Disabled woman with severe learning difficulties loses her case after 22 years: European Court of Human Rights rules that the DWP did not discriminate against her.

B asserted that there had been a violation of Article 14 of the European Convention on Human Rights (prohibition of discrimination) read in conjunction with Article 1 of Protocol 1 (interference in property), in that the state’s interference with her possessions discriminated unjustifiably between people who were unable to report facts because they were not aware of them and people who, like the applicant, were unable to report them for some other reason and, in the alternative, that the law treated identically people who were capable and people who were incapable of understanding that there was a fact which they were required to report.

‘Thus, after 22 years from when the facts arose (!), a conclusion to B v Secretary of State for Work and Pensions seems, finally, to have been reached’

B. v. THE UNITED KINGDOM – 36571/06 [2012] ECHR 255 (14 February 2012)

B v Secretary of State for Work & Pensions [2005] EWCA Civ 929 (20 July 2005)

B v. Secretary of State for Work & Pensions – Final Words from the ECtHR?

By Gordon Junor 

Background:

The applicant, “B”, who had a severe learning disability, had three children.

She was in receipt of: child benefit and means-tested income support, assessed on the basis that she was a lone parent with an additional amount of personal allowance for each child who was a member of her family and a family premium, all paid through her order book.

Under regulation 32(1) of the Income Support (General) Regulations 1987 (“the 1987 Regulations”), she was under a duty to report any change of circumstance which might affect her entitlement to benefit to the Department of Work and Pensions (“DWP”).

The applicant’s three children were taken into care but she did not report this fact to the DWP.

It was accepted that she did not realise that this was a fact which she was required to report.

When advised, through those supporting the applicant, of the changed position, the Secretary of State decided:

(1) under section 71(5A) of the Social Security Administration Act 1992 (“the 1992 Act”), to supersede her award of income support to reflect the fact that she had been receiving benefit to which she was not entitled;

(2) that the requirements of section 71(1) of the 1992 Act were satisfied so that the Secretary of State was entitled to recover the overpayment;

(3) that he should exercise his discretion so as to recover the overpayment; and

(4) to recover the overpayment by reducing the applicant’s future payments of income support by the amount permitted by regulation 16 of the Recovery Regulations.

It was noted that under section 10 of the Social Security Act 1998, the Secretary of State had power to supersede an award of income support, where there had been a relevant change in circumstances, with retrospective effect from the date when the change occurred.

Reference was made to the Overpayment Recovery Guide, within which there may be “abatement by notional entitlement”(the exercise of discretion to recover a lower amount on account of the fact that a claimant could have claimed, but did not claim, some other social security benefit during the same period where recovery is made of the net loss to public funds) and / or an exercise of discretion to waive recovery of overpayments (where there is reasonable evidence available that the recovery of an overpayment would be detrimental to the health and/or welfare of the debtor or their family or that recovery would not be in the public interest).

The applicant appealed to the Social Security Appeal Tribunal (“the Tribunal”) against the Secretary of State’s decision that she had to make repayment.

In so doing she then relied on previous decisions of the Social Security Commissioners in which they held that there would be no failure to disclose unless disclosure was reasonably to be expected.

The Tribunal allowed the applicant’s appeal, finding that the relevant test was “not what a reasonable man would have thought it appropriate to disclose, but rather what a reasonable man knowing the particular circumstances of the claimant would have expected her to disclose”.

It accepted that the applicant did not understand that the placing of her children in care was a material fact which she needed to disclose to the DWP, and that it was not reasonable to expect her, in the particular circumstances of her case, to have disclosed that fact.

The Secretary of State appealed to the Social Security Commissioners (“the Commissioners”).

The Commissioners allowed the appeal, holding that if a claimant was aware of a matter which he or she had been required to disclose, there would be a breach of that duty even if, because of mental incapacity, the claimant was unaware of the materiality or relevance of the matter or did not understand an unambiguous request for information.

Notwithstanding the then apparently settled case-law of the Commissioners, the “reasonableness test” was not a requirement under section 71 of the 1992 Act and did not represent a possible construction of section 71.

Capacity was not relevant to the issue of failure to disclose and the applicant was in breach of the obligations imposed on her under the first limb of regulation 32(1) of the 1987 Regulations.

The applicant then appealed to the Court of Appeal.

She submitted, primarily, that there had been a violation of Article 14 of the European Convention on Human Rights read in conjunction with Article 1 of Protocol 1, in that the state’s interference with her possessions discriminated unjustifiably between people who were unable to report facts because they were not aware of them and people who, like the applicant, were unable to report them for some other reason and, in the alternative, that the law treated identically people who were capable and people who were incapable of understanding that there was a fact which they were required to report.

