The Home Office has finally responded to the Court of Justice of the European Union’s judgment in the case of VI v Her Majesty’s Revenue and Customs C-247/20, handed down on 10 March 2022, by updating its guidance on European Economic Area (EEA) national qualified persons.

The update effectively concedes to the judgment in VI v HMRC and takes into account how the NHS handled the term “ordinary resident” in the past. It confirms that anyone living in the UK would be entitled to access the NHS, even if they did not have separate sickness insurance upon arrival.

The case that drove the update

You can read more about the judgment in VI v HMRC here. In short, the court held that eligibility for NHS treatment did not necessarily count as comprehensive sickness insurance. Once an individual was “affiliated” with the NHS they had comprehensive sickness insurance under the Free Movement Directive, and within the meaning of Article 7(1)(b). Comprehensive sickness insurance in this instance is a generic term encompassing all sorts of healthcare provided by EU countries.

The Home Office’s previous policy was that EEA nationals who were ordinarily resident in the UK had to demonstrate that they had comprehensive sickness insurance cover in the UK. This is simply not available. Most private insurance only covers secondary care and are often only available after an individual has been a resident in the UK for at least 12 months. This case considered role the NHS plays in providing comprehensive sickness insurance (healthcare) to EEA nationals and their family members.

The court considered that the word “affiliated” might mean an entitlement to comprehensive and free NHS treatment. They stated that a member state could in theory set conditions for EU nationals to, for example, have private insurance before being allowed to register with the NHS, or to have paid into the public sickness insurance system. But the UK never imposed any such conditions. The court suggested that it would not have been proportionate to impose such conditions because it could not be considered “an unreasonable burden on the public finances of the State”. Instead, under domestic law, a person holds an entitlement to comprehensive and free NHS treatment when they are “ordinarily resident” in the UK. A person is considered ordinarily resident if they are residing voluntarily, lawfully and for a settled purpose. Therefore, those who are ordinarily resident in the UK are affiliated with the NHS and hold comprehensive sickness insurance.

It is difficult to ascertain the scale of the wrongdoing by the government that followed from the UK’s unlawful definition of comprehensive sickness insurance. Huge numbers of EEA nationals may have been wrongly refused welfare benefits and housing assistance. Some may have been denied the protections against deportation afforded by Directive 2004/38 on the incorrect ground that they were not covered by the directive. Many people may have unnecessarily purchased expensive private health insurance. Others will have been wrongly denied student loans. Many may have been wrongly refused permanent residence rights and been prevented from acquiring British citizenship. Even children born in the UK could have wrongly been refused British passports on the grounds that their self-sufficient parents did not hold comprehensive sickness cover and where therefore not permanent residents under the Free Movement Directive.

The updated guidance

As is the way with the Home Office, a significant amount of legal compliance with international law is provided by way of updating guidance documents. This guidance update provides instructions for assessing whether an individual was ordinarily resident in the UK. The approach differs for EEA nationals and non-EEA nationals:

“EEA nationals – until 31 December 2020 EEA nationals living in the UK did not need to be exercising Treaty rights or have the right to reside under the Free Movement Directive in order to be considered ordinarily resident for the purpose of accessing the NHS free of charge – therefore, an EEA national could be regarded as ordinarily resident, and thus to have held CSI, even if they were not a qualified person.

Non-EEA nationals – they must demonstrate that their EEA national family member was exercising Treaty rights, had a right to reside under the Free Movement Directive or had a right of permanent residence in order for the non-EEA national family member to be considered ordinarily resident – therefore, if a non-EEA national cannot demonstrate that their EEA national family member was so resident, they will not be regarded as having held CSI on the basis of being “affiliated” to the NHS (because they would not have been entitled to comprehensive and free NHS treatment).”

The Home Office has taken a sensible approach to their update, choosing to look at what the NHS has historically asked EEA nationals to do in practice. NHS guidance before the Brexit transition period simply said that EEA nationals who were residing in the UK could access the NHS. As a result of VI v HMRC, this would mean that they also had comprehensive sickness insurance. The updated guidance confirms that this is how the Home Office wishes to treat historic checks on EEA nationals.

EEA nationals who were ordinarily resident were those working or self-employed, self-sufficient, or students. It should have been made clear through the updated guidance that an EEA national who were ordinarily resident would become a qualified person as soon as they were resident in the UK because they could access the NHS and have comprehensive sickness insurance. And their family members’ rights exploit their own status. So, where an EEA national is qualified, their non-EEA family member would be as well.

The guidance does stumble where could have made things clearer:

“EEA nationals living in the UK did not need to be exercising Treaty rights or have the right to reside under the Free Movement Directive in order to be considered ordinarily resident for the purpose of accessing the NHS free of charge – therefore, an EEA national could be regarded as ordinarily resident, and thus to have held [comprehensive sickness insurance], even if they were not a qualified person.”

The point of the decision in VI v HMRC, and the inclusion of the case in the policy update, is that once an EEA national is affiliated to the NHS and is therefore ordinarily resident, they are a qualified person under the Free Movement Directive. The case confirms that there cannot be a situation where a self-sufficient EEA national with comprehensive sickness insurance is not a qualified person. Yet the guidance seems to make this a grey area.

And the ambiguity continues with the differentiation between EEA nationals and their family members. Family members need to prove that their EEA national relative was a qualified person at the time they were using the NHS. Only then would they have been ordinarily resident in the UK. This echoes historic NHS guidance, in place until the post-transition period changes in 2021, which required checks for qualified status for non-EEA family members, even if it did not for EEA nationals themselves. The guidance says, “they must demonstrate that their EEA national family member was exercising Treaty rights” but might not be sufficiently clear to confirm that affiliation to the NHS is exercising treaty rights.

It is unlikely that a case involving a non-EEA family member will make it to court and result in a guidance update, in the same way that VI v HMRC has done here. A case involving an EEA national and their non-EEA family members being threatened with deportation for behaviour before the 2020 changes, and therefore needing to show long-term residency to benefit from the added protection against deportation under EU law, is becoming less and less likely the more time goes on.

A reminder about potential claims for damages

As a reminder, individuals who have been disadvantaged by a state’s infringement of EU law before the case of VI v HMRC may be able to claim Francovich damages. Schedule 1(4) of the European Union (Withdrawal) Act 2018 expunges the rule in Francovich from domestic law. But there appears to be a small window in the 2018 Act to allow for new actions for damages.

Section 39(7) of Schedule 8 applies where cases are begun within two years from the end of the transition period, and are based on facts that occurred before the end of the transition period. The clock is ticking. It appears it is still possible to launch new Francovich claims for damages suffered as a result of the UK’s unlawful approach to comprehensive sickness insurance, so long as the facts on which the claim is based happened before 31 December 2020, and so long as the damages claim begins before 31 December 2022. Remedies beyond December 2022 might still be possible, but the arguments are more tenuous.

This post has been updated as of 3 November, with thanks to Chris Benn from Seraphus Solicitors.