Introduction
The principle of parliamentary sovereignty, a key part of the United Kingdom's constitutional system, means Parliament holds full authority to create laws. No other body, including the courts, can overturn an Act of Parliament. However, the UK's entry into the European Economic Community (EEC) in 1973, and the passing of the European Communities Act 1972, changed this structure. This Act made European Community (EC) law part of UK law. R v Secretary of State for Transport, Ex p Factortame Ltd (No 1) [1990] 2 AC 85 became a major case, examining the relationship between national and EU laws. It established that directly applicable EC law takes priority over conflicting UK laws. The House of Lords evaluated how EC law’s direct effect and higher authority affected traditional views of parliamentary sovereignty.
The Background of the Factortame Dispute
The Merchant Shipping Act 1988, which aimed to limit foreign ownership of UK fishing vessels, was at the center of the Factortame case. Spanish fishing companies, operating through UK-registered subsidiaries, argued the Act’s rules treated them unfairly based on nationality and breached EC law principles on freedom of establishment and equal treatment. These rules are set out in the Treaty of Rome, which allows businesses to operate in any Member State and bans nationality-based discrimination.
The Preliminary Ruling and the House of Lords' Decision
The Factortame claimants asked for a temporary block on the Merchant Shipping Act 1988’s enforcement while the European Court of Justice (ECJ) decided whether the Act followed EC law. The High Court referred the EC law question to the ECJ under Article 234 (formerly Article 177) of the Treaty on the Functioning of the European Union. This process lets national courts ask the ECJ to interpret EU law. When the House of Lords reviewed the request to pause the Act, they faced a constitutional issue. Blocking the Act would temporarily set aside a law passed by Parliament, clashing with parliamentary sovereignty.
The ECJ's Decision and the Priority of EC Law
The ECJ ruled the Merchant Shipping Act 1988 conflicted with EC law. This required the House of Lords to choose between upholding parliamentary sovereignty or following the ECJ’s ruling on EC law’s higher status. The ECJ stated that by joining the European Community, Member States accepted EC law’s priority over national laws.
Setting Aside National Law: A New Approach
The House of Lords decided not to apply parts of the Merchant Shipping Act 1988. This recognized that directly effective EC law overrides conflicting UK laws. It created a rule that UK courts must follow directly effective EC law when national laws clash with it. This adjusted the understanding of parliamentary sovereignty. While Parliament kept the power to pass laws, courts could now refuse to apply those conflicting with directly effective EC law.
Impact on Parliamentary Sovereignty and UK Law
Factortame changed how UK and EU laws interacted. It confirmed EU law’s priority in the UK and allowed courts to ignore conflicting UK laws. This started debates about parliamentary sovereignty. Some claimed Factortame weakened it, while others argued Parliament had chosen to limit its power by joining the EEC and passing the 1972 Act.
Subsequent Developments
The Factortame case led to further rulings (Factortame No 2 and No 3), dealing with state liability for breaking EC law. The case remains relevant despite the UK leaving the EU. The European Union (Withdrawal) Act 2018 repealed the 1972 Act, but Factortame still shows how international and domestic laws can interact.
Conclusion
R v Secretary of State for Transport, Ex p Factortame Ltd (No 1) is a landmark case in UK constitutional law. The House of Lords’ choice to disapply UK law in favor of EC law established EU law’s priority in the UK. This moved away from traditional parliamentary sovereignty, raising ongoing questions about its effects. The case shows how national legal systems handle international obligations, balancing parliamentary sovereignty and EC law. Factortame continues to influence debates about national lawmaking power and international agreements. It remains a key example of how domestic and international legal systems interact.