The Court of Appeal rejected her argument on the view that there were no possessions of the applicant at stake; that, in any event, people who were unable to report facts because they were not aware of them were thought to be in an analogous, or relevantly similar, situation to people who were unable to report them for some other reason; and they found it unnecessary to determine what was considered to be a difficult question on possible discrimination, since the recovery of overpaid benefits could not in any event amount to a deprivation of possessions.

When the issues concerned were before the Court of Appeal ([2005] EWCA Civ 929) they had held that the words “failed to disclose” in section 71 of the 1992 Act “admitted of no qualification in favour of claimants who did not appreciate that they had an obligation to disclose, once they are aware of what had to be disclosed”with the result that the Secretary of State was entitled to recover.

In JM v Secretary of State for Work and Pensions 2010 UKUT 135 it was said, following on from B v Secretary of State for Work and Pensions, that “the test of failure for purposes of section 71”is to “depend not on any general principle or implied obligation arising from the circumstances but solely on the existence or otherwise of an express statutory duty to make the required disclosure, specifically imposed on the person concerned by some other provision outside the section itself”.

As had been recognised there is no duty of disclosure expressly provided for by section 71 but, rather, as noted in Hinchy v Secretary of State for Work and Pensions [2005] UKHL 16 this duty is “either inherent in the recoverability scheme under section 71 or can be found (there) in Regulation 32 of the Claims and Payments B v. Secretary of State for Work & Pensions.

As a result of B v Secretary of State for Work and Pensions the interpretation to be given to such regulations was, radically, changed with the previously accepted view that disclosure must have been reasonably to have been expected from the claimant rejected.

Rather, the view was taken that that construction was “simply impermissible in context”; that there were “specific duties of disclosure set out in a statutory scheme in respect of benefits”; and that the duty of disclosure was not found in section 71 but a “prerequisite” from regulation 32 although, by so deciding, the court fully then recognised that it was “changing the direction of the law by abandoning a supposed but erroneous requirement in respect of recovery cases to which regular reference has been made over the years”.

This approach has since been repeatedly followed and applied – as in GK v SSWP 2009 UKUT 98 (AAC) where breach of regulation 32 led to an entitlement to recover and in JM v Secretary of State for Work and Pensions though in VB v SSWP 2008 UKUT 15 (AAC) it was accepted that it could not reasonably have been known what the consequences of a change of care home funding arrangements would be for tax credit entitlement.

How far officials will (be allowed to) exercise their discretion to “decide whether it is right to take advantage of his entitlement to recover overpaid sums which in all probability will have been spent by people who did not realise that they were being overpaid”– as suggested in B v Secretary of State for Work and Pensions – remains for review in light of ongoing experience under the Guide.

In B v Secretary of State for Work and Pensions the applicant was thereafter refused permission to appeal to the House of Lords.

The position was finally referred to the European Court of Human Rights who gave their decision on 14 February 2012

Grounds of Challenge – Admissibility

The applicant maintained her arguments that, contrary to Article 14 of the Convention read together with Article 1 of Protocol 1, persons unable to report facts because they were unaware of them were treated differently under section 71 of the 1992 Act from those who were unable to report facts for some other reason and, in the alternative, that the law treated identically persons who were capable and persons who were incapable of understanding that there was something which they were required to report.

The UK Government submitted:

(a) that the application should be dismissed on account of its incompatibility ratione materiae with the Convention because there was no interference with any “possessions” of the applicant on the view she never satisfied the conditions of entitlement to the amounts of income support which were overpaid to her and had never had any enforceable right to receive the disputed sums and could not have complained if the Secretary of State had refused to pay those sums in the first place; and

(b) that the overpaid sums were recovered by reducing the applicant’s future benefits, rather than by the seizure of existing possessions to enforce a debt.

For the applicant it was responded that a determination under section 71 of the 1992 Act created a chose in action enforceable by the Secretary of State against the possessions of those subject to it, and that the creation of such a chose in action interfered with her peaceful enjoyment of possessions for the purposes of Article 1 of Protocol 1.

She disputed that no “possession” was involved as the amount in question should not have been paid to the applicant in the first place and contended that the resulting recovery of such sums from those possessions fell within the ambit of Article 1 of Protocol 1 since they authorised an interference with that person’s possessions.

She, further, argued that a person who was overpaid benefit owed no debt until the benefit was set aside with retrospective effect and setting aside her rights with retrospective effect had itself engaged Article 1 of Protocol 1.

Dealing with admissibility the Court noted that Article 14 complemented the other substantive provisions of the Convention and the protocols and had no independent existence since it has effect solely in relation to “the enjoyment of the rights and freedoms” safeguarded by those provisions.

The prohibition of discrimination in Article 14, however, extended beyond the enjoyment of the rights and freedoms which the Convention and its protocols require each State to guarantee and applied also to those additional rights, falling within the general scope of any Convention Article, for which the State has voluntarily decided to provide.

