Volume 42 | Number 3 Summer 2007
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II. The Principle of Proportionality
In this chapter, we discuss the function and scope of the principle of proportionality and similar balancing tests. We thereby understand proportionality not only as a judicial doctrine but also as legislative doctrine for the political institutions to follow. Proportionality is a trade-off-device which helps resolve conflicts between different norms, principles, and values. It is also a determining factor for the role of courts in reviewing administrative or legislative measures.10
Proportionality thus provides a legal standard against which individual or state measures can be reviewed.11 From a more procedural perspective, proportionality is closely related to the issues of intensity of review—the level of scrutiny exercised by judges—and whether there should be a full review on the merits or a more deferential standard of judicial review.12
A. Legal Principles
We begin our discussion by providing some conceptual reflections about the nature of legal principles. This shall provide a basic framework for the subsequent analysis of the principle of proportionality in different legal fora. In this chapter, we primarily focus on the characteristics of, and the relationship between, legal rules and principles. This distinction features prominently in the writings of Ronald Dworkin and has subsequently been refined, most clearly by German constitutional scholars.
There is no single authoritative definition of the concept of “legal principles,” either in domestic or in international law.13 The approach taken depends on a variety of factors, including the legal system at issue and the underlying legal philosophy which informs the scholar’s perspective on topics such as norms, rules, principles and values. Sometimes it also seems that continental lawyers are more interested in the search for underlying principles, taking the “top down” approach, as opposed to the common law “bottom up” approach.14
The debate about, for instance, trade and environment or trade and human rights often reflects the crucial role that general principles may play in the WTO law. Economic and non-economic principles, from both within and outside the WTO legal order, often need to be reconciled with—and balanced against—each other. It has been argued that proportionality has to play a crucial role in guiding this process.15
Finally, it is evident that principles, as understood in legal theory, are not necessarily the same as principles (or general principles) of EC law, public international law, or WTO law. These general principles may also be rules in a theoretical sense (see the discussion below), depending on their normative content. Werner Schroeder has argued that basic principles of EC law sometimes have a very narrow focus and lay down clear normative consequences; as a result, their legal character is one of rules rather than of principles.16
1. Nature of Principles
One recent suggestion to define principles is that they are “legal norms laying down essential elements of a legal order.”17 Another formula is that principles “formulate general and flexible imperatives,” which are “fundamental legal concepts and essential values of any legal system.”18 Yet another suggestion is that a principle of law may be conceived as aiming at particularly valuable objectives and thereby “explains and justifies all or any of the more specific rules in question.”19 While each of these definitions emphasizes a different aspect, taken together they provide a fuller picture of the basic nature of legal principles.
Traditionally, legal norms have been divided into rules and principles. One may alternatively distinguish between rules and standards,20 but our approach is to focus on the rules-principles dichotomy.21
The main feature of rules is that they apply in an “all-or-nothing fashion.”22 They may be either valid or invalid.23 More technically speaking, the character of rules implies that they lay down a “binary validity claim.”24 Whenever there is a conflict of rules, this conflict can only be solved in two different ways: either by declaring one rule invalid or by “introducing an exception clause into one of the two rules.”25 In the second case, one of the rules is the exception to the other.
Principles operate differently. They “express the idea of optimization.”26 Principles are “norms commanding that something be realized to the highest degree that is actually and legally possible.”27 Accordingly, principles can be realized to different degrees, as opposed to the all-or-nothing approach underlying rules.
Principles, similar to values, express the preference of some good over others. Whenever two countervailing principles collide, both will lay down competing optimization commands, and their relationship will not be absolute but relative.28 Principles are not invalidated (as this would be the case with rules); instead, they are outweighed, depending on each other’s relative weight. It would not make sense to introduce an exception since one principle may not be the exception to another.29
Conflicts of principles can only be solved through a balancing act which takes into account each principle’s weight. The “dimension of weight” is one of the main characteristics of principles.30 The weighing and balancing of countervailing principles will lead to a “conditional priority of one of the colliding principles over the other with respect to the circumstances of the case.”31 The assessment turns on the question of which principle carries relatively more weight. Note that the precedence of one principle over the other only relates to the specific facts of the case, and this relationship may change under different circumstances.
In the context of international trade, this leads us to the preliminary conclusion that neither trade-related nor non-trade-related principles can be considered, from a legal point of view, as unconditionally preeminent. In many cases, their relationship can only be determined on the basis of the facts of an individual case.
