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The fraught relationship between Church and State is not among the new government's highest priorities. But a ruling from the Court of Appeal at the end of April should have warned ministers that they ignore these tensions at their peril.

On the face of it, the issue was whether a Christian relationship counsellor was lawfully dismissed for refusing to provide psycho-sexual counselling to same-sex couples.  Gary McFarlane claimed he had been the victim of indirect religious discrimination. He accepted that counselling clients regardless of their sexual orientation was a legitimate aim for his employer, Relate Avon. But he argued that the rule had been applied to him in a disproportionate way. In his view, he should have been allowed to counsel only heterosexual couples.

The problem he faced was that a similar argument had recently been dismissed by the Court of Appeal in a claim brought by Lillian Ladele, a Christian registrar who had refused to register civil partnerships because of her view of marriage.

For McFarlane to have won his discrimination claim he would have to have shown that the Ladele judgment was reached per incuriam — in other words, wrongly decided by a court that had ignored its own earlier decisions. This is difficult to establish and there was little surprise when that claim failed. But McFarlane had another, more disturbing, argument. He produced a witness statement from Lord Carey of Clifton in which the former Archbishop of Canterbury referred by name to six members of the Court of Appeal. Those judges, Carey maintained, "should recuse themselves from further adjudication on such matters as they have made clear their lack of knowledge about the Christian faith".

Three of the six are Jewish, at least by descent. They included the two most senior judges in the Ladele case as well as the presiding judge of the court that dismissed an appeal by Nadia Eweida — a Christian who challenged British Airways over a policy, subsequently withdrawn, that stopped her wearing a cross with her uniform.

In calling for the creation of a "specialist panel of judges designated to hear cases engaging religious rights" — and saying the judges "should have a proven sensitivity and understanding of religious issues" — Carey was not, of course, arguing that Jews could never decide such cases. "I would be supportive of judges of all faiths and denominations being allocated to such a panel," he told the court.

But it was perhaps fortunate that the judge chosen to decide whether McFarlane should be granted permission to appeal was Lord Justice Laws. As the Guardian was to discover, "Laws could scarcely be more Anglican if he tried". Even so, his response to Carey's plea for a special court was as devastating as it was brief: "I am sorry that he finds it possible to suggest a procedure that would, in my judgment, be deeply inimical to the public interest," Laws said.

But although McFarlane's argument had been doomed because of the Ladele decision, Laws prepared a reserved judgment out of respect for Carey's broader argument. In the former archbishop's view, judges had condemned Christian teaching on sexual ethics as "discriminatory" and therefore bigoted.

Not so, explained Laws. Discrimination law looks at outcomes, not motives: a person might be guilty of discrimination whatever his intentions. In any event, the law permits discrimination in certain cases; it therefore cannot be equated with bigotry. He then moved on to the Human Rights Convention, which respects freedom of thought, conscience and religion. This also protects freedom of religious action but this is limited by the need to protect the rights and freedoms of others. 

As the judge explained, the law cannot protect a position held on purely religious grounds because we no longer live in a society where people share uniform religious beliefs. For example, I might believe it is wrong to work on the Sabbath but I cannot expect the law to enforce that belief in Britain — not least because you and I might celebrate the Sabbath on different days.

But Laws's ruling failed to impress religious commentators. He was accused of confusing secularism with neutrality by Melanie Phillips of the Daily Mail and Standpoint (and to whom I have been married for 36 years). Michael Nazir-Ali, the former Bishop of Rochester, argued that the law should continue to respect an individual's conscience as well as the Judaeo-Christian tradition underpinning British society.

Both courts and clerics are right, though neither side seems to understand what the other is saying. If Cameron and Clegg can work together, can it be so difficult to achieve a common understanding between faith leaders and judges?

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