Introduction
The European Union's legal system changes traditional ideas of state control. The principle of priority, directly addressed in R v Transport Secretary, Ex p Factortame Ltd (No 2) [1991] 1 AC 603, states that EU law takes precedence over national law where they conflict within EU authority. This principle moves away from the UK's historical view of parliamentary power and has clear effects on how member states engage with the EU. The case set out key rules for applying this principle, particularly on direct effect and the functions of national courts. The decision requires thorough review of its main points and outcomes.
The Doctrine of Priority: A Change in Application
Factortame (No 2) did not create the idea of EU law priority. The European Court of Justice (ECJ) first explained this in Costa v ENEL (1964) Case 6/64. However, Factortame (No 2) put this principle into practice in UK law. The House of Lords, following ECJ rulings as binding, decided that national courts must set aside conflicting national laws. This decision changed the understanding of parliamentary power by recognizing a higher legal structure in specific policy areas.
Direct Effect and Its Use in Factortame (No 2)
The direct effect principle from Van Gend en Loos (1963) Case 26/62 is key to Factortame (No 2). Direct effect allows individuals to rely on EU law in national courts. In Factortame, the Merchant Shipping Act 1988’s nationality rules for fishing vessels clashed with EU Treaty rights on business establishment and services. These Treaty provisions could be directly enforced by Factortame Ltd, allowing the House of Lords to set aside the UK law.
Effect on Parliamentary Power
Factortame (No 2) changed traditional views of UK parliamentary power. It showed Parliament could not pass laws conflicting with directly applicable EU rules in EU policy areas. While Parliament kept the formal power to repeal the European Communities Act 1972 (which added EU law to UK law), doing so would require leaving the EU. Thus, Factortame (No 2) revealed real limits on parliamentary power during EU membership.
Continuing Importance of Factortame (No 2)
Though the UK has left the EU, Factortame (No 2) remains a major legal reference. It clearly shows how priority works in shared legal systems. The case stays important for its significance in constitutional law and its effect on links between national and international legal orders. It also highlights challenges national systems face when joining multinational legal agreements.
The EU Position on Priority
The ECJ’s firm view on EU law priority, repeated in cases like Internationale Handelsgesellschaft (1970) Case 11/70, stresses the need for consistent law across member states. This uniformity supports the single market and protects individual rights under EU law. The Factortame cases, ending with Factortame (No 2), clarified how national courts should apply this priority in practice.
Conclusion
Factortame (No 2) stands as a key case in UK and European law. It confirmed EU law priority in EU policy areas and its effect on national authority. The ruling required the House of Lords to address limits on parliamentary power from EU membership, stating that directly applicable EU law replaces conflicting national laws. By setting aside the Merchant Shipping Act 1988, the House of Lords treated ECJ rulings as binding and accepted EU law’s priority in its policy fields. While UK-EU relations have changed, Factortame (No 2) still shows how national and multinational legal systems interact, revealing legal and constitutional outcomes of joining multinational frameworks. The case continues to shape debates about balancing domestic and international legal authority.
