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[2005] NISSCSC C1_04_05(CRS) (04 July 2005)

Decision No: C1/04-05(CRS)

SOCIAL SECURITY ADMINISTRATION (NORTHERN IRELAND) ACT 1992

SOCIAL SECURITY (NORTHERN IRELAND) ORDER 1998

COMPENSATION RECOVERY SCHEME

Appeal to a Social Security Commissioner

on a question of law from a Tribunal's decision

dated 6 May 2004

DECISION OF THE SOCIAL SECURITY COMMISSIONER

Background

This is an appeal, leave having been granted by the legally qualified panel member (LQPM), by the compensator, against a decision dated 6 May 2004 of an appeal tribunal sitting at Belfast.

The background history of the case is that the injured person (IP) suffered a severe head injury and ruptured spleen in an accident on 7 May 1995. At the time of the injury he was not in receipt of benefit and had been self-employed. Following the injury he was paid benefit by way of income support (IS) and severe disablement allowance (SDA). At some stage, prior to payment of the compensation and within the compensation recovery period of five years, he entered into a relationship as a result of which the weekly amount of IS paid to him increased by reason of his having acquired dependants. A certificate of recoverable benefits was issued. The compensator appealed the certificate of recoverable benefits to a tribunal. The appeal was on the basis that listed benefits which had been paid other than in respect of the accident or injury in question had been brought into account in that certificate. The compensator contended that the IP had been fit for work well prior to the end of the compensation recovery period and had in fact been working by February 1998. The compensator also contended that the increases to cover dependants were paid because the IP had entered into a relationship and not in respect of the accident or injury. The tribunal ruled that the entirety of the amount of IS received by the IP in the recovery period (including the dependency additions) was properly recoverable on foot of the certificate as being paid in respect of the relevant accident or injury. As regards SDA it ruled that this was not recoverable as it was unable to ascertain the basis upon which SDA was paid to the claimant in terms of the loss of faculty on which it was based and whether that loss of faculty related to the relevant injury. The decision as relating to SDA has formed no part of the appeal to me and I say no more about that aspect.

The compensator had, at the tribunal, questioned the credibility of the IP and in particular whether his unfitness for work continued throughout the compensation recovery period. In support of this contention the compensator sought an adjournment of the hearing on 30 January 2003 to present surveillance evidence to the tribunal. This evidence, the compensator claimed, would establish that the IP was engaged in gainful employment while claiming benefits from the Social Security Agency. The compensator submitted by letter of 11 February 2003 that this evidence raised the inference that the injured person was "probably similarly obtaining benefits fraudulently while engaged in gainful employment during this earlier period". It stated further:

"In this regard we enclose an entry from the plaintiff's General Practitioner notes and records (which we believe was earlier shared with by our instructing insurers) which shows that the plaintiff was injured in March/April 1998 while lifting and placing flagstones. It is clear that this is a task associated with the injured person's regular employment and again is strongly suggestive of the fact that the injured person was indeed engaged in gainful employment while obtaining benefits from the Social Security Agency."

This letter was addressed to the Compensation Recovery Unit and was part of the papers before the tribunal when it held a resumed hearing on 2 September 2003.

That evidence when produced did not relate to the period before the tribunal but related to a period in May 2001 approximately a year after the ending of the five year period which was the period covered by the certificate of recoverable benefits and hence by the appeal. The compensator at that hearing on 2 September 2003 conceded that the evidence was "not directly relevant" to the present claim but asked for the tribunal's "latitude". The tribunal ruled the video evidence (and I take this to include all the surveillance evidence) to be "inadmissible as irrelevant to and outwith the period of the present appeal." The compensator's representative then sought and was granted another adjournment to enable the production of further medical evidence as "we had been going to rely heavily on video evidence." This adjournment was also granted but at the resumed and final hearing on 6 May 2004 no such evidence was produced.

With regard to the GP's records, there was before the tribunal an extract therefrom dated 10 February 1998 which recorded that the IP had injured his back 10 days earlier while "lifting and placing flagstones". As regards this evidence the tribunal commented:

"It is in our opinion, unsustainable to infer that because [the injured person] had hurt his back lifting flagstones, he had been working and therefore was not entitled to benefit. This activity could easily have taken place in the home or garden. Nor is it reasonable to infer that he would have been capable of work if he were lifting flagstones – benefit was not awarded on any inability to lift/carry – both examining doctors noted that he had no problems with this descriptor."

