Deductions from Benefit Policy Unlawful
The Secretary of State unlawfully fettered her discretion to decide, where necessary in individual cases, how much to deduct from a person’s universal credit to pay off fines imposed under the criminal law: The Queen on the application of Blundell & Ors v Secretary of State for Work and Pensions [2021] EWHC 608 (Admin) Kerr J
The Secretary of State had a policy of deducting at a fixed rate. Any change had to be achieved by the individual applying to the magistrates’ court to vary the rate of payment of the fines.
It was argued on her behalf that this was lawful because the discretion had been properly exercised by reductions in the fixed rate from time to time, because she did not consider deduction rates in individual cases in relation to other debts that were not court imposed fines, and because the individual could apply to the court to vary the rate of payment of any fine.
To say that she was fettering her discretion was to elevate form over substance.
The Claimants asserted that the Secretary of State may have a policy but was unlawfully shutting her ears to requests to depart from it in exceptional individual cases on the ground of financial hardship.
The fines regulations gave the Secretary of State discretion to deduct ‘any sum’ from fines, within the set parameters, or no sum at all, while the deductions policy set a deduction rate fixed arithmetically with no possibility of departure from it in individual cases.
It was, said the Claimants, a text book case of a fetter on the exercise of a statutory discretion.
In the Court’s view it was no answer, at any rate in the present case, to the charge of fettering a discretion, to say that it did not matter because someone else could ‘un-fetter’ it.
The present case called for individual consideration, where necessary, by the person responsible for exercising the statutory power.
The judge did not accept counsel’s argument that the Secretary of State had lawfully exercised her discretion by setting maximum percentage rates for deductions, firstly at 30 per cent, and more recently 25 per cent from October 2021.
The alternative route to easing financial hardship, via the magistrates’ court, was inferior to the enacted statutory provisions.
The Court could not save the debtors from themselves by taking their money at source to pay off their fines.
The deductions regime was paternalistic: the debtor could not be left to pay off court fines voluntarily; they must be made to do so, for their sake and society’s.
The system operated awkwardly. It was not just that the debtor must have the nous to make an application.
If he/she did so and the magistrates were willing to help, deductions from benefit to pay court fines would in some cases be replaced by deductions reaching the same total amount to pay other debts.
The magistrates would not always know how much real help against hardship they were giving. Hence, they were asked by their association not to speculate about it in open court.
The policy and practice were not lawful in their present form. There would be no legal difficulty if the deductions policy admitted of exceptions, even rare exceptions, in individual cases.
The claimants themselves accepted that, but it did need revising to enable that to happen.
On that ground alone the application succeeded. Further grounds alleging irrational policy, disability discrimination and public sector equality duty were dismissed.
Subject to hearing argument, the Court did not propose to quash the policy; there were many parts of it that were good in law and untouched by the judgment, and severance might not be easy.
The Court was minded to grant a declaration in a form which it was hoped would be agreed between the parties.