Today, Friday 18^th December, the UK Court of Appeal delivered its judgment in Fratila & Tanase v Secretary of State for Work and Pensions, a case in which the AIRE Centre acted as a third-party intervenor.

The Court of Appeal found that preventing reliance on pre-settled status for the purposes of claiming certain social assistance benefits, amounted to unlawful discrimination on the grounds of nationality.

Background

The case concerned the Social Security (Income Related Benefits) (Updating and Amendment) (EU exit) Regulations 2019 (“the 2019 Regulations”), which have the effect of preventing reliance upon the right to reside in the United Kingdom known as “pre-settled status” (PSS) to claim certain social assistance benefits.

PSS is a residence status which was introduced in anticipation of the UK’s secession from the European Union and which is granted to European Union nationals (such as the Appellants) who have completed less than 5 years’ lawful residence in the UK.  The 2019 Regulations amended existing social security regulations with the effect that PSS alone could not be relied on to meet the qualifying residence tests which are a condition of entitlement to certain social assistance benefits. Instead, it was necessary to also demonstrate that someone with PSS was exercising a further ‘qualifying right to reside’ e.g. they were a ‘worker’, ‘self-employed person’ etc.

Arguments submitted  by the AIRE Centre

The AIRE Centre supported the Appellants’ argument that the change introduced by the Regulations preventing reliance on PSS for the purposes of entitlement to benefits amounted to unlawful discrimination (direct rather than indirect) on the grounds of nationality contrary to EU law.

The AIRE Centre argued that the ability to rely on Article 18 TFEU (which prohibits discrimination on the grounds of nationality) was clear from a series of cases both in the European Court of Justice (Trojani and most recently Krefeld) and the UK Courts. Indeed, the government’s position was inconsistent with arguments they had advanced (and which had been accepted) by the UK Supreme Court in Patmalniece.

As regards to Regulation 9(3)(c)(i) of the Universal Credit Regulations 2013 (which was introduced by the 2019 Regulations), the AIRE Centre argued that this provision amounted to direct discrimination on grounds of nationality. In the alternative, if it was indirect discrimination, it was not justified, given the very purpose of the EU Settlement Scheme was to recognise, and to facilitate, the integration of EU citizens in the UK. The government argued that any discrimination in entitlement to benefit was regulated entirely by the Citizens Rights Directive (CRD).  As the AIRE Centre pointed out, exceptions to entitlement to benefits arising under regulation 9(3) in respect of EU nationals were for cases expressly within Article 24 of the CRD (right to equal treatment), within the derogation in Article 24(2) or for cases applicable to non-EU citizens who did not have the right not be discriminated against on nationality grounds, conferred on EU nationals alone, by Article 18 TFEU. Charlie Banner QC for the AIRE Centre said the only “cuckoo in the nest” is where an EU national (with a domestic right to remain in the UK under PSS status) is excluded from benefit, by regulation 9(3)(c)(i).

The judgment of the Court of Appeal

In allowing the appeal, the Court of Appeal agreed with the High Court that contrary to what the government had sought to argue, Article 18 TFEU could be relied on by the Appellants. However, the Court of Appeal (on this point by majority) also set aside the decision of the High Court which had held that the relevant exclusion was only indirectly discriminatory and could be objectively justified on the facts of this case.

In its judgment, the Court of Appeal confirmed that there was no suggestion that Trojani is not still good law in the EU. In addition, as found in Krefeld, there can be other rights of residence, apart from those under the CRD, which can import equal treatment obligations. Article 18 TFEU was therefore applicable. In regard to the discrimination effected by regulation 9(3)(c)(i) this amounted to unlawful discrimination on the grounds of nationality.

A right to reside conferred by domestic law of a host state entails a right to claim benefits on the same terms as nationals of the host state; and any exclusion from such entitlement would be automatically discriminatory and incapable of justification.

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Charlie Banner QC of Keating Chambers and Yaaser Vanderman of Landmark Chambers, instructed by Herbert Smith Freehills, and all acting pro bono, represented the AIRE centre. The AIRE Centre is very grateful to them for their assistance.