45: Equality Act 2010 exceptions and charities – ECHR decision

In October 2020, the Supreme Court decided that the allocation policy of housing charity Agudas Israel Housing Association (the Charity) and its arrangements with Hackney London Borough Council (the Council) were lawful under the Equality Act 2010 (the Act). The position has recently been considered further after the complainant in the case appealed to the European Court of Human Rights (ECHR).

Background – facts

The Charity provides social housing and operates a housing policy which in practice means that the Charity’s properties are allocated to members of the Orthodox Jewish community (the Community), as demand for social housing from members of the Community continually outstrips the properties the Charity has available.

The Charity makes housing stock available to the Council which comprises approximately 1% of the Council’s social housing stock. In practice, the Council only nominates members of the Community for the Charity’s properties.

A local mother of four, who is not a member of the Community, was not nominated for the Charity’s properties and families from the Community were rehoused in Charity properties while she was waiting to be rehoused.

Background – the complaint

The mother challenged the arrangements and the Charity’s policy, claiming unlawful direct discrimination on grounds of religion or race, contrary to the Act.

The Act makes it unlawful in certain circumstances, including when providing public services or exercising a public function, to discriminate directly against any person on the basis of ‘protected characteristics’ set out in the Act. Those protected characteristics include religion or belief and race (which encompasses colour, nationality, ethnic or national origin). The Act also includes exemptions and exceptions which make discrimination lawful in specific circumstances.

In this case, the arrangements and the operation of the Charity’s policy were capable of amounting to discrimination on the basis of religion, but the Charity relied upon three exceptions under the Act:

• positive action (Section 158): where the discrimination or restriction is a proportionate means of achieving the aim of addressing certain needs or disadvantages experienced by persons who share a protected characteristic;
• charities exceptions (Section 193): Two exceptions specifically for charities acting in pursuance of a charitable instrument:
  • section 193(2)(a) – which permits the charity to restrict benefit to those with a protected characteristic if the restriction is a proportionate means of achieving a legitimate aim; and
  • section 193(2)(b) – which permits the charity to restrict benefit to those who share a protected characteristic if the restriction seeks to prevent or compensate for a disadvantage linked to the characteristic.

The Divisional Court, Court of Appeal and Supreme Court all found that the Charity was able to rely on all three of these statutory exceptions, any one of which was sufficient to make the Charity’s discrimination lawful. As such, the mother’s claim was dismissed at every level in the domestic Courts.

The mother appealed to the ECHR, complaining under Article 14 (enjoyment of Convention rights and freedoms without discrimination) in conjunction with Article 8 (right to respect for family life) that the discrimination against her had no reasonable or objective justification.

The ECHR’s decision

On 16 June 2022, the ECHR published a unanimous decision finding the mother’s application inadmissible finding it to be ‘manifestly ill-founded’. The inadmissibility finding means that the application will not go to a full hearing at the ECHR and the case is now concluded.

Reasons for the ECHR’s decision

Having considered the detail of the decisions in each of the Divisional Court, Court of Appeal and Supreme Court and the applicable law, the ECHR determined that the case was one falling within Article 8 of the Convention – there was no right under Article 8 to be provided with housing but where, as here, the member State opted to provide such benefits, it must do so in a way which is compliant with Article 14. The ECHR also accepted that the complainant was treated differently from members of the Community on the basis of religion while being in a comparable situation to such members in seeking accommodation catering to large families.

