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||Neutral Citation Number:  EWCA Civ 907
||Case No: C3/2010/1666
IN THE COURT OF APPEAL (CIVIL DIVISION)
ON APPEAL FROM THE UPPER TRIBUNAL
ADMINISTRATIVE APPEAL CHAMBER
Judge David Williams
 UKUT 18 (AAC)
||Royal Courts of Justice
Strand, London, WC2A 2LL
||29th July 2011
B e f o r e :
LORD JUSTICE RIX
SIR HENRY BROOKE
DAME JANET SMITH DBE
|| Faith Stewart
||- and –
||The Secretary of State for Work and Pensions
(Transcript of the Handed Down Judgment of
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Nathalie Lieven QC and Tim Buley (instructed by the Nottingham Law Centre) for the Appellant
Martin Chamberlain (instructed by the Solicitor to the Department for Work and Pensions) for the Respondent
Hearing date: 7th March 2011
HTML VERSION OF JUDGMENT
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Sir Henry Brooke:
- Two statutory schemes
- Parliament has created two schemes whereby public funds may be expended towards the funeral expenses of people in circumstance where appropriate funeral arrangements would not otherwise be made. By the first scheme, which sometimes used to be referred to as a pauper's burial, a local authority is under a statutory duty
"to cause to be buried or cremated the body of any person who has died or been found dead in their area, in any case where it appears to the authority that no suitable arrangements for the disposal of the body have been or are being made otherwise than by the authority".
(Public Health (Control of Disease) Act 1984, s 46(1))
- There was evidence before the court that whilst the exact nature of the provision differs somewhat from local authority to local authority, it now bears no resemblance to the old paupers' burials. While it was not suggested that all local authorities attained the same standard, we were told that funerals conducted by the Nottingham City Council's Bereavement Department were conducted as far as possible in accordance with the wishes of the deceased: they include attempts to consider whether a burial or cremation is preferred, a committal service and, if a cremation is conducted, ashes are scattered in a garden of remembrance. In response to an inquiry made in 2006-7 71 local authorities (out of 375) said that they arranged a total of 666 welfare funerals in the year under review.
- For the second scheme, Section 138 of the Social Security (Contributions and Benefits) Act 1992 ("the 1992 Act") provides that:
"(1) There may be made out of the Social Fund in accordance with this Part of this Act -
(a) payments of prescribed amounts, whether in respect of prescribed items or otherwise, to meet, in prescribed circumstances, maternity expenses and funeral expenses."
- In its present form the second scheme was introduced as a result of a major review of social security policy and provisions which was undertaken in 1984. This review led to the replacement of the "death grant" (first introduced by Section 22 of the National Assistance Act 1946, and pegged at a level of £30 between 1967 and 1986) by the more generous arrangements which I will now describe. In 1985 the Government published a White Paper entitled Reform of Social Security, Programme for Action, which presaged the creation of a new social fund from which grants, loans and payments might be made to help people meet regular expenses that were hard to pay for out of their regular income. Maternity and funeral expenses were one of four areas of need for which the fund would provide help, and from the outset the Government set out to ensure that payments for funeral expenses could be made in appropriate cases with a minimum of delay or bureaucratic form-filling. The White Paper said at paras 4.20 and 4.21:
"4.20 Payments will also be made to help low-income families who are unable to meet the reasonable cost of a funeral for which they are responsible. This will replace the death grant which has remained at £30 for nearly 20 years. The new system will also take the place of the existing supplementary benefit provisions for meeting actual funeral costs borne by supplementary benefit claimants. There will therefore be a common approach to low-income groups.
4.21 The Government accepts that it will be important to handle this part of the fund with a minimum of detailed investigation into personal circumstances at a distressing time for the person seeking help. We believe this is best done through making clear that receipt of any of the main income-related benefits – income support, family credit and housing benefit – will qualify someone for help. This avoids a separate assessment of income. It also means that more people, not less, will be able to get proper help with the costs of a funeral."
- In a House of Commons debate on 16 July 1986 the Parliamentary Under-Secretary of State for Health and Social Security, Mr John Major MP, set out the Government's intention succinctly in these terms:
"We propose that funeral expenses will be available automatically from the social fund to people on income-related benefits and will be paid quickly and, equally importantly, without intrusion or means-testing at the time of death."
- These new arrangements proved very popular. Between 1988-89 and 1993-94, for instance, awards increased from 37,000 to 72,000 with a corresponding rise in expenditure from £18.4m to £62.9m. Adjustments have been made to the scheme from time to time since then, without altering its essential character.
