England and Wales Court of Appeal (Civil Division) Decisions

IN THE COURT OF APPEAL (CIVIL DIVISION)
ON APPEAL FROM THE HIGH COURT (CHANCERY DIVISION)
MR JUSTICE NUGEE
CH/2015/0108

		Royal Courts of Justice Strand, London, WC2A 2LL
		16/01/2017

 


Lord Justice Flaux:

Introduction

1. The appellant (to which we will refer as “"the Authority”") appeals with the permission of Sales LJ against the Order of Nugee J dated 8 July 2015 setting aside a determination of the Pensions Ombudsman dated 28 November 2014, made in relation to the respondent, to whom we will refer as “"Mrs Young”", a former community nurse, and requiring the Authority to undertake a fresh assessment of her claim to Permanent Injury Benefit (“"PIB”") under the provisions of the National Health Service (Injury Benefits) Regulations 1995 as amended (“"the Regulations”").

The relevant provisions in the Regulations

2. This case concerns in particular Regulations 3 and 4 which provide as follows:

“"3 Persons to whom the regulations apply

(1)…[T]hese Regulations apply to any person who, while he (a) is in the paid employment of an employing authority … (hereinafter referred to in this regulation as “"his employment”"), sustains an injury, or contracts a disease, to which paragraph (2) applies.

(2) This paragraph applies to an injury which is sustained and to a disease which is contracted in the course of the person''s employment and which is wholly or mainly attributable to his employment and also to any other injury sustained and similarly, to any other disease contracted, if—

(a) it is wholly or mainly attributable to the duties of his employment; …

4 Scale of benefits

“"(1)…benefits in accordance with this regulation shall be payable by the Secretary of State to any person to whom regulation 3(1) applies whose earning ability is permanently reduced by more than 10 per cent, by reason of the injury or disease, …

(2) Where a person to whom regulation 3(1) applies ceases to be employed as such a person by reason of the injury or disease and no allowance or lump sum, other than an allowance under paragraph (5), has been paid under these Regulations in consequence of the injury or disease, there shall be payable, from the date of cessation of employment, an annual allowance of the amount, if any, which when added to the value, expressed as an annual amount, of any of the pensions and benefits specified in paragraph (6) will provide an income of the percentage of his average remuneration shown in whichever column of the table hereunder is appropriate to his service in relation to the degree by which his earning ability is reduced at that date.”"

3. As the judge said at [11] of his judgment:

“"There then follows a table which calculates by reference to the degree of reduction of earning ability and the length of service of the person concerned, the target amount as a percentage of his remuneration, so that, for example, if the degree of reduction of earning ability is between 10 per cent and 25 per cent, the target figure is between 15 per cent of remuneration for someone with less than five years'' service, but 60 per cent for someone of service of 25 years and over, but if the degree of reduction of earning ability is more than 75 per cent, the target is, in each case, 85 per cent of remuneration. As can be seen from the terms of regulation 4(2) the precise amount of benefit depends on a number of other matters, which it is not necessary to refer to, the general effect being that the income of the person concerned is topped up to the target amount.”"

The factual background

4. The relevant factual background can be summarised as follows. On 16 February 2010, whilst at work, Mrs Young sustained an injury causing pain in her neck and lower back whilst attending a patient, either whilst attempting to move the patient or due to her bending down low over the patient. That caused an episode of ongoing back pain which prevented her from working. An MRI scan on 28 July 2010 demonstrated that she had a degenerative condition or disease of her spine which was much more severe than would be expected in a healthy woman of her age (she was 53 at the time).
5. She did not return to work and her employment was terminated on grounds of capability on about 23 July 2011. She applied to the Authority for PIB under the NHS Injury Benefit Scheme. Her application was initially refused in September 2011 and there were various appeals which were also refused. It is not necessary to refer to all of them, but of particular relevance to the appeal is the second appeal decision of the NHS Benefit scheme dated 16 April 2012. In that decision, the writer, the Disputes Manager, stated:

“"…based on the advice of the Scheme’'s medical advisers, I am satisfied that Mrs [Young] has sustained an injury wholly or mainly attributable to her NHS employment.

