The High Court ruled that the EU settlement mechanism is illegal in Independent Monitoring Authority v. Secretary of State for the Home Department  EWHC 3274 (Admin), adding to the fallout from Brexit. The British government established the programme to transfer EU residents’ legal bases for residency from EU law to domestic UK law. The system does not adequately protect the rights of EU nationals, according to the court, which determined that it violates the Withdrawal Agreement between the UK and the EU.
The court concluded that, considering the conditions of the Withdrawal Agreement, EU nationals who have been granted pre-settled status should not be considered to have obtained illegal residency if they do not submit a second, subsequent application for permanent status.
The Home Office is appealing the decision, so it is not necessarily the last word on the subject. However, if the result holds following appeals, it might mean that the British government’s negotiators did a bad job of reaching an agreement on the draught Withdrawal Agreement. Or perhaps the Home Office erroneously interpreted the negotiated deal.
What Does EU Settlement Scheme Mean?
A new immigration status had to be granted to all EU residents living in the UK because the UK government’s choice of Brexit resulted in the termination of their right to reside there; otherwise, they would have been in the country unlawfully. All six or so millions of them. One choice was to enact a statute, known as a “declaratory scheme,” stating that they were lawfully residing. The disadvantage of this strategy is that persons who have status bestowed upon them automatically by the law may not necessarily have documentary evidence of that position. Instead, the UK government decided to implement a “constitutive plan” that would force all EU citizens to apply for a new status. Through the EU Settlement Scheme, this would be accomplished. The disadvantage of this strategy is that not everyone applies; some people are left as unauthorised residents.
The goal was to grant permanent settled status right away to EU citizens who could demonstrate that they had resided in the UK for at least five years. Like all other immigrant statuses, this one is known officially as “indefinite leave to remain.” The EU citizen would be granted temporary “pre settled status” for a term of five years if they had not yet been in the UK for five years. This status’ drawback is obvious from its formal legal name: limited leave to remain. The plan stipulates that an EU person granted pre-settled status must apply before their limited leave expires to avoid becoming an illegal resident.
2,677,190 individuals have received pre-settled status thus far. A portion of them won’t submit the mandatory second application. There are a lot of actual people even if only a portion of that large population. They could have forgotten, believed it didn’t matter, didn’t understand, were incompetent at the time, or any number of other possibilities. People don’t always act in ways that the government expects them to.
What Was The Matter At Hand?
The judicial review focused on the fate of EU nationals with pre-settled status if they fail to submit a timely application to the Home Office for further leave to remain before that status expires.
Under the terms of the Withdrawal Agreement, the Independent Monitoring Authority was established with the responsibility to investigate claims that EU citizens’ rights had been violated following Brexit (Article 159).
Contrary to how UK immigration law often operates, the Independent Monitoring Authority argued in this instance that those with pre-settled status do not lose all their rights by failing to submit a new application before the status expired. Furthermore, pre-settled status holders are not required to submit a settled status application because, in accordance with the Withdrawal Agreement, they should automatically gain the right to permanent residence if the requirements are met.
The hearing was held before Mr. Justice Lane, President of the Upper Tribunal, who outlined the very real issues that pre-settled status holders face when their leave ends without another application:
As the claimant points out, the consequence under the 1971 Act of limited leave coming to an end, without being followed by further leave, is extremely serious. The person concerned becomes an overstayer, who from that point is in the United Kingdom unlawfully. A person who knowingly remains beyond the time limited by the leave commits a criminal offence: section 24 of the 1971 Act. There is no legal ability to work or claim certain benefits. 
The EU Commission intervened, using the freedom to comment on the implementation and execution of the Withdrawal Accord granted by Article 162 of that agreement. The3million campaign organisation was given permission to submit written interventions in favour of the positions taken by the Independent Monitoring Authority and EU Commission. The court was asked to respond to two inquiries.
First, does the Withdrawal Agreement allow the Home Office to revoke the residency (and other rights) of those with pre-settled status who fail to submit a new application for settled status (or, in some circumstances, for further pre-settled status)? This could be regarded as the issue of legal repercussions.
