Humphreys v HMRC: Supreme Court, Day 2

by Carl Gardner on March 15, 2012

Yesterday I explained the facts and legal background to this case, and a short account of the first day of the hearing, which concluded just after 1 pm today. I was again in court to hear Jason Coppel complete his submissions for HMRC, and Richard Drabble briefly respond.

Jason Coppel began by stressing how little evidence there was that men are actually much more likely to be disadvantaged by the “one parent, main responsibility”  approach to payment of child tax credit embodied in the Tax Credits Act 2002, section 8 and the Child Tax Credit Regulations 2002, regulation 3. This seemed to be an attempt to resile from HMRC’s concession that the regime is indirectly discriminatory against men, and Lord Wilson picked Coppel up on that – his response was that his point was not about the existence of discrimination but about how fully it needs to be justified in the context of this evidence. I’m not sure this apparent to go behind what’s already been admitted helped HMRC, and indeed this morning saw a less commanding performance from Jason Coppel, whose submissions on the test for justification yesterday had been so impressive.

The most remarkable incident in the hearing was Lord Wilson’s impromptu judicial rant about Margaret Thatcher and the origins of the Child Support Act 1991. Lord Clarke had been exploring whether a family court could in some way make an order offsetting unequal entitlement to CTC – but Lady Hale explained that family courts can no longer order periodical payments for the benefit of children on divorce. This led Lord Wilson to ask, rhetorically, whether it was not true that Margaret Thatcher had come back from a visit to Australia in the last year of her premiership utterly convinced or the merits, including the merit of saving legal aid money, of having all consideration of financial support for children handled by a computer. This, he said, was the cause of what he called

the barrenness of the position of the family courts.

Lord Wilson never lost his composure during this intervention, but his less than positive view of this aspect of child support law was obvious to everyone in court.

Jason Coppel tried to argue that a court could take receipt of CTC into account in ancillary relief proceedings on divorce, but neither Lady Hale nor Lord Wilson was having that: they agreed that most financial orders on divorce are one-off, irreversible capital orders, and that it would be unreal to think receipt of CTC at the moment of divorce could have any influence over their content. This was a bad point for HMRC to make.

Jason Coppel was back on firmer ground when he turned to justifying the current CTC regime. He reminded the Justices that requiring CTC sharing in future would not be cost free, but would deny income to majority carers who might need it to buy important items for their children. It was not sensible to try to create a special sharing right only for minority carers in receipt of subsistence benefits like Mr Humphreys, since first, that would undermine the purpose of CTC – which was to deliver means-tested support regardless of parents’ work status – and would make the majority carer’s entitlement arbitrarily and unpredictably dependent on the working circumstances of their former partner.

Coppel relied on HMRC research showing that of 30 European countries, only 6 split their equivalents of CTC (Richard Drabble quibbled, later, with the reliability of the comparisons HMRC was making) and argued that in the current state of Strasbourg case law, the Court should be slow to interfere with ministers’ policy choice. He relied on Lord Bingham’s principle in Ullah v Special Adjudicator, that (see paragraph 20)

The duty of national courts is to keep pace with the Strasbourg jurisprudence as it evolves over time: no more, but certainly no less

(which Lord Wilson called “an odd principle”), and cited Lady Hale in Clift v Home Secretary, at paragraph 63:

it is not for us to declare legislation which Parliament has passed incompatible with the Convention rights unless the Convention and its case law require us so to do.

Coppel argued that the Hockenjos case, so central to Mr. Humphreys’ argument, was wrongly decided for a number of reasons. Most interesting was that in his view Lord Justice Scott Baker had seen justification as involving a subjective element – in other words, what mattered was at least in part what thought government had given to justifying the policy at time they made it. That, Coppel argued, was wrong: what mattered was whether objectively, at the time a policy is challenged, the government can advance good policy reasons to justify it. He relied on R (Begum) v Denbigh High School in support of that proposition. Justification can he said be post hoc as long as it’s sound.

I think that point goes too far. I absolutely agree that justification is an objective exercise: what matters is the actual social justification of a policy, not what went through the minds of the policymakers at the time. I think post hoc attempts to use policy arguments that are clearly nothing to do with the policy-maker’s real aims are likely to run into difficulty, though.

We didn’t get much more clarity on potential remedies if Mr Humphreys wins: Jason Coppel argued, I thought very surprisingly, that this was an appropriate case for a ruling with prospective effect – in other words, deciding what the law means, but only allowing people to rely on that meaning in courts in the future. This is something domestic courts have never done but which was left open as an option one day by the House of Lords in NatWest v Spectrum, Lord Nicholls saying at para. 41

“Never say never” is a wise judicial precept

I think this Spectrum submission needed to be developed in much more detail than it was, though: it is not clear whether a prospective ruling on the interpretation of secondary legislation in a human rights context really is the same thing as the Lords were contemplating in Spectrum. Richard Drabble I think killed off this suggestion by saying it’s not appropriate in a statutory appeal, where Mr Humphrey’s statutory rights at the time of his CTC claim must be resolved. Lord Reed, nodding, seemed very much to agree with that. Again, I think this Spectrum point was an odd, and bad, one for HMRC to raise. They should really have been arguing that the difficulty in identifying a remedy testified to the lack of cogency of Mr Humphreys’ human rights argument.

Richard Drabble’s final point was to stress that what’s at stake is something very practical: who buys the tea and breakfast when the children are staying with a substantial minority carer? That seemed to me a fairly ineffective point, given that Lady Hale had several times stressed that whether CTC actually was spent on children was

the big “if”.

This was a less impressive day for HMRC, and if the justification point goes against them I’m sure their idea of a prospective remedy will get nowhere (of course its potential appeal to them is that it would avoid the cost of back claims relating to unpaid CTC in the past).

I think judgment in this case will be for HMRC, though, dismissing Mr Humphreys’ appeal and upholding the Court of Appeal’s ruling. I think the Justices are likely to conclude that HMRC is right about the test for justification and that in the social context, a “bright lines” approach to awarding child tax credit, even if it leads to some distributive unfairness at the margins, is justified.

 

{ 2 comments… read them below or add one }

1 James Medhurst March 16, 2012 at 02:34

Hmm. Lots of interesting points here.

As to post hoc justification, I think the answer is that it is possible but that, if it was not relied upon at the time, there is unlikely to be sufficient evidence to discharge the burden of proof. This seems to be what was said in Hockenjos. There is also a credibility point. If not relied upon at the time, it can hardly have been a burning issue.

I think HMRC is right that, if the discriminatory impact is small, it will often be easier to justify. The problem is that, if a concession is made, there will be no statistics to show that size of the impact and, the burden of proof having shifted to the HMRC, it would have to have led statistical evidence itself in order to make the point good.

2 Tom ( iow) March 16, 2012 at 12:52

I would speculate that the number of cases this affects is fairly small, but when an affected case does arise, the impact is severe on the person. I don’t know if that counts as a small impact or not.

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