2011 06 Welfare Benefits

Friday 1 July 2011

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Case Law

The Supreme Court has handed down its judgment in R (Cart) v The Upper Tribunal and ors (Public Law Project and JUSTICE intervening) [2011] UKSC 28 (click here for transcript). The Court unanimously decided that permission for judicial review of the Upper Tribunal should only be granted where the criteria for a second-tier appeal applies. It had been argued on behalf of the Government that a refusal of permission by the Upper Tribunal was only reviewable in ‘exceptional circumstances’ ((R (Sinclair Gardens Investments (Kensington) Ltd) v Lands Tribunal [2005] EWCA Civ 1305, [2006] 3 All ER 650) . The claimants, on the other hand, argued that normal public law principles should apply (R (Wiles) v Social Security Commissioner[2010] EWCA Civ 258). The Court took a ‘middle way’ saying that the ‘second appeal criteria approach represented a proportionate answer to this question. It would recognise that the new enhanced tribunal structure deserved a more “restrained approach” to judicial review than has previously been the case, while ensuring that important errors could still be corrected. Lord Dyson’s speech at paragraphs [130]-[131] contains some useful guidance on the second appeal criteria:

“As explained by the Court of Appeal in Uphill v BRB (Residuary) Ltd [2005] 1 WLR 2070, it is not enough to point to a litigant's private interest in the correction of error in order to obtain permission for a second appeal. Permission will only be given where there is an element of general interest, which justifies the use of the court's scarce resources: see also Zuckerman on Civil Procedure 2nd ed, (2006) para 23.139. It follows that, if the law is clear and well established but arguably has not been properly applied in the particular case, it will be difficult to show that an important point of principle or practice would be raised by an appeal. The position might be different where it is arguable that, although the law is clear, the UT is systematically misapplying it: see, for example, Cramp v Hastings Borough Council [2005] 4 All ER 1014. .. the second limb of the test ("some other compelling reason") would enable the court to examine an arguable error of law in a decision of the FTT which may not raise an important point of principle or practice, but which cries out for consideration by the court if the UT refuses to do so. Care should be exercised in giving examples of what might be "some other compelling reason", because it will depend on the particular circumstances of the case. But they might include (i) a case where it is strongly arguable that the individual has suffered what Laws LJ referred to at para 99 as "a wholly exceptional collapse of fair procedure" or (ii) a case where it is strongly arguable that there has been an error of law which has caused truly drastic consequences.”

Mr Cart’s appeal was dismissed as there was nothing in his case to bring it within the second-tier appeal criteria.

The Supreme Court in Patmalniece v Secretary of State for Work and Pensions (AIRE Centre intervening) [2011] UKSC 11; [2011] 1 WLR 783 (Click here for transcript) ruled that while the right to reside requirement for welfare benefits amounts to indiscrimination between nationals of different Member States this was objectively justified. P was a Latvian pensioner in receipt of a small Latvian retirement pension. She came to the United Kingdom in June 2000 as an asylum seeker. She had never worked in the UK. P claimed SPC in August 2005, after Latvia had joined the EU. The claim was refused because she did not have a right to reside in the United Kingdom as required under reg. 2 of the SPC Regulations 2002 (SI 2002/1792). P appealed against the refusal arguing that the requirement was directly discriminatory on the grounds of her nationality and in breach of art. 3(1) of Regulation 1408/71 (regulating the co-ordination of social security benefits). Court held that the habitual residence test for SPC was not directly discriminatory on grounds of nationality; however, it put nationals of other Member States at a particular disadvantage and so was only indirectly discriminatory; the reasoning in Bressol v Gouvernement de la Communauté Française(C-73/08) [2010] 3 CMLR 559 applied. The Court went on to consider whether the indirect discrimination under the right to reside requirement for SPC was objectively justified on grounds independent of the appellant’s nationality. The purpose of the condition in reg. 2 of the 2002 Regulations was to ensure that P had achieved economic integration, or a sufficient degree of social integration in the United Kingdom or elsewhere in the Common Travel Area, as a pre-condition of entitlement to the benefit. The Secretary of State's justification lay in his wish to prevent exploitation of welfare benefits by people who come to this country simply to live off benefits without working here. The Court said that this was a legitimate reason bearing in mind the importance attached to combating the risks of "social tourism" and the principle that persons who depend on social assistance would be taken care of in their own Member State. Accordingly, there was no prohibition on discrimination on grounds of nationality under EU law. Lady Hale said that the Government’s aims in introducing the “right to reside” test were consistent with the aims of Regulation 1408/72. This provided that the State in which the person resides should be responsible for ensuring that they have the minimum means of subsistence to enable them to live there. But if they do not have the right under European Union law to move to reside there, then it is logical that that State should not have the responsibility for ensuring their minimum level of subsistence. Lord Walker dissented on the issue of justification. The Court also rejected a submission that the conclusion that the indirect discrimination was objectively justified would be undermined by the favourable treatment that regulation 2(2) gave to Irish nationals.

