Revisiting Factortame - why is it so important

INTRODUCTION

1.         The Relations between European Community Law and British Law has its Landmark in the decision from the European Court of Justice (ECJ) in the Factortame Case^[1]. In this Judgment, The ECJ stated the Supremacy and the immediate efficacy and enforcement of the Community Law. Also, it stated that no national legal system could be used to prevent the effectiveness of Community Law.

2.         Undoubtly this decision implies a need to abandon the classical Diceyan conception of Sovereignty rested in the Powers of the Parliament to enact law and to not be bound by previous acts. After the ECJ decision, this point of view was shaken and mut be put in perspective.

3.         In the following lines we will bring the facts that leads Factortame and others to seek for a judicial solution and a brief summary of the decisions regarding the application by Factortame for an interim relief (known as Factortame I and II).

4.         After, interpreting the speech of Lord Bridge of Harwitch upon sovereignty, we will show that the classical conception my be misleading, pointing that the classical definition cames from a non democratical point of view, which, perhaps, could be replaced.

---

ARGUMENT

1.         The Treaty of Rome, stated that products of fisheries shall be part of the Common Market to be created^[2]. Thus, since 1957, the fishing activities were a great concern for the European Economic Community. And a Common Policy was needed.

2.         The first document in this aspect was the Regulation (EEC) No 2141/70 of the Council of 20 October 1970, laying down a common structural policy for the fishing industry^[3], and granted free access to state members vessels to other members fishing areas.

3.         When United Kingdom accessed the European Economic Comunity (EC) in 1973 by force of the European Communities Act 1972 (ECA 1972), The Common Fisheries Policy (CFP), already existed.  

4.         The CFP establishes a fixed fishing quota for its members. But, due to differences between states members, and lax compliance standards of the Spanish fleet, the system did not worked as planned.

5.         The major problem is the "quota-hoping", where nationals from other members states registers theirs vessel in other states, different of their nationalities. The problem is that the product of the fisheries was not sent to the country where the vessel was registered, but to the country of the fishermen.

6.         The problem affected all members of the European Community, but special attention can be drawn to Spain and United Kingdom.

7.         Trying to put an end at the quota-hoping problem, in 1988 the United Kingdom changed the statutory regime governing the registration of Britishfishing vessels by enacting the Merchant Shipping Act 1988 (MSA 1988). Basically, Section 14 of MSA 1988 determined that the vessels should be registered only if it were British owned, managed from within the United Kingdom, and the charterer, operator or manager of the vessel is British.

8.         According to Iain McLean, Her Majesty's Governent knew about the risk that the MSA 1988 was probably unlawful under European Law^[4], as stated by Lord Parry speech. Indeed, if the citizens of the member states were entitled, under European Law, to the right not to be discriminated against on the grounds of nationality, having the right to establish a business anywhere in the European Community, and the right to participate in the capital of companies; if those rights were fundamental and could not be swept away, even by the CFP, why a Member State would enact a national law against it?

9.         The probable answer is related to a Diceyan conception of sovereignty. To Dicey^[5],

"The sovereignty of Parliament is, from a legal point of view, the dominant characteristic of our political institutions. And my readers will remember that Parliament consists of the King, the House of Lords, and the House of Commons acting together. The principle, therefore, of parliamentary sovereignty means neither more nor less than this, namely that "Parliament" has "the right to make or unmake any law whatever; and further, that no person or body is recognised by the law of England as having a right to override or set aside the legislation of Parliament,"8 and further that this right or power of Parliament extends to every part of the King's dominions."

10.       The point of view is shared by Jean Bodin. According to Encyclopaedia Britannica, difficulties related to sovereignty can be traced back to the time of absolutism, when “Bodin, stated in 1576 that the sovereign who makes  the laws cannot be bound by the laws he makes (majestas est summa in cives ac subditos ligisbusque solute potestas)”.^[6]

12.       Although the authorities of those Authors, the Section 2 (1) of ECA 1972 states that

2.-(1) All such rights, powers, liabilities, obligations and restrictions from time to time created or arising by or under the Treaties, and all such remedies and procedures from time to time provided for by or under the Treaties, as in accordance with the Treaties are without further enactment to be given legal effect or used in the United Kingdom shall be recognised and available in law, and be enforced, allowed and followed accordingly; and the expression "enforceable Community right " and similar expressions shall be read as referring to one to which this subsection applies.

13.       In other words,  British judges were implicitly empowered to enforce Community Law, disregarding British Law.

14.       In these grounds, Factortame – a Spanish company aggrieved by MSA 1988, among others, went to Court to challenge what they understood to be a breach of the European Law.

15.       According to the historical facts laid from Lord Bridge of Harwich in the judgment of the appeal for interim relief in the House of Lords^[7], the plaintiffs applied for a Judicial Review. The Divisional Court heard the application and requested a preliminary ruling under Article 177 of the Treaty of Rome. The Divisional Court also considered an application for interim relief, granting the order requested not to apply the MSA 1988. The Court of Appeal set aside the order for interim relief, but granted leave to appeal to the House of Lords.

