EHRM, 14-02-2012, nr. 36571/06

The applicant submitted that the basis upon which the Secretary of State could recover overpaid benefit from her possessions involved discrimination contrary to Article 14 because it treated persons in analogous situations differently and it treated in the same manner those whose situations were significantly different.

First, she submitted that those who could not reasonably be expected to report a material fact because they were not aware of it were treated differently from those who could not reasonably be expected to report it because they were unaware of the requirement to report it. These two groups were in an analogous situation because neither could reasonably be expected to report the fact and they were equally not to blame for not reporting it. Secondly, she complained that those who were incapable of understanding that they were required to report a fact were treated the same as those who were capable of understanding the requirement to report. The capacity or incapacity to report a fact was a personal characteristic for the purposes of Article 14 of the Convention.

The applicant complained that in neither case was there any objective and reasonable justification for such treatment, especially as the basis for liability to repay overpaid benefit was personal fault. Moreover, she complained that the discriminatory treatment demonstrated a failure to recognise the particular difficulties experienced by persons with learning disabilities.

With regard to the alleged difference in treatment between those who could not reasonably be expected to report a material fact because they were not aware of it and those who could not reasonably be expected to report it because they were unaware of the requirement to report it, the Government relied on the findings of the Court of Appeal, which held that there was no proper analogy between the two situations because the former involved a straightforward proposition of logic while the latter involved very different questions of cognitive capacity and moral sensitivity. Whereas it was reasonable to expect decision-makers to assess whether a claimant was aware of a fact, it was a much more difficult and complicated matter for them to decide whether a claimant's cognitive capacity and moral sensitivity rendered them able or unable to understand the materiality of that fact, and whether any such claimant could reasonably be expected to report it.

Further, the Government submitted that such a distinction was not based upon any ‘personal characteristic or status’, which was an essential requirement of Article 14 of the Convention (Kjeldsen, Busk Madsen and Pedersen v. Denmark, 7 December 1976, Series A no. 23). In particular, they submitted that this was not a distinction on grounds of disability, as a claimant could be aware of a fact but unable to report it for a reason entirely unrelated to disability, such as a failure to understand instructions.

With regard to the applicant's alternative formulation, the Government contended that section 71 did not seek to attribute blame. The underlying policy was to permit recovery, regardless of whether the failure to disclose was excusable or not. In any case, the Government argued that the distinction suggested by the applicant was again not one which was based on a personal characteristic.

Alternatively, the Government contended that if the applicant succeeded in establishing that there had been discrimination, then justification had clearly been made out. It was well-established that Contracting States had a broad margin of appreciation in determining features of their social security systems and that decisions taken in this context would be respected by the Court unless they were ‘manifestly without reasonable foundation’ (see, for example, Carson and Others v. the United Kingdom, no. 42184/05, § 73, 4 November 2008).

Against the backdrop of the wide margin of appreciation, the Government submitted that section 71 manifestly pursued the legitimate aim of ensuring that claimants for certain social security benefits were not permitted to retain sums of money to which they were not entitled because they did not fulfil the conditions of entitlement at the material time. The recovery of overpaid benefits served to maximise the resources available within the social security system for the payment of benefits to claimants who did meet the conditions of entitlement. The sums involved were significant across the social security system as a whole. Overpayments of Income Support identified in 2008/9 totalled almost GBP 280 million, of which approximately GBP 173 million was considered to be recoverable by the Secretary of State.

Moreover, the Government pointed out that the relatively broad test of liability under section 71 was counter-balanced by a number of other features of the social security system which served to reduce its adverse impact on benefit claimants. For example, a claimant would only be liable to repay overpaid benefit if she had acted in breach of a legal obligation to disclose; domestic law provided for the appointment of a third party to act on behalf of a claimant who might otherwise have difficulty complying with their obligations; section 71 did not permit the Secretary of State to charge interest on overpaid sums; and finally, there was a limit on the maximum amount which could be recovered each week and the Secretary of State could, in certain circumstances, apply his policies on abatement or waiver.

The Government therefore submitted that the applicant was not required to bear an ‘excessive burden’ (see, for example, Moskal v. Poland, cited above, § 73).

The Court has established in its case-law that only differences in treatment based on an identifiable characteristic, or ‘status’, are capable of amounting to discrimination within the meaning of Article 14 (Kjeldsen, Busk Madsen and Pedersen, cited above, § 56). Moreover, in order for an issue to arise under Article 14 there must be a difference in the treatment of persons in analogous, or relevantly similar, situations (D.H. and Others v. the Czech Republic [GC], no. 57325/00, § 175, ECHR 2007; Burden v. the United Kingdom [GC], no. 13378/05, § 60, ECHR 2008-). Such a difference of treatment is discriminatory if it has no objective and reasonable justification; in other words, if it does not pursue a legitimate aim or if there is not a reasonable relationship of proportionality between the means employed and the aim sought to be realised.

