Strand, London, WC2A 2LL
B e f o r e :
LORD JUSTICE SINGH
LADY JUSTICE ROSE
| The Queen (on the Application of TP, AR & SXC)
|Secretary of State for Work and Pensions
|Equality and Human Rights Commission
Zoe Leventhal and Jessica Jones (instructed by Leigh Day (TP and AR), and instructed by Central England Law Centre (SXC)) for the Respondents
Christopher Buttler (instructed by the Equality and Human Rights Commission) for the Intervener
Hearing dates: 3-5 December 2019
Crown Copyright ©
Sir Terence Etherton MR and Lord Justice Singh:
The general context
Previous Disability Welfare Scheme
"(1) A benefit known as universal credit is payable in accordance with this Part.
(2) Universal credit may, subject as follows, be awarded to
(a) an individual who is not a member of a couple (a 'single person'), or
(b) members of a couple jointly.
(3) An award of universal credit is, subject as follows, calculated by reference to
(a) a standard allowance,
(b) an amount for responsibility for children or young persons,
(c) an amount for housing, and
(d) amounts for other particular needs or circumstances."
[Diagram or picture not reproduced in HTML version - see original .rtf file to view diagram or picture]"(1) The calculation of an award of universal credit is to include amounts in respect of such particular needs or circumstances of a claimant as may be prescribed.
(2) The needs or circumstances prescribed under subsection (1) may include
(b) the fact that a claimant has limited capability for work and work-related activity;
(c) the fact that a claimant has regular and substantial caring responsibilities for a severely disabled person.
(3) Regulations are to specify, or provide for the determination or calculation of, any amount to be included under subsection (1).
(4) Regulations may
(a) provide for inclusion of an amount under this section in the calculation of an award of universal credit
(i) to end at a prescribed time, or
(ii) not to start until a prescribed time;
(b) provide for the manner in which a claimant's needs or circumstances are to be determined."
"Provision [ ] may secure that where an award of universal credit is made by virtue of sub-paragraph (1)(b)
(i) the amount of the award is not less than the amount to which the person would have been entitled under the terminated award, or is not less than that amount by more than a prescribed amount"
The scheme under challenge in TP (No. 1)
The scheme under challenge in TP (No. 2)
"4A. No claim may be made for universal credit on or after 16th January 2019 by a single claimant who, or joint claimants either of whom
(a) is, or has been within the past month, entitled to an award of an existing benefit that includes a severe disability premium; and
(b) in a case where the award ended during that month, has continued to satisfy the conditions for eligibility for a severe disability premium."
Evidence as to the policy background in TP (No. 1)
"My Lords, this amendment seeks to put an additional element into the amount of UC that is payable for those who are severely disabled and who have no one receiving either carer's allowance or a carer's premium for looking after them. In essence it seeks to recreate the current severe disability premium within UC. As such it would involve a significant increase in cost compared with the Government's plans. That increase stands at £400 million, unless there were other readjustments. However, let us just take it at face value. At face value, it is unaffordable.
On Monday the House approved the Government's plans to simplify the disability-related additions. Instead of the seven different components within the current system of benefits and tax credits for adults, and two further rates in child tax credits for disabled children, UC will just have two rates for both adults and children. By restructuring the rates in this way, we are not looking to make any savings. We are redistributing around £800 million of current spend without returning any savings at all to the Exchequer. The full amount will be reinvested by increasing the higher rate for more severely disabled people." (Emphasis added)
"a large and complex undertaking. For this reason, it is being introduced in a controlled, phased manner, so as to build capacity safely using a 'test and learn' approach whilst reducing legacy benefit costs. It was decided that this gradual build of the UC caseload, with a commensurate scaling down of legacy benefit resourcing, would best be achieved by initially confining access to UC to fresh claimants and to existing claimants who presented a fresh claim by reason of change in circumstances. In due course, the entire population will 'migrate' onto UC and legacy benefits will cease to operate."
(1) the need to test rigorously the computer systems being operated (it being a matter of public record that the IT designed to support UC has been problematic);
(2) the need to train very large numbers of decision-makers in different organisations;
(3) the need to address and overcome problems that might arise;
(4) the benefits of publicity as the system is gradually introduced.