16.       When the House of Lords first discussed the interim relief, it states that between particular, the possibility was clear. But granting an interim relief against the Crown, to Their Lordships position was not possible, for it has to confer upon the plaintiffs rights that were contrary to Parliament's sovereign will, and correspondingly, have to deprived British fishing vessels of the enjoyment of a proportion of the United Kingdom quota under CFP^[8]. As a matter of English Law, the Court had no power to grant the relief.

17.       But as Lord Bridge stated^[9]

It follows that this appeal must fall to be dismissed unlessthere is, as the appellants contend, some overriding principlederived from the jurisprudence of the E.C.J. which compelsnational courts of member states, whatever their own law mayprovide, to assert, and in appropriate cases to exercise, a power toprovide an effective interlocutory remedy to protect putativerights in Community law once those rights have been claimed andare seen to be seriously arguable, notwithstanding that theexistence of the rights is in dispute and will not be establishedunless and until the E.C.J. so rules.

18.       Lord Harwitch also explained that the principle of the Community Law that allows this argument to be invoked is the one that states that Community rights are directly enforceable. And those rights must be protected by national courts with effective remedies, overriding rules of national law which render the exercise of rights impossible or difficult^[10].

19.       But, until the analysis of Factortame, the European Court of Justice (ECJ) had ruled in the sense that delegated legislation must be valid unless and until declared invalid. Thus, the House of Lords decided to adjourn the decision related to the interim relief and submit the question to a preliminary ruling to the ECJ under article 177 of The Treaty of Rome.

20.       The ECJ, then, decided that Community Law were directly enforceable, ruling that national courts could set aside any rule of the legal system that prevents the effectiveness of Community Law. At last, the ECJ stated that if there is no remedy in the legal national system, the national courts are allowed to set aside any limitation and enforce the Community law, under the principle of cooperation laid down in article 5 of the Treat of Rome^[11][12].

21.       The case returned to the House of Lords^[13], and the interim relief was granted. The speech of Lord Bridge of Harwich brought issues regarding sovereignty and judicial discretion. Lord Goff of Chieveley added explaining which applicable principles the plaintiff must comply to get an interim relief in which the public interest is involved. The legal basis for that is the section 37 of the Supreme Court Act of 1981, and the Court must consider the existence of an adequate remedy in damages, and if in doubt, proceed to the balance of convenience.  Lord Jauncey of Tullichettle build his decision on the necessity of the Party to cross the threshold defined as being a strong prima facie case. Their Lordships concluded that the applicants for the interim relief had complied with the requisites and deserved the interim relief they sought.

22.       An interesting issue regarding Factortame is the question regarding sovereignty. Indeed, as Lord Bridge of Harwich stresses in his speech, ^[14] public comments on the decision of the ECJ suggested an invasion by a Community institution of the sovereignty of the United Kingdom Parliament.  And so eurosceptics raises this argument untill today, more than twenty years after the Court delivered its decision.

23.       To Lord Bridge this is a misconception. The supremacy of the Community Law over national law was established in the jurisprudence of the ECJ before the United Kingdom joined the community. In this sense, whatever limitation of its soverignty Parliament accepted when it enacted ECA 1972, was voluntary.

24.       Perharps there is misconception in Lord Bridges's point of view. It is difficult to agree with the statement that Sovereignty relies only on the supremacy of the Law, stablished by jurisprudence.

25.       Back in 1972, before the Parliament voted the ECA 1972, Her Majesty's Government printed a leaflet, with a brief summary of what was in the White Paper, called The Historic Decision^[15]. In this document the sovereignty issue was adressed as follows:

"There is no question of Britain losing essential national sovereignty; what is proposed is a sharing  and an enlargement of individual national sovereignties in the  common interest."

26.       The Supremacy of the Community Law was also there, but in soft words:

" The English and Welsh and Scottish legal systems will continue as before, except that there will be certain changes under treaties concerning economic and commercial matters. The British safeguards of habeas corpus and trial by jury will remain intact. So will the principle that a man is innocent until he has been proved guilty. Family law, nationality law, land law and the law of landlord and tenant will remain exactly the same. The common law will remain the basis of our legal system."

27.       The terms of Section 2 of ECA 1972 was also clear. Thus it is difficult to state that the ECJ was invading Parliament Sovereignty. Fact is that Parliament granted part of its sovereignty to European Community. As the others members did.

28.       The point is that what was not that clear was the concepts of Supremacy of Community Law, and its direct effectiveness. But, as Neil MacCormick^[16] puts it, the question concerning the enactment of law is related to democracy. The Diceyan view of sovereignty are construed upon a Parliament with parties which have strong internal discipline, and with little representation in the electoral system. If this is true, decision making of European Community Law can be as far from regular britons as its own acts.

