Now and again a judgment comes out which has an importance that transcends the issue being litigated in the case. If we, the authors of this blog, were betting types, we’d bet that the judgment of the Grand Chamber of the Court of Justice of 18 March 2014 in Case C-427/12 Commission v European Parliament and Council is such a judgment.

Why do we think that ? Because it is, we think, the first judgment that adumbrates expressly a “reasonableness” test for judicial review of legislative activity. If we are wrong about that, please leave a comment setting us right (and I take responsibility for the oversight, not Maria).

The facts of the case are hardly the stuff of epic legal battles but here goes.

The European Parliament and the Council had adopted Regulation 528/2012 of 22 May 2012 concerning the making available on the market and use of biocidal products (OJ 2012 L 167, p. 1). That Regulation, as adopted, contained an Article 80 (1) which provides for the adoption by the Commission of measures setting the fees payable to the European Chemicals Agency by an “implementing act” based on Article 291 (2) TFEU and not, as the Commission wanted, a “delegated act” adopted under Article 290 (1) TFEU.

The distinction between “implementing acts” and “delegated acts” was one of the innovations of the Lisbon Treaty. The Commission had issued a Communication on delegated acts on 9 December 2009 in COM (2009) 673 final (which shows that the Commission considered the distinction to be a big deal).

When the Commission made its proposal (COM (2009) 267 final) on 12 June 2009 to the Parliament and Council for a new biocides regulation, it included an Article 70 providing that it should subsequently adopt delegated measures on the fees payable to the Agency. During the legislative process, that provision was changed into what is now Article 80 of the Regulation and provides for an “implementing act” to be adopted by the Commission instead.

Consequently, the Commission asked the Court of Justice to annul Article 80 (1) of the Regulation. The Commission submitted that the Parliament and Council were wrong to choose an implementing act rather than a delegated act. The choice made by the EU legislature to confer on it the power to adopt a delegated act or an implementing act must, it contended, be based on objective and clear factors that are amenable to judicial review. The Commission submitted, first, that the respective scopes of Articles 290 TFEU and 291 TFEU are different and mutually exclusive. Secondly, in the light of the actual wording of those articles, the only decisive criterion which makes it possible for a delegated act to be distinguished from an implementing act relates to the nature and purpose of the powers conferred on the Commission. If the purpose of those powers is to adopt non-essential rules of general application, having the legal function of completing the normative framework of the legislative act concerned, those rules supplement the legislative act in accordance with the first subparagraph of Article 290(1) TFEU. If, by contrast, those rules are intended merely to give effect to the rules already laid down in the basic act while ensuring uniform conditions of application within the European Union, they come under Article 291 TFEU. The exercise of implementing powers under Article 291 TFEU may in no way affect the content of the legislative act. The Commission then claimed that an examination of the nature and purpose of the powers actually conferred on it by Article 80(1) showed that it will have to adopt an act supplementing certain non-essential elements of the legislative act within the meaning of Article 290 TFEU.

The Court disagreed. It dismissed the Commission’s action for annulment and upheld the legality of Article 80 (1) of the Regulation.

The Court begins by tracing the history of the distinction between the two types of measures. It held that before the Treaty of Lisbon, the expression ‘implementing powers’ in the third indent of Article 202 EC covered the power to implement, at EU level, an EU legislative act or certain EU provisions and also, in certain circumstances, the power to adopt normative acts which supplement or amend certain non-essential elements of a legislative act. The European Convention proposed making a distinction between those two types of power, which is found in Articles I‑35 and I‑36 of the Draft Treaty establishing a Constitution for Europe. That amendment was ultimately incorporated in the Treaty of Lisbon in Articles 290 TFEU and 291 TFEU.

It describes briefly the difference between the two.

When an EU legislative act confers a delegated power on the Commission pursuant to Article 290(1) TFEU, the Commission must adopt rules which supplement or amend certain non-essential elements of that act : the objectives, content, scope and duration of the delegation of power must be explicitly defined in the legislative act granting such a delegation. That requirement implies that the purpose of granting a delegated power is to achieve the adoption of rules coming within the regulatory framework as defined by the basic legislative act. By contrast, when the EU legislature confers an implementing power on the Commission on the basis of Article 291(2) TFEU, the Commission is called on to provide further detail in relation to the content of a legislative act, in order to ensure that it is implemented under uniform conditions in all Member States.

And then comes the punch line:

It must be noted that the EU legislature has discretion when it decides to confer a delegated power on the Commission pursuant to Article 290(1) TFEU or an implementing power pursuant to Article 291(2) TFEU. Consequently, judicial review is limited to manifest errors of assessment as to whether the EU legislature could reasonably have taken the view, first, that, in order to be implemented, the legal framework which it laid down regarding the system of fees referred to in Article 80(1) of Regulation No 528/2012 needs only the addition of further detail, without its non-essential elements having to be amended or supplemented and, secondly, that the provisions of Regulation No 528/2012 relating to that system require uniform conditions for implementation. (underlining added). 

The Court goes on to examine in some detail what Article 80 (1) of the Regulation actually did.

It then concludes as follows:

It follows from the foregoing that the EU legislature could reasonably take the view that Article 80(1) of Regulation No 528/2012 confers on the Commission the power, not to supplement certain non-essential elements of that legislative act, but to provide further detail in relation to the normative content of that act, in accordance with Article 291(2) TFEU.

In the second place, since the system of fees referred to in Article 80(1) of Regulation No 528/2012 relates to fees payable to an EU agency, the conferral of an implementing power on the Commission under Article 291(2) TFEU may be considered reasonable for the purposes of ensuring uniform conditions for the implementation of that system within the European Union.

Lots of “reasonable” and “reasonableness” added to the manifest error of assessment type of scrutiny.

Have a look at Advocate General Cruz Villalón’s opinion of 19 December 2013 too.

Weighty academic comment is beyond the scope of this blog and there will surely be lots of it on this judgment. Nevertheless, we feel compelled to ask a few questions. Does this judgment mark the start of the use by the Court of Justice of the “Wednesbury unreasonableness” test familiar to English administrative lawyers since the English Court of Appeal’s judgment of 1947 in Associated Provincial Picture Houses Ltd v Wednesbury Corporation [1948] 1 K.B. 223 ?

Or does the Court’s judgment in Case C-427/12 mark the start of something a bit like the U.S. Supreme Court’s “Chevron deference” as set out in Chevron U.S.A., Inc. v. Natural Resources Defense Council, Inc., 467 U.S. 837 (1984) ?

Admittedly, Case C-427/12 deals with legislative, not administrative, action and discretion. Nevertheless, the way the Court of Justice set out the test it applies in reviewing the exercise of legislative discretion is rather intriguing.