England and Wales Court of Appeal (Civil Division) Decisions

IN THE COURT OF APPEAL (CIVIL DIVISION)
ON APPEAL FROM QUEEN'S BENCH DIVISION
COMMERCIAL COURT
SIR MICHAEL BURTON sitting as a Judge of the High Court
CL-2016-000744

		Royal Courts of Justice Strand, London, WC2A 2LL
		20/12/2016

Lord Justice Elias :

1. This is the judgment of the Court to which all members have contributed.
2. On Thursday 8 December Sir Michael Burton heard an application by GTR, who own the franchise to run Southern Rail, for an interlocutory injunction to prevent ASLEF, the train drivers' union ("the union"), from calling strike action called for a number of days in December 2016 and January 2017. He refused the application. An appeal was lodged late on the following day, Friday 9 December, and given that the first three days of the strike had been called for the 13, 14 and 16 of December, a court was urgently convened to hear the appeal on Monday 12 December. We rejected the appeal and therefore refused to grant the injunction, and we notified the parties of our decision immediately after the hearing. We said we would give our reasons later, and this we now do.
3. The dispute is over the use of Driver Only Operated (Passenger) Trains (DOOP). These are already in widespread use by other train companies and indeed are currently used on more than 50% of Southern Rail routes. The company wishes to expand the procedure to all its routes which have trains with up to twelve carriages and which have in-cab CCTV installed. The DOOP procedure means that the doors of the carriages can be closed by the driver using the technology instead of having to employ a conductor specifically to carry out that task. The union has set its face against this extension and indeed seeks to reverse the practice on the routes where it is already established. It also wishes to establish the right to veto any new introduction of technology.
4. The employers contend that the strike is unnecessary, unjustified and grossly disproportionate. They point to the fact that DOOP has been employed extensively already; that the company has guaranteed that there will be no job losses; that for reasons spelt out in some detail by the judge below but which we will not repeat, extensive testing has disclosed no safety problems with DOOP; and that there has been widespread consultation over many months but that the union has set its face against any settlement, irrespective of the arguments put to it. Even if all safety concerns were satisfied, they have indicated that they would still take industrial action.
5. The company submits that the action will have very damaging effects on their business and the travelling public. They estimate that over 600,000 journeys will be affected every day and that other parts of the operating network will be overwhelmed. The estimate of their own loss is in the region of £20 million, quite apart from serious reputational damage.
6. In the context of this legal action, a particularly important aspect is the impact on Gatwick Airport. Although the Gatwick Express drivers are not called out (as a result of a term of a settlement in earlier industrial action) and the union has given an assurance that they will not be called upon to refuse to cross picket lines, there will undoubtedly be some real impact on the operation of the Gatwick Express line. Sir Michael Burton estimated that some 50% of Gatwick Express services would have to be cancelled with corresponding disruption to the travel arrangements of those using the airport for flights abroad, whether for leisure or professional reasons. Some 37% of travellers at Gatwick Airport travel by rail, and 90% of those use GTR services. The company submits that it is inevitable that passengers will miss their flights or give up the unequal struggle and choose not to travel, or postpone their trips until normal service returns.
7. The appellant floated in the course of the hearing the suggestion that the action may in part be designed to help a fellow union, the RMT, in its separate dispute with the claimant, and that it is also in part being pursued for political reasons. The union has made no secret of its hostility to private providers and Southern Rail in particular, and supports nationalisation of the railways. These submissions do not sit happily with the appellant's concession (at least for the purposes of this application) that the strike is in furtherance and contemplation of a trade dispute, however, since sympathy action and strikes with a political objective are not protected in law. In the circumstances, and since none of this is pleaded, we are not prepared to make the assumption that these may be other factors influencing the decision to call the strike. We do not think that it is legitimate for us to have regard to these considerations in our assessment of the case.
8. One may quibble with the accuracy of some of these estimated effects, and the union does, but the judge was surely right when he said that there would be a massive disruption of services as a result of this action. It is beyond argument, as the news reports graphically demonstrate, there has been and will be, substantial inconvenience to many thousands of commuters.
9. The union strongly disputes that the new system of door closing is as safe as the old, and it says the DOOP procedure is a very stressful one for drivers. It strongly disputes that it has been recalcitrant in negotiations and submits that strike action was the only effective way to achieve its legitimate industrial aim. It says that the DOOP system puts considerable pressure on drivers and places passengers at risk. It also points out that its sister union, the RMT whose members include the train guards, has held strikes and a series of overtime bans on the same issue without any success. Accordingly, it submits that strike action was the only rational way left for it to achieve its industrial objective.

