NHS Pensions Agency v Suggett [2006] EWCA Civ 10

[2006] EWCA Civ 10

Case No C3/2005/1018/CHANF

IN THE SUPREME COURT OF JUDICATURE

COURT OF APPEAL (CIVIL DIVISION)

ON APPEAL FROM (CHANCERY DIVISION)

Mr Justice Etherton

C3/2005/1018/CHANF

Venue Royal Courts of Justice, Strand, London, WC2A 2LL

Date Thursday 19 January 2006

Before

LORD JUSTICE MUMMERY

LORD JUSTICE LATHAM

LORD JUSTICE GAGE

Between

NHS Pensions AgencyAppellant

The Pensions OmbudsmanInterested Party

Ann Sheila SuggettRespondent

Elisabeth Laing (instructed by Treasury Solicitors) for Appellant

James Eadie (instructed by Pensions Ombudsman) for Respondent

Hearing Hearing dates: 15 December 2005

Judgment

Lord Justice Gage :

Introduction

[1]This is an appeal by the NHS Pensions Agency (The Agency), against the dismissal by Etherton J on 14 April 2005 of its appeal against a determination by the Pensions Ombudsman (the Ombudsman), on a complaint by Mrs Ann Shelia Suggett.

[2]Mrs Suggett has neither appeared nor been represented in this court. We were told at the outset by Miss Laing, counsel for the Agency, that the Agency has now re-considered her claim and she will not be affected in any way by this appeal whatever the result. The Ombudsman, represented by Mr James Eadie, appears to assist the court.

[3]In a written determination dated 22 October 2004 the Ombudsman held that the Agency had misdirected itself when refusing a claim by Mrs Suggett for Permanent Injury Benefits (PIB) from the NHS Pensions Scheme (the Scheme) arising out of injuries which she maintained were wholly or mainly sustained in the course of her employment by the NHS as a district nurse. By his determination the Ombudsman remitted Mrs Suggett’s claim to the Agency for further consideration and gave directions as to how the Agency should deal with the claim.

[4]The Agency appealed to the High Court against this determination and the directions given by the Ombudsman on a point of law in accordance with its right under section 151 (4) of the Pension Schemes Act 1993 (the Act).

[5]By his decision Etherton J dismissed the Agency’s appeal against the remittal of Mrs Suggett’s claim to the Agency for further consideration and varied in part the principal direction given by the Ombudsman. The appeal to this court is a second appeal and proceeds by permission of Jacob LJ on the ground that it raises a matter of general importance in relation to the powers of the Ombudsman to give directions as to the future conduct by the Agency of a remitted claim. There are two grounds of appeal which break down into three issues for this court to decide. They are: i) did the Ombudsman err in his construction of the Agency’s decision letter of 21 November 2003 refusing Mrs Suggett’s claim; ii) if the Ombudsman did not err, was he entitled to make a direction which fettered the Agency’s discretion to appoint a new medical adviser of its own choosing when re-considering Mrs Suggett’s claim; iii) was the judge entitled to uphold the Ombudsman’s direction on different grounds and vary it in the way he did. The facts

[6]The facts are not in dispute. Mrs Suggett was born on 23 February 1950. She was employed as a district Nurse by Leicestershire Health Authority. Entries in her general practitioner’s notes indicated that she ricked her back lifting a patient on 5 April 1970 and that she suffered from three episodes of back pain, left leg pain and sciatica in 1974. There was no reference in those notes to any link between the episodes in 1974 and her employment. However, Mrs Suggett asserted that the three episodes between 1970 and 1974 were work-related.

[7]On 23 April 1975, she hurt her back lifting a patient. She did not return to work as a district nurse, and her employment was terminated on 25 January 1976. She was re-employed by the NHS on a part-time basis on 16 December 1986 after having had her children. She had a further break in service between May 1988 and October 1992. After that she continued to be employed by the NHS until 29 June 2003 when she resigned on the advice of an occupational health adviser.

[8]She continued to suffer back pain from 1975 and has had a variety of treatments including disc decompression in 1979, a laminectomy in 1988, spinal fusion in 1989, and a number of epidurals to control the pain.

[9]In January 1997 she applied to the Benefits Agency for industrial injuries disablement benefit. Her application was successful. The medical examiner concluded that she was suffering from a prolapsed lumbar disc following the incident on 23 April 1975. Her award of benefit was reviewed on two occasions and on 12 October 2002 the award was continued for the rest of her life.

