Supreme Court judgment: Humphreys v HMRC

by Carl Gardner on May 16, 2012

If you’re in the business of predicting court judgments, you can sometimes end up looking a mug. My last prediction wasn’t the best. Oh, well. At least the judges agreed with me on the time limit.

Anyway, while the downside of legal punditry can be a mild judicial mugging from time to time, the upside is that occasionally you manage to get it right. After the Supreme Court hearing in Humphreys v HMRC, about sex discrimination in the child tax credit system, I wrote:

I think judgment in this case will be for HMRC .. 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.

And so it’s proved, today’s judgment by Lady Hale (which which all the other Justices agree) coming to just those conclusions. To be fair, I don’t think this was a hard one to call, as the unanimous judgment perhaps suggests.

At paragraph 19 Lady Hale says (the links are mine, obviously; I look forward to the day when court judgments contain their own hyperlinks):

It seems clear from Stec .. that the normally strict test for justification of sex discrimination in the enjoyment of the Convention rights gives way to the “manifestly without reasonable foundation” test in the context of state benefits. The same principles were applied to the sex discrimination involved in denying widow’s pensions to men in Runkee v United Kingdom [2007] 2 FCR 178, para 36. If they apply to the direct sex discrimination involved in Stec and Runkee, they must, as the Court of Appeal observed (para 50), apply a fortiori to the indirect sex discrimination with which we are concerned.

The meat of her reasoning comes in paragraphs 29 to 31:

The state is, in my view, entitled to conclude that it will deliver support for children in the most effective manner, that is, to the one household where the child principally lives. This will mean that that household is better equipped to meet the child’s needs. It also happens to be a great deal simpler and less expensive to administer, thus maximising the amount available for distribution to families in this way …

.. The ideal of integrating the tax and social security systems, so as to smooth the transition from benefit to work and reduce the employment trap, has been attractive to policy makers for some time. The introduction of CTC (and working tax credit) was a step in that direction. In my view it was reasonable for government to take that step and to regard the targeting of child support to one household as integral to it …

.. It is also reasonable for a government to regard the way in which the state delivers support for children, and indeed for families, as a separate question from the way in which children spend their time.

and her conclusion is at paragraph 33.

For all the reasons given, I conclude that the “no-splitting” rule is a reasonable rule for the state to adopt and the indirect sex discrimination is justified.

Fortunately this result means the Supreme Court could avoid the extremely tricky technical legal question of what possible remedy it could give Mr. Humphreys, had he won.

Lady Hale couldn’t resist a judicial policy suggestion, with which I’m sure Lord Wilson must have heartily agreed, given what I called his impromptu judicial rant at the hearing about “the barrenness of the position of the family courts”:

Some might think that the ideal solution would lie with restoring to the family courts the power to make appropriate orders to deal with such payments, either by ordering one parent to share it with the other, or by ordering a periodical payment to take account of the benefits which one parent receives .. Unfortunately, the advent of the child support scheme has removed the possibility of doing justice from the courts. To restore it would obviously be the more rational solution to the problem under discussion.

Whether giving judges power to micromanage the distribution of child tax credit regardless of Parliament’s broad policy conclusion would really be the most rational solution from the point of view of children, the taxpayer or society at large, I’m less sure.

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