Student Loans: Settlement Criterion Declared Unlawful

Lady HaleR (Tigere) v Secretary of State for Business, Innovation and Skills [2015] UKSC 57 (29 July 2015)

Soaring costs, rampant hostility towards foreigners and rigid rules have made the UK an unattractive place to live and study. But should settlement underpin access to student loans? As Lady Hale DPSC stressed at the outset of her judgment, Tigere’s case concerned the discriminatory rules of eligibility for educational loans which were inaccessible to students factually settled in the UK but not settled in the eyes of immigration law. “The appellant is not alone in her predicament,” spoke the voice of reason as her Ladyship clarified that the future of a very small group of young people – who, for no fault of their own, had hitherto been put in an invidious position – depended on the outcome of these proceedings. The case turned on whether either the lawful residence or settlement criterion governing access to student funding breached a Zambian national’s right to education under article 2 of the first protocol (A2P1) of the European Convention on Human Rights (ECHR) or unjustifiably discriminated against her in the enjoyment of that right. The “unjustifiably discriminatory” settlement criterion breached the ECHR whereas there was “ample justification” for the requirement to be lawfully ordinarily resident.

Allowing the appeal in part, the Supreme Court held by majority (3:2) that requiring settlement to qualify for a student loan breached Tigere’s ECHR rights, article 14 (prohibition of discrimination) read with A2P1 (no person shall be denied the right to education). This is good news for those with discretionary leave to remain (DLR) because they can no longer be denied student funding on the ground that they are not settled. According to the court, precluding persons such as Tigere from accessing student loans has a very severe impact on them. Likewise, denying or delaying higher education, until settlement is achieved, also damages the community and the economy. “Education is rather different” from general measures of political, economic or social strategy because the margin of appreciation allowed to the state under the ECHR increases exponentially with the level of education.


Aged six, Beaurish Tigere entered the UK in 2001 as a dependant on her father’s student visa. He left the UK in 2003 but Tigere, who is now 20 years old, and her mother overstayed. They were notified about their liability to removal in 2010 and simultaneously granted temporary admission and were ultimately granted DLR, with recourse to public funds, in 2012. Tigere has DLR until April 2018 and will be eligible for indefinite leave to remain (ILR) thereafter. As a child, she had no idea what her immigration status was. She did well at school, was head girl and wanted to attend university but was unable to do so. Tigere is on a six year route to settlement which, as of 9 July 2012, has been superseded by the ten year policy. This appeal only involved the law governing students who are ordinarily resident in England on the day when the academic year begins because the system for financial support for students ordinarily resident in Wales, Scotland and Northern Ireland is a devolved function and different regulations operate over there.

Notably, eligibility for student loans is also determinative of fee status. As Lady Hale pithily remarked at para 22, “such eligibility is also a passport to the right to be charged the fees applicable to home students; without it a university is free to charge the fees applicable to overseas students”. Just for Kids Law (the interveners) and the Coram Children’s Legal Centre confirmed that other young people in Tigere’s circumstances found it “extremely unfair” that the barrier erected by immigration status hampered their natural progression to university.

The Problem

The qualifying formula for a loan required a person to (i) be resident in England at the beginning of the year (ii) have been lawfully ordinarily resident in the UK for the three years before then and (iii) be settled in the UK on that day. It is in the context of the latter two requirements that this appeal threw up the issue of Tigere’s A2P1 right to education being infringed or her suffering unjustifiable discrimination of the enjoyment of that right. The wider dilemma posed by the qualifying formula engulfed those students who had spent their formative years in UK schools, felt British and shared the aspirations of their British schoolmates but were stifled from progressing at the same rate because they were not settled in the UK. For Lady Hale, the immigration status of such young individuals “is not their fault” and should not be an impediment to their future progress.

Although Tigere was able to apply for settlement outside the rules, access to a student loan was deemed insufficient reasoning for ILR to be granted to her. She had been admitted to Northumbria University’s degree (2013-2014) in International Business Management but was unable to attend because of the costs. She did not go to Northumbria. She tried to attend the University of Hull using an overdraft. But even with her mother’s support she ended up withdrawing because of the mounting costs. She also withdrew from Middlesex University in 2014-2015 but has unconditional offers for 2015-2016 from five universities including Manchester Metropolitan University, her premier choice. She merely wanted a loan and not a grant; it was striking that the terms of her DLR did not exclude her from recourse to public funds and she could access benefits such as income-based job-seeker’s allowance and housing benefit.

