Indirect effect describes a situation where national courts are required to interpret national law in line with an unimplemented or badly implemented directive, as opposed to ignoring national law in preference to the directive as occurs when direct effect is invoked. Indirect effect arises from the failure of a member state to implement a directive—either correctly or at all—but where direct effect cannot apply because the party against whom the directive is sought to be enforced is a private entity or otherwise fails to meet the conditions which would give the directive direct effect. In Von Colson and Kamann v Land Nordrhein-Westfalen, the ECJ ruled that national courts should interpret national law in line with the directive, "in so far as it is given discretion to do so under national law". While Von Colson dealt with a situation where a member state had failed to implement a directive correctly, in Marleasing v La Comercial Internacional de Alimentacion the ECJ extended indirect effect to situations where the member state concerned had not implemented the directive at all.
- Case 14/83  ECR 1891 at para 28.
- Case C-106/89,  ECR I-4135.