Obrey & Ors v The Secretary of State for Work And Pensions & Anor

An indirectly discriminatory rule governing social security benefits is justified unless it is manifestly without reasonable foundation. Whether a bright-line rule meets that standard must be assessed in its full statutory and socio-economic context. The possibility of further refinement or individual assessment does not itself make the rule unjustified.

On an appeal from the Upper Tribunal under section 13(1) of the Tribunals, Courts and Enforcement Act 2007, the Court of Appeal determines points of law. Evaluative judgments within a specialist tribunal’s expertise should not be reclassified too readily as legal questions.

The appellants had serious mental illnesses and were detained in hospital under section 3 of the Mental Health Act 1983 for more than 52 weeks. Their housing benefit ceased because regulation 7 of the Housing Benefit Regulations 2006 treated temporary absence as occupation for no more than 52 weeks in their circumstances.

The First-tier Tribunal found indirect discrimination contrary to article 14 of the European Convention on Human Rights. The Upper Tribunal set those decisions aside because the First-tier Tribunal had not applied the “manifestly without reasonable foundation” test. It remade the decisions and held that the discrimination was justified.

The appellants challenged the Upper Tribunal’s conclusion on justification. The central issue was whether they had identified an error of law in its evaluation of the 52-week rule.

1. The appeals were dismissed. The Upper Tribunal had applied the correct justification test and had committed no error of law. Sullivan LJ gave the principal judgment. Sharp LJ and Laws LJ agreed.

2. Section 13(1) of the Tribunals, Courts and Enforcement Act 2007 limits an appeal from the Upper Tribunal to a point of law. The division between law and fact should be approached pragmatically so that the expertise of the specialist tribunals is used effectively. The justification of an indirectly discriminatory rule within the benefits system was within the particular expertise of the Administrative Appeals Chamber. The Court of Appeal was therefore not to rehear the merits under the general approach in CPR 52.11. Laws LJ particularly endorsed this aspect of Sullivan LJ’s reasoning.

3. The 52-week rule was not a blanket and indiscriminate measure. Regulation 7 of the Housing Benefit Regulations 2006 first created a general 13-week exception to the requirement of actual occupation. Regulations 7(16) and 7(17) then extended that exception to 52 weeks for a carefully defined range of people, including hospital patients. The relevant question was not whether the list could be refined further. It was whether the failure to add a further distinction between physically and mentally ill hospital patients was manifestly unreasonable.

4. The Upper Tribunal was entitled to consider the wider system of aftercare, housing and benefits rather than housing benefit in isolation. Detailed judicial assessment of the operational effectiveness of that system would enter an area of social and economic policy involving the allocation of resources, in which courts should be particularly reluctant to interfere.

5. The proposed individual discretion would require prediction, continuing monitoring and potentially repeated adjudication concerning mentally ill patients. Whether those administrative problems differed from other benefit discretions, and whether an exception would generate challenges from other categories covered by regulation 7(16), were evaluative matters for the specialist tribunal. Its conclusions were neither erroneous in law nor irrational.

1. Court of Appeal (Civil Division): The appeals were dismissed. The Upper Tribunal had made no error of law in concluding that the indirectly discriminatory 52-week rule was justified.

2. Upper Tribunal (Administrative Appeals Chamber): By a decision dated 19 December 2012, the Upper Tribunal allowed the Secretary of State’s appeals, set aside the First-tier Tribunal’s decisions and remade them. It found indirect discrimination but held that the 52-week rule was not manifestly without reasonable foundation.

3. First-tier Tribunal (Social Security and Child Support): The tribunal found indirect discrimination which was disproportionate and unjustified, and therefore contrary to article 14 of the European Convention on Human Rights.