TD & Ors v The Secretary of State for Work And Pensions

The claimants challenged aspects of the implementation of Universal Credit (UC), principally the operation of regulations which terminated legacy benefit awards on the making of a UC claim (the so-called "lobster pot") and the absence of transitional protection where legacy awards were later found to have been wrongly terminated. The legal issues were whether the treatment amounted to unlawful discrimination contrary to Article 14 read with Article 1 of the First Protocol (A1P1) and/or Article 8, whether the Secretary of State's implementation was irrational, and whether the Public Sector Equality Duty (s.149 Equality Act 2010) had been breached.

The court analysed the statutory framework (Welfare Reform Act 2012, Schedule 6 and the Universal Credit Regulations 2013) and the relevant Universal Credit (Transitional Provisions) Regulations 2014 (regulations 8 and 13). It applied the established test of justification (whether the differential treatment is "manifestly without reasonable foundation", per the Supreme Court in R (Carmichael) and related authorities) and considered comparator groups proposed by the claimants (those whose legacy awards were not subject to error; "managed migrants"; and disability as a status).

The judge concluded that the "managed migrant" comparator was too speculative; disability was not shown to be a proper comparator for disparate impact on the evidence; and, on the material before the court (including witness evidence from departmental officials and ministerial submissions), the Secretary of State had given consideration to the position of claimants whose legacy awards were later revised. For those reasons the differential treatment was not shown to be manifestly without reasonable foundation, the irrationality challenge failed as duplicative of the justification challenge, and the public sector equality duty had been satisfied. The claims were dismissed.

The claimants (TD and AD; and PR) were recipients of legacy benefits whose awards were terminated following decisions of the Secretary of State in March 2017, requiring them to claim Universal Credit (UC). Later decision-making reversed the legacy decisions but, because of regulation 8 and regulation 13 of the Universal Credit (Transitional Provisions) Regulations 2014, the claimants remained on UC and did not receive transitional protection. Each claimant therefore suffered a lower monthly entitlement on UC than they had under the legacy system. They sought declarations that the implementation of UC in their cases amounted to unlawful discrimination under Article 14 read with A1P1 and/or Article 8, damages for distress, and alleged irrationality and failure to comply with the Public Sector Equality Duty.

Procedural posture: permission was granted for TD/AD by Simler J (2 August 2018) and for PR by Murray J (10 December 2018); the claims were heard in the Administrative Court before Mrs Justice May on 23–24 January 2019.

Issues framed:

• whether the Claimants suffered differential treatment on a protected ground within the ambit of Article 14/A1P1 (and, for TD/AD, whether Article 8 was engaged);
• whether that differential treatment could be objectively justified (the appropriate test being whether it was "manifestly without reasonable foundation");
• whether the Secretary of State acted irrationally in implementing UC without transitional protection for claimants whose legacy awards were later revised; and
• whether the Public Sector Equality Duty was breached.

Reasoning and outcome in brief: the court reviewed the statutory scheme creating UC (Welfare Reform Act 2012, Schedule 6 and the 2013 Regulations) and the 2014 Transitional Regulations (regs 8 and 13) which produced the "lobster pot" effect. The court considered the claimant's proposed comparator groups and rejected the "managed migrant" comparator as speculative. The court held disability was not shown on the evidence to be the appropriate comparator for disparate impact. The Secretary of State relied upon departmental evidence (including witness evidence from a Universal Credit policy official and ministerial submissions of March and November 2015) demonstrating that the position of claimants whose legacy awards were later revised had been considered and that a conscious policy decision had been taken. Applying the "manifestly without reasonable foundation" test, the court found that the Secretary of State had given sufficient consideration and that the differential treatment was not unjustified. The irrationality ground was treated as a re-statement of the justification claim and failed. On the PSED, the court concluded the Secretary of State had had due regard to equality considerations. The claimants' cases were dismissed.

The court noted the wider context, including earlier authority (R (TP and AR) v Secretary of State for Work and Pensions [2018] EWHC 1474) where Lewis J found unlawful discrimination in a different implementation scenario; the instant decision distinguished and proceeded on the basis of the material before the court, including evidence of ministerial consideration.

The claims are dismissed. The Secretary of State's implementation of Universal Credit, including the operation of regulations terminating legacy awards and the absence of transitional protection for claimants whose legacy awards were later revised, was not shown to be discriminatory in breach of Article 14 read with A1P1 nor irrational; the Secretary of State had given sufficient consideration to the position of such claimants so the differential treatment was not "manifestly without reasonable foundation". The public sector equality duty was also satisfied.

Permission to bring TD/AD's claim was granted by Simler J on 2 August 2018; permission for PR and the joinder of the claims was granted by Murray J on 10 December 2018. This is a first instance Administrative Court judgment: [2019] EWHC 462 (Admin).