England and Wales High Court (Administrative Court) Decisions

IN THE HIGH COURT OF JUSTICE
QUEEN'S BENCH DIVISION
THE ADMINISTRATIVE COURT

		Royal Courts of Justice Strand London WC2
		16 May 2007

1. THE DEPUTY JUDGE: I have before me a number of applications for judicial review, all of which raise the same legal issue.

The proceedings

2. The claimant, the Secretary of State, is the Secretary of State for Defence and the minister responsible for the Armed Forces. The Secretary of State is the minister responsible for deciding upon claims for disability pensions made in respect of members of the Armed Forces. Such pensions were, prior to 10 April 2006, awarded pursuant to the provisions of the Naval, Military and Air Forces etc (Disablement and Death) Service Pensions Order 1983. Awards are now made pursuant to the Naval, Military and Air Forces etc (Disablement and Death) Service Pensions Order 2006 ("the SPO"). Such awards are administered by the Veterans Agency, an Executive Agency of the Ministry of Defence ("the VA"). As of 1 April 2007 the Armed Forces Personnel Administration Agency (AFPAA) merged with the VA to form the Service Personnel and Veterans Agency (SPVA).
3. The defendant, the Pensions Appeal Tribunal ("the PAT") is a statutory Tribunal established under the Pensions Appeal Tribunals Act 1943 ("the Act") to hear, inter alia, appeals in relation to decisions of the Secretary of State concerning pensions for former members of the Armed Forces.
4. The interested parties are former members of the Armed Forces, who have brought appeals to the PAT against decisions of the Secretary of State concerning their pension entitlement. These applications for judicial review arise from and relate to decisions of the PAT not to strike out an appeal pursuant to Rule 9(3) of the Pensions Appeal Tribunals (England and Wales) Rules 1980 ("the Rules").
5. The Secretary of State considers that the PAT has misapplied or failed to apply Rule 9(3), and each of its decisions should be quashed and substituted with a declaration that each appeal is struck out.
6. Mr Beard appeared for the Secretary of State, and Mr Bourne, who provided very helpful written submissions, also appeared before me as advocate to the court.

The legal background and the identification of the issues

7. The Secretary of State awards retired pay pensions or gratuities in respect of disablement suffered by servicemen and women in the course of their service in the Armed Forces. The SPO sets out the scheme for dealing with such matters. Awards in respect of disabilities are made where disablement is attributable to or aggravated by service. A decision as to whether a disability is or is not attributable to or aggravated by service is known as an "entitlement decision". If an ex-serviceman is entitled to payment in respect of his or her disabilities (that is, the disability is attributable to or was aggravated by service), then the degree of the disability and the concomitant level of payment is assessed. This is known as the "assessment decision". These applications concern assessment decisions.
8. Pursuant to Article 6 of the SPO, a member of the Armed Forces with a degree of disablement assessed at 20 per cent or more will be awarded retired pay or a pension at rates set out in schedule 1 to the SPO. If the assessment of disablement is less than 20 per cent, then, pursuant to Article 7 of the SPO, the serviceman or woman will be awarded a gratuity (that is, a lump sum payment) in accordance with the rates set out in Schedule 1 to the SPO. The manner in which disablement is to be determined is provided for in Article 42 of the SPO, and in particular Article 42(2)(d) provides that:

"the degree of disablement shall be assessed on an interim basis unless the member's condition permits a final assessment of the extent, if any, of that disablement."

9. Article 44 of the SPO provides that the Secretary of State may review any decision he makes in relation to a claim for a disability award (although there are restrictions on his ability to revise it downwards). Ms Karen Lewis of the Veterans Agency has helpfully provided in her witness statement an outline of how the operation of the SPO works in practice.
10. In all the cases with which this judicial review is concerned the Secretary of State has previously accepted that, in each case, the interested party is entitled to some sort of payment; that is, they have at some time received a positive entitlement decision. In addition to and as a result of a positive entitlement decision, each interested party has been the subject of an assessment decision. Furthermore, in each case the interested party has appealed against the operative assessment decision. The right to appeal from the decision of the Secretary of State to the PAT is established by section 1 (entitlement decisions) and section 5 (assessment decisions) of the 1943 Act. Section 5 provides:

"5. Appeals against assessment of extent of disablement

(1) Where, in the case of any such claim as is referred to in section one, section two or section three of this Act in respect of the disablement of any person, the Minister makes an interim assessment of the degree of the disablement, he shall notify the claimant thereof and an appeal shall lie to the Tribunal from the interim assessment and from any subsequent interim assessment, and the Tribunal on any such appeal may uphold the Minister's assessment or may alter the assessment in one or both of the following ways, namely--

(a) by increasing or reducing the degree of disablement it specifies; and

(b) by reducing the period or which the assessment is to be in force.