The legal basis of the claims

10. The case is atypical for labour injunction cases. It is not alleged that the strike would be in breach of domestic law considered independently of EU law. It is accepted that the industrial action is in furtherance of a trade dispute and that a proper and lawful strike ballot has been held in which the members have voted overwhelmingly to strike. Over 75% of the members voted and almost 90% of those favoured the strike.
11. The case against the union is that it is acting in breach of certain provisions of EU law which have been incorporated into English law. More specifically, it is said that the strike constitutes an unlawful interference with the right of establishment conferred by article 49 of the Treaty on the Functioning of the European Union ("TFEU") and the right to provide and receive services pursuant to article 56. The statutory immunities given to trade unions taking action in contemplation or furtherance of a trade dispute do not, and could not in a manner compatible with EU law, extend to infringements of EU law. Accordingly, if the industrial action contravenes EU law as alleged, the employer would be entitled to an injunction. At this stage we are not of course concerned with the question whether a final injunction should be granted, but only whether it should be granted as an interlocutory measure pending trial.
12. It is not suggested that English law in any way discriminates against other EU business enterprises in the way its strike laws are drafted. The appellant therefore accepts that the logic of its argument is that a UK company which has the necessary cross border element would have a claim in respect of industrial action in circumstances where a company wholly owned by UK shareholders would not. That preferential treatment is, it submits, simply a consequence of the way EU law is framed and in particular, the need to protect the freedom of establishment and the freedom to provide services across the EU.
13. Article 49 makes it unlawful for a state to impose restrictions on the freedom of nationals of one member state to establish themselves in the territory of another member state. It includes situations where a business seeks to set up a subsidiary or branch of a parent company. The reason article 49 of the TFEU is potentially engaged here is that a French company, Keolis SA, owns 35% of the claimant's shares and plays an active part in its decision making. It is conceded by the union that this is enough to attract the application of the article. The unusual feature of this case is that it is not the state itself but a private body, the trade union, which is alleged to have imposed the relevant restriction. The authorities we discuss below show that in an appropriate case they can be subject to both article 49 and article 56.
14. The submission relating to article 56 is now advanced on a narrower basis than it was below. It was then argued that there was an interference with the provision and receipt of transport services by GTR itself which contravened article 56. That was always a difficult argument because article 58 provides that the provision of services in the field of transport services is governed by Title VI of the TFEU. Directive 2012/34/EU, made pursuant to article 91, establishes a single European Railway area. It was common ground below that GTR could only succeed under this head by relying on certain provisions in the Directive. The judge was not persuaded that there was any contravention of the Directive and this ground is no longer pursued.
15. The only article 56 argument now advanced relates to the rights of GTR's passengers to provide and receive cross-border services pursuant to article 56. It involves the appellant riding upon the coat tails of some of the passengers. It is asserted that because of the disruption to the operation of the rail link with Gatwick Airport in particular, there will be a large number of passengers who, as a result of the strike, will be impeded in their ability to provide services to, or receive services from, persons situated in other EU member states. By way of examples, they may be tourists receiving services from abroad, or professionals crossing borders to give advice, whether going from or entering into the UK. The contention is that the authorities support the proposition that in these circumstances it is not only the passengers themselves who have a claim against the union but also the appellant as the party facilitating their provision of services to others. It is pertinent to note that so far as this aspect of the claim is concerned, it does not depend upon Keolis' shareholding in the claimant. The cross border element is provided by the activity of GTR's passengers.
16. The union denied that any of the EU law grounds were even arguable. In any event, where the claim is brought under either article 49 or 56, the union would not be acting unlawfully if it could justify its actions as a proportionate means of achieving a legitimate aim. It submits that it was justified in the circumstances of this case.

