CDLA/1823/2004

DECISION OF THE SOCIAL SECURITY COMMISSIONER

1.	I allow the claimant’s appeal.  I set aside the decision of the Nottingham appeal tribunal dated 19 January 2004 and I refer the case to a differently constituted appeal tribunal for determination.  I direct the Secretary of State to provide the tribunal with copies of the instructions given to the claimant as to his duty to report facts to those responsible for administering disability living allowance.

REASONS

2.	The claimant’s feet were badly scalded when he was 4 years old and he had to have his toes amputated when he was aged 11.  He made a claim for disability living allowance on 30 January 1996, when he was aged 47, and was awarded the higher rate of the mobility component indefinitely, following a medical examination in which the medical practitioner found that, before the onset of severe discomfort, he could walk 20-40 yards at a slow pace and with a slight “waddle” due to pain where his toes had been amputated.

3.	In January 2003, the claimant was interviewed as part of a fraud investigation, which appears to have arisen initially because he was claiming severe disablement allowance and income support and was believed to have been working, both as a shop owner and as a taxi driver, without having declared that work.  There was evidence from investigators who had seen the claimant walking short distances and carrying heavy items and who had made a video recording.  Furthermore, when applying for a hackney carriage licence on 1 September 2000, the claimant had answered “no” to the question whether he had “any physical infirmity that might prevent you from assisting passengers with luggage”.  He also obtained a medical certificate from a doctor who was not his general practitioner and who certified, on a date that looks like 15 September 2001 but may be the previous year, that he had examined the claimant and that he did not have “any deformity, loss of members or physical disability”.  (It is fair to the doctor to point out that the question was said to “relate to the ability of the applicant to efficiently discharge duties as a driver of a Hackney Carriage or Private Hire Vehicle” and the doctor was certifying him fit to drive such a vehicle.)  In the light of that evidence, the claimant was asked questions about his entitlement to disability living allowance.  His replies were to the effect that his condition had not improved since he was awarded benefit, that his feet always hurt, that he walked on the edge and back of his feet to reduce the pain, that part of his difficulty came from his being overweight (19 stone) and that he had minimised his disability when applying for the hackney carriage licence so as not to prejudice his application.  However, he also conceded that he had walked from his car which he thought was parked “probably about 200 yards” away, although the tenor of his comments was that he could not manage that distance very often or without suffering as a result.

4.	On 21 February 2003, the Secretary of State superseded the award of disability living allowance with effect from 1 September 2000 and subsequently decided that £4,937.20 had been overpaid and was recoverable from the claimant.  The claimant appealed against the first of those decisions.  What happened to the second decision is not revealed in the papers before me but, for reasons I shall explain below, it may need some reconsideration.  On 19 January 2004, the Nottingham appeal tribunal dismissed the claimant’s appeal, finding that the claimant’s walking ability had “improved since 1996 in that from in or about 2000 to the date of the decision (06.02.03) he was able to walk at least 60 metres before experiencing severe discomfort”.  The claimant now appeals with my leave and the support of the Secretary of State.

5.	The Secretary of State submits that applying for a hackney carriage licence does not constitute a relevant change of circumstances and also that the appeal tribunal erred in failing to consider whether the claimant was virtually unable to walk in accordance with the criteria in regulation 12(1)(a)(ii) of the Social Security (Disability Living Allowance) Regulations 1991 (S.I. 1991 No. 2890), which required them to have regard to the speed at which, the length of time for which, and the manner in which, he walked, as well as the distance he could manage.  The first of those points is no doubt true but the appeal tribunal regarded the improvement in walking ability, rather than the application for the licence, as being the material change of circumstances.  The second point has more force, because the appeal tribunal nowhere referred to any factor other than distance.

