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09 June 2023

Third party deductions: Bindmans client, Helen Timson, successfully defends government’s appeal

4 mins

The Court of Appeal has today rejected all arguments made by the Secretary of State in Helen Timson, R (on the application of) v The Secretary of State for Work and Pensions [2023] EWCA Civ 656. 

The court confirmed that guidance issued by the Department for Work and Pensions (DWP) in relation to the ‘Third Party Deductions’ Scheme is unlawful because it allowed deductions to be made without first giving the person affected by the deductions a chance to have their say.

The DWP administers the ‘Third Party Deductions’ Scheme. The scheme gives private utility companies and others the ability to apply to the DWP for a proportion of a person’s benefits to be paid direct to them, to repay debt that they say is owed, and to meet ongoing usage costs.

Miss Helen Timson brought a judicial review challenging the way that the DWP operates the scheme. Following a High Court judgment in her favour last September, the DWP’s appeal against that decision was heard by the Court of Appeal in April 2023. 

All judges agreed that the way the DWP currently operates the scheme is unfair. Lord Justice Edis said (paragraphs 65 and 66 of the judgment) that:

‘[…] The submission of the Secretary of State in response to both Grounds 1 and 2 comes down to the proposition that because only in very few cases can the personal circumstances of the claimant or their family make any difference, there is no point finding out what they are. This is very close to saying that the interests of the claimant are irrelevant, which is precisely the opposite of what the Regulations say. The Secretary of State can only make a TPD direction after forming an opinion or being satisfied about the interests of the particular claimant and family under consideration. The Regulations therefore require that their interests are assessed in the light of all relevant information which must include anything they wish to say on the subject. After forming that judgment the Secretary of State may make a TPD direction. That involves a discretion.

In my judgment, the Regulations, by framing the decision-making as they do, require a consideration of the interests of the individual claimant and their family. Under the Guidance, however, the decision-maker has the option of contacting them, or of investigating their benefit records, but the Guidance allows a decision to be made where the claimant or their family has been given no opportunity to supply information beyond what the utility company puts in the spreadsheet. This appears to me to be obviously unfair.’

Today’s ruling has confirmed Miss Timson’s earlier victory in the High Court. It is also important for those who might be affected by deductions in the future. As recorded in the High Court judgment, there were over 250,000 deductions in respect of water, electricity and gas debts last year.

As a result of this judgment, the way that the DWP operates the ‘Third Party Deductions’ Scheme will need to change significantly. The Court of Appeal has made it clear to DWP decision-makers that benefit claimants should be given the opportunity to make representations and/or provide information prior to a decision to make a deduction to a utility company being taken.

This judgment applies to deductions for utility charges from legacy benefit (i.e. non-Universal Credit) only. The DWP can make deductions from benefit for other things which don’t have the same statutory requirement to be in a person’s ‘interests’ (e.g. for council tax, fines, and child support) and so will not be caught by this judgment.

Miss Timson is represented by Emma Varley of Bindmans LLP. Jenni Richards KC of 39 Essex Chambers and Tom Royston of Garden Court North Chambers are instructed as counsel.

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