Estoppel (Personal Bar) and HB overpayment recovery

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    Yvonne Lamont

    Just attended a Tribunal where the appellant is appealing against our decision to recover his HB overpayment stating his landlord was negligent- LA submisssion detailed that the o/pay had come about due to his failure to report his change in circumstance therefore he had contributed to the overpayment.
    Before the Tribunal got into looking at the events that had led to this situation the Chairman questioned the wording of one of the LA letters – the letter stated that the LA had at the time of discovering O/Pay spoken to the appellant’s landlord who advised his rent account was in credit – in a futher paragraph it states “that as your housing benefit has been paid direct to your landlord the overpaid benefit will be recovered from them” (the intention had been to invoice the LL who would in turn debit the appellant’s rent account for the amount of the opay) The LA did not consider this to be the decision letter as the actual amount of the o/pay had not been calculated at this time. Letters were then issued a few months later with the actual sum of the o/pay again stating it would be recovered from the landlord should his rent account be in credit. The Chairman however put forward that he considered the first letter to be the decision letter and suggested that the letter might be construed in such a way as to personnally bar the LA from later seeking recovery from the appellant. 28 days has now been given to allow the LA to submit a written submission addressing the issue of personal bar with reference to authority. Has anyone ever come accross this before ??


    Why the delay?

    If it was to calculate UE then there may be a case. If you had not revised/superseded at the time of the letter there was no OP decision and I cannot see how you can make a decision as to whom an overpayment will be recovered from before you have decided that (a) there is one and (b) who it is recoverable from. To attempt to do so would, I suspect, amount to fettering your discretion and be unlawful in itself.

    If the delay was for UE purposes you really need to be looking to see if you had grounds to revise under DMA.

    Also, estoppel is a private law remedy – I am not convinced it has a place in public law but confidently await contradiction on this point.


    I would suggest that you look into the judicial review ground of legitimate expectation.

    This is a public law remedy that is similar in a sense to estoppel and arises where a public body has given an undertaking or assurance that they will take a particular course of action or will not pursue a particular course of action and then seek to go back on that promise.

    In certain situations the courts have found that such an assurance given by a public authority has given rise to a ‘legitimate expectation’ on the part of the recipient of that undertaking and that that expectation should be upheld.

    You may be able to rebut such a charge by showing that you have been mindful of the original promise or assurance and have given reasons to the claimant for your decision and have offered the opportunity to dispute the decision – I’m not sure how this would be affected by the fact that they have a statutory right of appeal but I would suggest that this is in your favour.

    You might also be able to argue that the decision to recover from the landlord had been taken before the full circumstances had been disclosed by the claimant.

    Moreover, given that the circumstances under which you are able to recover overpayments from a landlord have changed from April 2006 and you are now obliged to recover from the party who failed to disclose – you could also argue that the assurance was in fact ultra vires and could not give rise to a legitimate expectation.

    I have pasted below an excerpt from an article on judicial review by Elizabeth Laing taken from the website of 11 Kings Bench Walk – the full article can be viewed here:

    [quote:1662abae23]”Legitimate expectation: an overview[33]

    20. This is one of the many areas in which the unsystematic nature of the common law, and loose use of language and concepts by advocates and judges has caused confusion and uncertainty. The difficulty is the impossibility, on the current state of the authorities, of predicting the legal result when a public authority decides to change a general policy, or to go back on a promise or representation made to a smaller class of people. What this means in practice is an ultra-conservative approach is necessary if the risk of litigation is to be avoided, and this can in turn can impose undesirable opportunity costs on the development of policy in the public interest. The reason for the difficulty is that there is no clear basis for courts’ decisions in some cases to categorise some legitimate expectations as substantive rather than procedural, and therefore no way of knowing in advance how the courts will decide to protect a legitimate expectation.

    21. The contradiction at the heart of the doctrine of legitimate expectation is that by protecting an expectation (particularly a substantive one) the court, in the name of fairness to the individual, is undermining, to a greater or lesser extent, the discretionary characteristics of the power conferred on the decision maker by Parliament. This cuts across another well-known principle of public law, which is that it is unlawful for a body on which a discretionary power has been conferred to fetter the exercise of that discretion in advance.

    22. The first question is what is a legitimate expectation? Sales and Steyn explain that a decision maker exercising a power may create an expectation (but not a legal entitlement) in a person who is affected by the exercise of that power that the power will be exercised in a particular way. This may be based on a promise, or representation, that the power will be exercised in a particular way[34], or on a consistent past practice. The expectation may either be substantive (that the decision maker will confer a benefit on the person) or procedural (that he will adopt a particular procedure before making a decision). A person cannot have a legitimate expectation that an authority will do something which is ultra vires[35].