6.	The claimant is particularly incensed at the decision that he is not entitled to benefit being retrospective.  Were it not retrospective, there would be no question of recovery of an overpayment.  Although the claimant has not raised any point of law as such, I consider that the appeal tribunal’s decision is erroneous in point of law because the chairman failed to record any adequate reason for making the supersession effective from 1 September 2000.  It is likely that the tribunal overlooked the material legislation.  This seems to me to be a more obvious defect than that identified by the Secretary of State.  However, the fault was not entirely the tribunal’s, because the Secretary of State, as is all too common, totally failed to deal with the issue of the effective date of his decision when making his submission to the appeal tribunal.  Indeed, there was no mention in his submission at all to the provisions relating to supersession in section 10 of the Social Security Act 1998 and regulations 6 and 7 of the Social Security and Child Support (Decisions and Appeals) Regulations 1999 (S.I. 1999 No. 991).  Instead, he reproduced numerous references to provisions relating to the care component of disability living allowance, which were completely irrelevant.

7.	By section 10(5) of the 1998 Act, a supersession decision made on the Secretary of State’s own initiative takes effect from the date it is made, unless regulations otherwise provide (or section 27 applies, which it does not in this case).  The only material exception where supersession is under regulation 6(2)(a)(i) on the ground of change of circumstances is provided for in regulation 7(2)(c)(ii) of the 1999 Regulations, which applies only where –

“the claimant … failed to notify an appropriate office of a change of circumstances which regulations under the Administration Act required him to notify, and the claimant … knew or could reasonably have been expected to know that the change of circumstances should have been notified”.

In such a case, the supersession is effective –

“from the date on which the claimant … ought to have notified the change of circumstances”.

The “regulations under the Administration Act” do not add much because regulation 32(1) of the Social Security (Claims and Payments) Regulations 1987 (S.I. 1987 No. 1968, as in force before 5 May 2003) merely required a claimant to notify the Secretary of State of –

“such … facts affecting the right to benefit … as the Secretary of State … may require … and in particular shall notify the Secretary of State … of any change of circumstances which he might reasonably be expected to know might affect the right to benefit … as soon as reasonably practicable after its occurrence …”.

The appeal tribunal did not consider whether the improvement in the claimant’s ability to walk which they had found had taken place was a matter about which he should have informed the Secretary of State.

8.	This point is obviously closely related to the question whether there has been any overpayment and, if so, whether it is recoverable under section 71(1) of the Social Security Administration Act 1992 on the ground that the claimant has –

“misrepresented, or failed to disclose, any material fact”.

A Tribunal of Commissioners in CIS/4348/03 has recently placed much emphasis on regulation 32(1) of the 1987 Regulations when holding Mr Commissioner Edwards-Jones QC in R(SB) 21/82 “to have been in error in importing a ‘reasonable expectation’ requirement into criteria that entitle the Secretary of State to recover an overpayment for a failure to disclose” under section 71(1).  In CIS/4348/03, the claimant failed to comply with clear and unambiguous instructions as to the need to report certain facts.  The Tribunal of Commissioners held that it was irrelevant that her mental capacity was limited.  It may be that the practical impact of their decision is confined to such cases.  Absent any suggestion of ill health or limited mental capacity, the significance of which were matters of controversy between Commissioners until the decision of the Tribunal, appeal tribunals and Commissioners would generally have considered that there had been a failure to disclose where disclosure had not been made despite being required by clear and unambiguous instructions, whether they had had Mr Commissioner Edwards-Jones’ dictum in mind or regulation 32(1) or both.  The more difficult cases, which the Tribunal of Commissioners did not have to consider, are those where instructions to report facts are ambiguous or expressed in such general terms as to require some interpretation by a claimant or where written instructions have been qualified by an officer acting on behalf of the Secretary of State or, indeed, where there have been no relevant instructions at all but the claimant might have had reason to suspect that he was not entitled to all the benefit he was receiving.

9.	In any of those circumstances, it seems to me that the question whether there has been a “failure” by the claimant to “disclose” (for the purposes of section 71(1) of the 1992 Act) or to “notify” (for the purposes of regulation 7(2)(c)(ii) of the 1999 Regulations) a fact to the Secretary of State must inevitably be determined by considering whether the Secretary of State could reasonably have expected the claimant to disclose or notify that fact.  Regulation 32(1) of the 1987 Regulations does not provide a simple answer where it is necessary to consider whether the Secretary of State has actually required the claimant to report particular “facts affecting the right to benefit”.  It may be necessary to decide how a reasonable claimant could have construed the instruction and it is, furthermore, expressly provided that a general requirement to keep the Secretary of State informed of changes of circumstances applies only in respect of “any change of circumstances which [the claimant] might reasonably be expected to know might affect the right to benefit”.  In the present case, there is no evidence in the papers before me as to what, if any, instructions were given to the claimant.  Not only is such information required when considering whether an overpayment is recoverable under section 71(1) of the 1992 Act, it is also required for the purpose of determining whether a supersession decision is to be made retrospective under regulation 7(2)(c)(ii) of the 1999 Regulations.

