UK Social Security and Child Support Commissioners' Decisions

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DECISION OF THE SOCIAL SECURITY COMMISSIONER

My decision is given under section 14 of the Social Security Act 1998:

The decision of the Newcastle appeal tribunal under reference 228/07/01325, held on 1 August 2007, is not erroneous in point of law.

REASONS

This case raises the issue of the correct approach to an application to supersede a tribunal's decision for ignorance or mistake of fact under regulation 6(2)(c)(i) of the Social Security and Child Support (Decisions and Appeals) Regulations 1999. It comes before me on appeal brought by the claimant with my leave. She has been represented by the Student Law Office of Northumbria University.

How the issue arises

The claimant and her husband married on 16 August 2004. At the time, she was receiving income support. Having made enquiries, the Secretary of State decided that the couple had lived together in the same household as husband and wife from 2 October 2001 (the date when their child was born). Accordingly, the Secretary of State decided that the claimant had not been entitled to income support from that date and that she was liable to repay the resulting overpayment of £17,833.55. The claimant's appeal to an appeal tribunal was dismissed. I call this the 'first tribunal'. Leave to appeal to a Commissioner against this tribunal's decision was refused by a district chairman and by a Commissioner.

On 25 October 2006, the claimant applied to the Secretary of State to supersede the decision of the first tribunal for ignorance of fact. That fact was that there was documentary evidence in existence to show that the claimant's future husband was living at different addresses in the period between the birth of their child and their marriage. The Secretary of State refused to supersede. The claimant's appeal to an appeal tribunal was dismissed. I call this the 'second tribunal'.

The legislation

Supersession is governed by section 10 of the Social Security Act 1998:

'(1) Subject to subsection (3) … the following, namely-

…

(b) any decision under this Chapter of an appeal tribunal …,

may be superseded by a decision made by the Secretary of State, either on an application made for the purpose or on his own initiative.

…

(3) Regulations may prescribe the cases and circumstances in which, and the procedure by which, a decision may be made under this section.'

Regulation 6(2) of the Social Security and Child Support (Decisions and Appeals) Regulations 1999 is made under the authority of section 10(3):

'(2) A decision under section 10 may be made on the Secretary of State's own initiative or on an application made for the purpose on the basis that the decision to be superseded-

…

(c) is a decision of an appeal tribunal or of a Commissioner-

(i) that was made in ignorance of, or was based upon a mistake as to, some material fact'.

The second tribunal's reasoning

The chairman began by deciding that the appeal was against the Secretary of State's refusal to supersede the decision of the first tribunal, not against the decision of the Secretary of State that was considered by that tribunal, saying: 'The earlier decisions of the Decision Maker are already "res judicata".' She then identified regulation 6(2)(c)(i) as the relevant provision.

The chairman then considered the argument for the claimant was that the first tribunal had been ignorant of a material fact. The structure of the chairman's reasoning appears from the following passages:

'3. This Tribunal takes the view that a "material" fact is a fact (or facts) which would, had the previous Tribunal been aware of it, have been of significance to the Tribunal in reaching its decision.'

'4. In relation to the existence of the documentation although it was a fact that the documents existed and were not disclosed, the Tribunal's view is that the mere existence of the documentation and the non-disclosure of them was not material to the earlier Tribunal's decision.'

'5. Today the Tribunal considered whether or not the documentation was evidence of a material fact or facts.'

'7. The Tribunal does not accept that the documentation showing [the other addresses] was evidence that [the claimant's husband] was living there.'

'8. … The documentation may corroborate the fact that [the claimant's husband] used other addresses but the documentation does not establish the fact that he was living there, as opposed to using the other addresses as a convenience …'

'11. In the Tribunal's view the material fact or facts in this matter relate to the actuality of where [the claimant's husband] was living and not the addresses he gave to various agencies on paper. The reasons for the previous Tribunal held on 11 July 2005 stated that the Tribunal found [the claimant] unconvincing. Had the previous Tribunal had the current documentation before them this Tribunal does not accept that the documentation would have constituted a fact or facts material to their decision. The Tribunal is satisfied that the previous Tribunal decision was made in possession of sufficient material facts to enable them to reach the decision they did, and that the decision of the Decision Maker not to supersede that decision was correct.'

