Disability comparator test thrown into doubt

Consultant editor Darren Newman looks at a recent housing case in which the House of Lords ruled that the approach to the comparator in disability-related discrimination cases established in Clark v TDG Ltd t/a Novacold is wrong.

One of the most significant cases of this summer with regard to employment law is a House of Lords decision on housing. In London Borough of Lewisham v Malcolm [2008] IRLR 700 HL, the Lords held that there was no disability discrimination when the Borough of Lewisham sought possession of Mr Malcolm's council flat on the grounds that he had forfeited his lease by moving out and subletting it. He argued that he had done so only because his mental illness had impaired his judgment and led him to behave irrationally. In ruling that there was no discrimination, the House of Lords has cast doubt on the leading employment law case of Clark v TDG Ltd t/a Novacold [1999] IRLR 318 CA.

Under the Disability Discrimination Act 1995, a person discriminates against a disabled person if, "for a reason which relates to the disabled person's disability", he or she treats the person less favourably than he or she treats, or would treat, others to whom "that reason does not or would not apply". In Clark, the Court of Appeal held that an employee dismissed for absence had been dismissed for a reason that related to his disability because his disability had caused his absence. The Court went on to hold that the comparator - a person to whom "that reason" did not apply - was an employee who was not absent.

The effect of this reasoning is that the comparison exercise is rendered essentially meaningless. Once it has been established that the treatment is for a reason that "relates" to the disabled person's disability, a finding that someone to whom "that reason" did not apply would not be treated in that way is inevitable, because without "that reason" the treatment would not have occurred.

Although the Clark approach sets the bar very low for establishing less favourable treatment, in the employment context, the defence of justification is relatively easy to establish. The employer need show only that the reason for the treatment is "substantial" and "material to the circumstances of the case". In cases such as Clark, where the employee had been absent for a year, one would expect the defence to be made without too much difficulty.

However, in Lewisham, a majority of the House of Lords held that the comparison drawn in Novacold is wrong. In the context of s.24 of the Act, which covers the leasing of premises, the majority held that the correct comparator for Mr Malcolm was not someone who had not sublet his or her flat (as suggested by Clark), but someone who was not disabled and who had sublet his or her flat. Since there was no doubt that anybody who had sublet his or her flat in breach of the lease would have been treated in the same way, it followed that there was no discrimination.

One factor that was clearly important in this case is that the defence of justification is much narrower in relation to this sort of discrimination than it is in relation to employment. Under s.24 of the Act, discrimination can be justified only on specific grounds, none of which applied here. This meant that, if Mr Malcolm established that he had been treated less favourably for a reason related to disability, his claim would be bound to succeed. Their Lordships clearly found such a situation unacceptable. However, in casting severe doubt on the correctness of Clark, they have left the law relating to disability and employment in a state of uncertainty.

In practical terms, the effect may not be all that great. The key protection for employees in the context of the Disability Discrimination Act 1995 is the duty to make reasonable adjustments, and a drastic narrowing of the scope for claiming less favourable treatment should not affect this.

However, it is never desirable for the law to be in a state of confusion. In his judgment, Lord Neuberger allowed for the possibility that Clark could be right in relation to employment, but wrong in relation to s.24 - although this does not seem a satisfactory solution. The Act needs to be recast so that the scope of discrimination is made clear. A single Equality Bill is due in the next parliamentary session. Is it too much to hope that parliament will express a clear view about what should and should not amount to disability discrimination?