[10]In early June 2003 she applied for PIB. Because of the lapse of time since the incident in 1975, and the unavailability of some of the original records, the Agency had to collect information from the various doctors who had treated Mrs Suggett over the period in question and from the Benefits Agency. It also sought advice from its medical advisers. On 27 August 2003 the Agency refused her claim on the grounds that her condition was not wholly or mainly attributable to her NHS employment in that: i) the nature of the incident in 1975 would not have been expected to cause permanent damage in a healthy spine; and ii) three entries in her notes in 1974 referred to back pain down the left leg and it was considered that pre-existing back problems were the major feature in her condition.

[11]Mrs Suggett appealed that decision but her appeal was rejected. The Agency’s letter to Mrs Suggett dated 30 September 2003 rejecting her appeal quoted advice given by the Scheme’s medical adviser. The adviser stated that he had examined the comprehensive GP records, notes and hospital correspondence and he set out entries in the records before continuing:

“These entries establish that not only did she have episodes of back pain prior to the index-incident of 23-05-75 [23/04/75] she also had sciatica. It is not unreasonable to advise that this may have been evidence that an intervertebral disc was having adverse pressure effects on her nerve roots. While the index-incident may well have exacerbated that process it is more likely than not that she had a degenerative disease as a result of constitutional factors and that the process of her disc prolapsing was already under way before the index-incident.”

[12]Mrs Suggett made a second appeal by a letter dated 22 October 2003. In that letter she stated:

“… I wish to appeal against this decision. I fail to understand how it cannot be accepted that the injuries I received during my NHS employment has grossly affected my earnings. I have had to work reduced hours and I have had to retire from a job I loved and was good at, at least two years before I wanted to, and I had continued working until sixties, I have lost seven years of income. This whole procedure is extremely upsetting and stressful, which of course is not helped by the fact that financially I am really struggling. The scheme’s medical advisor has stated that I probably already at the ages of twenty and twenty five had degenerative disc disease, I don’t see how that can be proved in the least. I have also enclosed a scan report from 02.08.88, which makes no mention whatsoever of any disc disease…”

The enclosed report was from Dr BF Millet. It read:

“… There is a central protrusion of disc material from the L5/S1 disc space which has migrated superiorly and has come to lie behind the vertebral body of L5….The protruded disc material is giving rise to severe thecal disc compression. The narrowest cross-section area of the theca measured at the level of the L5/S1 facet joints = 33.5 square millimetres. This is equivalent to a myelographic block. Several residual fragments of Myodil are demonstrated within the theca particularly at the L4/5 disc space level where they are giving rise to artefact. The appearances at L3/4 are normal.”

[13]The Agency sought further medical advice and by a letter dated 21 November 2003 dismissed that appeal. It is this letter which lies at the heart of the first ground of appeal. In the material part it reads:

“I am sorry to inform you that, after very careful consideration on behalf of the Agency by their Scheme’s medical advisers, we cannot recommend entitlement to the NHS Permanent Injury Benefits (PIB). This decision has been based on the information available to us and I shall explain in full how we came to the decision and what you have to do should you wish to appeal against it. For someone to be entitled to the Permanent Injury Benefit Allowance the Scheme has to be satisfied that your condition is wholly/mainly attributable to your NHS duties (i.e. the actual tasks you perform) and that you will suffer a permanent loss of earnings ability due to your condition. The Scheme’s Medical Adviser has advised that “It is confirmed that this medical adviser has not previously been involved in this case. Evidence submitted to support this further appeal is noted and carefully considered along with the previous medical evidence as noted in the previous decisions. After detailed evaluation of the notes from the GP records and the correspondence on various sources it remains the opinion that the weight of evidence points to the presence of symptoms prior to the index event. Therefore it is not considered that the specific claimed incident on 23/05/1975 can be accepted as being wholly or mainly responsible for the impairment now arising from her back condition.”

Therefore the criteria are not met.” It is common ground that the reference in this letter to 23 May 1975 should be to 23 April 1975. The letter mentioned that Mrs Suggett had a further right of appeal under the Agency’s internal dispute resolution but the Agency did not insist that Mrs Suggett should exhaust this before resorting to the Ombudsman. On 31 December 2003 Mrs Suggett made a complaint to the Ombudsman. The Scheme’s Medical Adviser has advised that Therefore the criteria are not met.”

