Principle of Proportionality as Principle of Economic Efficiency

Abstract

The principle of proportionality is at the cornerstone of EU law, and precisely of the case-law of the European Court of Justice (ECJ). Inspired by the different legal traditions of the Member States, the ECJ has developed the principle of proportionality to such an extent that the understanding of the judicial stance of the ECJ with respect to this principle shall illustrate the broader EU judicial reasoning.

In the law and economics literature, the general principles of law are commonly opposed to legal rules in terms of efficiency. On the one hand, the legal formalistic approach consists in apprehending the law as principled whereby principles of law do not and should not encompass an efficiency rationale and should be self-sufficient. On the other hand, the legal nihilism denying the existence or relevance of the general principles of law favourse legal rules that are said to incorporate an efficiency rationale. I intend to analyse the efficiency rationale of probably the most important general principles of EU law – the proportionality principle.

In this paper, I shall assert that not only does the EU proportionality principle encapsulates an efficiency rationale, but most importantly, it has been interpreted by the ECJ as such – hence I propose this representation of the principle of proportionality as a principle of economic efficiency.

After having introduced the principle of proportionality (I), I shall decipher the proportionality principle both from a law and economics perspective and from a comparative perspective (II). Then, I shall delve into the jurisprudence of the ECJ so that the judicial reasoning of the Court as this reasoning proves the relevance of the proposed representation (III). Finally, I conclude in light of the findings of this paper in line with the overcoming dividing line between moral principles/efficient legal rules (IV).

Keywords: Proportionality, Law and Economics, ECJ, Supreme Court, Judicial Reasoning

JEL Classification: K