If original decision notice suppressed, is this official error

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  • #38912
    smcphail
    Participant

    Help, looking for asistance!

    Think I’m losing it, late Monday afternoon feeling! In this case, should this overpayment be classed as official error as we omitted to issue a decision notice outlining award, which subsequently led to overpayment? Basically claimant submitted new claim and advised WTC & CTC in payment. CIS conf that awards were due to expire 2 months later and IR staff conf this was because only child reached 20 at this time and no longer qualifying child. Consequently claim was processed with approp end date for WTC & CTC, however decision notices suppressed in error. Claimant subsequently failed to advise the LA she was still eligible for a reduced WTC award on her earnings and claim ran on for some months with no WTC included as income. Clearly claimant failed to advise the LA of a relevant coc, however am I required to classify our failure to issue original dec notices as official error, and argue claimant materially contributed to error. Have checked prev postings, CPAG, zebedee, asked colleagues but no further forward. Also does anyone know of any caselaw which would assist in this area?

    #110166
    Kevin D
    Participant

    In my view, an argument could be made that the monies paid do not constitute HB/CTB and, if that is correct, the HB/CTB regs are not engaged at all. On that basis, none of the “official error” considerations are at issue and it’s a matter of common law principles. However, it could well be that the Council is unable to recover in any case on the grounds of estoppel.

    It has become well established that [i]”Notice of a decision is required before it can have the character of a determination with legal effect because the individual concerned must be in a position to challenge the decision in the courts if he or she wishes to do so. This is not a technical rule. It is simply an application of the right of access to justice. That is a fundamental and constitutional principle of our legal system”[/i]. That passage is from a House of Lords judgment in [b]R v SoS Home Dept & anor ex parte Anufrijeva [2003] UKHL 36[/b]. This reasoning has been firmly adopted in numerous decisions by Cmmrs and the Upper Tribunal relating to social security benefits.

    Translated, no notification = no decision. In turn, no decision means nothing has happened (i.e. no award has been made – of benefit).

    IF by any chance the monies do legally count as benefit and the normal HB/CTB regs on official error are engaged, I can’t see how any overpayment can possibly be recoverable based on the info given so far.

    Firstly, was the LA at fault? Although there is firm case law to the effect that LAs aren’t necessarily required to take into account future “predictable” changes, the facts here are somewhat different. The info given suggests that LA has a standard procedure for identifying such cases and a failure to operate such a procedure *could* constitute an error.

    On the basis of the o/p being caused by the LA, did the clmt contribute to the mistake / cause of the o/p? The LA appears to be suggesting the clmt failed to notify a change in circs. However, the clmt had not been notified of her award and, therefore, what instructions were given to the clmt about what changes to notify and how? I can’t see a Tribunal finding it is reasonable to expect a clmt to remember instructions on a claim form in this context.

    Next, could the clmt reasonably have been expected to realise there was an overpayment at either [b]the time of the payment(s )[/b] OR [b]at the time of any notice relating to the payment(s )[/b]? Again, the clmt wasn’t notified so were there any other notices relating to the payment? Also, without knowing what income had been taken into account, how could the clmt possibly realise s/he was being overpaid (unless s/he had a substantive benefits background)?

    Even if the monies do count as benefit AND there was no error by the LA, would I seek recovery on the facts of this case? Only if there was firm evidence that the clmt knew as a fact s/he was being overpaid and had deliberately closed his/her eyes to it.

    On the issue of estoppel, the clmt may well be able to argue s/he had a reasonable expectation that the monies were proper and correct and there was no reason to doubt s/he was entitled to the monies. If the monies have been spent (which presumably they have been), I would expect a Court to find for the clmt.

    In summary, based on the facts so far, no recovery – whether or not benefits and whether or not caused by LA error.

    #110170
    smcphail
    Participant

    Hi Kevin

    Thanks for this comprehensive response, you’ve raised a really interesting point here, wasn’t aware of potential legal implications where decision notice not issued.

