Article 263 TFEU

Judicial review is a mechanism for testing the legality of decisions or actions made by the
legislative and executive branches of government. It enables an independent court to
consider whether a legally binding measure violates procedural or substantive rules of law
and should therefore be rendered inapplicable.1 This mechanism is said to ‘lie at the heart of
good democratic structure’2 which prevents the abuse of power by highly independent
Community organs.3 The EU therefore needs to provide a mechanism where the legality of
EU legal acts can be judicially reviewed. Article 263 of the Treaty on the Functioning of the
European Union (TFEU) is the EU’s judicial procedure which allows the Court of Justice of
the European Union to review binding acts of the EU.4 This will be discussed in detail and in
particular the locus standi of natural and legal persons under Article 263 TFEU.

Article 263 TFEU deals with direct challenges to the legality of EU acts. 5 It provides that
when proceedings under Article 263 TFEU are successful the act in question will be declared
void.6 The Court of Justice of the European Union shall review the legality of any act of the
EU other than recommendations and opinions. This is because recommendations and
opinion have no binding effect and can’t be challenged. Only acts with legal effects may be
challenged, for example, directives, regulations and decisions can all be challenged directly.
This was reflected in Article 263 after the Treaty of Lisbon which amended the previous
Article 230 of the EC Treaty. Post-Lisbon Treaty, the three main reviewable acts include:
legislative acts, regulatory acts and acts and can all be challenged if brought within the
correct time limit and if the party has locus standi.

For an individual to take action by way of judicial review they must have locus standi. This
translates in Latin to ‘place of standing’ and is the right or capacity to bring an action or to
appear in court.7 The question of locus standi, being who is entitled to challenge the legality
of a decision, is a controversial one. There’re 3 categories of applicants who can raise an
action for judicial review; privileged applicants, semi-privileged applicants and non-
privileged applicants. Privileged applicants are entitled to challenge any binding act under
Article 263, this includes Member States, European Parliament, the Council and the
Commission. Semi-privileged applicants’ jurisdiction is confined to reviewing such acts of
those institutions that are necessary for the protection of their prerogatives, consists of
Court of Auditors, ECB and Committee of the Regions.8 The locus standi of non-privileged
applicants is much more limited and more restrictive than that of the previous two and this
has been criticised greatly.

1
Steiner & Woods, ‘EU Law’ (13th edn, Oxford University Press 2017)266
2
Lawrence W. Gormley, ‘Judicial Review: Advice for the Deaf?’ (2005) 29(4) Fordham International Law Journal
655
3
Ibid[657]
4
Ewan Kirk, ‘EU Law’ (4th edn, Pearson Education Limited 2015)62
5
Paul Craig & Grainne De Burca, ‘EU Law: Text, Cases and Materials’ (7th edn, Oxford University Press 2020)560
6
(n1)[267]
7
Cambridge Dictionary (Cambridge University Press 2021)<
https://dictionary.cambridge.org/dictionary/english/locus-standi>
8
(n1)[271]
Article 263 allows a non-privileged applicant- a natural or legal person- to challenge an act
of the EU in 3 types of situations. The first and least problematic type is when the act is
addressed to that person. When the act is addressed to the individual themselves there is
no problem to when standing exists- provided the action is brought within 2 months. It is
only when a natural or legal person seeks to challenge an act addressed to someone else,
when the controversy arises. The act must be of direct and individual concern to the person
seeking to challenge; or against a regulatory act which is of direct concern to them and does
not entail implementing measures.9

Direct and Individual Concern

The test of direct concern has a traditionally lower profile than the test of individual
concern10 and is uncontroversial in practice11. This is mainly due to the court being more
consistent and less rigid in their interpretation12. The concept of direct concern is that there
needs to be a direct, causal link between the act that is being challenged and the damage
the person has suffered.13 It must also leave no discretion to the addressees of the measure,
who’re entrusted with its implementation.14 This idea has been extended through case law;
the court has accepted that in situations where some degree of discretion is given to the
addressee, but this discretion was purely theoretical, the same conclusion should follow. 15

