State immunity laws breach human rights

Kingdom of Spain v Lorenzo [2025] EWCA Civ 59, handed down last week, follows the court’s ruling in December, at [2024] EWCA Civ 1602, in a claim brought by Lydia Lorenzo, a dual UK and Spanish national living in London when she was recruited to work in the Spanish Embassy. Lorenzo brought an employment tribunal claim for race discrimination and constructive unfair dismissal. The court accepted Spain’s immunity with regards to part of the case, but dismissed Spain’s attempt to assert immunity from Equality Act 2010 claims.

In last week’s ruling, as sought by the claimant, the court exercised its discretion to declare s 4(2)(a) of the State Immunity Act 1978 incompatible with art 6 of the ECHR, the right to a fair trial.

Section 4(2)(a) provides an exception. A state has no immunity in proceedings concerning employment contracts made in the UK or where the work is to be wholly or partly performed there unless ‘at the time when the proceedings are brought the individual is a national of the State concerned’. This would have given Spain immunity from Lorenzo’s employment claim as she has dual nationality.

Jehad Mustafa, partner at Farrer & Co, said: ‘This will likely result in Parliament changing UK law, allowing nationals of sending states to sue their own diplomatic missions in the UK’s employment tribunals.

‘This ruling will have widespread implications for the diplomatic community in London with potential for the work of diplomatic missions to be significantly disrupted. The ruling is set against the backdrop of London’s diplomatic community already processing a wave of unfavourable recent UK judgments, resulting in the UK being seen as an outlier globally.

‘This latest ruling brings into question whether the State Immunity Act 1978 is fit-for-purpose in its current form, as the world and the challenges facing diplomats are vastly different almost 50 years on. If reforms to immunities standards are sought, the UK should engage with the international community, to ensure a co-ordinated and consistent approach.’