EWCA Civ 618, Singh, Rose and Arnold LJJ
The standard of justification in Article 14 cases concerning welfare benefits has been fixed by the Supreme Court as being the “manifestly without reasonable foundation” (MWRF) test. There have been attempts to unseat this on the basis that it is inconsistent with the approach of the ECHR where protected chararacteristics such as sex or disability are concerned (see eg R (Carmichael) v Secretary of State for Work and Pensions  UKSC 58,  1 WLR 4550). These have failed, even the perennially courteous Lord Wilson insisting in R (DA) v Secretary of State for Work and Pensions  UKSC 21;  1 WLR 3289 that, as regards welfare benefits, “the sole question is whether it is manifestly without reasonable foundation. Let there be no future doubt about it.” This approach may fall to be revisited in light of the ECtHR decision in JD & Anor v UK (2020) 48 BHRC 36, in which that Court confirmed that the MWRF applies to discrimination challenged under Article 14 and A1P1 only in “circumstances where an alleged difference in treatment resulted from a transitional measure forming part of a scheme carried out in order to correct an inequality” (such as in Stecv UK (2006) 43 EHRR 47). Meanwhile, the decision of the Court of Appeal in TD indicates that even the MWRF test is capable of being breached.
The appellants challenged decisions made by the Secretary of State the result of which was to replace their entitlement to “legacy benefits” with an entitlement to universal credit (UC) payments at lower rates. In each case it was subsequently determined that the decisions to move the appellants onto UC should not have been made but that there was “no turning back” and they had to remain on UC. There was at the material time no transitional protection in place, and at the time of the decision no transitional protection which would apply to those in the appellants’ position. In TD’s case the drop in family income was from £1005.45 per month plus disability living allowance (DLA) of £333.23 per month to £872.90 per month plus DLA, the amount of which was subsequently increased as a result of which the UC payment was also increased and TD’s monthly income returned to pre-UC level. The Court accepted that the claim was not academic because TD sought a declaration and damages for distress. In Ms Reynolds’ case an erroneous decision to remove her Employment and Support Allowance (ESA) resulted in a transfer to UC the result of which was that a monthly income of £814.67 (ESA, Severe Disability Premium and personal independence payment) fell to £638.58.
The appellants claimed, inter alia, that the reduction in payments breached their rights under Article 14 and Article 1 of the First Protocol (A1P1). They sought to compare themselves with a variety of comparators. The only comparator group accepted by the High Court and the Court of Appeal was that of people on legacy benefits in respect of whom no mistake was made by the Secretary of State. May J rejected the claim at first instance on the ground that the Secretary of State had considered the impact of the legislative scheme on individuals such as the appellants. The Court of Appeal ruled that she had erred in so doing; while the question whether and to what extent a decision-maker had considered the relevant matter was not irrelevant, and while the Court would exercise appropriate reticence in relation to a conscious, deliberate decision by a government department, the question for the Court was whether the discriminatory measure was justified, not whether the decision-maker had given adequate consideration to this question.
The Court went on to apply the MWRF test, pointing out that the only difference between the appellants and their comparators were the acknowledged mistakes of the Secretary of State and that the latter had power to introduce transitional protection in respect of people in the claimants’ situation: “It is therefore the decision not to do so in the present context which is the subject of the challenge under Article 14” (para 72).
Had the appellants been selected as part of the pilot scheme to migrate those on legacy benefits to UC they would have received such protection. The reason for which those in the appellants’ position were not provided with transitional protection were administrative cost and complexity which, as Singh LJ put it for the Court: “have nothing to do with the merits of their cases” (para 83).
Singh LJ went on to stress (citing Lord Bingham in A v Secretary of State for the Home Department  UKHL 56,  2 WLR 87) that “in a discrimination case, what must be justified is the difference in treatment [here between those in respect of whom mistakes were and were not made by the state]and not merely the underlying policy”. He pointed out at para 86 that “it is well established that cost alone does not justify a difference in treatment; if resources are finite then a non-discriminatory solution is required”. And “[a]s to administrative complexity, which the Secretary of State did not suggest was sufficient justification in any event, “the starting point is that, to the extent that there is such complexity, it is because of the Government’s desire to apply the ‘no turning back principle’ to people who have only undergone a change of circumstance for the purposes of the Regulations because of an incorrect decision by the Respondent, which means that they cannot simply be reinstated on their legacy benefits and instead will have to be afforded some form of transitional protection” (para 87). Nor did Singh LJ accept on the evidence that the administrative difficulties would have been overwhelming.
All this being the case, Singh LJ concluded at para 92 that the difference in treatment was “manifestly disproportionate in its impact on these Appellants having regard to the legitimate aim which the Respondent sought to achieve. It was therefore manifestly without reasonable foundation”. The Court granted a declaration in those terms and transferred the damages claim to the county court.