The idea of direct concern is demonstrated in the subsequent cases. The case of NV
International Fruit Company v Commission16 concerned a group of fruit importers who
challenged a regulation which limited the quantity of import licenses between a certain
period of time. The quantity of licences was left up to national agencies to inform the
commission of the size of licences which were requested during the preceding week. The
ECJ found individual concern and the question was if there was direct concern. It held that
the national authorities don't enjoy any discretion in the matter and although it appeared to
be a general measure it was in fact disguised to be a ‘bundle of decisions’17 addressed to
each applicant where the commission decides the issues of the import licences. This was
therefore held that it does affect each party directly.

This decision can be compared to the one of Municipality of Differdange v Commission18

where the Commission authorised Luxembourg to grant state aid to steel firms if they
reduced their capacity. The municipality sought to challenge the decision and argued they
did have direct and individual concern because the reduction and closing factories would
mean a reduction in tax collections. It was held in this case however that the establishments
9
Consolidated Version of the Treaty on the Functioning of the European Union OJ C 326, 26.10.2012, p. 162–
163
10
Albertina Albers Llorens, ‘The Standing of Private Parties to Challenge Community Measures: Has the
European Court Missed the Boats?’ (2003) 62(1) Cambridge Law Journal 75
11
(n2)[659]
12
(n10)[75]
13
Magdalena Kucko, ‘The Status of Natural or Legal Persons According to the Annulment Procedure Post-
Lisbon’ (2017) LSE Law Review 106
14
(n5)[566]
15
(n10)[75]
16
Case 41-44/70 [1971] ECR 411
17
(n1)[274]
18
Case 222/83 [1984]ECR 2889
weren’t identified which had to be reduced and it was held there was a margin of discretion
for member states, thus the municipality being directly concerned wasn't satisfied.

Direct concern is more easily applied than that of individual concern. The court has
interpretated the test of individual concern very narrowly19and the court has frequently
found that individuals and companies that managed to satisfy the test of individual concern
were also directly concerned.20

The court first interpreted the term ‘individual concern’ in the case Plaumann & Co v
Commission.21 The case concerned a Commission decision to the German authorities which
refused permission to suspend custom duties on clementine importers from outside the EU.
Mr Plaumann was an importer of clementine's, who sought judicial review of Commission
decision and claimed to be individually concerned. The court subsequently took the
opportunity to set out the test of individual concern and concluded a person must prove the
decision affects them because of ‘certain characteristic which peculiarly relevant to him, or
by reason of circumstances in which he is differentiated from all other person, and not by
the mere fact that he belongs to a class of persons who are affected.’22 The court therefore
held that the importers didn’t satisfy this criterion, although the decision did affect the
importers, ‘by way of a commercial activity that anyone could practice in future’ 23 meant it
didn’t distinguish the applicant, therefore didn’t make them individually concerned. In other
words, in theory, anyone could import clemintines, therefore aren’t different from other
persons.

The Court of Justice have continually applied a strict interpretation of the Plaummann test,
and the courts included that to be individually concerned, they needed to belong to ‘a group
of people that couldn’t be enlarged after the measure entered into force.’ 24 This was known
as the ‘closed class test’ and has received much criticism for its ‘formalistic and retroactive
nature’25 and has only been satisfied when an applicant pursued the course of action before
the enactment of a measure26. A case where it was established that the individual was part
of a close group and therefore had individual concern was the case Alfred Toepfer and
Getreide-Import Gesellschaft v Commission27. It was held in this case that those who had
applied for a licence on the 1st October was part of a fixed closed class because they could
be very specifically defined and impossible for anyone else to join.28

The strict interpretation of the Plaumann test has essentially prevented private parties from
exercising their right to judicial redress29 and has led to the inadmissibility of most actions
brought by private individuals30. The test has come under much criticism and the application
19
(n10)[74]
20
Ibid[76]
21
Case 25-62 [1963] ECR 95
22
Ibid
23
(n10[77]
24
Ibid
25
Ibid
26
Ibid
27
Case 106 & 107/63 [1965]ECR 405
28
ibid
29
(n12)[109]
30
(n10)[81]
of the test is said to be economically unrealistic31. The test is based on the assumption that
when a contested decision is made, the attributes which distinguish people from others are
possessed. However, the fact that people can join the trade and acquire these attributes
does not mean they are presently part of a category.32 This reasoning makes it difficult for
individuals to satisfy individual concern and makes it very difficult to succeed.

