Secretary of State for Work and Pensions v SS [2013] UKUT 272 (AAC)

UKUT-AAC
Secretary of State for Work and Pensions v SS
[2013] UKUT 272 (AAC) · 2013-06-07

Decision

The appeal is allowed. I set aside the decision of the tribunal and I vary the decision of the decision maker dated 17 September 2010 so as to provide that the period of overpayment in respect of which the sums overpaid are recoverable from the claimant is between 8 January 2007 and 30 April 2010, both dates included. I remit to the Secretary of State the calculation of the amounts recoverable.

REASONS FOR DECISION

This appeal is brought by the Secretary of State with the permission of a district tribunal judge from a decision of the First-tier Tribunal allowing in part the appeal of the claimant from a decision of a decision maker that there had been an overpayment of pension credit to her as a result of a material misrepresentation by her. The misrepresentation was not in dispute and the only question before the tribunal at the hearing was whether there had been a break in the chain of causation so that part of the overpayment was not recoverable.The misrepresentation was in the claimant’s pension credit application on 8 January 2007, when she stated that she was not in receipt of any private pension. In fact, she was in receipt of an occupational pension from a former employer. The office dealing with her pension credit became aware on 7 October 2009, through a Generalised Matching Service Scan (GMSS), that the claimant was in receipt of her occupational credit, but despite this it carried on paying the claimant pension credit until 1 August 2010. The Secretary of State accepted that overpayments between 4 July 2010 and 1 August 2010 were not caused by the original misrepresentation, and the overpayment recovery decision under appeal only related to the period from 8 January 2007 to 4 July 2010.The tribunal determined that the claimant’s failure to disclose her occupational pension was the cause of the overpayment until the Secretary of State became aware of the fact of her receipt of that pension and had a reasonable time to act on it. It concluded that the reasonable time in this case was one month and found that the overpayments between 8 November 2009 and 4 July 2010 were not recoverable.The Secretary of State, who was not represented at the hearing, has appealed, contending that the failure to act on the information provided by the GMSS did not break the chain of causation and that the claimant’s initial misrepresentation remained one of the effective causes of the overpayments. It is also contended that the tribunal was wrong in its statement of reasons to treat the claimant’s misrepresentation as non-disclosure. As to this last point, the Secretary of State is plainly correct. The claimant had been asked if she or her partner had any private pensions and she responded by giving details only of a small private pension of her partner. This plainly involves a representation that there were no other such pensions, and that was plainly a misrepresentation. The point is, however, irrelevant to the question of causation on the facts of this case and would not justify setting aside the tribunal’s decision.The question of causation is one of fact, and requires an analysis of the relevant facts in order to determine whether any failure by the DWP to act on information received was sufficient to break the chain of causation resulting from the original misrepresentation or non-disclosure or was merely a concurrent cause of the overpayment. Once a question of causation is raised which the tribunal considers to be arguable, the Secretary of State must have an opportunity of dealing with it. This is both as a matter of natural justice that a party should have the opportunity of dealing with the other side’s case and because potentially relevant facts as to what happened and why nothing was done for so long are within the peculiar knowledge of the Secretary of State. He has therefore the obligation to disclose the relevant information and documentation in accordance with his duty to help the tribunal to achieve the overriding objective of dealing fairly and justly with the case (Tribunal Procedure (First-tier Tribunal) (SEC) Rules 2008, rule 2(1) and rule 2(4)(a)).In the present case, the claimant, who was then acting in person, raised no point as to causation in her notice of appeal, nor was it raised at any time until the tribunal hearing, where, as usual, the Secretary of State was not represented. It is also plain from an examination of the submissions of the decision maker to the tribunal that it was, understandably, not thought necessary to address the question of causation in those submissions, because no such point had been taken. Had the point subsequently been taken in advance of the hearing, the Secretary of State would, or may, have had the opportunity of dealing with it and producing necessary documentation and other evidence, and in the absence of any response, the tribunal may have been able to make adverse inferences against him. When, however, the point was first taken at the hearing, the Secretary of State was deprived of any opportunity of dealing with it unless the tribunal adjourned.Bearing in mind the importance in cases of causation of ascertaining what did cause the relevant office to continue the overpayments, it appears to me that the only proper course to have taken, once the tribunal had concluded that there was some merit in the claimant’s new contentions, was to adjourn the hearing and give directions for the production of the relevant information and documentation by the Secretary of State and for such written or oral submissions as he may care to make.I therefore set aside the decision of the tribunal. The representative of the Secretary of State has now sought to provide the missing information and has made his submissions on the question of causation. I must consider whether, in those circumstances, I should substitute my own decision for that of the tribunal or whether I should remit