INTRODUCTION

Principle of proportionality is a constitutional standard under the European Union (hereinafter referred to as EU) law. The purpose of this principle is to evaluate Union actions (whether be legislative or executive or administrative). Such a categorization, however, is not well defined under the EU law, which further complicates the role of proportionality principle in this context. Although, it is quite difficult to assess whether this principle has a specific role when it comes to executive actions of EU, but it is possible to assess how this principle functions as a methodological tool in judicial review and further act as a restriction on the exercise of public authority.[1]

One of the approaches for understanding role of the proportionality is to examine the interests which it serves. However, in EU law, it is not always easy. A major factor which contributes to this complexity is that proportionality exists as a separate and ‘free-standing’ head of judicial review for all actions of the EU. This means that the substantive interest which is served by the principle of proportionality can be considerably concealed. For instance, when the grounds of judicial review are of compliance with the fundamental rights, proportionality serves the interest of fundamental rights. However, when the grounds for judicial review are of compliance with the proportionality itself, the interest served may be either fundamental rights or otherwise.[2] The expression “otherwise” is also ambiguous and this ambiguity may provide a room for misapplication of the principle.

Proportionality PRINCIPLE under the EU LAW

The proportionality principle serves as a framework for assessing the legitimacy of actions which pursue a legitimate aim but may in certain cases infringe upon some other legally protected interest, generally a right. This principle primarily seeks to balance the conflicting interests, however, it is not an independent principle of review, as it does not refer to a particular independent substantive value. 

This principle requires a “three-stage analysis” for assessing the legality of a certain state action. Firstly, the measure should be rational and must be connected to some legitimate objective of the government (suitability). Secondly, the authorities must show that the chosen method amounts to the least intruding option among the other equally effective alternatives which are available for achieving such stated aim (necessity). Thirdly, the policy must stand firm against the strict scrutiny through the cost-benefit analysis, even in cases where such action is both suitable and necessary (proportionality stricto sensu). Proportionality stricto sensu is also often termed as a “balancing test”, as also observed byMöller:

“…there are at least two senses of balancing. The first we might call “interest balancing”. It operates according to a cost-benefit analysis: the respective rights or interests are “measured,” placed on a set of scales, and their weight is compared. The second kind of balancing we might call “balancing as reasoning” [i.e.] (…) making a moral argument as to which of the competing interests takes priority in the case at hand, and this moral argument may or may not proceed by way of interest balancing (interest balancing is one kind of moral reasoning but not the only one).”[3]

Generally, it is the second kind which the courts apply when dealing with cases related to (fundamental) rights.

Functions of Proportionality principle under the EU Law

Rights-proportionality

This primary classification aligns with the traditional juridical function of the proportionality principle. This maintains a doctrinal continuity with its historical application. Such application, primarily rights-focused, scrutinizes national measures which potentially infringes upon the entitlements which are established under foundational treaties of the EU or other derivative legislations as well as Union actions which affects the guaranteed protections.[4] Under article 52(3) of the Charter, legal authority is provided to the assessment of fundamental rights complying within its jurisdictional purview.[5]

For instance, the provisions relating to the internal market with their transformation of economic liberties into the actionable claims subjects themselves to proportionality principle. The jurisprudence concerning EU regularly allows private parties to enforce a Treaty-based entitlement against States with the help of direct effects mechanisms. Such an operational framework ensures that individuals have the right to challenge regulatory overreach even though legislations primarily govern the interstate obligations and not the citizen-state relations.[6]

The punitive measures across the jurisdictions of EU are also governed by the principle of proportionality. It includes both Union-imposed sanctions as well as the member state-imposed penalties, notwithstanding their nature being criminal or administrative. Such penalties may include restrictions on personal liberty or monetary penalties. Article 49(3) of the EU Charter provides for the necessity for a proportionate penalty and mandates that there should be a direct relation between the penalty and the gravity of the offence.

