Direct effect is a principle of EU law under which specific rights created by certain EU regulations and directives (=EU legislation) or court decisions are enforceable in the national courts of EU member states without first becoming part of national law.
The court of justice first defined the principle in the Van Gend en Loos case in 1962. However, in order for obligations created by European Law to have direct effect they must be precise, clear and unconditional and not require any additional measures, either national or European. Hence, the European Court of Justice has rejected direct effect in cases where a Member State had a margin of discretion in implementing the provision of EU law into national law.
The European Court of Justice has carved out two aspects to direct effect. The first is referred to as vertical direct effect and relates to the application of the principle between individuals and the State. The second is referred to as horizontal direct effect and relates to the application of the principle between individuals.
It is important to note that the neither the EU treaties nor the EC treaty prescribe for the direct effect of EU legislative measures. Rather, direct effect was created by the European Court of Justice to give effect to relevant provisions in order to further general principles of EU law.