Defining precedents at the Court of Justice of the European Union

In the context of preliminary reference procedures, the Court of Justice of the European Union (CJEU) routinely clarifies national courts’ questions surrounding the application of EU law in EU member states. Importantly, the CJEU’s answers to these references define legal precedents that shape the future decision-making of national courts applying EU law. What we know little about is how the CJEU decides on the appropriate level of specificity of its answers. Existing literature suggests that highly specific answers allow the CJEU to control case outcomes in national courts, but necessarily engage with the specifics of case facts and hence apply only to a limited set of cases in national courts. Less specific answers, on the other hand, promise a wider applicability but are open for interpretation by judges in national courts, and therefore do not control outcomes. How does the CJEU make its choice between controlling case outcomes in national courts and answers that carry a wider applicability? In this paper, I develop a formal model that addresses this question. The formal model argues that the CJEU strategically anticipates how its answers will affect national courts’ resolution of future cases involving EU law and their future use of preliminary references to clarify EU law. The model shows how national courts’ prominent role in the application and enforcement of EU law also allows national judges to indirectly shape the development of legal precedent in the CJEU’s answers to preliminary references. The model’s empirical implications are illustrated with evidence from two case studies.