The Plaumann test also provided controversy when the applicant sought to bring a
challenge against a directive or decision. Prior to the Lisbon Treaty, although it was
ambiguous, the court established that private parties could challenge the legality of
directives, if they satisfied the Plaumann requirement.33 The situation with regulations was
more complicated due to its general application and therefore cannot be challenged by an
individual. Therefore, in order to bring an action against a regulation the CJEU would have to
be convinced the regulation was merely a ‘disguised decision’ in order to show the
individual concern.34 In order to determine a regulation the court applied the even stricter
abstract terminology test. This required, as shown in the case Calpak35, the court to look
behind the form of the measure in order to determine whether in substance it was a
regulation or not.36 The issue is that it was possible to ‘draft norms in this manner, thus, to
immunize them from attack’37, in other words, as long as a directive or regulation is written
in sufficiently general terms, that will be sufficient to not be individually concerning an
individual. If it’s held that the regulation is a ‘true regulation’ then the applicant won’t be
held to have individual concern and will be unable to challenge the act.

The case of Codorniu SA v Council 38 was however a very liberalising move by the court,
which changed the legal stance on this situation. The case of Codorniu held that if a
regulation was a ‘true regulation’ it could nevertheless be of individual concern to the
applicant39, provided it satisfies the Plaumann test. This was however never followed by the
court and idea that Codorniu might lead to a test for standing based on adverse impact,
judged on the facts of the case, wasn't realised.40

Proposals for new interpretation of Individual Concern

There were various attempts, through case law, to move the system towards a more
liberalised, lenient interpretation of individual concern. The first of these was delivered by
Advocate General Jacobs in the case Union de Pequenos Agricultres (UPA) v Council41 which
was described as an ‘earthquake which shook the Plateau de Kirtchberg to its foundations’. 42
This case concerned challenges by Spanish trade associations against a commission
regulation which withdrew certain types of agricultural aid for small producers. UPA
31
(n5)[570]
32
ibid[571]
33
(n12)[108]
34
(n4)[67]
35
Cases 789 & 790/79 Calpak v Commission [1980]ECR 1949
36
(n5)[572]
37
Ibid
38
Case C-309/89 ECR I-1853
39
(n12)[109]
40
A Arnull, ‘Private Applicants and the Action for Annulment since Codorniu’ (2001)38 CMLRev 7
41
Case C-50/00 P [2002]ECR-6677
42
(n2)[665]
accepted it was a true regulation and therefore they couldn’t show individual concern.
However, on appeal they argued they have no alternative means for judicial review and
therefore should be held admissible. Advocate General Jacobs took the opportunity and
proposed a new liberal interpretation of individual concern and believed a private party
should be held individually concerned by a Community measure whereby ‘the measure has
or is liable to have a substantial adverse effect on his interests.’43 He thus shifted the focus
from a formalistic test to one based on the economic impact of the EU.44 This would also
ensure that individuals who are adversely effected by an act would never be without a
remedy and would ensure effective judicial protection for individuals.

The General Court supported Advocate General Jacobs opinion in UPA in the case Jego-
Quere v Commission45 and provided a further easing of the Plaumann test. The case
concerned a French company challenging a Commission regulation which imposed a
minimum mesh size on fishing nets in certain waters. As in the UPA case the pursuer had no
individual concern under the Plaumann test and the only way for the claimant to challenge
the regulation would be by violating the rules it laid down and claiming their illegality by
way of defence in national proceedings.46 The General Court stated individuals cannot break
the law in order to gain justice and proposed an alternative interpretation of individual
concern. It was held a natural or legal person should be considered individually concerned
when ‘the measure in question affects his legal position in a manner which is both definite
and immediate, by restricting his rights or imposing obligations on him’ 47. The French
company satisfied the new test and was held admissible.

