In February, we wrote about the application made by the Fire Brigades Union and the British Medical Association (and other trade unions) to the High Court for judicial review of the Government’s proposed method of paying the McCloud remedy costs.  On 10 March, Mr Justice Choudhury dismissed the application on all grounds, concluding that the legal bases on which the claims were brought by the unions were not made out.

The Court of Appeal has now granted permission to appeal, although the likely timing of the appeal hearing is not yet known. 

The Claimants are seeking to challenge the Government’s approach on how to treat the estimated £17bn of costs associated with addressing the unlawful age discrimination in public service pension schemes identified in McCloud.   

In the High Court judgment, Choudhury J did acknowledge that the McCloud remedy would represent “substantial additional cost” but concluded that there was nothing in the wording of the Public Service Pensions Act 2013 to prevent the Government from passing on the McCloud costs to members.  In exploring the purpose of the cost control mechanism, he stated that it was designed to control the cost of the reformed schemes by setting permissible margins (with a floor and ceiling) and ensuring that steps are taken to bring the cost back to the target cost if those margins are exceeded.  It was held that there was nothing to exclude any particular category of type of costs from the scope of the cost control mechanism, meaning that the McCloud remedy costs could legitimately form part of the calculations.

One of the grounds for complaint was that Government’s actions were indirectly discriminatory on the grounds of age, race and sex (on the basis that members of the reformed 2015 public sector schemes with these protected characteristics were disadvantaged to a greater extent).  Whilst the judge agreed that the shifting of such costs on to members would lead to inequalities, he concluded that age was not at the crux of the issue and that the inequalities were inherent to the nature of the remedy itself.

With the unions now having a bite at the cherry to challenge the Government’s decision, we await the Court of Appeal’s consideration of these issues with interest.

This blog post was written by Hannah Taylor and Shannon Willett.