High Court finds that the suspension of pension benefits breaches the Human Rights Act

In R (on the application of British Medical Association) v Secretary of State for Health and Social Care [2020] EWHC 64 (Admin) the British Medical Association (the “Claimant”), a trade union and professional body for doctors, successfully challenged the National Health Service Pension Schemes, Additional Voluntary Contributions and Injury Benefits (Amendment) Regulations 2019 (the “Regulations”). These brought in a new power of the Secretary of State (the “Defendant”) to suspend the payment of benefits under the NHS Pension Scheme where a member of the scheme was charged with certain offences.

The court found that the Regulations breached Article 14 of the European Convention on Human Rights (the “ECHR”), the right against discrimination, when read with Article 1, Protocol 1 (“A1P1”) ECHR, the right to property. In addition, it was found that there was an absence of appropriate procedural safeguards as required by Article 6(1) of the ECHR, the right to a fair trial, and the principles of natural justice.

Key points

• Public bodies must ensure that during the development of policy they have due regard to any fundamental rights which they might be engaging to ensure that their actions are appropriately justified.
• Decision makers must properly consider all the outcomes and consequences of their proposed decisions including any unintended consequences.
• Although there is often a wide margin of appreciation afforded to the State, and procedural flaws can sometimes be cured, where a measure is manifestly without reasonable foundation the court will usually have no option but to quash the relevant measure.

Background

This claim challenged the lawfulness of certain provisions of the Regulations by which amendments were made to the terms of the NHS Pension Scheme.

Before the Regulations were brought in, the Defendant had the power to forfeit a pension after a member or beneficiary of the pension scheme had been convicted of a prescribed criminal offence which was committed before the benefit became payable. Most, if not all, public sector pension schemes contain similar provisions. However, the hiatus between the conviction and the certification and forfeiture decisions, even if short, gave rise to the risk of the individual concerned using an accrued entitlement to a lump sum drawdown as a means of circumventing the effects of forfeiture. The aim of the Regulations was to reduce this risk by conferring upon the Defendant an additional power to suspend payment of pension benefits where a person was charged with certain serious offences.

There was nothing in the Regulations that entitled a person affected to appeal the decision to suspend their benefits. Suspension did not terminate automatically upon acquittal or in other circumstances in which forfeiture could no longer take place. Also, there was no limit in terms of time or amount, except that in most cases the guaranteed minimum pension could not be forfeited or suspended.

Most of the Claimant’s members belong to the NHS Pension Scheme. The Claimant had serious concerns about the potential impact on its members of the introduction of the suspension power.

Judgment

Mrs Justice Andrews held that the Claimant was entitled to declaratory relief and to a quashing order on the basis of a number of grounds of challenge.

Article 14 and A1P1 of the ECHR: Interestingly, for the purposes of the discrimination test, it was found that there was a sufficient analogy between the position of a current NHS employee and that of a retired NHS employee for a comparison to be made between them for the purposes of Article 14 read with A1P1. The suspension power subjected retired NHS employees to an immediate financial detriment which was not imposed on NHS employees who faced similar criminal charges.

The court considered it unnecessary to decide what the appropriate standard of review was for a case of this kind, because whichever of the tests was applied and however wide the margin of appreciation afforded to the State, the result was the same: this measure was found to be manifestly without reasonable foundation. It was not simply capable of causing hardship in individual cases; it was inherently unfair. This was because it offended against the presumption of innocence, which could not be put right. There was no objective rational justification for it. This finding was all the more forceful given that there was no evidence that anyone had turned their mind to how this new power might impact upon the presumption of innocence.

Article 6(1) of the ECHR: The court acknowledged that the power to suspend following charge was expressed in extremely broad terms, such that it would be difficult to challenge by way of judicial review. Therefore, the court took the view that nothing less than a full right of appeal to a court on the merits would suffice to satisfy the requirements of Article 6(1) and the principles of natural justice.

It was notable that in determining whether the discriminatory effect of the suspension power was justified and assessing the lawfulness of the measure challenged, the court stated that it must take a holistic view by considering the presence or absence of procedural safeguards. Nonetheless, it found that the introduction of a full right of appeal to a court would be insufficient to cure the breach of Article 14 read with A1P1. The breaches of Article 6(1) simply made an inherently unfair measure even more unfair.

Comment

The High Court found that the development of the new power had not taken into account serious consequences on individuals’ rights. Some issues might have been curable, for example by providing appropriate procedural safeguards. Nonetheless, the cornerstone of this judgment was the lack of consideration of the presumption of innocence which rendered the Regulations “manifestly without reasonable foundation”. The judgment also found that the justifications advanced by the Secretary of State for this were “woefully inadequate”. This case is therefore a reminder of the need for decision makers to think through all the consequences of their actions, including any unintended consequences, and appropriately assess those consequences before finalising their decisions.

In terms of the case’s wider application, the Defendant raised the issue of how the court should approach a challenge to the legality of a measure of general application which permits, but does not compel, a breach of the common law or the ECHR. While the court accepted that it is obliged to interpret legislation compatibly with the ECHR insofar as that is possible, it must also focus on whether there is something inherent in that measure that makes it incompatible with a fundamental right. If a measure appears to be incompatible there are limits to how far the court will be able to use its powers to read in provisions to make it compatible.