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Inability of tribunals to remedy human rights violation following decision of Court of Appeal in Secretary of State for Work and Pensions v Carmichael and another [2018] EWCA Civ 548 – ‘leapfrog’ certificate for challenge to that finding to be considered by Supreme Court

Decision in brief

On the facts, it was reasonable to expect claimant to attend a medical in his home town of Derby, but not to attend a medical further afield (eg, in Nottingham) – claimant therefore had good cause for failing to attend a medical in Nottingham – decision that a claimant has failed to show good cause for non-attendance has serious consequences and ‘tribunals should therefore examine the Department’s evidence and arguments with some care and, where that material is deficient, with a healthy degree of scepticism’

Decision in brief

But although a claimant has no right to assume that the same decision on entitlement will be made, on appeal any apparent difference from the previous award ought to be explained by the tribunal – depending on the facts, it may be reasonably obvious from the tribunal’s findings – but for that ‘the reasoning must be such as to be able to carry the clear implication that the First-tier Tribunal either found a change of circumstances or disagreed with the previous decision’

Summary

The claimants were all women on universal credit (UC), employed and paid monthly. Because they were paid on or around the last working day or last banking day of the month, there were times when earnings payable in respect of two different months were paid during one UC assessment period. For example, one claimant had an assessment period running from 30 November to 29 December, and received the November earnings on 30 November and the December earnings on 29 December. As a result, she (and the other claimants) were treated as having two lots of wages paid in the same assessment period. As they were entitled only to one work allowance in that month, their UC entitlement was severely reduced when they were paid the UC, leading to serious financial difficulty. The claimants’ challenge was based on arguments that the assessment of their earnings in this way led to effects that contravened the Welfare Reform Act 2012 so as to be ultra vires, or that it led to unlawful discrimination contrary to Article 14 of the European Convention on Human Rights (ECHR) read with Article 1 of protocol 1 of the ECHR. One claimant also argued that the Secretary of State had failed to comply with the public sector equality duty under section 149 of the Equality Act 2010.

In the High Court, Lord Justice Singh and Mr Justice Lewis held that the decisions counting payments of both sets of monthly earnings in the same assessment period were indeed wrong, although as that was because of an erroneous interpretation of the relevant regulation, did not go on to consider the claimant’s arguments about ultra vires or the ECHR. On the facts (which included equality impact statements regarding the impact of UC on groups with protected characteristics, including women), the court held that the Secretary of State had satisfied the public sector equality duty (paragraphs 64–67).

The court concentrated on regulation 54 of the Universal Credit Regulations 2013, SI No.376. That provides that the calculation of earned income ‘in respect of’ an assessment period is ‘to be based on the actual amounts received in that period’. The court noted that the regulation ‘does not provide that the amount of earned income “is to be the actual amounts” received “in” the assessment period. Rather, the amount of earned income is to be “based on” the actual amounts received’ (paragraph 50). Although earned income was indeed ‘based on’ earnings received in the assessment period, there might need to be ‘an adjustment’ where it was ‘clear that the amounts received in an assessment period do not, in fact, reflect the amounts of earned income received in respect of the period of time included within that assessment period’ (paragraphs 52 and 56). In the circumstances of these cases, therefore, the Secretary of State had wrongly interpreted regulation 54 and ‘wrongly assumed that where salaries for two different months were received during the same assessment period, the combined salaries from the two months were to be treated as earned income in respect of that assessment period’ (paragraph 62).

Comment from CPAG

The court directed further submissions on identifying the appropriate remedy.

Summary

As a child, the claimant was entitled to DLA. As required by law, at that stage the DWP appointed someone to act for her – in this case, her mother. As she neared the age of 16, the claimant was subject to the transfer to PIP process. The claimant was refused PIP and (through her mother) appealed. The First-tier Tribunal, proceeding on the assumption that the mother was the claimant’s appointee, decided to proceed in the claimant’s absence and at the hearing heard only from her mother. The tribunal dismissed the appeal. The claimant, assisted by a representative, appealed to the Upper Tribunal arguing that the tribunal acted unfairly by failing to consider adjourning with directions for the claimant to attend and give evidence.