Rights proportionality may also be conducted under the separate heading of “proportionality” in order to further the protected interested, as can be illustrated by the BAT[7] case. In this case the primary contention was with respect to the first Tobacco Products Directive[8]. Based on general principle of proportionality, it had restricted the use of certain words, and figures on the packages of cigarettes. The court had held, in this case, that such a Directive was proportionate and was in line with the object of public health as “there was no alternative measure which could have attained that objective as efficiently while being less restrictive of the rights of the manufacturers of tobacco products.”[9]

Subsidiarity-proportionality

Proportionality principle intersect with the subsidiarity (Article 5(3) TEU), particularly, when considering shared competences between the EU and its member states, requiring a balance between protecting authority of Member States and achieving objectives of the EU. This specific application is termed as “subsidiarity-proportionality.”[10]

The principle of subsidiarity is applied only after confirming the competence of the EU in a specific area, addressing whether governance should lie with the EU institutions or national/local authorities, however, prioritizing the latter when feasible.

Article 5(3) TEU states that in policy areas which are not exclusively reserved for EU, the Union may only act  if following conditions are fulfilled:[11]

• Member States are not able to adequately fulfil the goals of the proposed action independently, and
• The EU can achieve those objectives in a more effective manner due to the broader scope or impact of the concerned action.

According to Lenaerts and Van Nuffel, the principle of subsidiarity involves two primary conditions: a decentralization criterion (“only if”) and an effectiveness criterion (“better”). Further, it also includes a proportionality exercise, which can be inferred from the phrase “in so far as,” which seeks to balance the protection of national powers along with the achievement of objectives of the EU.[12] This connection between subsidiarity and proportionality also explains why many researchers highlight the conceptual overlap between the subsidiarity principle under Article 5(3) TEU and the proportionality requirement under Article 5(4) TEU. Latter explicitly provides that the measures of EU must strictly remain limited to the minimum which is necessary to accomplish Treaty goals, in substance implementation.[13]

De Búrca also notes “under paragraph two [now three], the question of what kind of action the Community should take is determined by reference to the aims of the action and not going beyond these aims. But clearly, the more precisely the ‘aims’ of an action are defined for the purposes of paragraph two [now three], the more this overlaps with paragraph three [now four] and becomes also a question of  how or what kind of Community power should be exercised, so that the proportionality question is subsumed into the second question.”[14]

Guthman recognizes that while considerations regarding proportionality does exists within the subsidiarity framework of Article 5(3) TEU, Article 5(4) TEU creates a separate proportionality assessment which extends beyond the scope of subsidiarity. Further, she also says that the abovesaid principles are interconnected, however, they are distinct analytically, because Article 5(4) has an universal application to all EU competences but Article 5(3), on the other hand focuses exclusively on shared competences. This difference can be traced to the desire of the Member States to push for the authority of EU over all policy domains.[15]

Schütze has also interpreted subsidiarity, however, from a lens of “federal proportionality”, framing it as a safeguard for the national self-governance against unreasonable encroachment  by the EU. He argued that Article 5(4) should retain the traditional role played by proportionality, i.e., of protection of individual liberties from the state overreach, while Article 5(3) seeks to address the preservation of collective autonomy. Although it may be theoretically correct, but such distinction lacks textual support in the treaties of EU and also is not reflected in the judicial interpretations.[16]

Burdens-proportionality

Article 5(4) of TEU provides that the actions of EU must not exceed than what is necessary for achieving the objectives proposed by the treaties. While proportionality do serve as substantive value by balancing the goals against restricted interests, however, the Treaty provision itself  has failed to specify such protected interests, which leads to ambiguity with respect to its practical application. Further, Protocol (No. 2) addresses this gap by emphasizing that legislative proposals must aim to minimize the financial and administrative burdens upon institutions of the EU, Member States, local authorities, businesses, as well as the citizens. The principle of burdens-proportionality is, thus, rooted in Protocol (No. 2).[17]

This interest has assumed a constitutional dimension, as unrestricted burdens has the potential to invalidate legislative or executive actions under Article 5(4) TEU. It is pertinent to note that this provision coexists with the general principle of proportionality and does not supersede it. Such framework also aligns with the Better Regulation Agenda of the EU, which aims for cost-effectiveness.[18]

There is a difference between burdens-proportionality and other forms of proportionality. First, Article 5(4) of TEU applies to both the competences, i.e., shared and exclusive, of the EU, while subsidiarity under Article 5(3) TEU is limited to shared competence only. Second, burdens-proportionality seeks to protect a large range of interests, including institutional efficiency of the EU along with the autonomy of Member States and private rights. Third, the operationalization of administration to a minimum in burdens-proportionality resembles with the historical principles as were provided under the ECSC Treaty.[19]

Not Proportionality

The principle of conferral mandates that the EU should have competence for acting in a given field. Two questions which can be linked to this principle are “whether the correct basis has been chosen” and “whether both the substantive and procedural legal basis requirements have been complied with.”

