The British Medical Association, R (on the application of) v His Majesty's Treasury & Anor

In an employer cost cap mechanism for public service pensions, the broad statutory term costs is not confined to the new scheme. It may include costs of a connected legacy scheme where the Treasury considers that appropriate. Costs of the McCloud Remedy could be treated as member costs because the remedy both compensated for discrimination and recognised pension rights to which affected members were entitled.

For indirect discrimination, the PCP must cause the disadvantage suffered by both the group and the individual. A neutral adjustment removing floor-breach benefits for all members did not cause the age-related disparity inherent in the remedy’s statutory cut-off. Wider affordability, sustainability and fair allocation of pension costs may form a legitimate aim. The common law imposes no general duty to consult, and compliance with the public sector equality duty is principally an evaluative question.

The British Medical Association and the Fire Brigades Union challenged Treasury directions governing valuations and the employer cost cap for public service pension schemes. The directions lifted a pause in the cost-control mechanism and treated the costs of the McCloud Remedy as member costs. The remedy followed the earlier age-discrimination litigation concerning transitional protection in public sector pension schemes.

Choudhury J dismissed both judicial review claims in [2023] EWHC 527 (Admin). The FBU appealed on improper purpose and indirect discrimination. The BMA appealed on consultation and the duty imposed by section 149 of the Equality Act 2010. The central issues were whether the Public Service Pensions Act 2013 permitted the treatment of the remedy costs, whether the directions unlawfully discriminated, and whether consultation or equality duties had been breached.

Both appeals were dismissed unanimously. The court upheld Choudhury J’s dismissal of the judicial review claims.

1. Statutory construction. The Public Service Pensions Act 2013 recognises legal and factual connections between new schemes and legacy schemes. Its references to costs do not contain an implied restriction to costs of the new scheme alone. Given that the schemes were unfunded, pay-as-you-go schemes, current contributions could properly fund benefits payable to members of connected legacy schemes. HMT was therefore entitled, subject to ordinary public-law limits, to include connected legacy-scheme costs in the cost-control mechanism.
2. McCloud Remedy costs. The remedy could be characterised both as compensation for a civil wrong and as recognition of pension rights to which affected members were entitled. Its costs could therefore be treated as member costs, or as costs in the nature of member costs. Including them in the mechanism was not an improper purpose.
3. Indirect discrimination. The challenged PCP was the inclusion of the remedy costs in the mechanism. Its effect was to remove floor-breach benefits for all members and was therefore indiscriminate and age-neutral. The age-related disparity arose from the remedy’s statutory cut-off, not from the PCP. The causation requirement for indirect discrimination was consequently not met. In any event, the analysis in Heskett v Secretary of State for Justice [2020] EWCA Civ 1487 was binding. The aim extended beyond simple cost saving to affordable and sustainable pensions and fair allocation of costs. The measure was proportionate in the context of social and economic policy.
4. Consultation. Where Parliament has imposed detailed consultation duties in a statutory scheme, the court should be reluctant to add further common-law obligations. The circumstances identified in R (Plantagenet Alliance Ltd) v Secretary of State for Justice [2014] EWHC 1662 (QB) were absent. There was no clear promise, relevant legitimate expectation or conspicuous unfairness. General commitments to involve stakeholders did not create a duty to comply with the Gunning criteria.
5. Equality duty and relief. Compliance with section 149 of the Equality Act 2010 was an evaluative question. The judge was entitled to find that the equality impact and timing issue had been adequately considered, and no appellate error was shown. The section 31(2A) issue under the Senior Courts Act 1981 did not arise, but the judge’s evaluation disclosed no error.

1. Court of Appeal (Civil Division) — In [2024] EWCA Civ 355, Asplin LJ, Nugee LJ and Elisabeth Laing LJ dismissed both appeals.
2. High Court of Justice, King’s Bench Division, Administrative Court — Choudhury J dismissed the BMA’s and FBU’s judicial review claims in [2023] EWHC 527 (Admin).