At first instance, it was held that apart from the student loan option no other realistic alternative existed to fund her education. The Court of Appeal [2014] EWCA Civ 1216, which considered proportionality to be the key issue, found otherwise. Laws LJ (Floyd LJ concurring) gave the leading judgment. The parties agreed that the objective of husbanding limited funds to afford priority to individuals who are likely to remain in the UK in order to complete their education and benefit the UK economy was a legitimate aim. Laws LJ emphasised at paras 25, 29 and 35 that the challenge was directed at a national strategic policy for the distribution of scarce resources in a field of great social importance. Affording a broad margin of appreciation to government policy, his Lordship allowed the government’s appeal and held that promulgating a bright-line rule was justified and the rule had been lawfully set.

The Court of Appeal also reasoned that the Business Secretary was entitled to elect a criterion based on settlement as defined from time to time by the Home Office. For Laws LJ, the limitation on eligibility under the Education (Student Support) Regulations 2011 (the regulations) for student loans to those settled, within the meaning of section 33(2A) of the Immigration Act 1971 (as inserted by section 39 and paragraph 7(b) of schedule 4 to the British Nationality Act 1981), and who had been ordinarily resident in the UK for three years did not breach the Convention rights of persons who, despite their lengthy residence in the UK, did not have ILR.

The regulations are produced within the meaning of section 22 of the Teaching and Higher Education Act 1998; the relevant minister is the Business Secretary and not the Education Secretary or the Home Secretary. The framework under the regulations enumerates twenty kinds of person. Of these, this case involved the “basic” category. As for the remaining nineteen categories of person, six are connected to the UK’s obligations towards refugees and thirteen relate to the European Economic Area (EEA), Switzerland and Turkey, and towards people settled in the UK who have exercised their rights of residence within the EEA or Switzerland. As noted, in the regulations, settled takes the meaning specified in section 33(2A) of the 1971 Act, i.e. the person concerned is ordinarily resident in the UK and no restrictions are imposed on the period of her stay. This includes British citizens and ILR holders but not those with limited grants of leave.

Lady Hale

Always hero to the underdog, her Ladyship yet again delivered a charismatic judgment where she demonstrated a great tenderness for human rights considerations. In her eyes, legal certainty and slavery to the rulebook alone were insufficient to produce a just outcome favouring the rule of law. Lord Kerr agreed with her, as did Lord Hughes (see below). She noted that the actual number of people affected by the blanket operation of the rule was unknown. The Home Office figures in 2013 indicated that 2000 people aged 16 to 23 were granted either DLR or its replacement, limited leave to remain (LLTR). From the available statistics, Lady Hale discerned at para 10 that “the numbers affected are not insignificant but a tiny proportion of the student loans which are made each year.”

The author of The Impact of University Degrees on the Life Cycle of Earnings: Some Further Analysis (BIS Research Report No 112, 2013), Professor Ian Walker, inclined to the view that young people with DLR or LLTR who were ineligible from student loans were no less capable than their eligible peers and there were weak incentives for them to shift abroad: see related document The Benefits of Higher Education Participation for Individuals and Society: Key Findings and Reports: “The Quadrants” (BIS Research Paper No 146, October 2013). Despite Professor Walker’s conclusion that “there would be sizeable gains to the Exchequer in the long run to extending student loans provisions to this relatively small group,” Lady Hale remained alive to the fact that gains to the Exchequer were not the same thing as gains to the Department of Business, Innovation and Skills, the department overseeing student loans.

In sketching the historical backdrop of the law, Lady Hale nostalgically looked back to the swinging 1960s. She observed that the three years’ ordinary residence test emerged under the University and Other Awards Regulations 1962, produced pursuant to the Education Act 1962, which introduced the system of mandatory grants for university education benefitting her own generation of students. Moreover, the settlement requirement was created thirty-five years later by the Education (Mandatory Awards) Regulations 1997.

“A person is not to be treated as ordinarily resident in a place unless that person lawfully resides in that place,” under the regulations. This accorded with Shah [1983] 2 AC 309 where it was said that, for educational purposes, “ordinary residence” did not cover someone whose residence in a particular place or country was unlawful. In Shah, the House of Lords had defined ordinary residence “as a man’s abode in a particular place or country which he has adopted voluntarily and for settled purposes as part of the regular order of his life for the time being, whether of short or of long duration.” In proceedings below, Tigere’s argument that temporary admission amounted to lawful residence was rejected and thereafter it became common ground that she only attained three years’ lawful ordinary residence in January 2015.

Analysing the Strasbourg jurisprudence, Lady Hale held at para 23 that A2P1 does not oblige contracting states to provide any particular system of state education. She mentioned the Belgian Linguistics Case (No 2) (1968) 1 EHRR 252 where it was held that A2P1 gives individuals “the right in principle to avail themselves of the means of instruction existing at a given time”. The article could not be interpreted restrictively because of the crucial role education performs in promoting human rights in a democratic society and the Supreme Court reiterated the Grand Chamber’s reasoning in Leyla Şahin v Turkey (2007) 44 EHRR 5 that:

136. … it is of crucial importance that the Convention is interpreted and applied in a manner which renders its rights practical and effective, not theoretical and illusory. Moreover, the Convention is a living instrument which must be interpreted in the light of present-day conditions …

137. … Although that Article [A2P1] does not impose a duty on the contracting states to set up institutions of higher education, any state doing so will be under an obligation to afford an effective right of access to them.

