In The Queen (on the application of) The Motherhood Plan & Kerry Chamberlain v HM Treasury & HMRC [2021] EWCA Civ 1703, the Court of Appeal (CA) upheld the High Court's dismissal of a judicial review of the lawfulness of the Self-Employment Income Support Scheme (SEISS) on the basis that whilst discriminatory it was justified.
- The SEISS was introduced in response to the COVID-19 pandemic. The rate of the spread of the virus and the severe social and economic impact meant that a government response was required quickly.
- The size and complexity of the problem that faced HMRC in designing such a scheme was unprecedented. A method of allocating payments needed to be simple given the timescales, apply to as many people as possible but not be susceptible to fraud.
- The method of calculating the payments due to each individual was based on Average Trading Profits (ATP) for the previous three tax years (2016/17, 2017/18 and 2018/19).
- A charity, whose aim is to highlight the discrimination faced by pregnant women and those on maternity leave, and a self-employed mother sought a judicial review of SEISS on the basis that:
- The scheme indirectly discriminated against women who were pregnant or on maternity leave during the relevant years for the ATP as their trading profits were abnormally reduced due to their time off work.
- Alternative methods of calculation were available or possible meaning that the discrimination was not justified.
- This was a contravention of Article 14 of the European Convention on Human Rights (ECHR) (protection from discrimination) when read in conjunction with Article of the First Protocol (right to property).
The judicial review was dismissed by the High Court with the judge ruling that:
- Any indirect discrimination was immaterial.
- Even if this was not the case, the scheme as designed was justified in that discrimination in light of wider considerations.
On appeal, the Court of Appeal held:
- Indirect discrimination under Article 14 only requires 'disproprtionately prejudicial effects on a particular group'.
- The method of ATP put the group at a disadvantage as it was 'disproportionately unrepresentative of their hypothetical no-Covid earnings' and this disadvantage arose from the scheme itself.
- The High Court judge had been wrong to rule that any discrimination was immaterial. SEISS was indirectly discriminatory towards pregnant women and new mothers as a group.
- In consideration of whether such discrimination was justified, as allowed by the ECHR, the court acknowledged that the ATP was the obvious method to be used by the scheme.
- The main priorities in designing the scheme were speed and simplicity. The legislation was formed under two Directions and the first did not contain any special provisions due to those priorities. The court held that this was justifiable in the circumstances.
- Ministerial Briefing Notes showed recent mothers were considered in later notes. The pros and cons of the various ways to address the issue were discussed. Finding a method that resolved the issues without creating more hard cases and anomalies would require far more time and resources than was available.
- The second Direction did include a limited mitigation for all forms of parental leave. Anything more was simply not practical.
In summary, the CA found that the group were indirectly discriminated against due to the use of ATP as the method of calculation for the SEISS, but given the time and resource constraints and the difficulties in gathering accurate data, all but limited mitigation was justified. The appeal was dismissed.
Useful guides on this topic
Covid-19: Self-Employment Income Support Scheme (SEISS) (now ended)
Self-Employment Income Support Scheme (SEISS): support for the self-employed during the Coronavirus crisis. The fifth SEISS grant covering May to September 2021 was open for claims until 30 September 2021.
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