(C) Alan Cleaver

What’s Wrong with Right-Hand Drive?

Angus MacCulloch

Political debate in the UK about EU migration always seems to focus on EU Citizens, particularly from Central and Eastern Europe, coming to the UK. In reality the position is much more fluid. Nearly 2 million UK nationals live elsewhere in the EU (see the FT) and movement never goes only one way. There is a constant flow of EU citizens moving back and forth between EU Member States exercising their free movement rights. The difficulty in predicting trends in the patterns of movement was highlighted recently; the “tidal flood” of immigrants from Bulgaria and Romania prophesised by many strident UK commentators proved to be illusory. A pair of recent judgments from the Court of Justice of the EU, the highest court within the EU legal system, highlights the problems faced by other EU Member States when they have a significant number of migrants coming into their territory from the UK and Ireland; because they arrive in vehicles with the steering apparatus on the wrong side …

On 20 March 2014 the Court of Justice of the EU (CJEU) handed down two separate, but connected, judgements in Case C-639/11 Commission v Poland and Case C-61/12 Commission v Lithuania. Both cases involve the Commission challenging those Member States’ (MSs’) refusal to register right-hand drive cars within their jurisdiction. Both MSs argued that their refusal to allow the registration of right-hand drive cars was a safety measure as the driver of a right-hand drive car has a field of vision considerably reduced when the traffic is on the right-hand side of the road. The owners of right-hand drive vehicles would have to go through the expensive process of moving the vehicle controls to the left in order to properly register their vehicle in either MS.

The European Commission challenged these rules on the basis that they were incompatible with the EU Treaty principles on the free movement of goods, namely Article 34 TFEU. Art. 34 prohibits and ‘measures having equivalent effect to quantitative restrictions’ on imports; MEEQRs for short. If the Court found that the Polish and Lithuanian refusal to register right-hand drive cars was found to restrict imports it would prohibited unless those Member States could justify it as being a proportionate attempt to protect an important policy; in this case road safety.

The most interesting aspect of the findings of the Court in these cases was not the eventual decision. It was not surprising that, given the EU has put in place a series of provisions to completely harmonise the market for new cars, the CJEU was resistant to the MSs’ attempt to restrict the import of vehicles from other MSs. However, the way in which the Court approached the question is interesting in two regards. First the test the Court used to decide whether the national measures fell within Art 34 TFEU, and second, the issues it took into account in deciding the proportionality question.

In his Opinion, delivered to assist the Court of Justice in its deliberations, Advocate General Jääskinen’s approach to Article 34 TFEU was very traditional. At paragraph [69] he uses the classic Case 8/74 Dassonville formula, which asks whether a measure is capable of hindering “directly or indirectly, actually or potentially” trade within the EU, to establish whether a measure was captured by Art 34. The approach he adopts is very much in accordance with the well-known ‘product requirement’ line of cases, typified by Case 120/78 Cassis de Dijon, where particular products are restricted because of their nature or their make up. It was significant then that the CJEU did not adopt that approach and went another way. In both instant cases it follows the approach previously set out by the Grand Chamber of the Court in Case C-110/05 Italian Trailers. At [52], in Case C-639/11, it sets out the ‘new’ test:

“In view of the Court’s settled case-law, the contested legislation constitutes a measure having equivalent effect to quantitative restrictions on imports within the meaning of Article 34 TFEU, in so far as its effect is to hinder access to the Polish market for vehicles with steering equipment on the right, which are lawfully constructed and registered in Member States other than the Republic of Poland”.

The Trailers ‘market access’ test is therefore the basis for the decisions in these cases; although the Court in its reference to previous case law does draw a direct line from Dassonville, to Cassis and Trailers. There is very little in the judgment itself that deals directly with how the Polish measure hinders market access, only the acknowledgement, at [57], that the measure is likely to reduce the number of vehicles in use. The key issue of note is that notwithstanding the AG’s use of the classic form of reasoning under Art 34 TFEU, the CJEU has chosen to rely entirely on the more recent test in Trailers. One wonders whether the approach adopted by the 5th Chamber might indicate a more comprehensive shift in the Court’s attitude.