The judgment below

17. Sir Michael Burton accepted the submission of GTR that he should apply the well known test in American Cyanamid and determine first, whether there was a serious issue to be tried that EU law had been infringed; and second, if there was, go on to decide whether the balance of convenience favoured granting or refusing the injunction. He concluded that the claimant had failed to establish an arguable case that there had been either an interference with the article 49 right to freedom of establishment or with the article 56 freedom to provide services. He did not, therefore, have to engage with the question whether any interference was justified as a proportionate action designed to promote a legitimate aim. The article 49 argument seems to have been advanced before the judge on the basis that the strike itself constituted a restriction which operated as a relevant deterrent to establishment. The judge rejected this, summarising his reasons as follows:

"36. In this case I am not persuaded that a company, which could be subject to industrial action in its home state and has been established here for 20 years, is able to assert that a measure such as is here taken constitutes a deterrent to establishment, where that measure is lawful at English law and could not have been complained of by any UK-owned competititor. It is, in fact, in my judgment, being relied upon by the Claimant really, Mr Mercer accepts, to give a positive discrimination in favour of the Claimant. I do not, in any event, accept that there is evidence from which I could infer that even this unprecedented strike can be described as directly liable to deter or prevent the Claimant from continuing to exercise its right of establishment in this country. In those circumstances, I do not conclude that there is an arguable case under Article 49."

18. As to the article 56 argument now being advanced on appeal, the judge concluded that to allow this argument to succeed would entail circumventing the provisions of article 58. In addition, he held that the impact on passengers using Gatwick was "indirect and uncertain" because passengers could get to Gatwick by other means. Also he was concerned that it would place rail companies whose routes encompassed Gatwick or other international passenger termini at a positive advantage compared with those whose routes did not.

The grounds of appeal

19. The appellant submits that the judge erred in these conclusions. In essence it says that he set the bar for an arguable case too high, failed properly to apply relevant EU authorities, and generally took too narrow a view of the protection afforded by EU law in this field. Essentially the arguments advanced before us were those which failed to persuade the judge below.
20. The union submits that the judge reached the right decision. It accepts, contrary to the stance it adopted below, that the Cyanamid test is the one which should be applied and we agree. However, it asserts that the judge correctly held that the claimant had not even jumped the "serious issue to be tried" hurdle.
21. We turn to consider the two grounds of appeal relating to articles 49 and 56 respectively.

Article 49

22. As we have said, it is conceded by the union that since the claimant is 35% owned by the French company, the necessary cross border element is satisfied. We therefore start from that premise.
23. In this case the appellant is of course already established and operating within the UK as a UK registered company. So the question is not whether it is being prevented or deterred from establishing itself. Mr Mercer QC, counsel for the appellant, accepts that there is no question that as a result of this industrial action it would withdraw from operating within the UK. His case is that the action discourages the appellant from extending its activities within the UK. He says that this is enough to engage article 49, and relies upon the well-known test enunciated in the Gebhard case (Case C-55/94 Gebhard v. Consiglio dell'Ordine degli Avvocati e Procuratori di Milano [1995] ECR I-4165), namely that the concept of a restriction encompasses:

"measures [that are] liable to hinder or make less attractive the exercise of fundamental freedoms."

24. A relatively unusual feature of this case is that the action allegedly said to constitute a breach of article 49 is not action by the state or some other public body; it is the action of a trade union which is in law a private organisation. It is now well established that, in an appropriate case, freedom of movement rights can be asserted horizontally against the unions. The critical issue in this appeal is when that is possible.
25. The appellant relies upon three cases in particular to support the contention that the action would infringe EU law.
26. In Viking (Case C-438/05 International Transport Workers' Federation and another v Viking Line ABP and another [2007] ECR I-10779) a Finnish shipping company wished to reflag one of its vessels so as to fly the flag of Estonia and to be operated by an Estonian subsidiary. The purpose was to enable it to crew the vessel with Estonians employed on Estonian terms rather than with a crew employed on the more expensive Finnish terms. The trade union in Finland took industrial action against all Viking's ships to seek to compel it to continue to apply collectively agreed Finnish terms and conditions. This would for all practical purposes have defeated the purpose of establishing the enterprise in Estonia.
27. The CJEU held that this was an unlawful infringement of article 49, notwithstanding that the action was taken by trade unions. The justification for subjecting the unions to EU law in this way was explained as follows:

"[33] In this regard it must be borne in mind that, according to settled case-law, Articles 39, 43 EC and 49 EC do not apply only to the actions of public authorities but extend also to rules of any other nature aimed at regulating in a collective manner gainful employment, self-employment and the provision of services ….

[34] Since working conditions in the different Member States are governed sometimes by provisions laid down in law or regulation and sometimes by collective agreements and other acts concluded or adopted by private persons, limiting application of the prohibitions laid down by these articles to acts of a public authority would risk creating inequality in its application …

[36] … collective action such as that at issue in the main proceedings, which may be the trade unions' last resort to ensure the success of their claim to regulate the work of Viking's employees collectively, must be considered to be inextricably linked to the collective agreement the conclusion of which FSU is seeking."

