Fratila - Race to judgment! Supreme Court AND the Court of Justice of the EU expedite parallel cases

In December, the Court of Appeal delivered a stunning blow to the UK government’s plans to prevent pre-settled status for EU nationals from conferring equal treatment with UK nationals when claiming benefits.  But the case took another extraordinary turn, when it transpired that a Northern Ireland Social Security tribunal (a first tier tribunal), had referred the question of the rights of people with pre-settled status, in another case, to the Court of Justice of the EU. The Secretary of State’s appeal in Fratila to the UK Supreme Court, and the Court of Justice case, are in a remarkable set of circumstances, BOTH being expedited and both are listed to be heard in May.

credit: UK Supreme Court

What’s going on?

Previously on the EU Rights & Brexit Hub… Check the precis of the issues in Fratila in our blog here. A super-quick recap: the new, post-Brexit regime for EU/EEA nationals who were resident in the UK before the transition period ended on the 31st December 2020 (and their family members), is the EU Settled Status scheme. Broadly, those who have been resident for five years (or fewer in some circumstances) and meet the suitability criteria should be entitled to settled status, while those with less than five years’ residence will typically be entitled to pre-settled status.  The government introduced rules to prevent people with pre-settled status from relying on that status to claim equal access with UK nationals to welfare benefits; instead they had to show another right-to-reside – typically being in work.

These rules were successfully challenged before the Court of Appeal, as while EU law permits Member States to require that EU migrants have a right to reside before granting them equal access to benefits, once that right to reside has been awarded, they are entitled to equal treatment. Pre-settled status is such a right to reside.

Where did this EU Court of Justice case appear from?

It’s pretty unusual to get a first tier tribunal refer a case to the Court of Justice of the EU. And the reference was somewhat sprung on those following the progress of Fratila, since it was registered on the 30th December 2020, AFTER the Court of Appeal’s judgment was handed down, and just THE DAY BEFORE the transition period ended – and the preliminary reference window closed to UK courts and tribunals.

The case is Case C-709/20 The Department for Communities in Northern Ireland, and concerns an EU national with pre-settled status who applied for, and was refused, Universal Credit. The tribunal requested an expedited preliminary ruling.

The tribunal referred two questions, which the Child Poverty Action Group have published in their guidance here. They are in essence: are the new rules discriminatory, contrary to Article 18 TFEU?, and if so, are they indirectly discriminatory, in which case are they justified? 

When are the cases being heard?

It’s a two court race… Somewhat surprisingly, both courts have agreed to expedite their cases (this is pretty rare in CJEU cases, with the result that both cases are listed in May). At the moment, the CJEU hearing is due to go ahead first, on the 4th May 2021 with the Supreme Court hearing a couple of weeks later on the 18th and 19th May 2021 (just giving any lawyers involved in both cases enough time to self-isolate between hearings, should they both be held in person in Luxembourg then London – if travel restrictions are still in place then!).  

Given the evident relevance, and probable decisiveness of the CJEU case, it remains to be seen whether the Supreme Court will press ahead with a hearing while the CJEU judgment is still pending. They may decide to adjourn, and wait for the CJEU judgment, or go ahead, on the understanding that they will not be able to reach their own judgment until the CJEU one has been handed down, at which point they would require further (written/oral) submissions from the parties.

Doesn’t Brexit make the CJEU case a bit pointless?

Can the Supreme Court pick-and-mix the CJEU cases it wishes to follow? In short – no. It is possible that, if the CJEU ruling goes against them, the UK government might seek to argue that the Supreme Court can and should depart from that ruling, using its powers in the EU Withdrawal Act 2018. While there is considerable debate still to be had on the matter of exactly which principles should govern decisions to stand by or diverge from CJEU cases covered by that power, that is an argument for another time.

This case appears to fall outside of the provisions making some CJEU caselaw ‘optional’, as a result of a three step legislative commitment:

credit: The Court of Justice of the European Union

• Step one: The UK-EU Withdrawal Agreement (Article 86) gives the CJEU jurisdiction on cases pending before the end of the transition period, subject to the usual provisions of Union law – which would include supremacy. Judgments the CJEU hands down on cases referred before the end of transition ‘shall have binding force in their entirety on and in the United Kingdom’ (Article 89).

• Step two: This is given effect in the EU Withdrawal Agreement Act 2020, which…

• Step three, inserted provisions into the EU Withdrawal Act 2018, (yes, we have to play a bit of statutory zig-zag here), requiring all rights, remedies and procedures provided for in the Withdrawal Agreement to be ‘recognised and available in domestic law’, and ‘enforced, allowed and followed accordingly’. All of which means that a judgment in this case should, as a matter of UK law, bind the Supreme Court.

So will the CJEU judgment make Fratila a foregone conclusion?

Well, no, but… as the questions facing both courts are so similar, it is highly likely that the CJEU judgment will in effect determine the outcome of Fratila. If the CJEU adopts the same position as the Court of Appeal, upholding the Trojani case, and finding that people exercising domestic rights to reside which are not conditional upon, e.g. working, cannot be subject to post-hoc, extra right to reside conditions in order to claim equal treatment, then the Secretary of State’s appeal would have to fail.

If, on the other hand, the CJEU makes an about-turn, and overrules Trojani (which it can do – it is not bound by its own precedent), then the claimant’s case would likely fail. A third possibility, would be that the CJEU overturned Trojani (and other case law) but proposed a different approach, to find that the rules are discriminatory, but indirectly discriminatory, in which case there would be a duty for the Secretary of State to demonstrate that they were justified, which would in turn be a matter for the national court to determine.   

To be continued…