The argument for the claimant

The claimant's representative presented her argument in four paragraphs:

• the tribunal had been wrong to refer to res judicata;

• it had been wrong to take evidence on cohabitation between the claimant and her husband;

• it failed to give adequate reasons on ignorance of a material fact; and

• the tribunal had misunderstood a particular piece of evidence.

The argument for the Secretary of State

The Secretary of State has not supported the appeal. His representative's submission is based on the decision of the Court of Appeal in Saker v Secretary of State for Social Services, which is reported as an Appendix to R(I) 2/88. He then submits that the second tribunal was right to decide that evidence of the use of other addresses for official purposes was not a material fact. Alternatively, if those addresses were a material fact, that did not mean that the first tribunal's decision had to be superseded on account of them. It was clear that the second tribunal had not been persuaded by them that the first tribunal's decision was wrong.

The second tribunal had been wrong to refer to res judicata. It should have relied on section 17(1) of the Social Security Act 1998. However, that did not affect the outcome.

The response for the claimant

The claimant's representative picked up the Secretary of State's argument on Saker, although she preferred to rely on R(I) 3/75 to similar effect. She argued that the evidence produced could have affected the outcome before the first tribunal and that the Secretary of State had confused ignorance of material fact and the weight to be given to the evidence. She concluded that the tribunal had applied too high a standard of proof.

Analysis

I deal first with the issues of res judicata and the standard of proof. Then I deal with ignorance of material fact.

Res judicata

This is a principle that provides for finality by prohibiting an issue that has once been decided to be raised again between the same parties. It has no place in social security law, because it is displaced by section 17 of the Social Security Act 1998:

'(1) Subject to the provisions of this Chapter, any decision made in accordance with the foregoing provisions of this Chapter shall be final; and subject to the provisions of any regulations under section 11 above, any decision made in accordance with those regulations shall be final.

(2) If and to the extent that regulations so provide, any finding of fact or other determination embodied in or necessary to such a decision, or on which such a decision is based, shall be conclusive for the purposes of-

(a) further such decisions;

(b) decisions made under the Child Support Act; and

(c) decisions made under the Vaccine Damage Payments Act.'

I regularly see cases in which the chairman has referred to res judicata. If that principle has been applied instead of section 17, the tribunal went wrong in law. However, merely using the language does not mean that the tribunal has applied the principle. It may be used as part of a lawyer's general vocabulary, rather than as indicative of the tribunal's analysis. That, I believe, is how the chairman used the words in this case. The issue was one of jurisdiction, not finality. The tribunal only had jurisdiction over the decision under appeal and that decision was the Secretary of State's refusal to supersede the first tribunal's decision. All that the chairman meant by 'The earlier decisions … are already "res judicata".' was that they were not before the tribunal. In that, she was correct.

The standard of proof

The standard of proof in proceedings before the appeal tribunal is the civil standard of the balance of probabilities. That is well known and I am entitled to begin with the assumption that the chairman knew it. See Wilson J in Re P (Witness Summons) [1997] 2 FLR 447 and 455. That assumption is, of course, rebuttable if the tribunal's reasons or the circumstances of the case show that it applied a different standard.

In this case, the chairman used the word 'establish' in paragraph 8 of her reasons. That is not sufficient to show that she applied the wrong standard. It is entirely consistent with applying the appropriate standard. Nor is there anything in the substance of her reasoning to suggest that she may have adopted a higher standard than the balance of probabilities.

'some material fact'

I now come to the substance of the appeal. I have to decide what a 'material' fact is or what it is about a fact that makes it material. That requires an excursion into the nature of supersession in order to determine the continuing relevance of the decision of the Court of Appeal in Saker, on which the Secretary of State has relied.