10.	There is a further difficulty in the present case in determining exactly what change of circumstances there had been that the claimant might have been expected to disclose.  It seems inherently unlikely that there had been an improvement in the condition of his feet, forty years after the amputation, and the appeal tribunal considered that he had merely become better at coping with his disability.  Given the length of time for which the claimant had been disabled, that does not seem very likely either but, on the footing that the appeal tribunal were entitled to make that finding, it was necessary, for the purposes of regulation 7(2)(c)(ii) of the 1999 Regulations – and, when the Secretary of State came to consider the overpayment decision in the light of the appeal tribunal’s findings, for the purposes of section 71(1) of the 1992 Act – to consider whether the claimant had been instructed to, or could otherwise reasonably have been expected to, inform the Secretary of State that he was now able to walk further than before, even though his physical condition had not itself improved.  Yet further difficulties lie in the facts that the examining medical practitioner’s estimate of the claimant’s capacity to walk did not purport to be terribly precise and that it was in any event probably unknown to the claimant.  The claimant himself had then suggested an estimate of a maximum of 50 yards on a good day.  Where any measurement is imprecise, it may be difficult to identify a reportable improvement.

11.	If those considerations suggest that it would have been better to terminate the award on the ground of mistake of fact rather than change of circumstances, difficulties remain.  Supersession under regulation 6(2)(b)(i) of the 1999 Regulations on the ground of mistake of fact would, by virtue of section 10(5) of the 1998 Act, be effective from the date of the decision.  Revision under regulation 3(5)(c) of the 1999 Regulations on the ground of mistake of fact would be effective from the beginning of the period of the award (see section 9(3) of the 1998 Act) but would be possible only if –

“at the time the decision was made the claimant … knew of could reasonably have been expected to know the fact in question and that it was relevant to the decision”.

The claimant may have known in general terms of his capacity to walk and its relevance to his entitlement to disability living allowance, but it would be hard to say that he should have known whether or not he qualified for the allowance, which is what regulation 3(5)(c) appears to be driving at.  Even regulation 12(1)(a)(ii) of the 1991 Regulations forbears from laying down any precise standards for determining whether or not a person is virtually unable to walk.

12.	Even if the award were revised, any overpayment resulting from the revision might well not be recoverable under section 71(1) of the 1992 Act.  Generally, a claimant’s statement as to the distance he can walk cannot be taken as purporting to be anything other than an honest opinion and, in those circumstances, even if it turns out to be wrong, it is difficult to regard it as amounting either to a failure to disclose a material fact or a misrepresentation, unless the Secretary of State or an appeal tribunal is satisfied that the claimant in fact made the statement dishonestly (see CDLA/5803/99).  Furthermore, the award of benefit in this case was almost certainly based on the examining medical practitioner’s estimate, which was different from, and might not necessarily have been influenced by, the claimant’s estimate.  

13.	The claimant’s appeal against the Secretary of State’s decision to supersede the award of disability living allowance must be considered by another appeal tribunal, who must consider afresh whether there were any grounds for supersession or revision and, if so, the date from which the decision is to be effective.  Until 1996, a decision as to the recoverability of an overpayment had to be made in conjunction with a decision reviewing the award under which the payment had been made.  Now, although there must first have been a revision or a supersession, any decision as to the recoverability of a resulting overpayment may be made entirely separately.  Whether or not that is desirable, it will be fairly obvious from what I have said above that, where there has been an appeal against a supersession or a decision that has been revised, it will be necessary for the Secretary of State to reconsider any decision to the effect that there has been a recoverable overpayment, in order to check that it is consistent with the terms of the decision given on the appeal.

	(signed on the original)	MARK ROWLAND
		Commissioner
		25 November 2004