Facts: Italy was one of the founding member states of the EEC (now the EU) in 1957. The Italian Electricity Nationalisation Act 1962 nationalised the electricity industry and created the “National electricity board”. Mr Flaiminio Costa, a shareholder of an electricity company, opposed the nationalisation policy and refused to pay his electricity bill to the newly created state owned company, ENEL He argued that the 1962 Act was incompatible with EU law.
Held: It was held that once a member state adopts the EU treaty it becomes “an integral part of the legal system” of that member state. Thus, the acceptance by member states of the rights and obligations arising from the treaty carries with it a clear and permanent limitation of their sovereign rights, and any subsequent unilateral act incompatible with the aims of the Community cannot prevail
⇒ In the 1970s and 1980s, the European Community issued national quotas to prevent over-fishing of the seas in and around Europe. A Spanish firm called Factortame sought to register as many as 95 of its shipping vessels as ‘British’ so that it can fish in British waters under British quotas. The UK parliament sought to legislate against this practice through the Merchant Shipping Act 1988. This Act restricted the registration of of ships as ‘British’ to those ship-owners who were, by nationality, British. It also required that these British vessels flying the British flag ought to operate from the UK—not, for example, from Spain. Factortame sought to challenge the Act in judicial review proceeding in the High Court.
⇒ The High Court was faced with a conflict of laws:
⇒ The High Court sought a preliminary ruling from the European Court of Justice on the substantive community law
⇒ The Court of Appeal and House of Lords held that the High Court had no power to make such an interim order
⇒ But, the House of Lords was less certain whether such remedy could exist as a matter of European law. Thus, their Lordships sent a second reference to the ECJ
⇒ The ECJ confirmed the incompatibility of the Act with EC law; it was said that EC law (now EU law) may be ‘supreme’ over that of any provision of domestic law (including an Act of Parliament)
⇒ In Factortame (No.5), the applicants were successful in seeking full damages for the time during which they were not able to fish pending the determination of the legal issues. Damages were assessed in the tens of millions (£)
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Facts: A lady was employed by her employer after another man had left the same position, but she was paid a lower wage (note, they were NOT employed at same time). European Community law (part of English Law by virtue of European Communities Act 1972) prohibits sex discrimination even with respect to successive employment. British legislation (Equal Pay Act 1970 as amended by Sex Discrimination Act 1975) prohibits sex discrimination only with respect to simultaneous employment.
Held: It was held that Community Law prevails over UK law – you cannot legislate contrary to community law
Facts: Miss Marshall, a 62 year old woman who worked for the NHS, was dismissed from her employment because she had exceeded the statutory retirement age – which, at the time, was 60 for women and 65 for men. She sought to rely upon an EU directive on equal treatment of men and women with regard to working conditions (including dismissal).
Held: The European Court of Justice (ECJ) agreed with Marshall. However, in stating that she could rely on the directive in this case (since it was sufficiently clear, precise, unconditional, etc., giving rise to direct effect), this was only possible because the employer was deemed to be part of the State.
Facts: Van Gend en Loos (a company) imported formaldehyde into the Netherlands from Germany. This attracted in import tax of 8%, payable to the Dutch state. EC law required that import taxes or other customs, where they currently exist between Memmer States, should not be increased. In this case, the rate of tax was not increased—rather, the formaldehyde was re-classified to fall within a higher tax bracket (from 3% to 8%).
Held: It was held that moving the product into a different tax band had the same effect as a tax increase contrary to the treaty provision
⇒ So this case established the principle of direct effect of (some of) EU law → EU laws are directly applicable in UK courts. For an EU provision to be directly effective it must be sufficiently clear, precise, and unconditional
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