Second, when a person’s circumstances match the necessary criteria, does permanent residency immediately result in their status as a resident or are they required to submit a second application? The second application query might be this one.
The Issue Of Legal Repercussions
For host nations that have chosen constitutive application procedures, the Independent Monitoring Authority and the EU Commission claimed that the Withdrawal Agreement only calls for one application for resident status.
They contended that the Withdrawal Agreement’s section on citizens’ rights does not say directly or inferentially that those who are given non-permanent resident status must afterwards apply for permanent resident status or risk losing all their rights.
The only clause in the agreement that permits someone who has been accepted as a beneficiary to renounce their residence status is Article 13(4):
The host State may not impose any limitations or conditions for obtaining, retaining or losing residence rights on the persons referred to in paragraphs 1, 2 and 3, other than those provided for in this Title. There shall be no discretion in applying the limitations and conditions provided for in this Title, other than in favour of the person concerned. [emphasis added]
For instance, Article 20 permits the restriction of residency rights when conduct is sufficiently serious (i.e., a deportation decision is made against a Withdrawal Agreement beneficiary). Given that Article 20 is present “in this Title,” this is in accordance with Article 13(4). Any method or rule that leads to that consequence is prohibited by the Withdrawal Agreement since it does not state that a person loses all rights if they do not apply to change their temporary resident status to a permanent resident status.
The court stated that using a constitutive framework to grant resident rights is acceptable. However:
Neither the United Kingdom nor a Member State can employ a constitutive scheme which fails to do this.
Regarding the first question, this was the conclusion of the situation. According to the court, a person who received residence rights under the Withdrawal Agreement kept such rights for as long as they continued to satisfy the pertinent requirements, which did not involve completing another application.
The Following Application Query
The court next proceeded to the issue of how permanent residence under the Withdrawal Agreement is obtained after concluding that someone cannot lose their residence rights simply because their pre-settled status expires. If someone having pre-settled status needs to submit a second application for permanent residence was at issue.
According to the EU Commission, there is only one resident status under the [Withdrawal Agreement], that of [Withdrawal Agreement] beneficiary, to which all the rights in Title II are connected because Article 18(1) residence status is referred to as a singular rather than a plural.
Or, to put it another way, the Home Office was not permitted to create two classes of beneficiaries, each with different rights; there is only one type or class of “beneficiary” of the Withdrawal Agreement and all such beneficiaries are entitled to the same rights.
The Home Office argued that the term “residence status” can refer to either a temporary or permanent status, and that the Withdrawal Agreement forbids the importation of declaratory rights gained under EU free movement law in cases where a host state has chosen to grant residence status through a constitutive procedure. The “right to acquire” permanent residence as used in the Withdrawal Agreement refers to the “right” to obtain after submitting a permanent residency application.
The Home Office cited constitutive laws of EU members as evidence that other countries compel people with temporary residence to seek for permanent residency. According to the EU Commission, references to needing new identification documents after a certain amount of time (for example, five or ten years) are made to ensure that photographic identification was replaced as people aged and have nothing to do with rights expiring or requiring an application to be granted the right of permanent residence.
Regarding the prospect that the Withdrawal Agreement would provide a hybrid legal structure that would consist of constitutive rights followed by declaratory rights, the court says:
If the drafters of the [Withdrawal Agreement] have, in fact, created a constitutive scheme that is, at this point, hybrid in nature, then that is the scheme which the United Kingdom and the Member States must operate, even though some of them might have preferred something else. 
The court noted that individuals having pre-settled status would likely desire to apply for settled status since it would provide as the clearest indication possible of their eligibility for permanent residence. For instance, established status greatly simplifies life while obtaining benefits. “I see no reason why the defendant should not continue to urge persons who have been given pre-settled status to apply for indefinite leave to remain,” Mr. Justice Lane stated in his ruling.
