R v Secretary of State for Transport, ex parte Factortame
| Jurisdiction | England & Wales |
| Judge | LORD JUSTICE AULD,MR JUSTICE POPPLEWELL |
| Judgment Date | 07 May 1997 |
| Judgment citation (vLex) | [1997] EWHC J0507-2 |
| Court | Queen's Bench Division (Administrative Court) |
| Docket Number | CO/1735/88 |
| Date | 07 May 1997 |
[1997] EWHC J0507-2
IN THE HIGH COURT OF JUSTICE
QUEEN'S BENCH DIVISION
DIVISIONAL COURT
Royal Courts of Justice
Strand
London WC2
Lord Justice Auld
and
Mr Justice Popplewell
CO/1735/88
MR D VAUGHAN QC and MR D ANDERSON [MS L FRAZER 06/05/97 ONLY] (Instructed by Thomas Cooper & Stibbard, London EC3A 2DJ) appeared on behalf of the 1st–83rd Applicants.
MR N FORWOOD QC (Instructed by Holman Fenwick & Willan, London EC3N 3AL) appeared on behalf of the 84th Applicant.
MR N GREEN (instructed by Davies Grant & Horton, Plymouth, Devon PL1 1LD) appeared on behalf of the 85th–97th Applicants.
MR S RICHARDS [MR A LINDSAY 06/05/97 ONLY] (instructed by the Treasury Solicitor, London SW1H 9JS) appeared on behalf of the Respondent.
( )
Wednesday, 7th May 1997
The 1st to the 83rd applicants, who are owned or controlled by Spanish interests, are claimants for damages against the Secretary of State for Transport in judicial review proceedings. They seek further discovery from him. They are owners or managers of fishing vessels who claim to have suffered damage from the exclusion of their vessels from the Register of British fishing vessels as a result of Section 14 of the Merchant Shipping Act 1988, which entered into force on 1st December 1988. The European Court of Justice, on 25th July 1991, ruled that that exclusion infringed European Community Law. The applicants' entitlement to damages will turn on whether they can prove, among other matters, that the United Kingdom's infringement was intentional or reckless. On that issue, the legal advice that the Government sought and received from time to time on the legality of the legislation as a matter of Community Law is likely to be important. In giving discovery the Secretary of State has waived legal professional privilege in respect of legal advice in connection with his "formulation of policy" before 29th October 1987, the date of the introduction to Parliament of the Merchant Shipping Bill.
The applicants maintain, by this application, that the Secretary of State, as a matter of fairness, should also waive such privilege thereafter until 25th July 1991, the date of the European Court's ruling that Section 14 infringed Community Law. The Secretary of State argues that fairness does not require him to extend the waiver because he will not suggest at trial that the legal advice he received before the introduction of the Bill to Parliament is representative of later advice or guided his approach thereafter to the enactment and implementation of Section 14.
The factual background to the applications in a little more detail is as follows.
Section 14 of the 1988 Act, which passed through Parliament substantially as first introduced, excluded from the British Register of Shipping fishing vessels owned or managed by non-nationals and by persons, whether nationals or not, who were not resident and/or domiciled in this country ("the nationality, residence and domicile conditions"). It was aimed at so-called "quota hoppers", in the main Spanish fishing interests who had purchased or who had become involved in the management of British vessels to obtain the benefit of this country's fishing entitlement under the Community's common fisheries policy. On 1st April 1989, on the expiry of the transitional period provided by the Merchant Shipping (Registration of Shipping Vessels) Regulations 1988, Section 14 took effect so as to exclude the applicants' vessels from the Register of British fishing vessels.
The applicants challenged the operation of the Act by these proceedings for judicial review, alleging that it infringed European Community Law. In the course of the proceedings the European Court of Justice, on references to it by the Divisional Court under Article 177 of the EEC Treaty, has given three rulings, described for convenience as Factortame 1 to III. In Factortame I ( Case C-213/89; [1990] ECR I-2433), on 19th June 1990, the European Court caused the House of Lords to suspend the nationality, residence and domicile conditions. In Factortame II ( Case C-221/89; [1991] ECR 1–3905), on 25th July 1991, the Court declared the conditions to infringe Community Law. And in Factortame III ( Case C-48/93; [1996] ECR 1–1029), on 5th March 1996, the Court ruled on the conditions under which a Member State may incur liability for damage caused to individuals by its breaches of Community Law. It held (paras. 51 and 58) that breach of a rule of Community Law confers a right of reparation on an individual where the national court is of the view that it satisfies three conditions, namely where: it is intended to confer rights on individuals; the breach is "sufficiently serious; and the damage is directly caused by the breach.
