R (Factortame Ltd) v Secretary of State for Transport
R (Factortame Ltd) v Secretary of State for Transport[1] was a judicial review case taken against the United Kingdom government by a company of Spanish fishermen who claimed that the United Kingdom had breached European Union law (then Community Law) by requiring ships to have a majority of British owners if they were to be registered in the UK.In order to put an end to this practice, the British Government enacted a series of measures which proved largely ineffective.The claimants also demanded an order of prohibition preventing the Secretary of State from treating its registrations under the 1894 Act as having ceased.HMG argued that the registration requirements were intended to ensure that fishing vessels flying the British flag had a genuine link with the UK.It also followed from the ECJ's case law that it was for the legal system of each Member State to designate the procedures intended to protect Community law rights, and that these procedures must not "be adapted so as it make it impossible in practice to exercise the rights which the national courts are required to protect" (case 61/79, Denkavit, ECLI:EU:C:1978:49).Following the Advocate-General's opinion, the ECJ held that a national court, in fact, has a duty to grant interim relief to safeguard alleged Community rights of individuals until the decision of the ECJ on the interpretation of Community law is available, and where a rule of national law would deny such relief, to set aside that rule.[9] In the same way that Parliament had introduced legislation to remedy areas of UK law which did not meet the standards set by EU directives, the House of Lords was now accomplishing the same task in giving judgment for Factortame.However, in the case of Macarthys v Smith, Lord Denning suggested that, should such an event occur, the courts would be obliged to obey the domestic law over the European.On 25 July 1991 the ECJ gave its ruling in case C-221/89 on the question referred by the High Court,[12] namely whether the conditions for registration of fishing vessels under the 1988 Act were compatible with Community law.Agreeing with Advocate-General Mischo's opinion, the court (sitting as the full court of 11 justices) en banc held that "it is for the Member States to determine ... the conditions which must be fulfilled in order for a vessel to be registered in their registers and granted the right to fly their flag, but, in exercising that power, the Member States must comply with the rules of Community law".In the event, the ECJ found the nationality requirements in the Merchant Shipping Act 1988 discriminatory and contrary to Article 43 EC as a restriction on the freedom of establishment.In respect of the condition that the vessel should be managed and its operations directed from the UK, the ECJ found, however, that this requirement was compatible with Community law.At this time the ECJ had just delivered judgment in Francovich (ECLI:EU:C:1991:428), which established the principle that "a State must be liable for loss and damage caused to individuals as a result of breaches of Community law".In its judgment delivered on 5 March 1996,[13] the court of nine justices en banc reaffirmed the right of reparation, and stated that it existed irrespective of whether the provision of Community law in question has direct effect.The ECJ rejected the contentions that the right to reparation required the introduction of legislation by the EU, and that the availability of damages should be decided, in each case, on the basis of the national law of the state in question.It rejected the argument that HMG's reliance on legal advice at the time of passing the 1988 Act did not deprive the breach of its grave and manifest character.This was not accepted by Judge Toulmin who emphasised that such damages were only awarded in cases where the breach in question had caused harm to the claimant's self-esteem.The Factortame case has produced large amounts of academic debate as to whether it can be reconciled with the idea of legislative supremacy as stated by Dicey.Prior to Brexit (31 January 2020), the UK recognised the primacy of the European Court of Justice for those areas of law in which the EU has competency."[17][18] This view of the UK's ultimate sovereignty was supported by Lord Justice Laws in the Thoburn v Sunderland City Council case, when he said that "there is nothing in the European Communities Act which allows the European Court, or any other institution of the EU, to touch or qualify the conditions of Parliament's legislative supremacy in the United Kingdom ... That being so, the legislative and judicial institutions of the EU cannot intrude upon those conditions."