Factortame 2 R v Secretary of State for Transport ex. p. Factortame

KEY POINTS

The process of reviewing national laws for compatibility with Community provisions involves preliminary rulings by the Court of Justice and the direct authority of national courts. This allows national courts to definitively rule that a national law contradicts a Community provision with direct effect. If a definitive ruling is made, national courts must disapply the conflicting law.
Additionally, they should have the power to provisionally disapply the law, under specific conditions, when the incompatibility is uncertain and requires a preliminary ruling from the Court of Justice.
Failing to allow provisional disapplication could undermine the judicial protection of rights granted by Community provisions, which is a clear obligation for national courts according to both the Court of Justice and the House of Lords.

In July 1991, the European Court of Justice (ECJ) ruled on the compatibility of the UK's Merchant Shipping Act 1988 with Community law. The ECJ affirmed that while Member States have the authority to set conditions for vessel registration, these must comply with Community law.
The 1988 Act's nationality requirements were found discriminatory and in violation of the freedom of establishment. The residence and domicile conditions also unfairly distinguished between UK nationals and those from other Member States. However, the ECJ considered the requirement for vessel management from the UK as acceptable.
The UK government's argument that the conditions were justified under the Common Fisheries Policy was rejected. The ECJ stated that registration criteria were allowed, but explicit nationality and residence conditions were not acceptable.
The UK could establish conditions ensuring a "real economic link," but these should only relate to the vessel's operations and the population dependent on fisheries. The ruling emphasized that such conditions could not be used to protect against opening national fishing waters to other Member States.

This case underscores the importance of provisional disapplication, allowing national courts to temporarily set aside a law when the incompatibility is not entirely certain and may require a preliminary ruling from the Court of Justice.
This approach acknowledges the need for judicial protection of rights conferred by Community provisions and prevents nullification of this protection in cases where the incompatibility is not definitively established.

In response to Factortame 1, the ECJ ruled that a national court has a duty to grant injunctions in order to safeguard rights granted under EC law and, where a national law fails to observe rights granted under EC law, the courts have a duty to apply EC law and disregard the conflicting national law(s).
Thus the HL granted an injunction forbidding the minister from obeying an act of parliament.

Said that in enacting the European Communities Act 1972:
1. Parliament voluntarily sacrificed some sovereignty
2. Accepted the argument that unless EC laws took precedence then the EC would be unviable
3. Thirdly there was a duty for national courts to override UK law in applying EC law.

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