However as a result of that injury, Mrs Young has been assessed as having suffered no Permanent Loss of Earning Ability (“"PLOEA”") because the effects of the accepted injury are not permanent. Regrettably that means she is not entitled to payment of PIB.

…

There is a view that degenerative conditions may well be permanently or temporarily exacerbated (aggravated) by work activities. But that is not the same as saying that the condition is wholly or mainly attributable to (caused by) their NHS employment.""

6. Mrs Young appealed to the Pensions Ombudsman who upheld her complaint and, on 29 May 2013, directed that her application be reconsidered. In the light of that determination, the Authority reviewed its prior decision and, on 25 June 2013, issued its decision that her application for PIB was not accepted, stating, inter alia:

“"I can see nothing in the medical adviser''s rationale that would cause me to disagree with his advice and recommendation so I have therefore accepted it. It is accepted that you sustained an injury to your neck and back on 16 February 2010 which is wholly or mainly attributable to your NHS employment, but that injury has not resulted in any PLOEA. This is because considering only the impact of the index event in a setting where you did not have a pre-existing condition and had comparable degenerative changes to a woman of your age at that time; the index event as described could not have caused more than a temporary soft tissue injury to your cervical spine and lumbar spine which would have resolved in a few weeks or months. The condition from which you now suffer and which is incapacitating you for work is a different pre-existing degenerative condition which is not wholly or mainly attributable to your NHS employment as explained by the Medical Advisor in his rationale. Hence there can be no PLOEA resulted from the claimed and accepted injury. It attaches instead to the non work related degenerative condition and so does attract any benefit.”"

7. Mrs Young appealed a second time to the Pensions Ombudsman whose office referred the case to a senior investigator, Mr Ken Buckley, who recommended not upholding the complaint. That recommendation was accepted by the Deputy Pensions Ombudsman whose determination dated 28 November 2014 stated:

“"My decision is that this complaint should not be upheld against NHSBSA.

My reasons are essentially the same as in Ken Buckley''s Opinion of 3 November 2014, (the Opinion), a copy of which is attached. My additional comments follow.

Mrs Young maintains that prior to her accident of 16 February 2010 while on duty with the NHS that she was a healthy active person with no evidence of back trouble. She therefore says that she should be entitled to PIB.

However, NHSBSA concluded that the injury on 16 February 2010, on its own had not resulted in a PLOEA of more than 10%. As explained by Mr Buckley in the Opinion, NHSBSA had properly considered Mrs Young''s claim taking into account the appropriate medical evidence available to them. I therefore do not consider that there are any grounds for me to find that their final decision in refusing her a PIB was perverse.

I therefore do not uphold Mrs Young''s complaint.”"

8. Mrs Young appealed that determination to the High Court pursuant to section 151(4) of the Pension Schemes Act 1993 and CPR 52.21 which provide for such appeals with the permission of the Court on points of law.

The judgment

9. At [13] and [14] of his judgment, the judge recorded that a lot of the pre-conditions for claiming PIB were common ground:

“"13 In the present case, the position that has now been reached is that quite a lot of the pre-conditions for claiming benefit are common ground. It has never been disputed that Mrs Young is a person who was in the paid employment of an employing authority. It is not now disputed that, for the purposes of regulation 3(1), she sustained an injury, namely the injury which she sustained on 16 February 2010, and that, for the purposes of regulation 3(2), that injury was sustained in the course of her employment, and was wholly or mainly attributable to her employment.