Principles play different functions in the legal order. One important aspect is that they fulfill an ordering function in a fragmented body of law and thus promote the coherence of the legal system.32 Related is the function that principles help resolve ambiguities and fill gaps in the legal texts. Judicial reasoning and law-making is supported by reference to general principles. Another crucial function of principles is that they can act as “‘gateways’ through which the legal order is attached to the broader public discourse.”33 All those aspects are relevant for WTO law as well, especially since it is in the process of evolving into a more mature legal system and generating some constitutional law-type norms, principles, and structures.34
Based on the preceding observations, one notes the crucial role that provisions such as Article XX GATT—and the legal rules and principles contained therein—play in resolving conflicts between trade and non-trade interests.35 Framing those interests in terms of legally protected principles, trade-offs between principles are necessarily seen as relative, depending on the weighing and balancing of countervailing rights and interests in concrete circumstances. This weighing and balancing, undertaken by the judiciary, follows from the character of principles. An alternative approach could be to reduce the role of principles in the legal system by increasingly transforming them into specific legislative rules. This would reduce the discretion exercised by the judicial bodies and provide greater predictability.36 Conflicts between economic and non-economic values and interests can thus be resolved in different ways. First, it may be done through judicial balancing, based on legal provisions such as Article XX GATT or the relevant provisions in the SPS and TBT Agreements. Second, more specific legislation or treaty provisions may also address those concerns and reduce the discretion for the judicial bodies.37 Given the frequent absence of specific rules on many sensitive issues and the prominent role of the dispute settlement process in shaping WTO law, the role and importance of principles has increased in the past and will continue to do so.
Proportionality is commonly referred to as a legal principle. It can also be described as a test or standard, but its legal character is one of a principle. Robert Alexy wrote: “[t]he nature of principles implies the principle of proportionality and vice versa.”38 The basic idea is that the principle of proportionality follows from the main characteristic of principles: the process of optimization.
If one considers fundamental human rights as principles, one realizes how proportionality and its three-step analysis (suitability, necessity and proportionality stricto sensu) follows from the nature of competing principles: in the first step, the test of suitability is to avoid that measures, which are not capable at all of achieving the pursued objective, are adopted. Such measures do not bring any benefit to the objective pursued; and, instead, they only entail negative effects for other countervailing interests or principles.39 The necessity element requires that the means employed to achieve the objective pursued by principle P1 be the least intrusive with regard to countervailing principle P2.40 Whenever there is a choice between different suitable measures, the least intrusive must be employed.
Necessity therefore allows for a distinction and choice among different measures adopted on the basis of principle P1. But the broadest question of whether any measure should be chosen at all to pursue a certain objective is not part of the necessity analysis; this involves a true balancing of the competing principles P1 and P2. This final stage of the analysis, the process of weighing and balancing, is called proportionality in its narrow sense (proportionality stricto sensu).41
It is only in cases that have passed the necessity test that a balancing and weighing of competing principles will come into play. This final step, proportionality stricto sensu, is not guided by other substantive criteria, except for the criterion that the measures must not be excessive or disproportionate with regard to the pursued objective. One important requirement, however, is that the relative weight of each principle be taken into account.42
The remaining question is how the weighing in this process should be undertaken and whether there are any substantive criteria guiding the weighing. As stated, weighing is relative and depends on the circumstances of each individual case. It establishes a conditional, as opposed to an absolute, priority of colliding principles.43 Weighing in that sense requires that the priority be established on the basis of reasons advanced in a discursive process.44
This is the crucial link between the theory of principles and proportionality. The third step of the proportionality analysis may be regarded as a specific procedural obligation. It requires public authorities and the judiciary to justify their decisions on the basis of rational legal arguments and in a structured manner.45 The factors that need to be considered and justified through legal reasoning are the weight attributed to each principle, the degree of interference with those principles, and the way in which those countervailing principles are balanced against each other. The importance of principles and proportionality increases in the absence of clear hierarchies of norms and whenever the outcome of a dispute cannot be determined simply on the basis of clear legislative provisions. A more principles-oriented approach (in conjunction with better rules) may help structure and rationalize the WTO legal system, clarify imprecise and open-ended provisions, and contribute to WTO law’s growing maturity and sophistication in the years to come.
