Court of Appeal upholds right to rent checks

Secretary of State for the Home Department v R (otao The Joint Council for The Welfare of Immigrants) [2020] EWCA Civ 542 (21 April 2020)

Davis, Henderson and Hickinbottom LJJ have held that the statutory scheme (the “right to rent checks”), created by the Immigration Act 2014, sections 20-37 (Part 3 Chapter 1), that imposes obligations on landlords to take measures to ensure that they do not rent private accommodation to tenants who are disqualified by virtue of their immigration status is not incompatible with the ECHRarticle 14 read in conjunction with article 8. Although the statutory scheme could still result in discrimination, it was nevertheless capable of being operated by landlords in a proportionate way in all cases and is justified. Yet in earlier proceedings reported as [2019] EWHC 452 (Admin), Martin Spencer J allowed the judicial review claim by the Joint Council for the Welfare of Immigrants (JCWI) and he made declarations that (i) the scheme is incompatible with article 14 read with article 8 of the ECHR, and (ii) a decision to commence the scheme in Wales, Northern Ireland and Scotland without any further evaluation of its efficacy and discriminatory effect would be irrational and a breach of the public sector equality duty laid down in section 149 of the Equality Act 2010 (the PSED). It was claimed by JCWI that the scheme produced the unintended consequences that those who are not excluded by the scheme from renting, but who were without British passports and ethnically British attributes, would be discriminated against by landlords in their administration of the scheme. 

Martin Spencer J held the scheme resulted in discrimination on grounds of nationality and/or ethnicity and that the executive was responsible for that discrimination. The court also held that the facts fell within the ambit of article 8, but not within it scope, and that the executive failed to justify the scheme, with the policy of the scheme being outweighed by its potential for race discrimination. The National Residential Landlords Association, the Equality and Human Rights Commission and the National Council for Civil Liberties intervened in these proceedings. The Court of Appeal held that the discrimination in this case was “justified” on the basis of the usual balancing exercise. The Court of Appeal’s point of departure was the observation that prior to arrival to the 2014 Act, section 25 of the Immigration Act 1971 as originally enacted made it an offence punishable by a fine and/or up to six months’ imprisonment for a person knowingly to harbour anyone whom he knew or had reasonable cause to believe was an illegal immigrant. This provision was later replaced by section 143 of the Nationality, Immigration and Asylum Act 2002 which deals with assisting unlawful immigration. In tandem with these provisions, Part VI of the Immigration and Asylum Act 1999 and Schedule 3 to the 2002 Act also restricted welfare support, including housing benefit, for irregular immigrants.

Background

Theresa May’s “flagship” 2014 Act laid down a new scheme which is designed to prevent irregular immigrants from being able to rent accommodation in the open property market whereby landlords must check that their tenants are not irregular immigrants. The scheme applies to “residential tenancy agreements” (RTAs) which, by section 20, include all those arrangements where a person is permitted to occupy rented property as their only or main home, unless the arrangement falls into one of the exclusions set out in Schedule 3 (which this case did not concern). Moreover, section 21 of the 2014 Act defines the category of persons disqualified from occupying premises under an RTA because of their immigration status. Section 32 of the 2014 Act requires the Home Secretary to issue a code of practice for the purposes of sections 20-37 and the Right to Rent Immigration Checks: Landlords’ Code of Practice (the Code of Practice) was issued in October 2014 and has been revised. Rogue landlords letting accommodation to an irregular immigrant in breach of section 22, are potentially liable to a number of sanctions or other adverse consequences. Section 23 empowers the Home Secretary to give the landlord a penalty notice for a penalty of up to £3,000 (subject to statutory excuses and an appeal). 

