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Foster: Q&A EU Law

Selected EU Law Terms

Abuse of a dominant position - Unlawful activities by large businesses, i.e. usually those having a market share of at least 40% in at least one EU state. Examples of such activities, which are contrary to Article 82 of the Treaty of Rome and the UK Competition Act 1998, include refusing to supply an existing customer and engaging in predatory pricing. The European Commission and the Office of Fair Trading can fine businesses up to 10% of annual worldwide turnover for breach of Article 82. The record individual fine, of [euro]497M, was against Microsoft in 2004. In the UK Napp Pharmaceuticals was fined £3.21M for abuse of a dominant position contrary to the Competition Act 1998 but this was reduced to £2M on appeal.

Administrative tribunal - A body established by or under Act of Parliament to decide claims and disputes arising in connection with the administration of legislative schemes, normally of a welfare or regulatory nature. Examples are employment tribunals and rent assessment committees. They exist outside the ordinary courts of law, but their decisions are subject to judicial control by means of the doctrine of ultra vires and in cases of error of law on the face of the record. Compare domestic tribunal.

Advocates General - Senior law officers who assist the European Court of Justice in its task of reaching a judgment in the cases brought before it. They are characterized by their independence and impartiality. Following the hearing of the case they deliver in open court an "opinion" that is not binding on the judges, but which reflects the views of someone with the same standing as a judge.

Arbitration - n. The determination of a dispute by one or more independent third parties (the arbitrators) rather than by a court. Arbitrators are appointed by the parties in accordance with the terms of the arbitration agreement or in default by a court. An arbitrator is bound to apply the law accurately but may in general adopt whatever procedure he chooses and is not bound by the exclusionary rules of the law of evidence; he must, however, conform to the rules of natural justice. In English law, arbitrators are subject to extensive control by the courts, with respect to both the manner in which the arbitration is conducted and the correctness of the law that the arbitrators have applied, although this control was loosened to some extent by the Arbitration Act 1996. The judgment of an arbitrator is called his award, which can be the subject of an appeal to the High Court on a question of law under the provisions of the Arbitration Act 1996. In some types of arbitration it is the practice for both parties to appoint an arbitrator. If the arbitrators fail to agree about the matter in dispute, they will appoint an umpire, who has the casting vote in making the award. English courts attach great importance to arbitration and will normally stay an action brought in the courts in breach of a binding arbitration agreement. See also alternative dispute resolution.
The modern origins of international arbitration can be traced to the Jay Treaty (1784) between the USA and the UK, which provided for the determination of legal disputes between states by mixed commissions. The Hague Conventions of 1899 and 1907 contained rules of arbitration that have now become part of customary international law. The 1899 Conventions created the Permanent Court of Arbitration, which was not strictly speaking a court but a means of providing a body of arbitrators on which the parties to a dispute could draw. Consent to arbitration by a state can be given in three ways: (1) by inclusion of a special arbitration clause in a treaty; (2) by a general treaty of arbitration, which arranges arbitration procedures for future disputes; and (3) by a special arbitration treaty designed for a current dispute. Examples of arbitration include the Clipperton Island Arbitration (France v Mexico) (1932) 26 AJIL 390; the Tinoco Arbitration (1923) 1 RIAA 369; and the Canada/France Maritime Delimitation Arbitration (1992) 31 ILM 1145. Sadly, some arbitration decisions have been ignored, e.g. the Beagle Channel Arbitration (Chile v Argentina) (1977) 52 ILR 93, in which the pope acted as mediator.
Arbitration between a state and a foreign national can be facilitated through the medium of the International Centre for Settlement of Investment Disputes (ICSID) based in Washington DC. Article 25 of the 1965 Convention on the Settlement of Investment Disputes Between States and Nationals of Other States extends to ICSID jurisdiction over investment disputes between "a Contracting State…and a national of another contracting State."