2. Public International Law and WTO Law
In the previous section, we outlined some general features of legal principles. We now explore the role and legal status of general principles in public international law and in WTO law. General principles of international law have a very specific connotation, whereas our previous discussion of principles was more generic. In light of the overall topic of this paper, both aspects should be covered and brought together in an attempt to define the role and status of the principle of proportionality in the WTO legal order.
General principles are a well-known and yet somewhat vague concept in public international law.46 Article 38(1)(c) of the Statute of the International Court of Justice (ICJ) lists “general principles of law” as one of the sources of international law.47 In international law, principles play an important role in filling the gaps left by the international legal order and to avoid a non liquet in rulings by international judges.48 Furthermore, they are crucial for international tribunals which may refer to general principles to justify their own decisions, because they provide a conceptual background for the interpretation of the law and state practice.49 The openness of principles to public and legal discourse is reflected in the fact that they help the judiciary construe the law “in a dynamic fashion responsive to today’s problems.”50 In cases of conflict between general principles and other specific norms of international law (treaties or customs), the norms will generally prevail.51 In the context of WTO law, “a principle could not be used with the effect of overriding a specific rule contained in the WTO agreements.”52 General principles only have a subsidiary function in the international legal order.
General principles may originate from different sources. Some principles may be derived from domestic law, from which they are borrowed and distilled on a comparative basis.53 On the other hand, general principles of international law are unique to international law, even though they mostly overlap with the general principles of law recognized by Article 38 of the Statute of the ICJ. One standard textbook definition of general principles of international law is that they are “primarily abstractions from a mass of rules and have been so long and so generally accepted as to be no longer directly connected with state practice.”54
Examples of general principles, which may be either procedural or substantive in nature, are the following: pacta sunt servanda, principles governing the judicial process, res judicata, and the principles of equity, good faith, equality of states, interpretation, right to self-defense, and right to independence.55 It has been argued that proportionality is also characterized as a general principle of international law, with its own foundations in the international legal order.56
WTO law is a branch of international law, and the WTO agreements need to be interpreted against the background of general principles of public international law.57 The preamble to the Agreement Establishing the World Trade Organization (WTO Agreement) states that the parties to the WTO Agreement are “determined to preserve the basic principles and to further the objectives underlying this multilateral trading system.”58 As Meinhard Hilf pointed out, there is no list of principles which one could refer to, and it is unclear whether those principles only encompass the economic justifications and objectives of the WTO system.59 The long list of basic principles suggested by Hilf and Goettsche includes trade liberalization, sovereignty and national deference, sustainable development, non-discrimination, transparency, rule of law, due process, good faith, natural justice, and proportionality.60 Cameron and Gray point to similar principles, such as the principles of effectiveness in treaty interpretation, in dubio mitius, legitimate expectations, non-retroactivity of treaties, state responsibility, estoppel, abuse of rights, and exhaustion of local remedies.61 Proportionality has not explicitly been recognized as a general principle of WTO law, even though it has been referred to by the appellate body to interpret individual provisions of the WTO Agreements.62 The point of reference has been the principle of proportionality as applied in the law on international countermeasures. In Cotton Yarn, the appellate body concluded:
It would be absurd if the breach of an international obligation were sanctioned by proportionate countermeasures, while, in the absence of such breach, a WTO Member would be subject to a disproportionate and, hence, “punitive”, attribution of serious damage not wholly caused by its exports. In our view, such an exorbitant derogation from the principle of proportionality . . . could be justified only if the drafters of the ATC [Agreement on Textiles and Clothing] had expressly provided for it, which is not the case.63
3. Conclusions
Many conflicts between legal provisions are not only conflicts of rules but also conflicts of principles. From a theoretical perspective, those conflicts may thus consist of conflicts between rules, principles, as well as rules and principles.