    23. Sales and Steyn identify two protections for public authorities: the requirements that any promise or representation should be clear and unequivocal[36], and that (where transactions with identifiable individuals are involved) the individual makes full disclosure of relevant facts to the decision maker. A further restriction on the scope of the doctrine is that a claimant cannot (absent some wholly exceptional factor) rely, as against a defendant, on representation made by a third party as to how the defendant will exercise his powers[37].

    24. In effect, the doctrine of legitimate expectation can be seen as conferring a quasi-contractual protection on an individual in circumstances where the public body concerned has not entered into a commitment with him which is binding on it in private law, and sometimes, even in circumstances in which he was not even in the contemplation of the body at the time that body uttered the policy on which he claims to rely, and sometimes, when he was not even aware of the policy, and did not rely on it.

    25. There may not be substantial objections to this where the protection conferred is a procedural one: in other words, the court holds that an individual has a right to be heard, either before a decision affecting him directly is made, or before a decision maker decides to change a policy which might otherwise have applied to him. There is a public interest in ensuring that authorities act fairly and consistently towards individuals, and it is quite feasible to create a duty of fairness, which demands that a decision maker should ask for, and take into account, any representation in such situations. In that sense it is perhaps unnecessary to complicate matters by resorting to the doctrine of legitimate expectation.

    26. The real objection of principle is in those cases where the courts have held that the individual has a legitimate expectation to a particular benefit. Coughlan v North East Devon Health Authority[38] is still a leading case in this area. That case concerned a so-called “home for life” promise to a resident in a residential home. There are two linked factors which make the case problematic. First, when the decision maker decided to close the home, it expressly took the promise into account. Second, therefore, the court, in order to justify its interference with the closure decision, held that the approach for the court was one of fairness, not a Wednesbury review. This meant that the court could substitute its view of whether a pressing public interest should displace the expectation for the view of the decision maker. This approach is contrary to earlier Court of authority[39]. The Court of Appeal finessed those decisions by creating a new category of case into which the desired outcome in Coughlan fitted neatly. This is described as “cases where a lawful promise has induced a legitimate expectation which is substantive” as opposed to cases where “the public authority is only required to bear in mind its previous policy or representation, giving it the weight it thinks is right, but no more, before deciding to change course”.

    27. The judgment in Coughlan gives no persuasive means of distinguishing these two classes of case. The best that can be done is to say that in that case, the promise was made directly to a small identifiable class, it was of great importance to them, and the consequences for the authority if it were held to the promise were “merely financial”[40]. The Court of Appeal asserts that there had been reliance by the claimant on the promise[41] (though it is not obvious what that reliance was[42]), and far from clear that it was detrimental in any real sense. Yet as Sales and Steyn argue persuasively[43], if the courts are to protect substantive legitimate expectations at all, as a minimum the claimant should have relied on the promise to his detriment.

    28. It is interesting that in a later decision, R (Bibi) v Newham London Borough Council[44] the Court, which included Sedley LJ, who had been a member of the Court in Coughlan, held that the facts fell into the first class. This case concerned priority for housing. There a local authority, acting on a mistaken view of the law, had made a promise to the claimants from which it then sought to depart. The Court held that the authority was not required to fulfil the promise, but rather to consider the case in the light of the promise, and to give reasons for any departure from the promise. Although the Court observed that “moral detriment” would be sufficient to generate a legitimate expectation, that is in the context of an expectation which generates no more than an obligation on the decision maker to take the promise into account, rather than an obligation to fulfil it. It may be that it will be seen that Coughlan is a high water mark, and Bibi is evidence that in future the Court will find it less attractive to create, and to protect, substantive legitimate expectations. In Bibi Schiemann LJ was careful to observe that the court’s role was not to usurp that of the executive, even where there was an abuse of power[45].

    29. There is another category of cases, sometimes referred to as legitimate expectation cases, in which the ground on which the court intervenes is “because it is illogical or immoral or both for a public authority to act with conspicuous unfairness and in that sense abuse its power” as Simon Browne LJ (as the then was) put it in R v IRC ex p Unilever Plc[46]. These are cases in which there is no clear unequivocal promise or representation. In Unilever the IRC had permitted the taxpayer on about 30 occasions in 20 years to submit tax computations more than 2 years after the relevant accounting period had ended, and had not refused claims to reliefs against the profits of the current year. In three subsequent years, the IRC refused claims to relief on the basis that the figures had been submitted outside the two-year statutory period. The IRC had never represented that it would not enforce the time limit, but the Court of Appeal held that it was so unfair as to amount to an abuse of power for the IRC to change its practice suddenly without clear advance notice. The IRC did have power to accept late claims. In that case, Simon Browne LJ analysed the standard substantive legitimate expectation cases as exemplifying a species of Wednesbury unreasonableness.

    33]I have found the article by Philip Sales and Karen Steyn “Legitimate Expectations in English Public Law: An Analysis” [2004] Public Law 564 very helpful.

    [34]This could be an assurance made to the person specifically, or a general policy statement.

