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

JurisdictionEngland & Wales
Judgment Date27 February 2009
Neutral Citation[2009] EWHC 341 (Admin)
Docket NumberCase No: CO/4211/2007
CourtQueen's Bench Division (Administrative Court)
Date27 February 2009

[2009] EWHC 341 (Admin)

IN THE HIGH COURT OF JUSTICE

QUEEN'S BENCH DIVISION

ADMINISTRATIVE COURT

Before:

Michael Supperstone QC (Sitting as a Deputy High Court Judge)

Case No: CO/4211/2007

Between
The Queen on the Application of the Child Poverty Action Group
Claimant
and
Secretary of State for Work and Pensions
Defendant

Mr Richard Drabble QC (instructed by Child Poverty Action Group) for the Claimant

Mr Andrew Henshaw (instructed by Dept for Work and Pensions) for the Defendant

Hearing dates: 26/01/2009

Michael Supperstone Q.C. (Sitting as Deputy High Court Judge)

Introduction

1

This application for judicial review concerns the practice of the Defendant, the Secretary of State for Work and Pensions, of seeking to recover overpaid Social Security benefit other than under Section 71 of the Social Security Administration Act 1992 (“the 1992 Act”). Permission to apply for judicial review was granted by Underhill J at an oral hearing on 6 February 2008.

2

Section 71 of the 1992 Act confers on the Defendant a statutory power to recover, subject to specified conditions, a payment of any relevant benefit from any person who has misrepresented or failed to disclose any relevant fact, where the payment would not have been made but for such misrepresentation or non-disclosure.

3

The Defendant's position is that Section 71 neither expressly nor by necessary implication removes his power to claim repayment at common law of money paid by mistake. The Claimant contends that the Defendant's practice is unlawful where the original payment was made pursuant to and in accordance with a valid determination and where the pre-conditions for recovery under Section 71 are not met.

Factual Background

4

The Defendant has adopted a practice of writing to claimants who he considers have been overpaid benefit, but who have not misrepresented or failed to disclose any relevant fact, letters claiming that he has a common law cause of action to recover the overpayment. The letters (with some variations) are in standard form, and are accompanied by a document headed “Questions you might have about the overpayment” (see exhibit “ SW1” to the witness statement of Mr Stewart Wright at pp 28 and 30 in the Court Bundle). I am informed that during the period between March 2006 and February 2007 such letters have been sent in some 65,000 cases.

5

The material part of the letter dated 10 July 2006 (CB, p28) states:

“We are writing to you because too much Income Support has been paid.

This is because of your Child Benefit ending or reducing.

Although this money is not recoverable under Social Security law we are asking for it back as it was money that should not have been paid.”

6

The accompanying document ( CB, p30) includes the following:

Why should I have to repay this money if the overpayment was not my fault?

A: Under common law anybody who receives money to which they are not entitled can be asked to pay it back. We are asking for it back because we have a right to recover this money and a duty to protect public funds.”

“What if I don't agree that I should pay this money back?

A: This money is recoverable under common law, as you were not entitled to receive this money. We are allowed to ask for the money back on this basis and could seek recovery through the courts if necessary.

In some circumstances we would not ask for the money back. For example where you thought that you were entitled to the money and all of the money has now been spent.”

7

In some letters the Defendant stated that the overpayment “was our mistake and we are sorry that it has happened. However you have been paid public money that you were not entitled to and it should be paid back” ( CB, p80).

8

The evidence is that though the Defendant regards overpayments made by mistake as recoverable in principle, subject always to any applicable defences, the practice of the Department for Work and Pensions depends on the circumstances. In particular (i) requests for repayment are not generally pursued beyond an initial request in cases where the claimant is unlikely to have been aware of the overpayment at the time it was made, and (ii) where the Department is aware that a vulnerable customer is involved the practice is to write the amount off immediately without making any request for repayment. It appears that no common law proceedings following despatch of the letter have so far been brought to recover an overpayment of benefit outside Section 71. Nevertheless it is clear from the evidence that receipt of a letter by a benefit recipient asserting a legal duty to pay what may be a substantial sum, enforceable if necessary by court action, is capable of causing very substantial distress.

The Legislative Framework

9

By Section 8(1) of the Social Security Act 1998 (“the 1998 Act”) it shall be for the Defendant to decide any claim for a relevant benefit.