We shall make one caveat. “Global” principles of administrative law need to be reflected carefully, especially when transplanting national or European constitutional concepts to the WTO level.64 Analogies and transfers must, in each case, reflect the specific legal and political system in which they operate, in particular since legal principles from a variety of national legal orders seem to resemble each other. Lawyers from different backgrounds may approach the same principles with different concepts in mind and may speak about the same legal phenomenon using different terminology: “[a]pparently identical words may have a different meaning and apparently different words may have the same meaning.”65 In any case, one must not disregard the different forms of national constitutional and international law traditions which shape the thinking about principles—what they are as well as what they are based upon. In the European context, Jürgen Habermas rightly warned that:
the same legal principles would also have to be interpreted from the perspectives of different national traditions and histories. One’s own tradition must in each case be appropriated from a vantage point relativized by the perspectives of other traditions, and appropriated in such a manner that it can be brought into a transnational, Western European constitutional culture.66
The concepts of proportionality, necessity, balancing, and reasonableness are widely used in many different jurisdictions. As we attempt to show throughout this article, their use and connotation varies from author to author, and from jurisdiction to jurisdiction. It is often difficult to reflect on one particular concept since it may be understood in many different ways. Proportionality, for instance, may generally be understood as a very strict test of review or a more relaxed and deferential test of review. Our own approach is influenced by the classical three-step proportionality test, developed in continental European legal thinking.
B. Introducing Proportionality
The principle of proportionality has many different facets. It is regularly invoked but its function, constituent elements, and scope of application often remain elusive. Proportionality is not a standardized legal concept and to a large extent depends on the legal regime within which it is used. The simplest formula to explain proportionality is the prohibition on using a “steam hammer to crack a nut, if a nutcracker would do.”67 This formula is quite illustrative but not very helpful in addressing complex legal question that arise in connection with the proportionality test.
Characterizing proportionality at a very general level, one of its key functions is to define the relationship between the state and its citizens, resolving conflicts of interest between these two spheres. More specifically, proportionality in its traditional form has provided a tool to define and restrain the regulatory freedom of governments. Proportionality “sets material limits to the interference of public authorities into the private sphere of the citizen . . . .”68
Proportionality as a legal concept mainly developed in the context of German Police Law (Polizeirecht) about a century ago.69 The principle related to the interference by administrative authorities with civil liberties.70 The German courts used proportionality to assess whether the measures taken by the police were more intrusive than necessary to achieve a certain objective.71 In German administrative law, proportionality developed as a device to control the discretion exercised by the administration.72 Some decades later, the principle of proportionality was also introduced to impose limitations upon the discretion of the legislator to enact legislation. This can be considered as the constitutional law aspect of proportionality as it is well-known it in many (federal) legal systems.
The previous paragraph identified the two different ways in which the principle of proportionality can be applied. First, as a legislative and administrative doctrine which guides the actions of the legislator and the administration by establishing a standard against which those actions are measured. Second, as a judicial doctrine which lays down a specific standard of review applied by the judiciary in reviewing legislative and administrative measures. The proportionality test requires an active role to be performed by the judiciary.73
C. Test in Different Contexts
Proportionality has developed as a test of review. It is used in different contexts. First, it is recognized in some systems as the test for the exercise of competences. Secondly, it is used to review justifications for interference with or restrictions on rights. Thirdly, it is also used to determine the extension of rights. Other limiting mechanisms, such as leaving national authorities a “margin of appreciation” in European Convention on Human Rights (ECHR) law, or having a rule of reason in U.S. federal anti trust law, may in fact incorporate similar balancing exercises.
In ECHR law, for instance, proportionality is applied in at least three different contexts: first, as a benchmark to establish the legality of derogations; second, with the aim to establish the legality of interferences by states with Convention rights; and, third, to determine scope of application of some of the rights established by the Convention.
On a more general level, a first use of proportionality is as a general test for the exercise of competences. This aspect features in domestic legal systems (e.g., control of discretion in German administrative law),74 as well as EU law. In the latter case, the Community courts control the exercise of discretion conferred on the Community institutions and, in particular, the European Commission. There are differences in the intensity of review depending on the area and subject matter of the decision. A second use relates to justifications for interference with, or restrictions on, rights. This is typically the case in areas such as EC free movement law, national constitutional law, the law of the ECHR and human rights in English law. In addition to the differences in the intensity of review depending on the area and subject matter of the decision, the kinds of rights involved provide another variable.
D. Typology of Functions
In this section, we distill the main functions of the principle of proportionality, many of which are also reflected in the debate on judicial review in the WTO and the balancing of trade and non-trade interests. Each of the functions mentioned below emphasizes one particular aspect of the principle of proportionality, so they should be regarded as complementary to each other.
1. Control and Limitation of Discretion
The basic idea underlying proportionality is that citizens of liberal states should only have their freedom of action limited insofar as is necessary for the public interest. Public authorities should, in the choice of their measures, choose the least onerous one. The principle of proportionality guides this process and thereby imposes restrictions on the regulatory freedom of governments.