One of the Home Office’s defences was that the EU Commission recognised the plan that holders of pre-settled status would need to apply for settled status at the time of the negotiations and going forward. The court stated that this can be interpreted as supporting the Home Office’s stance. However, because the court was tasked with interpreting the Withdrawal Agreement’s provisions in accordance with Article 31 of the Vienna Convention, it was not permitted to impose requirements on the Withdrawal Agreement that did not exist, such as the requirement to submit a second application for permanent residence. As a result:
If the defendant were right about what is contained in the new residence status, in the case of a person granted pre-settled status because they have not yet achieved the right of permanent residence, then the WA has failed to explain how that person is to apply for the right of permanent residence; and how the application is to be handled by the State concerned. That would be a remarkable omission. 
Therefore, upon fulfilment of the requirements of Article 15 of the Withdrawal Agreement, a holder of pre-settled status automatically receives permanent residency. Nothing in the Withdrawal Agreement mandates that the holder of Pre-Settled Status apply to be awarded Permanent Residence.
Mr. Justice Lane determined that the Independent Monitoring Authority was right on both counts.
the claimant is entitled to a declaration that the defendant’s interpretation of the Withdrawal Agreement, the EEA EFTA Agreement and the Swiss Citizens Rights Agreement is wrong in law and that the EUSS is accordingly unlawful.
To give the judgement effect, the parties were invited to reach an agreement on an order. However, Home Office Minister Lord Murray announced his desire to appeal the decision right away. It appears extremely likely that this will not be the end of the matter given the gravity of the problems and the sheer number of people who could be affected.
If the ruling is upheld, it might screw up the EU Settlement Scheme. But there is a way out of the situation.
According to the plan, all EU citizens would either possess immigration documentation or be in the country illegally. The word “metaphorical” is used in this sentence, which may provide a resolution. Much to their dismay, EU nationals are not provided with official documents as proof of their status. Their information is simply entered into a Home Office database and designated as having a specific status. The scheme’s goal of encouraging EU citizens to come forward and introduce themselves to the Home Office will still have been accomplished. The Home Office only needs to switch the database entries from temporary residence to permanent residency. Since there were no documents to begin with, it is not even necessary to issue new ones.
The plan was intended to result in temporary or permanent status, which is a secondary concern. The verdict severely undercuts this result. However, the Home Office’s desire for some EU nationals to acquire temporary status was never clear. Simply put, it appears overly difficult, for the Home Office as well as the individuals involved. Processing millions of applications to upgrade from temporary to permanent status has put the Home Office to work. Additionally, people must submit an upgrade application even though, in most circumstances, it will be accepted immediately. One could argue that the judgement saved the Home Office from itself.
The EU Settlement Scheme is really in some ways more generous than was needed under the Withdrawal Agreement, which adds another layer of complexity. Pre-settled status will have been granted to some EU individuals who weren’t really covered by the Withdrawal Agreement. This recent ruling does not imply that these EU citizens should instantly be granted the right to permanent residence.
But now that it has been proved that the UK government had wrongfully denied students and independent contractors the ability to reside in the country under EU law, we know the EU Settlement Scheme is not significantly more kind than was necessary. However, some people continue to profit despite the Withdrawal Agreement’s limitations. For instance, Zambrano carers and family members of Qualifying British Citizens are given EUSS pre-settled status, but they are not covered by the Agreements. These situations are referred to as Surinder Singh cases. The Home Office would not be required to apply this strategy to non-Withdrawal Agreement beneficiaries even though they would need to make accommodations for Withdrawal Agreement beneficiaries to ensure they did not lose their resident status if their pre-settled status expired without further application.
No one with pre-settled status should have their status expire before August 2023, five years after the scheme’s inception. If there is anything that persons with pre-settled status need to do next, it will depend on the outcome of the appeals and the Home Office’s reaction.
Here at Law Lane Solicitors, we have the experience and expertise to advise you on Immigration and Asylum. If you would like to speak to one of our specialists, then please call us on 0207 870 4870 today.
Tahir Shahab Khan