Under judicial review, a means-ends test can be employed for evaluating the question of competence as well as the choice of legal basis. When the competence as defined in a legal basis is coupled in terms of pursuing objectives, instead of the subject matter, the question of whether a measure is suitable or appropriate may arise at the time of the assessment of its legal foundation. In such case, the court will scrutinize the effects of measures for determining if they “truly pursues the objectives set forth by the Community [now Union] legislature.” However, this must align with the objectives set forth in the legal basis. In case a measure exceeds the objectives mentioned in the Treaty, it must be held as ultra vires for exceeding the competence which is conferred upon the EU by Treaties.

For instance, the Tobacco Advertising I applies the means-ends test for assessing the legal basis. Court held that elements which did not accord with the objectives outlined in Article 114 TFEU were included in the Tobacco Advertising Directive, thereby, deeming them “inappropriate”.

Principle of Proportionality in the Context of Shared Competences

Proportionality principle is an important aspect of the EU law. It serves as an essential mechanism for the purpose of balancing the competing legal interests and ensures that the power exercised by EU is justified as well as necessary. The significance of this principle becomes more definite within the context of shared competence, where both EU and the Member States may legislate and also adopt legally binding Acts.

The proportionality operates as an underlying constitutional principle which supports various aspects of EU law. This includes legislative processes, administrative actions and judicial decisions. It further mandates that actions which are taken by the EU must not exceed than what is necessary for achievement of its objectives. This does not only helps in the protection of individual rights but also helps to maintain a balance between EU and its Members, and safeguards national autonomy while facilitating the achievement of collective objectives.[20]

Where the legislative authority is shared between the EU and its Members, the proportionality principle serves as a safeguard against the unreasonable interference by the EU in domestic affairs. Article 5(3) TEU established the principle of subsidiarity providing for proportionality by determining as to when should EU act and not the Member States. Hence, the proportionality adds an additional layer which ensures that whenever EU  chooses to legislate on a matter, it should do so in a manner which is proportionate to the objectives proposed and further avoids disproportionate burdens on Member States.[21]

For example, where EU seeks to implement policies with respect to the areas traditionally managed at the national level (e.g., health care, education, or environmental regulation) the proportionality principle compels the EU to carefully assess the necessity as well as the appropriateness of its actions. Such assessment involves weighing of intended benefits of EU legislation against the potential costs and impacts on the sovereignty of the Member States and the rights of individuals.

Further, proportionality protects fundamental rights which are enshrined under the Charter of Fundamental Rights of the European Union. Additionally, it ensures that measures which are adopted by institutions of the EU should not unduly infringe upon these rights. For example, where EU legislation addresses public health concerns, proportionality requires that such measures must also respect to an individual’s right to privacy and property, mandating a delicate balancing act which demonstrates careful consideration of all impacted interests.[22]

In practicality, the application of proportionality in judicial decisions often reveals the challenges and complexities which are involved in striking such balance. The European Court of Justice (ECJ) has encountered various scenarios where it were to determine whether actions of the institutions of EU or Member States were justified under the proportionality principle. For instance, in the Gauweiler case[23], the ECJ reviewed the proportionality of actions taken under a monetary policy. The decisions of courts in such cases illustrates the ambiguity that can arise under “free-standing proportionality,” where it may be unclear as to which specific interests the Court is protecting, and how it is balancing the competing issues.[24]

Such an uncertainty also poses the risks for legal certainty and predictability in EU law. If different courts evaluate the same factual scenario under the banner of proportionality, however, reach divergent conclusions regarding which interests are prioritized, it may lead to inconsistencies in the application of EU law across Member States.

CONCLUSION

The proportionality principle stands as an underlying constitutional safeguard within the EU law, particularly in the domain of shared competences. As aforesaid, proportionality, as is enshrined in Article 5(4) of TEU, functions as an innovative limiting mechanism upon the powers of the EU.  It ensures that EU action should not exceed what is necessary for the achievement of its objectives. The principle has evolved considerably since its implied recognition in early jurisprudence, particularly in the 1956 Federation Charbonnière case, to its formal adoption in the Maastricht Treaty and subsequent refinement through the judicial decisions.