The proportionality test, as a key legal instrument to control and check the discretion exercised by the administration, involves a means-ends relationship.75 It establishes both a guideline as to the use of discretion by national authorities and a standard against which decisions are measured. The means employed by public authorities to attain a legitimate objective have to be the least onerous choice, and the impact on individual rights must not be out of proportion to the aim pursued. Democratic control over state actions is guaranteed through the close relationship between the rule of law and the principle of proportionality, whereby proportionality links the behaviour of public authorities to the rule of law. Modern thinking about the role of proportionality in public administration emphasizes that proportionality requires the administration to balance all relevant interests at issue and then to use its discretionary powers in light of this balancing exercise.76
2. Balancing of Conflicting Rights and Interests
Whenever there is a conflict of rights, values and interests, this conflict will often need to be resolved through a judicial balancing act. If this process is guided by the principle of proportionality, the conflicting objectives will be reconciled through the application of the three-step proportionality test.
Proportionality is applied, amongst others, to review domestic measures restricting the free movement within the EC Internal Market. In this context, proportionality guides the balancing process between free trade objectives and other legitimate public policy objectives. This reasoning also generally applies to WTO law, even though proportionality and balancing are not used as openly as in EC law.77 The balancing aspect is also part of the proportionality and necessity tests in public international law.
Frequently, competing interests and values are framed in terms of clear and precise rules elaborated by the law and policymaking process. If that is not the case, balancing of competing interests and values needs to be undertaken in the judicial arena and judges are required to make the necessary trade-offs according to the weight attributed to the different rights, interest, and values. It can be argued that the growing demand for necessity testing and balancing in WTO dispute settlement reflects the inability of the WTO’s bodies to “legislate” on many of the complex issues.78 The danger is that judges then act as substitute legislators.
The purpose of proportionality in such circumstances is to provide a test against which the balancing of conflicting interests may take place in a structured and deliberate manner. Legally, proportionality governs the ad hoc and variable substantive relationship between rules and principles and provides a rational legal tool to make the necessary trade-offs.
3. Standard for Judicial Review
Proportionality as a general principle of law underlies legislative and administrative actions. At the same time it is also used as a standard for judicial review.
The proportionality test is usually associated with a full review on the merits, going beyond the more traditional and narrower concept of a reasonableness review of the initial decision.79 Judges applying the principle of proportionality also define a particularly active role for the judiciary within the legal system: the review of administrative or legislative measures on the merits. The fact that courts apply the proportionality test as an independent ground of review has always raised concerns about undue judicial interference with administrative and legislative decisionmaking, the separation of powers, and balancing undertaken by the judiciary.80
We can illustrate this point by reference to English law. Traditionally, the discretion exercised by public authorities was reviewed by the courts, which applied a deferential reasonableness test, the so-called Wednesbury test.81 Justification for this test was based on the constitutional position of the courts. The intensity with which courts apply the reasonableness test also depends on the subject matter at issue, ranging from fundamental rights to economic policy choices. Paul Craig has argued that in the context of English law, a proportionality test would provide a more structured formula than the Wednesbury test, because it would require both the administration and the courts to justify their decisions.82 Another argument in favor of the adoption of the proportionality test is that it demands a more reasoned analysis from the decision-maker than the imprecise reasonableness test.83 Possible arguments against the adoption of the proportionality test as an independent ground of review relate to the separation of powers, the lack of expertise of the courts in the relevant area, and the fact that certain issues may be unsuited to a proportionality analysis.84 Recently, due to the adoption of the Human Rights Act 1998, the proportionality test, rather than the more deferential Wednesbury test, has become a key feature of judicial review in English law.
4. Scope of Legal Norms
Proportionality is also a tool to determine the scope and limitations of legal norms. Examples include the inherent limitations of the free movement provisions, such as the rule of reason in the context of Article 28 of the EC Treaty (the judicially created “mandatory requirements” doctrine).85 Other examples include the provisions on unlawful discrimination in ECHR and EC law. Despite the usually general wording of equality provisions, differences in treatment are allowed under certain circumstances. Proportionality serves the purpose to determine whether discrimination can be objectively and reasonably justified and thus does not fall afoul of the equality principle. The non-discrimination provisions include a kind of rule of reason.
