Case C-55/94 Reinhard Gebhard [1995] ECR 4165

Key point
  • The Chapter 2 on the Right of Establishment and Chapter 3 on Services in the TFEU are mutually exclusive since the former assumes that the provider and recipient of the service are in different states (Article 56 TFEU) and the right of establishment does not apply (Article 57 TFEU)
  • Any restrictions to the right to establishment can be subject to national rules that apply to the exercise of those services within the member state, provided that they are proportionate
Facts
  • Gebhard was a German lawyer who was practising in Milan in a chamber is established
  • He was suspended from practising by the Milan Bar Council as he was not registered with them as required under Italian law
  • Gebhard challenged the compatibility of the legislation with Community law
Ruling
  • The rule, as a restriction on the freedom of establishment, must be proportionate to be compatible with Community law
  • (It the jurisdiction of the national court to rule on compatibility)
Judgment

Distinguishing the free movement of persons and services

  • As a preliminary question, the court had to decide whether the facts fell under Chapter 2 on the Right of Establishment or Chapter 3 on Services in (what is now) the TFEU
  • The two chapters are mutually exclusive since the Chapter on Services assumes that the provider and recipient of the service are in different states (Article 56 TFEU) and the right of establishment does not apply (Article 57 TFEU): [22]
  • The right of establishment refers to the right to ‘participate, on a stable and continuous basis, in the economic life of a Member State other than his State of origin and to profit therefrom’: [25]
  • In contrast, the chapter on services applies where the provider of services moves to another Member State to pursue his activity on a ‘temporary basis‘: [26]
    • On the meaning of ‘temporary basis’: it refers to not just duration but also ‘regularity, periodicity or continuity’ and does not exclude services providers who equip themselves with infrastructure such as an office or chambers necessary to perform their service: [27]
  • Applying the above to the facts, Gebhard was found to fall under Chapter 2 on right of establishment professional activity on a stable and continuous basis: [28]
  • Contrary to the argument of the Milan Bar Council, the fact that Gebhard was not registered with them did not prevent him from being established: [29]

Application of the right of establishment

  • Where the taking-up or pursuit of a specific activity is subject to such conditions in the host Member State, a national of another Member State intending to pursue that activity must in principle comply with them: [36]
  • But national rules that restrict freedoms under the Treaty must fulfil four conditions:
    1. they must be applied in a non-discriminatory manner;
    2. they must be justified by imperative requirements in the general interest;
    3. they must be suitable for securing the attainment of the objective which they pursue; and
    4. they must not go beyond what is necessary in order to attain it: [37]
  • In applying their national provisions, Member States may not ignore the knowledge and qualifications already acquired by the person concerned in another Member State: [38]
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