Judge Mitchell rejected the claimant’s further appeal. He considered that, if the claimant’s mother was in fact her appointee for PIP purposes, he ‘could see no real prospect of these arguments succeeding’. He then considered whether the claimant’s mother was indeed her appointee for PIP purposes, and held, on the facts, that she was. The DWP explained to the judge that although there was a mandatory appointment of an appointee for a child DLA claimant (under regulation 44 of the Social Security (Claims and Payments) Regulations 1987 (SI No.1968), there was no direct equivalent for PIP (which cannot be claimed by a ‘child’ – ie, someone aged under 16). However, as a matter of process, in the lead-in to a transfer to PIP, the DWP considers whether to make a new appointment on the basis that the child is ‘unable to act’ for her/himself, under a separate power at regulation 33. If such an appointment is made, this regulation 33 appointee is automatically transformed into a similar appointee for PIP purposes (by virtue of regulation 28 of the Personal Independence Payment (Transitional Provisions) Regulations 2013, SI No.387).

The Secretary of State conceded that she could not supply records regarding the process of conversion of the claimant’s mother from her DLA appointee to her PIP appointee, but did supply records indicating that this did occur. The Secretary of State argued that under principles of presumption of regularity, the DWP should be regarded as having carried this process out correctly. Considering the evidence (which included the mother’s recall of a visit about this), the judge held the claimant’s mother was properly to be regarded as her appointee for the PIP appeal – ie, following conversion of the DLA appointment to a PIP appointment under regulation 28 of the Transitional Provisions regulations. If the presumption of regularity did apply, there was nothing from the claimant to rebut it; if the presumption did not apply, on the balance of probabilities, the conversion was in any case made (paragraphs 33–34). Further, there was no error in taking the mother’s evidence at face value: it had not been suggested to the tribunal that her knowledge of her daughter was imited, and in fact she argued the contrary. However, in concluding remarks the judge said that he would ‘strongly recommend’ that in other such appeals the DWP ‘properly explain and, if necessary, evidence the basis for any appointment’ (paragraphs 35–36).

Comment from CPAG

It remains the case that tribunals are able to take evidence from children, but of course must consider if that is right, and in practice are often reluctant to do so. Ultimately, what is right will depend on the individual facts.

Summary

The claimant was subject to a reduction in his eligible rent due to the application of the bedroom tax to an allegedly spare bedroom in his house. However, the claimant disputed that, mainly on the grounds that the room was unsafe to use due to asbestos-related risks. In rejecting the claimant’s appeal, the First-tier Tribunal found that (following remedial work) the room had been safe to use from January 2014, even though a surveyor had not confirmed that until October 2014.

Although Judge Mitchell set the tribunal’s decision aside for error of law (the tribunal had given inadequate reasons why the room was usable before October 2014), he substituted a decision to the same effect – ie, that the claimant was subject to a reduction under the ‘bedroom tax’ from January 2014 (paragraphs 42–49). In so deciding, the judge had to consider whether the allegedly spare room was capable of counting as a ‘bedroom’ under the relevant rule – ie, regulation B13 of the Housing Benefit Regulations 2006, SI No.213.

The 2006 regulations do not define ‘bedroom’. However, the judge considered that although (given that this was a social sector tenant) the local housing allowance (LHA) rules did not apply, ‘the LHA provisions’ treatment of unsuitable rooms is worth mentioning’. Those rules define a ‘room’ as ‘a bedroom or room suitable for living in’ (paragraph 36). But in the end the judge considered that he did not need to decide whether such a definition should apply regarding what is a bedroom under the bedroom tax rules. Existing authority, in particular SSWP v Nelson [2014] UKUT 525 (AAC), demonstrated that a ‘bedroom’ needs to possess certain characteristics, and that included avoiding ‘obvious safety risks’ (M v SSWP [2017] UKUT 443). It could not be assumed, held the judge, that, ‘potential renters would be willing to move into properties with unsafe bedrooms’ (paragraph 45). On the facts of this case, the asbestos had been effectively cleared from the bedroom in January 2014. The room was in fact safe, and so could count as a bedroom from that time, even though the claimant was not aware of that until the following October (paragraph 47).