14 The pre-conditions of regulation 3(1) and 3(2) are therefore now accepted to be satisfied.”"

10. That acceptance by the Authority that the pre-conditions of regulation 3 are satisfied, because the injury which Mrs Young sustained on 16 February 2010 was sustained in the course of her employment and was wholly or mainly attributable to her employment, was maintained before us by Mr Andrew Hogarth QC on behalf of the Authority in his submissions to us and in a letter to the Court after the hearing.
11. In the circumstances, before the judge and before this Court, the argument centred on regulation 4(1) and, specifically, the meaning and scope of the words: “"by reason of the injury”". At [15] of his judgment, the judge referred to the only previous case in which these provisions have been considered by the High Court, the decision of Etherton J (as he then was) in NHS Pensions Agency v Suggett [2005] EWHC 1265 (Ch); [2005] OPLR 287, where the medical evidence pointed to the presence of symptoms prior to the specific incident and the Agency concluded that the specific incident could not be accepted as wholly or mainly responsible for the impairment arising out of Mrs Suggett’'s subsequent back condition. The Pensions Ombudsman determined that the Agency had proceeded on the mistaken assumption that if Mrs Suggett had previously been presenting with similar symptoms or had been diagnosed with a similar condition, her present condition could not be attributed wholly or mainly to her employment and the Ombudsman concluded that the presence of symptoms prior to the index event did not lead to the conclusions reached.
12. That decision of the Pensions Ombudsman was upheld by Etherton J and a further appeal to the Court of Appeal was dismissed ([2006] EWCA Civ 10), although, as Nugee J notes in [17] of his judgment, there was no real further consideration of the relevant question. As Nugee J also notes, the relevant question was slightly different from that in the present case. It seems to have been more focused on regulation 3(2) than regulation 4(1). However, at [18] of his judgment, he cites the detailed commentary in the law report of Suggett by Professor John Mesher, who referred to the example given by the Ombudsman in his determination in that case of the professional footballer whose leg is weakened by a fracture in a car accident but then breaks the leg in a match. Professor Mesher says that this:

“"…was exactly in point, although rejected as a valid analogy by the agency. There could be no doubt that the injury was sustained in the course of employment and was wholly or mainly attributable to employment. The agency''s argument against the analogy was that the injury, the footballer''s continuing incapacity, would not necessarily have been wholly or mainly attributable to his employment. It argued that the question to be asked was whether the main cause of permanent injury was a pre-existing condition, accepting that a mere existing predisposition to injury was to be ignored. The Ombudsman did not pursue that argument, but was able to show that the agency had adopted a wrong approach by apparently accepting that, if Mrs Suggett had degenerative disc disease already in operation before 23 April 1975, her later condition could not be wholly or mainly due to the incident on that date. On that he was upheld by Etherton J. But as it was the agency''s appeal, and Mrs Suggett was not present or represented, a possible further legal flaw in the agency''s approach was not examined. The argument would run as follows, “"Injury”" is not defined in the 1995 Regulations and should bear its ordinary meaning, as in the social security industrial injuries scheme, of a physiological or psychological change for the worse. It indicates a particular occurrence and should be kept separate from the loss of faculty or the impairment in the normal power or function of some part or organ of the body that might result from the injury either alone or in conjunction with other causes. Under the 1995 Regulations the “"wholly or mainly”" test only applies to the connection of the injury to employment. Thus, in Mrs Suggett''s case (as in the example of the footballer) there was no question that the injury she received in the lifting incident on 23 April 1975 was wholly or mainly attributable to her employment under reg. 3(2). What had to be decided was whether, under reg. 4(1), her earning ability at the date of the application was permanently reduced by more than 10 % by reason of the injury. In reg. 4(1) there is no “"wholly or mainly”" condition. The test must therefore be whether the injury was still by the relevant date an operative cause of the reduction in earning ability, even though there were other causes that might be more substantial. That was not the approach taken by agency, but the question of whether it is the correct approach has been left open by the judge''s decision.”"