    With regards to you comments about LA’s failure to identify predictable change, in this case the info from IR conf her receipt ended when her daughter ceased to be a qualifying child. Although it appears that the assessor has not considered the possibility that there may still be some entitlement to WTC, I’m not sure that this in itself amounts to official error. As you know changes to tax credits are now notified via ATLAS, however not prev the case. Additionally claimant has adequate experience of HB scheme, in fact her appeal is against an existing o/p balance which also takes account of two earlier o/ps created as a result of her failure to notify the LA of changes to her circumstances;these decisions are outwith absolute time limit in any case.

    However I take you point that the lack of an intial decision notice could make it difficult to argue that total o/p recoverable. What I would say is that she was in fact issued with an annual decision notice the following February and the omission of tax credits was not picked up via HBMS until August, so I think I could successfully argue that the portion of the o/p between February and August is recoverable. Think this if probably the best way to go with this one, unless you have any other thoughts on this matter. Thanks again, Susan.

    #110175
    Kevin D
    Participant

    On the face of it, the period between Feb and August is a much brighter prospect from the LA’s point of view. HOWEVER…. if only life was that simple.

    A bit of clarification about the unnotified decision may help. Was that decision the first decision on the claim or was it a superseding decision relating to an award that was already in place?

    If the unnotified decision was the first decision on the claim to start an award for the first time, it is strongly argubable that any subsequent “decisions” are also of no effect because there was no award in place to supersede. In other words, if the first brick isn’t in place, all later bricks fall down because there is nothing to support the later bricks.

    In the unnotified decision was in respect of an award that was already ongoing, then the (legal) award in place would be the one previously notified to the clmt. On THAT basis, the LA *may* have a stronger case to the extent of being able to show that instructions were given to the clmt about notifying changes in circs. Of course if more monies were paid based on the unnotified decision, it is open to argument that the additional monies are again not benefit. Even if such monies are benefit, there is still the matter of the clmt not being notified and how did she realise? But, the issue of whether the clmt’s failure to notify the LA contributed to the cause of the o/p will be less clear cut in the “ongoing award” scenario.

    #110178
    smcphail
    Participant

    Well Kevin, you’ve really put a spanner in the works with this response! This was in fact a new claim and I’m not convinced the TS would take this view, rightfully or wrongfully. Say for example a claimant doesn’t receive intial decision notice which included an incorrect assessment of their earned income and consequently overpaid HB & CTB, but over a lengthy period receives a number of superseding decision notices to take account of changes to council tax/ rent increases etc which clearly show that assessed income is incorrect. Surely this does not effectively mean that a LA cannot recover resulting overpayment at all. Personally I have in the past determined that in such cases o/p should not be recovered prior to issue of first subsequent decision notice, but thereafter. I don’t recall taking such a case to TS but I would be surprised if they ruled in appellant’s favour, taking account of public funds. Of course, whether this would be down to lack of knowledge of law in this area on the tribunal’s part, I’m not sure. Appreciate your thoughts Susan

    #110185
    Anonymous
    Guest

    Assuming you can convince a judge the money *was* HB…

    Wouldn’t the claim form explain the claimant’s duty to report changes? (Edited to add: just noticed that Kevin addressed this, and yes its doubtful the claimant was given a copy of the declaration. But why would that not be sufficient? The claimant has read and signed a declaration stating that they understand their obligation to report changes and so on. If the claimant thought they might forget this declaration, maybe they should made a photocopy?)

    I’m sure that the claimant realised that HB/CTB was in payment from receiving revised Council Tax bills / bank statements / rent statements, therefore the duty imposed by the claim form would have required that they report the change in tax credits.

    They received a new tax credits award letter but did not tell the Council. How is that official error?

    The only official error was in failing to notify the original decision – but that did not cause the overpayment.

    If you can get past the ‘was it?’ / ‘wasn’t it?’ argument at tribunal, I would be confident that the overpayment is found to be recoverable.

