Howard, R (on the application of) v The Official Receiver

When an official receiver decides whether to revoke a debt relief order, the decision is the exercise of a judicial function for the purposes of paragraph 3 of Schedule 18 to the Equality Act 2010. The public sector equality duty in section 149 therefore does not apply.

The relevant function is judicial because revocation determines, or restores, competing legal rights and liabilities of the debtor and creditors. The conclusion is not altered by the absence of an adversarial hearing, or by the discretionary nature of the power. The statutory scheme provides safeguards through creditor objections, investigations and applications to the court.

The claimant sought judicial review of the Official Receiver’s decision to revoke her debt relief order under section 251L of the Insolvency Act 1986. She contended that she was disabled for the purposes of the Equality Act 2010 and that the Official Receiver had failed to comply with the public sector equality duty in section 149.

The Official Receiver argued that the decision was excluded from section 149 by paragraph 3 of Schedule 18 because it involved the exercise of a judicial function. The central issue was whether an official receiver exercising the statutory power to revoke a debt relief order was exercising such a function.

1. The claim was dismissed. The Official Receiver’s decision to revoke the debt relief order was not subject to the public sector equality duty.
2. The expression “judicial function” in paragraph 3 of Schedule 18 had to be interpreted in the light of the policy underlying the exclusion. The exclusion protects the requirement that legal rights and liabilities be determined by applying the law without the decision-maker being required to give due regard to additional equality considerations which might affect the outcome.
3. The making of a debt relief order directly affects creditors’ legal rights. It suspends enforcement of specified debts during the moratorium and may ultimately discharge those debts. The statutory scheme also requires the Official Receiver to determine applications by applying prescribed conditions and evidential presumptions under sections 251C and 251D of the Insolvency Act 1986.
4. Revocation has the corresponding legal effect of restoring the creditor’s right to enforce the debt and the debtor’s liability to repay it. The fact that section 251L confers a discretion to revoke does not prevent the function from being judicial. Judicial functions may involve discretionary judgments and need not be exercised through a fully adversarial procedure.
5. The statutory scheme reinforced that conclusion. Creditors may object under section 251K, the Official Receiver must consider objections, and affected persons may apply to the court under section 251M. It would be anomalous if the same revocation decision could produce different outcomes depending on whether it was made by the Official Receiver or the court, because only one decision-maker was subject to section 149.
6. Jones v Department of Employment was distinguishable. The adjudication officer in that case decided an individual claim for unemployment benefit and did not determine competing legal rights in the same way as the Official Receiver deciding whether to revoke a debt relief order.
7. The court declined to determine whether, alternatively, the Official Receiver would have complied with section 149. That issue was hypothetical and would not have produced a practical remedy in view of the expiry of the statutory period for revocation and the pending County Court application.