It appears that the tribunal was factually correct in that there were no points awarded to the claimant for limitations in lifting and carrying in relation to the incapacity for work test on the basis of which the claimant was awarded IS as being unfit for work. Incapacity appears to have been accepted on the basis of other functional limitations. There was no evidence that the incident of lifting flagstones took place while the claimant was working.

The Submissions

The claimant appealed to a Commissioner by letter dated 17 August 2004 initially on 4 grounds (the fourth ground was eventually withdrawn and I say no more about it). Further submissions were provided by letter of 8 February 2005.

I have considered all submissions and summarise them below:

(1) that the tribunal had erred in law in concluding that increases in IS by way of dependency additions paid after the IP formed a relationship were not paid "to or in respect of a person" within the meaning of Article 3(1) of the Social Security (Recovery of Benefits) (Northern Ireland) Order 1997 or alternatively had been paid "otherwise than in respect of the accident, injury or disease in question" within the meaning of Article 13(1)(b) of that Order. The compensator sought to distinguish the decision in Hassall and Pether v Secretary of State for Social Security reported in the "Reports of Social Security Commissioners decisions" as R(CR)1/95. This is a decision of the Court of Appeal in England and Wales on appeal from a Commissioner in Great Britain. The basis upon which it was sought to distinguish Hassall and Pether was that it was decided under the pre-1997 statutory framework and on the basis of circumstances which did not arise either in the current case or under the current statutory regime;

(2) that the tribunal had erred by implicitly misinterpreting Article 5 of the said Order in refusing to admit the video evidence referred to above as this evidence was critical along with other evidence to establishing the broader case that the IP was claiming benefits when not entitled to same and when fit for work;

(3) that the tribunal had erred in regard to the weight it gave to the entries in the GP notes and records regarding the claimant's activities in 1998 and/or failed to apply the correct burden of proof.

Observations were made on the appeal by the Department in letters dated 1 December 2004 and 8 April 2005 from Ms Boal of the Department's Decision Making Services branch (DMS). Ms Boal opposed the appeal. She submitted that the tribunal had not misdirected itself in law as to the proper interpretation of Article 3(1). She submitted that IS was paid to the IP as he was deemed to be incapable of work as a result of the accident on 7 May 1995 and submitted further that any increases in this benefit as a result of changes to the IP's domestic circumstances were also recoverable as he would not be entitled to the benefit if he was not incapable of work as a result of the accident or injury. As authority for this view she cited the case of Hassall and Pether, mentioning in particular a passage where Henry L.J., delivering the judgment of the Court stated:-

"Regulation 17 of the Income Support (General) Regulations 1987 provides that the claimant's "weekly applicable amount shall be the aggregate" of (in our cases) amounts determined in relation as to whether he is single, or part of a couple, or has children who are members of his family. The aggregate benefit can be broken down into its components, so much for himself, his wife, or child. The submission was that all that can be recouped from him are the payments going to his support, and not that part of the benefit which is calculated for the support of his wife and children i.e. that the relevant benefit paid "to or for the victim" in section 82(1) [of the Social Security Administration Act 1992] means only that part of the benefit paid in respect of the claimant himself. There are no specific words pointing to such a limitation."

Ms Boal submitted that the Northern Ireland equivalent to section 82(1) of the Social Security Administration Act 1992 was Section 78(1) of the Social Security Administration (Northern Ireland) Act 1992. She referred to the repeal of that section by the Social Security (Recovery of Benefits) (Northern Ireland) Order 1997 and submitted that the Order re-enacted the provisions of part 4 with significant amendments. She submitted that section 78(1) had been re-enacted within Articles 3(1) and 78(1) of the Order and that the interpretation given to Section 82(1) by the Hassall and Pether case was relevant to the interpretation of those provisions.

As regards the surveillance evidence Ms Boal submitted that Article 5(2) of the Order provided for a relevant period of five years but Article 5(4) shortened the period if compensation was paid within the relevant five year period. She submitted therefore that the tribunal did not err in law by ruling evidence to be inadmissible which dealt with periods outside the scope of the appeal.