The condition of sufficient seriousness is the relevant one for consideration here. The Court held (para. 55) that the decisive test is whether the Member State has "manifestly and gravely disregarded the limits on its discretion", taking into account the following (para. 56):
"… the clarity and precision of the rule breached, the measure of discretion left by that rule to the national … authority, whether the infringement and the damage caused was intentional or involuntary, whether any error of law was excusable or inexcusable, the fact that the position taken by a Community institution may have contributed towards the omission, and the adoption or retention of national measures or practices contrary to Community Law."
The Court went on to give some specific guidance to this Court on the question whether the introduction and maintenance in force of the 1988 Act constituted a sufficiently serious breach for the purpose. It held (para. 61) that the nationality condition constituted direct discrimination and was "manifestly contrary to Community Law" and (para. 62) that the residence and domicile conditions are "prima facie" incompatible with it. As to the latter, it held (para. 63) that this Court
"might take into account, inter alia, the legal disputes relating to particular features of the common fisheries policy, the attitude of the Commission, which made its position known to the United Kingdom in good time, and the assessments as to the state of certainty of Community law made by the national courts in the interim proceedings brought by individuals affected by the Merchant Shipping Act."
There were also separate proceedings in the European Court of Justice brought by the European Commission against the United Kingdom which resulted in the Court, on 10th October 1989, suspending the nationality condition and, on 4th October 1991, ruling that it infringed Community Law. See Commission v. United Kingdom ( Case C-246/89).
The applicants, in their Re-amended Statement of Claim, have set out the matters upon which they will rely in seeking to establish that the enactment and implementation of the Act constituted a "sufficiently serious" breach of Community Law. In paragraphs 34 and 35, there is a general and particularised allegation of intentional or reckless infringement of Community Law. The particulars, which were expressed to be the best the applicants could give pending discovery, include: the United Kingdom Government's drafting and introduction of the 1988 Act when it was on notice of its possible unlawfulness under Community Law and/or when it apprehended legal action by the applicants; a belief that the European Commission had so advised the United Kingdom Government; the drafting of the Act and the shortness of the transition period before it took effect, allegedly an attempt to frustrate legal challenge; and that whatever uncertainty the United Kingdom may have had about the illegality of the legislation it could have been left in little doubt about it after the European Court's rulings in Commission v. United Kingdom in 1989 and in Factortame I in 1990.
At a directions hearing on 10th September 1996 Collins J ordered that on the application, now fixed for 14th July 1997, the following two issues should be determined:
first, whether the rules of law infringed by the Secretary of State were intended to confer rights on individuals; and
second, whether the Secretary of State's breaches of Community Law were sufficiently serious as to give rise to liability for any damage that may subsequently be shown to have been caused to the applicants.
The issue on discovery arises in this way. At the hearing on 10th September 1996 Collins J also directed that the Secretary of State should make discovery of documents relevant to a number of allegations in the applicants' Re-Amended Statement of Claim, including those of intentional or reckless infringement in paragraphs 34 and 35. The Secretary of State, in making discovery, has made a general claim of legal professional privilege in respect of documents or part documents passing between Ministers or officials and Government lawyers, between Government lawyers, and instructions to and advice given by counsel, for the purpose of advising Ministers or officials. He has also claimed such privilege in respect of documents and part documents of Ministers, officials or government lawyers the dominant purpose of which was for existing or anticipated litigation. However, as I have said, the Secretary of State waived privilege in respect of documents relating to the provision of legal advice in connection with the formulation of policy up and until the Bill's introduction to Parliament on 29th October 1987.
The applicants challenge the entitlement of the Secretary of State to limit his waiver of legal professional privilege to the period before the introduction...
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