Comment from CPAG

The judge explicitly left undecided the question of whether the bedroom needed to be ‘suitable for living in’, as in the LHA rules. Although previous caselaw and the present cover at least some of that ground, the question could arguably be the subject of a future decision.

Summary

The claimant was the father of a child. He separated from the child’s mother in 2011. The mother received child tax credit (CTC) for the child, but by 2013/14 the child was spending broadly equal amounts of time living with each parent in turn. Following the issue by a court of an interim residence order (subsequently rescinded) that the child live with the claimant but with extensive contact with the mother amounting to shared care, the claimant submitted a claim for CTC citing the court order. HM Revenue and Customs (HMRC) decided that, on the basis of the court order, the father had main responsibility for the child, awarded him CTC from January 2014 and terminated the mother’s entitlement from the same date. The mother appealed to the First- tier Tribunal, who allowed her appeal, saying that there were no valid grounds for removing her entitlement and holding that because of the shared care neither the claimant nor the mother had main responsibility for the child.

Judge Wikeley allowed the claimant’s further appeal in so far as he held that although the original HMRC decision was wrong in being based exclusively on the existence of the interim maintenance order (PG v HMRC and NG (TC) [2016] UKUT 216 (AAC), reported as [2016] AACR 45), the tribunal had failed to make any finding as to which parent had main responsibility for the child, a finding which (as per CTC/4390/2004) is mandatory, not optional (paragraphs 21–22).

However, he did not set the tribunal decision aside. On the facts of the case, HMRC had decided that the tribunal decision had no direct impact on the father’s entitlement for that year, and had ultimately not attempted to recover (as an overpayment) any CTC from the whole of the 2013/14 year from the mother. As the judge noted, ‘we appear to have arrived at a situation in which HMRC has apparently given effect to separate decisions which mean that both parents have been found to be entitled to CTC’ for the tax year concerned, even though strictly only one person can be found to have main responsibility for a child at any one time. HMRC’s ‘pragmatic approach’ was perhaps understandable given the conflict-ridden history of the proceedings, and HMRC had exceptionally been able to countenance parallel payments for separated parents for the same period in other cases (DG v HMRC and EG (TC) [2016] UKUT 505 (AAC) cited) (paragraph 27). Exercising discretion as to whether setting the decision aside could be of any practical benefit to any of the parties, the judge decided not to do so (paragraph 28).

Summary

The claimant was entitled to child tax credit. She made a claim for universal credit (UC) – mistakenly, she later said, as she believed that in fact she was making a claim for personal independence payment. She withdrew the UC claim, but in the meantime her tax credits had been terminated. The claimant appealed to the First-tier Tribunal, which allowed her appeal.

Judge Jacobs held that the tribunal had erred in law, set the decision aside and substituted a new decision such that the decision to terminate the tax credits award following the claim for UC was correct. The transition from tax credits to UC was governed, in these circumstances, by regulation 8 of the Universal Credit (Transitional Provisions) Regulations 2014 (SI No.1230). That provides for termination where a claim for UC is made and ‘the Secretary of State is satisfied’ that the claimant meets the ‘basic conditions’ for UC in section 4(1)(a) – (d) of the Welfare Reform Act 2012.

In this case, the tribunal found that the DWP, following receipt of the UC claim, had notified HM Revenue and Customs (HMRC) of that by way of a ‘stop notice’ – ie, which caused HMRC to terminate the award of tax credits. Judge Jacobs agreed that it was a requirement for the Secretary of State (ie, the DWP) to be satisfied that the UC basic conditions were met. It was insufficient (for termination of the tax credits award) merely for the DWP to have issued the stop notice. Rather, the tribunal ‘needed some evidence to link the stop notice itself to the Secretary of State being satisfied about the basic conditions. All that was required was an explanation of the system that led to the notice being issued’ (paragraph 9). In fact, the First-tier Tribunal had not been provided with that, and should have given directions for that omission to be remedied. But having been supplied with an explanation of the system by the DWP himself, Judge Jacobs now felt able to hold that the termination of the tax credits was correct. The subsequent withdrawal of the UC claim after the issue of the stop notice ‘could not rewrite history by pretending that the claim was never submitted in the first place’.

