On Friday 10 March the Administrative Court handed down an important judgment in R (Fire Brigades Union, The British Medical Association and ors) v HM Treasury and ors [2023] EWHC 527 (Admin), a case estimated to be worth £19 billion.
The two trade unions, the FBU and the BMA, brought judicial review challenges to the decision of HM Treasury to make the Public Service Pensions (Valuation and Employer Costs Cap) (Amendment) Directions 2021. The challenges concerned the ‘Costs Cap Mechanism’ or ‘CCM’, which is a mechanism intended to control the costs of public pension schemes. It operates by modifying members’ benefits (and/or contributions) should the measured cost of pension provision deviate from a set target. The CCM was modified by the 2021 Directions to reflect the costs of what has been called ‘the McCloud Remedy’, which follows the decision in Lord Chancellor v McCloud & Ors [2018] EWCA Civ 2844. The costs of the McCloud Remedy are estimated to be £19 billion across the public service.
In a wide-ranging case, the unions brought a total of 8 grounds of challenge: (1) Article 6 ECHR, (2) legitimate expectation, (3) Padfield, (4) indirect age, race and sex discrimination, (5) error of statutory interpretation, (6) failure to consult, (7) breach of the PSED and (8) Tameside. Mr Justice Choudhury dismissed the application for judicial review on all grounds. The unions are seeking permission to appeal.
Nigel Giffin KC and Oliver Jackson acted for HM Treasury, the Secretary of State for the Home Department and the Secretary of State for Health and Social Care, as part of a multi-chambers counsel team.
The judgment is available here.