Furthermore, section 39 of the Immigration Act 2016 amended the 2014 Act to make the breach of section 22 by a landlord a criminal offence, where he “knows or has reasonable cause to believe that the premises are occupied by an adult who is disqualified as a result of their immigration status…”. The maximum sentence is five years’ imprisonment and/or a fine. However, it is a defence for the landlord to prove that he has, within a reasonable time, taken reasonable steps to terminate the RTA. Section 40 of the 2016 Act amended the 2014 Act and enabled the Home Secretary to serve a notice on the landlord informing him that the premises are occupied by an irregular immigrant, and the landlord may (i) terminate the agreement, or (ii) seek possession under new mandatory grounds under the Rent Act 1977 and the Housing Act 1988. If the landlord does not take such action, then he is liable to prosecution. If a landlord is convicted of the offence, it is a “banning order offence” under the Housing and Planning Act 2016 and the FTT has the power to make a “banning order”, prohibiting him from letting housing in England. Breaching a banning order attracts a civil penalty of up to £30,000 and is a criminal offence with a maximum sentence of 51 weeks’ imprisonment and/or a fine. A landlord against whom a banning order is made must be placed on the Database of Rogue Landlords and Property Agents and may also be deprived of a landlord’s licence. 

The Court of Appeal

Keeping this in mind, the Court of Appeal was of the view that the “term ‘right to rent’ as a term of art defined in section 21(2), the 2014 Act does not create any rights at all: rather, it curtails the ability or freedom of irregular immigrants to rent accommodation.” JCWI’s main concern was that the legislation would lead to racial profiling and discrimination against black and minority ethnic prospective tenants and encourage direct discrimination and indirect discrimination. It will be far easier for a landlord to let his or her property to a British/EU national who will simply have to produce their passport to confirm status. Overall, the research showed that owing to the right to rent checks, it was the case that landlords are less likely to consider letting to anyone without a British passport, and even less likely to consider letting to foreign nationals from outside the EU. 

Davis, Henderson and Hickinbottom LJJ allowed the government’s appeal and dismissed JCWI’s cross appeal. The Home Secretary’s grounds of appeal ran as follows. Ground 1 concerned ambit. Grounds 2 and 3 concerned causation. Ground 4 related to justification and grounds 5 and 6 related to relief. 

Causation

The Court of Appeal found that Martin Spencer J  had been right to find that those who have a right to rent, but do not have British passports, are the subject of discrimination. Hickinbottom LJ said that he did not find these issues “easy” or “not as easy as Martin Spencer J apparently found them to be” and was therefore “unable to agree with all of Martin Spencer J’s analysis and intermediate assessments and other findings of fact”. On the other hand, he did say this:

66. … nevertheless, I have ultimately concluded that he was right to find that those who had a right to rent, but did not have British passports (or, particularly, had neither such passports nor ethnically-British attributes), were the subject of discrimination on the basis of their actual or perceived nationality; and that that discrimination was caused by the Scheme in the sense that, but for the Scheme, that level of such discrimination would not have occurred. 

The government also objected to the proposition, advanced by JCWI and the National Residential Landlords Association that it is “rational” or “logical” for private landlords to discriminate against persons without British passports and/or apparent ethnically British attributes such as their name. Hickinbottom LJ found this to be “a troubling concept”, one that is based upon the premise that “most landlords have only one interest, namely letting their property and maximising their income” so that “it is rational in the purely economic sense for a landlord to avoid the risks [of letting to a non-British citizen] which he can do by renting to British passport holders” (as Martin Spencer J had analysed the problem). 

The court could not accept the concept of an individual acting “rationally” or “logically” by taking a course of action which, whilst being in his own interests, is to his knowledge discriminatory and unlawful. Admittedly, as Martin Spencer J had found, discrimination on the basis of any protected characteristic is insidious, and on the basis of such sensitive core attributes such as sex, sexual orientation or race is a particular anathema. However, Hickinbottom LJ did not understand how discrimination can be properly be described as “rational” or “logical” despite the discrimination arising out of the scheme owing to the administrative burdens and enforcement provisions imposed on landlords. 

The court found that the premise was not evidentially correct and at its highest JCWI’s evidence pointed to the fact that at least a majority of landlords manage to comply with the statutory scheme without unlawfully discriminating against those who are actually or apparently non-British. Hickinbottom LJ found that no evidence was tendered to explain why the minority discriminate against potential tenants who are actually or apparently not British, in an environment in which at least half of them can and do comply with the law without being discriminatory. Contrary to JCWI’s submission, “discrimination as a result of the scheme, whilst quite possibly foreseeable, was clearly not inevitable.” The actual evidence from the RLA landlord surveys in 2017 and 2018 consistently showed that, in the first 30 months of the scheme’s operation, only 5-6% landlords discriminated in the manner suggested in the ongoing judicial review claim. Overall, Hickinbottom LJ was partially persuaded by JCWI’s metrics, and acknowledging the usefulness of the data to certain extent, the court nevertheless held that:

