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CITY solicitors at Westminster have been warned that their victory in the so-called "benefit tourists" case has failed to resolve a crucial area of law on councils' obligation to house immigrants.
Barrister Clive Jones' advice came after the High Court ruling in which the council was judged to have acted lawfully when it refused accommodation to two unemployed and homeless HIV sufferers from EU countries.
Westminster turned down housing applications from Italian flower seller Gaudenzio Castelli and Spanish barman Jose Tristan-Garcia.
The two men sought to overturn the decision by claiming the council had failed in its statutory duty to house them on the basis of their need and medical conditions.
Deputy Judge Roger Henderson QC ruled, however, that neither had unfettered rights of residence and said that EU nationals who were likely to be a burden on another member state should return to their native country.
He decided that under Article 8a of the European Community Treaty, a local authority is entitled to determine whether the immigrant has a right of residence and therefore whether to offer accommodation.
The ruling looks likely to be challenged in the Court of Appeal.
Henderson's decision was hailed as a landmark ruling which strengthened the position of councils and the Government who wish to deter EU nationals moving freely between member states and claiming benefit.
But Jones has advised the council that the ruling does not cover the many immigrants in London who hail from countries outside the European Union.
He has warned that there is currently no legal means of refusing accommodation to the hundreds of immigrants, typically from ex-colonies, who are jobless in London.
Edmund Lazarus, chair of the housing committee, said: "This is of continuing concern to the city council."
Westminster will be pressing the Government to close the loophole in the provisions of the new Housing Bill, due to be published next month.
The city solicitor and corporate services division at Westminster was the subject of 27 gripes from the public during the three months from April to June this year. A report to the policy and resources department says six complaints were upheld, four were partly upheld and 17 rejected. Most related to the handling of property transactions.