Discrimination claims and equality law are naturally seen as the preserve of HR departments and employment lawyers as, more often than not, cases involve employees. However, protection under the Equality Act 2010 is much wider and can be relevant to property transactions and management.
As an example, the Equality Act prohibits discrimination in relation to disposals of property or management of property. Taking some obvious examples, it would be unlawful discrimination to refuse to rent out premises to a person of a particular nationality or to charge that person higher rent or evict them because of race.
On the face of it, discrimination law is about individuals and commercial property owners who typically deal with corporations may not be particularly concerned about the risk of discrimination claims. However, a recent Employment Appeal Tribunal decision that has wider implications far beyond employment law means this is not a safe assumption.
In the case in question, EAD Solicitors LLP v Abrams, a member of an LLP had ceased to be a member personally and instead incorporated a limited company that became a member of the LLP. When he reached the age at which a member of the LLP would normally be expected to retire he alleged that both he and his limited company had been subjected to discrimination. The LLP challenged whether a limited company could bring a discrimination claim and asserted that only an individual could do so.
That challenge was unsuccessful and the Employment Appeal Tribunal has ruled that a corporate entity can pursue a discrimination claim if it is alleging that it has been discriminated against because of a 'protected characteristic' of someone associated with it.
Protected characteristic is discrimination law jargon for the personal characteristics in respect of which discrimination is prohibited (such as race, sexual orientation and age).
The effect of a judgment that a corporate entity can bring a discrimination claim is very wide ranging and potential claims by corporate entities intimated in the judgment include:
- a company that has lost out in a tender exercise and believes that this is because it has a substantial Jewish workforce or an openly gay CEO;
- a company that believes it has lost out on opportunities because it offers employment to persons with specific disabilities that may not seem attractive to the other contractor; and
- a business that believes it has lost out because it openly supports Islamic education.
From a real estate perspective, there must be some risk that corporate tenants whose leases are terminated might seek to rely on discrimination claims to seek additional compensation if they can allege that the treatment related to a protected characteristic of a person or persons associated with them. This could be a particular risk in schemes seen by local communities a gentrification.
In the vast majority of cases any such claims are likely to have no real chance of success as there will be a strong commercial justification for a property owner's actions.
Additionally, parliament's intention in relation to the premises provisions of the Equality Act is most likely to have been about protecting residential tenants. However, commercial property owners will be in a much stronger position to defend any speculative claims if they can show a clear and documented commercial rationale for their actions and decisions.