The ecj created the doctrine of direct effect in relation to treaty articles
In EU law the EU legislature creates laws, through Treaties, Regulations and Directives, which are designed to be applied in the national territories of Member States. Article 258 TFEU provides a mechanism for proceedings to be initiated by the Commission against a Member State in order to ensure that the Member State complies with EU law obligations. However, this does not adequately safeguard the rights of individuals.  Thus, a Member State may fail to implement a directive or implement it incorrectly and this may impact on individuals who would be deprived of the rights which EU law sought to provide them. In an attempt to provide a more effective means of enforcement for individual rights, the ECJ has developed principles which mean that in some circumstances an individual can enforce their EU law rights in the national courts of the Member States. These principles are direct effect, indirect effect, and state liability. The focus of this essay is on the second of these principles, indirect effect, though consideration of this principle in relation to directives naturally involves an examination of the principle of direct effect. This essay attempts to critically consider whether it would make more sense for the courts to provide horizontal direct effect to directives rather than for them to ‘distort the meaning of national legislation’ through applying the doctrine of indirect effect.
The TFEU (like the EC Treaty before it) does not explicitly provide for the direct effect of EU law.  However, in the case of Van Gend en Loos v Nederlandse Administratie der Belastingen  the ECJ created the doctrine of direct effect in relation to Treaty articles. Following this case it was possible for an individual to directly enforce a right provided by EU law, where that right was provided by the Treaty. However, the ECJ limited the scope of direct effect to those provisions which were ‘sufficiently precise and unconditional’. 
Although the direct effect of Treaty articles was relatively clear cut, it was at first doubted whether Directives would be subject to direct effect.  This was because directives are not described as being directly applicable,  and are not directed at the world at large (including individuals) but merely at Member States. Furthermore, Directives are always conditional as they depend on the Member State giving effect to them and they leave a certain amount of discretionary choice as to the method of implementation to the individual Member States.  Despite this, the direct effect of Directives was established by the ECJ in Van Duyn v Home Office .  In this case a Dutch national arrived in the UK intending to work for the Church of Scientology. The immigration authorities refused the applicant leave to enter on the grounds of public policy. The applicant challenged the decision on the basis of what is now Directive 2004/38, claiming that the Directive, which provided that public policy decisions must be based on the personal conduct of the individual, was directly effective. The ECJ held that the Directive was directly effective and could be relied upon by the applicant. In doing so, the Court noted that “the useful effect of [a directive] would be weakened if individuals were prevented from relying on it before their national courts and if the latter were prevented from taking it into consideration as an element of Community law."  Thus, direct effect is seen to be promoting the effet utile of EU law in the form of Directives. 
However, despite the finding of direct effect of Directives, the principal does not stretch as far in relation to Directives as it does to Treaty articles and Regulations. In particular, a distinction must be drawn between vertical and horizontal direct effect. Vertical direct effect involves the individual enforcing his right ‘upwards’ towards and against the state. Horizontal direct effect, on the other hand, is concerned with direct effect amongst persons in the same position, ie the enforcement of individual rights as against another individual. Although vertical direct effect of Directives, was established in Van Duyn, there was no mention of horizontal direct effects.
It soon became apparent that Directives were to be granted only horizontal direct effects. In Marshall v Southampton and South-West Hampshire Area Health Authority (Teaching)  the applicant was dismissed at age 60 whereas male employees could retire at 65. National legislation did not prohibit employers from discriminated on the grounds of sex in retirement matters. The applicant contended that the treatment was in breach of an EU Directive. It was held that the Directive could only be directly effective as against the State, and not against a private person, eg a non-state employer. This rule was confirmed in the case of Faccini Dori. 
The refusal of the ECJ to extend the direct effect of Directives to horizontal situations means that even if the conditions for direct are satisfied, the individual will not be able to rely on the Directive in proceedings against another individual.  Thus, individuals can only enforce their rights where the other party is the State. This may lead to circumstances in which individuals who find themselves in very similar situations, but there is a difference for example in that one is employed by the State whereas the other is employed by a private company, do not benefit to the same extent from the enforceability of EU rights. This can hardly be described as satisfactory.
In order to overcome the injustice deriving from the refusal of the ECJ to confer horizontal direct effect on Directives, the ECJ has instead developed several strategies to reduce the impact of the rule.  The first of these strategies has been to adopt a broad interpretation of the State or ‘emanation of the State’. By doing so, the ECJ has sought to expand the circumstances in which it will be possible to make use of ‘vertical’ direct effect. Thus, in Foster v British Gas  it was held that the Directive in issue was enforceable against a nationalised utility company, despite the fact that the company was not a ‘state authority’ as it provided a public service, was under state control and was given special powers to exercise its public service functions. 