CP & Ors v Aylesbury Vale District Council and Secretary of State for Work and Pensions (HB) [2011] UKUT 22 (AAC) concerned appeals by 8 claimants against a decision that the service charge for maintaining a communal garden was ineligible for HB. Each of the claimants was substantially disabled and had a tenancy in a block of 6 flats owned by Aragon Housing. The flats had a communal garden area. The tenancy agreements recited that the accommodation is offered as part of a scheme aimed to promote independent living for people with a learning/physical disability. Their claims for HB included in a service charge of £1.50 per week per tenant in respect of the costs incurred by the landlord in maintaining the communal garden. The District Council decided that the garden maintenance costs were not eligible for the purposes of reg. 12 of the HB Regulations 2006 (SI 2006/213). A first-tier tribunal (‘FtT’) upheld that decision, saying it was bound by CH/755/2008, which held that the additional charge to provide a gardening service was a voluntary and optional extra and was not a payment that was a condition of occupying the accommodation. After considering the terms of the tenancy agreement and the relevant legislation the UT concluded that the part of the service charge attributable to the costs incurred by the landlord in the upkeep of the garden was eligible for HB because:

  • payment of the charge is “a condition on which the right to occupy the dwelling depends”, within reg. 12(1)(e) of the 2006 Regulations because the landlord is entitled to maintain the garden and to include the costs of doing so in the service charge and if the tenants do not pay it, the landlord can seek an order for possession;
  • the gardening charges are not “day-to-day living expenses” within the opening words of para. 1(a) of Schedule 1 and it is not one of the items specifically excluded within that description. The UT Judge commented that if cleaning of communal areas is eligible, it is difficult to see why maintenance of a communal garden is not;
  • the gardening charges are for services “connected with the provision of adequate accommodation”, and so not rendered ineligible by para. 1(g). If the communal garden was not maintained it would clearly become highly unsightly and unsuitable for use by the tenants: see para. 15 of the Appendix to CIS/1460/95.

The Judge said the facts and reasoning in CH/755/2008 were plainly distinguishable given that the tenancy in that case was of a two bedroomed bungalow and garden and there was no question of any part of the premises being shared or communal (click here for transcript).

Legal Aid Reform - the Government's 'Response'

On 21 June 2011 the coalition government published its response to legal aid consultation: “Legal Aid Reform in England and Wales: the Government Response” (Cm 8072) (click here for copy on Justice website).

The Response acknowledges that it received over 5,000 responses to the consultation. There were over 1,000 responses from solicitors, a further 800 from barristers, and 500 from not-for-profit organisations. There were over 100 submissions from representative bodies. It also received responses from members of the judiciary, experts and academics. The Response states that: “The majority of responses to the consultation did not support the proposed reforms,” (para 7).

Nevertheless, the Government has decided to go ahead with its proposal to remove a number of areas of social welfare law, including welfare benefits, from the scope of legal aid. The proposals are contained in The Legal Aid, Sentencing and Punishment of Offenders Bill.

Readers may recall that the proposal to remove welfare benefits from scope in the Consultation Paper: ‘Reform of Legal Aid in England and Wales’, (Cm 7967) was based on two central ideas:

  • that disputes concerning welfare benefits issues are objectively of low importance because they are “essentially about financial entitlement”; they do not involve threats to life, safety, liberty or homelessness;
  • that welfare benefit disputes can be resolved without recourse to legal or specialist assistance.