In deciding whether the interests of the applicant which were adversely affected by the impugned legislative scheme fell within the “ambit” or “scope” of Article 1 of Protocol 1, the Court accepted that if the present case concerned a “possession” belonging to the applicant, then it would fall within the “ambit” or “scope” of Article 14 of the Convention.

Beyond the general approach they have taken to “possessions” it was noted that the Court had specifically held that where an individual has an assertable right under domestic law to a welfare benefit, the importance of that interest should be reflected by holding Article 1 of Protocol 1 to be applicable and, moreover, the Court had held that the reduction or discontinuation of a benefit may constitute an interference with possessions which requires to be justified in the general interest.

It was clear to the Court that the Secretary of State had decided, apparently pursuant to an invariable policy, to recover the overpaid benefit by deducting it from future prescribed benefits where there did not appear to have been any question of his interfering with the applicant’s existing possessions for the purposes of Article 1 of Protocol 1.

On the alternative argument they thought that, where a benefit system relies on recipients to report any change in their circumstances, it would be perverse if they could acquire an assertable right to overpaid benefit where they have failed to report such a change. “To hold otherwise would enable recipients of benefits to profit from their own omissions and, in some cases, fraud.”

In the result the Court concluded that the applicant did not have an assertable right to the overpaid benefit and did not, therefore, accept that it amounted to a possession for the purposes of Article 1 of Protocol 1.

But the Court did further note that in order to recover the overpaid benefit the Secretary of State had reduced the applicant’s future award of income support and, on that basis, she therefore did have an assertable right to the receipt of income support at reduced rate.

Since the Court had previously accepted that the reduction of a benefit to which an applicant is entitled may amount to an interference with a possession they concluded that the reduction of the award to which the applicant was entitled, albeit to recover overpaid benefits, could be said to have interfered with a “possession” for the purposes of Article 1 of Protocol 1 of the Convention with the result that, thereby, the applicant’s interests fell within the scope of it and of the right to property which it guarantees which, in turn, was sufficient to render Article 14 applicable.

The Government’s submission that the application was incompatible ratione materiae was, accordingly, rejected and the application declared admissible.

The Merits of the Applicant’s Case

Contention for the applicant was that there had been discrimination contrary to Article 14 because it treated persons in analogous situations differently and it treated in the same manner those whose situations were significantly different.

Specifically, she argued, those who could not reasonably be expected to report a material fact because they were not aware of it were treated differently from those who could not reasonably be expected to report it because they were unaware of the requirement to report it, and that those who were incapable of understanding that they were required to report a fact were treated the same as those who were capable of understanding the requirement to report.

She asserted that in neither case was there any objective and reasonable justification for such treatment, especially as the basis for liability to repay overpaid benefit was personal fault.

Moreover, she complained that the discriminatory treatment demonstrated a failure to recognise the particular difficulties experienced by persons with learning disabilities.

In reply the Government relied on the findings of the Court of Appeal, which had held that there was no proper analogy between the two situations because “the former involved a straightforward proposition of logic while the latter involved very different questions of cognitive capacity and moral sensitivity”.

They further submitted that such a distinction was not based upon any “personal characteristic or status” which was asserted to be an essential requirement of Article 14 of the Convention.

In response to her alternative formulation, the Government contended that section 71 did not seek to attribute blame and that the underlying policy was to permit recovery, regardless of whether the failure to disclose was excusable or not.

Alternatively, if the applicant succeeded in establishing that there had been discrimination, then justification had clearly been made out since it was well-established that Contracting States had a broad margin of appreciation in determining features of their social security systems and that decisions taken in this context would be respected by the Court unless they were “manifestly without reasonable foundation”.

Against “the backdrop of the wide margin of appreciation” (which has generally been recognised by the Court and applied in the domestic courts), the Government submitted that section 71 “manifestly pursued the legitimate aim of ensuring that claimants for certain social security benefits were not permitted to retain sums of money to which they were not entitled because they did not fulfil the conditions of entitlement at the material time.

The recovery of overpaid benefits served to maximise the resources available within the social security system for the payment of benefits to claimants who did meet the conditions of entitlement. The sums involved were significant across the social security system as a whole”.

Moreover, the Government pointed out that the relatively broad test of liability under section 71 was counter-balanced by a number of other features of the social security system “which served to reduce its adverse impact on benefit claimants”.

For example, a claimant would only be liable to repay overpaid benefit if she had acted in breach of a legal obligation to disclose; domestic law provided for the appointment of a third party to act on behalf of a claimant who might otherwise have difficulty complying with their obligations; section 71 did not permit the Secretary of State to charge interest on overpaid sums; and finally, there was a limit on the maximum amount which could be recovered each week and the Secretary of State could, in certain circumstances, apply his policies on abatement or waiver.