The decision of the Ombudsman

[14]In his written decision the Ombudsman set out the facts as I have recited them and the submissions of the Agency. His conclusion appears at paragraph 35. It reads:

“My review of the way this matter has been considered leads to the conclusion that NHSPA have been proceeding on a mistaken basis. Although I note their contrary assertion, they appear to have been operating on the assumption that if Mrs Suggett has previously been presenting with similar symptoms or indeed been diagnosed with a similar condition, as those which feature in the present complaint this means that her present condition cannot be attributed wholly or mainly to her employment. That is a misconceived approach.” 15. The written determination continues: “36. The previous history to which NHSPA point as evidence, that her condition has not been wholly or mainly caused by her employment, is itself not inconsistent with such a cause. 37. The agency should have realised that there was a clear flaw in the medical advice which is quoted in paragraph 17: “…the weight of evidence points to presence of symptoms prior to the index event. Therefore it is not considered that the specific claimed incident on 23/05/75 [23/04/75] can be accepted as wholly or mainly responsible”

The presence of symptoms before the index event does not “therefore” lead to the identified conclusions. It is not the medical adviser who is the decision-maker. The decision-maker should have recognised the non-sequitur.” “…the weight of evidence points to presence of symptoms prior to the index event. Therefore it is not considered that the specific claimed incident on 23/05/75 [23/04/75] can be accepted as wholly or mainly responsible”

[16]The Ombudsman went on to explain that he had decided to make directions as to how the Agency should consider Mrs Suggett’s claim on remittal of it by him for further consideration. He said at paragraph 39; “It is not for me to express my own view as to whether Mrs Suggett meets the criteria. I am remitting the matter back to NHSPA for further consideration which will I hope address more carefully the particular criteria which applies. Although I have also noted that efforts have previously been made to ensure that different doctors have been responsible for providing the advice from the Scheme’s medical advisers I have also noted that the approach which I have criticised seems to be a consistent pattern emanating from the particular company which provides the medical advice to the scheme. My direction therefore requires the Agency in this particular case to take fresh advice from a different source. I do not accept that by involving Mrs Suggett (or if need be myself) in the selection process that there is any breach of Regulation 19.” 17. Accordingly the Ombudsman made the following direction; “Within 28 days of this determination NHSPA shall either appoint a suitable medical practitioner who has had no association with the medical advisers’, previously involved, to whose appointment Mrs Suggett consents or failing agreement on such an appointment shall revert to me for a suitable doctor to be selected.” He made three further directions but none are material to this appeal. The judge’s decision

[18]At paragraph 41 of his judgment

the judge stated :

“Miss Laing correctly contended that the ability of the Ombudsman to challenge findings of fact by the Agency is limited. The Ombudsman was not entitled to upset the decision of the Agency on whether the conditions in Regs. 3 and 4 have been met in the case of Mrs Suggett if the Agency has adopted a correct interpretation of those Regulations, has asked itself the correct questions, has taken into account all relevant factors and ignored irrelevant factors and has not arrived at a perverse decision.”

[19]The Judge cited two decisions as authority for that proposition which is not in dispute in this appeal.

[20]In deciding that the Ombudsman was entitled to come to the conclusion which he did

the judge said at paragraph 44:

“The final decision of the Agency on Mrs Suggett’s application for PIB is contained in the latest decision letter, namely the letter of 21 November 2003. The writer of the letter states clearly and categorically that she will “explain in full [my emphasis] how we came to the decision. The letter then paraphrases Regs. 3 and 4, and quotes the advice of the Agency’s medical adviser. No other information or material is mentioned in support of the Agency’s decision. In particular no reference is made by the Agency to the contents of the earlier decision letters or to the evidence reviewed by, and the opinion of, the Faculty of Occupational Medicine.”

[21]The judge stated that the Ombudsman was justified in criticising, in the way he did, the conclusion of the medical adviser quoted in the decision letter of 21 November 2003.

[22]The judge then went on to deal with the issue of the directions. He held that the direction, to which I have referred, went too far. He said that the extent of the interference with the discretion of the Agency as to who to appoint as a medical adviser was not justified on any rational basis. However, he held that some fetter on the exercise of that discretion was justified on the particular facts of this case. Accordingly he varied the direction in the following terms:

“… I shall direct, in place of the direction in para 42 of the Determination, that the Agency shall appoint as medical adviser, for the further consideration of Mrs Suggett’s claim to PIB, a suitable medical practitioner who is not employed by the company and has no other association with the medical advisers previously involved.”