Extortionate fees for some students to participate in higher education rendered the right to education theoretical or illusory and the Business Secretary conceded in Kebede [2013] EWHC 2396 (Admin) that at times eligibility for financial support falls within A2P1. The concession that immigration status fell within the “other status” catchall (in addition to sex, race, colour, language, religion etc) under article 14 meant that the debate, over whether or not denying Tigere a student loan constituted an unjustified denial of her right to education, became redundant. For Lady Hale, the question, considered on the strength of A2P1 alone or read together with article 14, was whether the predicament suffered by Tigere was justified?

In giving scrutiny to governmental decision-making, the court noted that authorities such as James v UK (1986) 8 EHRR 123 and Gogitidze & Ors v Georgia [2015] ECHR 475 militated in favour of usually allowing the state a wide margin of appreciation under the ECHR:

… when it comes to general measures of political, economic or social strategy, and the court generally respects the legislature’s policy choice unless it is “manifestly without reasonable foundation”.

The test was first developed in James in connection to whether an interference with the rights of property guaranteed by article 1 of the First Protocol (A1P1) was “in the public interest” and has been used by the Supreme Court – in Humphreys [2012] UKSC 18 and R (SG & Ors) [2015] UKSC 16 – in considering the justification for discrimination in access to cash welfare benefits, a type of property right that A1P1 protects.

“Education is rather different,” explained Lady Hale. In Ponomaryov v Bulgaria (2014) 59 EHRR 20, two Russian boys born in Kazakhstan had lawfully gone to Bulgaria on their mother’s residence permit as children. They had not chosen their fate and became fully integrated into Bulgarian society and were ultimately granted permanent residence. They however complained that, in contrast to Bulgarian nationals and aliens possessing permanent residence permits, for some time they had had to pay fees for their secondary education. The question arose as to whether, after having elected to provide such education free of charge, Bulgaria could deny that benefit to a distinct group of people?

It was held that requiring Anatoliy and Vitaliy Ponomaryov to pay fees on the basis of their nationality and immigration status was unjustified. Pointing out that running an educational system was expensive and complex to maintain, in Ponomaryov Strasbourg said that it was possible to distinguish education, which serves broader societal functions, from some other public services because it is a right that enjoys direct protection under the ECHR. So in the field of education arguments regarding resource-hungry public services (e.g. welfare programmes, public benefits and health care) could be transposed without qualification. Reiterating the centrality of education in a democratic society the court emphasised at para 55 that “in order to achieve pluralism and thus democracy, society has an interest in the integration of minorities.” For the Strasbourg court, the level of education determines the margin of appreciation: it increases exponentially with the level of education, i.e. the greater the level of education, the the margin of appreciation. Accordingly, better protected primary education ranks higher in the hierarchy whereas higher fees for foreigners in (optional) university education are “almost universal and were fully justified.” Secondary education occupied the middle of the spectrum but was in any event important to “the social and professional integration of the individuals concerned.”

The expression “manifestly without reasonable foundation” does not feature in the Ponomaryov judgment. Equally, calling it a “blunt instrument”, Laws LJ had eyed the unhelpful test with some suspicion. Lady Hale found that to be a fitting description. Tigere argued that, unlike other social welfare benefits, education was specially protected by A2P1; it was the hallmark of a democratic society. Yet, because the court was concerned with the distribution of finite resources arising out of the public purse, the judgments of the primary decision-maker, the Business Secretary, had to be paid due respect which was amplified where the issues had been engaged with (Miss Behavin’ Ltd [2007] UKHL 19) or had actively been considered in Parliament (R (SG) v SSWP). In the instant case, there was no evidence that the primary decision-maker had addressed his mind to the educational rights of students with DLR/LTTR when making the regulations. Moreover, the regulations had not been debated because they had been laid before Parliament pursuant to the negative resolution procedure.

Applying the fourfold test for justification developed in Huang [2007] UKHL 11, Aguilar Quila [2011] UKSC 45 (see here) and Bank Mellat (No 2) [2013] UKSC 39, her Ladyship held at para 34 that the regulations pursued a legitimate aim by channelling resources towards those students who are likely to stay in the UK to complete their education and generate economic contributions thereafter by virtue of their enhanced skills and the taxes they pay. On the other hand, the means chosen to pursue the legitimate aim were not rationally connected to it. In reality, Tigere had “no obvious alternative.” She had a clearly established private life in the UK. The court was in no doubt that she is just as closely connected with and integrated into UK society as her settled peers. Despite not possessing ILR – which “she will almost inevitably secure” – in the absence of a serious criminal offence her private life made her irremovable. Save high-flying individuals, because of larger wages in the UK labour market Professor Walker’s economic analysis of the majority of DLR/LLTR holders concluded that there was no incentive for them to relocate to their home country.