Block exemption - Exemption from Article 81 of the Treaty of Rome for certain types of anticompetitive agreements that fall within the scope of special EU regulations that have direct effect in the EU. Block exemptions exist in a number of different areas, including vertical agreements and agreements relating to motor-vehicle distribution, research and development, specialization, and technology transfer. The regulations are published in the EU's Official Journal; any agreement that complies with the regulations will be exempt from Article 81. Many contracts in the EU are drafted to comply with the block exemption regulations by using the wording of those regulations in the agreements themselves. Block exemptions can also be issued under UK competition law. EU block exemptions provide an automatic exemption from the provisions of UK competition law in the Competition Act 1998. All EU block exemptions are at www.europa.eu.int\comm\competition\antitrust\legislation

Co-decision procedure - A procedure introduced by the Maastricht Treaty that gives the European Parliament a power to veto certain legislative proposals. If the Council of the European Union and the European Parliament fail to agree after a second reading of the proposal by the Parliament, a conciliation committee of the Council and Parliament will attempt to reach a compromise. If no compromise is reached, the Parliament can reject the measure by absolute majority voting.

Common Agricultural Policy (CAP) - The agricultural policy of the EU as set out in Articles 32–38 of the Treaty of Rome. The overall aims of the CAP are to increase agricultural productivity, ensure a fair standard of living for the agricultural community, stabilize markets, assure the availability of supplies, and ensure that supplies reach consumers at a reasonable price. The Treaty is supplemented by a wide range of EU directives in this field.

Community legislation - Laws made by the Council of the European Union or the European Commission. Each body has legislative powers, but most legislation is made by the Council, based on proposals by the Commission, and usually after consultation with the European Parliament. The role of the Parliament in the legislative process was strengthened under the Single European Act 1986 and the Maastricht Treaty 1992. Community legislation is in the form of regulations, directives, and decisions. Regulations are of general application, binding in their entirety, and directly applicable in all member states without the need for individual member states to enact these domestically. Directives are addressed to one or more member states and require them to achieve (by amending national law if necessary) specified results. They are not directly applicable – they do not create enforceable Community rights in member states until the state has legislated in accordance with the directive: the domestic statute then creates the rights for the citizens of that country. A directive cannot therefore impose legal obligations on individuals or private bodies, but by its direct effect it confers rights on individuals against the state and state bodies, even before it has been implemented by changes to national law, by decisions of the European court. Decisions may be addressed either to states or to persons and are binding on them in their entirety. Both the Council and the Commission may also make recommendations, give opinions, and issue notices, but these are not legally binding.

Concentration - n. (in EU law) The technical term for a merger.

Conciliation - A procedure of peaceful settlement of international disputes. The matter of dispute is referred to a standing or ad hoc commission of conciliation, appointed with the parties' agreement, whose function is to elucidate the facts objectively and impartially and then to issue a report. The eventual report is expected to contain concrete proposals for a settlement, which, however, the parties are under no legal obligation to accept. Added impetus to this method of dispute resolution was given by the UN Draft Resolution on Conciliation of Disputes Between States and the Convention on Conciliation and Arbitration 1992. Sadly, conciliation failed completely to resolve the disputes arising from the break-up of the former state of Yugoslavia in the 1990s.

Consumer protection - The protection, especially by legal means, of consumers (those who contract otherwise than in the course of a business to obtain goods or services from those who supply them in the course of a business). It is the policy of current legislation to protect consumers against unfair contract terms. In particular they are protected against terms that attempt to exclude or restrict the seller's implied undertakings that he has a right to sell the goods, that the goods conform with either description or sample, and that they are of satisfactory quality and fit for their particular purpose (Unfair Contract Terms Act 1977). EU directive 93/13 renders unfair terms in consumer contracts void; it is implemented in the UK by the Unfair Terms in Consumer Contracts Regulations 1999. The Office of Fair Trading runs a special unfair terms unit, which investigates cases in this field. It also issues special guidance to businesses on unfair terms in particular sectors (for details see www.oft.gov.uk). There is also provision for the banning of unfair consumer trade practices (Fair Trading Act 1973). Consumers (including individual businesspeople) are protected when obtaining credit (Consumer Credit Act 1974) and there is provision for the imposition of standards relating to the safety of goods under the Consumer Protection Act 1987 and the General Product Safety Regulations 1994. There are, in addition, many legislative measures that are product-specific, such as toy safety regulations.