The second, and perhaps more important, strategy which the ECJ has adopted to limit the consequences of the lack of horizontal direct effect for Directives is to establish the principle of indirect effect. This principle was first set out in the cases of Von Colson and Kamann v Land Nordrhein-Westfalen  and Harz v Deutsche Tradax,  judgments in which were handed down on the same day. In both of these cases the female litigants had been the victims of discrimination in breach of the Equal Treatment Directive. The ECJ noted Article 4(3) TFEU (then Art 10 EC) which required Member States to take all appropriate measures to give effect to EU law. In Von Colson it was noted that the national courts are an organ of the State.  It was held that the national courts are required to interpret the wording of the national law in light of the Directive so as to interpret national law in requirement with EU law as far as it is possible to do so. 
Having established the principle of indirect effect, which requires the national courts to interpret national legislation in line with the Directive in question, the next issue for the ECJ was to determine whether this principle would apply even in horizontal cases between individuals. The answer to this question was provided in Marleasing SA v La Comercial Internacionale de Alimentacion SA  . In this case a Spanish court was confronted with a national law which conflicted with a particular Directive which had not been implemented in Spain. It was found that the interpretive obligation applied in horizontal cases and also that it did not matter whether the national law in question pre or post-dated the Directive. However, the interpretive obligation will only apply after the time limit for implementing the Directive has expired. 
Another strategy, related to that above, is to provide for incidental horizontal effects. This principal allows national law to be disapplied where it is not in conformity with an aspect of EU procedural law. Although this does not directly provide enforceable rights for individuals, it does affect horizontal relationships in the way the law is applied.  In CIA Security International SA v Signalson SA and Securitel SPRL  it was alleged that CIA had breached the national technical standard for alarm systems. CIA sought to defend this by claiming the inapplicability of the national standard because the State had failed to notify it to the Commission as required by a Directive. The ECJ found this to be the case and CIA was able to rely on the Directive in order to remove the national obligation. This did not create an obligation on the other party through horizontal direct effects, however it did affect the other party as they lost the case as a result of the disapplication of national law. 
Furthermore, where a Directive encapsulates a general principle of EU law, that general principle may be horizontally directly effective, even though the Directive itself would not be.  This is the case even where the time limit for implementation of the Directive has not passed. 
The introduction of these various strategies to avoid the potentially harsh consequences of a lack of horizontal direct effects of Directives mean that the law is left in a rather confused state. Various principles apply and all of these may be said to be developing over time. Thus, a particular individual cannot say with certainty whether or not a particular Directive will apply. It is therefore necessary to consider the justifications for the lack of horizontal direct effect for Directives and whether horizontal direct effect should in future be provided.
There are three main arguments against granting horizontal direct effects to Directives: a textual argument; a normative argument; and a distinction argument. The textual argument provides that Directives create obligations towards Member States alone. Craig has argued against this position, stating that there is nothing in the Treaty which provides explicitly that obligations can not be imposed on individuals by Directives.  Instead, Craig considers that the Treaty merely states that Directives are not necessarily addressed to all Member States but may be relevant to some alone. 
Dealing with the distinction argument, it is sometimes said that the denial of horizontal direct effects of Directives is justified on the basis that to provide otherwise would erode the distinction between Directives and regulations.  However, this argument is not persuasive as the same may be said of vertical direct effect of Directives.
Perhaps the most relevant argument against affording horizontal direct effects to Directives is that of legal certainty. This is a normative argument which provides that it would be contrary to legal certainty for obligations to be placed on an individual as the individual would not know whether to comply with existing national law or with the unimplemented Directive. 
However, it is at least arguable that legal certainty would be improved through the provision of horizontal direct effects of Directives. For example, if horizontal direct effects were given to Directives, the individual would be required to decide whether the provisions of the Directive differed from national law and if they were sufficiently precise and unconditional to have direct effect. This, it is contended, would be no more difficult than in any other circumstances where the individual is subject to U law obligations.  The current position of that individual, under the rule of no horizontal direct effects of Directives, is that the individual must still decide whether there are differences between the Directive and national law, since if there are the national court may interpret the national law in line with the Directive. However, in the court’s application of the interpretive obligation provided for by the principle of indirect effects, the Directive is not required to be sufficiently precise and unconditional to have direct effect. Thus, the individual may be faced with a much greater interpretive challenge as the Directive may be relatively vague but still be applicable to him through indirect effect. Moreover, if the horizontal direct effect of Directives were established, the individual would benefit from legal certainty in that any inconsistencies between national measures and the Directive would be settled in favour of the Directive. Yet, under the current law the individual must judge whether or not the national court (or courts if there are cross border issues) would feel able to read the relevant national law (which will inevitably differ from Member State to Member State) in a way which was consistent with the Directive, in which case the individual should comply with the Directive, or whether the national court could not so interpret, in which case the individual should comply with national law.  Furthermore, following the case of Pfeiffer  the national court must not only consider the precise national rule in question, but also the ‘whole body of rules of national law’.  Thus an individual must be aware of all the provisions of the Directive and all the provisions of the national law. 
In conclusion, it would indeed make more sense for the courts to accord horizontal direct effects to Directives. The arguments against doing so are weak, and doing so would allow for a greater degree of legal certainty and the provision of ‘just’ results without the need to resort to elaborate strategies designed to avoid the consequences of the rule against horizontal direct effects of Directives.