The relevant statutory provisions

[23]The relevant regulations in this case are the National Health Service (Injury Benefits) Regulations 1995 (as amended) (the Regulations). Regulation 3 (1) provides that the Regulations apply “…to any person who, while he (a) is in the paid employment of an employing authority…sustains an injury or contracts a disease to which paragraph (2) applies.” Regulation 3(2) provides:

“This paragraph applies to an injury which is sustained and to a disease which is contracted in the course of the person’s employment and which is [wholly or mainly] attributable to his employment and also to any other injury sustained and, similarly, to any other disease contracted, if – a) it is [wholly or mainly] attributable to the duties of his employment; Regulation 4 (1) goes on to provide: “[Subject to paragraph (5)], benefits in accordance with this Regulation shall be payable by the Secretary of State to any person to whom regulation 3 (1) applies whose earnings ability is permanently reduced by more than 10 per cent by reason of the injury or disease.”

[24]Regulation 19 of the Regulations enables the Secretary of State (for whom the Agency acts in these matters) to require any person who claims to be entitled to an allowance under the Regulations to submit to a medical examination by a registered medical practitioner selected by the Secretary of State. In that event, the Secretary of State shall also offer the person the opportunity of submitting a report from his own medical adviser as a result of an examination by him, and the Secretary of State shall take that report into consideration together with the report of the medical practitioner selected by the Secretary of State.

[25]The appointment and powers of the Ombudsman are set out in Part 10 of the Act. By section 146 the Ombudsman is given power to investigate and determine: i) a complaint that an actual or potential beneficiary of a scheme has sustained injustice by reason of maladministration in consequence of any act or omission of a person responsible for the management of the scheme of which he is a beneficiary (s.146(1)(a)); and ii) any dispute of fact or law between a person responsible for the management of a scheme and an actual or potential beneficiary of that scheme (s.146(1)(c)).

[26]It is not in dispute that the Ombudsman had jurisdiction to deal with Mrs Suggett’s complaint.

[27]The Ombudsman’s powers following an investigation made by him are contained in section 151. Section 151, so far as is material for the purposes of this appeal, reads:

“(1) Where the Pensions Ombudsman has conducted an investigation under this Part he shall send a written statement of his determination of the complaint or dispute in question – [(a) to the person by whom, or on whose behalf, the complaint or reference was made, and (b) to any person (if different) responsible for the management of the scheme to which the complaint or reference relates] and any such statement shall contain the reasons for his determination. (2) Where the Pensions Ombudsman makes a determination under this Part…, he may direct [any person responsible for the management of the scheme to which the complaint or reference relates] to take, or refrain from taking, such steps as he may specify in the statement referred to in subsection (1) or otherwise in writing.”

It is sub-section (2) above on which the Ombudsman relies as providing the power to make the direction given in this case. As I have already stated sub-section (4) of section 151 provides a right of appeal on a point of law from the Ombudsman to the High Court by, among others, “any person…responsible for the management of the scheme to which the complaint or reference relates”. Finally, sub-section (5) of s.151 provides that:

“(5) Any determination or direction of the Pensions Ombudsman shall be enforceable – (a) in England and Wales, in a county court as if it were a judgment or order of that court,…” [(a) to the person by whom, or on whose behalf, the complaint or reference was made, and (b) to any person (if different) responsible for the management of the scheme to which the complaint or reference relates] (2) Where the Pensions Ombudsman makes a determination under this Part…, he may direct [any person responsible for the management of the scheme to which the complaint or reference relates] to take, or refrain from taking, such steps as he may specify in the statement referred to in subsection (1) or otherwise in writing.”

The first issue – Did the Ombudsman err in his construction of the decision letter of 21 November refusing Mrs Suggett’s claim

[28]On this issue Miss Laing submitted that the Ombudsman was not entitled to find that the Agency had adopted the wrong approach to Mrs Suggett’s claim. She submitted that he misconstrued the decision letter of 23 November 2003 by taking an overly narrow view of it in that he read the decision of the Agency as being based solely on the advice of the last medical adviser. It is contended that the error was to construe the letter in isolation from all the other evidence including the advice of the two previous medical advisers.

[29]Miss Laing relied on the sentence in the letter recording the medical adviser’s advice which read:

“Evidence submitted to support this further appeal is noted and carefully considered along with the previous medical evidence as noted in the previous decisions.”

