisprudence to retrieve the outstanding balance of her history ; viz. , that proportion of the entire fees collectible required, under the Free Movement of Services Act 2008, as a part towards the quality audit which Xana is required to undergo in conformity with the commissariats of that same Act.

Cardinal to this job inquiry is the Law of the European Union refering to the freedom to supply and have services and besides the freedom of constitution

In order to supply a sound statement in response to this inquiry it will be necessary to analyze the commissariats of Council Directive 2006/123/EC, which the Free Movement of Services Act 2008 purports to implement ; Articles 43 to 55 of the Treaty of the European Union ( 1992 ) , which provide ( inter alia ) the nucleus government rules on which limitations to aforementioned freedoms are allowable under EC Law ; and, the instance jurisprudence of the European Court of Justice, the determinations from which supply penetration into how these rules are likely to be interpreted and applied, in order to find whether or non:

  1. The tutorial services supplied to Yvette by Xana, on a distance-learning footing, are likely to be considered ‘services’ for the intents of Articles 43 to 55 of the Treaty of the European Union and Council Directive 2006/123/EC ;
  2. The ‘quality audit’ limitation imposed on Xana by the Free Movement of Services Act 2008 is allowable under European jurisprudence ; and,
  3. The ‘contribution requirement’ imposed on Yvette by the Free Movement of Services Act 2008 is valid, taking into history the overruling aims of Articles 43 to 55 of the Treaty of the European Union and Council Directive 2006/123/EC.

In respect to whether or non the tutorial services supplied to Yvette by Xana, on a distance-learning footing, are likely to be considered ‘services’ for the intents of Articles 43 to 55 of the Treaty of the European Union and Council Directive 2006/123/EC: For the intent of the freedom to supply and have services across the European Union, a ‘service’ is defined by Article 50 EC, which states: “Services shall be considered to be ‘services’ within the significance of this Treaty where they are usually provided for wage, in so far as they are non governed by the commissariats associating to freedom of motion for goods, capital and individuals. [ 1 ] ” While it has been held by the European Court of Justice, in the instance of Belgium v. Humbel [ 2 ] , that the proviso of instruction by the State does non fall within the range of this definition, even where pupils are required to pay fees towards the operational costs of the establishments supplying their instruction ; in the present instance, because the services provided by Xena are to the full commercial and independent from the responsibilities of the United Kingdom to supply subsidised instruction to its citizens, it is extremely likely that the services in inquiry would be deemed to fall within the range of Article 50 EC.

For the intents of Council Directive 2006/123/EC, a ‘service’ is defined by Article 4 ( 1 ) of the Directive as being, “ … any freelance economic activity [ 3 ] , usually provided for wage, as referred to in Article 50 of the Treaty. [ 4 ] ” Additionally, a list of activities which are expressly excluded from the range of the Directive is provided by Article 2 ( 2 ) ( a ) – ( cubic decimeter ) and Article 2 ( 3 ) of the Directive, which includes such activities as private security services [ 5 ] and gaming activities [ 6 ] . Because the services provided by Xena to Yvette are of an economic nature, being provided in return for valuable consideration, and are non of the sort excluded by Articles 2 ( 2 ) and 2 ( 3 ) of the Directive, we can reason that it is likely that the services in inquiry would be deemed to fall within the range of Council Directive 2006/123/EC.

One exclusion to these regulations should be noted briefly: In the instance of Grogan [ 7 ] it was held that the proviso of fiscal information did non fall within the Treaty’s definition of a service, it instead stand foring a manifestation of freedom of look. While it could be argued that Xena’s primary concern activity is providing her clients with information, the ground that the Grogan determination can be distinguished from this present instance is that, in Grogan, the information was being provided for free — Xena charges for her information and offers it as portion of a structured educational service.

We can therefore conclude with some assurance that the service provided to Yvette by Xena qualifies as a ‘service’ for the intents of the European Treaty and besides Council Directive 2006/123/EC.

