Fratila v SSWP - Shock and law! Court of Appeal pulls rug from under the government’s rules on EU pre-settled status
Fratila v Secretary of State for Works and Pensions & Anor [2020] EWCA Civ 1741
Just before Christmas, the Court of Appeal of England and Wales delivered an explosive judgment, upending the government’s discriminatory plans, and finding that EU nationals with pre-settled status (under the UK’s new scheme for EU nationals resident before the transition period ended on the 31st of December 2020) are entitled to equal treatment with UK nationals when claiming benefits.
Yesterday the Supreme Court granted the Secretary of State permission to appeal – so there is a lot more to come on this.
Which rules were being challenged?
After introducing the EU settled status scheme (for EU nationals to apply for settled and pre-settled status) the government introduced regulations in 2019 to specifically exclude pre-settled status from conferring benefit entitlements. Instead, the government created further, meta-regulations, to preserve the effects of the old, pre-Brexit 2016 regs for people with pre-settled status, so that they could establish a right to benefits, but had to show another right to reside as well – such as through (the right amount of) work.
It was common ground among the parties that if the government had not introduced the 2019 regulations, then pre-settled status would in itself have been a right to reside for the purposes of benefit entitlement (though claimants would still have to meet the same conditions as UK nationals).
Why were the rules found unlawful?
The new regulations were found to discriminate against EU nationals, contravening the fundamental right to equal treatment under Article 18 TFEU (which applied to the UK until the end of the transition period). The Court of Appeal found that the CJEU case of Trojani applied here – that when an EU national has been granted an unconditional right to reside in a Member State, the host state is not entitled to discriminate against them on the ground of nationality, including when it comes to rights to welfare.
In short, it is ok to ‘gatekeep’ – to require a ‘right to reside’ of benefit claimants and for the conditions for getting one to be discriminatory. But once a right to reside is granted, Member States do not have a license to discriminate with impunity - otherwise the right to equal treatment would be pretty meaningless.
This argument has not previously had much use in the UK, as contrary to popular myth (spread in part by the UK coalition government’s references to ending the ‘something for nothing culture’), EU free movement law never did create unconditional rights to reside. It is the domestic construct of pre-settled status which is not conditional on e.g. being in work.
Who decided that pre-settled status should work that way?
Not the EU! Interestingly, the Withdrawal Agreement between the UK and the EU would have allowed the UK government to make temporary right to reside/pre-settled status conditional upon also being a worker/student/family member/self sufficient person. But, quite probably as a matter of administrative necessity, the UK government chose not to do so (and many people would have fallen through the gaps had they done so). In then seeking to impose conditions on access to benefits after the fact, ie acting as though it had made pre-settled status conditional, the government tried to both have and eat its cake.
What makes this such a dramatic ruling?
For well over a decade, the UK higher courts have been delivering rulings (like Mirga) affirming the UK government’s right to make entitlement to benefits conditional on having a right to reside under the 2006, then the 2016, regulations. Given the difficulty on relying on student or self-sufficient statuses in those regulations (due to, amongst other things, the difficulties around comprehensive sickness insurance), this has typically meant showing the status of worker, or family member of a worker.
On top of this, the past 10 years have seen a restrictive trend on EU citizenship/benefit entitlement cases (such as Dano) in the CJEU. This line of cases led the Secretary of State in Fratila to argue that the CJEU no longer required Member States to treat EU citizens equally with own nationals, unless certain conditions (typically having worker status) were met.
So on its face, this ruling seems like a dramatic departure from the domestic and EU judicial trajectory. But on closer inspection, it rests on the simple argument that those cases are different to, and do not overturn, Trojani. In cases where the right to reside derives from the EU free movement Directive, Member States impose that Directive’s conditions. But in cases where the right to reside has a different legal basis, (as with primary carer rights based on a different instrument, in Krefeld), Member States (and the UK), cannot impose extra limitations upon the fundamental right of equal treatment.
How does this affect EU nationals with pre-settled status?
The answer is less simple than we might have hoped! For four reasons:
The judgment appears to assume that it only concerns claims that arose before the end of the transition period, as Article 18 TFEU ceased to apply thereafter. However, the Withdrawal Agreement contains a provision (Article 12 WA) preserving the effects of Article 18 TFEU (the right to non-discrimination) for EU nationals who were resident before the end of transition - for their lifetimes. This is likely a point for future dispute.
The Secretary of State has been granted permission to appeal to the Supreme Court.
The Court of Appeal stayed (delayed) the judgment’s effects until the 26th February – and this stay has now been extended by the UK Supreme Court until the appeal is determined.
A Northern Irish tribunal has made a preliminary reference to the CJEU, on a different case but the EXACT same point (they got in under the wire, with the reference registered on the 30th December 2020!). The tribunal has requested that the case be expedited.
So for all of these reasons, we are unlikely to have a definitive answer for a while. However, it seems advisable to, where other rights to reside are not available, base claims and/or appeals on pre-settled status; the Child Poverty Action Group give excellent further guidance here.
Where does the case go next?
The case has now landed on the desks of the Supreme Court, with a parallel case also before the Court of Justice of the EU. We will have to wait and see what the courts come up with in terms of hearing dates. Under the Withdrawal Agreement, the CJEU’s ruling on a reference made by a UK court or tribunal (just) before the end of transition, will be binding on all UK courts.
Help!
If you are an adviser and would like some advice on, or drafting support with, using the Fratila case, please do get in touch: law-eurightshub@york.ac.uk