R (on the app of SH through her litigation friend MH) v Norfolk County Council & Sec State for Health and Social Care [2020]

This was a challenge to Norfolk’s adult social care charging policy on the grounds that it discriminated against severely disabled people contrary to Article 14 ECHR (Human Rights Act).

The challenge was brought on behalf of SH, a 24-year-old woman with Down’s Syndrome, Severe Learning Difficulties and Physical Disabilities who lived with her mother (MH). SH was in receipt of both ESA (support group) and PIP (enhanced daily living and enhanced mobility) and had a package of care including day services, overnight respite and some community support, via a Direct Payment under the Care Act.

In order to establish that different treatment amounts to discrimination (a violation of article 14), it is necessary [R (Stott) v Secretary of State for Justice [2018] UKSC 59; [2020] AC 51] to establish four elements:

(1) the circumstances must fall within the ambit of a separate Convention right (ie a right under another article of the Convention).

(2) the difference in treatment must have been on the ground of one of the characteristics listed in article 14 or “other status”.

(3) the claimant and the person who has been treated differently must be in analogous situations.

(4) objective justification for the different treatment must be lacking.

The parties agreed that SH’s income from benefits was ‘property’ which fell within the protection against being deprived of possessions “except in the public interest and subject to the conditions provided for by law…” by Article 1 of the First Protocol to the European Convention on Human Rights (A1P1).

The council argued that “severely disabled” was not a sufficiently specific status to qualify for protection from discrimination under Article 14.

However, the judge concluded without difficulty (and by reference to several previous cases including Mathieson v Secretary of State for Work and Pensions [2015]) that the status could readily be defined quite precisely, in terms of eligibility for ESA support group and PIP enhanced daily living and was, therefore, an ‘other status’ within the meaning of Article 14.

The claimant argued that: “The difference in treatment relied upon by SH is that the Charging Policy has a disparate impact on severely disabled people like SH compared with its impact on others. The proportion of earnings that she and other severely disabled people with high care needs and significant barriers to work are required to pay under the Charging Policy is greater than the proportion of earnings that people who are disabled but not severely disabled are required to pay. Less disabled people will have lower levels of assessable benefit (they will not be paid daily living PIP at the enhanced rate) and (unlike SH and other severely disabled people, who are entitled to ESA at the support group rate because they are not capable of paid work) may have earnings from employment or self-employment which will be entirely disregarded from their assessments. The way the Charging Policy is constructed means that, because her needs as a severely disabled person are higher than the needs of a less severely disabled person, the assessable proportion of her income is higher than theirs. Her needs-based benefits are awarded at higher rates (daily living PIP and ESA) and are fully assessed, and their earnings from employment or self-employment are not available to her and other severely disabled people, but are not assessed.

The two persons, or two groups of people, in the case are, on the one hand, the severely disabled (with high needs which result in higher assessable benefits and no access to earnings from employment or self-employment) and, on the other hand, everyone else receiving Council services covered by the Charging Policy.” [paras. 66 & 67]

The council’s position that, because the policy is the same for everyone, there is no difference in treatment, was quickly dismissed by the judge on the grounds that it is well established that a difference in impact can result in indirect discrimination, despite the same rules being applied.

The council also argued that individuals subject to the charging policy earning income from employment were not in an analogous position to severely disabled individuals such as SH, but the judge disagreed.

The council also contended that SH’s higher level of needs would result in higher disability related expenses (DREs), which would be disregarded in assessment of her charges and that this disregard was thus equivalent to the disregard of earnings for those able to work. The judge identified that the definition of DREs under the Charging Policy was “not at all coterminous with the higher rate of PIP” and further, that DRE was “harder to prove and claim than the blanket disregard of outside earnings for those able to get them.”

He further identified that “much of SH’s higher need, and of those like her, is met by the Council services themselves, none of which is carved out as disability related expenditure: on the contrary, the Charging Policy requires her to pay for it with every penny of the assessable income she has.”

Consequently, he took the view that “Neither the evidence nor the Charging Policy suggests to me that the DRE regime reduces to any significant extent, let alone eliminates, what would otherwise be differential treatment.”

The judge concluded that the positions of: (a) a severely disabled person with higher assessable benefits and no access to earnings; and (b) everyone else receiving Council services covered by the Charging Policy, with lower or no such benefits and, potentially, income from earnings which would be automatically disregarded – were analogous for the purposes of the ‘different treatment’ comparison and that there was a difference in treatment between the two groups.

(4) The test of objective justification for different treatment is a high one. Firstly, whether the difference is “a proportionate means of achieving a legitimate aim” and, secondly, whether the justification for the adverse effect of the rules is “manifestly without reasonable foundation”.

Thus, it was not the Charging Policy itself which had to be justified, but, rather, the differential impact which it was having.