the case to a new tribunal with directions as to the further information and documentation that the Secretary of State should provide.In the course of this appeal a direction was given, dated 6 September 2012, by a Registrar of the Upper Tribunal for the Secretary of State to make some enquiries regarding the history of the events that might throw some light on certain points. The matters identified in the directions were(1) the lack of information of what, if anything, the DWP did between the receipt of the GMSS in October 2009 and the decision to disallow the claim in July 2010,(2) information as to copy payslips relating to the claimant’s occupational pension at pp.24-29 of the file which had been certified as true copies by somebody on 30 April 2010,(3) what contact the DWP had had with the claimant following receipt of the GMSS to ask if she was in receipt of an occupational pension, despite the inference from the papers that it had not done so, and(4) why the overpayment decision excluded the overpayments after 4 July 2010.The response from the representative of the Secretary of State on this appeal is as follows:
“ 3. … I wrote to the officer in the Pension Service Appeals Team who referred [the claimant’s] case to my office for the information [the Registrar] requested. The reply I initially received was as follows:
“I have looked through the file and all the papers. It would appear that several letters were issued to the customer regarding the Occupational Pension along with a form A42 [ an authorization for the Department to contact a third party for information about the claimant ] to sign if she could not provide the information the first being sent between 14/04/10 and 29/04/10 information was then sought from the pension provider. There is no indication in the papers why it took form October 2009 to April 2010 for the GMS scan to be actioned.
I am not sure who noted the wage slips as certified true copies and I also do not know why the recoverable overpayment ceased on 4 July 2010.”4. I then asked whether the claimant had replied to any of the letters sent to her, and whether there was any evidence as to who sent the pension payment slips at pages 24-9 and when they were received. The reply was:
“It is not clear of how we found out about the NHS pension but she did reply about the increase to her husband’s Occ Pen” and
“there does not appear to be any covering letter with the pay slips therefore, I cannot comment on who sent them in.”
5. However, I also raised four additional points with the Pensions Service:#
“a) First, you say ‘several letters were issued to the customer regarding the Occupational Pension along with a form A42 to sign if she could not provide the information the first being sent between 14/04/10 and 29/04/10.’ Is the exact date of the first enquiry not recorded? What makes you think the letter was issued in the period between 14/04/10and 29/04/10?
b) You also said that ‘information was then sought from the pension provider.’ Do we have a date for when this request was sent? What response was received and when did it arrive?c) When and how did the claimant reply about the increase to her husband’s Occ Pen? Is it possible to fax me a copy of the reply?d) Did the claimant ever complete the A42? If she did, when was this received, and can you fax me a copy?6. I received no reply on these points.7. … The new information above suggests that no step was taken until the claimant was contacted during the second half of April 2010. No specific information is available as to why this delay occurred. In my experience, however, such delays are generally the result of GMS producing far more reports than an individual office or section can cope with. In these circumstances, the section or office typically responds by stockpiling the reports until such time as they can be acted on. This may well be many months later.The representative went on to state that it was possible that the pay slips had been certified either by the pension provider or possibly by an officer of the DWP. He conceded that the pay slips should be taken as having been received on 30 April 2010 and that this would break the chain of causation. I accept that concession. It is plain that the pay slips contained sufficient information to enable the pension credit office to stop the pension credit payments immediately and that as a matter of commonsense it was that failure to do so which led to the payments continuing (see GJ v Secretary of State , [2010] UKUT 107 (AAC) ).The claimant was given the opportunity to respond to the Secretary of State’s various submissions but did not do so.In the submissions to which I have referred, the representative of the Secretary of State submits that the case should now be remitted to a new tribunal which could take evidence from the claimant about her dealings with the pension credit office and direct a Presenting Officer to investigate the relevant departmental records and attend an oral hearing. That may be an appropriate course in future cases where similar issues arise, but both parties have had the opportunity to address these issues before me. The question of how the claimant responded to letters from mid-April 2010 appears to me to be irrelevant in view of the concession that the chain of causation was broken from 30 April 2010. There is no suggestion that there were any relevant dealings between her and the pension credit office before mid-April. Further, it appears likely that one of those letters was responded to giving permission for the DWP to contact the pension provider and that it was that which led to the provision of the pay slips by the pension provider (unless of course the pay slips were provided by the claimant herself and the copies were then taken and authenticated by an officer at the DWP. If, therefore, the relevant cut off date for causation purposes depended on the claimant’s response to correspondence in any way, I see no reason to treat that cut off date as any other than 30 April 2010.In all the circumstances, it appears to me that I