Court of Appeal declares State Immunity Act 1978 to be incompatible with the right to a fair trial

Image of Matt Jackson and Caitlin Page

Following on from Matt Jackson and Caitlin Page successfully resisting Spain’s appeal last year in Kingdom of Spain v Lorenzo [2024] EWCA Civ 1602 (see our article here), the Court of Appeal has today (29th January 2025) declared that section 4(2)(a) of the State Immunity Act 1978 is incompatible with article 6 of the European Convention on Human Rights. The Court also made a pro bono costs order for the Access to Justice Foundation.

Background to the appeal

Ms Lorenzo was employed by the Spanish Embassy in London. She was a dual British/Spanish national. She brought claims against Spain for race discrimination and unfair dismissal on Christmas Eve 2015. Spain resisted those claims relying on the State Immunity Act 1978.

The State Immunity Act 1978 bars (by section 1) all claims against foreign states in the UK unless one of a number of exceptions apply. One of those exceptions is found in section 4 which said at the time of Ms Lorenzo’s employment:

            Contracts of employment.

(1)  A State is not immune as respects proceedings relating to a contract of employment between the State and an individual where the contract was made in the United Kingdom or the work is to be wholly or partly performed there.

(2)  Subject to subsections (3) and (4) below, this section does not apply if—

(a)   at the time when the proceedings are brought the individual is a national of the State concerned; or

(b)   at the time when the contract was made the individual was neither a national of the United Kingdom nor habitually resident there; or

(c)   the parties to the contract have otherwise agreed in writing.

(3)  Where the work is for an office, agency or establishment maintained by the State in the United Kingdom for commercial purposes, subsection (2)(a) and (b) above do not exclude the application of this section unless the individual was, at the time when the contract was made, habitually resident in that State.

(4)  …

(5)  …

(6)  In this section “proceedings relating to a contract of employment” includes proceedings between the parties to such a contract in respect of any statutory rights or duties to which they are entitled or subject as employer or employee.

 So on a normal reading of the act, subsections (1) & (6) allowed Ms Lorenzo’s claims to proceed, but because Ms Lorenzo was Spanish as well as British, her claims were barred by section 4(2)(a).

The London Central Employment Tribunal dismissed Ms Lorenzo’s unfair dismissal claim, but allowed the discrimination claims to proceed in a decision made on 20th April 2021. Because EU law still applied to Ms Lorenzo’s claims, and the discrimination claims were based on EU law, the Employment Tribunal disapplied section 4(2)(a) of the State Immunity Act 1978 as it conflicted with article 47 of the EU Charter of Fundamental Rights:

Everyone whose rights and freedoms guaranteed by the law of the Union are violated has the right to an effective remedy before a tribunal in compliance with the conditions laid down in this Article.

Everyone is entitled to a fair and public hearing within a reasonable time by an independent and impartial tribunal previously established by law. Everyone shall have the possibility of being advised, defended and represented.

Ms Lorenzo’s unfair dismissal claim was not based on EU law and so that claim was dismissed.

Mrs Justice Ellenbogen in the Employment Appeal Tribunal upheld the Employment Tribunal’s decision in a judgment on 12th December 2023 (see our coverage here). Matt acted for Ms Lorenzo. Spain appealed against that decision to the Court of Appeal.

Court of Appeal Case

Matt, and now Caitlin, represented Ms Lorenzo in the Court of Appeal on 27th November 2024. As well as resisting the appeal, they argued that the Court of Appeal should declare that section 4(2)(a) of the State Immunity Act 1978 was incompatible with article 6 of the European Convention on Human Rights:

In the determination of his civil rights and obligations or of any criminal charge against him, everyone is entitled to a fair and public hearing within a reasonable time by an independent and impartial tribunal established by law…

Matt and Caitlin also argued that because of discrimination on nationality grounds, section 4(2)(a) infringed article 14 (Prohibition of discrimination) of the European Convention on Human Rights, and that as the section took away a right to claim, it also infringed article 1 of protocol 1 to the convention (Protection of property). The Employment Tribunal and Employment Appeal Tribunal did not have the power to make that declaration of incompatibility.

The Court of Appeal dismissed Spain’s appeal (see our article here) and in its judgment late last year, sought further submissions in writing, including from the Secretary of State for Foreign, Commonwealth and Development Affairs, on whether to make a declaration of incompatibility.

Supplementary judgment

Today, the Court of Appeal decided to uphold Matt’s and Caitlin’s submissions that section 4(2)(a) of the State Immunity Act 1978 infringed article 6 and declared that it is incompatible with the convention. Giving its judgment, the Court of Appeal said:

“1. In our previous judgment ([2024 EWCA Civ 1602]) handed down on 20 December 2024 we invited further submissions from the parties and from the Secretary of State on whether a declaration should be made that section 4(2)(a) of the State Immunity Act 1978 is incompatible with the ECHR.

2. The Claimant sought such a declaration relying not only on Article 6 but also on Article 14 and Article 1 of the First Protocol (A1P1). Spain made detailed submissions but expressed itself to be neutral.

3. The Secretary of State, who had not taken part in the appeal itself, accepted that it followed from our judgment that section 4(2)(a) is not compatible with Article 6 of the ECHR and that the court had a discretion to make a declaration of incompatibility. However, the Secretary of State submitted that the conclusions reached in the judgment do not support a declaration of incompatibility in respect of A1P1 and that any declaration should be in terms only that section 4(2)(a) is incompatible with Article 6…

4. We accept the submissions of the Secretary of State. We therefore make a declaration that section 4(2)(a) is incompatible with Article 6…”

Effect of judgment

The declaration of incompatibility is thought to be only the third ever made in an employment case (after Benkharbouche v Embassy of the Republic of Sudan and Mercer v Secretary of State for Business and Trade). It allows the government to make a remedial order to amend the State Immunity Act 1978 to remove the compatibility.

A remedial order was made to amend section 4(2)(b) after the Benkharbouche case to allow people who were neither British citizens or habitually resident in the UK to bring claims subject to some exceptions. The government has not commented on the declaration yet, but it appears likely that a similar order will be made to resolve section 4(2)(a)’s incompatibility.

If a remedial order is made, it is likely to widen the ability of claimants who work for foreign states to bring claims before the UK courts. It remains to be seen though whether an order will be made, and whether any restrictions are placed on who can bring claims.

Matt and Caitlin were instructed by Ryan Bradshaw of Leigh Day.