The King (on the application of K) v Secretary of State for Work and Pensions
| Jurisdiction | England & Wales |
| Judge | Mrs Justice STeyn DBE,Mrs Justice Steyn |
| Judgment Date | 07 February 2023 |
| Neutral Citation | [2023] EWHC 233 (Admin) |
| Docket Number | Case No: CO/176/2022 |
| Court | King's Bench Division (Administrative Court) |
[2023] EWHC 233 (Admin)
THE HON. Mrs Justice Steyn DBE
Case No: CO/176/2022
IN THE HIGH COURT OF JUSTICE
KING'S BENCH DIVISION
ADMINISTRATIVE COURT
Bristol Civil Justice Centre
2 Redcliff St, Redcliffe, Bristol BS1 6GR
Adam Straw KC and Tom Royston (instructed by Public Law Project) for the Claimant
Cecilia Ivimy and Jackie McArthur (instructed by Government Legal Department) for the Defendant
Hearing dates: 29 and 30 November 2022
Approved Judgment
This judgment was handed down remotely at 10.30am on 7 February 2023 by circulation to the parties or their representatives by e-mail and by release to the National Archives.
THE HON. Mrs Justice STeyn DBE
A. Introduction
The claimant was overpaid Universal Credit (‘UC’) by the defendant. The claimant has two disabled sons. During the period 1 July 2019 to 31 January 2021 the defendant treated her youngest son as being in full-time non-advanced education, when he was undertaking an apprenticeship, and so mistakenly paid the claimant the “ children and disabled children element” of UC. A tribunal found that the overpayment, in the sum of £8623.20, occurred due to “ official error” (a defined term), in circumstances where the claimant had taken “ all reasonable steps to repeatedly clarify her entitlement and provide information in relation to her sons” but unfortunately the defendant repeatedly miscalculated her entitlement to UC. The defendant's Complaints Team has apologised to the claimant for “ this profound lapse in service”.
Following the defendant's decision in January 2021 that the claimant had been overpaid, the claimant asked the defendant to waive recovery of the overpayment. The defendant refused to do so, applying a policy known as the Benefit Overpayment Recovery Guide (‘BORG’). By this claim for judicial review, the claimant challenges the lawfulness of decisions made on 19 October 2021, 20 December 2021 and 28 April 2022 to refuse to waive recovery of the overpayment. The defendant temporarily suspended repayments until 28 January 2023, and will not seek to recover the UC overpayment until it has first recovered a separate, smaller overpayment of Carer's Allowance, which is not at issue in this claim.
The claimant has pleaded nine grounds of claim but withdrawn one ground (Ground VIII). She has been granted permission on all grounds pursued save for Ground IX (publication) and Ground VI(c) (legitimate expectation), in respect of which permission is sought. In short, the claimant contends:
i) The defendant has unlawfully failed to publish the “ Decision Makers Guide to Waiver” (‘DMGW’) (proposed Ground IX);
ii) The Secretary of State's policy on waiver is and was an unlawful fetter on his discretion (Grounds I, II and V);
iii) The defendant's decisions to refuse to waive recovery in the claimant's case were unlawful because (a) the defendant applied an unlawful policy; (b) the defendant unlawfully fettered his discretion, failed to take into account material considerations and the decisions were irrational; and (c) unlawfully breached the claimant's legitimate expectation (Grounds I, II, IV and VI, including proposed Ground VI(c)); and
iv) The defendant breached the public sector equality duty in s.149 of the Equality Act 2010 when considering and formulating his policy between 2013 and 2022, and in exercising his functions regarding waiver of overpayments (Grounds III & VII).
These grounds give rise to the following agreed issues:
i) Has the defendant acted unlawfully by failing to publish the DMGW?
ii) Is the BORG materially inconsistent with the DMGW? If so, is the BORG unlawful to the extent it is inconsistent with the DMGW?
iii) Does the BORG 2022 (version 2.8) unlawfully fetter discretion / authorise or approve unlawful conduct?
iv) Did the BORG 2021 (version 2.6) unlawfully fetter discretion / authorise or approve unlawful conduct?
v) Are the defendant's decisions of 19 October 2021, 20 December 2021 and/or 28 April 2022 unlawful because they:
a) apply an unlawful policy?
b) apply a fettered discretion / fail to give lawful regard to all relevant considerations?
c) are irrational?
vi) Did the claimant have a legitimate expectation that the defendant would pay benefit in respect of her son, ‘A’? If so, did the defendant's decision not to waive recovery of that benefit unlawfully depart from that expectation?
vii) If the 2021 decisions are unlawful in any of the above respects, but the 2022 decision is not, is the 2022 decision nevertheless unlawful for being a review rather than a fresh decision?
viii) Has the defendant failed to comply with the PSED when considering and formulating his policy on recovery and waiver of overpayments in BORG 2021 and/or revising that policy in BORG 2022?
