File number:  CCR 4558 2001

DECISION OF THE SOCIAL SECURITY COMMISSIONER

1	I allow the appeal.

2	The compensator is appealing, with permission of a Commissioner, against the decision of the Liverpool appeal tribunal on 18 July 2000 under reference U 06 069 2000 01285.
 
3	For the reasons below, the decision of the tribunal is erroneous in law. I set it aside. I refer the appeal to a new tribunal be reheard in accordance with this decision (Social Security Act 1998 section 14(8) and (9)). The claimant and injured person must be notified as a party to the proceedings before a tribunal can hear this case properly. The listing officer should also note that the solicitors for the compensator have asked that the tribunal view a video at or before the rehearing as part of the evidence. 

4	This case came before me for oral hearing on 9 August 2000 at Bury County Court. The compensators were represented by Mr Gardiner of Hill Dickinson, solicitors. The Secretary of State was represented by Ms Haywood of the Office of the Solicitor to the Department for Work and Pensions. 

5	The question whether the injured person was, or should have been, a party to the proceedings before the Commissioner, or at the appeal tribunal below, was raised at the oral hearing. At my request, the claimant and injured person was contacted by a Legal Officer after the oral hearing. She indicated in reply that she was not aware of any of the proceedings in this case. I then became aware that a fellow Commissioner was considering the matter of the proper identity of parties to cases such as this in a case before him. I therefore stayed further consideration of this decision while he considered the matter. He has now done so, and I deal with that in this decision. The result, however, of the enquiries and the stay is unfortunately to add to the time taken in resolving this matter. 

Background to this appeal

6	The claimant (Mrs G) was injured in an accident at work on 14. 11. 1996. As a result of her injuries she claimed statutory sick pay and other benefits from the Secretary of State. She was awarded industrial injuries disablement benefit on the basis of an assessment of 16% disablement to 26. 12. 1997, increased to 20% from 27. 12. 1997 for life. She also made a civil claim against her employers. The compensator (the Insurance Company) paid a sum into court on behalf of the employers as defendants in a civil action as a settlement with Mrs G. The terms of the settlement, date 18 February 2000, were, so far as relevant:

The Claimant be at liberty to accept out of time the Defendants’ payment into court of £15,000 in full satisfaction of her claim for damages. The defendants also discharge these monies paid to the Claimant under the Social Security (Recovery of Benefits) Act 1997.

7 	A certificate of recoverable benefits had been issued by the Secretary of State to the Insurance Company in January 2000.  The amount shown in the order was £11,400.20, with adjustments depending on the precise date of payment. 	

8	The Insurance Company appealed against the certificate of recoverable benefits in March 2000. The grounds of appeal were that the medical evidence for both sides in the civil claim settlement showed that the injuries suffered by Mrs G as a result of her industrial accident were limited to the 12 to 18 months after the accident. Benefit claimed by her after that date was not related to the accident. The certificate of recoverable benefits should be limited to that time period. The Secretary of State decided that as no deduction had been made from Mrs G’s compensation she was not a party to the proceedings on the appeal. 

9	The tribunal heard the case at a hearing at which Mr Gardiner represented the Insurance Company and the Secretary of State was also represented. The tribunal produced a lengthy and detailed statement of reasons for its decision. Its conclusion was that the appeal should be dismissed and the certificate of recoverable compensation confirmed. The Insurance Company was granted permission to appeal to the Commissioner.

Should Mrs G be a party to the proceedings?

10	When the matter came before me, I raised the issue whether Mrs G, as the claimant, should have been a party to the proceedings. Neither party could give me a clear reason why she was not a party. It was agreed that I would cause an investigation to be made to see if she was or had been a party (or had been invited to be a party). As noted above, it is clear from Mrs G’s own statements to the office that she was not notified at any stage about the Insurance Company’s appeal. 