In this section the expression 'interim assessment' means any assessment other than such a final assessment as is referred to in the next following subsection.

(2) Where, in the case of any such claim as is referred to in section one, section two or section three of this Act in respect of the disablement of any person, it appears to the Minister that the circumstances of the case permit a final settlement of the question to what extent, if any, the said person is disabled, and accordingly--

(a) he decides that there is no disablement or that the disablement has come to an end or, in the case of any such claim as is referred to in section three of this Act, that the disablement is not or is no longer serious and prolonged; or

(b) he makes a final assessment of the degree or nature of the disablement;

he shall notify the claimant of the decision or assessment, stating that it is a final one, and thereupon an appeal shall lie to the Tribunal on the following issues, namely--

(i) whether the circumstances of the case permit of a final settlement of the question aforesaid;

(ii) whether the Minister's decision referred to in paragraph (a) hereof or, as the case may be, the final assessment of the degree or nature of the disablement was right;

and the Tribunal on any such appeal may set aside the said decision or assessment on the ground that the circumstances do not permit of such a final settlement, or may uphold that decision or assessment, or may make such final assessment of the degree or nature of the disablement as they think proper, which may be higher or lower than the Minister's assessment, if any, and if the Tribunal so set aside the Minister's decision or assessment they may, if they think fit, make such interim assessment of the degree or nature of the disablement, to be in force until such date not later than two years after the making of the Tribunal's assessment, as they think proper."

11. Section 5B of the Act was introduced by the Child Support Pensions and Social Security Act 2000 and, with effect from 1 January 2001, provides as follows:

"5B Matters relevant on appeal

In deciding any appeal, a Pensions Appeal Tribunal-

(a) need not consider any issue that is not raised by the appellant or the Minister in relation to the appeal; and

(b) shall not take into account any circumstances not obtaining at the time when the decisions appealed against was made."

12. By section 6(1) of the 1943 Act the provisions of the Schedule to the Act are to have effect with respect to the constitution, jurisdiction and procedure of the PAT. Paragraph 5 of the Schedule provides that rules may be made with respect to such matters relating to the practice and procedure of the PAT, and paragraph 5(3C) provides:

(3C) Rules under this Schedule may-

(a) make provision with respect to the striking out or reinstatement of proceedings before the Tribunal;

(b) provide that where an appeal to the Tribunal under this Act is struck out in pursuance of such rules no further appeal under this Act shall be brought in respect of the matters to which the struck-out appeal related except with leave given in pursuance of such rules ..."

13. The Pensions Appeal Tribunals (England and Wales) Rules 1980 were made pursuant to the 1943 Act and, in particular, paragraph 5 of the schedule thereto. Rule 9 of the Rules, which is the critical one for present purposes, provides as follows:

(1) An appellant may at any time before the hearing give notice to the Pensions Appeal Office that he desires to withdraw his appeal, and thereupon the appeal shall be struck out.

(2) Where, after notice of appeal has been given, the Secretary of State decides the issue arising on the appeal in favour of the appellant, the Secretary of State shall give notice of his decision to the Pension Appeal Office and to the appellant, and the appeal shall be struck out.

(3) In an assessment appeal the making of a new increased assessment for the period under appeal (whether covering additional disabilities or not) shall be deemed to be a decision by the Secretary of State in favour of the appellant and, on notice given in accordance with paragraph (2), the appeal shall be struck out without prejudice to any appeal against that decision."

The rationale of Rule 9(3)

14. If the Secretary of State's reassessment decides the issue pending on appeal entirely in favour of the appellant, the Secretary of State gives notice to the Pensions Appeal Office and the appeal is struck out under Rule 9(2). Rule 9(3) takes the same mechanism one step further. It is a deeming provision to the effect that, where the assessment of an appellant's disability is increased, the Secretary of State's new assessment is to be treated as a favourable decision for the purposes of Rule 9(2). Thus, even where the appellant does not get all that he wanted on reassessment, the appeal against the prior assessment is to be struck out once notice of the reassessment has been given by the Secretary of State. The deeming provisions specifies the status of the new assessment decision by the Secretary of State. It avoids the continuing consideration of an appeal, whose target decision has been superseded. It also makes clear that an appeal can lie against the new superseding assessment decision.
15. The striking out of an appeal which has been lodged in relation to a decision which was later reassessed to the advantage of the appellant does not prevent that appellant lodging a new appeal against the new assessment. Whilst it does prevent the PAT hearing the old appeal, access to the PAT is not prevented to challenge a decision in relation to a war pension.