Article 14 does not prohibit a Contracting State from treating groups differently in order to correct ‘factual inequalities’ between them; indeed in certain circumstances a failure to attempt to correct inequality through different treatment may in itself give rise to a breach of the Article (see Case‘relating to certain aspects of the laws on the use of languages in education in Belgium’ (merits), 23 July 1968, pp. 34–35, § 10, Series A no. 6, and Thlimmenos v. Greece [GC], no. 34369/97, § 44, ECHR 2000-IV).

The Contracting States enjoy a margin of appreciation in assessing whether and to what extent differences in otherwise similar situations justify a different treatment (Burden v. the United Kingdom, cited above, § 60). The scope of this margin will vary according to the circumstances, the subject-matter and the background. A wide margin is usually allowed to the State under the Convention when it comes to general measures of economic or social strategy. Because of their direct knowledge of their society and its needs, the national authorities are in principle better placed than the international judge to appreciate what is in the public interest on social or economic grounds, and the Court will generally respect the legislature's policy choice unless it is ‘manifestly without reasonable foundation’ (Stec and Others v. the United Kingdom, [GC], nos. 65731/01 and 65900/01, § 52, ECHR 2006).

In the present case the applicant has claimed that the difference in treatment between persons who could not reasonably be expected to report a material fact because they were not aware of the fact and those who could not reasonably be expected to report a fact because they were not aware of its materiality was discriminatory. However, the Court agrees with the Court of Appeal that these two groups could not be said to be in analogous, or relevantly similar, situations. On the contrary, although neither could be said to be ‘to blame’ for the failure to report, the Court considers the situation of persons who are not aware of a fact to be qualitatively of a different nature to that of persons who are aware of a fact but who are not aware of its materiality. As the Court of Appeal found, the proposition that you cannot report something that you do not know is a simple proposition of logic, whereas the proposition that you cannot report something you do not appreciate you have to report depends on difficult questions of cognitive capacity and moral sensitivity which vary from person to person.

The Court considers the applicant's alternative formulation, namely that, as someone who did not have the capacity to understand the obligation to report, she should have been treated differently from someone who did, to be somewhat more persuasive. It appears to the Court that the situation of these two groups is sufficiently different to require the respondent State to objectively and reasonably justify its failure to treat them differently.

That being said, the Court accepts that requiring decision-makers to assess levels of understanding or mental capacity before deciding whether or not overpaid benefits were recoverable would hinder their recovery and thereby reduce the resources available within the social security fund. It therefore considers that the decision not to treat the applicant differently from someone who had the capacity to understand the requirement to report pursued a legitimate aim, namely that of ensuring the smooth operation of the welfare system and the facilitation of the recovery of overpaid benefits.

With regard to the question of proportionality, the Court recalls that in the context of Article 1 of Protocol No. 1 it has held that public authorities should not be prevented from correcting mistakes in the award of benefits, even those mistakes resulting from their own negligence. Holding otherwise would be contrary to the doctrine of unjust enrichment, would be unfair to other individuals contributing to the social security fund, and would amount to sanctioning an inappropriate allocation of scarce public resources. However, the Court has observed that the above general principle cannot prevail in a situation where the individual concerned is required to bear an excessive burden as a result of a measure divesting him or her of a benefit (Moskal v. Poland, cited above, § 73).

In the present case the Secretary of State took a number of steps to ensure that the applicant was not required to bear an excessive burden. In particular, the Court observes that she was not required to pay interest on the overpaid sums, there was a statutory limit on the amount that could be deducted each month from her award of income support, and the amount to be repaid was in fact reduced to reflect the fact that during the material time she was entitled to, but had not been in receipt of, a disability allowance. Indeed, the Court observes that it would have been open to the applicant to request that the Secretary of State waive his right to recover the overpaid benefit if there was evidence that recovery would be detrimental to her health or welfare. As she did not make any such request, the Court cannot accept that the recovery would have had such a detrimental impact.

The foregoing considerations are sufficient to enable the Court to conclude that any failure to treat the applicant differently from persons who understood the reporting requirement was objectively and reasonably justified.

There has accordingly been no violation of Article 14 of the Convention read together with Article 1 of Protocol No. 1.