The 50th anniversary of the founding of the European Community (EC) will be celebrated on 27 March, 2007, making now a good time to take stock of the EC's impact on the legal world.

Its effect has undoubtedly been immense, with virtually every aspect of our lives being affected by EC law in the form of new directives, regulations and European Court of Justice (ECJ) decisions. Nothing, in national law, is any longer immune from challenge. Tax laws, planning decisions, even the world of sport have all felt the aggressive reach of regulation from Brussels and Luxembourg.

But beneath this proliferation of law-making lies a profound legal and constitutional question. Do the UK courts have any constitutional control over EC law making? If they do, what are the principles by which that control may be exercised? If they do not, what are the legal implications for parliamentary sovereignty?

The significance of these issues is not always appreciated. EC law rests on a series of economic imperatives. The underlying purpose of the EC treaties was one of economic integration. That integration was to be established by a common market free of internal restrictions on trade. The central tenets of the treaties, for example the four freedoms (freedom of movement of workers; the right to establish a trade or profession and to provide services; freedom of movement of goods and capital), progressive approximation of economic policies and creation of a common customs tariff, reflect this fundamental economic purpose.

There is, though, a tension between economics as a regulating principle of law and the wider constitutional concerns that underpin, for example, the protection of fundamental rights. In the words of one commentator: "The language of economics and the utilitarian philosophy that underpins it have displaced an older political language in which questions about controlling public power, ensuring accountability and political participation were central."

The rationale for the European Convention on Human Rights is, as might be expected, very different from that in EC law. As is well known, the convention was negotiated to guarantee rights of a type that were jeopardised in the holocaust. It was intended to cement the moral foundations of any new European order that might emerge after World War Two. It is a moral as opposed to an economic foundation that is required to provide continuing and effective protection for fundamental rights.

Historically, the ECJ was resistant to the idea that fundamental rights were either intrinsic to the treaty or part of the general principles of EC law. This position reflected the tension inherent in the then developing concept of EC law supremacy. If a member state were free to depart from uniform provisions of EC law then, axiomatically, EC law could not be supreme.

Although the ECJ's stance has softened considerably in recent years, there is still much potential for conflict between Luxembourg (the seat of the ECJ) and Strasbourg (the seat of the European Court of Human Rights). There is also the potential for conflict between our traditional doctrine of parliamentary sovereignty which might, in any given case, be thought to compel one outcome and application of EC law which – with its economic imperatives – might compel another.

If conflicts of this nature were to arise, we have no clear rules for their resolution. On one view, the issue of Kompetenz-Kompetenz (the competence to decide on competences) may require the determination of what is within the scope of EC law to be decided by the ECJ rather than by the national court (see articles 230 and 234 of the treaty). If that is right it has the effect that – in terms of applying EC law – parliamentary sovereignty is a dead letter.

But an extreme assertion of EC sovereignty may ignore the true content of what was actually transferred by the member states when acceding to the EC treaty. It is, surely, hardly conceivable that national parliaments would have ratified a treaty that was capable of violating the fundamental tenets of their own constitutions. If that is right, it means that UK judges retain overall control.

The dangers are particularly acute because of the concealed potential for the expansion by the ECJ of the proper content of EC law. In Phil Collins (1993), for example, the recordings of singers Phil Collins and Sir Cliff Richard had been distributed in Germany without permission. German nationals were protected against breach of copyright but this prohibition did not extend to foreigners. There were no EC provisions harmonising national laws with respect to protecting literary and artistic property but the ECJ still held that article 12 EC (protection against discrimination) applied and that German national law contravened EC law. Phil Collins, therefore, gives rise to the argument that national measures with even the most tenuous relationship to treaty provisions could lead to an extension of what is within the scope of EC law.

Already, our courts have become embroiled in these issues, though to no clear result. Phil Collins was unsuccessfully relied on by the claimants in R v Ministry of Agriculture, Fisheries and Food, ex partie First City Trading and others (1996). There, the claimants sought judicial review of the Beef Stocks Transfer Scheme that had been introduced following the fall in demand for British beef following the BSE crisis.

Mr Justice Laws took a very narrow view of the reach of EC law holding that the case was outside EC law altogether and that a mere connection with EC general principles was not enough. But in a later decision, Mr Justice Richards said that he had 'real doubts' about whether that was right.

In another recent case involving Arsenal Football Club, Mr Justice Laddie went as far as to say that the ECJ had acted outside its powers. However, he was overruled by the Court of Appeal which adopted a rather more cautious approach.

The vice president of the EC has recently suggested that the 50th anniversary of the signing of the treaties should be viewed as an opportunity for member states to sign up to the charter of fundamental rights, which suffered a serious setback in the referendums in France and the Netherlands when the constitution was roundly rejected by the voters.

But many do not welcome the further expansion of EU power unless it is capable of being checked by specific constitutional guarantees in the member states. Only time will tell whether that growing power can be checked or whether it is already out of control.