"It is the view of Government that there is a distinction between these cohorts (or that there will be when the status of managed migrant in fact comes into effect). Natural migrants are individuals who are, effectively, in the same position as new claimants. The change in circumstances triggers a fresh claim. They are easily recognisable and identifiable by virtue of that fact. Further, the whole process of entering claims by reference to legacy benefits is being phased out and it would make no sense to permit claimants bringing new claims (for whatever reason) to have that entitlement calculated by reference to legacy benefits rather than UC."
"The Government's view, however, is that where there is no change in circumstances, these factors do not apply. If the claimant is being managed to UC by changes introduced by the DWP, it is the view of Government that there should be a degree of protection against a reduction in entitlement by reference to the transition."
"100. This is set out in Government publications. The Universal Credit Policy Briefing Note 6: Transitional Protection (Pages 393-94, at para 2(a)) and the Universal Credit Policy Briefing Note: Transitional Protection and Universal Credit of 10 December 2012 (Pages 395-97) explained the principles behind transitional protection in UC as follows (Page 395):
'The cause of claimants moving to Universal Credit will determine whether Transitional Protection will apply. Once Universal Credit is launched, some people in receipt of current benefits will be moved over in a process wholly managed by DWP. Transitional Protection will be considered in these cases and will be applied, at the point of transition, where the total household Universal Credit entitlement would otherwise be lower than their total existing award of benefits and tax credits. Claimants who come onto Universal Credit as a result of a change in circumstances meaning they need to apply to Universal Credit instead will not be entitled to Transitional Protection'
101. Accordingly, the 'top up' commitment which is challenged in this claim does not arise on the facts of these cases (or indeed any case at present). The 'top up' commitment is that claimants whose circumstances have not changed would not be worse off in cash terms. This distinction was also explained in paragraph 13 of the Universal Credit Equality Impact Assessment of November 2011 (Pages 199-236) and highlighted in paragraph 13 of the White Paper (Page 145).
102. The requirement for new claims is itself set out in legislation. Moving between Local Authority areas is a clear example of this. In the case of Housing Benefit, section 134 of the Social Security Administration Act 1992 requires Housing Benefit to be funded and paid by the relevant Local Authority. It follows, therefore, that where an individual moves from one Local Authority are to another, they are obliged to make a new claim. This is classified as a change in circumstances for the purposes of natural migration to UC.
103. In general terms, individuals currently receiving SDP are, by definition, likely to have the severest disabilities and less likely to experience changes in circumstances such as a large drop in their income or change in employment than others. As many disabled individuals may also live in specially adapted housing, they may be less likely to move address than other cohorts. On that basis, those receiving SDP are less likely to be 'natural migrants' and more likely to be subject to managed migration to UC; thus being subject to transitional protection.
104. A Policy Submission dated the 25th October 2011 specifically addressed the proposed definition of a 'natural migrant' to the then Minister for Welfare Reform, Lord Freud. In Annex A, at page 5, a change of address thus necessitating a new claim for Housing Benefit was listed as one of the 11 mechanisms by which Transitional Protection would not be provided. As such, the circumstances of these cases have been expressly excluded as being within any top-up commitment."
"The Universal Credit (UC) Policy Briefing Note, published 13 May 2011, laid out our approach to Transitional Protection (TP). We have said that TP will be awarded where the total amount of household benefit is less under UC than the current system and where the claimant is 'managed moved' to UC and where circumstances remain the same: no TP is available for 'natural' migrations."
Evidence as to the policy background in TP (No. 2)
The Background relating to these individual Respondents
Relevant provisions of the Human Rights Act/ECHR
"Every natural or legal person is entitled to the peaceful enjoyment of his possessions. No one shall be deprived of his possessions except in the public interest and subject to the conditions provided for by law "
"The enjoyment of the rights and freedoms set forth in this Convention shall be secured without discrimination on any ground such as sex, race or other status."
The judgment of Lewis J in TP (No. 1)
First Ground: Challenge to the Regulations
(i) Presence of a Carer: Severely disabled people with a carer have their needs met by the standard allowance under Universal Credit, with respect to them, and their carer will receive a carer's allowance or payment of a carer's element as part of Universal Credit to reflect the responsibility of caring for a disabled person. Those severely disabled persons who do not have a carer with them under the pre-Universal Credit benefit system had their needs met by the payment of SDP or EDP on top of the basic allowance they received.