- Funeral payments out of the social fund are not, therefore, means-tested benefits. Instead, anyone who is already in receipt of a qualifying benefit is automatically financially eligible for a funeral payment. At the relevant date for the purposes of Ms Stewart's case (4 August 2003) the position was set out in Regulation 7 of the Social Fund Maternity and Funeral Expenses (General) Regulations 1987 in these terms:
"(a) the claimant or his partner (in this Part of these Regulations referred to as "the responsible person") in respect of the date of claim for a funeral payment-
(i) has an award of income support, state pension credit, income-based jobseeker's allowance, working tax credit [in prescribed circumstances], child tax benefit, housing benefit or council tax benefit [in prescribed circumstances]…
That regulation has now been replaced by, and rewritten in, Regulation 7 of the Social Fund Maternity and Funeral Expenses (General) Regulations 2005 in which the list of qualifying benefits has been set out in numbered list form but is otherwise unchanged, except for the addition of income-related employment support allowance..
- Section 113(1)(b) of the 1992 Act disqualifies a person from receiving any benefit under Parts II to V of the Act, but neither funeral payments nor any of the qualifying benefits which generate automatic financial eligibility for them are benefits under any of those Parts.
2. The proceedings in this case
- The appellant Faith Stewart served a sentence of imprisonment between 19 August 2002 and 5 October 2003. Her son Darren died while she was in prison. On 4 August 2003 she applied for a funeral payment from the Social Fund in respect of Darren's funeral. Seven days later her application was refused on the grounds that she was not in receipt of a qualifying benefit. Absent the Human Rights Act 1998 it is not suggested that that decision was not correct in law. The issue at the heart of this appeal is whether the refusal of a funeral payment violated her right, afforded by Article 14 of the European Convention of Human Rights ("ECHR"), not to be subjected to unlawful discrimination. It was common ground before us that Articles 8 and Article 1 of the First Protocol to the ECHR were both engaged.
- Although the Appeal Tribunal allowed her appeal on 4 April 2005, it did not provide a full statement of reasons. Because of the absence of reasons, when the Secretary of State appealed to the Social Security Commissioners, Mr Commissioner Williams (as he then was) granted permission to appeal and set aside the Appeal Tribunal's decision. On 19 July 2007 he directed that the matter should be argued before him afresh and that the parties should file evidence. After an oral hearing three months later, Judge Williams (as he now was) stayed the appeal pending judgment in the House of Lords in R (RJM) v Secretary of State for Work and Pensions  UKHL 63;  1 AC 311.
- On 3 November 2008, after that judgment had been published, he invited the parties to make further written submissions, and on 2 February 2009, following the receipt of those submissions, he invited the Secretary of State to file evidence on the question of justification. On 13 May 2009 the Secretary of State filed a long witness statement by Julie Munt, the civil servant who was then the leader on policy matters for the regulated elements of the Social Fund within the Department of Work and Pensions, and Ms Munt attended the further oral hearing on 11 June 2009. Five weeks later the judge issued a provisional decision, on which he invited the parties' observations, which were duly produced. His final decision, upholding the Secretary of State's refusal of a funeral payment, was issued on 27 January 2010. The judge granted the appellant permission to appeal to this court on 8 June 2010.
- In a long and very careful decision Judge Williams analysed the ways in which a prisoner might be entitled to one or more of the "gateway benefits" mentioned in Regulation 7(a)(i) of the 1987 Regulations. Ms Lieven does not contest any of his findings, so that it is not necessary to repeat his detailed reasoning here. In short his conclusions were as follows:
1. Job-seeker's allowance, state pension credit and income support
None of these benefits are available to prisoners.
2. Child tax credit
A prisoner can claim child tax credit for her child (assuming that her income is limited) if the child is living with her in prison in a prison mother and baby unit, or if her claim is made in agreement with anyone else entitled to claim the credit.
3. Working tax credit
There are formidable difficulties in the path of any prisoner who seeks a working tax credit when involved in a scheme that enables prisoners to work. The judge thought it possible – although unlikely – that some prisoner could pass the only available "narrow test", so that he could not say that there was any express rule which prevented prisoners from obtaining a funeral payment by this route.
4. Housing benefit and council tax benefit
Unless the custodial part of the prison sentence is likely to last substantially more than one year, there is scope for a successful claim for a funeral payment to be made through a prisoner's partner.