In 2002, the European Court delivered its judgement in UPA v Council 48in a special plenary
session. It wasn't the ground-breaking decision that many were hoping for and the court
quashed any potential advancement of the Plaumann test. The court reaffirmed the
Plaumann test entitlement and stated that it was for member states to establish a system of
legal remedies and procedures which ensured respect for the right to effective judicial
protection.49 The court also overturned the decision in Jego-Quere on appeal reaffirming the
Plaumann tests entitlement.

Regulatory Act

The Lisbon Treaty came into force in 2007 and reformed the rules on standing which
provided an exception for individual concern. It allowed a natural or legal person to
challenge a regulatory act which is of direct concern to them and does not entail
implementing measures.50 The term ‘regulatory act’ and ‘implementing measures’ were
both discussed by the courts in various cases.

43
(n37)
44
Catherine Barnard and Steve Peers (eds), European Union Law (OUP 2014)274.
45
Case T-177/01 [2002]ECR II-2365
46
(n1)[283]
47
(n44)51
48
(n40)
49
(n2)674
50
(n9)
A regulatory act wasn’t defined when it first appeared in Article 263, and the question of the
meaning of a regulatory act arose in the case of Inuit Tapiriit v Kanatami v Parliament and
Council51. The case concerned a group of entities challenging a regulation which prohibited
the marketing of seal products. The general court dismissed the action and concluded it
wasn’t a regulatory act and individual concern was therefore needed. It was stated
regulatory acts are understood as ‘covering all acts of general application apart from
legislative acts.’52 This was reaffirmed a couple weeks later in Microban International v
Commission53 where it was held the decision was a non-legislative general application and
was thus a regulatory act where individual concern didn’t need to be satisfied. This new
approach only applies with regulatory acts and the issue of this ruling arises when a
challenge is made against a legislative act. They would be unable to challenge this measure
directly because they wouldn‘t be within the scope of the new standing provision and would
have to establish individual concern, which would be difficult with the existing case law. 54

Under Article 263, the exception of individual concern only applies to regulatory acts that’s
of direct concern and doesn’t entail implementing action. The case Telefonica SA v
Commission55 was the first case which gave an interpretation of the concept of
implementing measures. The case concerned a commission decision that a Spanish financial
scheme constituted legal aid. It was stated in this case that in order to understand whether
the measure that is being challenged does entail implementing measures, reference should
be made exclusively to the subject matter of the action and where an applicant seek only
the partial annulment of an act. It’s solely any implementing measures which that part of
the act may entail that must, as the case may be, be taken into consideration.’ 56 Thus the
court rejected the application as the decision did entail implementing measures.

This approach that was adopted in Telefonica was held to be problematic, due to the fact
that as state aid funding was seen to be an implementing measure. It would be very difficult
to identify a significant number of legal measures which won’t require some form of minor
implementation at national level,57 again proving problematic for non-privileged applicants.

Conclusion

The court has continually defended its controversial standing on the locus standi of natural
and legal persons under Article 263. They continuously tried to strike a balance between a
procedure where parties can challenge the legality of administrative and legislative acts
against the fear of opening the floodgates to litigation. Having assessed the locus standi of
non-privileged applicants under Article 263 it is clear to see it is still very problematic and
leaves the applicants in a very unsatisfactory position. The inflexibility of the current case
law highlights the European Courts relucancy to amend the issues any time soon and looks
as if it is up to a member states to amend this position.

51
Cases C-583/11 EU:C:2013:625
52
ibid
53
Case T-262/10) [2011]ECR II-7697
54
(n5)[581]
55
Case C-274/12 PEU:C2013:852
56
Ibid [31]
57
(n1)[281]