5. Limit and Rationalize the Power of Judges
The proportionality test and its three-step structure also provides an important tool to confine the legal authority conferred on judges. As stated above, one important aspect of the principle of proportionality is that it is a key tool for the judiciary to give substance to relatively open-ended norms by connecting them to their objectives. Counterbalancing such far-reaching powers wielded by the judiciary, proportionality introduces rational legal arguments in the decision-making process. Those arguments need to be presented and justified by the parties to a dispute and the judiciary in a public, deliberative process. The requirement ensures that through the three-step analysis, the interests at stake, the weight attributed to conflicting norms, and the other reasoning applied are made transparent.86
6. Political Theory and Proportionality
Finally, proportionality can be approached from the angle of different political theory. Pluralists may look at proportionality as a tool to enhance participation rights by requiring authorities to consider carefully the views of interested parties.87 Liberals may be particularly interested in the three-step structure of the proportionality analysis which requires the administration to justify its decisions along the lines of the different steps.88 Proportionality thus becomes a tool to enhance accountability and justification for governmental action.89 Additionally, judges may also become more accountable since they also have to justify their decisions in a detailed fashion. Finally, republicans may consider proportionality as “a defence against naked political bargain” because it prevents some influential groups from getting exclusive access to the decision-making process.90
E. Different Elements of the Proportionality Test
The principle of proportionality, in its most elaborate form, consists of three different elements: suitability, necessity, and proportionality stricto sensu (proportionality in the narrow sense).91 These elements need to be assessed cumulatively, but they are in ascending order in terms of intensity with which the measure is reviewed.92
There is no single coherent principle of proportionality. Its constituent elements vary, as well as the degree and intensity of review imposed. It can also be the case that similar tests are given different names, such as necessity, reasonableness,93 cost-benefit-analysis,94 or rationality review, and yet their normative requirements may be very similar to the proportionality test.
1. Suitability
Suitability is the first step of assessment. It requires that the adopted measure is suitable or appropriate to achieve the objective it pursues.95 In other words, suitability requires “a causal relationship between the measure and its object.”96 It can easily be argued that measures which are not suitable at all to pursue the stated objective should not be imposed on that basis.97 Another function of this stage of assessment is to single out measures that claim to protect the general interest while, in reality, they have a protectionist purpose.
Courts have to determine the moment at which the suitability of a measure, as an objective standard should be assessed. In a given case, it may make a difference whether the measure is evaluated from an ex ante perspective (the moment when the measure was enacted) or an ex post perspective (the moment when the measure is analyzed by the court). In domestic law, the legislator is often granted a certain “right to err” in making his appraisals about future developments, operation, and effectiveness of the measure adopted. Thus, the scope of discretion granted to the initial decision maker will also affect the intensity of review—ranging from mere review of evidence to intense substantive review of the decision.
2. Necessity
The necessity test requires that the objective, upon which a measure is based, cannot be achieved by alternative means that are less restrictive than the measure adopted. If there is a choice between several appropriate measures, the least onerous and equally effective measure needs to be selected.98 This is often called the “least restrictive alternative.”99 The test combines two questions. The first question is whether there are less restrictive, or milder, measures. Secondly, one needs to ask whether the alternative measures are equally effective in achieving the pursued objective.100
The underlying objective of this test is that the measure adopted by the state should do minimal harm to citizens or the public interest. In the trade context, the necessity requires the states to impose the least trade-restrictive measure in pursuing non-trade-related domestic policy objectives.
Referring to an example from the case law of the ECJ, the Court in de Peijper ruled out the necessity of domestic legislation which the Dutch authorities tried to justify on public health grounds. The ECJ held that the measure was not necessary since the domestic authorities could have pursued the same objective as effectively by adopting other means which were less-restrictive to intra-Community trade.101 In Familiapress, another free movement case, the ECJ ruled that it was for the national court to assess whether the national prohibition was “proportionate to the aim of maintaining press diversity and whether that objective might not be attained by measures less restrictive of both intra-Community trade and freedom of expression.”102
In some English cases, such as the Shayler judgment, necessity is obviously interpreted differently than the classical three-step test outlined in this chapter.103 The English courts in these cases have tended to align “necessity” with the principle of proportionality stricto sensu. The relevant part of Shayler reads as follows:
It is plain from the language of article 10(2), and the European Court [of Human Rights] has repeatedly held, that any national restriction on freedom of expression can be consistent with article 10(2) only if it is prescribed by law, is directed to one or more of the objectives specified in the article and is shown by the state concerned to be necessary in a democratic society. “Necessary” has been strongly interpreted: it is not synonymous with “indispensable”, neither has it the flexibility of such expressions as “admissible”, “ordinary”, “useful”, “reasonable” or “desirable”. . . . One must consider whether the interference complained of corresponded to a pressing social need, whether it was proportionate to the legitimate aim pursued and whether the reasons given by the national authority to justify it are relevant and sufficient under article 10(2) . . . .104
This quote illustrates quite well that necessity concepts may differ and yet reflect the same underlying concerns.