(ii) Level of Disability: Under the previous system, there was differential treatment between those who had limited capability for work due to disability but were not eligible to receive SDP or EDP and those disabled persons whose greater needs were provided for by SDP or EDP. The former group is in the same, or a better position, under UC because the standard allowance is higher than the amount of the basic allowance formerly payable. The latter group no longer receives SDP or EDP and receives the same payment as other disabled people regardless of their level of disability, which the Claimants argued was discriminatory under Article 14 read with A1P1 because different cases were being treated in the same way, contrary to the principle in Thlimmenos v Greece (2000) 31 EHRR 15.
Second Ground: The Implementation Arrangements
(i) Objective justification: Lewis J held that there was nothing in the material before the court to indicate that the Secretary of State had addressed the consequences of implementation and what degree of protection would be appropriate for severely disabled people suffering a "cliff edge drop" in their benefits after moving local housing authority area. The need for transitional protection had been identified by the Government in the White Paper before the 2012 Bill was enacted. The decision to move severely disabled persons from legacy benefits to Universal Credit without transitional protection was manifestly without reasonable foundation: see para. 86 of the judgment.
(ii) Status: Lewis J was of the view that the differential treatment does not arise out of disability as such but arises out of the fact that one group of disabled people will move from one local authority to another and suffer the attendant disadvantage, while the second group of disabled people will not move and therefore not suffer the cliff edge drop in benefits. Lewis J held, at paras. 89-91, that this was an "other status" within Article 14, relying, by way of analogy, on the approach of the Supreme Court in Mathieson v Secretary of State for Work and Pensions  UKSC 47;  1 WLR 3250, at para. 22 (Lord Wilson JSC). He found that the defendant had failed to establish that this differential treatment was objectively justified and accordingly a declaration was granted that there was unlawful discrimination against the Respondents TP and AR: see para. 114 of the judgment.
Third Ground: Public Sector Equality Duty
The judgment of Swift J in TP (No. 2)
(i) The difference in treatment between the SDP natural migrant group, who would receive fixed-rate, generic transitional payments, and the Regulation 4A group, who would receive transitional protection, constituted unlawful discrimination, contrary to Article 14 when read together with A1P1.
(ii) The relief previously ordered by Lewis J required that regulations made by the Secretary of State should make provision for TP and AR to receive transitional payments equivalent to the difference between amounts previously paid under the legacy system and their current Universal Credit payments.
(i) No relevant comparison can be drawn between the legacy welfare benefits and UC welfare benefits. Article 14 says nothing about the amounts that should be paid by way of transitional provision.
(ii) The "no turning back principle" applied as the SDP natural migrant group had already migrated.
(iii) There was a cost saving and also administrative convenience in maintaining a fixed-rate, generic transitional payment for the SDP natural migrant group.
(i) The claim was not directed to the difference in the level of SDP benefits paid under the two systems, nor was it directed to any general proposition that Article 14 required transitional provision to be paid at any particular level. The claim concerned the much narrower point of justification of the difference in treatment between members of two groups, both of which met the eligibility requirements for SDP. The argument that Article 14 does not per se generate the need for specific transitional provision therefore loses its force, because the case was one where the Secretary of State had chosen to make transitional provision, but in different ways for the two groups: see paras. 48-49 of the judgment.
(ii) The "no turning back principle" was rooted in common sense; however, it failed to explain the distinction between the transitional arrangements. The trigger events which caused the natural migration of SDP claimants were not aligned to any material change of circumstances relevant to the needs of SDP claimants. Natural migration was not therefore any indication that the circumstances of the SDP natural migrant group were likely to be different from members of the Regulation 4A managed migrant group, or that there is a reason to treat the members of the two groups differently: see paras. 50-51 of the judgment.
(iii) Saving public expenditure can be a legitimate aim, but will not of itself justify differential treatment unless there is a reasonable relationship of proportionality between the aim sought to be achieved, and the means chosen to pursue it. Paying fixed-rate generic payments to members of the SDP natural migrant group would also be administratively more convenient; however, the convenience should not be overstated. The administrative efficiency argument failed to explain the difference in treatment between the SDP migrant group and the Regulation 4A group; natural migration alone was not a satisfactory ground of distinction and no other sufficient explanation for the difference in treatment was provided: see paras. 52-65 of the judgment.
