R (Child Poverty Action Group) v Secretary of State for Work and Pensions

JurisdictionEngland & Wales
CourtSupreme Court
Judgment Date08 December 2010
Neutral Citation[2010] UKSC 54
Date08 December 2010

[2010] UKSC 54


Michaelmas Term

On appeal from: 2009 EWCA Civ 1058


Lord Phillips, President

Lord Rodger

Lord Brown

Lord Kerr

Sir John Dyson, SCJ

The Child Poverty Action Group
Secretary of State for Work and Pensions


James Eadie QC

Andrew Henshaw

(Instructed by DWP/DH Legal Services)


Richard Drabble QC

Richard Turney

(Instructed by Child Poverty Action Group)


This appeal is all about the Secretary of State's right to recover certain social security benefits. As everyone knows, a large amount of public money is spent upon a whole range of such benefits. Entitlement to these in all cases requires first a claim and then an award. Inevitably on occasion overpayments occur. Sometimes more is paid than the sum awarded. For example, following an award, say, of £60 a claimant may be sent by mistake a cheque for £120 or two cheques each for £60. These cases present no difficulty. Everyone agrees that unauthorised payments of this kind are recoverable by the Secretary of State as money paid by mistake. The problem arises rather when overpayments are made in accordance with an award but the award itself is higher than it should be. It is common ground that before any question can arise as to recovering the sums overpaid in these cases the mistaken award must first be revised. And it is common ground too that following such revision the Secretary of State is entitled to recover any overpayment resulting from misrepresentation or the non-disclosure of a material fact. All this is expressly provided for by section 71 of the Social Security Administration Act 1992 (the 1992 Act). But does section 71 provide an exclusive code for recovery? That is the question.


In short, what is in issue in this appeal is whether in other cases of mistakenly inflated awards – most obviously in cases arising from "official error" (as it is called in Regulations to which I shall come) – the Secretary of State is entitled to recover the sums overpaid. This question arises, for example, where a claimant has notified a change of circumstances (such as that he has begun full-time work or that his child has left the household) and by mistake the Department overlooks (or delays actioning) the notification and continues making benefit payments at the same rate; or, indeed, where there is simply an erroneous calculation of the award. In cases like that is the Secretary of State permitted to seek recovery of such overpaid benefits at common law or is the exclusive route to recovery that provided by section 71 of the 1992 Act?


The judge at first instance, Michael Supperstone QC, sitting as a deputy High Court Judge, found in favour of the Secretary of State – [2009] EWHC 341 (Admin), [2009] 3 All ER 633. The Court of Appeal (Sedley, Lloyd and Wilson LJJ) [2009] EWCA Civ 1058, [2010] 1 WLR 1886– allowed the Child Poverty Action Group's appeal and declared:

"where a benefit falling within section 71(11) of the Social Security Administration Act 1992 is paid pursuant to the machinery contained in Part I Chapter II of the Social Security Act 1998, it can only be reclaimed from the claimant under section 71 of that Act (or some other specific statutory provision)."

The Secretary of State now appeals to this Court.


The circumstances in which the question arose for decision can be briefly told. At some unspecified date (seemingly in about 2006) the Secretary of State adopted a practice of writing to benefit claimants who he considered had been overpaid, but where there had been no misrepresentation or non-disclosure, indicating that the Department had a common law right of action to recover the overpayment. The letters were in substantially standard form accompanied by a document headed "Questions you might have about the overpayment" and asserted essentially that a mistake had been made, that too much of the relevant benefit had been paid and that "the law allows us to ask you to pay back money that should not have been paid" (or words to like effect). From March 2006 to February 2007 some 65,000 such letters were sent. Although no common law claim for repayment was ever in fact brought in the courts, the letters led, we are told, to the recovery of substantial sums – for example, just over £4m in the year 2007/8. The Child Poverty Action Group, however, an organisation with a long history of bringing legal test cases on behalf of social security claimants, thought the letters were based on a false legal premise and so brought this challenge to seek appropriate declaratory relief. Thus it was that the issue came before the courts.