should substitute my own decision for that of the tribunal rather than remit the case as suggested by the representative of the Secretary of State. Each side has now had the opportunity to deal with the evidence produced by the Secretary of State and the law has been thoroughly explored. There is nothing to indicate that any further information will be produced by Secretary of State if the matter was remitted than could have been, and has been, produced on this appeal. There is no evidence that the claimant can give to explain the delay on the part of the Secretary of State. The law has been comprehensively explored in the written submissions.I accept that the likely explanation for the failure to act on receipt of the GMSS was that provided by the representative of the Secretary of State – that there was not enough staff adequately to deal with the GMSS reports provided to the pension credit office. The essential question that I must determine is whether that lack of adequate staff to deal with the GMSS report in this case is a concurrent cause for the overpayments together with the original misrepresentation or whether, and if so at what point, as a matter of common sense, it effectively broke the chain of causation. The fact that the DWP’s neglected the information provided is not enough if it is only one of the effective causes and the original misrepresentation remains another one ( Morrell v Secretary of State , [2003] EWCA Civ 526 , reported as R(IS) 6/03).However, what is an effective cause is to be determined as a matter of common sense. Breaking the chain of causation does not mean that a situation must be arrived at where the original non-disclosure or misrepresentation was not in any way responsible for the overpayment. Even when the relevant office of the DWP has all the relevant information but fails to act promptly on it, and even where that information has been supplied late by the claimant, as a matter of strict logic the original breach of duty by the claimant remains a cause of the overpayment because had the duty been performed the overpayment would never have been made. Nevertheless, at least by that stage it is generally accepted that the failure of the DWP to act with reasonable speed breaks the chain of causation. What in my judgment is really meant by breaking the chain of causation applying the commonsense required the authorities referred to by me in GJ v Secretary of State [2010] UKUT 107 (AAC) is that a situation has been reached where intervening factors mean that it would not be right as a matter of common sense, and in all the circumstances, to hold the claimant responsible for subsequent overpayments.The answer to the factual question whether there has been a break in the chain of causation because of inaction thus depends on all the facts of the case. The facts in the present case are that the GMSS report clearly identified the claimant as having pension credit and a retirement pension at least from 26 September 2009, but it gave no information as to the amount of the retirement pension or as to whether it had been taken into account in assessing entitlement to pension credit. It would be necessary first for somebody to investigate whether the retirement pension had been disclosed. Once it was found that it had not been disclosed, it would be necessary to find out how much it was. A very small retirement pension may have little or no effect on entitlement to pension credit. All this could take time to ascertain, even in a well run and adequately staffed office.By contrast, a different GMSS report in relation to a different benefit might immediately provide information that made it apparent that benefit could no longer continue. For example it may show that a person in respect of whom carer’s allowance was being paid to a claimant had ceased to be entitled to disability living allowance and the award had been terminated. In those circumstances, little if any further investigation might be required before terminating or at least suspending the allowance. Or, as in GJ v Secretary of State , the information that benefit had terminated might be on a computer screen which had been accessed and viewed by an officer at the relevant office.A further relevant factor in the present case is that it is clear from the payslips at pp.24-29 that the claimant’s pension increased annually, rising incrementally between January 2007 and April 2009 from £5073.69 to £5576.25. The Pension Credit information booklet at pp.91-98 contains three references to pensions. At p.93 it is stated that “you do not need to worry about reporting changes to your pensions … unless it means you may get more Pension Credit.” At p.95, it states that “If you have a personal or work-related pension, we work out how much they go up each year using the information you or your pension provider has given us. If you were not able to give us this information, we assume that the pension goes up in April by an amount based on the previous September’s retail price index.” Finally, at p.98 the claimant was told to tell the DWP if she or her partner started to get any personal or work related pensions and “If you or your partner are already getting these you must also tell us if they change.”While it may be unclear whether the claimant was to report the, possibly index linked, increases to her pension, she was plainly on notice to check this in view of the final sentence quoted above, even if, which she has never stated, she believed that she had disclosed everything initially.I bear in mind that there has been no real explanation as to why the claimant failed to disclose her own pension in her claim form. It was plainly something that she knew about and it was also something that she was subsequently reminded about in the information booklet.I have been referred to a number of relatively recent cases raising the same issues. In CDLA/1708/2001, the claimant had a life award of the higher rate of the mobility component and the highest rate of the care component of disability living allowance. She had been