The Times - UK (2020-07-27)

the times | Monday July 27 2020 1GM 51

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A failure in the universal credit
system to accommodate claim-
ants who were usually paid their
salary on a particular day each
month if their usual payment date
fell on a weekend or bank holiday
was irrational and unlawful.
The Court of Appeal so stated
when dismissing the appeal of the
Secretary of State for Work and
Pensions against a ruling by the
Divisional Court (Lord Justice
Singh and Mr Justice Lewis)
([2019] EWHC 23 (Admin)) allow-
ing claims for judicial review by
the claimants, Danielle Johnson,
Claire Woods, Erin Barrett and
Katie Stewart, about the method
of calculation of their universal
credit.
Mr Edward Brown for the sec-
retary of state; Ms Jenni Rich-
ards, QC and Mr Tom Royston
for the first claimant; Ms Jenni
Richards, QC and Mr Stephen
Broach for the second to fourth
claimants.
Lady Justice Rose said that the
case concerned the application of
the provisions of the Universal
Credit Regulations 2013 (SI 2013
No 376) which set out how a
claimant’s earned income was cal-
culated for each monthly assess-
ment period within that claim-
ant’s period of entitlement to uni-
versal credit. The amount of
earned income in an assessment
period was an important element
when working out how much ben-
efit the claimant would be award-
ed for that assessment period.
The dispute arose because,
broadly, the system for identifying
the income earned by a claimant
in a particular assessment period
did not accommodate the fact that
people who were usually paid
their salary on a particular day
each month, such as on the last
day of the month, would in fact be
paid on a different day if their
usual payment date fell on a week-
end or bank holiday.
In certain circumstances that
led to two monthly salary pay-
ments falling within one of the
monthly assessment periods ap-
plicable for that claimant. The
claimant’s universal credit award
in respect of that assessment
period was then greatly reduced in
response to the apparently high
level of income received.
In the next assessment period
they would typically receive no
monthly salary payment. In re-
sponse to that apparent sudden
drop in income, they would subse-
quently get a much higher univer-
sal credit award: “the non-bank-
ing day salary shift”.
Although it might be thought
that would even itself out over
time, there were two reasons why
the claimants argued that was not
a sufficient answer.
The first was that the great fluc-
tuations in income each month,
aggravated by the fact that univer-
sal credit was paid in arrears,
made it very difficult for claimants
to budget for their stable monthly

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Universal credit system was

irrational as to calculation of

some claimants’ earned income

outgoings. That caused them to

incur additional costs such as

overdraft fees, high interest on

short-term loans or unpaid bills,

and in some instances court fees

to prevent landlords evicting

them if they fell behind with their

rent.

Even more concerning was that

claimants affected by the problem

irrevocably lost money over the

course of a year because they lost

the opportunity to receive the

work allowance for the assess-

ment period when they appeared

to have nil income. The work al-

lowance was the amount of salary

that a universal credit claimant

could earn before their award of

benefit was reduced.

The Divisional Court held that

the problem had arisen because

the secretary of state had wrongly

construed regulation 54 of the

Regulations which set out the

general principles for calculating

earned income.

Her Ladyship had reluctantly

come to the conclusion that the

Divisional Court had fallen into

error in construing regulation 54.

The provision could not bear the

meaning they gave it without

substantially undermining the

scheme as parliament intended it

to operate.

The cohort of people likely to be

claiming universal credit would

contain many people whose work

was of a casual, sporadic nature

and who received their payment

for that work in lump sums or in-

stalments rather than in regular

amounts. The general principles

set out in regulation 54 had to ap-

ply to all those kinds of work and

all those patterns of income. The

regulation was not specific to

those in employment.

The wording of regulation 54

was designed to avoid the need for

the kind of examination of the re-

lationship between the work done

and the amount received in any

one assessment period envisaged

by the Divisional Court. That was

essential because the system of

universal credit was intended to

be automated so that the calcula-

tion of the monthly amount could

be performed by a computer

rather than a department officer

able to make an evaluative deter-

mination.

That said, her Ladyship agreed

with the Divisional Court’s de-

scription of the way that the Regu-

lations applied to the claimants as

being “odd in the extreme”.