Issues in TP (No. 1)
Analysis of the issues in TP (No. 1)
The first ground of appeal
The second ground of appeal
"The Court recalls that Article 14 of the Convention protects against a discriminatory difference in treatment of persons in analogous positions in the exercise of the rights and freedoms recognised by the Convention and its Protocols. It observes in this connection that in the constituent parts of the United Kingdom there is not always a uniform approach to legislation in particular areas. Whether or not an individual can assert a right derived from legislation may accordingly depend on the geographical reach of the legislation at issue and the individual's location at the time. For the Court, in so far as there exists a difference in treatment of detained suspects under the 1988 Order and the legislation of England and Wales on the matters referred to by the applicant, that difference is not to be explained in terms of personal characteristics, such as national origin or association with a national minority, but on the geographical location where the individual is arrested and detained. This permits legislation to take account of regional differences and characteristics of an objective and reasonable nature. In the present case, such a difference does not amount to discriminatory treatment within the meaning of Article 14 of the Convention."
"Decisions both in our Courts and in the Court of Human Rights therefore combine to lead me to the confident conclusion that, as a severely disabled child in need of lengthy in-patient hospital treatment, [the appellant] had a status within the grounds of discrimination prohibited by Article 14. Disability is a prohibited ground Why should discrimination (if such it be) between disabled persons with different needs engage Article 14 any less than discrimination between a disabled person and an able-bodied person? "
The third ground of appeal
"In conclusion, the references cited above show clearly in my view that to limit intervention to a 'significant error of principle' is too narrow an approach, at least if it is taken as implying that the appellate court has to point to a specific principle whether of law, policy or practice which has been infringed by the judgment of the court below. The decision may be wrong, not because of some specific error of principle in that narrow sense, but because of an identifiable flaw in the judge's reasoning, such as a gap in logic, a lack of consistency, or a failure to take account of some material factor, which undermines the cogency of the conclusion. However, it is equally clear that, for the decision to be 'wrong' under CPR r 52.11(3), it is not enough that the appellate court might have arrived at a different evaluation. As Elias LJ said in R (C) v Secretary of State for Work and Pensions  PTSR 1344, para. 34:
'the appeal court does not second guess the first instance judge. It does not carry out the balancing task afresh as though it were rehearing the case but must adopt a traditional function of review, asking whether the decision of the judge below was wrong '"
"Applying the approach to justification favoured by the defendant, the decision to move a group of persons previously eligible for SDP and EDP onto universal credit because they move to another local housing authority area, without considering the need for any element of transitional protection (particularly in the light of earlier Government statements that an element of protection may be needed and the circumstances in which it should continue needed to be defined) is manifestly without reasonable foundation." (Emphasis added)
"In any event, the material before the court does not establish that the Transitional Regulations as they stand strike a fair balance between the interests of the individual and the interests of the community in bringing about a phased transition to universal credit. The impact on the individuals is clear. They were in receipt of certain cash payments (the basic allowance and SDP and EDP). They are now in receipt of cash payments which, overall, are significantly lower than the amount previously received. They are a potentially vulnerable group of persons as the Government in its own material recognises. On the material before me, there appears to have been no consideration of the desirability or justification for requiring the individual to assume the entirety of the difference between income related benefits under the former system and universal credit when their housing circumstances change and it is an appropriate moment to transfer them to universal credit. That is all the more striking given the Government's own statements over a number of years that such persons may need assistance and that there was a need to define with precision the circumstances in which they would not receive such assistance. In all the circumstances of this case, the operation of the implementation arrangements in the way they do is manifestly without reasonable foundation and fails to strike a fair balance." (Emphasis added)
The fourth ground of appeal
The Respondents' Notice
The duty of candour and co-operation
"The duty of candour is a duty to disclose all material facts known to a party in judicial review proceedings. The duty not to mislead the Court can occur by omission, for example by the non-disclosure of a material document or fact or by failing to identify the significance of a document or fact."
Issues in TP (No. 2)
Analysis of the issues in TP (No. 2)
The first ground of appeal
(i) First-time UC claimants who receive UC entitlement calculated at a rate which would, for some, be lower than they would have received under legacy benefits ("Cohort 1").