However, the difference in treatment of the complainant in this case ‘was objectively and reasonably justified’. This was on the basis that:

• article 14 of the Convention does not prohibit a member State from treating groups differently in order to correct ‘factual inequalities’ between them, something which was ‘clearly at issue’ in this case:
  • the Divisional Court had addressed in great detail the significant hardship and disadvantages faced by members of the Community in the private rental sector and their ‘pressing need’ for larger accommodation such as that offered by the Charity;
• the situation in this case fell within the wide margin of appreciation which the ECHR will usually allow to a State under the Convention when it comes to general measures of economic or social strategy:
  • the ECHR accepts that national authorities will in principle be ‘better placed than the international judge to appreciate what is in the public interest on social or economic grounds’;
  • in this case, where the State interference meant a restriction in properties available for longer-term rehousing to someone already housed in temporary accommodation, that wider margin applied;
  • the margin of appreciation may be narrower in a case concerning ‘rights of central importance’, such as where the State interference means the loss of a person’s only home;
• the domestic Courts had carefully considered whether there was a reasonable relationship of proportionality between the means employed and the aim sought to be realised by the arrangement between the Council and the Charity, and ‘at each level of jurisdiction they agreed that it was objectively and reasonably justified’:
  • the ECHR noted a point identified in the Divisional Court that the Charity’s housing accounted for only 1% of the Council’s available social housing stock, while members of the Community accounted for 83% of the Council’s waiting list for accommodation with six or more bedrooms, and 50% of those waiting for five-bedroom accommodation;
  • the judgments in the Court of Appeal and Supreme Court were ‘equally detailed’ – again noting that the effect of the Charity’s policy was to withdraw 1% of units from the pool of potentially available properties for letting, so that the disadvantage to non-members of the Community was ‘miniscule’; and
• in light of the above, the ECHR ’cannot but conclude’ that in the circumstances of the case the arrangement between the Council and the Charity did not exceed the wide margin of appreciation afforded to the national authorities in such cases.

Potential undecided question on a charities exception

The complainant also made a specific claim on one of the charities exceptions in the Act.

As noted above, section 193(2)(b) permits a charity, acting in pursuance of a charitable instrument, to restrict benefit to those who share a protected characteristic if the restriction seeks to prevent or compensate for a disadvantage linked to the characteristic. Unlike the exceptions in section 193(2)(a) and defences such as the positive action exception in section 158, the second charities exception is not subject to a proportionality test.

In her application to the ECHR, the complainant argued that section 193(2)(b) was incompatible with Article 14 because it does not require any difference in treatment in pursuing such an aim to be justified as proportionate.

The UK Courts in the case determined that the omission of a proportionality requirement from section 193(2)(b) was a deliberate choice by Parliament. However, the UK Courts also considered and determined that the Charity’s policy in this case satisfied section 193(2)(a) as a proportionate means of achieving a legitimate aim and that it qualified under the positive action defence in section 158, which contains a proportionality test.

As a result, the ECHR decided it did not need to consider whether section 193(2)(b) was compatible with Article 14 because it was clear on the facts of this case that the domestic Courts had considered the proportionality of the Charity’s allocation policy and the complainant had not been prevented from having her Article 14 rights considered properly at the domestic level.

Arguably, the decision leaves open the question of whether a challenge could still be made in a case where a charity’s defence rested solely on section 193(2)(b), without consideration that the charity’s difference in treatment was proportionate.

Comment

Charities are increasingly facing challenges under the Equality Act. For example, just days after the ECHR decision, the Hampstead Heath Charity succeeded against a legal challenge alleging that the charity’s charging policy at Kenwood Ladies’ Pond failed to make reasonable adjustments for disabled persons or indirectly discriminated against those with disabilities under the Act. Days later there was news of a case to be brought against a rape crisis charity under the Act for indirect discrimination due to its policy on women-only spaces.

These cases show what a difficult balancing act it can be for charity trustees in deciding how to carry out their operations. In that context, charities may find some relief in the unanimous dismissal at the first stage by the ECHR, re-affirming the decisions of the UK Courts and the principles set out in the Act that charities can in the right context restrict benefit to members of a group sharing a protected characteristic.

However, it needs to be remembered that these cases tend to be very fact-specific. For example, the fact that the Charity’s housing stock represented only 1% of the Council’s social housing stock in this case was considered highly relevant in all the UK Courts and referred to specifically again by the ECHR. Where a charity discriminates in a way which is within the ambit of the Act, it will need to be able to show that one or more exceptions/exemptions apply for that discrimination to be lawful.