A Christian fostering agency has lost a Court of Appeal wanting to overturn a ruling that deemed the agency "discriminatory" for its company policy of only working with heterosexual couples.
Three Court of Appeal judges have concluded that the Cornerstone (North East) Adoption and Fostering Service's policy is discriminating and could not be justified on the basis of the agency's religious beliefs.
They said more "credible evidence" was needed to prove the negative impact on cares and children if the policy was changed.
Pam Birtle, Cornerstone (North East) Adoption and Fostering Service's CEO said: "We're naturally disappointed that the Court of Appeal did not accept our argument that it is not the job of the courts to define what an evangelical is."
Last year, education watchdog Ofsted downgraded the agency's rating from "good" to "requires improvement" arguing the agency's policy discriminated against gay evangelical Christians wanting to adopt or foster children.
The agency decided to bring legal action against the watchdog saying that Ofsted was forcing it to abandon its Christian values.
However, in July 2020, High Court judge Mr Justice Julian Knowles ruled in Ofsted's favour saying the agency "must change its recruitment policy to allow gay men and lesbians who are evangelical Christians to apply to become prospective foster parents, and it cannot lawfully refuse to do so".
The agency then challenged that ruling but Lord Justice Peter Jackson, sitting with Lady Justice Asplin and Lady Justice Nicola Davies, concluded the policy is discriminatory.
They added that there could be "no doubting" the value of the agency's work or sincerity of its motives but said the agency had "failed on the facts" for not "putting up a substantial evidence-based case on justification".
Reacting to the ruling, Ofsted's Chief Inspector, Amanda Spielman said: "This outcome offers much needed clarity in what is a difficult, complex and sometimes emotive area of law.
"The court has found that Cornerstone's recruitment policy discriminates on the grounds of sexual orientation and is unlawful. Today's judgment supports the fair and equal treatment of people of all sexual orientations."
Cornerstone (North East) Adoption and Fostering Service has lodged an application to appeal to the Supreme Court.
Pam Birtle continued: "I do this work because I believe in it with all my heart. I was in the care system myself as a teenager and have been a social worker, foster carer and adopter over the last 40 years. I believe we are called by God himself to show the love of Christ to all people, including people who are LGBT, through doing this work in a uniquely Christian way.
"We invite Christians to join us in praying that a better accommodation will be found that allows evangelicals to play their full part in British public life without unjust restrictions being imposed on them."