[30]It is submitted that this passage in the medical adviser’s advice indicated that the Agency’s decision was based on earlier advice, which it is said could not be challenged as irrational. Miss Laing drew attention to the statement in the letter that the Agency had completed a “second review”. She submitted that inferentially, and as a matter of common sense, the Agency when making its decision considered and had regard to the opinions of all three medical advisers. In particular the reference in the decision letter of 30 September 2003 to sciatica suffered by Mrs Suggett before 24 April 1975 entitled the medical advisers to conclude that Mrs Suggett’s condition was due to a pre-existing degenerative disc disease. Further, Miss Laing pointed to the fact that Mrs Suggett in her letters concentrated on the incident of 23 April 1975, which she said was the cause of all her troubles.

[31]On behalf of the Ombudsman it was submitted that the letter of 21 November 2003, is expressly stated to be the explanation “in full” for the Agency’s decision. The only substantive reasoning for the decision is set out in the quotation from the last medical adviser’s conclusion. The medical adviser did not purport to consider the opinions of the previous medical advisers. It is submitted that his conclusion was flawed because the fact that Mrs Suggett had made previous complaints of back pain did not “therefore” automatically mean that she must have had a pre-existing degenerative condition of the back. It is submitted that the letter cannot be read as in some way incorporating or adopting the reasoning of the other medical advisers.

[32]Mr Eadie further submitted, that in any event, the previous two decision letters, citing the advice of the first two medical advisers, display the same error. He submitted that none of these letters dealt with the question of whether or not complaints of back pain in 1974 were connected with the work-related incident in 1970. Nor had the medical advisers addressed the question of whether or not Mrs Suggett’s symptoms pre-1975 might have completely resolved so making the 1975 incident the sole cause of her subsequent injury.

[33]As the submissions demonstrate the point at issue is a narrow one. It depends to some extent upon the proper interpretation of the letter of 21 November 2003. For my part, I am of the opinion that the advice of the last medical adviser must be interpreted as advice given in the light of all the previous medical notes, records, correspondence and medical evidence contained in the previous decisions. But what it does not say is that the medical adviser has taken into account the opinions of the previous medical advisers. On the contrary the medical adviser in stating that he has not been concerned previously in this matter, must by implication be taken to state that his opinion is his and his alone and not affected by the decisions of others.

[34]Since this was a second appeal by way of a re-taking of the decision, albeit described as a review, this would be a perfectly proper approach for the adviser to take. Further, as Miss Laing conceded, on each of the three occasions, the decision to refuse the claim was effectively a decision taken by the individual medical adviser. It follows that in my opinion the Ombudsman and the judge were right to concentrate on the decision letter of 21 November 2003.

[35]So far as that letter is concerned I am quite satisfied that it did display an error of approach which amounted to an error of law. Nowhere does it deal with the important questions referred to by Mr Eadie in his submissions. The most that can be said is that the medical adviser must have had in mind the GP’s notes recording complaints of back pain by Mrs Suggett in 1970 and 1974. It does not explain why those complaints are considered to be symptoms of a degenerative condition and not on-going symptoms from the 1970 work-related injury. Nor does it address the important question of causation in the event that the 1974 symptoms were not work-related. The bald assertion that the existence of the earlier symptoms must indicate the existence of a pre-existing degenerative condition which had a causative effect on the injuries sustained in 1975 does not on the facts of this case seem to me automatically to follow.

[36]Further, even if I had accepted Miss Laing’s submission that the decision letter of 21 November 2003 must be read as incorporating the medical opinions expressed in the two previous decision letters, in my view they also display the same error. The letter of 27 August 2003 makes the same bald assertion without further explanation. The letter of 30 September 2003 similarly makes the same assertion, but in it the GP’s notes, dating back to the incident in April 1970 when Mrs Suggett ricked her back lifting a patient, are set out. It also has a reference to a complaint by Mrs Suggett of sciatica in late 1974. But the significance of this is not explained in any other way than the assertion that Mrs Suggett’s condition is more likely to be due to degenerative disease as a result of “constitutional factors”.

[37]I would therefore hold that even if the Ombudsman had erred in looking in isolation at the letter of 21 November 2003 the earlier letters do not assist in overcoming the flawed reasoning demonstrated in the letter on 21 November 2003.

