Tax Credits and Judicial Review
Judicial review
What is judicial review?
When can JR proceedings be brought?
On what grounds can decisions be subject to JR?
How to bring JR proceedings
What can the court do?
What are the advantages?
What are the disadvantages?
When might JR be useful in tax credit cases?
Further
information and advice
Tax Credits and Judicial Review is one of a series of Child Poverty Action Group in Scotland leaflets giving guidance to advisers and those working with families in Scotland about aspects of the tax credit system of particular concern. Child Poverty Action Group promotes action for the prevention of poverty among children and families with children.
Judicial review
Judicial review (JR) is a legal remedy which is sometimes appropriate in tax credit cases. This leaflet explains when JR proceedings can be brought and when they might apply to decisions made by the Revenue in tax credit cases. The terms used in this leaflet, and the process described, are relevant to JR in Scotland. In England and Wales the terminology and process are slightly different.
What is judicial review?
JR is the process by which the Court of Session reviews the legality of a decision made (or the failure to make a decision) by a ‘public body’. The Revenue counts as a ‘public body’.
When can JR proceedings be brought?
JR is only available when there is no alternative remedy, for example the right of appeal to an independent appeal tribunal or to the Social Security Commissioners. You will usually also be expected to have exhausted the available complaints procedure which, in tax credit cases, includes the internal complaints procedure, the Adjudicator’s Office and the Parliamentary Ombudsman (see CPAG in Scotland’s leaflet Tax Credits and Complaints).
In Scotland there is no specific time limit for bringing JR proceedings, but they must be brought as quickly as possible.
On what grounds can decisions be subject to JR?
Illegality |
Irrationality |
Procedural impropriety |
Where the law has been applied wrongly
Where regulations go beyond what an enabling Act of Parliament allows (they are ultra vires)
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Where no reasonable authority (‘public body’), properly instructed as to the law, could possibly have come to the decision
Where discretion has been wrongly exercised,
- eg. irrelevant considerations have been taken into account or relevant considerations have been ignored
- a blanket policy has been applied so as the merits of individual cases are not considered
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Where the public body fails to exercise its powers in accordance with procedure laid down by law
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How to bring JR proceedings
- You should write a letter to the Revenue setting out every point which you believe supports your case and requesting that it reconsiders its decision (this is not essential, but is useful as part of the process of exhausting all available avenues for challenging the decision in question).
- If the Revenue doesn’t put things right, you can raise a petition for judicial review and obtain a court order for service of this petition on the Revenue.
- This court order is usually granted without opposition unless some form of interim remedy is requested at the same time.
- If some form of interim remedy is requested the Revenue will usually have the chance to oppose this.
- If the court orders the service of the petition for judicial review on the Revenue it will also specify a date for hearing the case.
Legal help: JR is a complex legal procedure and you should seek advice from a solicitor. Depending on your income you might be entitled to Legal Aid.
What can the court do?
There are four main orders that the court can make in JR cases.
Reduction |
Specific performance |
Interdict |
Declarator |
This nullifies the decision.
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This orders the decision-making authority to carry out its legal duties.
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This orders the authority not to do something. |
This makes a statement of the parties’ legal rights. |
Damages are rarely awarded in JR cases.
What are the advantages?
JR can be very fast and effective and public bodies like the Revenue have to comply with orders made by the court. The letter prior to JR action can be very effective in settling cases quickly without having to go through the whole JR procedure.
What are the disadvantages?
JR is a complex and expensive procedure which you cannot realistically attempt without the assistance of a solicitor. If you are not eligible for Legal Aid the costs can be prohibitive.
When might JR be useful in tax credit cases?
JR is most likely to be useful where there is no right of appeal against a particular tax credit decision, or where you are disadvantaged by the Revenue failing to follow procedure laid down by law.
Example
Maria is single parent with 3 young children, one of whom is disabled. Maria was overpaid child tax credit last year because the Revenue wrongly awarded tax credits on the basis that two of her children are disabled. Maria did not realise that she was being overpaid. The Revenue is now recovering the overpayment from her ongoing award at a rate of 25%. This is causing Maria and her family hardship. She has asked the Revenue to ‘write off’ the overpayment because it was caused by official error and because it is causing her hardship. The Revenue has refused to do so.
There is no right of appeal against this decision. Maria could use the internal complaints procedure and also complain to the Adjudicator’s Office and to the Parliamentary Ombudsman and this might be a remedy she would be expected to use. However, if the family’s circumstances are such that the issue needs to be dealt with urgently then the complaints procedure may not offer an effective remedy. She could have grounds for JR on the basis that the Revenue may not have followed its own policy in relation to recovery of overpayments and consequently may not have exercised its discretion properly.
A letter could be written to the Revenue setting out all the reasons why it is believed that the Revenue's decision is the wrong one and that it should be changed. If the Revenue does not agree then Maria could raise judicial review proceedings. She could ask the court for an interim order, such as interim interdict to prevent the Revenue making deductions from her payments. To be successful with this she will have to show that she has an arguable case in her favour and also that she is so disadvantaged by the effect of the Revenue's decision that it should not be permitted to enforce the decision before the court has decided the case. The court has complete discretion whether or not to make any interim order. At any further hearing of the case the court will listen to legal arguments for Maria and the Revenue and decide what should be done. If it decides to reduce the Revenue's decision then the Revenue will have to make a fresh decision on Maria's request not to recover the overpayment.
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Further
information and advice
CPAG
in Scotland Tax Credits Project summary webpages
Child
Poverty Action Group in Scotland
0141 552 0552 advice line for advisers on benefits and tax credits,
Monday, Tuesday, Wednesday and Thursday 10am to 12pm
Email: advice@cpagscotland.org.uk
email advice for advisers on benefits and tax credits
Website: www.cpag.org.uk/scotland/taxcredits/
for more tax credit leaflets from CPAG in Scotland
 CPAG
publishes the Welfare
Benefits and Tax Credits Handbook, a comprehensive guide
to benefits and tax credits for claimants and advisers.
CPAG in Scotland’s
advice line is only for advisers. If you are having problems with
your own tax credit or benefit claim and are in need of advice you
should contact your citizens advice bureau or other local welfare
rights service.
HM Revenue and Customs (formerly the Inland Revenue)
Tax Credit Helpline 0845 300 3900
(textphone 0845 300 3909)
© Child
Poverty Action Group, February 2006
CPAG in Scotland’s Tax Credit Project is funded by the Scottish
Governmnent.
This fact
sheet was last updated February 2006
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