With regard to the GP's evidence, Ms Boal submitted that it was not reasonable to infer from the GP notes that the claimant would have been capable of work in that lifting and carrying was not one of the functional descriptors indicated when he was found incapable of work and therefore awarded IS.

As regards the burden of proof Ms Boal submitted that the burden of proof was neutral and the tribunal's task was to decide, based on the evidence and facts, whether any benefit paid otherwise than in respect of the relevant accident had been included in the Certificate of Recoverable Benefits. As authority for this she cited decision C7/99(CRS) wherein the Commissioner stated:

"… I am satisfied that the neutral onus of proof referred to in C2/96(CRS) is applicable to Article 13(1) of the Order as it was to section 94(1) of the 1992 Act. I agree with the Chief Commissioner in the above mentioned decision where he states:-

"The burden of proof is neutral and the question simply has to be determined in the light of all the evidence on the relevant issues.""

Ms Boal submitted that in the present case the tribunal had considered all the evidence and given reasons for its decision. She submitted that the tribunal was entitled to come to the conclusions which it had in relation to the recoverability of IS for the relevant period.

A further submission was made by the compensator and received in the Commissioners Office on 8 February 2005. The compensator submitted that where a claimant for IS received benefit on the basis of his own individual circumstances and later underwent a change in personal circumstances such that his claim for benefit was increased to include an element for "dependants", that portion of the benefit payment which was attributable to those dependants was not a payment "to or in respect of a person" within the meaning of Article 3(1) of the Order or alternatively it had been paid "otherwise than in respect of the accident, injury or disease in question" within the meaning of Article 13(1)(b) of the Order. Accordingly the compensator submitted that that portion of IS which was attributable to the dependant(s) might not be recouped from the compensator.

Referring to the Hassall and Pether decision, the compensator submitted that although the Court of Appeal had held that the benefits (including the dependants addition) were recoverable, the reasoning of the Court of Appeal was important and had to be distinguished from this case in certain important respects. That case was decided under the previous statutory framework for recovery of benefits pursuant to which the compensator could set off a compensation recovery liability against both general and special damages. The IPs in that case were in receipt of the relevant benefit prior to their respective accidents and continued in receipt of that benefit after the accident, albeit, on a different basis. Post accident benefits were recouped and set off against the IPs' damages. The IPs sought to set off only that portion of IS which was attributable to them and not their dependants, arguing that it would be unfair to reduce their general damages by such an amount. The Court rejected this argument ruling that any perceived unfairness could be remedied by an appropriate claim for special damages seeking loss of benefits. Critically, it was also held that since there was a dependency element to the benefit prior to the accident, if only a portion of the benefit was recouped, there would be a windfall to the dependants, namely the benefit of the special damages claim and also the benefit of the dependency aspect of the income support.

Such a set of circumstances did not and could not arise either in the current case or under the current statutory regime. The claimant in this case was not in receipt of benefits prior to the accident and, pursuant to the 1997 Order, the recoverable benefits would only be set off against special damages. Accordingly, in the present case, it was not open to the claimant to make a claim for loss of benefits by way of a special damage claim which would make up for the recovery of the enhanced amount of IS. In this case, the amount of special damages claimed was fixed by reference to the pre accident earnings. In the aftermath of the accident the claimant did not have any dependency. He elected to change his domestic circumstances and to bring about that dependency. His new domestic partner and family were not dependant on his income prior to the accident and accordingly there would be no windfall to them if only a portion of the IS was recouped. An analogy was drawn to a fatal accidents claim where a widow's claim was limited to her own dependency if she had no children at the time of death so that if she later took on responsibility for a child she could not recover her new enhanced dependency as there was no such dependency at the time of death.

The compensator submitted that ultimately the simple question was whether the enhanced level of IS had been paid otherwise than in relation to the accident, injury or disease in question and whether "the amount, rate or period" of benefits was correct (per Article 13 of the Order). Although IS was a recoverable benefit the clear reason for the increased entitlement was the claimant's decision to change his domestic circumstances and was in no way attributable to any deterioration in his medical condition. Accordingly that portion of the benefit must have been paid otherwise than in relation to the accident. The accident may have been the reason for the payment of benefit but the dependency increase was paid by reason of a change in domestic circumstances. The compensator was therefore entitled to a reduction in the recoverable benefits of the amount of IS which equated to that amount.