- After concluding his detailed analysis of the different benefits, the judge summarised the position in these terms in paragraph 58 of his decision:
"Qualifying benefits: summary
At the end of 2003 there may have been some mothers able to claim successfully child tax credit for their children. They would be able to claim funeral payments successfully for their children or any other individual for whom they were responsible. A prisoner could continue claiming and receiving housing benefit or council tax benefit if the total absence from the home was likely to be less than 13 weeks. Such a prisoner could claim a funeral payment successfully if otherwise entitled to claim. And claims could be made in most cases through the partner of a prisoner if the absence was less than a year. Few if any prisoners would have been entitled to the disability element of working tax credit at the time because they would be prevented from receiving most relevant disability benefits because of their status as prisoners. Prisoners then had a nil entitlement to income support and to state pension credit. Prisoners would be prevented by the circumstances of their imprisonment from being entitled to jobseeker's allowance. No such prisoner could claim a funeral payment successfully."
- Ms Lieven suggested in broad terms that the people affected by the discrimination of which she makes complaint were partnerless prisoners without qualifying benefits who had a close relative or close friend who dies and where there is nobody else who should reasonably take responsibility for the funeral expenses. Alternatively, even where such a prisoner has a partner, where a close friend dies and the partner is not the close friend of that friend.
3. The issues in the appeal
- We turn to the issue at the centre of this appeal. ECHR Article 14 provides that:
"The enjoyment of the rights and freedoms set forth in this Convention shall be secured without discrimination on any ground such as sex, race, colour, language, religion, political or other opinion, national or social origin, association with a national minority, property, birth or other status." (My emphasis)
- Against this background Ms Lieven set out succinctly the issues we have to decide in these terms:
"There are three issues in the appeal, on all of which Judge Williams found against Ms Stewart:
(i) Did the refusal of a funeral payment constitute direct discrimination against Ms Stewart on the grounds of her status as a prisoner?
(ii) If not, did that refusal constitute indirect discrimination against Ms Stewart on the grounds of her status as a prisoner?
(iii) If there was discrimination, was it justified?
There are two matters which are not in issue as they have now been accepted by the Secretary of State:
(i) That the subject of the dispute, i.e. the funeral payment, falls within the ambit of Article 8 and Article 1 Protocol 1 of the ECHR, and therefore is capable of falling within the non-discrimination provision of Article 14;
(ii) That Ms Stewart's position at the time as a "prisoner" is capable of being an "other status" within Article 14."
4. Was there direct discrimination?
- Ms Lieven contends that whatever may be the situation with other qualifying benefits, there has been a deliberate decision to introduce a rule whereby prisoners are expressly excluded from entitlement to income support – and therefore entitlement to funeral payment (See Regulation 21 and Schedule 7 para 8 of the Income Support (General) Regulations 1987). She says that this rule is directly discriminatory against prisoners because there is a difference in entitlement that is directly referable to their status as prisoners. The fact that some other prisoner might, if he or she was in different circumstances, receive the benefit by a different route cannot alter the fact that the rule is directly discriminatory against prisoners.
- I do not accept this argument. The issue at the heart of this case is not whether prisoners are wrongfully denied access to income support for reasons referable to their status as prisoners, but whether they are wrongfully denied access to a funeral payment for such reasons. The short answer is that they are not. If the status in question was not "prisoner" tout seul, but "a prisoner who is not entitled to income support" then the answer would be different. But being a prisoner tout seul did not exclude Ms Stewart from entitlement to all qualifying benefits, and it did not therefore exclude her from entitlement to a funeral payment. Being a prisoner was not "the reason why" she was refused a funeral payment. Nor can it be said that "but for" being a prisoner she would have qualified. For these tests, see, by analogy, Shamoon v Chief Constable of the Royal Ulster Constabulary  UKHL 11,  2 All ER 26, per Lord Nicholls at  and per Lord Hope at , advancing the "reason why" test for direct discrimination in the context of domestic discrimination legislation. And see, too, James v Eastleigh BC  2 AC 751 per Lord Bridge at p 765 and Lord Goff at p 774 for the "but for" test in domestic discrimination legislation. For the "but for" test in the context of ECHR Article 14, see Stec v United Kingdom (2005) 41 EHRR SE18 at .
- It follows that this is not a case of direct discrimination.
5.Was there indirect discrimination?
- Judge Williams, with some hesitation and without hearing argument on this matter at the second hearing, concluded that there was not. He was influenced by the consideration that a claimant has only to establish an entitlement to one of the qualifying benefits in order to achieve entitlement to a funeral payment, and there was no express rule denying prisoners an entitlement to some of these benefits. The Secretary of State, however, accepted before us that the funeral payment scheme was indirectly discriminatory against prisoners in that it is more difficult for a prisoner than a non-prisoner to qualify for such a benefit. This is clearly correct.
