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Fundamental misinterpretation led to Norwegian legal scandal

Fundamental misinterpretation led to Norwegian legal scandal

| Text: Björn Lindahl, photo, Jan Richard Kjelstrup / ASD

It has been called Norway’s worst ever miscarriage of justice. Thousands of people were accused of cheating the benefits system when accepting unemployment allowance and other support while living abroad. It then turned out it was never illegal – as long as it happened within the EEA.

At the centre of the scandal is NAV, Norway’s welfare agency, where employment services, social insurance and municipal social services are gathered in one giant organisation. But the scandal is equally serious for politicians, the courts and the media. They failed to ask whether it really was necessary to sentence some 50 people to prison and 2 400 to pay back several hundred thousands of Norwegian kroner because they had failed to understand, or willingly broken, rules about only accepting benefits if they were living in Norway. A rule which the authorities did, in fact, not have the right to enforce. 

ESA, The EFTA Surveillance Authority, is supposed to make sure Norway, Iceland and Lichtenstein have the same access to the EU’s four freedoms as EU member states. Yet not even that authority reacted when some remarkable rulings started appearing in front of Norway’s National Insurance Court – the special court dealing with appeals in social insurance cases.

On 28 October, Norway’s Minister for Employment and Social Inclusion Anniken Hauglie called a press conference alongside the head of NAV and Tor-Aksel Bush, Norway’s Director of Public Prosecutions. 

She began with apologising to all those who had been unfairly prosecuted and to their families. 

Anniken HauglieAnniken Hauglie (Conservatives) was asked many questions when she informed parliament about what had happened at NAV.

“But the state will make good the mistakes and pay compensation,” she promised.

Sigrun Vågeng, who heads NAV, then told the gathered press that even though Norwegian law says you “must live in Norway in order to access work assessment allowance, sickness benefit and attendance allowance”, this was in breach of the new EU social insurance regulation which was introduced in 2012. It trumps Norwegian law.

“Both NAV and the courts have been interpreting this wrongly. Our interpretation is now that we cannot from Norway’s side prevent or reject such benefits on the grounds that those who are entitled to them are living in an EU or EEA country.”

Even the Director of Public Prosecutions Tor-Aksel Bush apologised and said the public prosecutor had to change too.

“What we must learn from this is that in addition to going through the facts in the judgement, the courts must also investigate the legal aspects of the notifications presented by a country’s authorities.”

It is definitely the first time that the Norwegian people received an apology on the same day from both the Minister for Employment and Social Inclusion, the head of the country’s largest authority and the Director of Public Prosecutions. 

"Would have liked to have been informed earlier"

Even though the Director of Public Prosecutions said he would have liked to have been informed earlier, they presented a united front: things would be tidied up and the best people to do this were the three of them. Except Tor-Aksel Busch had some time ago already announced his retirement, so the job would fall on his successor Jørn Sigurd Maurud.

He immediately let it be known that he was biased, being married to a former minister for employment and social inclusion, who might also carry some of the responsibility.  

Prime Minister Erna Solberg quickly declared her confidence in Anniken Hauglie, who for her part said she had confidence in Sigrun Vågeng. Even though Hauglie has asked for permission to inform parliament about what had happened, the opposition has not been happy and has presented a range of follow-up questions.

The parliament's smallest party, Red, announced a vote of confidence agains Anniken Hauglie already on the evening 27 October. It only got the party's single vote. The other parties wants to see whether it is possible to prove that she did not act quickly enough when she was told NAV’s interpretation of the law was wrong.

Alarming EU judgement

A judgement in the EU Court back in February 2017 should have set alarm clocks ringing. It concerned British woman Linda Tolley, who in 1993 became so ill that she no longer could cook for herself. As a result, she got the British version of the benefit which has now become the focus of investigations in Norway. 

Nine years after being awarded the benefit, she and her husband moved to Spain. After a few years, British authorities concluded that she should have lost her benefit when she moved, and stopped her payments. Mrs Tolley appealed and finally won in the EU Court (or rather, her husband did, since the woman died before the court passed judgement).

The peculiar thing is that Norway used its right according to the EEA agreement to comment on the judgement. This is something Norway has only done a handful of times in the past three years. The Norwegian comment was well prepared and focused on the fact that member states themselves should be allowed to decide the rules for these types of benefits.

Because Norway engaged with the issue, it was also informed about the judgement when it was made. According to Aftenposten, the newspaper that first wrote about the Tolley judgement, many things indicate that judgement was instrumental in changing NAV’s interpretation of the EU regulation. But if this happened in 2017, should not someone have put the brakes on back then? How many miscarriages of justice happened during that period, where benefit recipients were accused, sentenced and, in many cases, imprisoned?

No ministerial head to roll – yet

When all investigations have been finished and after parliament’s Standing Committee on Scrutiny and Constitutional Affairs has processed them, we will find out whether the Minister for Employment and Social Inclusion and the head of NAV get to keep their jobs.

“So far, the opposition is not keen to get rid of the minister, but it is thought to be only a matter of time before Prime Minister Erna Solberg chooses to let Hauglie go. The best guess is that this will happen just before Christmas,” writes political commentator Arne Strand in the Dagsavisen newspaper.

The press conference where the NAV scandal went public

Anyone can watch the press conference (above) where the Minister for Employment and Social Inclusion Anniken Hauglie (right) explained about the new interpretation of which rules applied for those who take different welfare benefits with them to other EEA countries. Far left: Director of Public Prosecutions Tor-Aksel Busch. In the middle: head of NAV Sigrun Vågeng. Watch the press conference here.

EU law trumps national legislation

The EU regulation on social security determines which country's social security system covers individuals who move within the EU area. National legislation that comes into conflict with EU law is set aside. Regulation 883/2004 covers EU and EEA countries – i.e. Iceland, Lichtenstein and Norway.


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