(ii) Natural migrants with relevant disability needs, who received UC plus a transitional payment of £80 per month tapering down in due course ("Cohort 2"). This is the Respondents' cohort.
(iii) Managed migrants in the pilot scheme, who will receive UC and any transitional protection in respect of the entirety of the difference between their former and current entitlement ("Cohort 3").
(iv) Severely disabled claimants who have not migrated because they are subject to Regulation 4A and receive ongoing legacy benefits, which may be superior or inferior to UC entitlement ("Cohort 4").
" In this respect the situation has moved on since the events which were in issue before May J in TD. Given the provision now made by the Managed Migration Pilot Regulations, the managed migrant group is no longer too speculative to form a proper comparator. when those Regulations are considered in the context of events since February 2018, it is clear that for SDP claimants the managed migrant group will comprise all of the Regulation 4A Group."
(i) managed migrants are only claimants in the pilot scheme;
(ii) the Regulation 4A group is not linked to the pilot scheme at all.
The second ground of appeal
"What must be justified is the difference in treatment."
" Any discriminatory measure inevitably affects a smaller rather than a larger group, but cannot be justified on the ground that more people would be adversely affected if the measure were applied generally. What has to be justified is not the measure in issue but the difference in treatment between one person or group and another. " (Emphasis added)
"decisions on such matters are primarily for the Executive. The degree of respect to be afforded by the court to decisions of this nature is substantial, and the question for the court is whether or not the decision is 'manifestly without reasonable foundation'."
"This claim is not directed to the difference in the level of benefits paid to severely disabled persons under the legacy benefit system and under the Universal Credit system."
As Swift J observed in the same paragraph, this was a situation in which the Secretary of State had already decided to make some transitional provision but had then chosen to do so in different ways for the different groups. It was that difference of treatment which needed to be justified.
"No sufficient explanation for the difference in treatment has been provided. The Secretary of State's 'bright line'/administrative efficiency submission explains the treatment of the SDP natural migrant group on its own terms, but does not explain why that group is treated differently to the Regulation 4A group. Both groups comprise severely disabled persons; all of whom meet the criteria for payment of SDP (or would continue to meet those criteria but for natural migration). The simple fact of natural migration is not a satisfactory ground of distinction because the trigger conditions for natural migration are not indicative of any material change in the needs of the Claimants (or the other members of the SDP natural migration group), as severely disabled persons. The same point is sufficient to dispose of the further suggestion in Miss Young's witness statement that the Secretary of State considered the SDP natural migrants as being in materially the same position as new welfare benefits claimants (i.e. severely disabled persons presenting themselves to the welfare benefits system for the first time, after the implementation of Universal Credit). There is no logical foundation for that view; if there were a logical foundation for it, it would negate the rationale for regulation 4A of the Transitional Provisions Regulations."
"The requirement of justification brings with it the burden of explanation. Overall, I am not satisfied that the Secretary of State has identified any reason that explains the different treatment of the SDP natural migrant group from the Regulation 4A group. The standard that the Claimants must meet for this purpose is the manifestly without reasonable foundation standard. Even though that standard is low (so far as the burden it places on the Secretary of State), as I have explained, there is a mis-match between the reasons the Secretary of State relies on, and the difference in treatment that needs to be justified." (Emphasis added)
" acceptance that savings in public expenditure can constitute a legitimate aim for the purposes of Article 14 does not entail that that aim will in itself constitute a justification for discriminatory treatment. [T]he question whether a discriminatory measure is justifiable depends not only on its having a legitimate aim but also on there being a reasonable relationship of proportionality between the means employed and the aims sought to be realised."
"Saving cost is, of course, a legitimate objective of public policy. But, as the Court of Justice of the European Union emphasised in O'Brien 'budgetary considerations cannot justify discrimination'. In other words, if a benefit is to be limited in order to save costs, it must be limited in a non-discriminatory way. "
"62. I expect that the concern that lies behind the point at paragraph 64 of Miss Young's statement (and see also, paragraph 6.1 of the submission to Ministers, set out above, at paragraph 35), is that if something that looks like Transitional Protection is extended to the SDP natural migrant group, other natural migrants who have the benefit of no transitional provision at all, would attempt to piggy-back on that to found their own claims. Thus, piece by piece, the Secretary of State's policy might be dismantled.
