Introduction
The Factortame case, specifically Case C-213/89 Factortame (No. 1) [1990] ECR I-2433, is a landmark ruling by the European Court of Justice (ECJ) that significantly impacts the relationship between national law and European Union (EU) law. At its core, the case concerns the principle of the supremacy of EU law and the obligations of national courts to grant interim relief when domestic legislation potentially conflicts with EU law. The principle of EU law supremacy dictates that, in areas where the EU has competence, EU law takes precedence over the laws of the individual member states. National courts are required to interpret their domestic law in a manner consistent with EU law. The key requirement established by this case is that national courts must set aside any national law that would prevent them from granting interim relief where EU law rights are at stake. This obligation is a direct consequence of the need to ensure the full effectiveness of EU law.
Background to the Factortame Litigation
The genesis of the Factortame case lies within the context of the Common Fisheries Policy (CFP) of the European Economic Community (EEC), the predecessor of the EU. This policy allocated fishing quotas to member states, intending to manage fishing stocks and ensure fair access for all. However, there were concerns that certain individuals and companies were registering vessels in the UK to gain access to the UK's quota, despite lacking genuine economic links to the UK. The British government, in response, enacted the Merchant Shipping Act 1988 and related regulations in an attempt to remedy this issue. These measures established stricter requirements for registering a fishing vessel as British. Specifically, it stipulated that such vessels needed to be at least 75% owned by British residents. This legislation effectively excluded a large number of Spanish fishermen from fishing in British waters, prompting legal challenges.
The Core Issue: Interim Relief
The Spanish fishermen, many of whom were impacted by the new registration requirements, sought judicial review of the 1988 Act and regulations, arguing that they contravened EU law, specifically provisions regarding non-discrimination on the basis of nationality. A central aspect of their challenge was the request for interim relief. This meant they asked the court to temporarily suspend the application of the 1988 Act until the compatibility of the legislation with EU law was fully assessed by the courts. Under the existing English common law at the time, courts had no power to suspend Acts of Parliament via interim injunctions, primarily because injunctions could not be issued against the Crown, which would effectively nullify or interfere with the sovereign powers of parliament. Therefore the national courts were unable to grant interim relief.
The ECJ Ruling in Factortame (No. 1)
Faced with this legal barrier, the House of Lords sought clarification from the ECJ regarding whether EU law obliged national courts to provide interim relief in instances of potential conflict between national law and EU law. The ECJ delivered a landmark judgment in Factortame (No. 1), stating that national courts are indeed obliged to provide interim relief where it is necessary to protect rights derived from EU law. This is despite any conflicting domestic legal rules. Specifically, the ECJ held that:
Community law must be interpreted as meaning that a national court which, in a case before it concerning Community law, considers that the sole obstacle which precludes it from granting interim relief is a rule of national law must set aside that rule.
The ECJ further elaborated that the full effectiveness of EU law would be greatly undermined if national legal systems could prevent national courts from granting interim relief necessary to protect rights conferred under EU law. The judgment emphasised that national provisions that might impede the full effectiveness of EU rules, even temporarily, are incompatible with the principles of the EU legal order as described in Simmenthal. Therefore, if a national court has the ability to temporarily suspend legislation, where that legislation is the only barrier to providing interim relief, it is required to do so.
Implications of the Factortame Judgment
The ruling in Factortame (No. 1) had profound implications for the relationship between national legal systems and EU law. It firmly established the concept of the supremacy of EU law. This meant the legal framework of member states was subordinate to EU law in areas of Union competence. Several key points emerge from the ruling:
1. Primacy of EU Law: The judgment clarified that when domestic law and EU law clash, the principle of primacy requires domestic courts to prioritize the application of EU law. This principle is particularly true in situations where it is necessary to safeguard the rights of individuals as afforded by EU law.
2. Obligation for Interim Relief: The ECJ imposed an obligation on national courts to set aside domestic legal rules that prevent them from granting interim relief in cases involving potential breaches of EU law. This obligation is fundamental to ensuring the efficacy of EU law and the rights of individuals under it.
3. Limitation of Parliamentary Sovereignty: The judgment represented a restriction on the traditional concept of parliamentary sovereignty in the UK. National courts were now required to disregard national law, even Acts of Parliament, when these laws conflicted with EU law, at least until a final judgment on compatibility could be obtained from the ECJ.
4. Direct Effect: The principle of direct effect stipulates that some EU provisions may create rights which individuals can rely on directly before national courts. Factortame (No. 1) reinforced the importance of direct effect by ensuring that EU law does not remain a theoretical framework, but actually provides individual protections in practice.
Factortame (No. 2) and Subsequent Developments
Following the preliminary ruling in Factortame (No. 1), the case returned to the UK courts. In Factortame (No. 2) [1991] 1 AC 603, the House of Lords applied the principles set forth by the ECJ, granting interim relief and disapplying the relevant sections of the Merchant Shipping Act 1988. This action represented a significant moment in UK constitutional history, as it was the first time a UK court had disapplied an Act of Parliament due to conflict with EU law.
The Factortame litigation continued through several other cases, further developing the jurisprudence related to state liability for breaches of EU law (Factortame (No. 3)/Brasserie de Pêcheur [1996] ECR I-1029). It also considered situations where member states could be held liable for damages caused by such breaches. This was developed in Köbler [2003] ECR I-10239, which determined that liability for a breach extended even to decisions made by national supreme courts. The rulings in Bergaderm [2000] ECR I-5291 clarified the conditions for non-contractual liability of EU institutions. In areas with limited discretion for the EU institution, an infringement of EU law is a sufficiently serious breach. These cases collectively illustrate the broad reach of EU law supremacy and the requirements for effective legal protection.
Relevance to Other Areas of Law
The principles established in the Factortame litigation extend beyond the realm of fisheries law. The core tenets of EU law supremacy, the obligations for interim relief, and the ability of individuals to invoke EU rights before national courts have broad application. These concepts have had significant effects on areas, such as the free movement of goods (see CIA Security International SA v Signalson SA [1996] ECR I-2201, which ruled that technical regulations that were not properly notified cannot be applied in a horizontal dispute), employment law, and consumer protection, among others. They also provide a basis for assessing the legality of national measures that might impede or breach the rights granted under EU law.
Furthermore, these cases have informed the ongoing debates on the relationship between EU law and national constitutions, and specifically, the application of EU law to existing national legislation. The ruling made in the case Zuckerfabrik Suderdithmarschen [1991] ECR I-415, which determined that national courts can also grant interim relief when the compatibility of a Community regulation is being challenged, supports the view that courts will grant interim relief to protect individuals against potentially unlawful measures, regardless of the source.
Conclusion
The Factortame (No. 1) [1990] ECR I-2433 judgment is a landmark case that fundamentally altered the understanding of the relationship between EU law and national law. It established the principle that national courts must provide interim relief to protect EU law rights and must disapply any conflicting domestic legal rules. This ruling has had far-reaching implications, including the limitation of the traditional doctrine of parliamentary sovereignty in the UK and it has provided a basis for the legal protection of individual rights granted by EU law. This landmark decision continues to be a cornerstone of EU legal jurisprudence, and an important example of the practical impact of EU law on the domestic legal systems of member states.