observed and recordings of her had been made between 22 April and 13 May 1999, and she had been interviewed on 19 May 1999 when the recordings were put to her. But it was only on 6 August 1999 that her award had been superseded. There was no explanation for the delay in superseding the award. Mr. Commissioner Mesher concluded that the causal link to the claimant’s failure to disclose her true condition had been broken on 19 May 1999 when the investigating officer felt he had enough information to put it to her in an interview and had heard her reactions and explanations. This was a conclusion of fact to which he came in that case. His approach is similar to that of the representative of the Secretary of State in the present case, but he did not have to consider a period of extensive delay by the DWP in investigating the matter.In JM v Secretary of State , [2011] UKUT 15 (AAC) , the claimant had been in receipt of income support. His home had been destroyed by a gas explosion and he received two capital sums – an insurance payout of nearly £19,000 in February 2002 and £10,000, the proceeds of sale of the land on which his home had stood, in December 2003. The DWP received information as to his capital which appeared to be incompatible with his claim in a GMSS report on 7 February 2007. Judge Lane pointed out that this information provided evidence that he was legal owner of the capital but it did not necessarily follow that he was beneficial owner. In that case the claimant was interviewed on 6 March 2007 when he stated where the money had come from and that he had been told that the money or some of it would be disregarded. Receipt of the GMSS report did not demonstrate categorically that the claimant was not entitled to benefit and the interval between receipt of the information and the interview was only a month. Judge Lane held that mere receipt of the information from the GMS was not enough, and it is not suggested otherwise in the present case. There was no subsequent delay in interviewing the claimant, and the overpayment decision was only in respect of the period ending on 7 March 2007. This decision also provides no assistance in deciding how delay should be treated in relation to causation. Nor does it mean that in every case where information is provided, whether by means of a GMSS report or otherwise, the information should not be acted on immediately. Some information may be sufficiently clear to demand immediate action to avoid further potential overpayments.In CSG/595/2011, the claimant had been in receipt of carer’s allowance for her daughter from 12 August 2002. She had limited earnings as a cleaner with the local council. At some point between then and the 2008/9 tax year, her earnings had increased to an extent that she was no longer entitled to carer’s allowance. On 20 May 2009, a report issued by HMRC indicated that her earnings in the year ending 5 April 2009 appeared from her National Insurance Contributions to have been £6583. The benefits office, on receipt of this information, had written to HMRC on 3 June 2009 for details of her employer and HMRC duly provided this information. There was then a delay of over 7 months before the DWP contacted the employer (still the local council) on 13 January 2010 asking for information as to the claimant’s employment and earnings. The delay was unexplained. It is unclear how long the council took to respond, but on 1 April 2010 the claimant was asked for details of work related expenses. These were provided by the claimant by letter of 6 April 2010.It appears that it then took until 28 October 2010 for a supersession decision to be made and on 9 December 2010 an overpayment decision was made covering the period from 17 April 2006 to 31 January 2010. It would appear therefore that the claimant had earnings in excess of the permitted amount from the earlier of those dates. It would also appear either that benefit had been suspended from 31 January 2010 or that it had been determined that any subsequent overpayment was solely caused by the DWP’s failure to act on the information it had.The First-tier Tribunal determined that the department was aware on 20 May 2009 that the claimant was in receipt of a greater income than that declared and should have suspended payment pending further enquiries, so that the subsequent payments were due to official error. The Secretary of State appealed, contending that the First-tier Tribunal had erred in law in concluding that the causal link had been broken when the benefits office received the information as to the claimant’s earnings from HMRC. The decision of the Upper Tribunal, Judge Burns QC, referred to JM v Secretary of State and to the contention of the Secretary of State that the principles set out in that case applied equally in the case before him. It was pointed out in the Secretary of State’s submissions that further information was still needed as to possible deductions before the claimant’s entitlement in that case could be calculated.Judge Burns pointed out that the Secretary of State did not appear before the tribunal to present his case or attempt to discharge any burden of proof, and there was no evidence before the tribunal to enable it to determine that the information from HMRC was in any way inadequate to enable the Secretary of State to take appropriate action. The information was that the earnings were prima facie over the permitted limit, and the action referred to was suspension of benefit. The tribunal was entitled to come to the view that the chain of causation had been broken and the Secretary of State had failed to provide the necessary evidence as to why the benefit had not been suspended.Judge Burns held in effect that the information provided by HMRC was such that, in the absence of any explanation from the Secretary of State as to why benefit was not suspended, a tribunal was entitled to conclude that it should have been suspended and that, as a matter of fact, the failure to do so was of such significance as to break the chain of causation. It emphasises