Bearing this decision in head, we must now turn to see whether or non the ‘quality audit’ limitation imposed on Xana by the Free Movement of Services Act 2008 is allowable under European jurisprudence:

Of peculiar relevancy to this question is the freedom of constitution as provided by Article 43 EC [ 8 ] . This Treaty Article provides, inter alia, that: “ [ R ] estrictions on the freedom of constitution of subjects of a Member State in the district of another Member State shall be prohibited.” Within the context, constitution includes the “setting-up of bureaus, subdivisions or subordinates by subjects of any Member State established in the district of any Member State, ” and besides, “the right to take up and prosecute activities as freelance individuals and to put up and pull off projects, in peculiar companies or houses. [ 9 ] ”

While it is true that the ‘audit requirement’ does non forbid constitution of English linguistic communication service suppliers in the United Kingdom, the law of the European Court of Justice has interpreted the freedom of constitution widely. In the Gebhard [ 10 ] instance, the European Court of Justice provided four conditions which must be satisfied in order for a restrictive state step to be deemed valid at jurisprudence: “It follows… from the Court ‘ s case-law that national steps apt to impede or do less attractive the exercising of cardinal freedoms guaranteed by the Treaty must carry through four conditions: they must be applied in a non-discriminatory mode ; they must be justified by imperative demands in the general involvement ; they must be suited for procuring the attainment of the aim which they pursue ; and they must non travel beyond what is necessary in order to achieve it. [ 11 ] ” This latter demand of ‘necessity’ was provided in the earlier instance of Kraus v Land Baden-Wuerttemberg [ 12 ] and is further supported by Council Directive 2006/123/EC: “ [ N ] o such mandate strategy or limitation should know apart on evidences of nationality. Further, the rules of necessity and proportionality [ 13 ] should ever be respected. [ 14 ] ”

The inquiries which therefore autumn for finding are as follows:

  1. Is the ‘quality audit’ demand imposed by the Free Movement of Services Act 2008 an imperative demand in the general involvement [ 15 ] ?
  2. If so, is the ‘quality audit’ demand a suited and proportionate manner of accomplishing those aims? And,
  3. If so, does the ‘quality audit’ demand travel beyond what is necessary to accomplish its legitimate aims?

In respect to ( a ) ; the justifications which have been proffered by the authorities of the United Kingdom for the infliction of the ‘quality audit’ demand are double: First, that it promotes ‘the pureness of the English language’ ; and, 2nd, that it ‘protect occupations in the UK further and higher instruction sector’ .

In respect to the latter of these purposes, because it is an economic purpose, i.e. advancing employment for the benefit of the United Kingdom’s economic system, the Courts are improbable to see this in the ‘general interest’ or a ‘legitimate public interest’ [ 16 ] . This decision is farther supported by the determination in the instance of Finalarte Sociedade de Construcao Civil V Urlaubs und Lohnausgleichskasse der Bauwirtschaft [ 17 ] .

In respect to the former purpose: While it is true that one of the legitimate purposes suggested by Council Directive 2006/123/EC is the aim of advancing higher quality in instruction [ 18 ] , it is hard to reason that the purpose of ‘promoting pureness of language’ falls within this legitimate class, particularly since the European Courts of Justice by and large take an extremely restrictive reading of ‘legitimate purposes [ 19 ] ’ . If anything, this profferred justification fits more comfortably inside one of the cutural caputs of public policy aims, such as for the ‘promotion of the national linguistic communication [ 20 ] ’ .