On the question of whether the adoption of a bright-line rule was nonetheless justified, in the absence of a sufficient rational connection between the aim and the rule, so as to make the scheme efficient in terms of speedily identifying individuals who qualify, Lady Hale found the Strasbourg authorities to be “not altogether clear”: para 36. There was objection to a blanket exclusionary rule in relation to prisoners’ voting (Hirst v UK (No 2) [2005] ECHR 681) and a blanket inclusionary rule in relation to the retention of DNA profiles (S and Marper v UK (2009) 48 EHRR 50). There was the recognition that, despite the consequences, drawing lines was inevitable (Animal Defenders International v UK (2013) 57 EHRR 21).

Bright-line rules in administering social security schemes were accepted in R (RJM) v SSWP [2008] UKHL 63. But article 14 and A2P1 ECHR had been violated in Ponomaryov because it was not possible for the two alien boys to request an exemption from the payment of school fees. Mentioning R (T) (Liberty intervening) [2014] UKSC 35, Lady Hale said that even where a bright-line rule is justified it must be rationally connected to the aim and a proportionate way of achieving it. Moreover, an inclusionary bright-line rule, which specifies persons who definitely should be included, was advantageous because of “simplicity, clarity and ease of administration”. An exclusionary bright-line rule, without any scope for discretion or flexibility, was something entirely different. For Lady Hale, debate in Tigere’s case had focused on “a bright-line rule or a wholly individualised system” whereas “obvious intermediate options” existed in the form of “a more properly tailored bright-line rule” (which may cater for exceptions in strong cases which failed on the rule itself). She held at para 37 that it was harder to justify exclusionary rules, which allow for no discretion to consider unusual cases falling the wrong side of the line but equally deserving.

A bright-line rule could, in the instant case, have been chosen which more closely fitted the legitimate aims of the measure. Lady Hale did not quarrel with the proposition that as a rule of thumb “the settlement rule is a good rule … for identifying those who definitely should be eligible for student loans” because “they are the people with the right to stay and work here for as long as they please.” However, it was untoward to stop just there because:

38. … there are also people such as the appellant who have lived here for many years and cannot in reality be removed from the country unless they commit a serious crime. The appellant points to the criteria currently used in the Immigration Rules for the grant of leave to remain on grounds of private life. Paragraph 276ADE (1) includes a person who (iv) is under the age of 18 years and has lived continuously in the UK for at least seven years (discounting any period of imprisonment) and it would not be reasonable to expect to leave the UK; or (v) is aged 18 years or above and under 25 years and has spent at least half his life living continuously in the UK (discounting any period of imprisonment). To this might be added an exceptional cases discretion. Given the comparatively small numbers involved, in the total scheme of things, it has not been shown that this would be administratively impracticable. Indeed, in principle, different fees could be charged for processing different applications, based on the administrative costs of doing so.

All this gave teeth to Tigere’s argument. As regards striking a fair balance between individual rights and the interests of the community, between the means and the ends, the court rejected the slippery argument that “access is not denied but merely delayed” and the consequences, for students denied loans until they upgrade from DLR/LLTR to ILR, are not so great at all. “The impact upon the appellant and others in her position is clearly very severe” for Lady Hale and she reiterated Vos LJ’s rationale that the fact that Tigere, who had been socioculturally immersed in British life from a young age and could not be removed because of the strength of her article 8 ECHR connections to the UK, fell foul of the twin requirements of the regulations was “no fault of hers.”

In sum, it was wrong to deprive her of higher education at a stage “in her life when her primary and secondary education has led her reasonably to expect that she will go with her peers to university.” Lady Hale agreed with the wisdom of Vos LJ’s approach and she held at para 40 et seq that in the circumstances the denial of student loans causes dual problems; it has a very severe impact upon those it affects and denying or delaying higher education for these individuals additionally harms the community and the economy. Thus, the settlement criterion unjustifiably infringed Tigere’s rights under the ECHR. Keeping the momentum going in studies is important to retain knowledge and Lady Hale distinguished a voluntary gap year from an enforced gap of several years. She said that the victims of the rule would not be able “understand why they are allowed access to all the public services, including cash welfare benefits, but are denied access to this one benefit, which is a repayable loan.”

