The High Court of London determined on Wednesday that the British government’s post-Brexit compensation plan for EU citizens is unconstitutional.

The Independent Monitoring Authority, an organization funded by the government to monitor citizens’ rights, filed the lawsuit against the Home Office, claiming that by requiring EU citizens to reapply for the right to live and work in the United Kingdom, Britain is in violation of the withdrawal agreement with the EU.

The IMA’s lawyers argued at a hearing last month that the scheme unlawfully requires EU citizens to make a second application after being allowed to remain in the UK or lose their rights of residence.

EU citizens and their family members who had not established a right of permanent residence before the end of 2020 can be granted limited leave to enter and remain in the UK for five years, known as “pre-settled status”.

Robert Palmer, representing the IMA, said those who did not make another application within five years of being granted pre-settled status would “automatically lose their right to residence in the UK”.

He argued this aspect of the EU settlement scheme – and a similar scheme for citizens from the countries of the European Economic Area and the European Free Trade Association – was “straightforwardly incompatible with the withdrawal agreement”.

Judge Peter Lane ruled the British government’s interpretation of the withdrawal agreement was “wrong in law” and the settlement scheme was unlawful. He granted the Home Office permission to appeal against his decision.

“I am glad that the judge has recognized the substantial impact this issue may have had on the lives and livelihoods of citizens with pre-settled status in the UK,” IMA CEO Kathryn Chamberlain said in a statement.

In a statement, Minister of the Home Office Simon Murray said: “Our commitments to uphold EU residents’ rights in the UK are very serious since they are our friends and neighbors.

“The EU settlement programme goes above and beyond what is required of us by the exit agreement, safeguarding the rights of EU nationals and providing them with a path to permanent residence in the UK.

We want to appeal this judgment because we are disappointed in it.