CCR/3425/2003

DECISION OF THE SOCIAL SECURITY COMMISSIONER
  
1.	I dismiss the claimant’s appeal.  However, for reasons I shall explain, that may not be to his disadvantage.

REASONS

2.	The claimant is a former police sergeant who was injured in an accident at work on 12 January 1996, when he tripped on some stairs.  He injured his knees and, he says, his back.  He did not at first seek medical attention but he was away from work for ten days before going back on lighter duties. He did see his general practitioner in the following month and, after his condition deteriorated, he had an operation on his left knee in November 1996.  He appears to have been away from work for a year after that operation and then to have returned to light duties for a while before becoming permanently unable to work.  I think he remained employed by the police authority until April 1999 but nothing turns on that date.

3.	He claimed disablement benefit, which was awarded from 1 May 1996, on the basis of assessments of 20 per cent. disablement in respect of impaired locomotion due to the knee injuries for the first three years, 40 per cent (20 per cent for impaired lower limb function and 20 per cent. for impaired spinal function) for the next year and 48 per cent. for the year after that (28 per cent. for impaired lower limb function and 20 per cent. for impaired spinal function).  He was also awarded incapacity benefit from 26 May 1997 to 30 November 1997 and then again from 19 April 1999 but apparently only until 28 September 1999 (although the certificate may be in respect of only that period because the paying office seems to have destroyed some of the evidence of payments).  He was also awarded the middle rate of the care component and the higher rate of the mobility component of disability living allowance from 26 May 1999.  The total amount of benefit shown in the certificate of recoverable benefits now before me in respect of the relevant period ending five years after the accident was £16,241.54.

4.	That certificate was not the first that was issued.  The claimant had sued the police authority and the case was settled following the payment into court of £10,000.  The “Part 36 Payment Notice” dated 6 July 2001 recorded that the gross compensation offer was £22,184.39, and that £12,184.39 had been deducted “in accordance with section 8 of and Schedule 2 to the Social Security (Recovery of Benefits) Act 1997”.  

5.	The original certificate of recoverable benefits appears to have been in the sum of £19,903.64 and that sum was paid on the compensator’s behalf to the Secretary of State.  The compensator appealed against the certificate on the ground that benefits paid after the beginning of 1998, two years after the accident, should not have been brought into account.  The certificate was then reviewed.  The present certificate was issued and £2,852.10 was refunded to the compensator.  That was because incapacity benefit for the six-month period in 1997 had been included but the documentation in relation to that period had been destroyed, although I do not think that, at the time, either the claimant or the compensator would have disputed that the claimant had been paid incapacity benefit during that period in respect of the accident.

6.	The compensator not being satisfied with the review, continued with the appeal.  The case came before the Wolverhampton appeal tribunal on 6 March 2003.  Neither the claimant nor the Secretary of State attended the hearing or was represented.  The tribunal allowed the appeal and held that all benefits paid more than six months after the accident were not paid in respect of the accident.

7.	In the light of that decision, the Secretary of State superseded the claimant’s award of disablement benefit on 23 April 2003, and decided that he was not entitled to any disablement benefit from that date.  The claimant appealed against both the decision of the tribunal and the decision of the Secretary of State.  The latter appeal has been stayed pending my decision in this case.  

8.	An appeal to a Commissioner lies only on a point of law.  Insofar as the claimant argues that the decision was against the weight of the evidence, he has not raised any point of law.  However, I granted leave to appeal on two grounds.  Firstly, the claimant submitted that he had been misled into not attending the hearing of his appeal, which raised the question whether there had been a breach of the rules of natural justice, and secondly he complained that the tribunal relied upon medical evidence provided by the compensator without his consent, which raises an issue about confidentiality.

9.	I held an oral hearing at which I was greatly assisted by submissions made by Ms Sally Robertson of counsel, instructed by Messrs Russell Jones & Walker, on behalf of the claimant, Mr Karl Hirst, instructed by Messrs Browne Jacobson on behalf of the compensator and Mr Jeremy Heath of the Office of the Solicitor to the Department for Work and Pensions on behalf of the Secretary of State.