[38]On this issue I agree with the conclusion of the judge that the decision of the Ombudsman displayed no error of law. Second issue-Was the Ombudsman entitled to give the direction restricting the Secretary of State’s discretion to appoint a medical adviser of his own choice

[39]This issue is confined to the direction given by the Ombudsman at paragraph 42 of his written determination. Although the discretion to appoint a medical adviser is that of the Secretary of State it is the Agency which administers the Scheme on his behalf and for that reason I shall refer to the discretion as that of the Agency rather than of the Secretary of State. By his direction the Ombudsman sought to restrict the Agency from appointing a medical adviser from the same organisation which had supplied all three medical advisers hitherto involved in Mrs Suggett’s claim.

[40]Before dealing with the submissions of counsel it is relevant to refer to some of the background information supplied to us by Miss Laing on instructions. As is clear from the decision letters the medical advisers, in each case, came from an international company, Schlumberger. We were told by Miss Laing that the NHS has an appointed panel of doctors employed by Schlumberger to act as medical advisers for the purpose of administering the Scheme. The panel consists of approximately twelve doctors divided between two different locations: one in Preston and one in Glasgow. The first two medical advisers in this case came from Preston. The third operated from Glasgow. It follows that all three came from a panel of approximately twelve doctors located in Preston and Glasgow. The Agency deals with a large number of claims each year of which there are appeals in many of them. The appeal process can involve up to three appeals. In this case Mrs Suggett, as already explained, made only two appeals before complaining to the Ombudsman. The Agency subcontracts the provision of medical advice on claims made on the Scheme to Schlumberger. It appears that the reason for this is to reduce the cost of administering the Scheme. In this case, as I have already indicated, it seems clear that the decision at each stage of the appeal process was effectively taken by the medical adviser.

[41]Miss Laing submitted that the direction made by the Ombudsman was an unjustified fetter on the right of the Agency to appoint a medical adviser of its own choice. The basis for the submission is that there is nothing in the facts to support the Ombudsman’s conclusion that the approach by the three medical advisers seemed to display a “…consistent pattern emanating from the particular company which provides the medical advice to the scheme”. Miss Laing pointed out that the system of appeals was an internal system and she submitted the Agency was entitled to have a doctor of its own choice to advise it. She stressed that if a direction restricting the Agency’s right to use a panel of medical advisers supplied by Schlumberger became commonplace the cost of administering the Scheme would inevitably rise.

[42]Further she submitted that, although each doctor was employed by Schlumberger, each was a professional person, subject to the ethics and discipline of the medical profession, who could be relied upon to give objective independent advice. Miss Laing submitted that for this reason, the direction given by the Ombudsman was unnecessary. A different doctor, albeit employed by Schlumberger, would exercise his or her own independent judgment when dealing with a further appeal particularly where, as here, the Ombudsman had pointed out the error of the approach of the previous medical advisers.

[43]Mr Eadie, pointing out the Ombudsman’s wide powers provided by section 146 (2) of the Act, submitted that on the facts of this case the Ombudsman was entitled to make the direction. He stressed that the powers of the Ombudsman to make determinations and/or directions are not confined to cases where the Ombudsman found either maladministration or a risk of maladministration (see s.146 (1)(c)). He conceded that the powers of the Ombudsman, although wide, must be subject to certain limits, but submitted the direction was justified in this case by reason of the Ombudsman’s finding that the decision letters showed a consistent error of approach at each stage of the appeal process. Accordingly, he submitted that the Ombudsman was entitled to direct that a medical adviser be appointed from an organisation other than Schlumberger.

[44]In my judgment, there are a number of factors of general application to the exercise by the Ombudsman of his discretion to make a direction. Firstly it is common ground that the discretionary power of the Ombudsman to give directions is not limited to cases where it is proved either that maladministration has occurred or there is a risk of maladministration occurring. However, secondly the discretion is clearly circumscribed in that an Ombudsman cannot direct the Agency to do that which it has no power to do, or refrain from doing something which it is legally obliged to do. Thirdly, in making a direction the Ombudsman must act judicially so as not unreasonably to fetter the discretion of the Agency. Fourthly, in cases such as the instant one, in my judgment the Ombudsman can legitimately take into account as a factor the perception of bias and unfairness even though there may be no actual bias or unfairness.