Having said that, Lady Hale found strong public policy reasons for insisting on a period of lawful ordinary residence before someone became entitled to public services. She held that the lawful residence criterion was compatible with Tigere’s rights under the ECHR. This was so notwithstanding the fact that the Business Secretary’s aim was not clearly articulated; but under Bidar [2005] QB 812 limiting benefits to genuinely integrated people, who met the short test of three years’ ordinary residence to have a rightful place in society, was a reasonable mechanism. Shah exacted that unlawful conduct should not be rewarded. Arogundade [2013] EWCA Civ 823 made a similar point but unlike her Tigere was not at fault because she had no control over her parent’s actions. In Ponomaryov, Strasbourg did not find Anatoliy and Vitaliy Ponomaryov to be culpable in illegal immigration; they were not a “swarm” of illegal entrants laying siege to public services/free schooling. Lady Hale expressed a preference for not dealing with “the knotty problem of whether lawful residence is a status” (according to the government, it is not a status for the purpose of article 14). Holding that the lawful residence criterion was “fully justified”, with her customary realism her Ladyship simply said:

45. There are indeed strong public policy reasons for insisting that any period of ordinary residence required before a person becomes entitled to public services be lawful ordinary residence. Furthermore, if the requirement were to be relaxed for people in the position of the appellant it would also have to be relaxed for all the other categories of persons eligible for student loans to whom the requirement of three years’ ordinary residence (here or in the EEA) applies, who are just as likely as the appellant to be the victims of their parents’ decisions rather than their own. The administrative burden involved in making the moral judgments required would be intolerable. And the overall balance of harm involved in a delay of up to three years is of a different order from the balance involved in a six or ten year delay.

Lady Hale did not quash the settlement criterion because she foresaw cases where it is not incompatible with the ECHR. She also refused to read the regulation down because the authorities would not have proper instruction on when a refusal of funding breached a Convention right. Instead, Lady Hale modelled Tigere’s remedy on In re G (Adoption: Unmarried Couple) [2008] UKHL 38 – a decision, like numerous others mentioned above, to which she was a party – and granted “a declaration that the application of the settlement criterion to her is a breach of her rights under article 14, read with article A2P1, of the Convention.” The approach was advantageous because it left no doubt about Tigere’s entitlement to a student loan and allowed the Business Secretary to hammer out a better rule which did not impinge on “the Convention rights of other applicants, now and in the future.”

Concurring Judgment: Lord Hughes

Lord Hughes agreed with Lady Hale that the requirement of three years’ ordinary residence was justified. He also agreed with her about Tigere’s entitlement to the declaration that the settlement rule infringed her Convention rights because the discrimination involved had not been justified. However, Lord Hughes differed in his reasoning from Lady Hale and he made “a significant qualification in granting a declaration”. His Lordship’s advice to the Business Secretary was to promulgate a rule “which incorporates an elastic ‘exceptional case’ discretion.” But there was no necessity to construct a rule incorporating discretion for exceptional cases. As Lord Hughes explained:

68. … for my part I am wholly satisfied that if he [the Business Secretary] should elect not to include such a discretion, that decision could not result in any infringement of Convention rights. That is the qualification to which I referred at the outset of this judgment, and which seems to me to be called for.

His Lordship also reasoned that clear rules facilitated smooth decision-making; by operating mechanically they reduced administrative costs (thus preserving the maximum possible sum available for lending to students) and helped applicants and administrators alike. He presented a different picture of blanket and bright-line rules. For him, all rules are blanket rules and are both inclusionary and exclusionary. Dressing them up as “blanket” (with a pejorative connotation) or “bright-line” (often approved of) rules obscured the naked truth that a rule is a rule.

The Dissenters: Lord Sumption and Lord Reed

The minority would have dismissed the appeal. In mounting their critique, the dissenting justices appraised the authorities on sex discrimination, housing, subsistence benefits and spousal leave to enter. For their Lordships, in instances where a range of rational and proportionate policy options is available to the decision-maker, questions surrounding the optimal allocation of scarce resources were not for the court and were in reality questions of social and economic evaluation, i.e. matters of political and administrative judgment best left “to those who are answerable to Parliament.” Unlike the majority, Lord Sumption and Lord Reed did not think that Ponomaryov produced a game-changing effect on the Strasbourg jurisprudence. The ruling did not produce the overreaching consequences attributed to it by Lady Hale. For them, save the scant observation that the expression “manifestly without foundation” does not appear in the text of the Ponomaryov judgment, the majority failed to provide “a single reason in support of abandoning” the “right” test (which was neither discussed nor was in issue in Ponomaryov). The dissenters could thus see:

77. … no principled reason why state benefits in the domain of education should be subject to any different test from equally important state benefits in other domains.