10

Section 9 of the 1998 Act provides, in so far as is material, that any decision of the Defendant under Section 8 or Section 10 of the 1998 Act may be revised by the Defendant and regulations may prescribe the procedure by which a decision of the Defendant may be so revised. By Section 9(3) a revision under this Section shall take effect as from the date on which the original decision took (or was to take) effect.

11

Section 10 of the 1998 Act provides, in so far as is material, that any decision of the Defendant under Section 8 or this Section, whether as originally made or as revised under Section 9, may be superseded by a decision made by the Defendant, either on an application made for the purpose or on his own initiative. A decision under this Section shall take effect as from the date on which it is made or, where applicable, the date on which the application was made (s. 10(5)), or any other date prescribed by regulations (s.10(6)).

12

Any decision made in accordance with the above provisions shall be final (s.17(1) of the 1998 Act).

13

The terms of an award of benefit are governed by the Social Security (Claims and Payments) Regulations 1987 (as amended).

14

Section 71 of the 1992 Act, which is the first section in Part III of the 1992 Act entitled “Overpayments and Adjustments of Benefit”, provides:

“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.”

By sub-section 5A of section 71 of the 1992 Act an amount shall not be recoverable under sub-section (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 1998 Act.

15

By Regulation 3(5) of the Social Security and Child Support (Decisions and Appeals) Regulations 1999 a decision of the Defendant under Section 8 or Section 10 of the 1998 Act:

“(a) which arose from an official error; or

(b) except in the case of a disability benefit decision or an incapacity benefit decision where there has been an incapacity determination … where the decision was made in ignorance of, or was based upon a mistake as to, some material fact and as a result of that ignorance of or mistake as to that fact, the decision was more advantageous to the claimant than it would otherwise have been but for that ignorance or mistake;

may be revised at any time by the Defendant”.

The Parties' Submissions

16

It is common ground that an overpayment can be recovered only after the relevant award has been revised or superseded.

17

Further it is not suggested on behalf of the Claimant that Section 71 of the 1992 Act expressly abrogates the Defendant's common law rights of restitution. Accordingly the issue is whether it does so by necessary implication.

18

The Defendant accepts that the principle established in the case of Auckland Harbour Board v. R [1924] AC 318 which provides that payments made by a government minister out of the Consolidated Fund without specific authority of Parliament are illegal and ultra vires and can be recovered by the government has no application in the present case.

19

Mr Drabble Q.C., for the Claimant, submits that Section 71 of the 1992 Act forms part of a coherent piece of adjudication machinery and that once the statutory scheme is considered as a whole, it can be seen that there is no room for any of the common law causes of action that the Defendant seeks to rely on. Mr Drabble referred me to the legislative history for a comparison of the statutory adjudication scheme of which Section 71 forms part dating back, at least, to the Social Security Act 1986 (“the 1986 Act”) and the current adjudication machinery. The 1992 Act was a consolidating Act. In the adjudication scheme under the 1986 Act and the 1992 Act as originally enacted, there was a division of responsibility between the Secretary of State and an independent officer called an Adjudication Officer. The Secretary of State was responsible for processing a claim for benefit; once processed he had a statutory duty to submit the claim for determination to the Adjudication Officer. If the Adjudication Officer made a determination that the...

To continue reading

Request your trial
3 cases
  • R (Child Poverty Action Group) v Secretary of State for Work and Pensions
    • United Kingdom
    • Supreme Court
    • 8 December 2010
    ...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 P......
  • R (Child Poverty Action Group) v Secretary of State for Work and Pensions
    • United Kingdom
    • Court of Appeal (Civil Division)
    • 14 October 2009
    ...for declaratory relief failed, however, before Michael Supperstone QC sitting as a deputy judge of the Queen's Bench Division ( [2009] EWHC 341 (Admin)), and the issue now comes before us for redetermination. The Social Security Administration Act 1992 10 Section 71 of the 1992 Act origina......
  • JD CH 3495 2008
    • United Kingdom
    • Upper Tribunal (Administrative Appeals Chamber)
    • 21 April 2009
    ...Supperstone QC, sitting as a Deputy High Court Judge, in R (Child Poverty Action Group) v Secretary of State for Work and Pensions [2009] EWHC 341 (Admin). That case was concerned with whether the Secretary of State has a right to recover overpayments of social security benefits on the grou......

VLEX uses login cookies to provide you with a better browsing experience. If you click on 'Accept' or continue browsing this site we consider that you accept our cookie policy. ACCEPT