QUEENS BENCH DIVISION
Strand, London, WC2A 2LL
B e f o r e :
MR JUSTICE BEAN
| IN THE MATTER OF A CLAIM FOR JUDICIAL REVIEW
THE QUEEN ON THE APPLICATION OF JS AND OTHERS
|- and -
|THE SECRETARY OF STATE FOR WORK AND PENSIONS
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CHILD POVERTY ACTION GROUP
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SHELTER CHILDREN'S LEGAL SERVICE
(instructed by Hopkin Murray Beskine) for the Claimants
Mr James Eadie QC, Ms Karen Steyn and Mr Simon Pritchard
(instructed by The Treasury Solicitor for the Defendant
Mr Richard Drabble QC, Mr Tim Buley and Ms Zoe Leventhal
(instructed by Herbert Smith Freehills LLP) for the Child Poverty Action Group
Mr Jonathan Manning (instructed by Freshfields Bruckhaus Deringer LLP) for the Shelter Children's Legal Service
Hearing dates: 2-4 October 2013
Crown Copyright ©
Lord Justice Elias :
This is the judgment of the court.
"(6) The amount specified under subsection (5) [the "relevant amount"] is to be determined by reference to estimated average earnings.
(7) In this section "estimated average earnings" means the amount which, in the opinion of the Secretary of State, represents at any time the average weekly earnings of a working household in Great Britain after deductions in respect of tax and national insurance contributions.
(8) The Secretary of State may estimate such earnings in such manner as the Secretary of State thinks fit."
In fixing the relevant amount, therefore, the Secretary of State has to focus on the net average earnings of a working household, but he has a broad discretion how to determine that figure. He may also determine different caps for different cases: section 97(1).
Grounds of claim and history of the case
1) Failure by the Secretary of State to comply with his Public Sector Equality Duty imposed by Section 149 of the Equality Act 2010;
2) Discrimination on various grounds contrary to Article 14 of the ECHR taken with Article 8 and/or Article 1 of Protocol 1 (A1P1);
3) Breach of the claimants' rights under Article 8 of the ECHR and/or the defendant's obligations under the United Nations Convention on the Rights of the Child ("UNCRC") to ensure that the best interests of children are a primary consideration "in all actions concerning children", including those taken by legislative bodies;
4) Irrationality and/or unreasonableness at common law. The contention here is that the Secretary of State acted irrationally or unreasonably in failing to obtain relevant information about the impact of the scheme on single parents escaping domestic violence; and on those in temporary accommodation. In addition it is submitted that it is irrational to seek to create incentives for single parents with children under five to work when it is clear that in most cases they are simply not in a position to do so.
The nature of the Claimants' case
Parliamentary procedure and the status of the Regulations
"when a statutory instrument has been reviewed by Parliament, respect for Parliament's constitutional function calls for considerable caution before the courts will hold it to be unlawful on some ground (such as irrationality) which is within the ambit of Parliament's review. This applies with special force to legislative instruments founded on considerations of general policy".
Relationship to other legislation
The best interests of the children
"in all actions concerning children, whether undertaken by public or private social welfare institutions, courts of law, administrative authorities or legislative bodies, the best interests of the child shall be a primary consideration".
"it is clear from the recent jurisprudence that the Strasbourg court will expect national authorities to apply Article 3.1 of the UNCRC and treat the best interests of a child as a 'primary consideration'. Of course, despite the looseness with which these terms are sometimes used, "a primary consideration" is not the same as "the primary consideration", still less as "the paramount consideration"."
" the cap is likely to affect where different family types will be able to live. Housing Benefit may no longer cover housing costs and some households may go into rent arrears. This will require expense and effort by landlords and the courts to evict and seek to recoup rent arrears. Some households are likely to present as homeless, and may as a result need to move into more expensive temporary accommodation, at a cost to the local authority.
6 Broadly this policy affects large families who are out of work, in the most part with three or more children, or households in high rent areas receiving large Housing Benefit payments.
7. On average households will lose around £93 per week. The median loss is around £66 per week; this is less because the mean is skewed by some households losing large amounts.
8. Around 40% of the losers will lose less than £50 per week. Around 25% will lose between £50 and £100 per week. Around 20% will lose between £100 and £150 per week. The remaining 15% will lose more than £150 per week.
10. Approximately 40% of households who are likely to be affected by the cap will consist of five or more children whilst over 80% will consist of 3 or more children. Fewer than 10% of households likely to be affected by the cap will have no children at all."
Homelessness and the effect of the cap
The grounds of challenge
"The enjoyment of the rights and freedoms set forth in this Convention shall be secured without discrimination on any ground such as sex, race, colour, language, religion, political or other opinion, national or social origin, association with a national minority, property, birth or other status."
Categories of discrimination and relief
"a general policy or measure that has disproportionately prejudicial effects on a particular group may be considered discriminatory notwithstanding that it is not specifically aimed at that group".
However, in an appropriate case the discrimination may be justified.
"The right not to be discriminated against in the enjoyment of the rights guaranteed under the Convention is also violated when states without an objective and reasonable justification fail to treat differently persons whose situations are significantly different".
How is article 14 engaged?
Article 8: interference with family life
"The European Court of Human Rights has never held that a failure of the state to provide financial or other support to a person represented a violation of Article 8".
"Article 8 does not in terms recognise the right to be provided with a home. Nor does any of the jurisprudence of the Court acknowledge such a right. While it is clearly desirable that every human being should have a place where he or she can live in dignity and which he or she can call home, there are unfortunately in the Contracting States many persons who have no home. Whether the State provides funds to enable everyone to have a home is a matter for political, not judicial, decision."