13. As the judge noted at [19] of his judgment, that encapsulated the argument before him of Mr Douglas Leach on behalf of Mrs Young. The judge then goes on to discuss the meaning of the words: “"by reason of the injury”" in regulation 4(1) which, as he said, incorporate a causation test, in relation to which, as he says at [21], the court was presented with a stark choice:

“"between Mr Leach''s argument, which says that A causes B if A is an operative cause of B – in this case, if the injury that Mrs Young sustained on 16 February 2010 was an operative cause of the permanent reduction in her earning ability – or whether, as Mr West says, that A is only the cause of B if it is the operative cause of B – in this case, that the injury on 16 February 2010 is the cause of the earning ability being permanently reduced.”"

14. The judge determined at [22] and [23] that it was sufficient if the injury sustained on 16 February 2010 was an operative cause:

“"Purely as a matter of language, I am inclined to the view that if A is said to cause B, it is sufficient for A to be a cause of B, it is not normally a necessary requirement before A can be said to have caused B, that A is the sole or dominant cause or the operative cause…

…if you posit the question, “"Does A cause B?”" it is not necessary before a positive answer can be given to that question to conclude that A is the sole, dominant, direct or proximate cause of B; instead it is enough for A to be a contributory cause of B, or an operative cause of B.”"

15. He went on to discuss at [27] and [28] the anomaly identified by counsel for the Authority, that an injury which was wholly or mainly due to employment, but which was only a contributory cause of a loss of earning capacity should nevertheless trigger the entirety of the benefit:

“"27. I can see that that is a real possibility that gives rise to a significant anomaly. The question is whether it is sufficiently anomalous to require a reading of the words at the end of regulation 4(1) “"by reason of the injury”", which are designed to prevent that result. I am not satisfied that this is a sufficient basis on which to displace what I regard as the normal use of the language. It is always dangerous to speculate on the way in which regulations were envisaged by the draftsman as working, especially where the paradigm case, which the draftsman primarily would have had in mind, is a case where the injury or disease is plainly attributable to employment and, by itself causes the reduction in earning capacity. It is not obvious, simply by reading the regulations, what the draftsman has envisaged would be the case in circumstances where an injury which is attributable wholly or mainly to employment has contributed, maybe significantly to a loss of earning capacity, but could not be said to be the operative cause. It may well be that that is not something which the draftsman has focussed on at all. If one reverts to the example given by Mr Mesher in his commentary, to the example of the footballer, or if one can make it slightly more realistic in the context of the NHS scheme, a nurse who has had a car accident, as a result of which she has a significantly weakened leg, if she slips in the course of employment and breaks her leg, it may very well be that, if asking the question whether that the slip was the predominant cause of a total loss of earning capacity, the answer would be no, the predominant cause being the pre-existing injury to the leg. But if one asks the question, whether her injury sustained in the course of employment has caused her to have to give up work forever, it is not at all obvious that the answer to that would also be “"no”". I think most people would regard the answer to that as “"yes”": however fortuitous it may be, she has slipped at work, she has broken her leg, that has caused, due to her pre-existing weakness, a permanent loss of earning capacity and has required her to give up her job.

28 So too here: if in fact the relatively minor episode which Mrs Young suffered on 16 February did trigger an underlying condition, and had the result that she was thereafter incapacitated, unable to work and unable to earn, it is not at all obvious to me that that does not satisfy the language of regulation 4(1) as being an injury by reason of which Mrs Young''s earning ability has been permanently reduced. I am not therefore persuaded that a purposive construction requires an interpretation of regulation 4(2) under which permanent injury benefit is only payable if the injury in question is the dominant or sole or main or operative cause of the reduction in earning ability.”"