28. We pause to note that the court is not saying that it is the effect of the industrial action itself which is critical, it is the effect on Viking if it had to accept the terms imposed by the unions. The court then explained further why the unions were in this case playing a role akin to a public body:

"[60] In the present case, it must be borne in mind that, as is apparent from paragraphs 35 and 36 of the present judgment, the collective action taken by FSU and ITF is aimed at the conclusion of an agreement which is meant to regulate the work of Viking's employees collectively, and that those two trade unions are organisations which are not public law entities but exercise the legal autonomy conferred on them, inter alia, by national law.

[61] It follows that Article 43 EC must be interpreted as meaning that, in circumstances such as those in the main proceedings, it may be relied on by a private undertaking against a trade union or an association of trade unions."

29. The reason for finding that the industrial action infringed article 49 in this case was explained as follows:

"[72] In the present case, first, it cannot be disputed that collective action such as that envisaged by the FSU has the effect of making less attractive, or even pointless, as the national court has pointed out, Viking's exercise of its right to freedom of establishment, inasmuch as such action prevents both Viking and its subsidiary, Viking Eesti, from enjoying the same treatment in the host Member State as other economic operators established in that State.

[73] Secondly, collective action taken in order to implement ITF's policy of combating the use of flags of convenience, which seeks, primarily, as is apparent from ITF's observations, to prevent shipowners from registering their vessels in a State other than that of which the beneficial owners of those vessels are nationals, must be considered to be at least liable to restrict Viking's exercise of its right of freedom of establishment."

30. It is plain from these paragraphs that the measure which was likely to hinder or make less attractive the exercise of the freedom of establishment was not the mere fact that damage may result from the industrial action; it was the objective which the industrial action was seeking to achieve. In Viking the agreement would have denied Viking any of the benefits of reflagging and re-establishing itself in Estonia.
31. The second case is Holship, (Holship Norge AS v Norsk Transportarbeiderforbund Case E 14/15) which also relates to article 49. It is a decision of the EFTA court which is not strictly binding on us but is persuasive since the court applies the EEA Agreement which is essentially in the same terms as the relevant EU law. Holship was a Norwegian forwarding agent wholly owned by a Danish company. Its main activity in Norway was cleaning fruit crates but it was also involved in the transport of the crates. It wished to use its own employees to load and unload crates at the port of Drammen. In Norway the stevedoring work (loading and unloading ships) is carried out by stevedores who have a monopoly. That is the result of a collective agreement, known as the Framework Agreement, between the employers' association and the trade unions. It was designed to provide stability of work and to remedy the fact that dockworkers had been casual workers with no guarantee of work. The actual operation of the scheme was carried out by an organisation which was non-profit making and consisted of representatives of both sides of industry. Holship wished to employ its own workers and the trade unions insisted that it should honour the Framework Agreement and employ the port's workers. When the company refused to concede the point it was subject to a threatened boycott.
32. The Norwegian Supreme Court referred the matter to the EFTA court which, contrary to the decision of the Norwegian Court of Appeal, held that the boycott would be unlawful. The court referred to various provisions of competition law and then held, with respect to article 49 (article 31 of the EEA), that the priority clause imposed an unjustified interference with the right of freedom of establishment. It summarised the basic principle as follows:

"115 Article 31 EEA prohibits all restrictions on the freedom of establishment within the EEA. Measures liable to hinder or make less attractive the exercise of fundamental freedoms guaranteed by the EEA Agreement, albeit applicable without discrimination on grounds of nationality, are an encroachment upon these freedoms requiring justification (compare Case E-2/06 ESA v Norway [2007] EFTA Ct. Rep. 164, paragraph 64, and Case E-9/11 ESA v Norway [2012] EFTA Ct. Rep. 442, paragraph 82).

116 With regard to question B2 it is important to recall that a restriction on the right of establishment is prohibited by Article 31 EEA, even if it is of limited scope or minor importance. No form of de minimis rule exists in that regard. It is thus of no significance for the assessment whether a restriction on the freedom of establishment exists if the company's need for unloading and loading services proved to be very limited and/or sporadic."

