Fratila & Anor v Secretary of State for Works and Pensions & Anor

A lawful domestic right of residence may engage the EU-law prohibition of nationality discrimination in access to social assistance. The Citizens Rights Directive does not exhaustively regulate every residence right capable of engaging equal treatment. An express exclusion of persons with pre-settled status is direct discrimination, even where it forms part of a wider eligibility scheme and affects only some EU nationals. Such discrimination requires no justification analysis.

The appellants, Romanian nationals, challenged an amendment to the Universal Credit Regulations 2013. The amendment excluded a right to reside arising from pre-settled status under Appendix EU from the residence conditions for Universal Credit. Swift J dismissed the judicial review claim, holding that the exclusion caused indirect discrimination which was objectively justified, and that Ms Fratila lacked standing.

The Court of Appeal considered Article 18 TFEU, the distinction between direct and indirect discrimination, objective justification and Ms Fratila’s standing. The central issue was whether the Appendix EU exclusion was unlawful direct discrimination.

1. Appeal allowed. Ms Fratila had standing because she alleged that, but for the challenged amendment, she would have been entitled to Universal Credit earlier and had suffered financial loss. The contrary finding was reversed.
2. Article 18 TFEU applied. The Citizens Rights Directive was not an exhaustive code governing every residence right capable of engaging equal treatment. The court applied Krefeld and followed Trojani, as understood in Abdirahman and Patmalniece, in recognising that a lawful domestic right of residence could support reliance on the prohibition of nationality discrimination.
3. The exclusion in regulation 9(3)(c)(i) was direct discrimination. It specifically excluded persons whose right to reside arose from Appendix EU. It did not become indirect discrimination merely because it operated within a composite eligibility scheme. Nor did the fact that it affected only some EU nationals alter the conclusion.
4. Because the discrimination was direct, objective justification did not arise. The court nevertheless observed that, had the discrimination been indirect, the unusual and time-limited circumstances of the EU Settlement Scheme might have supported justification. It declined to re-evaluate that issue on the basis of submissions concerning the COVID-19 pandemic.
5. Lord Justice Dingemans dissented on the discrimination and justification issues. He considered the exclusion indirectly discriminatory under Bressol and Patmalniece, capable of justification, and would have dismissed the appeal.

• Court of Appeal (Civil Division) — [2020] EWCA Civ 1741: appeal allowed. The court reversed Swift J’s conclusion on standing and held that regulation 9(3)(c)(i) caused unlawful direct discrimination.
• High Court, Administrative Court — Swift J: judicial review dismissed. The exclusion was held to cause indirect discrimination which was objectively justified.