Fratila and Tanase v SSWP & AIRE Centre  EWHC 998 (Admin); Fratila and Tanase v SSWP & AIRE Centre  EWCA Civ 1741
Current status: Court of Appeal judgment handed down 18 December 2020. Read the Court of Appeal judgment. Secretary of State granted permission to appeal by Supreme Court on 22 February 2021. The stay on implementing the Court of Appeal Order, which struck down the regulations challenged was extended until the Supreme Court judgment. In C-709/20 CG v Department for Communities (NI) - a CJEU case that raised the same issue, the CJEU decided on 15 July 2021 that a rule such as that challenged in Fratila was not unlawfully discriminatory. Both parties in Fratila have accepted that the CJEU judgment is binding on the Supreme Court. The parties have each made representations to the Supreme Court about further case management directions and a response is awaited.
CPAG brought judicial review proceedings on behalf of two EU nationals, a severely disabled man and his carer, who were refused universal credit on the basis that their limited leave to remain in the UK under Appendix EU to the immigration rules (‘pre-settled status’) was not a qualifying right of residence for the purposes of means-tested benefits.
On 27 April 2020, the High Court dismissed the claim. The Claimants sought permission to appeal and, following the grant of permission by the Court of Appeal, the Court found in favour of the Appellants/Claimants in a judgment handed down on 18 December 2020.
The Secretary of State appealed to the Supreme Court and that appeal awaits determination. Meanwhile on 15 July 2021, the Court of Justice of the European Union in a case which raised the same issue held that the rule which excluded pre-settled status from being a qualifying right of residence was not unlawfully discriminatory in EU law. However, the Court of Justice also held that the Decision Maker, before refusing benefits due to such a rule would be required:
"to check that a refusal to grant such benefits based on that legislation does not expose that citizen, and the children for which he or she is responsible, to an actual and current risk of violation of their fundamental rights, as enshrined in Articles 1, 7 and 24 of the Charter of Fundamental Rights of the European Union. Where that citizen does not have any resources to provide for his or her own needs and those of his or her children and is isolated, those authorities must ensure that, in the event of a refusal to grant social assistance, that citizen may nevertheless live with his or her children in dignified conditions. In the context of that examination, those authorities may take into account all means of assistance provided for by national law, from which the citizen concerned and her children are actually entitled to benefit"
The Court of Justice's decision means that the basis on which the Court of Appeal decided Fratila was incorrect. However, it raises an issue as to whether the rule challenged is nevertheless unlawful (and should still be struck down) in that it did not allow for an individual assessment of whether applying it might lead to a breach of the fundamental rights which the Court of Justice held was required. Another possibility is that the rule is lawful but should be disapplied whenever it leads to a breach of fundamental rights. A further issue (unlikely to be determined by the Supreme Court given the facts in Fratila) is whether post 31 December 2020, EU citizens can in any event rely on the protections which the Charter of Fundamental Rights of the European Union provided.
The parties in Fratila have written to the Supreme Court suggesting further case management directions and a response is awaited.
The claimants, Ms Fratila and Mr Tanase are Romanian nationals who came to the UK in 2014 and 2019 respectively. In 2019, each was granted limited leave to remain in the UK under the EU Settlement Scheme (also known as ‘pre-settled status’).
Having obtained pre-settled status, both claimants applied for universal credit but were refused on the grounds that their pre-settled status was not a sufficient right to reside to enable them to access means-tested benefits.
It was argued on behalf of the two claimants that the non-entitlement to benefits, despite having limited leave to remain in the UK with no conditions restricting recourse to public funds, is in breach of the EU right not to be discriminated against on the ground of nationality in comparison with UK nationals, a right which has direct effect. As a result of such unlawfulness, the claimants requested that the Social Security (Income-related Benefits) (Updating and Amendment) (EU Exit) Regulations 2019 are quashed.
The Divisional Court hearing took place on 18 – 19 February 2020 and judgment was given on 27 April 2020, dismissing the claim and refusing permission to appeal.
The High Court (Swift J) held that Ms Fratila and Mr Tanase were correct to submit that as EU nationals legally resident in the UK under domestic law (because they had pre-settled status) they could rely upon Article 18 TFEU to protect themselves against unlawful discrimination on the grounds of nationality. However, the Court held that the discriminatory treatment they had suffered was lawful because it was justified. Read the High Court judgment.
