Alex Ewing: “Bedroom tax” unlawful – Strasbourg Court

12 November 2019 by Alex Ewing

J.D. and A v the United Kingdom (nos. 32949/17 and 34614/17) – read judgment

Much may have changed in the political world since the Coalition Government introduced its controversial ‘bedroom tax’, but the legal fall-out from the policy continues. The European Court of Human Rights has delivered its verdict on the compatibility of the scheme with the prohibition on discrimination set out in Article 14 of the European Convention on Human Rights. The Strasbourg Court has found that the policy discriminated unlawfully against women at risk of domestic violence.

Background

As is well known, in 2012 the United Kingdom government introduced new regulations with the effect that those in social housing with an ‘extra’ bedroom had their housing benefit reduced: the so-called ‘bedroom tax’. The purported aim of the policy was to save money and to incentivise those with an ‘extra’ bedroom to either move property or take in a lodger thereby resulting in a saving of public funds.

It is not difficult to imagine why someone might have an extra bedroom but have strong reasons (related to disability or gender) for not moving house. The Government sought to make provision for such cases through a discretionary scheme operated by local authorities but funded by central government.

The two applicants in this case applied to the Court alleging a violation of Article 14 (prohibition of discrimination) in conjunction with Article 8 (right to respect for private and family life) and Article 1 of Protocol No. 1 (protection of property). Both applicants lived with their child in a three-bedroom house (in social housing) and were therefore caught by the 2012 regulation. The first applicant had a specially adapted property as she lived with her severely disabled daughter. She argued that she had been discriminated against on the basis of her daughter’s disability. The second applicant was included in a “Sanctuary Scheme” because she had suffered extreme domestic violence. As a result, some adaptations had been made to her property, including the installation of a ‘panic room’. She argued that she had been discriminated against on the basis of her gender as the victim of gender-based violence. The crux of both the applicants’ arguments was that the reduction in housing benefit was disproportionate and that the award of Discretionary Housing Payments (DHPs) could not alleviate the disadvantage caused since they were ‘discretionary and precarious, in contrast to an entitlement benefit’.

The Government argued that the applicants had received DHPs to cover the shortfall in rent and that this was an appropriate way of dealing with their situation. It also argued that in cases involving general measures of economic or social strategy the appropriate test was whether the justification for the policy was ‘manifestly without reasonable foundation’; and that the policy was appropriate under that test. This argument was successful in the Supreme Court in 2016, which unanimously held that the use of DHPs was proportionate to deal with the first applicant’s case, and by a majority held that it was proportionate for the second applicant’s case (Rutherford and Others v Secretary of State for Work and Pensions [2016] UKSC 58).

The First Section of the European Court of Human Rights handed down its judgment on at the end of last month. Interestingly, the British judge, Tim Eicke, had represented one of the parties in the Supreme Court in 2016 and was therefore precluded from sitting in accordance with Rule 28 of the Rules of Court. Lady Dorrian sat as an ad-hoc judge in his place.

The judgment

The Court opted to examine the complaint under Article 14 in conjunction with Article 1 of Protocol No. 1. (cf Rutherford, para 49).

Treatment

This was a case, they noted, of alleged indirect discrimination: the changes made in the regulations applied to all beneficiaries under the scheme and the applicants had been treated the same as everyone else. In this context, the same treatment of two groups of people can be discriminatory if it particularly prejudices a group whose situation is significantly different because of their status.
The question was therefore whether the applicants – having been treated in the same way as everyone else – had been particularly prejudiced by the bedroom tax because of their disability or gender. The Court found that they had been because (i) they had a particular need to be able to remain in their specifically adapted homes for reasons directly related to their vulnerable status and (ii) because they were less able to mitigate the reduction in their housing benefit.
It was then for the Government to provide an ‘objective and reasonable’ justification for the fact that they had failed to treat the applicants differently. Importantly, the Strasbourg Court disagreed with the Supreme Court’s use of the ‘manifestly without reasonable foundation’ test, holding that any such treatment would require ‘very weighty reasons’ to be justified.