    #110187
    smcphail
    Participant

    Kevin

    I really appreciate this response, very informative ,particularly caselaw quoted. I have decided that this overpayment should not be recovered after all in light of circumstances and will ensure that this information is cascaded to all Benefits Staff, in the hope that every effort is made by assessors to ensure future decision notices are not suppressed Susan

    #110188
    Kevin D
    Participant

    Just to be clear, I don’t discount Michael’s argument(s ) out of hand. But the absence of notification in the first instance means it would be one heck of a struggle for the LA (well, depending on the FtTJ and the quality of any representation the clmt had).

    As for the case law and detail of reponse, you were in luck. It’s essentially a tweaked copy and paste from “stuff” done long ago with more recent case law simply added. I don’t have the energy to compile huge responses from scratch at the moment 🙂 .

    #110184
    Kevin D
    Participant

    I am as confident as you ever can be in benefits that even if a FtT found the lack of initial notification to be irrelevant, a UT would very much find otherwise. I think the following examples (there are others) also effectively answer the point about whether subsequent superseding decisions, correctly notified, should stand where the first “decision” isn’t of any effect.

    In [b]SD v Newcastle CC (HB) [2010] UKUT 306 (AAC) (aka CH/0872/2009)[/b], Judge Mesher found that the failure to issue notification of an Income Support superseding decision meant that IS was still in place (because the purported superseding decision in question was of no effect). In turn, HB/CTB was still lawfully passported.

    In [b]CSH/0447/2010[/b], a notification was issued but was so defective that Judge Ward found the decision was of no effect and, in turn, there had been no valid supersession / revision (again, leaving the original award in place). Of interest, Judge Ward expressly observed that the principles of the effect of notification / non-notification applied equally to HB/CTB as to other social security benefits (there is a reference to s.71 SSAA 1992).

    In [b]CH/0920/2010[/b], Judge Poynter found, on the facts of the case, the lack of a compliant notification meant he was not satisfied the alleged overpayment could stand. He went on to decide the LA should not get a further opportunity to correct it’s omissions.

    In [b]C10/07-08(HB) [NI][/b] (para 22), it was found that a later notification could “perfect” a prior lack of notification. However, nothing displaced the finding in Anufrijeva of the principle that until / unless such perfection occurred, the decision remains of no effect. In my view, on the facts of the case referred to in the OP, such “perfection” cannot suddenly apply to acts and events that have already occurred such as payment(s ) of monies. I think it would be difficult to perfect the original “decision” based on the info given so far.

    Albeit in a different context, Judge Ward found in [b]CH/2463/2008[/b] that an earlier decision that was tainted meant that two later decisions must also be tainted.

    In all the above, the principle remains rock solid: if the initial “brick” doesn’t exist, or is sufficiently faulty (the test is “substantial compliance”), all subsequent bricks fall. The only exception is where the earlier brick can be made good but, in my view, that won’t always be possible and in most cases it will only be of limited effect such as “legitimising” any further decisions whilst still not being able to negate the EFFECT the earlier failures had. In other words, you could now notify the clmt and try to argue all the monies were HB/CTB, but couldn’t remotely argue that the clmt had, previously, been given any information about entitlement, nor rights, nor duties (including instructions on the how/why/when/what of when to notify changes in circumstances).

    Taking a completely different approach, suppose for the sake of argument that “winning” was the be all and end all at Tribunal. Which party’s case do I think would give me the best chance of “winning”? Based on the info so far, it’s an easy decision: I’d much prefer to argue the claimant’s case – even if the monies paid did constitute benefit. Unless there is more to this, it’s my professional view that such a case should not even be considered for taking to Tribunal but, others may disagree (the joys of benefits….).

    Even if it wasn’t what you wanted to hear, I hope it at least helps to focus some thoughts.

    #110189
    Anonymous
    Guest

    Kevin, you mentioned Awaritefe recently: “defective notifications shall only render a decision to be of no effect where the defects have resulted in “significant prejudice” or “substantial harm” to the persons affected.”

    Does this apply to initial decisions on a claim? If so, where is the prejudice or harm in the failure to issue the letter? I’m not looking to disagree just for argument’s sake, but curious as to the implications of what you’re saying.

    Susan – if you’re going for the “not HB” approach you may have some subsidy work to do: in particular those overpayments would not be eligible for any.

