Court of Appeal: Underhill VP, Simler and Warby LJJ, [2021] EWCA Civ 348, 15 March 2021

The Court considered an appeal from a High Court decision which had rejected indirect race discrimination and PSED challenges to the application of the Defendant’s ex gratia scheme to support and assist third-country national refugees outside the UK who have fled the conflict in Syria. The case is important, if somewhat disheartening to equality lawyers, for its conclusions on the (limited) extra-territorial effect of the Equality Act 2010. It is worth emphasising that the Court of Appeal’s approval of the High Court’s conclusions on justification were subject to the proviso that the limited evidence on which the High Court was prepared to find in the Defendant’s favour was the result of the way in which the claim had developed post-issue; as Underhill LJ, concurring with Simler LJ leading judgment, stated at §110: “the story is indeed a good illustration of the perils of “rolling judicial review”.

The Vulnerable Persons Resettlement Scheme (“the Scheme”), and its successor UK Resettlement Scheme (“the new Scheme”), allow resettlement in the UK to those refugees who are judged most in need of resettlement according to criteria set by the United Nations High Commissioner for Refugees (“UNHCR”). The resettlement initiative had initially been targeted at Syrian nationals only but had been opened to non-nationals who had fled Syria from 2017. The appellants were Palestinians who fled from Syria to Lebanon as refugees from the conflict in Syria and who sought resettlement in the UK under the Scheme or the New Scheme (which were in identical terms, the new Scheme having replaced the Scheme after it reached its quota for resettlement). Because the UNHCR alone could make referrals under the schemes the appellants could not realistically be considered for resettlement as they were under the exclusive mandate of the United Nations Relief and Works Agency (“UNRWA”) which assists Palestinian refugees in Lebanon, Jordan, Syria the West Bank and Gaza and which does not have a resettlement mandate.

The appellants sought to challenge the respondent’s decision to rely exclusively on UNHCR for referrals to the Scheme, and its failure to put in place any alternative mechanism to enable Palestinian Refugees from Syria (“PRS”) like them to be referred, thereby excluding them from resettlement in the United Kingdom under the Scheme. They claimed that the Scheme and New Scheme (the schemes) unlawfully discriminated against them as Palestinians and that the respondent had breached the PSED in implementing it.

The High Court (Elisabeth Laing J) ruled that the schemes did not unlawfully indirectly discriminate against the appellants on racial grounds because the claim was outside the territorial scope of the Equality Act 2010 and that, in any event, any indirect discrimination was justified and therefore lawful. She accepted that the PSED applied to the decision to establish the Scheme, taking the view that she was obliged to do so by the decisions in Hottak v SSHD [2015] EWHC 1953 (Admin) and R (Hoareau & Anor) v SSFCA [2019] EWHC 221 (Admin), although she did not agree with the reasoning in those decisions on this issue. Laing J also rejected a common law rationality challenge which will not further be considered here.

The Court of Appeal noted that the respondent did not appear to have recognised the impact of using UNHCR as the exclusive gatekeeper for the Scheme had on those, like PRS, who fell outside its mandate. Laing J had, below, commented on “a puzzling obtuseness about the consequences of the exclusive mandates of UNRWA and UNHCR”, the respondent having insisted prior to trial that PRS were eligible for resettlement under the schemes. At §24 the Court of Appeal noted UNRWA reports that PRS registered in Lebanon live “an extremely fragile and precarious existence and are forced to subsist on humanitarian handouts” and referred to UN figures which showed that “95% of PRS are food insecure, and experience ‘hunger, cold and illness in pre-existing camps already lacking resources’. Access to healthcare is restricted, as is access to education. As PRS, they have no state to assist them, and are entirely dependent on international agencies and other states for assistance and support”. The Court accepted that “Although not assessed by UNHCR for obvious reasons, on the face of it, the appellants meet the criteria for resettlement under the Scheme: they have sought refuge in Lebanon from the Syrian conflict and meet one or more of the Scheme’s vulnerability criteria. Nobody has suggested otherwise.”

Laing J had ruled below that the discrimination claim did not fall within the Equality Act 2010, taking the view that s29(9) of the Act, which provides as regards immigration clearance decisions that “it does not matter whether an act is done within or outside the United Kingdom” was not intended “to undermine the normal presumption about extraterritorial effect’ (also relying in s29(10) EqA). She considered herself “bound by the decision in Hottak … that the territorial reach of Part 3 is to be decided in accordance with the reasoning of the House of Lords and of the Supreme Court which applies in claims under the Employment Rights act 1996”, alternatively that the reasoning was “strongly persuasive. There is no reason in principle or logic why Parliament can possibly be taken to have intended that a Part 3 claim should have a territorial reach which is different from, and wider than, that of a Part 5 [employment] claim. Where the claimant is not a British citizen, does not live or work here, and has no other link at all with the United Kingdom, other than a wish to benefit from a policy of the Secretary of State, the very exceptional connection with the United Kingdom which is required is absent” (§107). Even had this not been the case, Laing J stated that the broader purpose of the Scheme had been (§123) to “help vulnerable refugees in Syria as candidates for resettlement in the United Kingdom as quickly and effectively as possible. The partnership with UNHCR, the body which is to assess and chose the candidates in the region, is essential to that purpose. UNHCR has been chosen because of the Government’s long relationship with it, because it is present in the relevant regions and because it has the necessary expertise”. Nor were less intrusive means available.

