Landmark Ruling Sparks Warning to Local Councils: As its claimed a Barrage of Legal Claims Over Unlawful Benefit Deductions is Looming...

Teesside Court, Where the legal challenge was heard.

The landmark case, which is set to go before a full hearing next year could lead to claimants having to be formally consulted before deductions are made from their welfare benefits, in a ruling which could be the biggest legal victory for struggling council tax payers in decades.

30th Sep 2025

Local councils across the country are said to be on high alert in the face of the prospect of a flood of legal challenges that could force them to repay tens of thousands of pounds in unlawfully deducted welfare benefits.

The warning follows a tribunal decision which heard on Teesside in September, where the Department for Work and Pensions (DWP) unsuccessfully attempted to derail a claimants appeal over deductions taken from their welfare payments for what was said to have been "Council Tax Arrears".

The case, draws striking parallels to a High Court ruling made earlier this year, potentially upending how local councils recover debts such as council tax arrears from vulnerable benefit recipients....

A Question of Jurisdiction

The Teesside & Durham Post obtained the official appeal documents revealing the Secretary of State for Work & Pensions sought to have the case dismissed from the First-tier Tribunal sitting at Teesside Court in September 2025, arguing that the tribunal on Teesside "lacked the jurisdiction to rule on the case". However, the tribunal judge hearing the case rejected this claim highlighting that already well established legal case` law had been established in a previous High Court Ruling with the judge allowing the appeal to proceed to a full hearing.

The Ruling Could have Huge Consequences for local council's across the country..

Local council's such as Hartlepool Borough Council could see a flood of legal challenges, if the ruling is successful next year

The claimant's legal representatives successfully contended that the deductions—believed to have been initiated by Hartlepool Borough Council for council tax arrears back in 2024—violated established legal precedents, leading to a near ten-month delay in proceedings due to the Department for Work & Pensions's intervention in defending the claim ..

At the heart of the appeal is said to be the High Court case of Roberts v Secretary of State for Work and Pensions (SSWP), which was decided back in January 2025. In that ruling, Mr Justice Harrington found the DWP's practice of making automatic deductions from Universal Credit for rent arrears was unlawful when claimants were not properly consulted beforehand. Specifically, the court held that the DWP must provide individuals with an opportunity to make representations—such as explaining financial hardships or disputing the debt—before initiating deductions. Failure to do so rendered the deductions invalid, as they breached principles of natural justice and procedural fairness under the Social Security Administration Act 1992 and the Universal Credit Regulations 2013.

The judgment emphasised protecting vulnerable claimants from arbitrary financial penalties, noting that such deductions could exacerbate poverty and homelessness without due process. The Teesside case reportedly mirrors the High Court ruling Roberts v SSWP in several key ways, extending the High Court's principles beyond rent arrears to other local council debts such as council tax. In both instances, the core issue is the DWP's role in facilitating deductions without adequate consultation.

The claimant's representatives argued that Hartlepool Borough Council's request for deductions from the individual's entitlement to state benefits—without allowing the claimant to respond or challenge the deductions—directly contravened the High Court's mandate. Just as it did in the Roberts High Court Case, where the lack of prior notice led to unlawful rent deductions, this appeal alleges that council tax recoveries were imposed arbitrarily, potentially classifying them as "overpayments" under welfare regulations, meaning what sums have been deducted could have to be returned if a full hearing determines them to be 'unlawful'...

If upheld, its claimed the ruling could entitle claimants in a similar position to a full refund in any deductions which have been taken without the claimants consent, plus interest, costing local councils millions of pounds. In a brief interview following the tribunal hearing, the claimant's legal representative stated:

"There was no legal basis for the DWP to bring any application to the court in a bid to attempt to derail proceedings, which in turn has led to a considerable delay in my clients case of nearly ten months".

"With little now in the way of the case failing to succeed, councils are left with a simple choice: stop punishing the vulnerable, or face many more legal challenges like this."

The implications are said to be 'profound' for local councils across Teesside. If a full tribunal hearing rules in the claimant's favour, in a case thats likely expected to be heard by late 2025 or Early 2026, deductions for council tax arrears made without consultation would be deemed to be unlawful overpayments, meaning local councils may be ordered to pay back affected individuals.

Experts estimate this could impact thousands of Universal Credit recipients, with refunds potentially running into millions of pounds collectively.

As a result, its claimed Local Councils will be forced to overhaul their debt recovery processes, incorporating mandatory consultation steps to comply with the Roberts case to avoid litigation, with the development underscoring a growing scrutiny of welfare deduction practices, prioritising claimant rights, amidst rising cost-of-living pressures.