Factortame
Factortame was unquestionably the most important constitutional case of the 20th century and Her Majesty’s government argued that it was not just a “constitutional enormity” but the most significant legal development since the Bill of Rights in 1689. It will be studied by English Law students for generations to come.
We were instructed by 97 British companies who owned fishing vessels registered in the United Kingdom and flying the British flag. The shareholders and directors were mainly Spanish and EC citizens. The UK Government introduced the Merchant Shipping Act 1988 on 1st December 1988 with the clear and deliberate intention to disallow British fishing vessels to be owned or operated by companies unless the shareholders and directors were 75% British with residence and domicile in the United Kingdom.
We argued successfully that this was a clear breach of EC law in that it discriminated against EC citizens on grounds of nationality, residence and domicile. The difficulty was that the Merchant Shipping Act 1988 was a piece of primary legislation and constitutionally parliament is supposed to be supreme. Not any longer. The case lasted ten years largely due to the hard line adopted by the government who refused to agree anything and took every point to the highest court. There were four separate substantive points determined in the case, as outlined below.
We obtained an injunction effectively against the legislature in bringing the act into effect. This was a first. This was reversed on appeal but the House of Lords referred this point to the ECJ who agreed that injunctive relief was available in these circumstances.
Secondly, the House of Lords referred the substantive point to the ECJ who held that the act was unlawful and the offending sections should be struck out. This was also a first.
Thirdly, we applied for damages (as the injunction didn’t take effect until 18 months after the act was introduced), and again the case was referred to the ECJ who agreed that in certain circumstances damages were available. We then had to persuade the courts in England that on the evidence of this case damages were available. The House of Lords agreed with us. Damages were to be assessed by the Technology and Construction court but eventually the government settled the claims for in excess of US$55 million, much to the relief of our long suffering clients. This was the first time damages had been awarded against the state in such circumstances without proving misfeasance.
Finally the government refused to pay our clients’ legal costs relying on the antiquated principle of champerty, although they lost that case too in the Court of Appeal. In all, the government made our clients go to court on countless occasions and lost every time except once, in the Court of Appeal on the injunction, and even that decision was overturned by the House of Lords.