6. Can the discrimination be justified?
- We are not concerned in this case with a rule which discriminates on the "core" or "primary" grounds listed in Article 14, such as race or sex. Discrimination on these grounds is regarded as "suspect" and any purported justification of it requires intense scrutiny (see R (Carson) v Secretary of State for Work and Pensions  UKHL 37,  1 AC 173 per Lord Hoffmann at  –  and Lord Walker of Gestingthorpe at  – ). Discrimination on other grounds "merely require[s] some rational justification" (see Lord Hoffmann in Carson at ). Discrimination on grounds of prisoner status has only recently been recognised as falling within "other" status in Article 14 (Shelley v UK (2008) 46 EHRR SE16). It is not discrimination on the ground of an inherent characteristic, like race or sex: it is plainly discrimination of a non-suspect kind.
- In Shelley v UK the Strasbourg Court said at p 209:
"…[T]he Court would observe that being a convicted prisoner may be regarded as placing the individual in a distinct legal situation, which even though it may be imposed involuntarily and generally for a temporary period, is inextricably bound up with the individual's personal circumstances and existence, as may be said, variously, of those born out of wedlock or married. Prisoners' complaints do not therefore fall outside the scope of Article 14 on this ground. The legal status of a prisoner, is however, very relevant to the assessment of compliance with the other requirements of Article 14."
I do not consider that this reasoning could be further extended, as Ms Lieven suggested, to confer a "status" for Article 14 purposes on a sub-category of prisoners restricted to those not in receipt of qualifying benefits.
- When considering whether any rational justification is available for the discrimination identified in this case, the Court must take into account three other principles that have been developed in recent case-law.
- The first is that the judiciary should accord the legislature or the executive a wide margin of appreciation or discretion when considering discrimination in the arena of social policy (including entitlement to state benefits): see Carson (supra) per Lord Hoffmann at  and Lord Walker at . See also Carson v UK, decision of 4 November 2008 (App No 42184/05) at  and . The discretion to be accorded to the legislature or executive is especially wide where the discrimination is indirect rather than direct (Humphreys v Revenue and Customs Commissioners  EWCA Civ 56 at ).
- The second principle to bear in mind is that it is legitimate for the Secretary of State to apply "bright line" rules in constructing eligibility rules in the arena of social welfare (see Reynolds v Secretary of State for Work and Pensions (heard with Carson) per Lord Hoffmann at , Lord Rodger of Earlsferry at  and Lord Walker at ). In RJM (see paragraph 10 above) Lord Neuberger of Abbotsbury said at :
"[P]olicy concerned with social welfare payments must inevitably be something of a blunt instrument".
- And finally in this context, consideration of cost and administrative convenience can be good reasons capable of justifying discrimination. This principle can be drawn from the case of Esfandiari v Secretary of State for Work and Pensions  EWCA Civ 282. It was argued in that case that the funeral benefits regime unlawfully discriminated against migrants because the 1987 Regulations did not permit payments to be made for a burial abroad, except as provided for by EU law. In rejecting this argument Carnwath LJ said at :
"Decisions on the allocation of public funds for such purposes are questions of social policy, not law. If justification is required, the considerations set out in the evidence of the Secretary of State, in summary that an amended scheme would be more complex and more costly to administer, are not irrational, and are well within the 'margin of appreciation' allowed by Strasbourg jurisprudence."
- Francis v Secretary of State for Work and Pensions  EWCA Civ 1303;  1 WLR 3202, however, is authority for the proposition that if the Secretary of State relies on administrative convenience and "bright line" rules he must still show some "serious adverse consequences" to justify the discrimination.
- The Secretary of State no longer relies on his original contention that depriving many prisoners of access to funeral payments forms part of their punishment. He seeks to justify the discrimination in three main ways:
i) Funeral payments are in their nature likely to be one-off expenses. That being so, it would be administratively complicated and costly to establish a separate mechanism for means-testing benefits.
ii) Moving away from the requirement for a prior award of a means-tested qualifying benefit would be bound to have an impact on a wider group of potential beneficiaries. The change could not be confined to prisoners alone. This would require extensive and costly new administrative machinery.
iii) The fact that the state makes alternative provision for those who do not qualify for funeral payments is an important factor in considering whether the "bright line" eligibility rule has "some rational justification". It does not leave them without any assistance at all.