"Article 8 may more readily be engaged where a family unit is involved. Where the welfare of children is at stake, Article 8 may require the provision of welfare support in a manner which enables family life to continue."
Article 14: the grounds of discrimination
"The benefit cap discriminates against (a) women (particularly lone parents and survivors of domestic violence, both categories which overwhelmingly consist of women) and (b) large families (which are more prevalent amongst certain racial and religious groups, including orthodox Jews, such as the SG family, and Catholic Roma such as the MG family). The claimant's claim that the cap discriminates on grounds of sex, race, religion and age, contrary to Article 14 ECHR taken together with Article 8 and/or Article 1, Protocol 1 ECHR ("A1P1"). "
Impact on large families
"15 The proper approach to justification in cases involving discrimination in state benefits is to be found in the Grand Chamber's decision in Stec v United Kingdom (2006) 43 EHRR 1017. The benefits in question were additional benefits for people who had to stop work because of injury at work or occupational disease. They were entitled to an earnings related benefit known as reduced earnings allowance. But on reaching the state pension age, they either continued to receive reduced earnings allowance at a frozen rate or received instead a retirement allowance which reflected their reduced pension entitlement rather than reduced earnings. Women suffered this reduction in benefits earlier than men because they reached state pension age at 60 whereas men reached it at 65.
16 The court repeated the well known general principle that
"A difference of treatment is, however, discriminatory if it has no objective and reasonable justification; in other words, if it does not pursue a legitimate aim or if there is not a reasonable relationship of proportionality between the means employed and the aim sought to be realised" (para 51).
"The scope of this margin will vary according to the circumstances, the subject matter and the background. As a general rule, very weighty reasons would have to be put forward before the court could regard a difference in treatment based exclusively on the ground of sex as compatible with the Convention. On the other hand, a wide margin is usually allowed to the state under the Convention when it comes to general measures of economic or social strategy. Because of their direct knowledge of their society and its needs, the national authorities are in principle better placed than the international judge to appreciate what is in the public interest on social or economic grounds, and the court will generally respect the legislature's policy choice unless it is 'manifestly without reasonable foundation'."
17. The Grand Chamber applied the Stec test again to social security benefits in Carson v United Kingdom (2010) 51 EHRRR 369, para 61
18. The same test was applied by Lord Neuberger of Abbotsbury (with whom Lord Hope of Craighead, Lord Walker of Gestingthorpe and Lord Rodger of Earlsferry agreed) in R (RJM) v Secretary of State for Work and Pensions  AC 311, which concerned the denial of income support disability premium to rough sleepers. Having quoted para 52 of the Stec case 43 EHRR 1017 he observed, at para 56, that this was "an area where the court should be very slow to substitute its view for that of the executive, especially as the discrimination is not on one of the express, or primary grounds". He went on to say that it was not possible to characterise the views taken by the executive as "unreasonable". He concluded, at para 57:
"The fact that there are grounds for criticising, or disagreeing with, these views does not mean that they must be rejected. Equally, the fact that the line may have been drawn imperfectly does not mean that the policy cannot be justified. Of course, there will come a point where the justification for a policy is so weak, or the line has been drawn in such an arbitrary position, that, even with the broad margin of appreciation accorded to the state, the court will conclude that the policy is unjustifiable."
19. Their Lordships all stressed that this was not a case of discrimination on one of the core or listed grounds and that this might make a difference. In R (Carson) v Secretary of State for Work and Pensions  1 AC 173 both Lord Hoffmann and Lord Walker drew a distinction between discrimination on grounds such as race and sex (sometimes referred to as "suspect") and discrimination on grounds such as place of residence and age, with which that case was concerned. But that was before the Grand Chamber's decision in the Stec case 43 EHRR 1017. It seems clear from Stec, however, that the normally strict test for justification of sex discrimination in the enjoyment of the Convention rights gives way to the "manifestly without reasonable foundation" test in the context of state benefits. The same principles were applied to the sex discrimination involved in denying widow's pensions to men in Runkee v United Kingdom  2 FCR 178, para 36. If they apply to the direct sex discrimination involved in the Stec and Runkee cases, they must, as the Court of Appeal observed, at para 50, apply a fortiori to the indirect sex discrimination with which we are concerned."
"The Government's specific aims in introducing the benefit cap are to:
(1) introduce greater fairness in the welfare system between those receiving out-of-work benefits and tax payers in employment;
(2) make financial savings where the benefit cap applies (the most recent estimate is that applying the cap is expected to save £110 million in 2013/14 and £185 million in 2014/15) and, more broadly, help make the system more affordable by incentivising behaviours that reduce long-term dependency on benefits; and
(3) increase incentives to work."
"The Government believes that linking the level of the cap directly to average earnings is the most transparent means of achieving its goal of increasing fairness between those out of work and receiving benefits and those tax-payers in work. The Government acknowledges that some households earning at the level of the average wage may have their income increased by in-work benefits such as Child Tax Credit or housing benefit. But calculating the level at which the benefits received by those who are not working by reference to in-work benefits would undermine the financial incentives the benefit cap provides for people to move into work. The benefit cap will only incentivise people on benefits to obtain work if it makes it more likely that a person's income will rise on entering work. Likewise, if the level of the benefit cap was based on the number of children in a household it would undermine the intention that there should be a clear upper limit to the amount of benefit families can receive."