Cooperation procedure - A procedure introduced by the Single European Act 1986 that allows the European Parliament to impede the adoption of proposed legislation by the Council of the European Union; the Maastricht Treaty extended the use of this procedure to cover new areas of policy. It applies when there is a second reading of a draft measure. If the Parliament takes no action for three months after receiving the proposal, it proceeds. However, if, after a second reading, Parliament votes by an absolute majority to reject the measure, this can only be overturned by a unanimous decision of the Council.

Council of Europe - A European organization for cooperation in various areas between most European (not just EU) states. The assembly of the Council of Europe elects the judges of the European Court of Human Rights. The Council's fundamental role is the maintenance of pluralist liberal democracy and economic stability in Europe. To this end member states have endorsed the preservation of individual rights as being a, if not the, vital method of achieving these aims. The Constitution of the Council of Europe provides that each member must ensure "the enjoyment by all persons within its jurisdiction of human rights and fundamental freedoms." This provision was implemented by the creation of two human rights treaties, the European Convention on Human Rights 1950 and the European Social Charter 1961.

Court of First Instance - The first court of appeal from decisions of the European Commission. Established under powers conferred by the Single European Act 1986, it started to operate at the end of October 1989. Appeals from the court are to the European Court of Justice.

Damages - pl. n. A sum of money awarded by a court as compensation for a tort or a breach of contract. Damages are usually a lump-sum award. The general principle is that the claimant is entitled to full compensation (restitutio in integrum) for his losses. Substantial damages are given when actual damage has been caused, but nominal damages may be given for breach of contract and for some torts (such as trespass) in which no damage has been caused, in order to vindicate the claimant's rights. Damages may be aggravated by the circumstances of the wrong. In exceptional cases in tort (but never in contract) exemplary damages may be given to punish the defendant's wrongdoing. Damages may be classified as unliquidated or liquidated. Liquidated damages are a sum fixed in advance by the parties to a contract as the amount to be paid in the event of a breach. They are recoverable provided that the sum fixed was a fair pre-estimate of the likely consequences of a breach, but not if they were imposed as a penalty. Unliquidated damages are damages the amount of which is fixed by the court. Damages may also be classified as general and special damages.
The purpose of damages in tort is to put the claimant in the position he would have been in if the tort had not been committed. Recovery is limited by the rules of remoteness of damage (Hadley v Baxendale (1854) LR 9 Exch 341, 156 ER 145). The claimant must take reasonable steps to mitigate his losses and so may be expected to undergo medical treatment for his injuries or to seek alternative employment if his injuries prevent him from doing his former job. Damages may also be reduced for the claimant's contributory negligence. The purpose of damages in contract is to put the claimant in the position he would have been in if the contract had been performed, but, as in the case of damages in tort, recovery is limited by rules relating to remoteness of damage. Again as in the case of torts, the claimant is also under a duty to take all reasonable steps to mitigate his losses and cannot claim compensation for any loss caused by his failure to do this. If, for example, a hotel reservation is cancelled, the hotelier must make all reasonable attempts to relet the room for the period in question or as much of it as possible.
Damages obtained as a result of a cause of action provided by the Human Rights Act 1998 will be provided on the basis of the principles of just satisfaction developed by the European Court of Human Rights.

Dualism - n. See monism.

European Atomic Energy Community (Euratom) - The organization set up under the Treaty of Rome (1957) by the six members of the European Coal and Steel Community and effective from 1 January 1958. Euratom was formed to create the technical and industrial conditions necessary to establish the nuclear industries and direct them to peaceful use to obtain a single energy market.

