Secretary of State for Work and Pensions v Timson
12 June 2023
Secretary of State for Work and Pensions v Timson [2023] EWCA Civ 656 (9 June 2023) is a very important judgment on fair procedure in the benefits system, with the potential to help prevent large deductions being made inappropriately from the benefit incomes of families who are already in poverty.
Schedule 9 to the Social Security (Claims and Payments) Regulations 1987 allows deductions of up to 25% to be made from a range of social security benefits to pay various third parties owed money by a claimant: for example, water companies, energy companies and landlords.
Those types of deductions may only be made under Sch.9 if doing so is in the ‘interests’ of the claimant and their family.
Hundreds of thousands of deductions are made each year. The approach of DWP has for many years – perhaps since the 1980s – been to accept applications for deductions on bulk spreadsheets, containing the details of potentially thousands of claimants at a time. The guidance for decision makers gives no indication that individual claimants should be contacted by DWP before a deductions decision is made, and in reality it appears that claimants are not contacted. Limited information about each claimant is provided by the applicant company. The Respondent in this appeal, Ms Timson, said that SSWP was operating a process in which bulk applications were simply rubber-stamped, and that deductions had been taken from her benefit when she had no idea that an application had even been made. She said that if she had been contacted, she could have explained to SSWP why deductions would not be in her interests.
The High Court decided that SSWP’s policy was unlawful because it was procedurally unfair, and also because it caused decisionmakers to fail to make rationally necessary enquiries before making a decision. The Court of Appeal unanimously agreed. Edis LJ said:
- … I find it impossible to see how such a consideration can take place fairly without the claimant and other members of the family being able to say what they think is in their interests, and why. It may include matters which are uniquely within the knowledge of the claimant. Even in Bank Mellat, where the question concerned the national interest of the United Kingdom, the Supreme Court held that a prior opportunity to make representations was required as a matter of fairness…
- In my judgment, the Regulations, by framing the decision-making as they do, require a consideration of the interests of the individual claimant and their family. Under the Guidance, however, the decision-maker has the option of contacting them, or of investigating their benefit records, but the Guidance allows a decision to be made where the claimant or their family has been given no opportunity to supply information beyond what the utility company puts in the spreadsheet. This appears to me to be obviously unfair.
The implication of the Court’s judgment is that upon receiving any application of this kind from eg a utility company, SSWP will now have to contact each individual claimant, give them the opportunity to make representations and submit evidence, and consider all that information before making an individual decision.
An interesting question arises as to whether this judgment will be applicable in the context of deductions from universal credit. The relevant UC regulations do not include an ‘interests’ requirement in the same way as the 1987 regulations, which might be said to be a relevant point of distinction. However, SSWP’s policy appears to indicate that his objective is to take deductions from UC for utility debt etc only if doing so is in the claimant’s interests. That might be said to make Timson directly applicable.
A further interesting question arises about when it actually will be in a claimant’s ‘interests’ to make involuntary deductions. For (eg) water debt, a claimant cannot be cut off, and if they have no assets they may not fear debt recovery proceedings. If they say they do not want deductions, how is it in their interests to overrule them? The High Court had said that it thought it would be rare for deductions not to be in a claimant’s interests; the Court of Appeal decision expresses some scepticism about that comment, but more importantly, points out that the question does not properly arise for decision in Timson, and should be left for another case where it does [§67].
Tom Royston acted for Ms Timson, led by Jenni Richards KC, and instructed by Emma Varley at Bindmans.