With regard to the second ground – the failure to admit the surveillance evidence, the compensator submitted that benefits were being paid inappropriately and that the IP's health was such that he was not entitled to benefits but rather was fit for work. The surveillance evidence showed that he was in fact working at the time of the video footage while at the same time claiming benefits. There was clear evidence of the inappropriate nature of the benefit and damages claimed and the evidence also significantly undermined the credibility of the claimant's assertions to his doctors regarding his capacity for work. The significance in potential weight of that evidence was enhanced when considered in conjunction with the extracts from the GP notes and records, particularly the note in February 1998. The surveillance evidence should not have been excluded on the grounds that it was beyond the period in respect of which benefits were sought to be recouped. It was critical evidence in establishing the broader case of whether the claimant was claiming benefits when not entitled and when fit for work. Its weight in helping to establish that case lay not on its own but when considered in conjunction with the other evidence in the case. It should not therefore have been excluded. The appropriate course was to admit the evidence and attach to it such weight as the tribunal saw fit.

As regards the ground relating to failure to give adequate weight to entries in the GP records, the compensator submitted that the tribunal had failed to give adequate weight to the entries in the GP's notes and records regarding the claimant's activities in 1998. The claimant was a manual labourer. He was clearly engaged in manual labour at that time and was therefore fit for work. In particular, the significance of the evidence was apparent when considered in the round together with all the other evidence including the video evidence. Accordingly the compensator submitted that all of the evidence should have been admitted in the round and considered in the round.

By letter of 8 April 2005 the Department made further observations. It accepted that the circumstances in the present case did differ somewhat from those in Hassall and Pether but continued to submit that the principles of that decision applied in respect of the relevant benefits. It referred to GB Commissioners CCR/14743/1996 where the Commissioner supported the principles in Hassall and Pether stating in paragraph 5:-

"…Now it is true that the claimant became entitled to additional benefit when his wife lost her job but it remains the case that his benefit, which is undeniably a relevant benefit, was increased and that that benefit was in the circumstances and unarguably paid in respect of the claimant's accident. In my view the fact that the dependency element only became payable when the wife lost her employment does not alter the point that the benefits included in the certificate of total benefit are recoverable for the reasons explained in CCR/1/1993 and the Hassall case. The essential point is that the benefits were his benefits and section 82 does not permit the benefit entitlement to be split between what is paid for the claimant himself and what is paid because he has dependants…"

The Department submitted that although the said decisions were prior to the current legislative arrangements the principles were still applicable. In this case it was not in dispute that the IP was receiving IS on the basis of incapacity as a result of an accident. In accordance with Article 2(2) and Schedule 2 of the Order IS was a listed benefit for the purposes of Article 3 thereof and the Court of Appeal's decision in Hassall and Pether had looked at the interpretation of the wording of the previous legislation and found that it did not restrict the recovery of benefit to the amount paid in respect of the victim. The interpretation was still relevant to the current legislation. Article 3(1) provided that the Order applied in cases where any of the listed benefits had been or were likely to be paid to or for the IP:-

"during the relevant period in respect of the accident, injury or disease".

This, she submitted, was similar to the wording of section 78(1)(a) of the 1992 Act.

The Department submitted that IS was one of the benefits which could be recouped from the compensation head of "Compensation for Earnings lost during the relevant period" by Schedule 2 of the Order. The tribunal in the present case had found that for the relevant period the claimant was receiving IS which had been paid in respect of an accident. She submitted that the enhanced level of IS was not paid "otherwise than in relation to the accident, injury or disease in question". Although the relevant change that resulted in the increases was not directly related to the accident in question, IS remained payable to the claimant as a result of that accident and therefore it remained a recoverable benefit in accordance with the current legislation. Ms Boal further submitted that she could see nothing in the legislation that would allow recovery to be made for a component part only of IS and she therefore submitted that the full amount of IS paid throughout the relevant period was recoverable within Article 3(1) of the Order.