29.       In that point of view, sovereignty does not relate with the institution Parliament, nor with the aspect related to supremacy of law, but it relates to decision making and the democratic process. This being so, we have a displacement of point of views, from the Sovereign to the subject, changing the habitus^[17], and perhaps the fields where the concept of sovereignty had its classical topoi.

30.       Now, we must not be confused. The supossed atack by the ECJ decision on the Parliament Sovereignty can not be effective unless national courts applies the rulings. In the case, it was to the House of Lords to strike the blow.

31.       But it is worth noting that even though the Judiciary has to enforce the Community Law, the House of Lord did not took it on a liberal or revolutionary way. Rather, it took it in a very conservative pace. The speeches of their Lordships were very clear on stating that public interest must prevail, and that the applicant for an interim relief against the Crown must demonstrate that it has a strong prima facie case, being that a threshold to cross. The result is that there can be a dissaplication of an act duly enacted by the Parliament in breach of Community Law, even with an interim relief. But for that to happen, there cannot be a damage remedy, the applicant must cross the threshold of demonstrating prima facie a strong case and then surviving the balance of convenience. We can say, then, that although possible, the possibility to follow Factortame steps are extremely difficult and hard.

---

CONCLUSION

1.         The Sovereignty question relied upon the Power of Parliament can be misleading. When enacting the ECA 1972, the Parliament transfered part of its sovereignty to European Community. Diregarding this it did not entirely give away its entire powers, and still is the place where acts are enabled.

2.         Furthemore, the supossed attack at the Sovereignty of the Parliament are to be made by the national courts. But in this sense, the courts must follow what is contained in procedural rules, plus observe the requisites the House of Lords stablished, which are very strong on protecting public interest and British Law.

3.         In this sense, it is difficult to state that there is a revolution against Parliament Sovereignty. It is more for a evolution instead.

---

BIBLIOGRAPHY

^[1990] 2 AC 85

^[1990] EUECJ C-213/89

^[1990] 2 LLR 365

A.V. Dicey Introduction to the study of the law and constitution. <http://www.constitution.org/cmt/avd/law_con.htm.> accessed in 17 april 2013.

Community Fisheries Policy OJ L 236, 27.10.1970, p. 1–4 (DE, FR, IT, NL)  English special edition: Series I Volume 1970(III) P. 703 – 706

Iain McLean. What's Wrong With The British Constitution (Oxford University Press 2009) p.198

N. MacCormick Questioning Sovereignty: Law, State, and Nation in the European Commonwealth (Oxford University Press 1999). Pp124-136.

P. Bourdieu. The Force of Law: Toward a Sociology of the Juridical Field. <http://cablemodem.fibertel.com.ar/seminario/bourdieu.pdf> access in 17 april 2013.

'Sovereignty',  Encyclopaedia Britannica. Volume 21 (1963) 101

The Treaty of Rome 1957 <http://www.ab.gov.tr/files/ardb/evt/1_avrupa_birligi/1_3_antlasmalar/1_3_1_kurucu_antlasmalar/1957_treaty_establishing_eec.pdf> accessed 17 april 2013

---

Notas

^{[1] [1990]} EUECJ C-213/89

^[2] Treaty of Rome, Article 38. <http://www.ab.gov.tr/files/ardb/evt/1_avrupa_birligi/1_3_antlasmalar/1_3_1_kurucu_antlasmalar/1957_treaty_establishing_eec.pdf> accessed 17 april 2013

^[3]  OJ L 236, 27.10.1970, p. 1–4 (DE, FR, IT, NL)  English special edition: Series I Volume 1970(III) P. 703 - 706

^[4] Iain McLean. What's Wrong With The British Constitution (Oxford University Press 2009) p.198

^[5] A.V. Dicey Introduction to the study of the law and constitution. <http://www.constitution.org/cmt/avd/law_con.htm.> accessed in 17 april 2013.

^[6]  'Sovereignty',  Encyclopaedia Britannica. Volume 21 (1963) 101

^{[7] [1990]} 2 AC 85

^[8] ibid

^[9] ibid

^{[10] [1990]} 2 AC 85

^{[11] [1990]} EUECJ C-213/89

^[12] Treaty of Rome <http://www.ab.gov.tr/files/ardb/evt/1_avrupa_birligi/1_3_antlasmalar/1_3_1_kurucu_antlasmalar/1957_treaty_establishing_eec.pdf> accessed 17 april 2013

^{[13] [1990]} 2 LLR 365

^[14] ibid.

^[15] See Annex I, p 12.

^[16] Neil MacComirck Questioning Sovereignty: Law, State, and Nation in the European Commonwealth (Oxford University Press 1999). Pp124-136.

^[17] The concept of habitus is that of Bourdieu, in P. Bourdieu. The Force of Law: Toward a Sociology of the Juridical Field. <http://cablemodem.fibertel.com.ar/seminario/bourdieu.pdf> access in 17 april 2013.