The claimants alleged that

what was irrational was the initial

and ongoing failure of the secre-

tary of state to include in the Reg-

ulations an express adjustment to

avoid the consequence of the

combination of the non-banking

day salary shift and the applica-

tion of regulation 54 for those in

the position of the claimants for

whom the consequence of regula-

tion 54 was arbitrary; and the fact

that there was no policy reason

why the particular claimants

should face the difficulties that

they described.

The secretary of state’s case was

that a solution had not been de-

vised or implemented because

other factors outweighed the de-

sirability of finding an answer to

the problem. It was the rationality

of that conclusion that was the

subject matter of the challenge.

The secretary of state had put

forward no reason why the date

on which the claimants submitted

their claim for universal credit

should result in them losing a con-

siderable amount of money each

year for however long their enti-

tlement lasted. In her Ladyship’s

judgment that was the most egre-

gious aspect of the way the system

worked.

Devising a computer pro-

gramme capable of recognising

and responding to the huge num-

ber of factors covering every as-

pect of a claimant’s family and fi-

nancial circumstances — their

earned and unearned income,

their receipt of other state benefits

or compensation payments that

might need to be taken into ac-

count or disregarded, their re-

sponsibility for children or other

caring responsibilities, their own

disability or that of a household

member, their housing situation

and so forth had to be an exercise

of mind-boggling complexity.

Her Ladyship could not accept

that the programme could not be

modified to ensure that the com-

puter could recognise that the end

date of a particular claimant’s as-

sessment period coincided with

their salary pay date so that if the

latter date fell on a non-banking

day the receipt of two roughly

equal payments was likely to be

the result of a salary payment

being made a day early and the

second payment should be moved

into the next assessment period. It

might not solve the problem in

every instance but it would go a

long way towards doing so.

The threshold for establishing

irrationality was very high, but it

was not insuperable. The present

case was one of the rare instances

where the secretary of state’s re-

fusal to put in place a solution to a

very specific problem was so irra-

tional that the threshold was met

because no reasonable secretary

of state would have struck the bal-

ance in that way.

Lord Justice Irwin agreed.

Lord Justice Underhill, agree-

ing, said that non-banking day

salary shift was common and en-

tirely predictable, and its arbitrary

effect on entitlement to universal

credit was now well-recognised,

whether or not it was actually pre-

dicted when the scheme was being

designed. That effect had a se-

verely harmful impact, which

they could do nothing to avoid, on

very large numbers of vulnerable

claimants.

Parliament could not have in-

tended the rule-making power to

be exercised in a way which pro-

duced so arbitrary and harmful an

impact on the claimants and the

very many other claimants who

were in the same position.

The present case was a case

which turned on its own very

particular circumstances. It had

no impact on the lawfulness of

the universal credit system more

generally.

Solicitors: Treasury Solicitor;

Leigh Day Solicitors; Child

Poverty Action Group.

Court of Appeal
Published July 27, 2020
Regina (Johnson and others) v
Secretary of State for Work and
Pensions
Before Lord Justice Underhill, Lord Justice
Irwin and Lady Justice Rose
[2020] EWCA Civ 778
Judgment June 22, 2020

There is no Court Circular for July 25 and 26

NOTICE OF CAPITAL

REDUCTION

Cr­2 020 ­ 002677

In The High Court Of Justice

Business and Property Courts Of

England And Wales

Insolvency and Companies List

(ChD)

In The Matter Of AssetCo P.L.C 

And In The Matter Of The

Companies Act 2006

Notice is hereby given that, on 13

July 2020, a Claim was issued in

the High Court of Justice, Business

and Property Courts of England

and Wales, Companies Court

(ChD), by AssetCo plc (the

“Company”) seeking an order

confirming the reduction of the

share capital of the Company by

cancelling (i) all issued deferred

shares of 24 pence each (i i) all

issued A deferred shares of 495

pence each and (iii) the balance

standing to the credit of the share

premium account of the Company.

And notice is further given that

the said Claim is directed to be

heard at a remote hearing before

a Judge of the Insolvency and

Companies Court at The Rolls

Building, 7 Rolls Buildings, Fetter

Lane, London, EC4A 1NL on

Tuesday, 4 August 2020 at 10.30

am.