[45]Applying these factors to this case, I can see nothing wrong with the Ombudsman’s desire to direct the Agency to use a doctor not employed by Schlumberger to advise on the re-consideration of Mrs Suggett’s claim. It seems to me immaterial that the appeal process is an internal appeal process. It is conceded that the Ombudsman had jurisdiction to deal with Mrs Suggett’s complaint. Once he had made his determination, in my view, there was no reason why he should not have exercised his powers under section 146(2). Further, in my opinion, on the facts of this case, the Ombudsman was quite entitled to conclude that there seemed to be a consistent pattern in the medical advice coming from doctors employed by Schlumberger. His conclusion, with which I agree, was that each of the three medical advisers had adopted the same wrong approach. Where, as here, each of the doctors came from a small panel. I can see no reason why his decision can be said to be in any way irrational and every reason for concluding that it was justified. That is not to say that the Ombudsman must have concluded that any other doctor coming from Schlumberger would be biased. It is saying no more than that in all the circumstances of this case the perception of fairness and independence required a doctor from outside Schlumberger’s organisation to deal with the re-consideration of Mrs Suggett’s claim. The judge’s variation of the direction

[46]The judge varied the direction given by the Ombudsman by deleting that part of it which required the Agency to obtain Mrs Suggett’s agreement to the appointment of the medical adviser or in default of agreement appointment by himself. The criticism of the judge, as I understand it, is that he sought to justify the direction for different reasons than those of the Ombudsman. In support of this submission Miss Laing relied on a passage in paragraph 66 of the judgment which reads in the material part:

“…if there are grounds for believing that, absent directions, an adviser may be selected whose advice may result in maladministration, I see no reason why the Ombudsman cannot give directions under s.151(2) designed to prevent a recourse to such adviser. Such directions must not, however, interfere more than is necessary with the SoS’s discretion. If the directions interfere more than can be properly justified, they are irrational and invalid.”

[47]Miss Laing also relied on what

the judge said at paragraph 75 of his judgment:

“I consider, however, that it was within a legitimate exercise of the Ombudsman’s powers to form the view that, on the particular facts of this case, the SoS should avoid using doctors employed by the Company in the further consideration of Mrs Suggett’s claim to PIB. Three of its doctors have advised so far, and the Ombudsman was entitled to consider that, by reason of community of interest and common association, other doctors employed by the Company might be or feel constrained in expressing a different view”

[48]Miss Laing submitted that these passages demonstrate that the reason given by the judge for justifying the direction was different from that given by the Ombudsman. In seeking to justify the direction for a different reason the judge resorted to an impermissible fact finding exercise of his own. Whereas he ought to have quashed the direction. Further, she expressed the anxiety of the Agency that a direction on the basis put forward by the judge could have far reaching effects on the administration of the Scheme. The use of the expressions “community of interest and common association” might have the effect of requiring the Agency to cease the practice of employing medical advisers from the same organisation when implementing the appeal process under the Scheme. She informed the court that, if such directions became a regular practice, there would be a consequential increase in the cost of the administering the Scheme. She also submitted that by rejecting the complaint of maladministration and quashing that part of the Ombudsman’s determination and directions, the judge must be taken to have ruled out any reason for the Ombudsman to hold that absent the direction there was a risk that advice would be given which might lead to maladministration.

[49]I reject Miss Laing’s submissions on this issue. It is relevant to note in this context that a direction of an Ombudsman is enforceable as if it were an order of the county court. In my judgment the judge’s powers on an appeal from an Ombudsman are those provided by CPR 52-11 namely that the court will allow an appeal where the decision of the lower court is wrong. Once the court finds that the decision is wrong the court will have all the powers set out in Part 52.10-(2) as appropriate to an appeal on a point of law from an Ombudsman.

[50]As to the criticism of the judge’s reason for upholding the direction of the Ombudsman, in my opinion the judge was doing no more than expressing in a different way the same reasoning as that of the Ombudsman, which I find in principle justified the direction. The judge’s finding that the part of the direction which he deleted was irrational was in my judgment also justified. It did fetter more than was reasonable the discretion of the Agency to appoint a medical adviser of its own choice. In the circumstances, in my view the judge had power pursuant to Part 52.10-(2) to vary the direction. The effect of the variation in this case was no more than a reduction in the restriction imposed on the Agency’s exercise of its discretion.

[51]In reaching my conclusions on issues two and three I am not to be taken as holding that the use of Schlumberger by the Agency in this case has any wider implications beyond the facts of this case. 52. For the reasons expressed I would dismiss this appeal.

Lord Justice Latham:

[53]I agree.

Lord Justice Mummery:

[54]I also agree.