It is convenient at this point to set out the more material parts of section 71 of the 1992 Act (as amended). Section 71 appears in Part III of the Act under the title Overpayments and Adjustments of Benefit – Misrepresentation etc:

"71. –Overpayments – general.

(1) Where it is determined that, whether fraudulently or otherwise, any person has misrepresented, or failed to disclose, any material fact and in consequence of the misrepresentation or failure –

(a) a payment has been made in respect of a benefit to which this section applies; or

(b) any sum recoverable by or on behalf of the Secretary of State in connection with any such payment has not been recovered,

the Secretary of State shall be entitled to recover the amount of any payment which he would not have made or any sum which he would have received but for the misrepresentation or failure to disclose.

(2) Where any such determination as is referred to in subsection (1) above is made, the person making the determination shall in the case of the Secretary of State or the First-tier Tribunal, and may in the case of the Upper Tribunal or a court –

(a) determine whether any, and if so what, amount is recoverable under that subsection by the Secretary of State, and

(b) specify the period during which that amount was paid to the person concerned.

(3) An amount recoverable under subsection (1) above is in all cases recoverable from the person who misrepresented the fact or failed to disclose it….

(5A) Except where regulations otherwise provide, an amount shall not be recoverable under subsection (1) unless the determination in pursuance of which it was paid has been reversed or varied on an appeal or has been revised under section 9 or superseded under section 10 of the Social Security Act 1998….

(8) Where any amount paid, other than an amount paid in respect of child benefit or guardian's allowance, is recoverable under –

(a) subsection (1) above;…

it may, without prejudice to any other method of recovery, be recovered by deduction from prescribed benefits.

(9) Where any amount paid in respect of a couple is recoverable as mentioned in subsection (8) above, it may, without prejudice to any other method of recovery, be recovered, in such circumstances as may be prescribed, by deduction from prescribed benefits payable to either of them.

(10) Any amount recoverable under the provisions mentioned in subsection (8) above –

(a) if the person from whom it is recoverable resides in England and Wales and the county court so orders, shall be recoverable by execution issued from the county court or otherwise as if it were payable under an order of that court; …"

Section 71(11) lists the various benefits to which the section applies. It is unnecessary to reproduce it here.


It is important to note that when the 1992 Act was passed, indeed at all times before 1998, the adjudication of awards and the payment of awards were constitutionally separate functions. Adjudication officers (and, before them, other independent officers) were responsible for all decisions concerning the making of awards, the Secretary of State for their payment. By sections 1 and 8 of the Social Security Act 1998 (the 1998 Act), however, the functions of adjudication officers were transferred to the Secretary of State who thereupon became the primary decision-maker in relation to the making of awards as well as remaining responsible for their payment. Prior to this merger of functions there had been provision for the revision of awards on a review (as well as the reversal or variation of awards on appeal). The 1998 Act introduced new provisions enabling the Secretary of State (by section 9) to revise, and (by section 10) to supersede, his section 8 decisions. This explains the language of section 71(5A). Essentially the same provision, however, had been made in section 71(5) which it replaced. As already noted, there could be no question of the Secretary of State ever seeking to recover an overpayment until the relevant award in one way or another had been formally corrected. These sections can be seen to reflect other provisions too in the governing legislation: regulation 17(1) of the Social Security (Claims and Payments) Regulations 1987 (SI 1987/1968) which imposes a statutory duty on the Secretary of State to pay the benefit awarded "for an indefinite period", and section 17 of the 1998 Act by which the Secretary of State's decision is declared to be final.


The next matter to note is that the 1992 Act was a consolidating statute. The immediate forerunner of section 71 had been section 53 of the Social Security Act 1986 which in turn had replaced both section 20 of the Supplementary Benefits Act 1976 governing the recovery of overpayments of the main non-contributory benefits and section 119 of the Social Security Act 1975 which governed the recovery of overpayments of contributory benefits. Section 119 had provided a defence if the claimant showed that he had exercised "due care and diligence to avoid overpayment." All the other provisions had adopted the test of misrepresentation or failure to disclose that is now re-enacted in section 71(1).


The final point to note from the statutory material is the express provision made by regulation...

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