European Coal and Steel Community - The first of the European Communities, established by the Paris Treaty (1951) and effective from 1952. The ECSC created a common market in coal, steel, iron ore, and scrap between the member states, and it coordinates policies of the member states in these fields. The Treaty expired in July 2002 after 50 years in force. The original members were Belgium, France, West Germany, Italy, Luxembourg, and the Netherlands. These six countries, in 1957, signed the Treaty of Rome setting up the European Economic Community.

European Convention on Human Rights - A convention, originally formulated in 1950, aimed at protecting the human rights of all people in the member states of the Council of Europe. Part 1 of the Convention, together with a number of subsequent protocols, define the freedoms that each signatory state must guarantee to all within its jurisdiction, although states may derogate from the Convention in respect of particular activities. The Convention established a Commission on Human Rights (now abolished) and a Court of Human Rights in Strasbourg. The Court may hear complaints (known as petitions) by one state against another. It may also hear complaints by an individual, group, or nongovernmental organization claiming to be a victim of a breach of the Convention. The Court cannot deal with any complaint, however, unless the applicant has first tried remedies in the national courts. All complaints must be made not later than six months from the date on which the decision against the applicant was made in the national courts. The Court will only investigate a complaint if it is judged to fulfil various conditions that make it admissible. The Court has power to make a final ruling, which is binding on the parties, and in some cases to award compensation.
Despite the fact that the UK took perhaps the most significant part in writing and inspiring the Convention, and was the first to sign and to ratify it, the Convention articles only came into force in the UK on 2 October 2000. This followed the entry into force of the Human Rights Act 1998.

European Court of Justice (ECJ, Court of Justice of the European Communities) - An institution of the European Union that has three primary judicial responsibilities. It interprets the treaties establishing the European Community; it decides upon the validity and the meaning of Community legislation; and it determines whether any act or omission by the European Commission, the Council of the European Union, or any member state constitutes a breach of Community law.
The Court sits at Luxembourg. It consists of 25 judges appointed by the member states by mutual agreement and assisted by 8 Advocates-General. Proceedings before the Court involve written and oral submissions by the parties concerned. Proceedings against the Commission or the Council may be brought by the other of these two bodies, by any member state, or by individual persons; proceedings to challenge the validity of legislative or other action by either Commission or Council are known as proceedings for annulment. Proceedings against a member state may be brought by the Commission, the Council, or any other member state. Appeals from the Court of First Instance go to the ECJ. The decisions of the Court are binding and there is no appeal against them.
The Court also has power, at the request of a court of any member state, to give a preliminary ruling on any point of Community law on which that court requires clarification.

Force majeure - [French] Irresistible compulsion or coercion. The phrase is used particularly in commercial contracts to describe events possibly affecting the contract and that are completely outside the parties' control. Such events are normally listed in full to ensure their enforceability; they may include acts of God, fires, failure of suppliers or subcontractors to supply the supplier under the agreement, and strikes and other labour disputes that interfere with the supplier's performance of an agreement. An express clause would normally excuse both delay and a total failure to perform the agreement.

Free movement - The movement of goods, persons, services, and capital within an area without being impeded by legal restrictions. This is a basic principle of the European Community, whose treaty insists on the free movement of goods (involving the elimination of customs duties and quantitative restrictions between member states and the setting up of a Common External Tariff) as well as the free movement of services, capital, and persons (including workers and those wishing to establish themselves in professions or to set up companies).

General Agreement on Tariffs and Trade (GATT) - An international treaty signed in 1947 to provide for some measure of world free trade with the aim of reducing high tariffs on goods. Its objectives in extending free trade have been achieved in a series of eight negotiations (rounds); the last of these, the Uruguay Round (1986–94), led to the establishment of the World Trade Organization and further agreement to ensure more free trade around the world.