The Government therefore submitted that the applicant was not required to bear an “excessive burden” Dealing with the merits the Court noted that only differences in treatment based on an identifiable characteristic, or “status”, are capable of amounting to discrimination within the meaning of Article 14 and, moreover, in order for an issue to arise under Article 14 there must be a difference in the treatment of persons in analogous, or relevantly similar, situations.

Such a difference of treatment is discriminatory if it has no objective and reasonable justification: in other words, if it does not pursue a legitimate aim or if there is not a reasonable relationship of proportionality between the means employed and the aim sought to be realised.

But Article 14 does not prohibit a Contracting State from treating groups differently in order to correct “factual inequalities” between them; indeed in certain circumstances a failure to attempt to correct inequality through different treatment may in itself give rise to a breach of the Article.

The Contracting States enjoy a margin of appreciation in assessing whether and to what extent differences in otherwise similar situations justify a different treatment.

The scope of this margin will vary according to the circumstances, the subject-matter and the background.

A wide margin is usually allowed to the State under the Convention when it comes to general measures of economic or social strategy.

Because of their direct knowledge of their society and its needs, the national authorities are in principle better placed than the international judge to appreciate what is in the public interest on social or economic grounds, and the Court will generally respect the legislature’s policy choice unless it is “manifestly without reasonable foundation”.

The Court agreed with the Court of Appeal that the situation of persons who are not aware of a fact to be qualitatively of a different nature to that of persons who are aware of a fact but who are not aware of its materiality.

As the Court of Appeal had found, “the proposition that you cannot report something that you do not know is a simple proposition of logic, whereas the proposition that you cannot report something you do not appreciate you have to report depends on difficult questions of cognitive capacity and moral sensitivity which vary from person to person”.

They further considered the applicant’s alternative formulation, namely that, as someone who did not have the capacity to understand the obligation to report, she should have been treated differently from someone who did, to be somewhat more persuasive and that the situation of these two groups was sufficiently different to require the respondent State to objectively and reasonably justify its failure to treat them differently.

But they accepted that requiring decision-makers to assess levels of understanding or mental capacity before deciding whether or not overpaid benefits were recoverable would hinder their recovery and thereby reduce the resources available within the social security fund and, therefore, that the decision not to treat the applicant differently from someone who had the capacity to understand the requirement to report pursued a legitimate aim, namely that of ensuring the smooth operation of the welfare system and the facilitation of the recovery of overpaid benefits.

With regard to the question of proportionality, the Court recalled that in the context of Article 1 of Protocol 1 it had been held that public authorities should not be prevented from correcting mistakes in the award of benefits, even those mistakes resulting from their own negligence.

Holding otherwise would be contrary to the doctrine of unjust enrichment, would be unfair to other individuals contributing to the social security fund, and would amount to sanctioning an inappropriate allocation of scarce public resources (though that general principle cannot prevail in a situation where the individual concerned is required to bear an excessive burden as a result of a measure divesting him or her of a benefit)

The Court accepted that the Secretary of State took a number of steps to ensure that the applicant was not required to bear an excessive burden.

In particular, she was not required to pay interest on the overpaid sums, there was a statutory limit on the amount that could be deducted each month from her award of income support, and the amount to be repaid was in fact reduced to reflect the fact that during the material time she was entitled to, but had not been in receipt of, a disability allowance ; the Court also noted that it would have been open to the applicant to request that the Secretary of State waive his right to recover the overpaid benefit if there was evidence that recovery would be detrimental to her health or welfare and as she did not make any such request, the Court could not accept that the recovery would have had such a detrimental impact.

The foregoing considerations were sufficient to enable the Court to conclude that any failure to treat the applicant differently from persons who understood the reporting requirement was objectively and reasonably justified.

Outcome / Conclusions

The Court duly declared the application admissible but held there to have been no violation of Article 14 of the Convention read together with Article 1 of Protocol 1.

Thus, after 22 years from when the facts arose (!), a conclusion to B v Secretary of State for Work and Pensions seems, finally, to have been reached.

What has been said to be the “state of flux” in the relative domestic law would seem, therefore, to have been settled and not, seemingly, disturbed – directly at least – in the now Welfare Reform Act 2012. *

Gordon Junor, advocate, works, writes and tutors in a range of areas of law and regularly contributes to a number of legal publications including Scots Law Times, The Journal of the Law Society of Scotland, and is a contributing editor to the Scottish Human Rights Law Group. 

SCOLAG LEGAL  JOURNAL EXTRACT PAGES Issue: 416 PUBLISHED: June 2012 PAGES: 138 – 140, & 142 TITLE: B v. Secretary of State for Work & Pensions – Final Words from the ECtHR?

AUTHOR: Gordon Junor 

CITE AS: 2012 SCOLAG 138-140,142

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