I held a hearing of the appeal on 20 April 2005 which was attended by Mr McLaughlin of Counsel instructed by Messrs. Murphy & O'Rawe, Solicitors and by Miss Stewart for the Department. The IP did not attend. I am grateful to the representatives (including Ms Boal who made written representations for the Department) for their considerable assistance in this matter. I deferred making a decision to await confirmation from the solicitors that they were not proceeding with their original fourth ground. This confirmation was received on 2 June 2005. At hearing the arguments outlined above were reiterated and Mr McLaughlin submitted that his clients had never found out exactly why benefit was increased but now understood that it was because the IP had entered into a relationship. Miss Stewart confirmed that this was correct and Mr McLaughlin stated that he assumed that that was the reason and was proceeding on that basis though if he was successful in his appeal he considered that I might need to direct further enquiries to be made as to the dependency element.

With regard to the Court of Appeal decision in Hassall and Pether, Mr McLaughlin distinguished the present case on its facts. However, he submitted also that the reasoning of the Court of Appeal was somewhat flawed. He referred to the following passage from the judgment of Henry L.J.:-

"The third submission is on first impression more troubling. These applicants were the claimants for the post-accident benefits. Both claims included income support, which we have been told is an income related "topping up" benefit. Regulation 17 of the Income Support (General) Regulations 1987 provides that the claimant's "weekly applicable amount shall be the aggregate" of (in our cases) amounts determined in relation as to whether he is single, or part of a couple, or has children who are members of his family. The aggregate benefit can be broken down into its components, so much for himself, his wife, or child. The submission was that all that can be recouped from him are the payments going to his support, and not that part of the benefit which is calculated for the support of his wife and children i.e. that relevant benefit paid "to or for the victim" in section 82(1) means only that part of the benefit paid in respect of the claimant himself. There are no specific words pointing to such a limitation. And in the ordinary case where there is a loss of earnings claim what will be claimed as damages is the loss of earnings which would have been used to support the whole family. And if all that was recouped from a damages award containing that claim was the victim breadwinner's portion, there would then be double recovery in relation to his wife and children's share. In these circumstances I am quite clear that section 82(1), which as we have seen does not distinguish between cases where there is a loss of earnings claim and others, cannot be construed in the way the applicants suggest."

Mr McLaughlin submitted that the reasoning was flawed in that the Court was endeavouring to interpret the section by what would take place after the accident occurred. He submitted that the Court's reasoning could not stand scrutiny in that it was endeavouring to interpret the section by determining on what a person spent their money. In any event there was a clear distinction in this case in that here there had been no pre accident award of damages. There was no windfall and there could be no windfall and the section should not be interpreted by reference thereto.

As regards the Commissioner's decision CCR/14743/1996, Mr McLaughlin conceded that that decision did go against the compensator in that the Commissioner had concluded that the benefit was the IP's benefit and it was paid to him and had concluded that the statute did not allow it to be split. In Mr McLaughlin's submission in this case there was no dispute that IS was paid to the IP but the element of it which related to the dependants was paid otherwise than in respect of the injury and there was nothing in the relevant legislative provisions to prohibit the splitting of the benefit where part of it was paid otherwise than in respect of the relevant injury.

Reasons

I begin with ground 3 - the weight to be given to the evidence of the GP records. The tribunal obviously gave consideration to the entirety of the medical evidence both in support of and against the compensator's contentions (including the February 1998 entry in the GP records relating to lifting flagstones). It considered the basis on which the claimant had been found unfit to work. This was on the basis of his score in the statutory test (the personal capability assessment) set out in the Social Security (Incapacity for Work) (General) Regulations (Northern Ireland) 1995 and concluded that he attained the necessary score due to injuries sustained in the accident. The tribunal explains why it gave the weight it did to the reports of the doctors who examined the IP in connection with his benefit claims and to the medical evidence produced by the compensator. The weight to be given to evidence is essentially a question of fact. An appellate body, such as a Commissioner, can disturb same only if the conclusion as to weight is unreasonable or perverse. I do not consider that it was so. Essentially the tribunal concluded that the benefit in the contentious period was paid due to mental health problems and other problems arising from the injuries in the accident and the tribunal considered it properly paid in light of the Departmental medicals and the report of Mr Gallagher, consultant ENT surgeon. The tribunal's reasoning is sustainable and clear in this respect and I find no unreasonableness or perversity in the weight it gave to the evidence. There is no merit in this ground.