COURT OF APPEAL
The Court of Appeal granted an application for permission to appeal against the decision of the High Court on 29 May 2020. The appellants (claimants) application for the case to be expedited was not granted but the hearing took place on 27 – 28 October 2020. Judgment was handed down on 18 December 2020, allowing the appeal.
CPAG successfully argued that case law has established that EU nationals with a right of residence under domestic law cannot be treated differently to a UK national in relation to access to social security. The Court found unanimously, that under EU law, as it applies in the UK up to the end of the transition period on 31 December 2020, the fact that the UK had granted under its national law a right of residence to Ms Fratila and Mr Tanase means they are entitled to rely on the EU Treaty’s prohibition on discrimination, including in relation to social assistance.
A majority of the 3-judge Court further found that the exclusion of pre-settled status as a sufficient right to reside for the purposes of claiming means-tested benefits was prohibited as made clear in previous cases. The same majority found that the rule was directly discriminatory on the grounds of nationality and as this type of discrimination is not capable of being justified under EU law, it was unlawful. The decision means that those with pre-settled status who are present in the UK can now rely on that status in order to meet the habitual residence requirement for means-tested benefits.
In his leading judgment, Lord Justice McCombe agreed with CPAG’s argument that once a right of residence had been granted by the UK, the discrimination was prohibited outright:
“It is perhaps not surprising that EU law should, in principle, allow EU nationals to take benefit from particular national laws of individual States if they lawfully reside in the State in question, without discrimination on the basis of nationality. Such entitlement would be entirely consonant with the aims and objects of the Union.”
The Order of the Court of Appeal quashes both the legislation which provides that having ‘pre-settled status’ is not a sufficient right to reside for the purposing of accessing means-tested benefits and the decisions of SSWP refusing Ms Fratila’s and Mr Tanase’s claims for universal credit. The Court of Appeal also refused SSWP’s application for permission to appeal.
However, the Court granted a short stay to 26 February 2021 during which time its quashing order did not have effect. The effect of the quashing of the legislation is that, once the stay is lifted, anyone with pre-settled status satisfies the ‘right to reside’ test for access to means-tested benefits.
The Supreme Court has granted the SSWP permission to appeal. It also extended the stay in implementing the Court of Appeal Order. The case had been set down for hearing on 18 and 19 May 2021. However, there was another case then pending in the Court of Justice (C-709/20 Department for Communities) which was a referral from a Northern Ireland Appeal Tribunal and raises the same issue as in Fratila. The Supreme Court hearing did not go ahead as its decision had to await the judgment of the Court of Justice (whose decision the parties accepted will bind the Supreme Court).
The decision in C-709/20 was that the rule was not unlawfully discriminatory in EU law but that decision makers were required to check before refusing benefits on the basis of such a rule that doing so did not breach fundamental rights to dignity (Article 1 of the Charter of Fundamental Rights), family life (Article 7) and the rights of the child (Article 24).
After the judgment in C-709/20 the parties have written to the Supreme Court setting out proposals for further case management directions.
WHAT CAN A CLAIMANT IN A SIMILAR POSITION DO?
[NOTE - this section and the note will be updated as and when appropriate]
CPAG have prepared this advice for claimants and their advisers (note this is the fifth version of the advice which we update as things develop).
The reasons given by the Court of Appeal for quashing the regulations cannot now be sustained (in light of CG). However, it is still possible the Supreme Court might quash the regulations (as they did not allow for the individual consideration of fundamental rights the Court of Justice held to be necessary). In those circmstances, claimants need to challenge decisions now in order to protect their potential rights.
- Claimants with pre-settled status who have failed the habitual residence test in relation to a claim for means-tested benefits should apply for a “revision” of the decision (mandatory reconsideration), if they have not already done so.
- Claimants who have already had a mandatory reconsideration refused should immediately appeal against the decision to the first-tier tribunal, relying on the fact that Fratila may ultimately show those decisions are unlawful. These appeals may need to be stayed.
- Claimants with pre-settled status who have not yet made a claim for benefit should claim benefits to which they think they are entitled as soon as possible.
Please note that this webpage (and note for advisers) is up to date at the time of writing (21 September 2021) and advisers should check back regularly for updates.