However, even if this former purpose is considered legitimate and in the general involvement, it is non obvious that enforcing a dearly-won and stiff [ 21 ] ‘quality audit’ is a proportionate manner of accomplishing this aim, nor that it is necessary in order to accomplish that aim. For illustration, Xena might already be in ownership of a quality blessing enfranchisement from her place State which would function the intent every bit good. While this is mere guess, it reveals one circumstance under which the ‘quality audit’ imposed by the Free Movement of Services Act 2008 is a disproportionate and unneeded demand in visible radiation of the aim of advancing the national linguistic communication. However, as per the determination in the instance of Jean Thieffry v Conseil de l’ordre diethylstilbestrols avocats a la cour de Paris [ 22 ] , this statement will merely get the better of the UK’s [ C1 ] claim ( that the disparagement for the freedom of constitution is justified ) if it can be shown that there exist tantamount ‘qualifications’ or audit enfranchisement procedures in other Member States of Europe. If such equalities exist, so the UK’s claim is more likely to be successful and the ‘quality audit’ proviso of the 2008 Act will probably be deemed valid. Conversely, if it is held that equalities do be [ C2 ] in other Member States, so I would reason that the Courts would non be satisfied that the ‘quality audit’ demand satisfies the trial as set out in the Gebhard [ 23 ] instance.

One concluding point on this question: We have non been provided with inside informations of the enforcement mechanisms which have been adopted under the 2008 Act to oblige concern conformity ; if this Act creates a condemnable jurisprudence offense for neglecting to undergo the ‘quality audit’ procedure, which is rather possible, so the step must be deemed contrary to the aims of Council Directive 2006/123/EC which, at Article 1 ( 5 ) provinces: “Member States may non curtail the freedom to supply services by using condemnable jurisprudence commissariats which specifically regulate or affect entree to or exercising of a service activity… [ 24 ] ” We are non in ownership of the facts required to do any steadfast decision in this respect.

In decision, one would hold to reason that, by supplementing the execution of Council Directive 2006/123/EC with a ‘quality audit fee’ , the national legislative went beyond the aims of that Directive. This raises two interesting inquiries: First, when a Member State implements a Directing but adds extra conditions to those steps, can it be said that the State failed to implement the Directive properly ; and, if so, would it be possible for a private party such as Xena to take legal action against the State straight top recover her losingss?

In respect to the former question: It must depend upon the Directive in inquiry. For illustration, if the Directive was one which sought to enforce minimal duties [ 25 ] , so a State which ‘gold-plates’ the commissariats of that Directive, through implementing steps, could non be said to be in breach of its Article 249 [ 26 ] responsibility to decently and efficaciously implement that Directive. Conversely, if the Directive was one based upon the rule of maximal harmonisation [ 27 ] , so gold-plating is purely prohibited.

From an analysis of the commissariats of Directive 2006/123/EC, I would reason that it is a Directing falling into the latter of these two classs. The logical thinking for this is as follows: Council Directive 2006/123/EC intents to advance freedom of constitution and freedom to supply and have services by “remov [ ing ] barriers [ 28 ] ” . The lone disparagements from this rule, i.e. the lone barriers permitted, are those provided by the Directive ; for illustration, those provided by Article 17 of the Directive. Therefore, if the ‘quality audit fee’ is non a permitted disparagement, so one must reason that the United Kingdom have [ C3 ] failed to implement Directive 2006/123/EC decently.

In respect to the 2nd question ; viz. , whether or non a private person would be able to convey legal action against the State to retrieve his or her losingss: In the instance of Andrea Francovich and Others v. Italian Republic [ 1991 ] [ 29 ] it was held that an person can convey an action against the State straight, but merely where ( 1 ) the Directive which that State has failed to implement decently is capable of confabulating rights onto individuals such as the claimant and is clear in the definition of those rights ; and, ( 2 ) the loss being claimed for was caused by that State’s failure to implement the Directive properly.

In our present instance, there is no uncertainty that all three of these conditions would be deemed satisfied if the Court agrees that the infliction of the ‘quality audit fee’ is an undue disparagement from the aims of Directing 1008/123/EC: The Directive promotes single rights ; in order to assessment [ C4 ] whether or non the ‘quality audit fee’ is an undue disparagement the bounds of the freedoms that the Directive intents to advance must be deemed clear ; and, without the undue disparagement, no difference would hold arisen between Xena and Yvette!