63. Even were such a risk to exist I do not consider it would be capable of amounting to justification of the difference of treatment in issue in this case. The premise for the argument would have to be that the piggy-back claims would be valid in law. I cannot see how it could be a defence to the claim of discrimination brought by the Claimants in this case, to say that it was necessary they be subjected to less favourable treatment to guard against the possibility that other, legally valid, claims might be made against the Secretary of State. In any event, I do not consider that any fear of piggy-back claims is realistic. Different treatment for both the SDP natural migrant group and the Regulation 4A group, as opposed to natural migrants generally, is explicable for the reasons highlighted by the House of Commons Select Committee. Those reasons are specific to the severely disabled who met the conditions for entitlement to SDP under the legacy benefits system. This was the position taken in the February 2018 Departmental presentation. For the avoidance of doubt, my reasoning in this judgment is directed solely to whether the distinction in treatment under the Transitional Provisions Regulations between (a) the SDP natural migrant group; and (b) the Regulation 4A group, is justified in law. No part of the reasoning in this judgment should be taken to suggest that if the Claimants' case succeeds, the distinction that otherwise exists under the Secretary of State's policy between natural migrants and managed migrants, is legally invalid." (Emphasis added)
(1) As at February 2018 there were 11,000 former members of the EDP only group who had migrated to UC (presumably as natural migrants) but it is not known how many, if any, of those were worse off.
(2) There is a Regulation 4A gateway for SDP recipients, which does not include the EDP only group.
(3) Managed migration is limited to a pilot for 10,000 of those in receipt of legacy benefits, which may or may not include members of the EDP only group.
(4) Therefore, as matters stand, the only members of the EDP only group who will move to UC other than those within the 10,000 pilot will be those who are natural migrants.
(5) It is not known how many of the EDP only group within the pilot or who will be natural migrants will be worse off.
The third ground of appeal
"[T]he trigger events are not aligned to any material change of circumstances relevant to the needs of SDP claimants."
Complaint is made about similar passages at paragraphs 55, 60 and 65 of the judgment. It is submitted that the "trigger events" for migration from legacy benefits to UC are not intended to be aligned to "need". The relevance of a trigger event is that it is "an appropriate trigger to move a person from the existing benefit system to Universal Credit", as Lewis J had said in TP (No 1), at para. 81. It follows that TP (No 1) has already established that the trigger events in question are lawful irrespective of the absence of connection to need.
(1) whether the trigger events are appropriate identifiers for a move from legacy benefits to UC, in principle; and
(2) whether the use of the trigger events themselves amounts to sufficient justification for the differential treatment between the SDP natural migrants group and the Regulation 4A group.
Lady Justice Rose:
(i) regulation 6 provides that, with some exceptions, a "universal credit claimant" may not make a claim for income support, housing benefit or a tax credit;
(ii) a person is a "universal credit claimant" if he is entitled to Universal Credit and has made a claim for Universal Credit: regulation 6(2);
(iii) a Universal Credit claimant makes a claim for housing benefit if he "takes any action which results in a decision on a claim being required under the relevant Regulations", including the Housing Benefit Regulations 2006;
(iv) there are various exceptions set out in regulation 6(5) (9) which specify circumstances in which a Universal Credit claimant is not precluded from making a claim for, amongst other things, housing benefit.
"60. The question whether there is a difference of treatment based on a personal or identifiable characteristic in any given case is a matter to be assessed taking into consideration all of the circumstances of the case and bearing in mind that the aim of the Convention is to guarantee not rights that are theoretical or illusionary but rights that are practical and effective. It should be recalled in this regard that the general purpose of Article 14 is to ensure that where a State provides for rights falling within the ambit of the Convention which go beyond the minimum guarantee set out therein, those supplementary rights are applied fairly and consistently to all those within its jurisdiction unless a difference of treatment is objectively justified".
"Where an early release scheme applies differently to prisoners depending on the length of their sentences, there is a risk that, unless the difference in treatment is objectively justified, it will run counter to the very purpose of Article 5, namely to protect the individual from arbitrary detention."