33. In this case the appellant is of course already established and operating within the UK as a UK registered company and has been for twenty years. That, however, is not a barrier to the article 49 claim because it is not just concerned with the initial establishment but, as Holship shows, restrictions which make it less attractive to remain.
34. The EFTA court concluded that the boycott aimed at procuring acceptance of the collective agreement, and in particular the priority clause, was likely to discourage or even prevent the establishment of companies from other EEA states. It was a restriction on the freedom of establishment, and the court went on to find that it was not justified.
35. Again, we note that the critical feature which constituted a potential deterrence was not the fact that there was a boycott of the company; it was the purpose for which the boycott was being pursued.
36. The third in the trilogy of cases relied upon by the appellant was the Laval case (C-341/05 Laval un Partneri Ltd v Svenska Byggnadsarbetareforbundet [2008] IRLR 160. Laval, a Latvian company, won a contract to refurbish a school in Sweden. It was intending to have the works carried out by its Latvian workforce which was considerably cheaper than Swedish labour would be. It was subjected to industrial action in the form of picketing and boycotts, the aim of which was to compel it to accept the terms of a relevant Swedish collective agreement. It complained that this involved an unlawful interference with its right to freedom to provide services under article 56 and also an infringement of the Posted Workers Directive notwithstanding that the industrial action was lawful under Swedish domestic law. The CJEU agreed. It held that the employer could in principle be required to meet the relevant Swedish labour standards with respect to the mandatory requirements of the Posted Workers Directive, but it was an unlawful interference with its right to provide services under article 56 to compel it to accede to other more favourable terms not protected by the Directive, or to give rights not conferred by the Directive. The company was entitled, subject to the protection of the Directive, to apply Latvian terms to the Latvian workers. It should be allowed to employ its own staff on its own terms just as the Swedish companies could do. It would frustrate the purposes of creating a free market and would undermine article 56 to compel it to apply Swedish terms and conditions.

Again, we note that it was the deterrent effect of the object of the strike, rather than the effect of the strike itself considered independently of that object, which constituted the unlawful restriction on the provision of services. Paragraph 99 of the decision makes that clear:

"In the case in the main proceedings, it must be pointed out that the right of trade unions of a member state to take collective action by which undertakings established in other member states may be forced to sign the collective agreement for the building sector – certain terms of which depart from the legislative provisions and establish more favourable terms and conditions of employment as regards the matters referred to in Article 3(1), first sub-paragraph, (a) to (g) of Directive 96/71 and others relate to matters not referred to in that provision – is liable to make it less attractive, or more difficult, for such undertakings to carry out construction work in Sweden, and therefore constitutes a restriction on the freedom to provide services within the meaning of Article 49 EC."

