R v Secretary of State for Transport, ex parte Factortame Ltd (No 5) [2000] 1 AC 524 (HL, 28 October 1999)

Decision of the House of Lords given on 28 October 1999 (Lord Slynn of Hadley, Lord Nicholls of Birkenhead, Lord Hoffmann, Lord Hope of Craighead and Lord Clyde) in the appeal of the Secretary of State for Transport, effectively representing the United Kingdom, against Factortame Limited and other owners and managers of fishing vessels.

The respondents' vessels lost their place on the British register on 31 March 1989 under the Merchant Shipping Act 1988 and regulations made under it, which imposed nationality, residence and domicile conditions on owners. The European Court of Justice had already held that this legislation breached Community law. The only question on appeal was whether the breaches were 'sufficiently serious' to give a right to compensatory damages under Community law. Causation was left for later, and a claim for exemplary damages was no longer pursued.

The Secretary of State argued that the United Kingdom had a wide discretion to deal with a serious economic problem (quota hopping) and that any breach was excusable. The law was unclear until Factortame II, the measures were tied to the common fisheries policy and to a state's right to decide who may fly its flag, other member states had acted in the same way, independent legal advice had been followed, and the Government had acted in good faith.

Held (unanimously): appeal dismissed. Agreeing with the Divisional Court and the Court of Appeal, the House held that the discriminatory nationality conditions were a sufficiently serious breach of Community law under the Brasserie du Pêcheur / Factortame III test. The United Kingdom was therefore liable in principle to compensate the respondents for loss caused by the breach.

Note: this file is a printout of part 1 of the published opinions and contains only the opening of Lord Slynn's speech. The remaining speeches are not included.