Terms & Conditions

[cbuck]

Would appreciate any advice on this as I am starting to doubt my position.

Customer advised us May 07 of a backdated JE award. We applied the new rate from April 2007 and notified this to customer including an explicit statement that the arrears of pay were to be treated as capital and would not therefore affect their prior HB entitlement.

The customer phoned and queried this and was told that the decision was as stated and they could go out and spend their windfall. A month or so later this, and other similar claims were revisited and the arrears applied as income for the past periods that they covered. An overpayment was raised and we are seeking recovery.

My instincts scream that this is official error, and with the clear advice given by this office, the customer couldn’t possibly have been aware, so non-recoverable. However the arguments against centre around the fact that the overpayment period is historical and is due to the provision of a change provided recently. The scale of the overpayment has not been affected by our decision in May, all that happened in effect is that we were a bit slow in notifying the changed entitlement.

How would my learned peers approach this? 😕

[Anonymous]

I think this is more a case of maladministration. The faulty advice did not cause the overpayment – the overpayment had already been made at the time when the advice was given. The overpayment was no-one’s fault: arrears of income always cause a no-blame overpayment.

If you attempt to recover in the county court you may find that the claimant uses the defence of estoppel: you gave poor advice, the claimant acted on that advice to his detriment and is now unable to repay so you are estopped from recovering.

A more straightforward answer would be to offer a full or patrial write-off, taking into account the claimant’s ability to repay now. It may be the case that the claimant can easily raise the money, or can pay it back in instalments, and the only harm done is the sense of disappointment that there was no windfall after all. On the other hand, the claimant could be put in a really awkward position if you were to recover now. In cases like this, the Ombudsman will recommend a bit of compensation for upset and time and trouble, plus a write-off of any amount up to and including the whole overpayment depending on exactly how hard it would be for the claimant to repay it now.

[Anonymous]

Peter, I’ve always wanted to know this…

What exactly is “estoppel”?

[Anonymous]

Lets play Call My Bluff:

ESTOPPEL.

Frank Muir: An estoppel is a small, hand-blown glass receptacle traditionally used to serve vinegar. To keep the vinegar fresh, a glass stopper was used to seal the bottle and over time the words stopper and bottle got run together.

Richard O’Sullivan: “Estoppel” is a legal remedy that prevents a person from denying the truth of a statement or the existence of facts which have caused another person to act to their detriment. For example, if X gives money to Y to buy a car for X, Y is “estopped” from changing his mind and keeping the car for himself.

Pauline Collins: Estoppel is a village deep in the pine forests of northern Estonia which is believed to be the birthplace of the Christmas tradition of the Yule log. Its name comes from the ancient Finnish “Ystapp” – a bundle of fire wood and “Iyull” – the winter solstice.

Robert Robinson: So there you have it: estoppel, a glass vinegar bottle, a mediaeval legal remedy or an Estonian village. Hannah Gordon, who is bluffing and who is telling the truth?

[Anonymous]

Straight from Wikipedia – but it’s right 😯

Estoppel is a legal doctrine recognised both at common law and in equity in various forms. It is meant to complement the requirement of consideration in contract law. In general it protects a party who would suffer detriment if:

The defendant has done or said something to induce an expectation
The plaintiff relied (reasonably) on the expectation…
…and would suffer detriment if that expectation were false.
Unconscionability by the defendant has been accepted as another element by courts, in an attempt to unify the many individual rules of estoppel.

Estoppel is generally only a defense that prevents a representor from enforcing legal rights, or from relying on a set of facts that would give rise to enforceable rights (e.g. words said or actions performed) if that enforcement or reliance would be unfair to the representee. Because its effect is to defeat generally enforceable legal rights, the scope of the remedy is often limited. Note, however, that proprietary estoppel (applicable in English land law) can be both a sword and a shield and the scope of its remedy is wide.

For an example of estoppel, consider the case of a debtor and a creditor. The creditor might unofficially inform the debtor that the debt has been forgiven. Even if the original contract was not terminated, the creditor may be estopped from collecting the debt if he changes his mind later. It would be unfair to allow the creditor to change his mind in light of the unofficial agreement he made with the debtor beforehand. In the same way, a landlord might inform a tenant that rent has been reduced, for example, if there is construction or a lapse in utility services. If the tenant relies on this advice, the landlord could be estopped from collecting rent retroactively.

Estoppel is closely related to the doctrines of waiver, variation, and election and is applied in many areas of law, including insurance, banking, employment, international trade, etc. In English law, the concept of legitimate expectation in the realm of administrative law and judicial review is estoppel’s counterpart in public law, although subtle but important differences exist.

This term appears to come from the French estoupail or a variation, which meant “stopper plug”, referring to placing a halt on the imbalance of the situation. The term is related to the verb “estop” which comes from the Old French term estopper, meaning “stop up, impede”. Note the similarity between the English terms “estop” and “stop”.

So in that case, Peter, I think it’s Frank’s vinegar bottle top. 😉 8)

[JamesPickering]

There is a very common case whos name escapes me now which shows the principle in action. The case is from 1945 and involves some flats and the rent charged during the war.

I am sure someone will know it (it is in the Commercial Law syllabus of the IRRV level 1 but do not have my notes to hand).

[Stalbansbenefits]

Central London Property Trust Ltd v High Trees House Ltd

[cbuck]

Hmm, they could just change ‘estopped’ to ‘stopped’ and save all those unnecessary ‘e’s!

Anyway… thanks Peter, I am still inclined to think an official error occured when we made our initial decision on how to treat the notification of change. Although the award notice only shows a decision supeseded from 02.04.07 it is implicit that the period prior to 02.04.07 has been redetermined and judged to be unaffected. That happens every time we pick (sometimes out of thin air) an effective date for supersession. We tell the customer that the payslip provided changes their entitlement from date 1, therefore by inference it has no effect on any entitlement prior to date 1.

In this case we went further and specifically told the customer that we had considered the effect of the change all the way back to year dot, but entitlement remained unchanged until 02.04.07. Surely this amounts to an erroneous award for the period up to 02.04.07? Not only did we have the information at our disposal but we specifically considered the effect on earlier entitlement, came to the wrong conclusion and issued an incorrect notification.

I really think we should be wrong in this case and punished accordingly (but not by the Ombudsman thanks!!)

[Anonymous]

I agree you made an official error, in that you chose not to revise the earlier decision, but that did not cause any overpayment to be made. Your error delayed the identification of the overpayment, but it didn’t cause it to happen. I am afraid you are entitled to 40% subsidy on this whether you like it or not! You could always donate it to charity

[cbuck]

Grr, grumble, humph. I really don’t like being wrong about how wrong we have been. I better go and get that overpayment back! Cheers Peter.

[Stalbansbenefits]

You don’t [i:249a77ab04]have[/i:249a77ab04] to recover the overpayment. Just use your discretion to write it off.

[cbuck]

No question in this case of actually having any of the money back, I just wanted the satisfaction of hitting the non-recoverable button and watching it gurgle away down the plughole. Instead there are forms and authorisations and blah blah… 👿

[Author]

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