Elias, R (on the application of) v Secretary of State for Defence & Anor

A non-statutory compensation scheme may be framed as a complete scheme. The minister is not required to consider exceptional claims falling outside its carefully defined eligibility criteria unless the scheme itself provides for exceptions.

A criterion based on place of birth is not necessarily direct discrimination on grounds of national origins, even where its practical effects are similar. It may nevertheless constitute indirect discrimination where it disproportionately disadvantages persons of non-British national origin. A legitimate aim of targeting persons with close links to the United Kingdom does not justify criteria closely related to descent or national origins where less discriminatory criteria were reasonably available.

A public authority subject to the race equality duty must assess potential discriminatory effects when the policy is formulated, not for the first time during litigation.

The claimant, Diana Elias, was a British citizen of Iraqi or Indian Jewish family background. She had been interned by Japan in Hong Kong during the Second World War. She challenged her exclusion from the Far Eastern Prisoner of War Ex-Gratia Compensation Scheme because neither she nor a parent or grandparent had been born in the United Kingdom.

She alleged that the Secretary of State had unlawfully fettered his discretion by refusing to consider exceptional cases, that the birth-link criteria constituted direct or indirect discrimination under the Race Relations Act 1976, and that the Secretary of State had failed to comply with the statutory race equality duty.

The central issues were whether the scheme had to accommodate exceptional claims, whether its criteria were unlawfully discriminatory and unjustified, and whether the statutory duty had been properly performed.

1. Exceptional cases. The application succeeded on the discrimination and statutory-duty grounds. The scheme was established under the Crown’s common-law powers but was intended to define the class entitled to payment. The Secretary of State was not obliged to consider extending it case by case. British Oxygen v Board of Trade and R v Secretary of State for the Home Department ex parte Bentley concerned the improper fettering of an existing discretion and did not require consideration of claims outside this scheme.
2. Direct discrimination. The birth-link criteria did not amount to direct discrimination on grounds of national origins. They were not identical to a national-origins criterion because persons of non-British national origin might qualify through a parent or grandparent born in the United Kingdom, while persons of British national origin might not qualify. The possibility was not so fanciful that it could be disregarded.
3. Indirect discrimination and justification. The Secretary of State conceded disparate impact on grounds of national origin. The objective of limiting compensation to persons with a close link to the United Kingdom at the time of internment was legitimate. Public expenditure was relevant to defining the scope of the scheme, but did not itself justify the particular discriminatory criteria.
4. The court applied the proportionality approach in Bilka-Kaufhaus GmbH v Weber Von Hartz. The criteria required careful scrutiny because their effect was markedly related to immutable characteristics and national origins. Referring to the place of birth of the claimant, a parent or grandparent closely linked eligibility to descent. Less discriminatory criteria, such as residence or domicile, could have served the legitimate objective. The scheme was therefore unlawful.
5. Section 71 duty. The Secretary of State had to have due regard to the need to eliminate unlawful racial discrimination when the scheme was being formulated and carried into effect. Later consideration during the litigation did not cure the failure. Given the obvious discriminatory effect, the Secretary of State could not rationally conclude without proper assessment that no race-equality issue required consideration.
6. The court also held that the positive duty to promote equality of opportunity and good relations had no material independent relevance to this compensation scheme. The court upheld the application on two grounds and reserved the question of appropriate relief.

This was a first-instance judicial review. Earlier challenges to the compensation scheme were described in [2003] EWCA Civ 473 and [2002] EWHC 2463 (Admin), but this judgment concerned distinct grounds.