The Tribunal's decision

16. In each case with which this judicial review is concerned, the Tribunal has received a notification from the Secretary of State of an increased assessment. In each case the Tribunal refused to strike out the appeal pursuant to Rule 9(3). The Tribunal essentially gave four reasons for refusing to strike out the appeals, to which I shall refer shortly.

Decision

17. The duty of the Tribunal to strike out an appeal in the circumstances specified in Rule 9(3) follows from the plain meaning of the Rule. Further, that obligation is entirely consistent with, and promotes the legislative system of, appeals in the present context. Where a decision under appeal is superseded by a reassessment by the principal decision-maker, there is good reason why it should not be presumed that the original appeal should continue. First, the appellant may be sufficiently satisfied with the reassessment that he or she no longer wishes to be troubled with the appeal. Secondly, any grounds given for the appeal may have been overtaken in whole or in part, depending upon the nature of the reassessment decision. Thirdly, the Rule does not preclude a new appeal against a new assessment, and therefore there is no prejudice to the appellant.
18. This interpretation is reinforced by section 5BB of the 1943 Act. In deciding an appeal the PAT is precluded from taking into account any circumstances not obtaining at the time when the decision appealed against was made. If the original appeal continued once an increased reassessment had been made, the PAT would not be permitted to take into account the reassessment in carrying out its consideration of the original appeal. That would be so even though the Secretary of State's position had clearly changed and even if the reassessment was based on more up-to-date medical information. In my judgment, that would be an unsatisfactory state of affairs.
19. In my judgment, none of the reasons given by the Tribunal provide any basis for refusing to strike out the various cases pursuant to Rule 9(3). First, the Tribunal said that the new increased assessment did not deal with every issue raised on the appeal, since the new interim assessment did not award the highest possible assessment; that is, 100 per cent (see the decision in the case of Mr Crouch-Baker at paragraph 5). However, Rule 9(2) specifically provides that if an appeal is entirely acceded to, it should be struck out if notice is given. If it were only in cases where maximum assessment had been made that the appeal could be struck out, there would be no need for Rule 9(3).
20. Secondly, the Tribunal said that no evidence was provided by the Secretary of State to support his new assessment, and it would not therefore be possible for the PAT to decide what the right level of assessment would be (see the same decision at paragraphs 5 and 6). However, it is clearly part of the purpose of Rule 9(3) to ensure an automatic procedure in circumstances where the decision under challenge has been overtaken by subsequent developments. It is not envisaged and it is not necessary for the Secretary of State to provide to the PAT background material which he considered in reaching his new decision.
21. Thirdly, the Tribunal said that, if where Rule 9(3) applied, the PAT was obliged to strike out an appeal, such a decision could not be described as a judicial decision since it was a mere reaction to a second assessment decision by the Secretary of State (see the same decision at paragraphs 7 and 8). However, the language of Rule 9(3) is clear and the purpose of the rule is sound. It is therefore irrelevant that the PAT's act in striking out does not involve an independent judicial consideration of whether the appeal should be struck out. The rules could have been framed in a different way that would have necessitated such consideration. But that particular form of rule making was not chosen.
22. Fourthly, the Tribunal said that the Secretary of State's interpretation of Rule 9(3) would require action which was not a decision for the PAT acting judicially. The PAT hearing a full appeal might decide that the appropriate assessment was neither the appealed nor the new assessment made by the Secretary of State (see the same decision at paragraphs 9 and 10). However, the PAT is a statutory Tribunal, and is only able to take decisions where the relevant statutory provisions give it power to do so. If the appellant decided to appeal the new assessment, the PAT could indeed reach its own view of the correct assessment. But Rule 9(3) makes it clear that, in the absence of such a new appeal, the PAT simply has no jurisdiction to rule on the correctness of the assessment originally subject to challenge.
23. Finally, the Tribunal said that there was no indication that the appellant wished to withdraw his appeal (the same decision in paragraph 11). However, Rule 9(1) provides for the striking out of an appeal when an appellant wishes to withdraw. Rules 9(2) and 9(3) apply to cases where the appellant has either not indicated a desire to withdraw or, even, wishes to proceed.
24. I should finally on this issue say something about the expression in Rule 9(3), namely the expression "for the period under appeal". It is helpful to consider in this context the specific cases of Nicholls and Drummond. In Nicholls, a final assessment was replaced by an interim assessment for a closed period. In Drummond, an interim assessment for an open period was replaced by an interim assessment for a closed period. In both of these cases the Secretary of State's second assessment did not decide the level of disablement applying after the end of the closed period. The first assessment in each case included such a decision, subject in the case of Drummond to the need for a further interim or final assessment, and subject in both cases to the power of further review. It could therefore be argued that, in each case, the second assessment did not cover at least part of the period under appeal. However, in my view, that argument has no force.
25. First, the increased assessment could still have had an effect after the end of the closed period because payment would continue at the increased rate unless and until a further review took place, and also any further review would start from the baseline of the increased assessment, subject only to the limited power to renew downwards.
26. Secondly, in each case the old assessment in respect of an indefinite period was entirely replaced by something new; that is, an increased assessment for a closed period, which would be followed by a further assessment at the end of that period. Whilst the new assessment did not definitively fix the level of disablement which would apply at the end of the closed period, it did determine what would or could happen at the end of that period.
27. The common feature therefore of all the cases is that the first arrangements for whatever period were superseded by the second, so that the second should rightly be regarded as an assessment "for the period under appeal".