The council’s evidence included a stark account of the financial challenges of austerity for local authorities and demonstrated a conscientious process of consultation and phased introduction of a less favourable Charging Policy which included measures intended to mitigate the impact on affected individuals. The judge identified that these mitigation strategies were primarily focussed on supporting access to employment amongst affected individuals, a mitigation which was not available to SH.

He also identified that the council’s consultation and consideration process had not identified or discussed the differential impact between severely disabled individuals unable to access employment and others affected by the Charging Policy.

Crucially, the judge also identified that the council did not seem to have ever considered the alternative approach specifically suggested by the Care Act guidance of setting a maximum percentage of disposable income (over and above the minimum income guarantee) which may be taken into account in charges, highlighting that para 8.47 of the Care Act Guidance said the Council “should” consider this approach.

Overall, the judge concluded that the differential impact on these analogous groups “was overlooked and not considered or consciously justified at all. It appears to have been a consequence that was unintended and unforeseen. None of the additional mitigations had structurally addressed that discriminatory impact. There was an appeals process, but the Council was defending SH’s claim and there was no proposal to alter the differential impact on her or on others like her.” [para.88]

The justifications put forward by the council focussed largely on the council’s financial situation. The judge was sympathetic to the difficult position facing the council, but quoted Swift J in R (TP) v Secretary of State for Work and Pensions [2019] that “Saving public expenditure can be a legitimate aim but will not of itself provide justification for differential treatment unless there is, in the case in hand, a reasonable relationship of proportionality between the aim sought to be achieved, and the means chosen to pursue it (i.e. the measure under challenge)” [para. 90]

The clear words of the Care Act guidance warning against exactly the policy decision the council had taken were decisive, since they explicitly identified an alternative policy which the council could have pursued without causing the differential treatment:

“The Guidance warns against the approach adopted by the Council (of assuming that all of the legally assessable income was available to be taken in charges). It also suggests an alternative, which could be used to raise the same amount of revenue (applying a maximum percentage of disposable income to be taken into account in charges).”

The judge found that there was no relationship between the aims identified and the specific discriminatory impact in issue at all. The discrimination was not proportionate to those aims. It was not reasonably linked to them. [para. 91]

Overall, the judge concluded: “The objectives identified are not sufficiently important to justify discriminating against the most severely disabled as compared with the less severely disabled in order to advance it. The discriminatory impact is not rationally connected to the objective at all. A less intrusive measure was suggested by the Guidance but was not considered. Balancing the severity of the measure’s effects on the rights of the persons to whom it applies against the importance of the objectives, the discriminatory effect is irrational, unnecessary, and wholly out of proportion.” [para. 93]

Consequently, the differential impact of the Charging Policy on the severely disabled was found to be manifestly without reasonable foundation.

Comment

The specific aspects of the policy which were successfully challenged here were:

(1) Reducing the Minimum Income guaranteed under the council’s charging policy to the minimum statutory level;

(2) Taking the full amount of PIP enhanced daily living into account as income for assessing adult social care charges.

This is an extremely important judgement which is likely to have implications well beyond Norfolk.

The two factors successfully challenged upon are now commonplace in the Charging Policies of councils across England, as they have sought to claw in as much money as possible in charges to shore up their finances in the face of heavy cuts to funding from central government.

Local authorities should urgently review their Charging Policies to see whether one or both of these elements are present.

Where they are, it will be necessary to review the decision making process that led to their current policy and consider whether

(a) The differential impact of the current policy on (i) severely disabled people unable to move into employment and with higher level of benefit entitlements; and (ii) others affected by the charging policy – was explicitly considered in that process, and whether any justification advanced for pursuing their current policy was specifically both linked to, and proportionate to that different treatment;

(b) The specific alternative approach of applying a maximum percentage of disposable income to be taken into account in charges was fully considered.

In doing so, councils would be wise to take careful note of Care Act Guidance paras. 8.46 & 8.47:

“8.46 Local authorities should consult people with care and support needs when deciding how to exercise this discretion. In doing this, local authorities should consider how to protect a person’s income. The government considers that it is inconsistent with promoting independent living to assume, without further consideration, that all of a person’s income above the minimum income guarantee (MIG) is available to be taken in charges.

8.47 Local authorities should therefore consider whether it is appropriate to set a maximum percentage of disposable income (over and above the guaranteed minimum income) which may be taken into account in charges.

Charging policies are notoriously difficult to challenge, the reference in the Guidance to ‘affordability’ being disingenuous, appeals processes being wholly a matter of preference in each council, and with most council’s officers obviously ill-equipped to bring public law expertise to bear upon individuals’ challenges to the financial assessment outcome.

The real value of this case to the advice sector is that it shows that discrimination law is a discrete factor that needs to be taken account of by advisers, when looking for grounds for public law challenges to charging policies.

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