The Court of Appeal did not accept that the decision in Hottak was binding on the question whether Part 3 EqA generally had extra-territorial effect, deciding instead to “approach the question of territorial reach from first principles” (§54 per Simler LJ, with whom Warby and Underhill LJJ agreed). She went on to rule that (§58) “a natural reading of section 29(1) and (6) is that they do not ordinarily extend to things done outside the United Kingdom because otherwise section 29(9) would not be necessary”. Simler LJ accepted, however, that s29(9) carried the implication that s26(6) applied to functions exercisable under the Immigration Acts and, accordingly, “to decisions to grant entry clearance in individual cases” (§60). She further accepted that it was artificial to separate out the various stages of the decision-making process in this case (i.e. initial policy from final entry clearance acceptance or refusal in the individual case). That being the case, the exception in s29(9) applied to the bring the policies under challenge back within the jurisdiction of the EqA (§§65-71). Simler LJ found, however, that Laing J had not erred in her approach to the question of justification and that, accordingly, the race discrimination claim failed (§§75-78), this in part because the limited evidence before the High Court was the result of the way in which the appellants’ case had developed post-issue:

1. 88. The chronology demonstrates that there was a lack of clarity until very shortly before the substantive hearing about the precise nature of the issues to be determined in the judicial review. In consequence the evidence did not deal as fully and clearly with the issues as it would otherwise have done. In particular, while Ms King-Fisher addressed expressly the problem with self-referral as an alternative referral mechanism, she did not address the suitability or otherwise of NGOs that could fill this role [of referring applicants for resettlement who fell outside the UNHCR’s mandate]. The criticism made by Mr Jaffey of the evidence and the Judge’s finding on less intrusive means must be seen in this context.
   89. I have concluded against that background that the Judge did not reverse the statutory burden of proof. She was entitled to be critical of the evidence on alternative means. It was for the respondent to demonstrate that there was no mechanism equivalent to UNHCR that could properly be established without unacceptably compromising the objective of the Scheme. But because of the way that the case developed, it is clear that the evidence did not deal directly with referral by an NGO. The Judge’s complaint that there was little if any evidence that any specific NGO had the necessary capacity was a statement of fact and did not involve a reversal of the burden of proof.
   90. I have also concluded that there was (just) a sufficient evidential basis to support the finding made by the Judge in this regard The qualities she identified in UNHCR including as the world’s foremost resettlement expert and the extent of the functional delegation and trust put in UNHCR by the United Kingdom government in relation to this and other resettlement schemes (that enabled UNHCR uniquely to identify those who had come from Syria, conduct checks and assessments on the ground, and make a comparison based on a close understanding of the position of particular individuals in a large cohort of vulnerable displaced people to identify the neediest and most vulnerable) were inevitably qualities that could not be replicated, or replicated immediately in an NGO. For example, an NGO operating in Lebanon would not have the same comparative data points necessary for identifying the neediest and most vulnerable displaced people from the larger cohort. Furthermore, unlike the other countries referred to in the Resettlement Handbook which appeared to have existing referral relationships with NGOs in the region, the United Kingdom used UNHCR as the sole referral agency for the Scheme and this was consistent with the way it had previously operated its other resettlement schemes. In other words, it did not have the pre-existing referral relationships with NGOs that Norway, Canada and the United States may have done. In these circumstances, and given the urgency and complexity of the process of this very large resettlement scheme from start to finish, as described by Ms King-Fisher, the Judge was entitled to conclude that to operate the Scheme in a different way (through an NGO) would have had serious resource and timing implications. The Judge was entitled to conclude that as with self-referral, referral by an NGO could not have achieved the “security, reliability, speed and consistency which flow from using UNHCR as a gatekeeper”…
   91. … [Laing J] was entitled to note that some other forms of humanitarian assistance (not including resettlement) were available to Palestinian refugees living in difficult conditions in, for example, Lebanon through this UN refugee agency and that they were not therefore totally without assistance. This point, though it had limited weight, was not irrelevant to the proportionality analysis. What the Judge was really saying was that in a complex crisis involving millions of displaced people, a high percentage of whom were vulnerable, and with ten times more displaced Syrians than Palestinians, it was proportionate to structure a scheme which only had capacity for 20,000 people by targeting it at the biggest part of the pool in the knowledge that vulnerable PRS were not totally without assistance. In the result I accept, as Sir James Eadie submitted, that it was a factor she was entitled to consider as providing some limited support for the United Kingdom’s decision that using UNHCR exclusively to make referrals for resettlement was proportionate in the circumstances.