    #110191
    Kevin D
    Participant

    Hi Michael,

    No problem with raising it – we’ve posted and debated on here long enough to realise we’re just trying to get it right.

    As I see it, the distinction between Anufrijeva and Awaritefe is this (in broad terms):

    [b]Anufrijeva[/b] is about where there has been no notification at all. [b]Awaritefe[/b] is where there has been notification and whether the content of the notification is defective to the extent of not being substantially compliant and/or causing “significant prejudice” and/or “substantial harm”. Without notification, I can’t see that Awaritefe is engaged at all.

    In my view, the judgments neatly dovetail with each other. One says (broadly) “non notification = thin air”. The other says (broadly) “So you’ve notified the clmt/LL etc; hurrah. Great. Now, let’s see if the notification is any good”. Even if it could be argued that the two contradict each other rather than compliment each other, Anufrijeva would have to be followed because of hierachy (House of Lords over Court of Appeal).

    #110192
    d-stainsby
    Participant

    The official error that may have cause the overpayment through not notifying the original decision is that of not complying with paragrah 9(g) of Schedule 9 of the ain HB Regs which provides:

    “the decision notice shall include a statement as to–
    ……..
    (g)
    his duty to notify any change of circumstances which might affect his entitlement to, or the amount of, housing benefit and (without prejudice to the extent of the duty owed under regulation 88 (duty to notify changes of circumstances)) the kind of change of circumstances which is to be notified, either upon the notice or by reference to some other document available to him on application and without charge.”

    The extent of the duty to disclose a change of circimstances was considered by the Court of Appeal in Hooper v Secretary of State for Work and Pensions [reported as R(IB)2/07]:

    Mr Commissioner Jacobs as then was had held that the statement in the factsheet that the claimant should disclose his having started work amounted to a requirement to disclose a change of circumstances within the meaning of regulation 32(1) of the Social Security (Claims and Payments) Regulations 1987, and that there had therefore been a failure to disclose in breach of section 71(1) of the Social Security Administration Act 1992. The Commissioner followed B v Secretary of State for Work and Pensions [2005] EWCA Civ 929, reported as R(IS) 9/06, in disregarding the claimant’s mental state and memory difficulties

    The Court of Appeal disgreed with the Commmisioner and Dyson LJ held at paragraphs 56-58

    “I agree with the reasoning of both of these Commissioners. Read in the context of the factsheet as a whole, I do not consider that the words “you should tell the office … before you start work” and “you should fill in an application form before you do any permitted work” are the language of clear and unambiguous mandatory requirement. The consequences for a claimant of not complying with a requirement in accordance with regulation 32(1) can be very serious. That is why in my view, if the Secretary of State wishes to impose a requirement on claimants within the meaning of regulation 32(1), it is incumbent on him to make it absolutely clear that this is what he is doing. There should be no room for doubt in the mind of a sensible layperson as to whether the SSWP is imposing a mandatory requirement or not.
    57. Mr Commissioner Jacobs said that the word “should” in the factsheet was a “polite way of wording an instruction”. There may be contexts where the dictates of politeness are such that “should” means “must”. Even in a social context, “should” may not mean “must”. As Thomas LJ pointed out in argument, “you should go to the doctor” does not mean the same as “you must go to the doctor”. The former is more the language of “you would be well advised to go to the doctor”. The latter is an instruction. But there is no reason why the Secretary of State should have felt inhibited from using the clear and unambiguous word “must” in the present context. The context is not one which demanded politeness at the expense of clarity.
    58. For these reasons, which are essentially the same as those given by Mr Commissioner Mesher and Mr Commissioner Howell QC, I would allow the appeal on the third issue.”

    In the present case it will be easy to argue that the claimant had not failed in his duty to dislcose the change of circumstances, simply because the LA had not put him on notice that hen had such a duty. It is similarly farily easy to argue that the resulting overpayment is in consequence of the LA’s error not only in making an inchote initial decision but also in failing to properly inform the claimant of his duty to disclose the change in his circumstances.

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