The erosion of state and diplomatic immunity by European law? Two recent English Court of Appeal cases

In the case of (1) Benkharbouche and (2) Janah v (1) Embassy of the Republic of Sudan and (2) Libya, the English Court of Appeal (the Court) considered the claims by employees of the embassies of Sudan and Libya, that s16(1)(a) and 4(2) of the English State Immunity Act 1978 (the SIA) were incompatible with Art. 6 of the European Convention on Human Rights (the ECHR) and Art. 47 of the Charter of Fundamental Rights of the European Union (the EU Charter). Both Art. 6 and Art. 47 relate to the right to a fair trial.

In its judgment of 5 February 2015, the Court determined that ss.4(2) and 16(1)(a) were incompatible with Art. 6 of the ECHR and a declaration of incompatibility would be made indicating to Parliament that the SIA requires amendment. Further, the Court found that these sections also violated Art. 47 of the EU Charter and that they should be disapplied where the claimants' claims were derived from EU law measures. As described in more detail below, the Court's decision indicates that state bodies and diplomatic missions that anticipate benefitting from immunity under the SIA may find that such immunity does not shield them from civil law claims, where it is incompatible with provisions of EU law. This case arose in the context of employment claims against the embassy employers but its application may be felt more broadly in other civil claims which are derived from EU law.

In another recent case involving employment claims, Reyes and Anor v Al-Malki and Anor, the respondent Saudi diplomatic agent and his wife claimed diplomatic immunity pursuant to Arts. 31 and 37 of the Vienna Convention on Diplomatic Relations 1961 (the Vienna Convention). In contrast to Benkharbouche (in which the focus of the Court's consideration was the UK domestic law, the SIA), the Court of Appeal in Reyes was considering international law. In its judgment in Reyes of 5 February 2015, the Court found that: the claims brought were covered by diplomatic immunity pursuant to the Vienna Convention, on the basis that the activity of employing someone was incidental to life as a diplomatic agent for which the immunity was granted; the Vienna Convention remains an authoritative statement of international law on diplomatic immunity; the compatibility of the limitation on access to a court with the state's international law obligations was determinative as to whether the restriction on access to a court was proportionate; and those obligations were not incompatible with Art. 6 of the ECHR.

The claimants in Benkharbouche, B and J, are Moroccan nationals. B, who had been employed at the Sudanese embassy, claimed for unfair dismissal, non-payment of the minimum wage, unpaid wages and a breach of the Working Time Regulations 1998 (the Regulations). J, who had worked at the Libyan embassy, made similar claims and also claimed for racial discrimination and harassment.

The main issues before the Court of Appeal were whether: (i) the statutory provisions complied with ECHR rights or could be read down compatibly with them; and (ii) Art. 47 of the EU Charter could be given horizontal direct effect so as to require disapplication of the statutory provisions.

Art. 6 of the ECHR - the Court of Appeal’s Decision 

In relation to Art. 6 of the ECHR, the Court determined that, if a state gave effect to a rule of international law requiring the grant of immunity, that would be held to be a proportionate means of achieving a legitimate aim, namely compliance with international law. However, s16(1) of the SIA granted immunity of a breadth which was beyond that which was required by international law and s4(2)(b) of the SIA was not required by international law. International law obligations thus did not justify the discrimination against foreign nationals caused. As the provisions of the SIA could not be read down compatibly with ECHR rights, pursuant to the interpretative obligation in s3(1) of the Human Rights Act [2000] (the HRA)(s3(1) requires that “[s]o far as it is possible to do so, primary legislation and subordinate legislation must be read and given effect in a way which is compatible with the Convention rights”), a declaration of incompatibility would be made. The declaration will not affect the application of the SIA to B and J’s claims but will instead act as a signal to Parliament to consider amendments to the SIA.

Art. 6 of the ECHR - the Court of Appeal’s Reasoning

In reaching this conclusion, the Court considered both English jurisprudence on the relationship between Art. 6 of the ECHR and the jurisprudence of the European Court of Human Rights (ECtHR) on the same issue. In Holland v. Lampen Wolfe, the House of Lords had described Art. 6 as both forbidding a contracting state from denying the benefit of its powers of adjudication but also as pre-supposing that contracting states have the powers of adjudication in the circumstances. Those powers, it was explained in Holland, are limited by state immunity which is a creature of customary international law, and is derived from the equality of sovereign states. This analysis - i.e. starting from the position that Art. 6 cannot be engaged if international law denies adjudicative jurisdiction - was more recently endorsed in Jones v Saudi Arabia (see our blog post here).

The Court highlighted the conflicting approach of the Strasbourg Court, which, in Al Adsani v the UK (see our blog post here), started from the position that Art. 6 was engaged before evaluating whether the grant of immunity was proportionate to pursuit of a legitimate aim and did not impair the very essence of the right to a fair trial. In this case, the Court considered that it did not have to choose between the contrasting approaches of the English courts and the ECtHR: if the state was giving effect to a rule of international law which required the grant of such immunity, it would be a proportionate way of pursuing a legitimate aim, that aim being compliance with international law. It considered this approach consistent with the Strasbourg jurisprudence.