Hundreds of responses pointed out the folly of these assumptions, drawing attention to how the Green Paper had underestimated or completely misunderstood:

  • the complex and highly technical nature of welfare benefits law:
  • the need for specialist advice and assistance, particularly in identifying a point of law for appeals to the Upper Tribunal;
  • the difficulties facing welfare benefit claimants if they are left to resolve the kind of issues that arise in Welfare Benefit appeals without expert assistance, even allowing for the inquisitorial nature of the tribunal system.
  • the importance of welfare benefits advice in avoiding and resolving possession proceedings: outstanding housing benefit issues are often the root cause of rent arrears possession claims;
  • that removing welfare benefits from scope will mean proceedings being adjourned and delayed (thereby increasing use of court time and costs) due to the absence of proper advice that resolves the underlying issue.

The Government’s response to the detailed representations consists of just three paragraphs (paragraphs 99-101):

“We do not consider that most cases before the tribunal will be sufficiently complex, and, compared with cases involving the safety, liberty or homelessness, we consider these cases to be a lower priority for funding.

The Government has considered the concerns raised about the risk that the loss of benefits could later lead to homelessness. We intend to retain legal aid for debt cases where the home is at immediate risk due to rent or mortgage arrears. Where the arrears are as a result of a dispute about welfare benefits, we do not believe that legal aid should be provided for the welfare benefits appeal, because the tribunal is accessible without legal assistance and because the risk of homelessness is not as immediate. We need to prioritise need, and those facing eviction or possession proceedings (or who are already homeless) are in greater need.

For the reasons set out above, it remains the Government’s view that legal aid should be removed for welfare benefits cases, as proposed in the consultation. However, it will be retained for judicial review of welfare benefit decisions, and for claims about welfare benefits relating to a contravention of the Equality Act 2010 that are currently funded, as proposed in the consultation.”

The Response states that the above will help in its aim of reforming the legal aid scheme based on the needs to:

  • discourage unnecessary and adversarial litigation at public expense;
  • target legal aid to those who need it most;
  • make significant savings in the cost of the scheme; and
  • deliver better overall value for money for the taxpayer.

It is difficult to see how removing welfare benefits from scope will achieve any of these aims. Many who took the trouble to respond to the consultation will be left with the impression that the superficial nature of the Government’s ‘response’ suggests that it has approached the topic with a ‘closed mind’ and that the policy to remove welfare benefits from scope cannot be justified either on rational social or economic grounds.

For reaction to Government’s decision to remove welfare benefit from scope see:

Citizens Advice: “The government is making a fundamental mistake on legal aid and it is those in greatest need who will suffer. Restricting the scope of legal aid is the wrong way to reform the system and may cost more than it saves.” (click here for link)

LASA: “Proposals in the bill to slash free face-to-face legal aid advice will hurt thousands of the most vulnerable people, end up costing more than is saved and undermine the basic principle of access to justice for all.” (click here for link)

Child Poverty Action Group: “This will take advice away from the most vulnerable people just when the benefits system is being turned on its head by welfare reforms and the new universal credit. It spells disaster for people reliant on advice services and will threaten hundreds of advice centres with closure across the country.”

For a more general response to the legal aid cuts see Guardian article 28 June 2011 which reports a speech made by Lady Hale in which she warns that ‘Legal aid cuts will hit poorest’:

“In an unusually forthright speech that appeared to address those concerns directly, Hale, who is patron of Hammersmith and Fulham law centre, voiced worries circulating in the broader legal community about problems of access to justice for the less well-off.

"There is a well-known ironic saying," she said in a speech to the Law Society on Monday evening, that "in England, justice is open to all – like the Ritz."

Legal aid was now being removed from "most civil and legal cases", she noted. But providing legal advice at an early stage, she said, could often save greater costs for government agencies at a later stage when problems spiralled out of control.

"These plans will, of course, have a disproportionate effect upon the poorest and most vulnerable in society."” (click here for link)

In the course of the Sir Henry Hodge Memorial Lecture, entitled ‘Equal Access to Justice in the Big Society’, (Click here for transcript) Lady Hale said:

“In real life, as we all know and research has shown,clients come with a variety of interlocking problems. Family breakdown can easily lead people into debt, if debts are not tackled early and in the right way, they can easily lead to homelessness. People need the right advice and they need it early, before things have escalated into court. The idea that the law in some of these areas is simple and easy to understand is laughable.”

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