Lord Sumption and Lord Reed found real tension in Lady Hale’s rationale because for them she tacitly acknowledged that Tigere was driven to argue that there should not be a bright-line rule at all; this was the consequence of her whimsical distinction between inclusionary and exclusionary rules, and the erroneous belief that “an exceptional cases discretion” might solve the problem. The dissenters’ views intersected with those espoused by Lord Hughes who proposed that a bright-line rule is both inclusionary and exclusionary and as regards eligibility “it necessarily excludes those who fall outside the definition.” Coverage for cases on the basis of exceptionality, therefore, defeats “the purpose of having a bright-line rule in the first place”: para 97. Similarly, although cogently presented, the argument about Tigere’s irremovability was “fallacious” nonetheless: para 87.

The multifarious nature of claims on the state’s resources could therefore not be accommodated by a set of rules and practically speaking “no realistic half-way house” existed “between selecting on the basis of general rules and categories, and doing so on the basis of a case-by-case discretion”: para 89. Equally, the majority’s interpretation of Ponomaryov was flawed because it was evident that the margin of appreciation increased exponentially with the level of education. This was at one with the Grand Chamber’s reasoning in Catan v Moldova and Russia (2013) 57 EHRR 4. In reality, the decision in Ponomaryov left no scope for doubt “that the present case would have been most unlikely to succeed in Strasbourg.” Bah v UK (2012) 54 EHRR 21, where reliance had been placed in Ponomaryov to support the conclusion that immigration status was a justifiable basis for differential treatment in the allocation of social housing, amplified this conclusion.

Their Lordships said in light of the Belgian Linguistics Case (No 2) that A2P1 does not import a right to public financial support. Furthermore, Strasbourg remained alive to practical considerations in instances where no right to financial support was conferred under the ECHR and the issue turned on the justification for discrimination. The discrimination produced by the regulations was justified because it was legitimate to discriminate between those who do and those do not have a sufficient connection to the UK. Discretionary decision-making involved an element of arbitrariness whereas the clear rule challenged by Tigere was capable of being applied accurately and consistently without arbitrariness: if anything, the straitjacket produced by the regulations was in order. It also facilitated faster decision-making, simplified administration and increased predictability as young people needed to know “whether they will get a student loan or not.” Under Bank Mellat (No 2) [2014] UKSC 39, the court needed to show self-restraint and also needed to accord a measure of discretion to the primary decision-maker.

Equally, both Strasbourg (Evans v UK (2008) 46 EHRR 34) and Luxembourg (Case C-138/02 Collins v SSWP [2004] 2 CMLR 8) valued legal certainty. Indeed, in Animal Defenders International – involving the prohibition on political advertising in the UK – Strasbourg had also rejected the proposition that undue restrictions on the freedom of expression warranted the adoption of a less restrictive rule. As the Grand Chamber put it:

110. … the core issue is whether, in adopting the general measure and striking the balance it did, the legislature acted within the margin of appreciation afforded to it.

It was also a longstanding principle of English law that the courts are not meant to impose their own opinions for those of the legislature or executive “as to the place at which to draw a precise line.” Where public expenditure sought to fulfil economic or social policy substantial respect had to be paid to the legislature or executive and the consequent width of the discretion had to be afforded to the primary decision-maker.

According to Lord Sumption and Lord Reed, it was clear to the Grand Chamber in Carson v UK (2010) 51 EHRR 13 that the overall workability of the system was important. The court needed to desist from indulging “an assessment of the effects” and it needed to stick to matters of principle: namely whether the legislation as such unlawfully discriminates between persons who are in an analogous situation? In the instant case, on Tigere’s own analysis there were a mere 534 individuals like her out of a total cohort of 1.45 million annual applications for students loans. Though there was no real danger of the floodgates being flung ajar, lying outside the sweet spot, the 534 individuals were nevertheless expendable.

Lord Sumption and Lord Reed opined at para 98 that a line needed to be drawn at some point in a continuous spectrum because “proportionality cannot be tested by reference to outlying cases.” Future economic contribution from this tiny cohort of applicants was just one of many things. Although Tigere could not be removed because of article 8, which turned on several factors and did not always protect illegal immigrants, the same was not necessarily true of everyone who had been refused a student loan pursuant to the eligibility criteria under attack.


This case exemplifies the uneasy relationship between human rights and the objective – in this instance predicated on excluding the minority – of running an “effective administration”. (The ruthlessness of the rules sired by this ideal will, of course, be all too familiar to people working in immigration.) It exposes a substantial divergence of views between Lady Hale and Lord Kerr on the one hand and Lord Sumption and Lord Reed on the other. The latter did not, in the final analysis, make a secret of their penchant for the mechanical predictability offered by legally certain bright-line rules over Lady Hale’s more compassionate, should I say “expansionist”, approach to human rights. She seemed determined not to sacrifice the rights of the few in the interests of superior efficiency no matter how attractive it may have appeared to her two distinguished colleagues.