Interim measures - (in competition law) Temporary sanctions that the European Commission and the UK Office of Fair Trading have powers (by decision and under the Competition Act 1998, respectively) to impose on businesses that are in breach of the competition rules, pending a final decision. This ensures that permanent damage is not done to the party who has complained of a breach of the rules. The interim measures may consist of requiring the offending company to resume supplies of goods to the complainant or to remedy the conduct of which complaint has been made in some other way.

Jurisdiction - n. 1.The power of a court to hear and decide a case or make a certain order. (For the limits of jurisdiction of individual courts, see entries for those courts.)
2. The territorial limits within which the jurisdiction of a court may be exercised. In the case of English courts this comprises England, Wales, Berwick-upon-Tweed, and those parts of the sea claimed as territorial waters. Everywhere else is said to be outside the jurisdiction.
3. The territorial scope of the legislative competence of Parliament. In international law, jurisdiction can be exercised on a number of grounds, based on the following principles: (1) the territorial principle, i.e. that the state within whose boundaries the crime has taken place has jurisdiction, irrespective of the nationality of the transgressor (British Nylon Spinners Ltd v ICI [1952] Ch 19 (CA) 26); (2) the nationality principle, i.e. that a state has the power of jurisdiction over one of its nationals for an offence he has committed in another state (Joyce v DPP [1946] AC 347 (HL)); (3) the protective principle, i.e. that a potentially injured state can exercise jurisdiction in all cases when its national security is threatened (US v Archer 51 F Supp 708 (1943); (4) the passive personality principle, i.e. that a state has jurisdiction if the illegal act has been committed against a national of that state (Achille Lauro incident of 1985); (5) the universality principle, i.e. that when the accused has committed a crime in breach of a rule of jus cogens (such as a crime against humanity), any party having custody of the alleged lawbreaker is permitted to bring criminal proceedings against him (Filartiga v P na-Irala 630 F 2d 876, 890 (2d Cir 1980)).

Locus standi - [Latin: a place to stand] The right to bring an action or challenge some decision. Questions of locus standi most often arise in proceedings for judicial review.

Maastricht Treaty - The Treaty on European Union, which was signed at Maastricht (in the Netherlands) in February 1992 and came into force on 1 November 1993. The Treaty amended the founding treaties of the three European Communities by establishing a European Union based on these Communities. It required the defining and eventual implementation of a common foreign and security policy (CFSP), cooperation in justice and home affairs, and – under certain conditions – the introduction of a single currency. It also introduced the principle of subsidiarity and increased the powers of the European Parliament. It has since been amended by the Amsterdam Treaty.

Monism - n. The theory that national and international law form part of one legal structure, in which international law is supreme. It is opposed to dualism, which holds that they are separate systems operating in different fields.

Positive discrimination - Actively favouring one category of people over others because they are considered to be disadvantaged. Positive discrimination is usually illegal in the UK as it is in itself discrimination, but actions that encourage a particular group are permitted. Thus job advertisements stating that applications from women and ethnic minorities are welcome are legal, but choosing a candidate for a post solely on the grounds of racial origin or sex will not be permitted in most circumstances. Special rules apply to the selection of Parliamentary candidates (Sex Discrimination (Election Candidates) Act 2002). Positive discrimination is permitted in some circumstances in European Law (Case C-409/95 Marschall v Land Nordrhein Westfalen [1997] ECR I-6363).

Reciprocity - n. A provision of the Statute of the International Court of Justice (ICJ) under which a state may limit its consent to the Court's compulsory jurisdiction. This form of consent to suit imposes the prior condition that in any future litigation that state may invoke a claimant state's narrower terms of general consent to ICJ jurisdiction. Reciprocity thus enables the consenting state to avoid suit on the same basis that would be available to the claimant state, if the latter were a defendant in similar ICJ litigation.