- For the first of these arguments the Secretary of State takes us back to the thinking which led to the scheme being constructed in its present form (see paragraphs 4-5 above). If means-testing were required, applicants would have to fill in a bureaucratic form (and possibly answer further questions about their means) at a difficult time in their lives when such intrusion into their private affairs would be unwelcome. It is also said that social fund decision-makers are not trained to apply a means test, and the introduction of this training would add cost to the scheme. Furthermore, the calculations would have to be performed manually rather than by simply accessing the computer system used for income support and jobseekers' allowance, as happens at present. And it would not be possible to make payments within the current 14 day average period.
- For Ms Stewart it is suggested that we are only concerned with a relatively small number of claimants who cannot rely on the qualifying benefit route because they are prisoners. The Secretary of State should not be permitted to rely on sweeping generalisations without giving more detail of the degree to which there would be administrative inconvenience in having to consider these prisoners' applications afresh and carry out a means test upon them. (It has not been suggested, however, that Ms Munt was given an opportunity to respond to this criticism when she gave oral evidence in the Upper Tribunal). Ms Lieven added that Ms Stewart, and other prisoners, would have been only too happy to complete a means test application form if this meant that they would have the opportunity of obtaining a funeral payment.
- In response it is argued that it simply would not be possible to restrict the introduction of any new arrangements to prisoners without qualifying benefits who might qualify if a means test were available. Students, people from abroad who do not qualify because of their immigration status, and people in receipt of contributory (rather than means-tested) benefits might also qualify if new means-tested "gateway" arrangements were to be introduced. Ms Munt observed that all these groups contain some people with an income level equivalent to those who qualify for social fund payments. If the Secretary of State were to introduce a separate means test for prisoners, logic would dictate that he should also introduce one for these other groups too. It is said that it would be impossible to justify giving a prisoner an advantage not offered to a student or to a person of similar means in receipt of contributory benefits – and Government statistics suggest that the number of people in receipt of contributory benefits exceeds 15 million. Mr Chamberlain, who appeared for the Secretary of State, said:
"Put another way, the primary justification advanced by the Secretary of State has nothing to do with prisoner status. If the justification advanced – administrative simplicity and cost – is not a good one, there would be ramifications for all the other groups who do not qualify for means-tested benefits, and all the other benefits listed in the Annex to Ms Munt's statement where eligibility depends on the prior award of a means-tested benefit."
- He added that the introduction of a means-tested inquiry for a much wider group than prisoners alone would be contrary to the policy aims that were advanced when the scheme was first introduced. Applications could not be processed quickly, and whatever prisoners like Ms Stewart might be thought likely to say, there would be a need for an intrusive and resented inquiry into the means of a large cohort of applicants. It would in effect, he says, entail the creation of an entirely new scheme, where payments could be made to anyone of limited means, as opposed to those with an existing award of a qualifying benefit.
- Finally, he would not exclude entirely the relevance of the fact that the alternative of a local authority funeral is available (see paragraphs 1 and 2 above), as Ms Munt points out. He argued that the fact that the state makes alternative provision for those who do not receive funeral payments was an important factor in considering whether the "bright line" eligibility has "some rational justification". Ms Lieven accepted that the availability of this fall-back provision was relevant, but its adequacy depended on the sensitivities and resources of each individual authority, and it was a quite different scheme from one which provided money for the deceased's funeral to arrange the funeral as they (or the deceased) wished.
- Ms Lieven submitted that it was legitimate to consider prisoners separately from the other groups mentioned by Ms Munt, because the exclusion of other groups without qualifying benefits from entitlement to a funeral payment could and should be separately justified. She referred to the Government's desire to have a robust immigration system, its wish that students should meet such expenses by other means (as opposed to relying passively on the taxpayer), and the fact that helping the beneficiaries of contributory benefits would raise quite complex issues.
- This would, however, demand a decision that a new, quite different, means-tested approach should be restricted to prisoners alone. Such a decision would in turn be subjected to complaint from all the other excluded groups who would complain that they were being unlawfully discriminated against, and in my judgment a decision to that effect in this case would justly expose the court to the charge that it is trespassing in territory in an area of social policy that is properly the preserve of the legislature, for the reasons fully set out in the case-law I have cited. Although the arguments may be slightly different for each group, in essence what is being demanded is a significant change from the simple scheme introduced by Parliament in 1987, with significant ramifications in delay and expense, and in my judgment the Secretary of State has established a rational justification for the discriminatory treatment of most of the prisoners who seek funeral payments.
- For these reasons I would dismiss this appeal. For the sake of clarity I would add that Dame Janet Smith, who has now retired, was a full member of this Court when the appeal was heard.
Dame Janet Smith:
- I agree.
Lord Justice Rix:
- I also agree.
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