R (Factortame Ltd) v Secretary of State for Transport

This case, formally known as R v Secretary of State for Transport, ex parte Factortame Ltd (No. 2) [1991] 1 AC 603, is a landmark decision of the House of Lords (now the Supreme Court of the United Kingdom) concerning the relationship between United Kingdom domestic law and European Union law (now enshrined in the Treaty on European Union and the Treaty on the Functioning of the European Union). The case established the principle that UK courts must set aside any rule of national law that conflicts with EU law, even if that national law is an Act of Parliament.

The dispute arose from the Merchant Shipping Act 1988, which introduced a new registration system for fishing vessels designed to ensure that only British vessels could fish in British waters. Factortame Ltd, a company owned and controlled by Spanish nationals, argued that the Act discriminated against them and violated EU law guaranteeing the right of establishment.

The House of Lords, initially uncertain as to whether they had the power to suspend an Act of Parliament, referred the matter to the European Court of Justice (ECJ). The ECJ ruled that a national court must set aside any national law that conflicts with EU law, even if that law is an Act of Parliament. Following this ruling, the House of Lords accepted the ECJ's judgment and suspended the relevant provisions of the Merchant Shipping Act 1988, effectively giving precedence to EU law.

The Factortame case is highly significant because it affirmed the supremacy of EU law over national law in the UK legal system, a principle central to the UK's membership of the European Union. It demonstrated that the UK Parliament's sovereignty was, to a degree, limited by EU law obligations. The case has been subject to considerable legal and political debate, particularly in the context of Brexit, as it highlighted the implications of EU membership on the UK's legal and constitutional order. The principle established in Factortame remained relevant in the UK until the end of the transition period following the UK's withdrawal from the EU on 31 December 2020. While the European Union (Withdrawal) Act 2018 repealed the European Communities Act 1972, it initially retained "retained EU law" but subsequent legislation has altered the legal landscape.