The Next Step: Rutherford/A and the “Bedroom Tax’s” Journey to the Supreme Court

Though headlines proclaiming the end of the “bedroom tax” may be somewhat premature, the decision of the Court of Appeal in Rutherford v Secretary of State for Work and Pensions [2016] EWCA Civ 29 marks an important development in the case law surrounding the controversial policy ahead of its hearing in the Supreme Court later this month. This blog covered the lower Court hearing back in November, and now the judgment is available, some of those same issues can be re-visited with the benefit of the Court’s opinion.


It is worth starting by highlighting that the two cases heard jointly here – Rutherford (concerning a child with severe disabilities and his grandparents who care for him) and A (concerning a victim of domestic violence in a sanctuary scheme with a “panic room”) – will be heard alongside the MA appeal in the Supreme Court at the end of February. There is, therefore, only a matter of weeks before the hearing and months before a (hopefully) determinative judgment which is freer to consider important underpinning issues outside the scope of the Court of Appeal. This case therefore, is perhaps best treated as an interesting step in the overall journey of the “bedroom tax” case law, as opposed to something more definitive.


The judgment itself is a short and fairly abrasive affair – no doubt in part due to the looming Supreme Court consideration and the clear benefits of hearing both sets of cases together. Indeed, the hearing for the case began with Lord Chief Justice Thomas haranguing the parties for bringing their own appeal at great taxpayer expense as opposed to intervening in MA (though problems with the latter –  not least the lack of any capacity for attaining legal aid for such an intervention – were of course raised in defence of their position).


The claimants here followed the well-trodden Human Rights Act 1998 path of arguing that the Right to Property under the first part of the first protocol (A1P1) was engaged to leverage the parasitic Article 14 (Prohibition of Discrimination) which they contended had been breached due to unjustified indirect discrimination (so-called Thlimmenos discrimination: namely the failure to treat an individual differently who warrants differential treatment, without justification). In common with most other appeals to Welfare Reform Act 2012 reforms, a Public Sector Equality Duty challenge under s.149 Equality Act 2010 was bolted on for A, but was not successful and is not considered in detail here.


The Government position, also a well-trodden path, was that, inter alia, the existence (and on the facts of the two cases, actual payment) of discretionary housing payments (DHPs) justified the discrimination. The key issue was the relationship between two previous cases: Burnip and MA. The former had found that DHPs cannot be capable of justifying otherwise unlawful discrimination (because, for instance, of their unreliable and discretionary nature), and the latter which distinguished itself from Burnip on a number of grounds, including the “bedroom tax” regulations being made in an environment of austerity, changes that had been made to the DHP fund, and – importantly for Rutherford – that Burnip dealt with an easily identifiable category which was not open to abuse, whereas MA dealt with the broader grouping of those requiring an “extra” bedroom (relative to the room standard) by reason of disability. Both Burnip and MA were Court of Appeal decisions, and neither party in Rutherford argued that they were incorrectly decided – so the Court determined they were bound by both, and consequently had to reconcile these two positions.


The crux of the decision was that the Court considered both sets of claimants to fall into the Burnip camp more than the MA one – particularly due to them constituting relatively small, easily identifiable classes of claimant which would be amenable to exemption as opposed to reliance on DHPs. International obligations (particularly the UNCRC, discussed below) proved useful in the proportionality exercise under Article 14, as it was clear that the Government did not place the interests of children as a primary consideration, particularly in their efforts to justify the differential treatment of children and adults (some adults who require overnight care are statutorily exempted from the “bedroom tax,” whereas children in the same position are not).


There are few aspects of this decision with are worth noting, particularly with an eye to the MA Supreme Court hearing later this month.


First, this tug-of-war between the MA and Burnip positions will need reconciling. Any Supreme Court ruling which fails to do so will leave a muddled position for ongoing polices which are reliant on DHPs for mitigation (particularly further changes to Local Housing Allowance and the reduction in the level of benefit cap). In this respect, the inclusion of Rutherford within the hearing may well be beneficial, as it will force the Court to consider claimants who fall into both camps at the same time. The status-quo is problematic in part due to its reliance on identifying specific classes of claimant – if the class is large and unmanageable, DHPs may justify any otherwise unlawful discrimination, if small and identifiable, probably not. The issue is that many of these larger categories are themselves comprised of many smaller more identifiable ones – indeed, this “salami-slicing” issue caused some problems within MA when dealing with the circumstances of the Carmichaels: one set of the claimants who were unable to share a bedroom by reason of disability.


Second, the Court may well re-visit the problematic (and often ill-applied) “manifestly without reasonable foundation” bar incorporated into the proportionality assessment. Given the binding effect of MA and Burnip, the Court was not able to consider this issue (nor were they willing to hear arguments on the matter), however, there is some potential here through two key avenues. The first strand relates to the aftermath of Re Recovery of Medical Costs for Asbestos Diseases (Wales) Bill [2015] UKSC 3, where the Supreme Court clarified that when considering the four stages of proportionality, the fourth and final stage (otherwise known – some would argue, incorrectly – as the “balancing” stage) is not subject to the “manifestly without reasonable foundation” bar. In other words, the aim of the policy, the measure’s connection to that aim, and whether a less intrusive measure was available, are all subject to this “manifestly without reasonable foundation” bar, but when the Court considers whether, on a fair balance, the benefits of achieving the aim by the measure outweigh the dis-benefits resulting from the restriction of the relevant protected right (in this case, the prohibition of discrimination), they do so by consideration all relevant aspects as a whole, not with reference to a specific deferential test. Although the Supreme Court was oddly silent on this consideration in the benefit cap appeal in SG, re-casting the proportionality assessment along these lines may provide a more structured, and ultimately more scrutinising, examination of the measure than what has arisen in previous appeals – particularly those which ask whether the measure as a whole is “manifestly without reasonable foundation” as opposed to undertaking carefully the four stages required.


The second strand is more fundamental (though arguably, less likely); it may be that the Court re-considers whether the “manifestly without reasonable foundation” test should apply in both of these circumstances at all – particularly in an instance of alleged gender discrimination in A. In Stec v UK, the Court was clear that the “manifestly without reasonable foundation” bar was dependent on the circumstances of the case, and was only “usually” – rather than always – applicable to measures of “economic or social strategy.” In an instance of discrimination on “suspect” grounds (such as gender discrimination under A’s facts), the “very weighty reasons” articulation or similar may be more appropriate.


Third, the Courts are clearly increasingly keen to make use of international instruments to aid their interpretation of proportionality under Article 14. In Rutherford, the Court limited themselves to using instruments which were held as relevant under MA and Burnip (the United Nations Convention on the Rights of the Child, and the United Nations Convention on the Rights of Persons with Disabilities).  Given their clear alignment with the claimants in the cases which will be coming before the Supreme Court, their use clearly has the potential to extend the scope and standard of inquiry undertaken by the Court. One may hope, however, that given the opportunity other international instruments which are not limited to certain classes of person – for instance, International Covenant on Social, Economic and Cultural Right elements such as the Right to Adequate Housing and/or the Right to Social Security – may muscle themselves in as interpretative guides within the proportionality assessment, and in turn, extend the ability of non-discrimination based elements (such as the minimum core obligations or the non-retrogression aspects) of these obligations to enter into the case law.


All eyes will be on the Supreme Court hearing later this month in what will certainly be an interesting set of arguments. Everything is on the table; the DWP argument may change sizably from the earlier appeals. The issues above are very likely to feature, but given the make-up of the bench sitting on the case, we are likely to have some diverging perspectives (and judgments) handed down.

By Jed Meers

York Law School

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