R v Hackney London Borough Council and another

Positive action under Equality Act 2010, sections 158 and 193(2)(a), is assessed by conventional four-stage proportionality analysis. Its permissible aims may include improving outcomes for a disadvantaged group. The benefits to that group may be balanced against the effects on excluded groups, rather than against the circumstances of the worst-affected individual.

A charity satisfying section 193(1) and providing benefits to prevent or compensate for disadvantage under section 193(2)(b) need not prove proportionality separately. Parliament established a proportionate, bright-line exemption. Neither Convention-compatible nor EU-compatible interpretation permits a proportionality requirement to be added contrary to that fundamental legislative choice.

A charitable housing association primarily allocated its limited social housing stock to members of the observant Orthodox Jewish community. The appellant, who was not a member of that community, alleged unlawful direct discrimination on grounds of religion and race. The association relied on the positive-action and charitable exemptions in sections 158 and 193 of the Equality Act 2010.

The Divisional Court dismissed the claim: [2019] EWHC 139 (Admin); [2019] PTSR 985. The Court of Appeal dismissed the appeal: [2019] EWCA Civ 1099; [2019] PTSR 2272.

The Supreme Court considered proportionality, the distinction between positive action and impermissible discrimination, whether section 193(2)(b) contains an implied proportionality requirement, and a new claim that the allocation policy constituted racial or ethnic discrimination under the Race Directive.

1. Appeal dismissed. Lord Sales, with whom Lord Reed, Lord Kerr and Lord Kitchin agreed, held that the Divisional Court correctly applied conventional four-stage proportionality analysis. Lady Arden agreed that its evaluation disclosed no appealable error.

2. Sections 158 and 193(2)(a) of the Equality Act 2010 permit aims extending beyond equality of opportunity. They may support measures intended to improve outcomes by overcoming disadvantage or meeting needs associated with a protected characteristic. The restrictive employment cases under the Equal Treatment Directive did not govern these provisions. Cresco confirmed that conventional proportionality analysis applies to the more analogous positive-action provisions.

3. The allocation policy proportionately pursued legitimate aims. The community experienced substantial poverty, overcrowding, housing discrimination, anti-Semitism and religion-related needs. The association supplied about 1% of local social housing, while demand from the protected community greatly exceeded supply. Its practical concentration on that community was therefore neither an impermissible blanket rule nor disproportionate.

4. Proportionality under sections 158 and 193 may be assessed by balancing benefits and disadvantages at group level. Comparing the protected group with the single worst-affected excluded individual would distort the assessment. Bright-line criteria can be justified by efficient administration, certainty, consistency and effective direction of scarce resources. Those considerations have particular force for charities.

5. An appellate court reviewing proportionality does not repeat the balancing exercise merely because it might have reached another conclusion. Intervention requires the decision to be wrong through an error or an identifiable flaw which undermines its cogency. Lady Arden emphasised that the appellate function remained one of review.

6. The new Race Directive claim failed. Unlike the matrilineal descent criterion in JFS, the association selected by Orthodox Jewish religious observance. Religious observance is not a prohibited ground under that Directive. A wider ethnic-group case would have required evidence and was not permitted.

7. Section 193(2)(b) contains no additional proportionality requirement. Parliament created distinct limbs in section 193(2), against the public-benefit regulation of charities, and itself struck the proportionate balance. Adding proportionality would make paragraph (b) redundant and contradict a fundamental legislative choice. Neither section 3(1) of the Human Rights Act 1998 nor the Marleasing obligation authorised that construction. The ambit of article 8 was left open.

1. United Kingdom Supreme Court: The appeal was dismissed by [2020] UKSC 40. The court upheld the application of sections 158 and 193 of the Equality Act 2010.
2. Court of Appeal: The appeal was dismissed in [2019] EWCA Civ 1099; [2019] PTSR 2272. It held that section 193(2)(b) contained no implied proportionality requirement and that the proportionality assessment below disclosed no appealable error.
3. Divisional Court: The claim was dismissed in [2019] EWHC 139 (Admin); [2019] PTSR 985. It held that the allocation policy was justified under sections 158 and 193.