McGrath v Secretary of State for Work and Pensions

A High Court judge is bound by a Court of Appeal decision unless entitled to distinguish it. The judge cannot prefer a later Strasbourg decision where it conflicts with binding domestic authority. Recovery of overpaid benefit by deductions from current benefit therefore fell outside the scope of Article 1 of Protocol No 1 on the basis of binding authority. Alternatively, the deductions were authorised by law, pursued a public interest and were proportionate. In assessing proportionality, the court must consider the burden on the claimant, but social-security policy attracts a wide margin of judgment. Delay, administrative neglect, health and financial effects may be relevant, but did not make recovery disproportionate on these facts. The Department’s recovery and waiver policies did not unlawfully fetter its discretion, and its decisions were not irrational.

The claimant sought judicial review of the Secretary of State’s decision to recover a 1996–1997 income-support overpayment by deductions from her employment and support allowance. She argued that continued recovery breached Article 1 of Protocol No 1, was irrational, and resulted from an unlawful fettering of discretion or failure to consider relevant matters. The overpayment arose after an unappealed decision that she had misrepresented or failed to disclose remunerative work. The Department had pursued recovery intermittently and later refused to abandon or waive it. The central issues were whether Article 1 of Protocol No 1 was engaged, whether recovery was disproportionate, and whether the Department’s policies and decisions were unlawful.

1. Convention claim. The claimant challenged recovery, not the underlying decision that the overpayment was recoverable. B v Secretary of State for Work and Pensions [2005] EWCA Civ 929 held that recovery of overpaid benefit stood outside Article 1 of Protocol No 1. That reasoning remained binding. The High Court could not adopt the contrary approach in B v United Kingdom [2012] ECHR 36571/06 in preference to the Court of Appeal’s decision. It was for the Court of Appeal or Supreme Court to determine whether the domestic decision should no longer be followed.
2. Proportionality. If Article 1 of Protocol No 1 were engaged, the deductions were authorised by statute and pursued the public interest in recovering public money. Any deprivation would nevertheless have to strike a fair balance. Social-security policy attracts a wide margin of judgment. The burden on the claimant, delay, administrative conduct, health and financial circumstances were relevant considerations. However, the claimant had accepted responsibility for the overpayment, had not appealed, had offered to repay but made no payment, and had worked for substantial periods while the debt remained unpaid.
3. The Department had sent repeated repayment demands, and the evidence did not establish the gross delay or negligence found significant in Moskal v Poland (2009) 50 EHRR 22. The statutory limit on deductions, previous suspensions and the possibility of seeking a further suspension or negotiating a lower rate also supported proportionality. Continued recovery was therefore not disproportionate.
4. Public-law grounds. Because the same factors could not establish disproportionality, they did not establish Wednesbury unreasonableness. The abandonment policy applied only where recovery could not be effected and did not fetter the wider discretion to waive recovery on grounds such as ill-health or the public interest. The Department had considered delay, medical evidence and the claimant’s other representations. Its refusal to waive recovery did not meet the high threshold of irrationality.
5. The claim was dismissed.

First-instance judicial review. The judgment states that Collins J had granted permission and indicated that time would be extended if necessary. No appeal decision is stated.