As regards ground 2, relating to surveillance evidence, this evidence, it appears, related to a period in 2001 approximately one year after the end of the period with which the tribunal was dealing. The tribunal considered this evidence inadmissible as it dealt with periods outside the scope of the present appeal and was irrelevant to the appeal. The strict rules of evidence do not apply to tribunals. In general terms evidence is admissible if it is relevant. The compensator sought to adduce the surveillance evidence to prove that the claimant was fit for work and indeed working within the period up to May 2000. Before the tribunal the compensator accepted that it was not directly relevant to the "present claim" which I take to mean it was not directly relevant to the period covered by the certificate of recoverable benefits (up to 7 May 2000).

Was the tribunal correct in considering the surveillance evidence to be irrelevant? Certainly it had no probative value as to whether the claimant was working or fit to work in the period covered by the certificate of recoverable benefits. It might, of course, have been used to attack the IP's general credibility in conjunction with medical evidence. If he was working while claiming benefits he may not be a truthful person. However, I find it difficult to see how evidence which might show that in May 2001 the IP was working while claiming benefit can be relevant to whether he was fit for work and/or working in a period which ended approximately one year previously. That being so I think the tribunal was entitled to its view that the surveillance evidence was irrelevant to the questions which it had to determine, these being related to the period ending in May 2000. As requested at the second hearing on 2 September 2003 the tribunal gave to the compensator the opportunity to produce further medical evidence. It did not do so.

I come now to ground 1 of the grounds of appeal – whether the tribunal erred in finding that all of the IS (including dependency additions) was recoupable. The relevant legislation is contained in the Social Security (Recovery of Benefits) (Northern Ireland) Order 1997.

Article 3(1) provides:-

"This Order applies in cases where -

(a) a person makes a payment (whether on his own behalf or not) to or in respect of any other person in consequence of any accident, injury or disease suffered by the other, and

(b) any listed benefits have been, or are likely to be, paid to or for the other during the relevant period in respect of the accident, injury or disease."

Article 3(4) provides:-

"In a case where this Order applies -

(a) the "injured person" is the person who suffered the accident, injury or disease,

(b) the "compensation payment" is the payment within paragraph (1)(a), and

(c) "recoverable benefit" is any listed benefit which has been or is likely to be paid as mentioned in paragraph (1)(b)."

Article 8 (so far as relevant) provides:-

"(1) A person who makes a compensation payment in any case is liable to pay to the Department an amount equal to the total amount of the recoverable benefits.

(2) The liability referred to in paragraph (1) arises immediately before the compensation payment or, if there is more than one, the first of them is made."

Article 10 so far as relevant provides:-

"(1) This Article applies in a case where, in relation to any head of compensation listed in column (1) of Schedule 2 –

(a) any of the compensation payment is attributable to that head, and

(b) any recoverable benefit is shown against that head in column (2) of the Schedule.

(2) In such a case, any claim of a person to receive the compensation payment is to be treated for all purposes as discharged if –

(a) he is paid the amount (if any) of the compensation payment calculated in accordance with this Article, and

(b) if the amount of the compensation payment so calculated is nil, he is given a statement saying so by the person who (apart from this Article) would have paid the gross amount of the compensation payment.

(3) For each head of compensation listed in column (1) of Schedule 2 for which sub-paragraphs (a) and (b) of paragraph (1) are met, so much of the gross amount of the compensation payment as is attributable to that head is to be reduced (to nil, if necessary) by deducting the amount of the recoverable benefit or, as the case may be, the aggregate amount of the recoverable benefits shown against it."

Schedule 2 provides under column (1) as a head of compensation:-

"Compensation for earnings lost during the relevant period" and the recoverable benefits shown against that head in column (2) of the Schedule include "Income support" and "Severe disablement allowance".

Article 11(4) provides that:-

"For the purposes of this Order -

(a) the gross amount of the compensation payment is the amount of the compensation payment apart from Article 10, and

(b) the amount of any recoverable benefit is the amount determined in accordance with the certificate of recoverable benefits."

Article 13, so far as relevant, provides:-

"(1) An appeal against a certificate of recoverable benefits may be made on the ground –

(a) …

(b) that listed benefits which have been, or are likely to be, paid otherwise than in respect of the accident, injury or disease in question have been brought into account."

