K, R (on the application of) v Secretary of State for Work and Pensions

The claimant was paid a Universal Credit children and disabled child element in error because her son undertook an apprenticeship; the First-tier Tribunal held the overpayment arose from "official error". The claimant applied for waiver of recovery and the Secretary of State refused, applying the Department's Benefit Overpayment Recovery Guide (BORG) policy. The claimant sought judicial review of three refusal decisions and contended, among other things, that (i) an unpublished internal Decision Makers Guide to Waiver (DMGW) ought to have been published; (ii) the published BORG unlawfully fettered discretion and was materially inconsistent with the DMGW; (iii) the specific refusal decisions unlawfully failed to consider relevant matters, were irrational and breached a legitimate expectation; and (iv) the Department breached the public sector equality duty (s.149 Equality Act 2010) in formulating/revising its waiver policy.

The court held that the DMGW was an important statement of policy and that failing to publish it was unlawful; reading the BORG together with the DMGW, the BORG was not materially inconsistent with the DMGW and was not itself unlawful. The court found the defendant’s April 2022 (third) decision unlawful because it failed to take material considerations into account (notably the way the overpayment arose, the claimant’s good faith and repeated queries, detrimental reliance and the public‑interest ground for waiver), and that the Secretary of State had breached the claimant’s legitimate expectation that the benefit payments were properly payable. The court also found the defendant had failed to comply with the public sector equality duty when revising the waiver policy. The claim was allowed and the challenged refusal(s) quashed.

Background and parties: The claimant, a single mother of two disabled adult sons, received Universal Credit. From 1 July 2019 to 31 January 2021 the Department treated her younger son as in full‑time education when he was undertaking an apprenticeship, resulting in an overpayment of the Child and Disabled Child element of UC of £8,623.20. The First‑tier Tribunal determined the overpayment arose from "official error". The claimant requested waiver of recovery; the Department refused and relied on published and unpublished departmental guidance (the BORG and the unpublished Decision Makers Guide to Waiver (DMGW)). The claimant brought judicial review challenging the refusals and policy.

Nature of the claim / relief sought: A claim for judicial review seeking (i) declarations and quashing of the decisions refusing waiver (decisions of 19 Oct 2021, 20 Dec 2021 and 28 Apr 2022), (ii) declaration that the failure to publish the DMGW was unlawful, (iii) orders addressing unlawful policy or fettering and (iv) relief for breach of the public sector equality duty.

Issues framed: Whether the DMGW should have been published; whether BORG v2.8 was materially inconsistent with the DMGW or unlawfully fettered discretion; whether the individual decision(s) unlawfully applied policy, fettered discretion, failed to take relevant considerations into account or were irrational; whether the claimant had a substantive legitimate expectation that the payments would not be recovered; and whether the PSED (s.149 Equality Act 2010) was complied with when formulating/revising policy.

Court’s reasoning (concise): On publication, the court applied the principles in Lumba and B v SSWP and held the DMGW was an important policy document decision‑makers were required to apply and that claimants were entitled to know its terms; withholding it was unlawful. On the relationship between DMGW and BORG the court read the two together and concluded the published BORG was not inconsistent with the (unpublished) DMGW; the BORG was not itself unlawful or a prohibited fetter. On the 28 April 2022 decision the court found the decision‑maker failed to give adequate reasons or to take material considerations into account (the prolonged, repeated departmental miscalculations, the claimant's good faith and repeated queries, detrimental reliance, and the public‑interest ground for waiver), and that omission rendered the decision unlawful and irrational in its reasoning. The court found the claimant had a clear and unambiguous legitimate expectation the Department would treat her as entitled to the element at the time (based on repeated assurances and continued payments) and it would be unfair to permit the Department to resile from that expectation. Finally, the court concluded that in revising its waiver policy the Secretary of State had not complied with the PSED because there were reasonable grounds to suspect the policy might have adverse impacts on disabled claimants and the Department had not made adequate enquiries or equality analysis specific to waiver.

Remedy: The refusal(s) to waive recovery were quashed; permission was given on the legitimate expectation and PSED grounds and a declaration was made that failure to publish the DMGW was unlawful. The court declined to hold the BORG unlawful.

The claim is allowed. The court held that: (a) the Department’s failure to publish the Decision Makers Guide to Waiver was unlawful; (b) the published Benefit Overpayment Recovery Guide (BORG v2.8) was not materially inconsistent with the DMGW and was not, on its proper reading, an unlawful fetter on discretion; (c) the defendant’s 28 April 2022 decision refusing waiver was unlawful because material considerations (including the prolonged departmental error, the claimant’s good faith, detrimental reliance and the public‑interest ground) were not adequately taken into account and the reasoning was flawed; (d) the claimant had a clear and unambiguous legitimate expectation that the benefit in question was payable and it would be unfair to permit the Department to resile; and (e) the Secretary of State breached the public sector equality duty in revising the waiver policy. Accordingly the refusal to waive recovery was quashed.