11	In his recent decision CCR 3808 2000 Commissioner Rowlands commented on the position of the claimant and injured party in that case as follows (at paragraph 13 of his decision) :

“Although the claimant had not exercised her own right of appeal to the tribunal, she was made a party to the compensator’s appeal before the tribunal. Regulation 1(2) of the Social Security and Child Support (Decisions and Appeals) Regulations 1999 (SI 199 No 991) defines “party to the proceedings” so as to embrace anyone “who has a right of appeal to an appeal tribunal under section 11(2) of the 1997 Act”, which includes a claimant where there has been a section 8 deduction. If that provision is to be construed literally, the claimant was rightly made a party to the proceedings before the tribunal, although I am at a loss to see why she should have been because she did not have any real interest in the outcome.”

I adopt that view of the wording of the regulation here. 

12	Mr Gardiner explained to me at the oral hearing that a payment into court had been made, and a Part 36 payment notice detailing a reduction of the sum under section 8 of the Social Security (Recovery of Benefits) Act 1997  had been given. At my request, a copy of that certificate was produced. It confirmed the payment of the sum shown in the certificate of recoverable compensation. The existence of that certificate directly contradicts the submission made by the Secretary of State to the appeal tribunal that no deduction had been made to Mrs G’s compensation, so she was not a party to the proceedings (document 112 in the appeal papers).  It is clear from this that Mrs G should be a party to these proceedings, whether or not she had an active interest in this appeal. In this case Mrs G has had her own advisers in the past. She may wish to consult them or another Citizens Advice Bureau, welfare rights office, solicitor or other expert adviser about the case. I think it is for her to form a view of where her interests might lie. I must therefore set aside the decision of the tribunal and refer the whole case to a new tribunal for decision with Mrs G as a party.

13	I add a more general point. When a payment into court is made under Part 36 of the Civil Procedure Rules (Offers to Settle and Payments into Court) , rule 36.23 applies if the payment is a compensation payment for the purposes of the Social Security (Recovery of Benefits) Act 1997. If the rule applies, the defendant must file a Part 36 payment notice with the payment stating, in addition to the usual details (see rule 36.6): the amount of gross compensation; the name and amount of any benefit by which that amount is reduced because of section 8 of and Schedule 2 to the 1997 Act; and that the sum paid in is the net amount. This is supplemented by paragraph 10 of the practice direction supplementing Part 36.  That will usually make it clear if the claimant should be a party to the proceedings before the appeal tribunal. It would be good practice for parties to provide, and tribunals to ask for, a copy of the relevant Part 36 payment notice if there is a payment into court, so as to avoid the confusion that occurred in this case.   

The arguments before the tribunal 

14	The issue of who should be a party to the case was not the main reason for appeal. The grounds of appeal for the Insurance Company were that the tribunal had erred in law in the way it decided that the benefits payable to Mrs G after the 18 months did arise as a result of the accident and were recoverable under the certificate of recoverable benefits from the Insurance Company. In part this was because, in the view of the Insurance Company, the tribunal had wrongly disregarded medical evidence. The other was that the tribunal had wrongly refused to view video evidence. 

15	The main issue was the extent of the liability of the Insurance Company to refund to the Secretary of State any benefits paid to Mrs G after the date of the accident. The maximum period is the five year limit set out in section 3 of the Social Security (Recovery of Benefits) Act 1997. The sum involved is significant. Assume that Mrs G continues to receive both industrial injuries disablement benefit and incapacity benefit on a weekly basis throughout that period at the same level as at the date of the certificate of recoverable benefits. Assume also that those benefits continue to be attributed to the accident. Benefit has been refunded for the period from August 1997 (when first claimed) to February 2000, so a further 2½ years of the full period remained. That would add a further £11,000 or so to the £11,400 already paid. However, section 3(4) of the 1997 Act provides:

	“If at any time before the end of the [five year] period … -
  (a) a person makes a compensation payment in final discharge of any claim        made by or in respect of the claimant and arising out of the accident … or
  (b) an agreement is made under which an earlier compensation payment is treated as having been made in final discharge of any such claim,
   	the relevant period ends at that time.”