Any creditor or shareholder of the

Company desiring to oppose the

making of an Order for the

confirmation of the above

reduction of share capital should

contact the Company’s solicitors in

advance of such hearing in order

that arrangements may be made

for remote attendance by such

creditor or shareholder at such

hearing.A copy of said Claim will

be furnished to any such person

requiring the same by the

undermentioned Solicitors on

payment of the regulated charge

for the same.

Dated: 27 July  2020

Geldards L.L.P, Dumfries House,

Dumfries Place, Cardiff, CF10 3ZF

[email protected]

Solicitors for the above­named

Company

CR-2 020 - 002801

IN THE HIGH COURT OF JUSTICE

BUSINESS AND PROPERTY

COURTS OF ENGLAND AND WALES

COMPANIES COURT (Ch D)

IN THE MATTER OF OCTOPUS

TITAN VCT PLC

AND IN THE MATTER OF THE

COMPANIES ACT 200 6

NOTICE IS HEREBY GIVEN that a Claim

Form was on the 15 July 2020 issued in

Her Majesty’s High Court of Justice

seeking the confirmation of the

cancellation of the share premium

account as at 31 October 2017 of the

above named Company. AND NOTICE

IS FURTHER GIVEN that the said Claim

Form is directed to be heard before

the Insolvency and Companies Court

Judge at the Royal Courts of Justice,

The Rolls Building, 7 Rolls Building,

Fetter Lane, London EC4A 1NL on

Tuesday 4 August 2020 at

10.30am. Any Creditor or Shareholder

of the said Company desiring to oppose

the making of an Order for the

confirmation of the said cancellation off

share premium account as at 31

October 2017 should appear at the time

of the hearing in person or by Counsel

for that purpose. If the hearing is held

remotely (including by Skype), any

Creditor or Shareholder who wishes to

appear should contact

[email protected] in

advance of the hearing. A copy of the

said Claim Form will be furnished to

any such person requiring the same by

the undermentioned Solicitors on

payment of the regulated charge for

the same.

DATED this 27th day of July 202 0

Howard Kennedy LLP

No. 1 London Bridge

London SE1  9 BG

Ref: SH3

Tel: 020 3755 600 0

Fax: 020 3 650 6847

Solicitors for the above-named

Company

BROWN Joan died peacefully on 18th

July 2020, aged 86. Beloved wife of the

late Michael and much loved mother of

Miranda and Jonathan. Devoted

grandmother to Freddie, Corrie,

Alexander, Liz and Nicholas. Private

cremation with a memorial service at a

later date. No flowers please but

donations to Dr Graham's Homes,

Kalimpong, India c/o WJ Wright,

Rectory House, High Street, Bourton on

the Water, GL54 2AP.

LAIDLAY Frances Diana Janet (née

Dobbie) died on 14th July 2020, aged 8 0

Much loved wife of the late Malcolm,

loving and dearly missed mother of

Cleland, Catriona, Natasha and Rosalie,

beloved grandmother and great

grandmother.Private funeral due to

COVID-19 regulations. Donations to

Dorothy House if so wished, c/o CS

Bowyer, Funeral Directors, 2 The

Bullpit, Bradford on Avon BA15 1NB.

Tel: 0122 5 863208.

CREATURA: FIRST ANNIVERSARY

Mr Mario Creatura wishes his wife,

Mrs Amy Creatura, a very happy first

wedding anniversary. As new parents

to Milo and Rocco, may the years ahead

be as happy and love-filled as their first

as husband and wife.

BOYAGIS John 92 peacefully on July

2 2nd. Dearly loved by Claudia his wife,

his children Paula, Sandy, Julia and his

5  grandchildren. Memorial service at a

later date

Anniversaries

Legal Notices

Deaths

Legal News

Claudia has never known

a life without pain.

Claudia is living with Epidermolysis Bullosa (EB) –

a painful genetic skin blistering condition which

makes her skin as fragile as a butterfly’s wing.

To learn more about butterfly children like Claudia

go tobutterflychildren.org.uk

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