The structure as relevant in this case therefore appears to be that as between the compensator and the IP the compensation payment could be reduced by setting off any benefit paid by way of IS from the compensation due under the head of:

"Compensation for earnings lost during the relevant period."

Obviously in the present case I do not know if the entire sum set out in the certificate of recoverable benefits was so deducted. Nor am I privy to how compensation or damages were calculated. Nor do I know how much if any of the compensation or damages was for loss of earnings. However, the above legislative structure does form part of the context for the application and interpretation of Article 13(1)(b).

Whether or not the amounts in Article 10(2) are actually deducted by the compensator, the gross amount of the compensation payment is to be the same (Article 11(4)) for the purposes of the recoverability of benefits.

Article 13 provides for the grounds on which a certificate of recoverable benefit may be appealed. Article 13(1)(b) provides that a ground of appeal is that listed benefits have been paid otherwise than in respect of the accident, injury or disease in question. There were essentially 2 arguments based on this ground –

(1) that a part at least of the IS included in the certificate of recoverable benefit should not have been paid at all as the IP was incapable of work;

(2) that even if IS itself was properly payable throughout the compensation period the dependency increase should not be recoverable as it was paid because the claimant formed a relationship and acquired dependants.

The tribunal concluded, on argument 1 above that IS was properly paid for the compensation period as the IP was incapable of work throughout that period due to the relevant accident or injury. I have dealt with the arguments on surveillance evidence and weight given to medical evidence earlier in this decision. I consider the tribunal was entitled on the evidence to its conclusion that IS included in the certificate was properly paid and was not paid other than in respect of the relevant accident or injury.

As regards argument 2, I observe first that the dependency increases can only be removed from the certificate of recoverable benefit (leaving aside whether Article 13(1)(b) permits splitting of the benefit) if they were paid other than in respect of the accident, injury or disease in question. I then ask why these benefits were paid. It appears to me that they were paid because the claimant who was entitled to IS as incapable of work due to the relevant accident or injury, remained so entitled on the same basis once he formed the relationship which gave him dependants. All that happened when he formed the relationship was that the rate at which benefit was payable was increased to cover the dependants. The basis of his entitlement (ie that he was incapable of work) remained the same. Had he not acquired the dependants he would have been paid at a lower rate. However, had he not been incapable of work, no matter how many dependants he acquired he would not have been entitled to IS. His entitlement to the benefit was because he was incapable to work. Accepting, as I do, the tribunal's conclusion that his incapacity was due to the relevant accident or injury I find it difficult to see how it can be said that he was paid IS other than in respect of the relevant accident or injury. The accident or injury does not have to be the sole cause, merely an effective cause of the payment of the benefit. For the compensator to succeed the benefit must be paid "other than in respect of" the relevant accident or injury. While incapacity due to that accident or injury remains an effective cause of the payment it cannot be paid "other than in respect of" that accident or injury.

The increased rate of IS was not a separate benefit. It remained IS and IS remained payable for the same reason it was always payable – because the IP was unfit for work. Once that unfitness was found to be as a result of the relevant injury then the entire benefit was correctly concluded to be paid in respect thereof. Decision R(CR)3/03 (a decision of a Commissioner in Great Britain) was not argued before me so I do not base my reasoning on it. However it appears to me to be decided on the same effective cause basis as I indicate above.

Mr McLaughlin has sought to distinguish the Hassall and Pether cases firstly on the facts and secondly because they were decided under the compensation recovery legislation in force prior to the 1997 Order. However I think the rationale of Hassall and Pether still applies – the state does not subsidise the compensator whether under the 1992 or 1997 legislation (see the judgment of Henry L.J.). If only the personal element of the benefit was recoverable, the compensator, who has the ability to deduction from the damages for loss of wages the total amount of benefit paid (even if that reduced the amount under the loss of wages head of damages to nil), could be enriched.

Whether such deduction is made and its effect in any particular case will of course depend on the agreement reached between the IP and the compensator and on the amount of damages for loss of wages. That is not the concern of the scheme. However the legislation provides that the state is to recover from the compensator all the listed relevant benefits paid in respect of the relevant accident, injury or disease.