On the PSED challenge Laing J had ruled that the Secretary of State had failed to have due regard to the need to advance equality of opportunity between persons who shared a relevant protected characteristic and persons who do not share it (s149(1)(b) EqA). She rejected a claim based on s149(1)(a) on the basis that any “discrimination” in issue fell outside the territorial scope of the Act. Simler LJ upheld Laing J’s conclusion on s149(1)(a) on the basis (§96) that “Although I have reached a different conclusion in relation to territorial effect, that conclusion is limited to the application of the scheme rules to the appellants’ individual cases and does not extend to the making of the Scheme.” As to s149(1)(b), in relation to which Laing J considered herself constrained by Hottak v SSHD and R (Hoareau & Anor) v SSFCA despite her own views on extraterritoriality (§100):

“The fact that this provision applies to public authorities in the exercise of their functions does not answer the question of territorial effect any more than it answered it in relation to section 29 EA 2010. The two are conceptually distinct. That the PSED applies to a function exercised in the United Kingdom (for example the making of a policy) does not lead inevitably to the conclusion that the duty is to have regard to persons or matters outside the United Kingdom. The Divisional Court in Hottak DC concluded that in the formulation of policy “it does not matter… that the policy may have an impact wholly or partly outside Great Britain.” That is true so far as it goes. The duty will apply to the formulation of the policy whatever its impacts, but the real question is whether the duty extends to having due regard for promoting equality (or fostering good relations) in respect of persons or matters outside the United Kingdom when formulating that policy. The Divisional Court also said that “the territorial limitations implicit in section 149(1)(a) follow the application of the substantive parts of the act, but otherwise there are no territorial limitations”. In reaching that conclusion, the normal presumption against extraterritoriality does not appear to have been drawn to the attention of the Divisional Court; and that may explain why the approach adopted appears to reverse the normal presumption without any basis for doing so having been identified. Nor is the question answered by determining whether the exception in Schedule 18 EA 2010 applies to disapply the section 149(1)(b) duty in circumstances where section 29(9) EA 2010 makes clear that the exercise of entry control functions is within the scope of the Act, no matter where the conduct takes place.”

Simler LJ went on to rule that:

1. 101. “The starting point, as before, must be the presumption that Parliament legislated for territorial effect only, unless Parliament can reasonably be taken to have intended to legislate for extraterritorial effect. There is nothing in the express words of section 149(1)(b)EA 2010 to suggest that Parliament intended to extend the territorial reach of subsection 1(b) to persons or matters outside the United Kingdom. The points made earlier which suggest that Parliament did not intend Part 3 to have extraterritorial effect save in limited circumstances apply with equal force to this provision.
   102. The duty in subsection (1)(b) is explained by section 149(3) and (5)EA 2010 as including the need to remove or minimise disadvantages suffered by people who share a protected characteristic that are connected to that characteristic; the need to take steps to meet the needs of people who share a protected characteristic that are different from the needs of people who do not; and the need to encourage people who share a relevant protected characteristic to “participate in public life or in any other activity in which participation by such persons is disproportionately low”. The latter involves tackling prejudice and promoting understanding. I find it difficult to see why or how Parliament could have expected public authorities to take these steps in relation to people outside the United Kingdom in a place where the authority is unlikely to have any real sphere of operation, or in a place or country where different views may be taken on questions of equality and non-discrimination as reflected in local laws, customs and traditions. Certain characteristics that are protected characteristics in Great Britain are far from protected elsewhere and there may be great sensitivity in this regard. It cannot be for a public authority in this country to determine how best to advance equality of opportunity between people subject to foreign law, traditions and customs. These points reinforce the force of the normal presumption in this case.
   103. Although, as Mr Jaffey submitted [for the appellants], the duty is a procedural one, it seems to me that the purpose of this legislation can properly and effectively be achieved without implying extraterritorial effect. To require a public authority to have regard to the equality needs of people who are outside the jurisdiction and whose equality of opportunity and good relations with others it will necessarily have limited if any scope to influence is not implicit in the statutory scheme and as Elisabeth Laing J noted, would make it “incoherent”. It would mean that section 149(1)(b) requires a public authority to have due regard to the need to advance equality for anyone anywhere in the world, regardless of the public authority’s actual capacity to advance that person’s equality of opportunity. That seems to me to be a meaningless duty. There is nothing to suggest that was Parliament’s intention.
   104. For a claimant who is not a British citizen, does not live or work here, and has no other link at all with the United Kingdom other than a wish to benefit from a policy of the Secretary of State, the exceptional connection with the United Kingdom which would otherwise be required to establish a territorial extension to the EA 2010 is absent. The fact that government practice may extend to conducting equality impact assessments where the effects are felt outside the United Kingdom is not a guide to the interpretation of this provision, and does not lead me to a different conclusion…”

Claimant: Ben Jaffey QC, Blinne Ní Ghrálaigh and  Julianne Kerr Morrison, instructed by Leigh Day Solicitors

Respondent: James Eadie QC, David Blundell QC, instructed by The Treasury Solicitor

post modified 15 January 2022