3. Proportionality Stricto Sensu
The third step is to analyze whether the effects of a measure are disproportionate or excessive in relation to the interests affected. This final stage of assessment comes into play once a measure has been found suitable and necessary to achieve a particular objective. It is at this stage that a true weighing and balancing of competing objectives takes place. The more intense the restriction of a particular interest, the more important the justification for the countervailing objective needs to be.105
This third step will often not be reached. In EC law, the necessity analysis dominates most cases where the ECJ has applied the proportionality test. In some other cases, the ECJ tended to disguise proportionality stricto sensu as a normal necessity analysis, and it did not explicitly address the third step of analysis.106 Within the necessity test, the Court has conducted a marginal review of proportionality, as some cases on consumer protection and product labeling illustrate.107 The Court has hereby implicitly questioned the level of protection adopted by the Member States, in addition to a traditional review of suitability and necessity of the domestic measures.
In those rather rare cases where the ECJ has applied proportionality stricto sensu, it has usually reviewed the objectives submitted by the Member States to justify their domestic measures. In Stoke-on-Trent, the Court outlined proportionality stricto sensu in the most unambiguous way:
Appraising the proportionality of national rules which pursue a legitimate aim under Community law involves weighing the national interest in attaining that aim against the Community interest in ensuring the free movement of goods.108
It should be noted that this was a rather exceptional statement in the jurisprudence of the ECJ.109 Nevertheless, this statement highlights that balancing in the trade context usually involves the comparison of the value and the importance of the national objective upon which the measure is based with the overall interest in ensuring free trade. The relative costs and benefits of the domestic measure and the restrictions imposed on free trade will be assessed.
Danish Bottles is a classic case in which the ECJ applied the full proportionality test in the area of domestic environmental protection. It found that:
[T]he system for returning non-approved containers is capable of protecting the environment and . . . affects only limited quantities of beverages compared with the quantity of beverages consumed in Denmark. . . . In those circumstances, a restriction of the quantity of products which may be marketed by importers is disproportionate to the objective pursued.110
In another case concerning the review of a Community legal act, the ECJ explained the full proportionality test as follows:
[T]he principle of proportionality . . . requires that measures adopted by Community institutions should not exceed the limits of what is appropriate and necessary in order to attain the legitimate objectives pursued by the legislation in question, and where there is a choice between several appropriate measures, recourse must be had to the least onerous, and the disadvantages caused must not be disproportionate to the aims pursued . . . .111
The application of the principle of proportionality in the area of fundamental rights is also illustrative. Whenever fundamental rights are restricted or interfered with by public authorities, the legislative or administrative measures will be assessed against the background of the principle of proportionality. This assessment is particularly relevant in areas covered by the ECHR and domestic constitutional law. Usually, the first stage of assessment is to identify the protected right or interest. One then moves on to identify the extent to which the right is interfered with or restricted. The next stage is to identify the reasons for that restriction. Finally, the last stage is to assess whether the interference was excessive or not. Restrictions have to be suitable, necessary, and proportionate. In this context, proportionality stricto sensu involves a “fair balance” between the disadvantages for the person whose rights are restricted and the weight of the legitimate aims pursued by the state. Interferences with fundamental rights need to be “proportionate to the policy aims that underlie them.”112
The justification for balancing and proportionality stricto sensu was outlined above. In the area of fundamental rights, for instance, state measures that are necessary may still be disproportionate because the disadvantages caused to an individual are excessive, compared to the aims pursued by the state. A necessary measure may be proportionate when it just marginally impacts on fundamental rights. On the other hand, even a severe impact on fundamental rights, such as the shooting of a criminal, may, in individual circumstances, be the only possible way to achieve a specific objective. It is only after a finding of necessity that a careful balancing and weighing will come into play.113