Sanction - n. 1. A punishment for a crime.
2. A measure taken against a state to compel it to obey international law or to punish it for a breach of international law. It is often said that international law is deficient because it lacks the power to impose sanctions or even to compel states to accept the jurisdiction of courts. There are, however, certain sanctions that can be applied. A state may, in certain cases, use force in self-defence, or as a sanction against an act of aggression, or as a reprisal (for example, by expropriating property belonging to citizens of a country that had previously carried out unlawful acts of expropriation). It may also act by way of retorsion. There are also certain powers of sanction available under the United Nations system, such as economic (and, at least in theory, military) sanctions, although the powers of the Security Council to impose sanctions are subject to veto.

Sex discrimination - Discrimination on the ground of sex under either the Sex Discrimination Act or the Equal Pay Act. The Sex Discrimination Act has a wider definition of sex than the Equal Pay Act in that it now includes within its scope discrimination on grounds of transsexualism. The Equal Pay Act 1970 forbids having different terms for men and women in their contracts of employment. The Sex Discrimination Act 1975 (as amended by the Sex Discrimination Act 1986) goes further, prohibiting discrimination when offering a contract of employment and before entering into such a contract. It also prohibits discrimination in employment on the grounds of marital status and discrimination in partnerships with six or more partners, trade unions, qualifying or authorizing bodies, vocational training, and education. The Act provides for special exceptions; for example, when male or female characteristics are a genuine requirement of the job. It is also unlawful to victimize someone who has complained of illegal discrimination. The Act covers both direct and indirect discrimination. The latter includes making conditions that apply to both sexes but in such a way that, for instance, the proportion of women who can fulfil the conditions is considerably less than men. An example would be insisting on a record of continuous service for promotion, which is far more difficult for women to satisfy because of pregnancy and motherhood. The Acts are reviewed by the Equal Opportunities Commission and enforced by employment tribunals. It is proposed to establish a commission for Equality and Human Rights that will cover all heads of discrimination.
Restrictions preventing women from working where they wish, including the right to work underground, were removed by the Employment Act 1989.

Single European Act - The legislation passed in 1986 in the European Community (in force from 1 July 1987) that committed all member states to an integrated method of trading with no frontiers between countries by 31 December 1992. It was the first Act to amend the principles of the Treaty of Rome. In practice, some of its terms on harmonization, such as the insurance market, have taken considerably longer to implement. The main creation of the Single European Act is the Single Market for trading in goods and services within the EU.

Whistle-blowing - n. The disclosure by an employee of information regarding his employer's business. In certain circumstances (with respect to disclosures of wrongdoing by the employer and provided the disclosure is made in the public interest) employees are given legal protection from retaliation by the employer. The Public Interest Disclosure Act 1998 protects employees from dismissal, or subjection to any detriment, with respect to certain types of disclosures. Contractual provisions attempting to oust the operation of the Act (e.g. the use of 'gagging clauses' in an employment contract) are rendered void by the Act. Qualifying disclosures must be made in good faith and must pertain to any of the following:
criminal offences;
the breach of a legal obligation;
a miscarriage of justice;
a danger to the health or safety of any individual;
damage to the environment;
deliberate covering up of information tending to show any of the above matters. Qualifying disclosures may be made to the employer or (by means of internal procedures) to a legal adviser, a minister of the Crown, or a prescribed regulator. If an employee is unable to make disclosures to any of these named persons, or fears retaliation in making such disclosures, then wider disclosure may be made (as long as this is not for personal gain). Wider disclosure could be, for example, to the police, the media, a Member of Parliament, or a non-prescribed regulator. Workers and employees who are dismissed or subjected to a detriment as a result of making a qualifying disclosure to an appropriate recipient can, within three months of such action, make a complaint to an employment tribunal. Case: Street v Derbyshire Unemployed Workers' Centre [2004] EWCA Civ 964, [2004] IRLR 687.

Source: Oxford Dictionary of Law. Ed. Elizabeth A. Martin and Jonathan Law. Oxford University Press, 2006. Oxford Reference Online. Oxford University Press. 10 January 2007 www.oxfordreference.com