B. The legislative and policy framework
Universal Credit
The Welfare Reform Act 2012 (‘the 2012 Act’) introduced a new benefit, UC. It is a single payment for each household, paid monthly in arrears, to help with living costs for those on low income or who are out of work. It was first introduced in 2013 and replaced six existing benefits, which are known as legacy benefits.
There is a UC “ standard allowance”. The standard allowance is based on age and whether the claimant is single or part of a couple. In addition to the standard allowance, “ additional elements” may be paid as part of UC: these are additional sums to assist those with children, caring responsibilities, and limited capability to work due to ill health or disability, and to assist with childcare and housing costs: s.1 of the 2012 Act and the Universal Credit Regulations 2013 (SI 2013/376).
Official error
The term official error is defined in regulation 2 of the Universal Credit, Personal Independence Payment, Jobseeker's Allowance and Employment and Support Allowance (Decisions and Appeals) Regulations 2013:
“‘official error’ means an error made by –
(a) an officer of the Department for Work and Pensions or HMRC acting as such which was not caused or materially contributed to by any person outside the Department or HMRC;
(b) a person employed by, and acting on behalf of, a designated authority which was not caused or materially contributed to by any person outside that authority,
But excludes any error of law which is shown to have been such by a subsequent decision of the Upper Tribunal, or of the court as defined in section 27(7) of the 1998 Act”. (Emphasis added.)
Recovery of overpayments
Section 71(1) of the Social Security Administration Act 1992 (‘the 1992 Act’) provides:
“ 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.
…
(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.
…
(8) Where any amount paid is recoverable under –
(a) subsection (1) above;
…
It may, without prejudice to any other method of recovery, be recovered by deduction from prescribed benefits.
…” (Emphasis added.)
The benefits to which s.71 applies are listed in subsection (11). The list does not include universal credit.
Until 2013, the Secretary of State only had power to recover overpayments where the original award was obtained by misrepresentation or non-disclosure. There was no power under the statutory scheme to recover in cases of receipt – even knowing receipt – of an overpayment due to a mistaken award. In particular, the Secretary of State had no power to recover overpayments caused by official errors: R (Child Poverty Action Group) v Secretary of State for Work and Pensions [2011] 2 AC 15 (‘ CPAG v SSWP’), Lord Brown JSC, [15]. That continues to be the effect of s.71 in relation to the benefits to which it applies.
In CPAG v SSWP, the Supreme Court held that,
“section 71 constitutes a comprehensive and exclusive scheme for dealing with all overpayments of benefit made pursuant to awards”: Lord Brown JSC, [12], [15], Lord Dyson JSC, [22], [35].
In doing so, the court rejected the Secretary of State's contention that he had a common law right (subject to common law defences) to seek recovery of overpayments, including official error overpayments.
In 2013, at the same time as introducing UC, the 2012 Act inserted a new s.71ZB into the 1992 Act which provides (so far as material):
“ Recovery of overpayment of certain benefits
(1) The Secretary of State may recover any amount of the following paid in excess of entitlement –
(a) universal credit,
(b) jobseeker's allowance,
(c) employment and support allowance,
…
(2) An amount recoverable under this section is recoverable from –
(a) the person to whom it was paid, or
(b) such other person (in addition to or instead of the person to whom it was paid) as may be prescribed.
(3) An amount paid in pursuance of a determination is not recoverable under this section unless the determination has been –
(a) reversed or varied on an appeal, or
(b) revised or superseded under section 9 or section 10 of the Social Security Act 1998,
except where regulations otherwise provide.
…
(7) An amount recoverable under this section may (without prejudice to any other means of recovery) be recovered –
(a) by deduction from...
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