There is a second issue on this application, namely whether the PAT had power to re-open its decision not to strike out the appeal under Rule 9(3). The Secretary of State submits that the PAT had such power and should have exercised it. In the light of my judgment on the first issue, I believe that the second issue has been rendered academic. It is plain that the PAT should strike out appeals in the circumstances prescribed by Rule 9(3), and no power to re-open any decision is required in the present context.

The point in issue is not straightforward, and I should not decide it unless it is strictly necessary to do so. Mr Beard rested his case on essentially two arguments. First, he referred to Rule 37, which empowers the PAT or the President to give such directions as may be necessary for mitigating the consequences of non-compliance with any of the Rules. Second, he argued that a decision relating to strike out under Rule 9(3) was constitutive of jurisdiction (see Ashan v Carter [2005] EWCA Civ 990, by Sedley LJ at paragraphs 16 and 17.

The appeals, if continued, would have been nullities in Mr Beard's contention, and it was always open to a Tribunal to re-open an interlocutory decision where there were grounds for believing that a continued purported exercise of jurisdiction would be a nullity or "inexistant" -- a term Mr Beard used drawing on his recondite knowledge of droit administratif. However, I have doubts whether Rule 37 was designed with this type of situation in mind, and I also have doubts whether the distinction between constitutive and adjudicative jurisdiction leads to the conclusion advanced. As Mr Bourne pointed out, there is no general power in Tribunals to revisit interlocutory decisions, whether constitutive or adjudicative, and in this case arguably there was no specific rule which conferred such power. However, in the event, as I have already indicated, I believe that it is unnecessary to decide this question.

28. In conclusion, therefore, I allow the judicial reviews in relation to the first issue and grant the declaration requested.
29. MR BEARD: I am most grateful to your Lordship. Just for clarity, there were four cases in relation to which, strictly speaking, prior to this morning no permission had been given. They are, I think my learned friend will agree, precisely on all fours so far as the issues are concerned.
30. THE DEPUTY JUDGE: So permission should be granted and the same relief granted in respect of them.
31. MR BEARD: I am most grateful. Just as a point of clarity, in one case, the case of Grant, the interested party has in fact agreed to the matter being withdrawn and did not wish to press his appeal. We had, in those circumstances, attempted to communicate with the Tribunal to have the matter withdrawn. The Tribunal has not responded by signing a consent order, even though consent was given by the interested parties. In the circumstances, the Secretary of State is somewhat in your hands as to whether or not, my Lord, the matter should be simply subject to an order that it be withdrawn, even though the PAT has not consented to it, with which the Secretary of State is entirely content and would be consistent with the consent given by the interested party. The alternative of course is that a declaration in the form sought is made, because formally that case has not been withdrawn.
32. THE DEPUTY JUDGE: Yes, if we give them a bit more time and then you can always restore if you need to.
33. MR BEARD: My Lord, to have it withdrawn?
34. THE DEPUTY JUDGE: Yes.
35. MR BEARD: I think the situation is that it has been some long time since the PAT has been asked to give its consent --
36. THE DEPUTY JUDGE: I see. So nothing has happened.
37. MR BEARD: Nothing has happened, and in the circumstances an application was made to this court formally to have the matter withdrawn, but unfortunately this court on the papers was not able to get that done in time, and so formally it was not withdrawn. So if your Lordship were minded to, if your Lordship had concerns, then the Secretary of State would simply ask for an order that the case of Grant be withdrawn with no order as to costs.
38. THE DEPUTY JUDGE: Okay, I will do that.
39. MR BEARD: It is case number 8 on the list -- 10157 of 2006. If your Lordship is content with that?
40. THE DEPUTY JUDGE: Yes, I am.
41. MR BEARD: I am most grateful.
42. THE DEPUTY JUDGE: I think that is everything.
43. MR BOURNE: My Lord, thank you.