75. For those reasons, I do not agree with every aspect of Martin Spencer J’s approach or his findings. However, whilst the burden of proving discrimination falls upon the person who asserts it – in this case, the Joint Council – in the context of article 14, the courts recognise the difficulty in proving discrimination and they take a broad brush approach to evidence (see, e.g., DH v Czech Republic (ECtHR Application No 57325/00) (2008) EHRR 3 at [178]-[179]). Despite the criticisms made on behalf of the Secretary of State and my observations above, on the basis of all the evidence, I am satisfied that, as a result of the Scheme, some landlords do discriminate against potential tenants who do not have British passports, and particularly those who have neither such passports nor ethnically-British attributes such as name. By “as a result of the Scheme”, I mean that, but for the Scheme, the level of discrimination would be less. Almost all of the evidence – notably the evidence from mystery shopping exercises and surveys – points clearly in that direction.

The court explained that although it was satisfied that, owing to the right to rent scheme, some landlords do discriminate against potential tenants who do not have UK passports and those who do not have ethnically-British attributes and lack visible Britishness, the nature and level of discrimination needed to be kept in perspective which was a factor in relation to justification. 

Ambit and scope of article 8 

Notably, article 14 is not free-standing and it relates only to the enjoyment of one of the substantive ECHR rights – in the present context, article 8. Abdulaziz (1985) 7 EHRR 471 an Stec (2005) 41 EHRR SE18 remained the court’s point of departure and Hickinbottom LJ stated that for article 14 to be engaged, it does not require a breach of that substantive right. Otherwise article 14 would add nothing to the protection given by those rights and would be at most a mere reinforcing provision. Nevertheless, article 14 must have some relationship with a substantive right. The court invoked Lady Hale’s observation in In re McLaughlin [2018] UKSC 48 when she said “it is fair to say that the English courts have made rather heavy weather of the ambit point, particularly in connection with article 8, because of its broad and ill-defined scope”. Hickinbottom LJ’s view was that domestic courts had overworked themselves in attempting to identify a set of rules to define the “ambit” of substantive rights in this context whereas the ECtHR has taken a relaxed and loose approach to the concept. He said that if circumstances fall within article 8’s scope then they also fall within its ambit. Therefore, where there is violation of article 8, in the sense that there is an interference with rights falling within the scope of article 8(1) which is not justified, that is also a violation of article 14 if it is discriminatory on the basis of a relevant status. That much was uncontroversial.

JCWI submitted that Martin Spencer J erred in holding that the facts of this case did not fall within the scope of article 8 because he rejected the contention that the facts of this case fall within the scope of article 8, primarily because he considered that such a finding would be inconsistent with the clear Strasbourg jurisprudence that article 8 does not give a person a right to a home (albeit it gives everyone the right to seek to obtain a home for themselves and their family). Since article 8 did not give any general right to a home so there was nothing to prevent a state imposing general restrictions on the ability to find and obtain a home and Hickinbottom LJ agreed with the judge’s conclusion that the facts of this case do not fall within the scope of article 8, essentially for the reasons given by him at first instance. Overall, the ambit of article 8 needs to be widely construed and is not restricted to its scope and positive modalities. The court was prepared to assume, without deciding, that the facts fell within the ambit of article 8. Hickinbottom LJ’s further agreed with Davis LJ’s conclusion that the connection with article 8 was too indirect and could not be described as more than tenuous. 

Justification

On the basis that there was relevant discrimination which fell within the ambit of article 8 of the ECHR, the vital question in the present case was whether there is “an objective and reasonable justification” for the difference in treatment to which the scheme produced. 