Comment from CPAG

It is disappointing that this decision does not include what explanation the DWP offered of how the system ensures that the Secretary of State is satisfied about the basic conditions being met before the stop notice is issued. The judge did not decide on whether the claimant could have protected herself by withdrawing the claim before the stop notice was issued, as that did not arise on the facts. But the reasoning of the decision would appear to allow that possibility. For more, see the article ‘Defective claims revisited’ in Bulletin 267, p8.

Summary

The claimant was refused housing benefit, being considered to have notional capital of £102,830 for the sale of her former home. The claimant appealed and argued to a First-tier Tribunal that she had paid it to her children. The tribunal rejected the argument that most of the money was paid to clear a debt to her daughter and refused her appeal. A subsequent claim was rejected on similar grounds (with application of the diminishing notional capital rules) and the claimant’s appeal against that was rejected, on the grounds that the facts found by the earlier tribunal were res judicata – ie, could not be disturbed on a new claim. Later, another new claim was met with the same response both by the local authority and a further First-tier Tribunal. On this occasion, the claimant changed her account, saying that in fact she had spent the money on gambling and providing medical evidence of treatment for compulsive gambling.

Judge Jacobs held that the most recent First- tier Tribunal had erred in law, because it took the same approach as the preceding tribunal in applying the principle of estoppel per rem judicatum (sometimes called res judicata) to this case. That was wrong because, as had been made clear in CH/704/2005, that principle ‘has little application to the determination of social security claims generally and none to the determination of housing benefit claims’ (paragraph 7). Although decisions of tribunals are final (subject to supersession, appeal, etc.), the determinations embodied within them are not conclusive. So the determinations about the claimant’s actions made by first tribunal were not conclusive for the purposes of a subsequent claim. A decision on a claim can be changed on revision or supersession, and ‘there is no reason why errors should not equally easily be corrected in new claims’ (paragraph 7).

That was not to say that the earlier decisions were irrelevant to the new claim. It might be difficult for a claimant to persuade a local authority or tribunal to take a different view from that previously taken, ‘particularly where the claimant has admitted lying and, as it would seem in this case, committing criminal offences by making false statements for the purpose of obtaining benefits’ (paragraph 8). However, the possibility that a claimant was an untruthful person telling the truth on this issue must be recognised. The tribunal ought to have considered whether the claimant was now telling the truth and, if so, what the legal implications were (paragraph 8). The case was remitted to a fresh tribunal consider afresh what the facts were.

Comment from CPAG

This decision does not alter the basic position that decisions are final, subject to revision, supersession or appeal. The judge was concerned here with the contention that the estoppel/res judicata principle applies to the determination of claims – ie, to the determination of claims for a different, subsequent period to that in a previous decision.

Summary

The claimants (one for disability living allowance (DLA), one for jobseeker’s allowance (JSA)) had both sought ‘mandatory reconsiderations’ of decisions more than 13 months after they were made. The DWP refused to revise the decisions, on the ground that they were made outside the absolute time limit, and so refused to revise the decisions. The claimants then appealed to the First-tier Tribunal, but in both cases the tribunal refused jurisdiction on the basis that the application for mandatory reconsideration had been refused for being outside the absolute time limit, and there was no right of appeal following such a refusal.

Judge Pool QC rejected the further appeal of the DLA claimant, but allowed the further appeal of the JSA claimant and remitted the case to a fresh tribunal. The reason for the differing outcomes was that the DLA claimant’s application for mandatory reconsideration was simply that he disagreed with it, and had therefore had to rely on a revision on ‘any ground’, whereas the JSA claimant raised a specific point of official error (incorrect advice to claim ESA) in the decision, and was therefore able to rely on a revision for ‘official error’, to which no time limit applied. On the judge’s interpretation of the relevant rules, the bar on a right to appeal following a refusal to revise a decision made more than 3 months ago applies only to ‘any ground’ applications which are refused, but not to an ‘official error’ application which is refused.