37. Mr Mercer QC submits that these cases demonstrate the principle that trade union action can constitute a breach of article 49. The only question, applying the Gebhard test is, he submits, whether the action is "liable to hinder or make less attractive" the exercise of the fundamental freedoms.
38. The appellant's submissions, however, wavered on the question whether the infringement of article 49 stems from the interference with business which inevitably arises from the calling of strike action, or whether it stems from the objective of the action.
39. In our judgment, it is absolutely plain for the reasons we have given that it is the object or purpose of the industrial action and not the damage caused by the action itself which renders it potentially subject to the freedom of movement provisions. A helpful test to apply is to ask whether, if the rules were laid down by government, they would be an unlawful interference with the freedom of establishment. In our judgment it is inconceivable that a rule which did not discriminate on grounds of nationality and which required a driver and a guard on all trains to ensure the safe closing of doors rather than just a driver, could be said to constitute a deterrent to freedom of establishment or to make it less attractive. Mr Mercer agrees that it would not cause Keolis SA to withdraw from the UK. His contention is that it would make it less attractive to exercise its right to establish further enterprises in this country.
40. We do not accept that a rule of the kind would conceivably have that effect. As this court has pointed out in an admittedly different context in two cases, R. (on the application of Preston) [2012] EWCA Civ 1378, [2013] Q.B.687 and Shindler v Chancellor of the Duchy of Lancaster [2016] 3 WLR 1196, even where a measure operates to the detriment of a person (in those cases not being deprived of the right to vote in a UK general election or referendum, respectively) that will not justify an inference that their freedom of movement has been infringed if the effect is either too uncertain, indirect or insignificant to have the requisite deterrent or dissuasive impact. We have no doubt that it would be too insignificant here.
41. Mr Mercer may well be on stronger ground when he says that  the activities of the union, and its willingness to take such draconian industrial action to achieve what from the company's view is such a limited objective, may as a matter of fact discourage the French investors from further involvement in businesses in this country. But article 49 does not protect companies from having to deal with strong or even bloody minded trade unions. The true analogy with this case would be if Viking, once operating in Estonia, was faced with threatened industrial action over terms and conditions of employment from an Estonian trade union. Nothing in Viking begins to support the proposition that such action would constitute a prima facie interference with the right of establishment. Nor does Holship protect companies from pressure for improved terms and conditions from their own workforce or its representatives.
42. Viking would not be protected from the bargaining strength of the Estonian trade unions; it would have to make its accommodations with them in the same way as Estonian based companies have to do.  The purpose of article 49 is to allow companies to have access to an open and free market, not to give them a more favourable protection than locally based enterprises.
43. Furthermore, were the strike itself to be the relevant restriction, this would have profound effects on the legality of strike action. It is now firmly established in EU law, as Viking itself asserted at paras 43-44, that the right to take collective action, including the right to strike, "must be recognised as a fundamental right which forms an integral part of the general principles of Community law the observance of which the Court ensures…". It is not an untrammelled right, but the core of that right at least must be protected.
44. It seems to us that every strike by workers in a particular EU state may be said at some level to make it less attractive for a company in another EU state to continue to operate in that state, and certainly it might discourage it from expanding its operations. The logic of this argument, as Mr Cavanagh QC also counsel for the company, frankly and properly conceded, is that every such action will prima facie involve a breach of article 49 and in every case the issue will be whether the union – the onus being on it - can justify its actions.  Mr Cavanagh submits that in the overwhelming majority of cases it would be able to do so and that the potential restriction is of no practical significance. But it would hardly be compatible with the freedom of association or the protection of the right to strike as a fundamental right effectively to put the legality of industrial action in every strike with cross-border impact into the hands of the courts, with the onus on the union to persuade them that the action was not disproportionate.
45. For these reasons, we agree with the judge, although for slightly different reasons, that the article 49 submission does not provide a serious issue to be tried. We are satisfied that we can reject that argument at this stage.

