A landmark decision in the House of Lords concerning the meaning of ‘discrimination’ in the Disability Discrimination Act (DDA) 1995, not only has potential to revolutionise the application of the Act in employment law, but also relieves landlords of a very onerous restriction on their ability to take action in case of tenant default, where the tenant is disabled. Cases to date have concerned residential tenancies, but the law applies equally to business lettings.
BACKGROUND
The case concerned is London Borough of Lewisham v Malcolm [2008], which we reported on last year at the Court of Appeal stage (see IHL154, p115). Mr Malcolm (M) was a tenant of the London Borough of Lewisham (the Borough), enjoying security of tenure under the Housing Act 1985. He suffered from schizophrenia, though this was usually controlled by medication. The Borough did not know of his condition.
M exercised his right to buy, apparently with the intention of letting the property, but ‘jumped the gun’ by sub-letting before the sale to him had proceeded. This occurred during a phase in which M had not been taking medication to control his condition and accordingly his judgment was impaired, although it could not be said that his condition was the cause of the sub-letting.
Sub-letting was in breach of covenant, and removed M’s security of tenure. In line with its general policy of protecting its stock of social housing, the Borough served notice to quit and took possession proceedings. Its right to possession in these circumstances was not subject to any discretion on the court’s part, nor any consideration of reasonableness.
At first instance, M was unsuccessful in challenging the possession proceedings on disability discrimination grounds. That decision was reversed in the Court of Appeal.
LEGISLATION
The relevant provisions of the DDA 1995 are:
- Section 22(3)(c), by which: ‘It is unlawful for a person managing any premises to discriminate against a disabled person occupying those premises… by evicting the disabled person, or subjecting him to any other detriment’; and
- Section 24(1), which provides that for the purposes of s22, a person discriminates against a disabled person if: ‘for a reason which relates to the disabled person’s disability, he treats him less favourably than he treats or would treat others to whom that reason does not or would not apply’.
A PROBLEM OF INTERPRETATION
Section 24(1) logically requires that a ‘comparator’ be identified, that is, an ‘other to whom that reason does not or would not apply’. One can then compare how the landlord has treated or would treat such a person, as against how the landlord has actually treated the disabled person. In identifying the appropriate comparator, however, the courts have struggled with the apparently innocuous words ‘that reason’. To understand why, an example may help.
Imagine that a tenant, A, suffers from a mental condition which renders them effectively unemployable. As a result, they are unable to pay any rent, and the landlord seeks to evict them. The reason for evicting A is arrears of rent; however, this reason is related to A’s disability.
If one interprets the words ‘that reason’ in s24(1) as referring back simply to the earlier words ‘a reason’, the appropriate comparator is a tenant (whether mentally disabled or not) who is not in arrears of rent. Would they be evicted? Of course not, therefore the disabled person has been treated less favourably than the comparator, therefore there is unlawful disability discrimination. That is what one may call the ‘wider’ interpretation.
The ‘narrower’ interpretation is to regard ‘that reason’ as referring back to the words ‘a reason which relates to the disabled person’s disability’. This interpretation brings the disability back into the equation, so that the appropriate comparator becomes a tenant without a mental disability who is in arrears of rent. Would they be evicted? Yes of course they would, so the disabled person is not treated less favourably and, therefore, there is no discrimination.The House of Lords was faced with a choice between these two interpretations.
A related issue concerned the Borough’s lack of knowledge of M’s schizophrenia. Could it be said to have sought possession ‘for a reason which relates to [his] disability’ without any knowledge of the disability?
THE COMPARATOR ISSUE
Since the decision in Clark v Novacold Ltd [1999], the courts have been proceeding on the basis that the wider interpretation is the correct one. Thus, for example, in both North Devon Homes Ltd v Brazier [2003] and Manchester City Council v Romano [2004], the reason for the attempt to evict was anti-social behaviour towards other tenants, arising out of mental disability. In both cases, the court took as the comparator a tenant whose behaviour was not anti-social, and who accordingly would not have been evicted. The result, therefore, was unlawful discrimination (although in Romano, the landlord was able to take advantage of the statutory defence of justification).