16. The judge then referred to the “"eggshell skull”" concept in the law of tort and the submission by counsel for the Authority that the concept had no place in the present context. The judge rejected that submission at [29]:

“"I accept of course that the concept of the eggshell skull is a rule applicable to the liability of tortfeasors but it does not seem to me that that necessarily means that it is inapplicable. The basis of the rule is that if A tortiously injures B and due to some inherent weakness in B''s constitution the consequences are very much more serious than they would be in the normal case, that is nevertheless damage which has been caused by A''s tortious wrong, for which A is liable in law. It does not seem to me that such a reasoning is necessarily inappropriate to the different situation in which, as a result of an injury sustained in an employment, an employee who suffers from a pre-existing, unusual weakness, suffers consequences which are very much more serious than they would be for an ordinary employee of ordinary constitution.”"

17. Mr Leach submitted on behalf of Mrs Young that, in focusing on the impact the injury of 16 February 2010 would have had on a woman of her age with no more than age-related degeneration to her spine rather than the impact of the injury on Mrs Young with all her pre-existing conditions, the Authority and its medical advisers had asked the wrong statutory question for the purposes of regulation 4(1). The judge accepted that submission at [32]:

“"In those circumstances, it does seem to me that NHS BSA asked the wrong question, and I agree with Mr Leach that the question that should have been asked was not what impact the injury would have had on a woman of Mrs Young''s age who did not suffer from degeneration of the spine, but what impact it had on Mrs Young, given her pre-existing condition. It by no means follows that the injury will have been an operative cause at all of the permanent loss of earning capacity. It may be, and neither Mr Leach nor I, nor indeed Mr West, suggested that we have the medical qualifications to form any view of this, that the impact of the injury was something that, even for Mrs Young, had no lasting or permanent effect, and that the lasting or permanent effect was entirely attributable to her pre-existing condition. But it does seem to me that Mr Leach is right, that that question has not been asked and has not been answered.”"

18. The judge went on to find that the appeal succeeded and that the determination of the Deputy Pensions Ombudsman should be set aside and the matter be remitted to the Authority to answer the right question.

The parties’' submissions

19. As we have already noted, in his submissions before us on behalf of the Authority, Mr Hogarth QC accepted that the injury or strain sustained on 16 February 2010 was: “"wholly or mainly attributable to [Mrs Young’'s] employment”", so the pre-conditions of regulation 3 were satisfied. However, the underlying disease from which she suffers, the degenerative condition of the spine, was not attributable to her employment. He submitted that, on the correct construction of regulation 4(1), Mrs Young should not be entitled to PIB because it was that degenerative condition which was the operative cause of her PLOEA not the injury or strain which occurred on 16 February 2010.
20. Mr Hogarth QC criticised the analysis of the learned judge in a number of respects. First, he submitted that, in effect, the judge had applied to the Regulations a “"material contribution”" test which was inappropriate outside the law of negligence. Second, he submitted that the judge’'s interpretation of the Regulations imported into this area the eggshell skull concept which, again, was inappropriate outside the law of negligence and made the NHS liable as insurer, which was not the intention of this statutory scheme. This was a generous benefit scheme under which the benefit should only be payable if the loss of earnings capacity is wholly or mainly attributable to the injury to which regulation 3(2) refers. He submitted that the effect of the judge’'s construction is that if the employee suffers any injury in the course of employment and the underlying degenerative condition is then triggered, PIB is payable even though it is the degenerative condition which is the operative cause of the permanent loss of earnings capacity.
21. On behalf of Mrs Young, Mr Leach’'s primary submission was that the judge’'s construction of “"by reason of”" as meaning that the index injury must be “"an operative cause”" was entirely correct and could not be faulted. Once the gateway of regulation 3 was passed (as it was accepted by the Authority that it was in this case), then one came to the question of benefit under regulation 4 and provided that the injury was an effective cause, entitlement to the benefit arose. The contrary argument on behalf of the Authority, that the index injury had to be the operative cause of the PLOEA, involved an impermissible writing into regulation 4 of the words: “"wholly or mainly”" before “"by reason of”" and elided the two separate questions under regulation 3(2) and regulation 4(1).
22. Mr Leach pointed out that the words: “"wholly or mainly”" in regulation 3(2) were added by amendment by the National Health Service (Injury Benefits) Amendment Regulations 1998. The fact that such an amendment was made to regulation 3(2), but not to regulation 4(1) was fatal to the Authority’'s argument in this case.
23. Mr Leach submitted that in [32] of the judgment, the judge was not determining or prejudging whether Mrs Young was entitled to PIB. He was simply deciding that the Authority and its medical advisers had asked the wrong question and proceeded on the erroneous assumption that one should look at the impact of the index injury on a hypothetical person of Mrs Young’'s age. Furthermore, in reaching the conclusion he did, the judge was not relying on the eggshell skull principle as an aid to the correct construction of regulation 4(1) so that Mr Hogarth QC’'s criticism in that regard was misplaced.