10.	The natural justice point arises out of a letter written to the claimant by the Compensation Recovery Unit after the compensator’s appeal had been received.  It explained in very general terms why there was an appeal but assured the claimant that “there is no need for concern” and that “if the compensator’s appeal succeeds then you may also be entitled to a refund in relation to the reduction which was made to your compensation.  If the appeal is unsuccessful then nothing will change.”  The claimant was then told that, by law, he had the right to attend the hearing and that a copy of the appeal papers were being enclosed “for your perusal”.  The claimant unsurprisingly says that he relied on that letter when deciding not to attend and that had he been aware that a consequence of the tribunal’s decision might have been a review of his entitlement to disablement benefit, he would certainly have attended.  He also complains that he was not sent a copy of a video-recording that the tribunal had.

11.	If the claimant had in fact lost anything by his failure to attend, I would accept that there had been a breach of natural justice because the claimant had been misled by the letter.  However, on a true analysis, I do not think he did lose anything.  On the contrary, he should have gained a windfall.

12.	I have already expressed myself on more than one occasion to be mystified by a claimant’s right to attend a compensator’s appeal if the compensator has made a deduction under section 8 of the 1997 Act from his compensation.  The right clearly does not exist because the consequence of the tribunal’s decision may be a supersession or revision of an award of benefit, because there is no such right in a case where there has been no section 8 deduction, even though the possibility of a supersession or revision of an award of benefit is at least as great in such cases.  The right appears to exist because there may be a recalculation of the section 8 deduction if the compensator is successful.  However, it is confusing for claimants like the present claimant who have no complaint about the section 8 deduction.  A deduction may be made under section 8 to the extent to which the compensation payment would otherwise overlap with benefits paid in respect of the relevant accident.  If the claimant accepts that the benefits were paid in respect of the accident, he is in no position to seek the refund that might follow a successful appeal by a compensator and his interests are prima facie aligned with those of the Secretary of State.  If the Secretary of State is resisting the compensator’s appeal, the implication is that he considers that the awards of benefit made to the claimant during the relevant period were correct and he has no present intention of superseding or revising them.  Of course, there are cases where a claimant argues that benefits were properly paid otherwise than in respect of the relevant accident and in such a case the claimant’s interests would be aligned with those of a compensator who had appealed.  However, in such a case, it is not unreasonable to have expected the claimant to have exercised his own right of appeal against the certificate of recoverable benefits.

13.	In those circumstances, it is understandable that the letter sent by the Compensation Recovery Unit to the claimant should have been worded as it was.  I accept that it did not alert the claimant to the possibility that the Secretary of State might change his mind about the claimant’s entitlement to benefit in the light of the tribunal’s decision but I do not see why a claimant should have the right to intervene in a compensator’s appeal to influence a subsequent decision on entitlement to benefit merely because a section 8 deduction has been made from his compensation when another claimant would not have such a right merely because no deduction had been made.

14.	The truth is that the claimant’s opportunity for arguing his case in relation to entitlement to benefits lies in his right of appeal to a tribunal against a supersession decision or following a revision.  If he has not been involved in a compensator’s appeal, the decision in that appeal is of very limited evidential weight in subsequent proceedings and certainly no adverse inference can be drawn against a claimant who does not involve himself in proceedings in which he appears to have no practical interest.   The decision may have some weight because some medical judgment will have been brought to bear on the conflicting evidence, but the claimant’s case will not fully have been heard and it will be the role of a subsequent tribunal dealing with his entitlement to benefit to form its own view without undue reliance on the previous decision.  Indeed, a claimant who does participate in a compensator’s appeal to oppose the compensator runs the risk of being unsuccessful against more vigorous opposition than is usually put up by the Secretary of State and of there being a weightier adverse decision in consequence.

15.	I also agree with both Ms Robertson and Mr Heath that the Secretary of State himself should not blindly follow a tribunal’s decision to allow a compensator’s appeal with an apparently consistent supersession or revision without forming his own view of the merits of the claim for benefit in the light of all the other evidence and consideration of the question whether there are truly grounds for supersession or revision or whether there are merely differences of medical opinion.  There is very considerable force in Ms Robertson’s submission that a claimant’s views on an apparently adverse decision on a compensator’s appeal should be obtained before the Secretary of State reverses his previous stance and decides to supersede or revise an award of benefit.  This approach would prevent there from being any apparent difference between the position of a claimant who has not availed himself of the right to participate in a compensator’s appeal and a claimant who did not have any such right at all.  