In the context of shared competence, proportionality operates as a final check in the three-step constitutional assessment. After ascertaining that the EU possesses competence under the principle of conferral, and determining that the EU-level action is appropriate as per the subsidiarity principle, proportionality examines how such action should be executed. Hence, it can be said that proportionality comprises three essential elements: suitability of the measure in order to achieve legitimate aims, the necessity of the measure (i.e., employing the least restrictive means), and proportionality stricto sensu.

The proportionality principle has, thus, acquired a distinct “federal dimension” in the EU law, which serves to protect national regulatory autonomy against the unwarranted encroachment by the EU. Further, It provides a balance to the potential “competence creep” by requiring that institutions of the EU should demonstrate restraint even when they are legally permitted to act. By utilising this mechanism, proportionality helps in maintaining the delicate federal balance between EU objectives and  the sovereignty of the Member State.

REFERENCE

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[1] G. De Búrca, ‘The Principle of Proportionality and its Application in EC Law’ (1998) 13 Yearbook of European Law, 105, at p. 106.

[2] R. Alexy, A Theory of Constitutional Rights (OUP, 2002).

[3] K. Möller, ‘Proportionality: Challenging the Critics’ (2012) ICON 709, at p. 711.

[4] K. Lenaerts and P. Van Nuffel, European Union Law (Sweet & Maxwell, 3rd ed., 2011), at 7-034.

[5] Case C-293/12 Digital Rights Ireland, ECLI:EU:C:2014:238.

[6] Verwaltungsrechtsdogmatik unter dem Einfluß des Gemeinschaftsrechts’ (2001) EuR, 376, at p. 382.

[7] Case C-491/01 The Queen v Secretary of State for Health, ex parte British American Tobacco (Investments) Ltd and Imperial Tobacco Ltd. (‘BAT’), ECLI:EU:C:2002:741.

[8] Directive 2001/37 on the approximation of laws, regulations and administrative provisions of Member States concerning the manufacture, presentation and sale of tobacco products, OJ [2001] L194, 18.7.2001.

[9] A. Barak, Proportionality – Constitutional Rights and their Limitations (CUP, 2012), Ch. 6 ‘The

Nature and Function of Proportionality’, at p. 132.

[10] V. Kosta, Fundamental Rights in EU Internal Market Legislation (Hart Publishing, 2015), Chapter 5, p. 172.

[11] Case C-210/03 Swedish Match and Others, ECLI:EU:C:2004:802.

[12] K. Lenaerts and P. Van Nuffel, European Union Law (Sweet & Maxwell, 3rd ed., 2011), at 7-028.

[13] K. Lenaerts and P. Van Nuffel, European Union Law (Sweet & Maxwell, 3rd ed., 2011), at 7-039.

[14] G. De Búrca, ‘The Principle of Subsidiarity and the Court of Justice as an Institutional Actor’ (1998) 36(2) Journal of Common Market Studies 217, at 220.

[15] K. Guthman, Constitutional Foundations of European Contract Law (2014), at p. 308.

[16] R. Schütze, ‘Subsidiarity after Lisbon (2009) 68(3) The Cambridge Law Journal 525, at 533.

[17] Protocol (No 2) on the Application of the Principles of Subsidiarity and Proportionality, Art. 5.

[18] S. Weatherill, ‘The Challenge of Better Regulation’ in S. Weatherill (ed), Better Regulation (Hart Publishing, Bloomsbury Collections 2007), at p. 4.

[19] Case C-426/93 Commission v Germany, ECLI:EU:C:1995:367.

[20] Dahl, A. (1999). Competence and Subsidiarity Perspectives in EU Climate Change Policy: From Harmonisation To Differentiation? Energy & Environment, 10(3), 333–352.

[21] Case T-143/06 MTZ Polyfilms, ECLI:EU:T:2009:441.

[22] Katcherian, J. E. (2012). Unraveling the Paradox: Competence and the Failure of Subsidiarity in the European Union. Political and Legal Anthropology Review, 35(2), 271–288.

[23] Case C-62/14 Peter Gauweiler and Others v Deutscher Bundestag, ECLI:EU:C:2015:400.

[24] A. Türk, Judicial Review in EU Law (Edward Elgar Publishing, 2010), at p. 143.