Analysis and conclusions

24. In my judgment, once it is accepted, as it is in the present case, that the injury suffered by Mrs Young on 16 February 2010 was wholly or mainly attributable to her employment, so that the pre-conditions of regulation 3 are satisfied, the judge’'s construction of regulation 4 must be correct. The words “"by reason of”" import a “"but for”" test of causation: was the injury an operative or effective cause of the PLOEA. What they do not import is the construction for which the Authority contends, that the injury is the effective or the operative cause. Such a construction seems to me to necessarily involve reading across the words “"wholly or mainly”" from regulation 3(2) so that the provision reads: “"whose earning ability is permanently reduced by more than 10 per cent wholly or mainly by reason of the injury”". This rewriting of the regulation is wholly impermissible. The fact that the words: “"wholly or mainly”" were added to regulation 3(2) by amendment in 1998 but those words were not also inserted in regulation 4 before: “"by reason of”" prohibits any construction which involves reading those words into regulation 4.
25. As Sales LJ observed during the course of argument, depending on the context, the words: “"by reason of”" can mean both that the relevant matter is the causa sine qua non of what has occurred (the “"but for”" test of causation), and that it is the causa causans of what has occurred. However, in the present case, an argument that regulation 4 requires that the injury be the causa causans of the PLOEA was not presented to the judge, who was presented with the “"stark choice”" to which he referred in [21] of his judgment. Equally, no such argument was addressed to this Court. The rival constructions of the regulation put forward were either that the PLOEA was wholly or mainly by reason of the injury or that the injury was an effective or operative cause of the PLOEA (i.e. that, but for the injury, there would not have been a permanent loss of earning ability). As I have said, given that stark choice, the latter is clearly the correct construction.
26. It is important to have in mind that, as Mr Leach pointed out, at [32] of his judgment, the judge is not prejudging whether Mrs Young is ultimately entitled to PIB. He is simply stating that the Authority and its medical advisers have not yet assessed that entitlement by asking themselves the correct statutory question. It may be that when they do so, it will emerge that even if there was an increased deterioration of the degenerative condition caused by the immediate injury on 16 February 2010, the medical evidence is that even if that injury had not occurred, the degenerative condition would always have deteriorated to such an extent that Mrs Young would not have been able to work. That is the possible scenario which the judge is positing in the second and third sentences of [32] and to which Professor Mesher is alluding in the penultimate sentence of his commentary on Suggett which I quoted at [12] above. However, any such medical evidence would require to be assessed by reference to the correct statutory question, which has not yet been asked.
27. I do not accept Mr Hogarth QC’'s various criticisms of the judge’'s analysis. I do not consider that there is any question of the judge applying a “"material contribution”" test, nor did the eggshell skull principle form part of his reasoning as to the correct construction of regulation 4. In its context, I read what he said in [29] of the judgment as no more than that the fact that the correct construction of the regulation may lead to a result which is the same as in the eggshell skull cases is no reason for not adopting that construction. That is plainly right. If the regulation has been drafted in such a way as to have that consequence, the solution is not for the courts to read words into the regulation which are not there, but for there to be a legislative change.
28. For all these reasons, I consider that the appeal should be dismissed.

Lord Justice Sales:

29. I agree.