In this case, therefore, the Insurance Company is liable only to refund the benefit up to the time when the claim was finally discharged. This was the date that the consent order was made, on 18 February 2000. So the liability of the Insurance Company stopped at that time.

16	The Insurance Company seeks to limit its liability to the Secretary of State further. The accident occurred in November 1996. The Insurance Company considered on the basis of the medical evidence that Mrs G would no longer be suffering from the results of the accident after about 18 months, say May 1998. If that was so, then not only did it avoid prospective payments by its settlement but also it would be liable only to have refunded the sums paid out in benefit to Mrs G for those 18 months. That is roughly £3,400 rather than the £11,400 actually refunded (or the £22,000 or more total cost of benefits over five years). That is of course a significant further reduction of liability on the part of the Insurance Company. 

17	The Insurance Company took the view it did about Mrs G on the basis of the expert medical views of the medical advisers, both consultant orthopaedic surgeons, instructed by both sides about the settlement of the civil action. While the terms of the settlement cannot deflect the statutory liability of the Insurance Company to pay the Secretary of State, they could cap the liability of the Insurance Company by means of an offset against the payment to the claimant. The tribunal pointed out in its decision that any such approach by the Insurance Company was not reflected in the consent order. It commented:

 “The court order does not specify any period in respect of which the payment of £15,000 is made and does not contain a provision, which the compensator’s solicitors could have been expected to insert, that the recoverable benefits are to be discharged by the compensator up to a specified date 12 to 18 months after the accident and by Mrs [G] thereafter. The court order specifies that the compensator is to pay all the listed benefits found to be recoverable but its terms did not assist us in determining whether the whole or part only of the amount on the CRB was recoverable.”

18	The next part of the tribunal decision explained in considerable detail why the tribunal rejected the submission of the Secretary of State to it that it could not investigate this issue. Its reasoning anticipated the decision of the Tribunal of Commissioners in CCR 6524 1999 and linked cases. In the submission to the Commissioner, the secretary of state's representative accepted, as the Secretary of State is bound to do, that the tribunal was right in ignoring the submission of the secretary of state's representative to it and in dealing with the Insurance Company’s arguments about causation.

19	It is clear, therefore, that the tribunal was looking at the right question, although I must find that it did so without Mrs G as a party to the proceedings. 

Were the claimant’s benefits attributable to the accident?

20	 The substance of the Insurance Company’s argument was directed at this issue. As my decision must be based on the procedural grounds set out above, this ground of appeal is no longer decisive. Further, the matter must go back to a new tribunal, so the evidence must be reheard and reconsidered. The new tribunal must consider for itself whether it is satisfied that the industrial injuries disablement benefit and incapacity benefit were paid to Mrs G as a result of the accident. The Insurance Company’s approach was that, in substance, Mrs G was not entitled to incapacity benefit at all, so her award could not be based on the accident. It was also obliged to argue that the award of industrial injuries disablement benefit was wrong.  The new tribunal has the clear guidance of the Tribunal of Commissioners in CCR 6524 1999 on this issue. That Tribunal confirmed that these are both contentions that the Insurance Company is entitled to make, and that if made the tribunal must decide. It must, of course, balance all the evidence in reaching its conclusions, and it may reach a conclusion inconsistent with the award of benefit. Indeed, if it agrees with the Insurance Company it must reach that conclusion as to the industrial injuries disablement benefit. The claimant may have her own concerns with those issues. 

21	As there is to be a rehearing, I draw attention to the issue of the unseen video. The solicitors for the Insurance Company were anxious that I saw the video that the tribunal declined to see. I explained that I was concerned only with issues of law, and it was not viewed (although facilities had been made available so that I could see it if relevant). It was also agreed that the video be returned to the custody of the solicitors as it was a master copy, and it was so returned. The solicitors will no doubt wish the new tribunal to see that video.  I have suggested that this be noted when the case is relisted. The solicitors will need to supply a copy of the video to the appeal tribunal at the appropriate time.

								David Williams
								Commissioner

								12 December 2002
[Signed on the original on the date shown]