The relevant rules were a combination of provisions about appeals in the Social Security Act 1998 and about ‘mandatory reconsideration’ (ie, revision) which for DLA and JSA are in regulation 3 of the Social Security (Decisions and Appeals) Regulations 1999, SI No.991. The judge noted that where the mandatory reconsideration request is made more than 13 months after the decision, ‘in many cases’ the tribunal will have no jurisdiction to consider an appeal. This follows from the fact that regarding revisions ‘on any ground’ (eg, where the disagreement is simply that the decision maker ‘got it wrong’), the effect of regulation 3(1) and (3) was to require that the application be made within 13 months of the decision. There was no jurisdiction to hear an appeal against a refusal to revise. But a tribunal will have jurisdiction to hear an appeal, even where the request for mandatory reconsideration is more than 13 months after the decision, ‘where the substance of the mandatory reconsideration request’ falls within regulation 3(5) – ie, is where the ground is ‘official error’ (as defined in regulation 1) (paragraph 3). The judge noted in that in R (CJ) and SG v SSWP [2018] AACR 5, it had been suggested that there was no tribunal jurisdiction where the mandatory reconsideration had been made after 13 months. Refining that, the judge held that was correct insofar as it applied to requests for revision on ‘any ground’; but, he said, ‘“any time” revisions falling within regulation 3(5) are in a different position’ (paragraph 11). The effect was that First-tier Tribunals do not have jurisdiction to hear appeals where the mandatory reconsideration is made after 13 months, but do have jurisdiction in such cases where the basis is official error. It was not necessary for the applicant to use such terms: ‘what is important is the substance of the request’ (paragraph 12).

Comment from CPAG

This important decision establishes that, if ‘official error’ is the basis for the mandatory reconsideration, appeals against a refusal to revise can still be made even if the mandatory reconsideration was requested after more than 13 months. 

Summary

The claimant did some temporary work in November 2015, but did not receive payment for that work until 15 December. In the meantime, the work had ceased and he had claimed UC, with the first assessment period being 1 to 31 December. The payment of wages on 15 December was overlooked, but later corrected on revision, resulting in an overpayment of UC which the claimant was liable to repay. The claimant’s appeal again the revised decision and the decision that he must repay the overpayment was dismissed by the First-tier Tribunal.

Judge Jacobs held that the tribunal had not erred in law, and so rejected the claimant’s further appeal. Regarding receipt of the earnings, what mattered as far as the UC legislation is concerned ‘is when a payment is made’. If made within an assessment period, it is treated as income for that period, and so the decision maker ‘correctly fixed the claimant’s assessment period’ so as to treat the earnings as income in respect of that period (paragraph 8).

Liability to repay the overpayment was governed by section 71ZB of the Social Security Administration Act 1992. There, liability did not (unlike for most social security benefits) depend on claimant misrepresentation or failure to disclose. Neither was there reference to official error or what was reasonable to expect the claimant to have realised (paragraph 10). A claimant can appeal about the amount of an overpayment of UC but nothing else. The cause of the overpayment was irrelevant on an appeal under section 71ZB (paragraphs 11–12).

Decision in brief

Claimants were single after splitting up as a couple – house rented as a joint tenancy but under a legal agreement each claimant had exclusive use of a bedroom and living room – local authority and First-tier Tribunal applied one- bedroom shared accommodation rate, on basis that as one claimant got carer’s allowance for caring for the other, there was no ‘exclusive’ use of two rooms, and house rented as a joint tenancy – held that ‘exclusive’ use is in contradistinction to ‘shared’ use, and was about whether there was an exclusive right, not the actual use of the room – and must be able to look beyond any tenancy to look at subsidiary agreements that have legal force (such as subletting) – on facts of the case, claimants had a legal agreement regarding exclusive use of rooms such that the one-bedroom self-contained rate applied