16.	A significant part of the problem lies, or did lie, with the Secretary of State’s approach to appeals under the 1997 Act.  He appears not to have regarded himself as obliged to address his mind to whether evidence presented by a compensator case any doubt on the correctness of the relevant awards of benefit.  He seems to have thought that the approach required by R(CR) 1/02 applied only to tribunals and not also to his own decisions as to whether to include benefits in a certificate of recoverable benefits or, more importantly, to review or not to review such a certificate upon receipt of an appeal.  The submission in this case, which I accept is of some antiquity, failed to make any reference to R(CR) 1/02, despite the compensator’s express reliance upon it (by reference to the original file numbers of the cases), and included irrelevant references to CCR/8023/1995 and to Hassall v. Secretary of State for Social Security [1995] 1 W.L.R. 812 (also reported as R(CR) 1/95, although the Secretary of State showed no sign of appreciating that it had been reported anywhere), which were both decided under the scheme for recovery of benefits that existed before the 1997 Act came into force.  Consequently, the submission’s analysis of the evidence entirely missed the point of the appeal.  Moreover, it really is quite inappropriate to dismiss the evidence of three fellows of the Royal College of Surgeons and two consultant psychiatrists on the ground that, “[w]hilst there is no doubt that [they] are all eminent in their own field, entitlement to benefits are [sic] decided by bodies of Independent Statutory Authorities”, particularly as most decisions are now taken by the Secretary of State himself.  If the Secretary of State does not address the appropriate issues, the claimant cannot possibly be expected to understand them.  In this case, if the Secretary of State had properly considered the grounds of appeal, he would have expressed a view as to whether the new evidence threw any doubt on the claimant’s entitlement to benefit and, if appropriate, could even have taken action in that regard before the compensator’s appeal was heard.  Hearing a claimant’s appeal on entitlement at the same time as a compensator’s appeal might then be possible.  However, I appreciate that questions of entitlement are dealt with by different decision-makers at different places and it may all be too complicated for the Secretary of State to co-ordinate decision-making in that way.

17.	The upshot of all this is that I am not satisfied that the claimant lost an opportunity to make submissions of sufficient practical significance to him for there to have been a breach of the rules of natural justice.  He is no worse off than a claimant in respect of whom there had been no section 8 deduction.  On the contrary, he should be considerably better off as a direct consequence of the tribunal’s decision.  The effect of the tribunal’s decision was that none of the benefits listed on the certificate of recoverable benefits was recoverable save for ten weeks’ worth of disablement pension at £19.80 pw.  The compensator should therefore have received a refund of £16,043.54 from the Secretary of State following the tribunal’s decision and was obliged by regulation 11(5) of the Social Security (Recovery of Benefits) Regulations 1997 (S.I. 1997 No. 2205) to recalculate the section 8 deduction.  As only benefits paid in respect of the accident are deductable, because only such benefits are recoverable, that should have resulted in the whole of the section 8 deduction less £198 being refunded by the compensator to the claimant.  The claimant should therefore have been paid £11,986.39.

18.	It was common ground before me that that had not been done.  Mr Hirst said that the Part 36 notice was inaccurate and that there had in fact been no section 8 deduction.  The notice was certainly defective because it did not list the benefits in respect of which the deduction had been made by name and amount as required by CPR r.36.23(3)(b) but it was clear in stating that the gross payment was in excess of £22,000 and that was the sum that the claimant therefore had to better in order to avoid costs.  Mr Hirst’s instructions were that correspondence had made it clear that the true offer was £10,000 gross without any deduction.  Ms Robertson did not accept that that was so.  If it had been, the claimant would have had no right to attend the hearing before the tribunal or to bring this appeal.  It might just be possible to go behind a Part 36 notice if there were cogent contemporaneous evidence showing that the parties had been at one in their understanding that an offer to settle was being made on a different basis from that suggested in the notice.  However, no such evidence has been forthcoming since the hearing before me.  Accordingly, I am not prepared to go behind the notice, although I am at a loss as to how the deduction was calculated.  In those circumstances, the claimant has gained a right to a windfall of nearly £12,000 from the tribunal’s decision without losing his right to oppose the Secretary of State’s supersession of his benefit in proceedings in which the compensator will not be playing an active part.

19.	I turn, then, to the question whether the tribunal was entitled to have regard to the medical reports submitted to it by the compensator.  Indeed, the issue is broader than that because, if the tribunal was not entitled to have regard to them, neither was the Secretary of State and they should never have been sent to the Secretary of State in the first place.  Of course, tribunals are not bound by the strict rules of evidence but I accept Ms Robertson’s submission that a tribunal ought not to receive evidence where the person providing it is thereby in contempt of court or in breach of rules of court or other statutory provisions.  Neither Mr Hirst nor Mr Heath argued to the contrary.

