Intervener Accepted As Party To Preliminary Reference Challenge To Tobacco Directive

13 Nov 2014

By Judgment dated 7th November 2014, Mr. Justice Turner referred seven questions to the Court of Justice of the European Union (“CJEU”) concerning the validity of the Tobacco Products Directive 2014/40/EU (“TPD2”).  TPDU2 introduces a number of packaging and labelling requirements for tobacco products, including the controversial requirement that packets display combined text and graphic health warnings which must cover at least 65% of the external surface of the packaging.  The Directive also imposes a ban on the manufacture of menthol and flavoured tobacco products and also prohibits manufacturers from making statements on the packets that a particular product is less harmful or more environmentally friendly.

The reference arises in the context of two claims for judicial review brought by British American Tobacco UK Ltd (“BAT”) and Philip Morris Brands SARL (“Philip Morris”), which seek to challenge the obligation of the Secretary of State for Health to implement TPD2 by 20 May 2016.  The seven questions referred challenge the Directive on the basis that the EU legislature has used an inappropriate legal basis, namely Article 114 TFEU, in circumstances where TPD2 lacks any genuine internal market rationale and has the potential to distort competition by restricting the ability of manufacturers to differentiate their products.  The other grounds of challenge are that the provisions of TPD2 infringe the fundamental principles of proportionality and subsidiarity and delegate too much power to the European Commission.

In his Judgment, Turner J held that there was no dispute that questions regarding the validity of TPD2 should be referred to the CJEU for preliminary ruling pursuant to Article 267TFEU, since only the CJEU has jurisdiction to declare measures of European Union law invalid.

He then went on to assess the status of a number of interested parties who wish to intervene in the proceedings so that they could be classified as “parties” to the proceedings and gain full participation rights before the CJEU.  Those organisations included a manufacturer of specialist niche tobacco products (“Von Eicken”) and producers of cigarette papers as well as a producer of menthol tobacco capsules.

In a previous ruling regarding the intervention of the Polish National Association of Tobacco Growers (“KZPT”), handed down on 24 October 2014, Mr Justice Turner had refused permission to intervene but went on to express the obiter opinion that, even if they had been admitted as an Intervener in the domestic proceedings, they would not have been automatically entitled to participate as a “party” pursuant to the rules of procedure of the CJEU.  That ruling reversed previously accepted jurisprudence that a successful application under CPR 54.17 automatically conferred the status of party at EU level.

Turning to the position of the other four Interveners in this case, Mr Justice Turner made clear that that did not mean that a person heard under CPR 54.17 can never be characterised as a party.  In his view, the court should adopt a more flexible approach based on the substantive merits of their respective positions.  He was persuaded that each of the four interested parties had a sufficiently strong interest in the outcome of the preliminary reference that they should be categorised as parties to the proceedings.  This was because each of the organisations was able to demonstrate a firm relationship with the UK.  Although Von Eicken had a more limited connection to the UK than the others, it would be unfair to deny it the right to participate as it was a direct competitor to the main Claimants BAT and Philip Morris.  In such circumstances, it could not expect those Claimants to address its specific concerns of Von Eicken before the ECJ.  Each of the organisations were affected by the Directive from a different perspective and were therefore able to bring a higher level of experience and expertise to bear on the issues.

Please click to view the full Philip Morris Brands v Secretary of State for Health judgment.

Please click to view the previous ruling in British American Tobacco v Secretary of State for Health.

The Intervener Von Eicken was represented by Anneli Howard (appearing unled), instructed by Irwin Mitchell LLP.

The Polish National Association of Tobacco Growers (KZPT) was represented by Tim Ward QC.