Hoffmann-La Roche v Secretary of State for Trade and Industr...

Facts

• Hoffmann-La Roche, a pharmaceutical company, produced patented medicines including Librium and Valium.
• The Secretary of State for Trade and Industry sought to impose price controls on these drugs, citing the public interest in fair pricing.
• The government based its action on the claimed prerogative powers of the Crown, arguing these permitted regulation of commercial terms for public benefit.
• The case was brought before the House of Lords to determine whether such prerogative powers could lawfully be exercised to override or supplement statutory provisions concerning commercial regulation, specifically in relation to patents and market pricing.

Issues

1. Whether the Crown's prerogative powers permit the government to regulate prices of patented medicines independent of, or contrary to, statutory law.
2. Whether executive action on commercial regulation can override rights or obligations established by Parliament through legislation.
3. Whether the prerogative powers are displaced when Parliament has legislated on the relevant subject matter.

Decision

• The House of Lords held that prerogative powers cannot override or conflict with statutory law established by Parliament.
• It was determined that the government’s attempted use of the prerogative to control prices of patented medicines, without statutory authority, was unlawful.
• The judgment confirmed that where Parliament has legislated, the corresponding prerogative power is displaced.
• The Court emphasized that rights related to property, such as patents, could not be restricted by executive prerogative in contravention of existing statutes.

Legal Principles

• Prerogative powers are subject to, and cannot interfere with, the supremacy of Parliament and statutory law.
• Executive authority may not create new rights or obligations that conflict with legislation passed by Parliament.
• When statutory law exists on a subject, any related prerogative power is rendered inoperative.
• Judicial review is an effective means to ensure government acts within legal boundaries and does not exceed its powers.

Conclusion

The House of Lords in Hoffmann-La Roche v Secretary of State for Trade and Industry [1975] AC 295 established that executive prerogative powers cannot be used to override or supplement statutory regulations, especially in commercial matters. The case reinforced parliamentary sovereignty and continues to serve as a leading authority on the limits of executive power under administrative law.