Accordingly, in the context of embassy employment disputes, the Court considered in any case that it was necessary to evaluate whether the immunity granted in s4 and s16(1)(a) of the SIA was required by international law, or lay within the margin of appreciation accorded to states to determine the extent of their obligations under international law.

Section 16(1)(a) of the SIA

The effect of s16(1)(a) (when read with other relevant provisions of the SIA and the Vienna Convention) was a blanket immunity in all cases concerning embassy or consular employment disputes. The Court considered the requirements of international law under international conventions, namely: the European Convention on State Immunity 1972, the Vienna Convention (to both of which the UK is a party), and the UN Convention on Jurisdictional Immunities of States and their Property 2004 (signed but not ratified by the UK, and not yet in force, but which the English Court has indicated “powerfully demonstrates international thinking on [the international law of state immunity]” (Aikens J in AIG Capital Partners Inc., v Republic of Kazakhstan, cited with approval by Lord Bingham in Jones v Saudi Arabia))).

The Court’s analysis of these conventions , and of state practice in addressing state immunity in the context of employment disputes (including a review of both legislative and judicial approaches), did not support the existence of a rule of customary international law which required the grant of immunity in employment claims brought by service staff of a mission in the circumstances of B and J.

The Court therefore concluded that a rule of the breadth of s16(1)(a) of the SIA was not required by international law, nor was it within the range of tenable views of what was required by international law. Therefore it was incompatible with Art. 6 of the ECHR.

Section 4(2) of the SIA

Section 4(2) of the SIA disapplies the exception to immunity created by s4(1) where an individual is not habitually resident in the UK at the time the employment contract is made. The Court found that there was no rule of international law which required the grant of immunity in the circumstances identified in s4(2) and rejected the contentions by Libya (and supported by the Secretary of State as intervenor), that s4(2)(b) gave effect in domestic law to the UK’s international legal obligations under the European Convention on State Immunity. There were no legitimate objectives which could be achieved by such a limitation on immunity and the Court accepted that, “through the lens of modern understanding of the importance of non-discrimination, it is untenable to suggest that a forum state has no sufficient interest in adjudicating on the employment law rights of local long term workers simply because they are non-nationals or happen to have been resident outside the jurisdiction before they commenced their employment”.

The Court concluded that s4(2)(b) of the SIA in relation to B and J’s claims infringed both Art 6. and Art. 14 of the ECHR .

The EU law claims and the EU Charter

The Court also held that Art. 47 of the EU Charter was violated, given its content was, for the purposes of the case, identical to Art. 6 of the ECHR.

Art. 52(5) of the EU Charter confirms that the EU Charter only applies to Member State national courts (and EU institutions and like bodies), where they are implementing EU law. The Court held, however, that B and J's claims were "within the scope" of EU law, as they were based on EU law measures.  

Further, the Court found that a right under the EU Charter could be relied on "horizontally" in certain circumstances (meaning that it could relied on even though Libya is not an EU Member State or one of the institutions referred to in Art. 51 of the EU Charter). Not all Charter provisions had horizontal effect, but Art. 47, which reflected general principles of EU law and did not depend on its definition in national law to take effect, fell into the category of those that could.

The Court therefore decided, in accordance with s2(1) of the European Communities Act 1972, that it should disapply s4(1)(b) and 16(1)(a) of the SIA, to the extent required to allow B and J’s EU law claims to proceed.

Comment

The Court’s finding in respect of Art. 47 of the EU Charter is the more practically significant in the context of the claims against the Sudanese and Libyan embassies, as it allows certain of those claims to proceed, notwithstanding the immunity granted by the SIA. The decision demonstrates that, as far as claims within the scope of EU law are concerned, states and other entities which would otherwise benefit from immunity under the SIA may find that this immunity is impacted by Art. 47 of the EU Charter.

The declaration of incompatibility with Art. 6 of the ECHR in respect of ss4(2) and 16(1)(a) of the SIA will not immediately assist B and J in their claims, as the SIA will remain in full force and effect until Parliament takes further action. However, s10 and schedule 2 of the HRA provide a mechanism whereby amendments to legislation can be made in order to remove an incompatibility identified by the courts.

This case further serves to demonstrate that there has been a general shift in perception since the passing of the SIA, both in terms of the recognition and protection of the rights of individuals and also of the extent to which states can and should be able to claim immunity in relation to civil law claims. A declaration of incompatibility in relation to certain provisions of the SIA may, in due course, provoke a review of the whole of the SIA by Parliament to ascertain whether the scope of the immunity it grants is consistent with international law.

For further information, please contact Andrew Cannon, partner, Hannah Ambrose, Professional Support Lawyer, or your usual Herbert Smith Freehills contact.