Justification

It was common ground that the Government had pursued a legitimate aim, namely curbing public expenditure. The Court’s task was to assess whether there was a reasonable relationship of proportionality between this legitimate aim and the means employed. If the measure was disproportionate and without very weighty reasons, then it could not be said to be objectively and reasonably justified.
In the case of the first applicant, the Court found that the treatment of the applicant was justified and there had been no violation. It was ‘not in fundamental opposition to the recognised needs of disabled persons in specially adapted accommodation but without a medical need for an extra bedroom to move into smaller, appropriately adapted accommodation’. Whilst the DHP scheme had a number of disadvantages, it allowed local authorities to take individualised decisions; something that the Court identified as important in ensuring proportionality. There were also safeguards in place in the award of DHPs, such as the requirement on the local authorities to take their decision in light of the Human Rights Act and their Public Sector Equality Duty. The Court understood these safeguards as ensuring that the applicant would be awarded DHPs in circumstances where the need for appropriately adapted accommodation would otherwise not be met.
In contrast, the Court found a violation of Article 14 in conjunction with Article 1, Protocol No. 1 in the case of the second applicant (by five votes to two). The impact of treating those housed in Sanctuary Schemes the same as everyone else was disproportionate in the sense of not corresponding to the legitimate aim of the measure. The Court reached this conclusion by comparing the legitimate aim of the bedroom tax – to incentivise those with ‘extra’ bedrooms to leave their homes for smaller ones – with the aim of Sanctuary Schemes, which was to enable those at serious risk of domestic violence to remain in their own homes safely. These aims were in conflict with one another and the Government had not given any weighty reasons for prioritising the former over the latter. In this context, the provision of DHP could not make up for the reduction in benefit because it ‘formed part of the scheme of incentivising residents to leave their home.’ Therefore, the imposition of the bedroom tax on this ‘small and easily identifiable group’ had not been justified and was discriminatory.

Comment

While the Court’s emphasis on the advancement of gender equality and the need to prevent discrimination against disabled people will be welcomed, the judgment is not without difficulty. The Court acknowledges the reduced certainty and stability of DHP in finding the scheme disproportionate in relation to the second applicant but finds it proportionate in relation to the first, making a distinction between the two situations on a basis which is hard to discern. The uncertainty in the provision of DHP threatens the sanctity and security enjoyed by the first applicant and her daughter in her specifically adapted house, much in the same way as the uncertainty of the policy is inconsistent with the aims of the “Sanctuary Scheme”. The Court also pointed towards the DHP scheme and its attendant safeguards as a ‘weighty reason’ justifying the treatment of the first applicant. But the DHP scheme is a safeguard that aims to mitigate or eliminate the prejudicial effects of the treatment; not a reason that can be used to justify the treatment in the first place.
Of more general importance was the Court’s view as to the principles which ought to govern its approach to such cases. The Supreme Court had applied the ‘manifestly without reasonable foundation test’ drawn from the Grand Chamber judgment in Stec and Others v the United Kingdom ([GC], nos. 65731/01 & 65900/01 ECHR 2006-VI). In the circumstances of that case, the Grand Chamber had employed the more benign test of ‘manifestly without reasonable foundation’ because 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.

Or as Lord Toulson put it in a domestic context,

choices about welfare systems involve policy decisions on economic and social matters which are pre-eminently matters for national authorities. (Rutherford, para 32).

The Supreme Court unanimously agreed that this test was the correct one in the bedroom tax case.
Strasbourg disagreed. It did not disown the ‘manifestly without reasonable foundation’ test, but it restricted its scope so that it only applies to 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’. The Court had in mind here cases like Stec, where the difference in treatment was justifiable because it formed part of the scheme of correcting the inequality in the state pension ages. The justification for the ‘manifestly without reasonable foundation’ test in these types of cases is because the State is best placed to decide how and when to correct an inequality. Outside of the specific circumstances of transitory measures designed to correct an inequality, the ‘very weighty reasons’ test must be applied.

This development of the Court’s case-law could have potentially significant implications for the way in which discrimination cases involving social and economic measures are approached in the future. The Supreme Court is likely to be very reluctant to embrace the First Section’s approach, particularly since there have been no shortage of concerns expressed about the trend towards judicialisation of the welfare state. Moreover, since its judgment in the bedroom tax case the Supreme Court has had opportunity to further look at the ‘manifestly without reasonable foundation’ test and once again confirmed that this was, in its view, the correct approach. For a period, there was a view that the test may only apply to the first three limbs of the proportionality test and not to the balancing act conducted at the fourth stage. But only a few months ago, attempting to put an end to the debate in the ‘second benefit cap case’, Lord Wilson endorsed the test and said ‘let there be no future doubt about it’. The Strasbourg judgment in JD & A has ensured that this is unlikely to be the case. Will the decision provide encouragement to those judges who considered the test an inappropriate one in a domestic context to develop domestic law in line with it? Or perhaps more likely, are we heading for another Poshteh situation, where the Supreme Court opts to follow its own case-law over that of a single Chamber judgment? We will surely find out sooner rather than later.

Alex Ewing is among the Blog’s new team of regular contributors, writing about cases from the European Court of Human Rights.