When the CJEU came to address proportionality it again justified its reasoning on the basis of Trailers, [59]-[62], rather than the older case law, at [53]:

“legislation may be justified in order to meet imperative requirements, on condition that it is appropriate for securing the attainment of the objective pursued and that it does not go beyond what is necessary in order to attain that objective”.

This two part test, of appropriateness and necessity, is then applied. The Court accepts that in the absence of harmonisation it is for the MS to decide the level of protection of road safety. The Court accepts there is “empirical evidence” that having a car’s steering equipment positioned on the same side as the direction of traffic restricts the driver’s field of vision and increases risk. It therefore appears, although it does not say so explicitly, to accept that some form of measure to deal with that risk may be appropriate [57]. The Court, however, took a much stronger line on whether the refusal of registration was necessary.

It first noted that new right-hand drive vehicles could be registered and used, due to the harmonised procedures for new cars, and that previously registered vehicles posed no more risk than new vehicles [59]. Tourists and other temporary road users could also operate right-hand drive vehicles without restriction. They too could not be considered as presenting a different risk that a domestic right-hand drive vehicle [60]. The Court also drew attention to the fact that 22 MSs made no distinction between right and left-hand drive vehicles [61]. The final element in the Court’s argument is perhaps the most important and wide ranging. It stressed that the statistical data presented by the Polish Government did not prove “to the requisite legal standard” the relationship between right-hand drive vehicles and the number of accidents [62]. Through these arguments the Court highlights that while the risk may be real, it is already tolerated to an extent within the MS, and that there is limited evidence of a significant risk to road safely. On that basis the Court decided that the refusal of registration to all right-hand drive vehicles was therefore disproportionate; other “means and measures” could be employed to enhance visibility for the driver which would less restrictive [63].

Not a surprise, but a different approach

The eventual decision by the CJEU is not a surprise. Given the strenuous effects the EU has made to ensure the harmonisation of the market for new cars, it would have been a real surprise if they were to accept restrictions on the registration of previously registered vehicles without a very strong case to support it. The courts reliance on the the Trailers ‘market access’ test is potentially important, as it may mean that we see a simplification of the law in this area. The use of a single test in Art 34 TFEU will remove need to separate restrictions into distinct ‘types’ of restriction, but it may also re-introduce some risk of the over-broad interpretation of the prohibition. The Court’s approach to proportionality, whether the measure is appropriate and necessary, is also interesting; particularly the focus the Court gave to a MS’s ability to provide evidence “to the requisite legal standard” on the proportionality of the measure. The ability to provide robust evidence as the nature and the significance of the risk that is being addressed through the measure looks likely to play a significant role in future Art 34 TFEU cases. This may mean that MSs will be required to adopt clear evidence-based policy if they wish their measures to stand up to EU scrutiny.

Angus MacCulloch (@AngusMacCullochis a Senior Lecturer in Law at Lancaster University Law School.  His research interests lie primarily in Competition Law, on which he co-authors a popular textbook and a cases and materials text, with a particular focus on antitrust and enforcement issues.  The majority of his recent work focuses on the impact of the introduction of the UK’s cartel offence.  He is an editor of the Competition Law Review, a founding member of the Competition Law Scholars Forum, and maintains the ‘Who’s Competing?’ blog.

You can find out more about Angus’ research at http://www.lancaster.ac.uk/fass/law/profiles/angus-macculloch

About these ads

Leave a Reply

Fill in your details below or click an icon to log in:

WordPress.com Logo

You are commenting using your WordPress.com account. Log Out / Change )

Twitter picture

You are commenting using your Twitter account. Log Out / Change )

Facebook photo

You are commenting using your Facebook account. Log Out / Change )

Google+ photo

You are commenting using your Google+ account. Log Out / Change )

Connecting to %s