Former Conservative peer Lord Hanningfield has been acquitted of submitting false expenses claims after a ruling that the issue is a matter for Parliament.
Hanningfield, 75, was accused of claiming around £3,300 in House of Lords allowances which he was not entitled to in July 2013.
He was due to stand trial at Southwark Crown Court in London but the prosecution offered no evidence against him.
Judge Alistair McCreath ruled that the main issue in the case, whether Hanningfield was carrying out Parliamentary work or not, does not fall under the jurisdiction of the criminal courts.
Hanningfield, of West Hanningfield, near Chelmsford in Essex, was formally found not guilty of false accounting.
Prosecutor Patrick Gibbs QC said: "The authorities are asserting exclusive cognisance over the meaning of Parliamentary work.
"The prosecution ask the court to rule on the issue."
He added: "The courts and Parliament strive to respect each other's role and courts are careful not to interfere with the workings of Parliament."
Judge McCreath ruled that the issue of whether Hanningfield was carrying out Parliamentary work does not fall under the jurisdiction of the criminal justice system.
"The daily allowance is payable to the House of Lords provided that they have spent time during the course of the material day engaged in what is described as Parliamentary work," he said.
"At the heart of the prosecution case is an allegation that on the material days Lord Hanningfield did not carry out Parliamentary work."
He added: "The criminal courts in this country do not have jurisdiction over every alleged criminal wrongdoing.
"There is a particular aspect of that which relates to that which has been or has not been done in relation to the activities of Parliament."
Judge McCreath continued: "It is manifestly impossible for the Crown to present their case without requiring the jury to receive evidence on the topic of, and make a determination of, what is and is not Parliamentary work.
"Until late last week it appeared that Parliament was not asserting in relation to that topic, what is Parliamentary work, that that was a matter for their exclusive jurisdiction.
"Towards the end of last week and indeed relatively late on Friday, it became evident that Parliament was exercising exclusive cognisance in relation to the matter of Parliamentary work."
He added: "In other words Parliament was saying 'It is a matter for us as Parliament to make that determination, not for the criminal court'.
"Parliament having made that decision means that the prosecution are not in a position to invite the jury to consider the question of what is Parliamentary work, let alone make a determination of it."