In Bank Mellat v HM Treasury (No 2) [2013] UKSC 39, Lord Reed formulated the test for justification in four questions, i.e. whether (i) the objective of the measure is sufficiently important to justify limiting a protected right, (ii) the measure is rationally connected to the objective, (iii) a less intrusive measure could have been used without unacceptably compromising the achievement of the objective, and (iv), balancing the severity of the measure’s effects on the rights of the persons to whom it applies against the importance of the objective, to the extent that the measure will contribute to its achievement, the former outweighs the latter. In the present case there was no argument that the objective of the scheme was sufficiently important to justify the limitation of a protected right, that it was rationally connected to the objective, and that a less intrusive measure could not have been used and limb (iv) thus lay at the heart of the appeal. In the round, in light of the decided authorities as applied to the present case, Hickinbottom LJ held that: 

119. Given that the Scheme is clearly capable of being operated in a proportionate way in most individual cases – indeed, it seems to me that it is capable of being operated by landlords in such a way in all individual cases – in my view, this is a complete answer to the claim on both article 8 grounds (if, contrary to my view, the facts of this case fall within the scope of that article) and the article 14 claim.

Moreover, even if that were not so, his Lordship would have held that the discrimination which the scheme produces is justified. The discrimination was justified in any event and the court applied R (MA) v SSWP [2016] UKSC 58 to clarify that it would have concluded that the legal test to apply was whether Parliament’s assessment that the scheme’s adverse effects were proportionate to the benefits to the public was manifestly without reasonable foundation. In R (DA) v SSWP [2019] UKSC 21 the so-called “bedroom tax” case about welfare benefits , it was made clear that, the manifestly without reasonable foundation test applied to all of the Bank Mellat limbs including justification. But whether the manifestly without reasonable foundation test applied was not determinative in the present case and this led Hickinbottom LJ to hold that:

140. … In my view, the criterion simply recognises that, where there is a substantial degree of economic and/or social policy involved in a measure, the degree of deference to the assessment of the democratically-elected or -accountable body that enacts the measure must be accorded great weight because of the wide margin of judgment they have in such matters. The greater the element of economic and/or social policy involved, the greater the margin of judgment and the greater the deference that should be afforded. That is, for obvious reasons, particularly so when that body is Parliament. However, if the measure involves adverse discriminatory effects, that will reduce the margin of judgment and thus the degree of deference. That will be particularly so where the ground of discrimination concerns a core attribute such as sex or race.

He added that in Humphreys v HMRC [2012] UKSC 18 Lady Hale could not have meant that, where some element of social or economic policy is concerned, that simply “trumps” any degree of discrimination. Looking at the issue of justification for the discrimination in the present case on the basis of the usual balancing exercise, the court was satisfied that it is justified. Among other things he accepted the executive’s assertion that the right to rent scheme is one part of a set of measures designed collectively to deter illegal immigration by making various facilities and services – including employment and NHS services and also accommodation – unavailable to irregular immigrants. Whether the scheme has been effective is difficult, if not impossible, to verify empirically, and is essentially a matter of judgment for Parliament. The court stated that while discrimination in all its forms is of course abhorrent, the scheme does not intend, encourage or directly create discrimination and the discrimination is entirely coincidental. 

Comment 

Perhaps judges are ignorant of reality, but I know for a fact that even rich people are often harassed by their landlords and estate agents because of the right to rent scheme. One lady I came across, who was a PhD student, was being constantly checked by her landlord and estate agent. They even checked her immigration applications before she made them and constantly conducted checks throughout the year (on a regular basis). She was the child of a rich father and so was able to get her lawyers to explain everything about the scheme in writing to the landlords after which they started to get the real picture and backed off. 

Many a time people with ILR are also harassed by landlords and estate agents who want to repetitiously conduct right to rent checks on them simply because they have a foreign passport. The victimisation caused by the right to rent scheme is not always reported and immigrants generally want to keep a low profile in the hostile environment. They prefer not be be dragged into controversy and comply with whatever abuse their landlords give them. It is therefore unsurprising that JCWI are appealing this judgment to the Supreme Court so that the apex court’s judges can finally deliver justice and end the ongoing abuse and discrimination confronting foreign nationals in the UK’s private housing market. 

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

Senior Partner, Khan & Co, Barristers-at-Law
This entry was posted in Article 8, Court of Appeal, ECHR, Hostile Environment, Human Rights Act, Immigration Act 2014, Immigration Act 2016, Judicial Review, Parliament, Politics, Public Interest, UKSC and tagged , , , , , , , . Bookmark the permalink.

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