    [35]See eg R v the Secretary of State for Education and Employment ex p Begbie [2002] 1 WLR 1115 at 125D-G, 1129E-F and 1132B-C. Cf Rowland v Environment Agency [2004] 3 WLR 24 in which the Court of Appeal held that a common assumption that part of the river Thames was private which might otherwise have given rise to a legitimate expectation at common law was overridden by the rule that public rights of navigation can only be displaced by statute. The expectation could amount to a property right for the purposes of Article 1 of Protocol 1 to the European Convention on Human Rights, but that would be overridden by a pressing public interest.

    [36]R v (ABCIFER) v the Secretary of State for Defence [2003] QB at paragraph 72. There is a recent application of this principle in R (Nurse Prescribers Limited) v The Secretary of State for Health [2004] EWHC 405 (Admin), Mitting J. The case concerned a policy restricting nurse prescribers to prescribing generic saline products. Relying on that policy, the claimant incurred considerable expenditure buying stocks of generic saline products. The policy was then changed. The Judge held that the claimant had no substantive legitimate expectation that the policy would not be changed, because no such representation was made by the defendant. Moreover, there were good policy reasons, of which the executive was the best judge, for overriding any expectation. However the Judge also held that the claimant had a procedural expectation that the the Secretary of State would inform it if the policy was changed. This expectation was breached, but the Judge gave the claimant no relief, observing that there was no point quashing the change of policy since it was inevitable that the same decision would be made again for good reason, and that there was an obligation on the claimant to inform the Secretary of State if it incurred costs in reliance on the policy.

    [37]R (Bloggs 61) v the Secretary of State for the Home Department [2003] 1WLR 2724.

    [38][2001] QB 213.

    [39]Re Findlay [1985] AC 318; R v the Secretary of State for the Home Department ex p Hargreaves [1997] 1 LWLR 906, CA.

    [40]This last factor is rather tendentious.

    [41]Paragraphs 53(c), 65 and 86.

    [42]The move to Mardon House, a modern, purpose-built facility, was from Newcourt Hospital, a large old house with communal wards which was considered unfit for modern care: judgment, paragraph 53). The accommodation at Mardon House was, from the description given in the judgment, incomparably better than that at Newcourt Hospital.

    [43]Op cit, page 581: and see eg ex p Begbie at p1124 per Peter Gibson LJ.

    [44][[2002] 1 WLR 237.

    [45]Judgment, paragraph 41.

    [46][1996] STC 681at pages 694-5..



    Charlie, is the following a fair summary or over-simple?

    Whether you look at private law estoppel, or as public law legitimate expectation, neither of these doctrines will prevent the authority from determining under s75 that an overpayment is recoverable from a person, or from two or more persons. Recoverability is governed entirely by the question what, or who, caused the overpayment. There is a right of appeal against any such determination.

    If the determination stands after the appeal process is exhausted, the authority is free to embark on recovery. It does this partly as a creditor taking private action against a debtor, and estoppel may very well come into play in the circumstances described as part of the debtor’s defence to the civil action. The council also acts as a public body using its discretion in the course of its administrative functions, and legitimate expectation may come into play as a ground for JR of the decision to pursue recovery (from A rather than B, or at all).


    Hi Peter,

    I don’t profess to be an expert, but my view is that legitimate expectation could be raised in an appeal concerning the LAs choice of target for recovery.

    The problem here is that the LA appears to have given an undertaking that they would recover from A rather than B prior to the overpayment decision being made.

    Personally I think that legitimate expectation could be raised as a ground for disputing the decision on appeal – the grounds of judicial review, as with other public law principles such as human rights, are applicable to decisions made under the HB scheme in addition to the statutory provisions that govern decision-making – and not just to the question of whether or not to pursue recovery.

    It may also be that estoppel and/or legitimate expectation could be raised as a defence to a civil action for recovery or alternatively as a head for a seperate action for judicial review. This may be more successful against decisions – such as whether to recover – which do not carry a statutory right of appeal. The courts are less likely to scrutinise the decisions of public authorities on JR grounds where a person has exhausted, or has failed to exercise a statutory right of appeal.


    But there cannot be an appeal about choice of target anymore.

    CH/4234/2004 has put such matters outside the scope of the HB/CTB adjudication process. Choice of target is now a private law/general public administration issue and not a Benefits decision.


    I might of mis-understood the original post, but have TAS not admitted the appeal?


    Oh well, I cannot answer for that!


    Well Peter I expect it will all become clear after I’ve been to your training next week!


    Personally, I cannot see how a Tribunal can consider estoppel and I think it is well outside their jurisdiction. I agree with Peter that this is a matter for the civil courts. We could always see if the Commissioner has a view on Tuesday though!

    Yvonne Lamont

    Just to advise the Tribunal heard this appeal last month and refused the claimant’s appeal.
    The chairman decided that having taken into account the additional submission and Commissioners decision R(SB) 8/83 that there was no room for the principle of personal bar in relation to benefit entitlement.

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