I personally prefer Lady Hale’s judgment because it entitles people like me, i.e. those holding DLR, access to student funding and a “passport” to home fees; albeit these days home fees are also expensive. (I should clarify that I am not a part of the cohort of 534-2000 individuals and have never applied for a student loan.) On the other hand, I equally enjoyed reading the dissenting judgment which purports to make a genuine point about running an efficient administration – but in reality allows the rights of the few to be sacrificed in the name of legal certainty. For the dissenting justices, paragraph 276ADE (1)(v) draws the line, for article 8 purposes, as regards those aged 18 years or above and under 25 years who have spent at least half of their lives living continuously in the UK. However, the policy considerations behind granting limited leave to remain, because of article 8 rights, could not be used as a peg to grant financial support for higher education. For example, the hardship – in terms of difficulty, delay and costs – to the Student Loans Company could not be downplayed. Thus, the majority view was flawed because the terms of the immigration rules set out in paragraph 276ADE lacked teeth for the provision to be utilised as a didactic device. Ultimately the dissenting justices thought that it was difficult to sustain the majority’s argument because wherever one draws the line many young people, with an equally strong connection in comparison to those on the right side of it, will remain on the wrong side of it.

It will be interesting to see how such differences will pan out in cases such as Ali UKSC 2013/0266 and Bibi UKSC 2013/0270 (see case preview), Mandalia UKSC 2014/0059 (see case preview) and MM (Lebanon), see here. In MM, of course, the victims of the rule can hardly be described as a tiny minority because almost half of the UK’s population is unable to satisfy the onerous minimum income requirements under Appendix FM of the immigration rules. The outcome of these important Supreme Court cases, involving bright-line rules that have created disastrous consequences for immigrant communities, will define the future of a great many families and the degree of division between the justices – who will yet again wrestle with the complexities of the law – will be interesting to observe.

“We cannot close our eyes to the fact that candour cannot always be assumed in this field,” protested the dissenting justices. In the present case, the Business Secretary’s choice that discrimination because of residence and settlement is not “manifestly without foundation” was sufficiently justified. In fact, it promoted legal certainty and the rule of law. In the final paragraph of their judgment they relied on Bank Mellat (No 2), Corner House Research [2008] UKHL 60 and Lord Carlile & Ors [2014] UKSC 60 (see here) to warn the majority that no matter how:

100. … intensive the judicial scrutiny of a public authority’s decision, it is not open to the courts to take the decision-making function out of the hands in which Parliament has placed it and assume that function themselves.

Lord Sumption was in the press a lot last week. Just the other day, making him the mot du jour, the Guardian (6 August 2015) dubbed Lord Sumption “the brain of Britain” and in the interview the cleverest man in Britain let it be known: “it’s how you play the game. We [barristers] like winning. We like winning.” He candidly accepted that his banker/lawyer father’s “string-pulling” opened doors for him at the bar. Regurgitating his diverse set of accomplishments, the Guardian remained intrigued by why he has not as yet become “recognisable to the man on the street”? Why is “a uniquely British object” not a household name? He was, however, rightly labelled “a metonym for the establishment”. As this judgment paradigmatically demonstrates, the genius historian-judge remains totally suspicious of “judge-made law” and draws the line by insisting that judges should not interfere with the will of Parliament which must remain sovereign to sustain the robust but flexible system of British democracy.

The interview in the Sunday Times (9 August 2015) also extolled Lord Sumption’s indelible brilliance and his seminal historical research. Among other things, Cursed Kings – the most recent volume in his Lordship’s celebrated history of the Hundred Years’ War – remained central to the conversation yet again. “Specialisation cramps imagination and limits curiosity,” argued the medievalist in him. The conversation also recalled that his ascent to the bench had aroused a measure of jealousy because more experienced candidates, who had for long years toiled in judicial roles, had considered his nomination unfair. Justifying his preference for an elite based on capital to one based on power he made no bones about the fact that “the reason why I left academic life was the money”.

Sharing his infinite wisdom, he explained further “judges are the natural allies of political reform” because they make things “more transparent” and “more efficient” whereas “politics is all about fudging things”. On the other hand, ever the pragmatist, Lord Sumption maintained: “sometimes a measure of inefficiency, injustice, is essential to make the world go round.” Yet ceding territory to inefficiency to make Tigere’s world go round was not an option for him: injustice was the cure for people like her. And most tellingly, regarding his own leapfrogged elevation to the seat of a Supreme Court judge, despite being such an ardent adherent of the bright-line rule he somewhat intriguingly also argued that:

I simply think that you have to make some exceptions.