Article 56

46. We turn to the article 56 claim which, as we have said, is now on a more limited basis than it was below. The case depends upon the alleged interference with the ability of passengers to travel abroad to provide or receive services, given in particular the disruption which the strike will cause to those who use Gatwick Airport. This argument was dismissed by the judge on the basis that this would always enable rail companies to circumvent the exclusion contained in Article 58 TFEU by relying on the rights of their passengers. In addition, the judge was not satisfied that the strike would amount to more than an indirect or uncertain restriction upon passengers who would be able to make their way to Gatwick Airport via other routes.
47. In our view there are several substantial obstacles in its path.
48. First, GTR seeks by this submission to avoid the effect of Article 58 by linking it to the freedom of passengers to give and receive services which, it submits, fall outside the ambit of Article 58. It also submits that given the lack of clarity in the case law on Article 58 the judge erred in finding that there was no serious issue to be tried on this point. In addition, in the course of oral argument Mr. Mercer sought to emphasise that the circumstances of the present case were highly exceptional because of the significance of Gatwick Airport and that permitting such a claim should not therefore be regarded as a means of circumventing the effect of Article 58 as a matter of course.
49. In support of his submission that Article 58 has a far less expansive scope than that suggested by the judge Mr. Mercer relied on Joined Cases C-340/14 and C-341/14, ECLI:EU:C:2015:641 Trijber (at [43]-[59]) and Case C-628/11 International Jet Management ECLI:EU:C:2014:171 (at [34]-[62]). However, in our view these authorities do not assist GTR. In particular, we note that Trijber concerned pleasure boats in Amsterdam, an activity which, in the view of the court, fell outside the scope of the transport sector.
50. It is not necessary for us to decide this point on the present application for interim relief. However, our provisional view is that the freedom to provide services in the field of transport is governed by a special legal regime and that it would, therefore, be surprising if it were possible for a railway company to avoid the clear effect of Article 58 by free-wheeling in the slip stream of their passengers in this way.
51. A second question which arises for consideration under this head is whether, in any event, it would be open to GTR to rely in these proceedings on the infringement of the rights of it passengers. In one sense, this is may be considered a matter of standing. However, it may also be seen to raise the question whether the substantive law of the EU permits the rights of others to be invoked in these circumstances.
52. Mr. Mercer placed at the forefront of his submissions on this point Case C-224/97, [1999] EUECJ C-224/97 Ciola v Land Vorarlberg, which, he said, establishes that a company may rely on its customers' rights where its customers are affected. Mr. Ciola, the manager of a company which ran a marina on Lake Constance, was prosecuted for granting mooring rights to non-residents in excess of the quota set by the local authority. The court held that EU law precluded such a quota. It stated that "the right freely to provide services may be relied on by an undertaking as against the State in which it is established if the services are provided for persons established in another Member State". It went on to say that "that right includes the freedom for recipients of services to go to another Member State in order to receive a service there, without being obstructed by restrictions" (at [11]). This was a reference to the counterpart of Mr. Ciola's right to provide services. As Mr. Segal points out, GTR seeks to found this part of its case on the rights of its customers to provide or receive services to or from third parties. It does not seem to us that Ciola assists in this regard.
53. Joined Cases C-286/82 and C-26/83, [1984] EUECJ R-286/82 Luisi and Carbone, on which Mr. Mercer also relies, establish that the freedom to provide services includes the freedom, for the recipients of services, to go to another Member State in order to receive a service there without being obstructed by restrictions. However, in our view, it does not provide any support to GTR on the issue now under consideration.
54. Mr. Mercer also referred briefly to Case C-60/00, ECLI:EU:C:2002:434 Carpenter where Mrs Carpenter, a third country national, was able to rely on the free movement rights of her husband in order to justify her claim to remain in the United Kingdom. However, it seems to us that that case must be understood in the specific context of the law on EU citizenship and Article 8 ECHR and cannot be applied, without more, to the present case.
55. It seems to us, therefore, that none of these authorities supports GTR's case. However, once again it is not necessary for us to express a concluded view on this point.
56. We have explained above at some length, in the context of considering the freedom of establishment under article 49, why, when determining whether that provision is engaged, it is necessary to focus on the purpose or object of the industrial action as opposed to the effect of the industrial action itself.
57. The position is the same under article 56, and indeed Laval was itself an article 56 case. In each of these cases it is the impact of the purpose or object of industrial action, as opposed to the industrial action itself, which justifies giving horizontal effect to the Treaty Articles in such situations.
58. Case C-112/00, ECLI:EU:C:2003:333 Schmidberger was relied on before us as an example of a case in which collective action was considered to be a restriction on the free movement of goods, as it involved an effective blockade by environmental campaigners of the Brenner Pass used by many heavy goods vehicles to travel between Austria and Italy. However, that case involved a challenge to the failure of the Innsbruck Provincial Government to ban the demonstration and was not concerned with the horizontal operation of free movement. In particular, it does not provide any support for the proposition that industrial action of itself may engage the Treaty provisions on free movement. Plainly, approaching the matter in that way, it would be quite impossible to say that the object of the action in this case interferes with the freedom to receive or provide services, and Mr Mercer did not suggest that it did. He accepted that it was the strike action, rather than its purpose, which potentially interfered with their free movement rights.
59. In the present case the judge, in considering whether the effect of any breach of Article 56 would be too uncertain or indirect, concentrated on the effect of the industrial action itself. This, no doubt, reflected the basis on which the case had been pleaded and presented to him. Proceeding on this basis he concluded that he was not satisfied that the measure could amount to more than an indirect or uncertain impact upon the many passengers who would have to make their way to Gatwick Airport by other routes during the currency of the strike.

Justification

60. Even if it were legitimate to focus on the form which the industrial action takes, we would agree with the judge. It is not possible in this case to say, in advance of the action being taken, with respect to any individual passenger, that his or her ability to travel to or from the EU will be interfered with. Moreover, it would undermine the right to strike in a most fundamental way if all passengers potentially and indirectly affected by the strike could claim that it was interfering with their rights to provide and receive services. Subject to a defence of justification, the union's liability would be open ended. That would be an extraordinary consequence of this argument succeeding.
61. At the hearing we invited counsel to address us initially on the scope and effect of Articles 49 and 56. In the light of the conclusion which we have reached on those issues it was not necessary for us to hear argument on the issue of justification. Despite the fact that both parties wanted us to address that issue, we think it would have been inappropriate to do so at an interlocutory stage when the issue in the event did not arise.

Disposal

62. It was for these reasons that we refused the interlocutory injunction.
63. We stress that we reached our decision on purely legal grounds. Whether the strike is or is not proportionate, there are no legal grounds on which GTR is entitled to an injunction to block it.