the importance of the Secretary of State providing a proper explanation of any delay in taking this type of action. It does not lay down any sort of general rule that information of this kind must always be acted on. Even in that case, evidence from the Secretary of State as to the reasons for not acting immediately may have persuaded the First-tier Tribunal to come to a different conclusion. The decision of Judge Burns was simply that on the evidence before it, the First-tier Tribunal was entitled to come to the conclusion of fact that it did reach.CG/0344/2012 was another case of carer’s allowance where in the course of the award the claimant’s earnings exceeded the statutory limit, but she failed to notify the DWP of this. The eventual overpayment decision covered the period from 3 December 2007 to 17 January 2010, but on appeal the First-tier Tribunal found that the liability of the claimant to repay the overpayment was only from 3 December 2007 until 31 May 2009 on the grounds that the Secretary of State had known of her earnings from 28 May 2009, when information as to her earnings had been received from HMRC. On that occasion the Secretary of State was represented at the hearing by a presenting officer.The appeal was determined by Judge Jacobs. He accepted the submission of the Secretary of State that the information on the HMRC form did not properly allow the Secretary of State to supersede the claimant’s award of carers’ allowance bearing in mind the complexities involved in arriving at a final weekly figure. He also determined that, on the facts of that case, it would have been premature to have suspended payment merely on the basis of the information on that form. He does not set out the facts which led him to that conclusion, and it is possible that it was a borderline case where deductions may have meant that the claimant remained entitled to the award or it may be that he had in mind that as the figures provided by the revenue were historic (as pointed out by him in the previous paragraph of his decision) it could not be assumed that the claimant was earning any particular amount when the information was received.Judge Jacobs concluded that the tribunal had been in error of law in determining that the relevant cut-off date was 31 May 2009 because the further information to which he referred was needed before a decision could be reached. He then went on to substitute his own decision in favour of the Secretary of State. In doing so, he considered the unexplained delay that occurred after 28 May 2009. He finds that it did not look as if the Secretary of State made any enquiries of the claimant’s employer until January 2010 and that it was not possible to tell why not. However, he concluded that that did not help the claimant even if the Secretary of State had some responsibility for not acting sooner. The overpayment was the consequence of her failure to report her change of circumstances. It did not matter that there had been another cause.There is an apparent conflict between the decisions of Judge Burns and Judge Jacobs. Insofar as it turns on the effect of the information supplied by HMRC in each case, it is not a conflict that I need to resolve. Insofar as they involve different findings of fact based on similar evidence, that is also something that need not concern me. Judge Burns was accepting that the decision of the tribunal under appeal involved a finding of fact which it was entitled to make on the evidence. Judge Jacobs came to a different finding of fact on similar, but not identical evidence. Even on identical evidence, two judges can come to different findings of fact and be upheld on appeal.While it appears to me that there may well be circumstances where a failure to act properly or expeditiously by the DWP, even without full information, may well lead to the chain of causation being broken, that is not the case here. The claimant misrepresented that she was not receiving an occupational pension in response to a clear question at a time when she was well aware that she was receiving such a pension. She received annual increases to that pension and the information booklet would have drawn attention to its relevance and to the possible need to disclose the increases. I see no reason to find in those circumstances that the chain of causation was broken at some point because there was a delay on the part of the DWP in acting on the incomplete information received by way of the GMSS report. Accordingly, the claimant is liable to repay the overpayments received during the period of delay. The result may have been different, for example, if the overpayment had resulted from an innocent misrepresentation as to a partner’s income of which the claimant had no knowledge, or as a result of a failure to disclose where, although there was a duty to disclose, the matter that required disclosure was one where it was understandable that the claimant had failed to appreciate its significance.There may also come a time when the delay becomes so great that the original chain of causation must, as a matter of common sense, be treated as broken. This is so whether the information is complete or incomplete, although the more complete it is, the less delay is tolerable. It does not appear to me that the DWP can simply neglect matters indefinitely while paying benefit and then seek to recover overpaid sums from relatively impecunious people to whom they have been paid, possibly in many cases as a result of a misrepresentation or failure to disclose made in wholly innocent circumstances. That is not in the interests either of the taxpayer whose money is being spent in this way or the possibly morally innocent recipient who will have to repay anything overpaid.In the present case, however, I am satisfied that the chain of causation was only broken, as conceded by the Secretary of State, on 30 April 2010, and overpayments made after that date are therefore not recoverable.

(signed on the original) Michael Mark

Judge of the Upper Tribunal

7 June 2013

Cited in 2 later judgments