The legislation does not expressly permit the splitting of benefits into personal and dependency rates. Hassall and Pether was authority under the pre 1997 legislation for the proposition that the pre 1997 legislation did not permit the splitting of a benefit for recoupment purposes into the personal element and the dependency element. Mr McLaughlin submits that the Court's reasoning does not stand scrutiny when applied to the present case because it was decided under the old legislation and on the basis that not to permit full recovery (of personal and dependant elements) would enrich the IP and on the basis that the IP could have claimed for loss of non-recoupable benefits as a head of damages. There is no doubt that those factors were part of the Hassall and Pether reasoning. Much of the decision was based on the construction of the then relevant statutory provisions. However, as the Department submits, many of the relevant provisions are similarly or identically worded except that the compensator now has to repay the benefit. As Henry L.J. remarked the challenge to the certificate (which it was agreed covered all the relevant benefits paid in the relevant period) had to be (under the pre 1997 scheme) based on whether benefits are paid "otherwise than in consequence of the accident." The post 1997 wording is "otherwise than in respect of". I do not consider this language to make a substantial alteration. It may be that it postulates a less direct link but I reach no conclusion on that. Much of the reasoning in Hassall and Pether appears to relate to Section 82(1) of the 1992 Act which obliged the Secretary of State to furnish the compensator with a certificate of "total benefit, equal to the gross amount of any relevant benefits paid … to or for the victim … in respect of the accident" which was then recoupable from the IP. The submission by the IP in that case was that benefit for the support of his wife and children could not be recouped because the phrase "to or for the victim" meant only the benefit for the IP himself. The Court ruled that Section 82(1) permitted no such construction.

Moving to the present legislation Article 6 of the 1997 Order obliges the compensator to make application for a certificate of recoverable benefits and obliges the Department to issue said certificate. Article 3(4) defines "recoverable benefit" as a listed benefit paid as set out at Article 3(1)(b). Article 3(1)(b) refers to benefits paid "to or for the other", the "other" being (Article 3(1)(a)) the person to or in respect of whom the compensation payment is paid, in other words the IP. The rationale of Hassall and Pether as regards the benefit properly included in the certificate of recoverable benefit still applies. That is that all the relevant benefits paid to the IP in respect of the relevant accident or disease whether to cover himself or his dependants is recoverable. The compensator can set off the entirety of this benefit paid against damages for loss of wages and, following the Hassall and Pether, reasoning, could be enriched if he did this and then only had to repay the state the personal element of the benefit.

As regards causation – ie whether the benefit was paid as a consequence of the accident, I have been referred to the case of Eagle Star Insurance v Department for Social Development [2001] NICA (12 February 2001). That decision is authority for the proposition that decisions on whether benefit is recoupable as part of the compensation recovery scheme are not to be determined by whether or not the IP was correctly awarded benefit but has to be decided on the basis of whether the benefit was paid in respect of the relevant accident or injury. The tribunal in this case reached the conclusion on the evidence before it that the benefit was properly paid because of the injuries received in the relevant accident. It was, as I indicated above, entitled to that conclusion. As Nicholson L.J. stated:-

"They must reach their own decision, having given such weight as they think fit to the information (if any) presented to them by the DHSS and by the compensator through the DHSS."

The Eagle Star case has nothing to say on the question of whether benefit can be split into personal and dependency elements. While Hassall and Pether, being decided under different legislation, must be approached with caution, I do not agree with Mr McLaughlin that its reasoning does not stand scrutiny. The reasoning in Hassall and Pether was that neither the compensator nor the IP were to be enriched by reason of the recoupment scheme. The same appears to me to apply under the new legislation. The Court did as Mr McLaughlin submits consider the effects of different interpretations of the relevant provisions but only for the purposes of determining the correct interpretation of the relevant section in context and its application to the case before it. That appears to me to be quite correct. I do not consider that IS being paid because of the relevant injury, the legislation permits recovery of only the personal element thereof.

To succeed in this appeal it had to be found that benefits had been included in the certificate of recoverable benefits which were paid otherwise than in respect of the relevant injury. The tribunal was entitled to its conclusion that no part of the IS was so paid. It did not err in law.

The appeal is dismissed.

(Signed): Moya F Brown

Commissioner

4 July 2005