A possible defense mechanism that could be invoked by the United Kingdom when supporting its place is that the Free Movement of Services Act 2008 implemented Directive 2006/123/EC before the 27ThursdayDecember 2009 [ 30 ] ; i.e. before the concluding day of the month for national heterotaxy of the Directive. The United Kingdom might therefore argue that it has another 12 months to be able to implement the Directive properly, and can non be held apt for neglecting to make so before the concluding heterotaxy day of the month.

While the jurisprudence is non wholly clear on this point, the trial to be applied is that which was formulated in the instance of Brasserie du Pecheur [ 31 ] . In this instance it was held that: “ [ W ] here a breach of Community jurisprudence by a Member State is attributable to the national legislative assembly moving in a field in which it has a broad discretion to do legislative picks, persons enduring loss or hurt thereby are entitled to reparation where the regulation of Community jurisprudence breached is intended to confabulate rights upon them, the breach is sufficiently serious and there is a direct causal nexus between the breach and the harm sustained by the individuals.” Writers such as Dreards ( 1997 ) have argued that, in pattern the applicable trial which can be derived from the Brasserie du Pecheur instance is as follows: Could the province in inquiry have moderately been expected to gain that its Acts of the Apostless or skips were go againsting Community jurisprudence [ 32 ] ?

In the present instance, I would reason that the breach is sufficiently serious to justify province liability, even though the Directive was implemented prior to the termination of the heterotaxy deadline.

In respect to the concluding question of this paper ; viz. , whether or non the ‘contribution requirement’ imposed on Yvette by the Free Movement of Services Act 2008 is valid: Of peculiar relevancy to this question is Article 14 ( 1 ) of Council Directive 2008/123/EC which provides that: “Member States shall non do entree to… a service activity in their district topic to conformity with… discriminatory demands based straight or indirectly on nationality… [ 33 ] ” Because lone occupants of the United Kingdom are subjected to this contributory surcharge, there is no uncertainty that this step would be deemed prejudiced by the European Court of Justice. This is supported by the determination in the instance of Van Binsbergen [ 34 ] in which it was held that measures know aparting on evidences of nationality ( whether straight or indirectly ) must be abolished in conformity with Article 49 of the European Treaties. While it could be argued that because the step looks to state of abode instead than nationality,per Se[ 35 ] , that it does non know apart on the footing of nationality. However, this statement is likely to neglect as, in pattern, this means that more UK subjects are likely to be affected negatively by the step than non-UK subjects [ 36 ] .

If this analysis is accepted, so it follows that it will besides be possible to convey a claim against the State straight. The logical thinking for this place is indistinguishable to that provided above in respects to province liability for presenting the ‘quality audit fee’ , an undue disparagement from Council Directive 2006/123/EC

In decision, if Xena brought a claim against Yvette, Yvette would probably be successful in reasoning that she should non hold to pay the extra audit charge. Even if the Court do accept that the aims of enforcing this charge on Xena are legitimate, proportionate and necessary, the limitation to Yvettes freedom to entree educational services has been compromised by a prejudiced step ; viz. , the demand that receivers of English linguistic communication services in the United Kingdom must pay a surcharge to lend to the costs of the audit procedure imposed under the Free Movement of Services Act 2008.

In this instance, Xena should convey a instance against the State straight in conformity with the Francovich rule of State liability, to retrieve her losingss.


Barnard, C. and J. Scott, ‘The Law of the Single European Market’ , Hart Publishing, Oxford and Portland, Oregon, 2002.

Craig, P. and G. De Burca,‘EU Law Text, Cases and Materials’, Fourth Edition, Oxford University Press, Oxford, 2007

Foster, G.‘Blackstone’s Statutes EU Treaties & A ; Legislation’ ,Eighteenth Edition, Oxford, Oxford University Press, 2007

Tobler, C. , ‘Indirect Discrimination: A Case Study Into the Development of the Legal Concept of Indirect Discrimination Under EC Law’, Antwerpen – Oxford, Intersentia, 2005.

Dreards, E. ,‘Brasserie du Pecheur, Snatching Defeat from the Jaws of Victory’ ,Current Survey, ELRev, 1997, 620 ff.

Leave a Reply

Your email address will not be published. Required fields are marked *