Blundel & Ors, R (On the Application Of) v Secretary of State for Work And Pensions

The claimants challenged the Secretary of State's deductions policy for taking sums from universal credit to pay criminal fines. The key legal issue was whether the Secretary of State unlawfully fettered her statutory discretion by operating a fixed, largely non‑departable deduction rate for fines (subject only to statutory minima and the overall percentage cap); the court found that the policy did unlawfully fetter the statutory discretion and must be revised so that exceptions can be considered in individual cases. The claimants' separate challenges that the policy was irrational and that it amounted to unlawful disability discrimination were rejected. The court also found a breach of the public sector equality duty under section 149 Equality Act 2010, but refused relief in relation to that breach under section 31(2A) Senior Courts Act 1981 as it was highly likely that proper compliance would not have produced a materially different outcome for the claimant concerned.

Background and parties: These judicial review claims were brought by five universal credit claimants (in two claims) who had court fines from which the Department for Work and Pensions deducted sums from their universal credit. They challenged the Secretary of State's published deductions policy and the application of the deduction regime to them.

Relief sought and issues: Claimants sought declarations and other relief on grounds that the deductions policy (i) fettered the Secretary of State's statutory discretion to deduct "any sum" (or none) within the legislative parameters, (ii) was irrational, (iii) indirectly discriminated against and failed to make reasonable adjustments for a disabled claimant under the Equality Act 2010, and (iv) was adopted without due regard to the public sector equality duty (PSED) in section 149 Equality Act 2010.

Statutory and regulatory framework: The court set out the fines collection regime (Courts Act 2003, Schedule 5 and related provisions), the power in section 24 Criminal Justice Act 1991 to authorise deductions from benefits (including universal credit) and the implementing Fines (Deductions from Income Support) Regulations 1992 and the Universal Credit etc. (Claims and Payments) Regulations 2013 (in particular Schedule 6 and limits on deductions such as the assessment‑period cap and the priority order for deductions).

Court's reasoning: On fettering, the court held that the deductions policy effectively imposed a rigid arithmetical rule that prevented the Secretary of State (or her officials) from considering individual requests for reduced deductions on grounds of financial hardship. Reliance on the availability of magistrates' courts/fines officers to vary payment terms does not cure an unlawful fetter because those are different functions and it is not lawful for the Secretary of State to abdicate her statutory discretion by placing the onus on another decision‑maker. The court compared but distinguished R (Mayaya) v SS for the Home Department and emphasised that the deductions issue concerns fluid and changing financial circumstances requiring the person exercising the deduction power to be able to consider exceptions.

On rationality, the court concluded that the decision to set an overall deduction cap (30% in 2019 and prospectively 25% from October 2021) and allocate the handling of individual repayment plans to the courts/fines officers fell within the Secretary of State's judgment and did not meet the high threshold for Wednesbury unreasonableness.

On discrimination and reasonable adjustments, the court found insufficient evidence to make the required comparisons and to show that the policy placed a defined group of disabled persons at a substantial disadvantage; accordingly the individual discrimination and reasonable adjustment claims failed.

On the PSED, the court accepted that the Secretary of State had not performed the duty before adopting the policy in October 2019 and that constituted a breach. However, applying section 31(2A) of the Senior Courts Act 1981, the court concluded that timely compliance would have been highly likely to produce the same substantive outcome and therefore refused relief in respect of that breach.

First instance: The claim succeeded on the primary ground that the deductions policy unlawfully fetters the Secretary of State's statutory discretion to vary deductions in individual cases; the court held the policy must be revised to allow (even rare) individual departures for hardship. The other grounds failed: the policy was not irrational on the Wednesbury standard; individual disability discrimination and failure to make reasonable adjustments were not established; there was a breach of the public sector equality duty but relief was refused under section 31(2A) Senior Courts Act 1981 because a different outcome was highly unlikely.