20.	Ms Robertson relies on CPR r. 31.22, which provides:

“(1)	A party to whom a document has been disclosed may use the document only for the purpose of the proceedings in which it is disclosed, except where –
    (a)	the document has been read to or by the court, or referred to, at a hearing which has been held in public;
    (b)	the court gives permission; or
    (c)	the party who disclosed the document and the person to whom the document belongs agree.
  (2)	The court may make an order restricting or prohibiting the use of a document which has been disclosed, even where the document has been read to or by the court, or referred to, at a hearing which has been held in public.”

21.	The first difficulty with this argument is that the only medical reports that could conceivably have been caught by CPR r. 31.22 were those disclosed by the claimant to the compensator, whereas the reports about which the claimant principally complains are those disclosed by the compensator to him.  The rule does not restrict a party’s right to do what he likes with his own documents.  Ms Robertson sought to get round that difficulty by arguing that a report based on medical records disclosed by the claimant fell within the scope of the rule.  There may be cases where use of a document amounts to use of the documents used in preparing it but I do not consider this to be such a case.  Furthermore, there is force in Mr Hirst’s argument that a claimant who agrees to be examined by an expert and provides the medical records necessary for a report to be produced does so voluntarily and the documents are not “disclosed” for the purpose of CPR Pt. 31.  The note to the rule in the White Book suggests that the rule is a codification of the common law and Mr Hirst referred to Derby & Co Ltd v. Weldon (No.2) (The Times, October 20, 1988) in which it was held that the undertaking implied at common law not to use disclosed documents for collateral or ulterior purposes or to disclose them to third parties applied only to documents discovered compulsorily in an action under a court order.

22.	Secondly, while r. 31.2 says that a party “discloses a document by stating that the document exists”, medical reports brought into existence for the purposes of litigation are privileged so that they cannot be inspected and disclosure need not identify the individual document.  In my judgment, Mr Hirst is correct to suggest that medical reports do not fall within the scope of CPR Pt. 31 at all.  The Rules draw a distinction between disclosed documents (Pt. 31), witness statements (Pt. 32) and reports by experts (Pt. 35).  Mr Hirst points out that, although there are restrictions on the use of witness statements (see r. 32.12) as well as disclosed documents, there is no similar provision in Pt. 35 dealing with experts’ reports.  Therefore, the approach taken in Miller v. Scorey [1996] 1 W.L.R. 1122, to which Ms Robertson referred, does not apply.

23.	I am therefore satisfied that the mere fact that experts’ reports, including medical reports, are obtained in the course of litigation does not prevent a party from subsequently disclosing them to a third party.  However, it does not follow that such reports may be shown to all and sundry.  People are entitled to have their medical details treated confidentially.  The issue is therefore one of confidentiality rather than breach of procedural rules.  A tribunal ought to refuse to consider evidence disclosed to it in a clear breach of confidence just as it ought to refuse to consider evidence disclosed to it in a clear breach of the Civil Procedure Rules.

24.	However, one material difference is that the Civil Procedure Rules provide a mechanism for a party to obtain the permission of the court to disclose a document or a witness statement and it is in effect the failure to make use of that mechanism that entitles a tribunal to refuse to consider the evidence without much ado.  Where a breach of confidence is alleged, it would be for the objecting party to make an application to a court to have the other party restrained from disclosing the offending document.  If no such application has been made and the objecting party is not simply seeking an adjournment while an application is made but is inviting the tribunal to exclude certain evidence, it seems to me to be necessary for the objecting party to satisfy the tribunal that there would clearly be a breach of confidence that a court would restrain were an application to be made.

25.	Both Mr Hirst and Mr Heath argued that a compensator’s right of appeal against a certificate of recoverable benefits would be rendered next to useless if the compensator could not rely on medical reports obtained in the course of defending the claimant’s claim for compensation.  It would, of course, be possible for compensators to obtain a claimant’s express consent to the use of any medical report obtained in the litigation in the event of the compensator wishing subsequently to appeal against a certificate of recoverable benefits.  However, for two reasons, I have come to the conclusion that such express consent is not essential.

