The Court of Appeal has today handed down judgment in the case of Harrington v Secretary of State for Work and Pensions [2023] EWCA Civ 433.
Eleanor Sibley acted pro bono for the AIRE Centre (the intervener), led by Tom de la Mare KC and Ravi Mehta of Blackstone Chambers, and instructed by Herbert Smith Freehills.
Background facts
The appeal concerned the refusal of disability living allowance (care component) to a British child who was living in the UK on the basis that her father was self-employed in Belgium.
According to the Department for Work and Pensions, the fact of the father’s economic activity in Belgium meant that under EU law it was Belgium (not the UK) that was responsible for paying the appellant cash sickness benefits, including the Disability Living Allowance care component.
As there were no comparable benefits available in Belgium, any right to cash sickness benefits there was entirely theoretical. As a result, the appellant child went without the financial support that she needed.
Issues in the appeal
The appeal concerned the proper interpretation of EU Regulation 883/2004, which contains rules for coordinating social security benefits across EU states.
This regulation remains relevant after Brexit because it continues to apply to many people under the terms of the Withdrawal Agreement between the UK and the EU.
Under the regulation, the basic position is that only one member state will be responsible (or “competent”) for paying cash sickness benefits to a person to whom the regulation applies at any one time. The regulation contains rules for working out which state that is.
Secretary of State for Work and Pension's argument
The Secretary of State argued that under Article 21 of the regulation, the appellant had a derived right to cash sickness benefits in Belgium, based on her father’s economic activity there.
She argued that, as a general rule, it is the state of economic activity that is responsible for paying cash sickness benefits.
Based on this general principle, she argued that Article 21 operated as a rule of priority, according to which the appellant’s derived rights (based on her father’s economic activity in Belgium) took precedence over any independent rights to cash sickness benefits in the UK that she may otherwise have had.
Appellant's argument
The appellant argued that her own residence-based rights should take priority over any derived rights based on her father’s economic activity in Belgium.
Intervener's position
The intervener’s position was that the starting point for determining the competent state was Article 11(3).
Under the general rule in Article 11(3)(e) of the regulation, the appellant had an independent, residence-based, right to cash sickness benefits under UK legislation. As none of the exceptions to the general rule applied, that was the end of the matter.
The intervener argued that there was no basis for reading in a rule of priority according to which any derived rights based on the father’s economic activity in Belgium should take priority.
The Court of Appeal’s decision
The Court of Appeal found that the UK was the competent state for paying the appellant cash sickness benefits.
Lewis LJ (with whom Andrews and Baker LJJ agreed) found that the question of which state is competent for paying cash sickness benefits is determined by applying Article 11(3) of the regulation. In the appellant’s case, the rule in Article 11(3) meant that it was her state of residence – i.e. the UK – which was responsible for paying her cash sickness benefits.
Lewis LJ rejected the argument that there was any rule of priority according to which another member state should be found to be competent. In particular, he rejected the argument that Article 21 of the regulation was intended as a rule of priority.
Lewis LJ noted that this conclusion was consistent with the position under the predecessor to the regulation, and found that there was nothing to suggest that the legislature had intended there to be a significant change. Lewis LJ also found it to be consistent with the regulation’s aim of promoting free movement. He found that the appellant did not, in fact, have a concurrent, derived, right to benefits in Belgium and that his conclusion was consistent with the single competent state principle.