With the greatest of respect to Lord Sumption, against the backdrop of the foregoing dissent, his slippery statement is contradictory in excelsis because he resiled from making an exception and missed out on a golden opportunity to apply his own maxim to make a real difference to a young black woman’s life. To be sure, he was less gallant in her case than he was in his own. To the everyday person, it is quite mind-blowing that a paradox of this nature can exist. If anything, the juxtaposed cases expose a double standard because Lord Sumption justifies his own seat on the basis of an exception but he oddly remains intransigent to carving one out for a bright young black woman. (Who went to work in a supermarket instead of going to university.)

In the grand scheme of things, Lord Sumption’s brilliance is beyond doubt and he has (already) dispensed everyday “blind” justice to the masses, like Susan Plevin, mis-sold Payment Protection Insurance (PPI). In Plevin v Paragon Personal Finance Ltd [2014] UKSC 61, the Supreme Court’s judgment involved the conduct of insurance intermediaries which was governed by a statutory scheme contained in the Insurance Conduct of Business (ICOB) Rules 2005 made by the Financial Services Authority (now the Financial Conduct Authority (FCA)) under powers conferred upon it by the Financial Services and Markets Act 2000. ICOB created duties owed directly by the provider of the service to the insured; these “hard-edged” rules did not require insurance intermediaries to disclose commissions to their customers. In that case Lord Sumption dismissed the first defendant lender Paragon Personal Finance’s appeal from the order of the Court of Appeal 2013 EWCA Civ 1658 where Moses, Beatson, Briggs LJJ had allowed, on other grounds, an appeal by the claimant borrower, Mrs Susan Plevin (a widow and a college lecturer who was issued/mis-sold a PPI policy in 2006).

His Lordship held (and the other justices concurred) that an agreement for PPI was unfair within the meaning of section 140A (allowing a court to reopen an unfair credit agreement) of the Consumer Credit Act 1974, as inserted, when the debtor had not been told, before concluding the agreement, that over 70% of the one-off £5,780 premium would be used to pay commission to various parties. He overruled Harrison v Black Horse Ltd [2012] Lloyd’s Rep IR 521 – the previous authority on ICOB by which Briggs LJ was bound – because it was wrongly decided.

In Harrison, Tomlinson LJ found the level of commission “quite startling” but he refused to hold that the relationship was thereby rendered unfair, because the lender had committed no breach of the ICOB rules either in charging the kickback or in failing to disclose it. Setting things straight, Lord Sumption addressed the dilemma and essentially held that a failure to disclose the large commission payment on a single premium PPI policy rendered the relationship between a lender and the borrower unfair. It was wrong to treat the absence or presence of a regulatory duty under ICOB as conclusive on the question of whether particular conduct made a relationship unfair within the parameters of the 1974 Act.

It was held in the Supreme Court that although the regulatory rules establish a minimum standard of conduct applicable in a wide range of circumstances, the provisions of the 1974 Act lay down a wider test of fairness which potentially focuses on a much wider range of factors such as the characteristics of the borrower, their sophistication or vulnerability, the state of their knowledge, the extent of market choice and the creditor’s awareness of these factors. In Plevin’s case, Lord Sumption clearly regarded the size of the commission as a weighty reason for concluding that the non-disclosure made the transaction unfair. The landmark ruling means that even where insurance was sold perfectly legally, lenders, who sold PPI policies aggressively to those who did not need or want them, could be put on the spot for compensation where PPI policies were sold through an agent.

In other words, as headlined in the same issue of the Sunday Times as his recent interview (but bizarrely without crediting the Plevin decision to him), banks are “braced for a mis-selling bombshell”. Indeed, this doomsday ruling is a searing experience for banks such as the top four British lenders HSBC, Barclays, RBS and Lloyds which have already been lumbered with record “conduct costs” for PPI mis-selling; approximately £26 billion from 2010 to 2014 (on some estimates arguably even greater than £30 billion). The total conduct costs – including other types of misconduct such as benchmark, forex rigging etc – from which the international banks have been reeling are estimated to exceed £200 billion for the same period. If the FCA decides (see here) to apply the Plevin judgment right across the financial services industry, its effects could snowball into yet another misconduct bill of £33 billion for the banks.

Honestly, Lord Sumption, if you can hit the bad banks with such a whammy, then is it really too much to ask to tread on the toes of pompous politicians and give the human rights underdog a bit of justice?

About Asad Ali Khan, BA, MSc, MA, LL.B (Hons), LL.M

Senior Partner, Khan & Co, Barristers-at-Law
This entry was posted in Appendix FM, Article 14, Article 8, ECHR, Education, Human Rights Act, Immigration Rules, Lady Hale, Settlement, Students, UKSC and tagged , , , , , . Bookmark the permalink.

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