26.	Firstly, since the 1997 Act has been in force, a claimant who has claimed relevant social security benefits since an accident can be taken to know that the consequence of obtaining compensation through an action in the courts is that the compensator will become liable to pay to the Secretary of State a sum representing the benefits paid to the claimant in respect of the accident.  The claimant can further be taken to know that, if the compensator succeeds in limiting the period in respect of which, say, compensation for loss of earnings is payable to the claimant, with the consequence that the amount of benefits that are deductable from the compensation under section 8 is limited (see R(CR) 2/04), the compensator may well wish to submit to the Secretary of State or an appeal tribunal that benefits paid to the claimant were not paid in respect of the accident and that that may involve an argument that the benefits ought not to have been paid to the claimant at all (see R(CR) 1/02).  Since such a submission is effectively an extension of the litigation in the courts, being a form of third party proceedings, and can equally be regarded as a consequence of his claim for benefits, it is at least arguable that a claimant must be taken implicitly to have consented to the compensator’s disclosure to the Secretary of State or a tribunal of any report obtained in the litigation in the courts.

27.	Secondly, even if such consent is not to be implied, I find it inconceivable that a court would restrain a compensator from disclosing medical reports obtained in the course of litigation to the Secretary of State or an appeal tribunal if the claimant applied to a court for such an order.  The court would have to balance the claimant’s right to confidentiality against the compensator’s right to a fair trial of an appeal under the 1997 Act.  Given that the Secretary of State is himself under a duty of confidentiality to the claimant and that the claimant inevitably consents to the Secretary of State having medical details about him when he claims a benefit requiring his disability to be assessed, it seems obvious that any application for an injunction would be rejected.  

28.	Accordingly, I am not satisfied that the tribunal erred in law in considering the medical reports disclosed by the compensator.  Similarly, it seems to me that a person who both claims benefits and seeks compensation must accept that it may be necessary for the Secretary of State to disclose to the compensator medical details obtained in the course of investigating the claimant’s entitlement to those benefits and that the Secretary of State may make use of reports disclosed by the compensator when considering the claimant’s entitlement to benefits.  As I have commented before, in order to prevent the Secretary of State from being caught up in litigation between a claimant and a compensator, the 1997 Act envisages three separate sets of bipartite proceedings: between the claimant and the compensator in the courts, between the compensator and the Secretary of State on an appeal under the 1997 Act and between the Secretary of State and the claimant as to the claimant’s entitlement to benefits.  Those proceedings are all interlinked and it is absurd to suggest that evidence obtained in the course of one set of those proceedings should not be available for use in another.  The reports have, after all, all been brought into existence with the claimant’s co-operation because he is seeking compensation on a basis that is consistent with his entitlement to benefits. 

29.	The tribunal’s decision has not been challenged on any other ground and I therefore dismiss the claimant’s appeal.  However, that is not necessarily to his disadvantage.

30.	Firstly, as I have already suggested, he appears to be entitled to a payment of £11,986.39 from the compensator.

31.	Secondly, while the decision of the tribunal sitting on 6 March 2003 was one the tribunal was entitled to reach, it is not binding on the tribunal that is to hear the claimant’s appeal against the Secretary of State’s supersession of the award of disablement benefit and it was by no means the only decision that could have been reached.  Although there had been some suggestion that the claimant was shown by video surveillance evidence not to have been as disabled as he claimed, the tribunal was not impressed by that evidence.  Its decision was based on its view as to the cause of the claimant’s disablement.  In respect of the disability arising from the condition of the claimant’s knee, there was a clear dispute as to causation between the two surgeons who gave the most detailed reports.  It will be for the Secretary of State to show that the view that is inconsistent with all the adjudicating medical authorities and his medical advisors should prevail, rather than the alternative view.  The surgeons appear to have agreed that the condition of the claimant’s back was not directly attributable to the relevant accident but the psychiatrists were initially of the view that there was a significant psychiatric component that was at least partially attributable to the disability resulting from the injury to the claimant’s knees, although the video surveillance evidence caused them to have doubts.  Given that the assessed level of disablement was less than it would have been if the Secretary of State had decided that the claimant was virtually unable to walk as a result of the accident and that it is for the Secretary of State to show grounds for supersession, the claimant seems to me to have an arguable case notwithstanding the medical reports.  The fact that the last tribunal reached a decision in favour of the compensator, in the absence of both the claimant and the Secretary of State who at that time was supporting the award of benefit, is of very little significance.

32.	Finally, I must apologise for the very great delay there has been in the writing of this decision.

	(signed on the original)	MARK ROWLAND
		Commissioner
		7 June 2005