As their lordships pointed out in Malcolm, the logical consequence of adopting the wider interpretation is that the comparison will always result in a finding of discrimination, since without the reason for the unfavourable treatment, there would be no unfavourable treatment. The comparison becomes a pointless exercise.
If the narrower interpretation is adopted, though, it becomes much harder for the disabled person to establish discrimination. Where there is a legal ground for eviction, a landlord will always say: ‘I took no account of their disability; I would have evicted whether or not they were disabled.’ Proving the contrary may be an uphill struggle.
AN ISSUE OF POLICY
The choice between the two interpretations comes down to a question of the intended policy behind the DDA 1995 and related legislation. As Baroness Hale observed in Malcolm:
‘This raises questions about the fundamental principles underlying disability discrimination law. Is it intended simply to secure that disabled people are treated in the same way as other people who do not have their disability? Or is it intended to secure that they are treated differently from other people in order that they can play as full as possible a part in society whatever their disabilities?’
It is easy to state the question, but not so easy to come to a satisfactory answer. As Mummery LJ (whose views on the question appear to have fluctuated somewhat) remarked in Novacold:
‘… anyone who thinks there is an easy way of achieving a sensible, workable and fair balance between the competing interests has probably not given much serious thought to the problem’.
Lord Neuberger, while acknowledging in his opinion in Malcolm that ‘anti-discrimination statutes should, at least in general, be construed benevolently towards their intended beneficiaries’, set out in typically lucid fashion how the wider interpretation:
‘… could produce a particularly unjust regime for landlords... under s22(1) and (4), a landlord could not lawfully refuse to let, or permit an assignment, to a person with a record of non-payment of rent due to disability, so he would often be obliged to let to such a person. Thereafter, under s22(3)(c), he might never obtain possession against that person for non-payment of rent. Indeed… the landlord could not even sue for rent arrears’.
He added that:
‘The wider construction… would mean that a licensee, whose licence had expired and who refused to vacate because of physical or mental disability, could not be evicted, or even sued for damages, by virtue of s22(3)(c). Even a person who entered as a trespasser would… appear to be immune from suit if his entry or remaining on the property was attributable to his disability.’
These outcomes he described as ‘startling, indeed penal, results’.
In the event, four out of the five members of the House of Lords (Baroness Hale dissenting) concluded that the narrower construction was the correct one, and accordingly overruled Novacold.
KNOWLEDGE OF DISABILITY
For good measure, the House of Lords was unanimous in holding that there could generally be no unlawful discrimination unless the person alleged to have discriminated had some degree of knowledge of the disability. This is particularly welcome because a finding of unlawful discrimination may not simply determine that some action taken was unlawful, it may also give rise to an action for damages. That would be a hard outcome in circumstances where the ‘discriminator’ had no knowledge of the disability.
NEED FOR REFORM?
Novacold having been overturned is big news in disability discrimination law. For landlords, the ‘startling, indeed penal, results’ identified by Lord Neuberger are no longer a threat. It was apparent, though, from remarks made by various of the judges, that they found it regrettable to be faced with such a choice between extremes. On the one hand, penalising holders of private property rights to an unacceptable degree and on the other, emasculating the anti-discrimination legislation.
Though their lordships did not indicate that they considered reform necessary, it is perhaps becoming apparent that the law as presently formulated is struggling, in cases such as this, to achieve that ‘sensible, workable and fair balance between the competing interests’ to which Mummery LJ referred. Reading between the lines, their preference would have been for a framework that gave the courts discretion to achieve that balance on the basis of all the circumstances of each individual case. While it may be difficult for any government to contemplate giving the courts quite that degree of latitude, there is certainly a case for a review of this aspect of the DDA 1995.
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