R (Child Poverty Action Group) v Secretary of State for Work and Pensions
| Jurisdiction | England & Wales |
| Judge | Lord Justice Sedley,Or,Lord Justice Lloyd,Lord Justice Wilson |
| Judgment Date | 14 October 2009 |
| Neutral Citation | [2009] EWCA Civ 1058 |
| Court | Court of Appeal (Civil Division) |
| Docket Number | Case No: C1/2009/0585 |
| Date | 14 October 2009 |
[2009] EWCA Civ 1058
IN THE COURT OF APPEAL (CIVIL DIVISION)
ON APPEAL FROM THE HIGH COURT OF JUSTICE
QUEEN'S BENCH DIVISION
ADMINISTRATIVE COURT
MR M. SUPPERSTONE QC
Royal Courts of Justice
Strand,
London, WC2A 2LL
Lord Justice Sedley Lord Justice Lloyd
and
Lord Justice Wilson
Case No: C1/2009/0585
CO/4211/2007
Mr Richard Drabble QC (instructed by The Child Poverty Action Group) for the Appellant
Mr Andrew Henshaw (instructed by Office of the Solicitor, DWP) for the Respondent
Hearing date: Thursday 9 July 2009
Lord Justice Sedley :
From time to time, inevitably, accidental overpayments are made to individuals entitled to social security benefits. The error may have happened because the entitlement has been misunderstood, because of a faulty computation or simply because of a misprint.
“Where it is determined that, whether fraudulently or otherwise, any person has misrepresented, or failed to disclose, any material fact”, s. 71 of the Social Security Administration Act 1992 makes provision for the Secretary of State to recover any consequent overpayment. There is no other express provision in the social security legislation for recovery of these overpayments.
The issue which thus arises could not be starker or simpler: where the cause of an overpayment has not been misrepresentation or non-disclosure, can the Secretary of State resort to common law to recover it? For the Child Poverty Action Group, which advances the present strategic challenge, Richard Drabble QC asks what the point was of enacting s.71 if it was possible for such overpayments and many others besides to be collected as debts without legislative help. Absent such provision, he argues, there is no power of recovery. For the Secretary of State, Andrew Henshaw asks what there is in the language or objects of s.71 which suggests that it was intended to be exhaustive of the state's right to recover overpaid public funds. Its purpose, he submits, is to confer particular powers for the recovery of one class of overpayment, leaving the remainder to the general law.
The issue can be drily stated in this way, but its reality is more troubling. Until recently the Department enforced recovery either under s.71 or not at all. For overpayments not covered by that section it would ask claimants for repayment but would take no further steps. What has prompted these proceedings is the adoption of a new practice, illustrated in the documentation, of asserting a right to take legal action outside s.71.
A typical letter now reads:
“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.
If you cannot pay this amount in full or would like to discuss the matter further, please contact us ….”
Or“We are writing to let you know that a mistake has been made and we have paid you too much Income Support.
This because of your entitlement to the benefit has stopped.
This 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. The law allows us to ask you to pay back money that should not have been paid.
……………..”
Annexed to every such letter is a questionnaire which reads:
Questions you might have about the overpayment
Q What should I do if I want to know more about the overpayment?
A Please contact us and we will provide an explanation. Our address and phone number are at the top of this letter.
Q 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.
Q What do I do if I cannot pay this money back?
A We do not intend to cause any hardship by asking for this money back. If you cannot afford to refund the money in one go we can arrange for payments to be made by instalments.
Q 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.
If you think this is relevant in your case then contact us and explain the situation and we will consider whether to continue to seek a refund of the money. Our address and phone number are at the top of this letter.
It is evident that this material is based on legal advice about the law of restitution. The covering letters seek, creditably, not to threaten and not to alarm unduly. But the impact (the examples quoted were seeking repayment of £2,055.55 and £796.00 respectively) can be devastating to a person already living in or close to penury.
Moreover (and this too appears to be far from unique) the second example quoted above turned out to relate to a non-existent overpayment. A well-composed letter of complaint from the claimant's local CAB elicited this in response:
Firstly I would like to explain that Debt Management is responsible for the recovery of overpayments based on referrals made to us by the office that was responsible for the paying of the benefit. On 22 October 2007 we received a referral from the Luton Job Centre Plus Office stating that an overpayment of Income Support had occurred for the period 29 November 2006 to 17 April 2007. This was calculated to be £796.00 and based on the accompanying evidence the Decision Maker decided that the overpayment was not recoverable under Social Security Legislation but could be requested to be repaid under Common Law. As you state there is no requirement to repay the overpayment and there is no right of appeal against the decision. However the text of the letters issued in these cases has been drafted to meet the legal requirements of our solicitors. The debt has since been written off.
Although more than 65,000 such letters, with the enclosed Q and A, have been sent out, we are told that no claim has yet been initiated in the courts for recovery of an overpayment falling outside s.71.
In this situation, stressful for claimants and problematical for the Department, CPAG's application for judicial review of the claimed entitlement was an appropriate use of the Administrative Court's jurisdiction. The claim 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.
Section 71 of the 1992 Act originally read as follows:
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 on an appeal or review, there shall also be determined in the course of the appeal or review the question whether any, and if so what, amount is recoverable under that subsection by the Secretary of State.
(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.
(4) In relation to cases where payments of benefit to which this section applies have been credited to a bank account or other account under arrangements made with the agreement of the beneficiary or a person acting for him, circumstances may be prescribed in which the Secretary of State is to be entitled to recover any amount paid in excess of entitlement; but any such regulations shall not apply in relation to any payment unless before he agreed to the arrangements such notice of the effect of the regulations as may be prescribed was given in such manner as may be prescribed to the beneficiary or to a person acting for him.
(5) Except where regulations otherwise provide, an amount shall not be recoverable under subsection (1) above or regulations under subsection (4) above unless—
(a) the determination in pursuance of which it was paid has been reversed or varied on an appeal or revised on a review; and
(b) it has been determined on the appeal or review that the amount is so recoverable.
(6) Regulations may provide—
(a) that amounts recoverable under subsection (1) above or regulations under subsection (4) above shall be calculated or estimated in such manner and on such basis as may be prescribed;
(b) for treating any amount paid to any person under an award which it is subsequently determined was not payable—
(i) as properly paid; or
(ii) as paid on account of a payment which it is determined...
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