The nature of supersession

Decisions on benefit entitlement and related issues may have to be changed from time to time. It may be necessary to correct mistakes or to update the decision to take account of changes of circumstances. The concept used for this purpose from 1948 was review. This was permissible on specified grounds only. It thereby provided a framework for decision-making and protection for claimants against arbitrary changes to decisions. Reading the decisions from the 1950s shows that the Commissioner and his deputies treated review as an uncomplicated concept. This is not to say that it did not give rise to difficult questions, especially in relation to decisions based on estimates or predictions, which caused problems in severe hardship allowance.

Despite these practical difficulties, the conceptual essence of review remained relatively straightforward until the mid-late 1980s. The Commissioners then undertook a more sophisticated analysis. They distinguished between review, which was a process of considering whether to change a decision, and revision, which was the change (if any) made to the decision. This analysis could produce some refined distinctions that were difficult to apply in practice. The Government's eventual response came as part of the reform of the adjudication process under the Social Security Act 1998. Review was abolished and replaced by the twin concepts of revision and supersession. The former is not to be confused with the revision element of review.

It is questionable whether the change has in all respects been an improvement. An issue that immediately arose was whether there was a right of appeal if the Secretary of State declined to supersede a decision. This was considered by a Tribunal of Commissioners in R(DLA) 6/02 and R(I) 5/02, both of which arose before the Human Rights Act 1998 came into force. As part of its analysis and in an attempt to provide a right of appeal against a refusal to supersede, the Tribunal introduced the terminology of threshold and outcome criteria. It explained its approach in R(DLA) 6/02:

'37. Regulation 6 prescribes threshold criteria, not outcome criteria. By that we mean this. It prescribes cases and circumstances in which an application is brought within the scope of section 10. That is in accordance with our interpretation of supersession as a process that is neutral on the correctness of the decision that has been superseded. It does not prescribe criteria that determine whether a new outcome is appropriate. That is not governed by regulation 6. It is left to be determined, without prescription, by reference to the facts of the case and the conditions of entitlement.'

In other words, a threshold criterion is one that has to be satisfied before a process can be undertaken, whereas an outcome criterion is one that dictates the result of the process. The Tribunal's decisions were not appealed by the parties. However, its approach was challenged in a later case in which the Commissioner applied the analysis: CDLA/3912/2001, which arose after the Human Rights Act came into force. On appeal, the Court of Appeal decided that the grounds for supersession were outcome criteria, not threshold criteria: Wood v Secretary of State for Work and Pensions reported as R(DLA) 1/03, at paragraphs 39-43 and 76. (Arden LJ's analysis was different – see paragraph 62.)

The effect of Wood is that a decision to refuse to supersede is appropriate in two circumstances. First, if the Secretary of State decides that the evidence presented does not justify embarking on a reconsideration of a decision. Second, if the Secretary of State undertakes a reconsideration but decides not to change the decision.

The Commissioners did not analyse review in terms of threshold and outcome criteria. However, that terminology captures the distinction drawn between review and revision. Threshold criteria had to be satisfied before a review could be undertaken. But there could be no revision unless an outcome criterion was satisfied. One infelicity in the Commissioners' approach was that the same criteria were used for both purposes. This apparent anomaly was resolved by the Court of Appeal in Saker v Secretary of State for Social Services, (R(I) 2/88).

The Saker decision

This case concerned an application under section 110 of the Social Security Act 1975:

'(1) Any decision under this Part of this Act of an adjudicating medical practitioner or a medical appeal tribunal may be reviewed at any time by an adjudicating medical practitioner if satisfied by fresh evidence that the decision was given in ignorance of a material fact or was based on a mistake as to a material fact.'

The Court of Appeal considered the meaning of 'material fact' in that context. Lloyd LJ drew on the law of insurance for his analysis (pages 167-168):

'In my judgment a fact is a material fact for the purpose of section 110 if it is a fact which would have influenced the judgment of the medical board.'

'… "influenced" means that the fact is one which would have had an impact on the formation of the prudent insurer's opinion; in other words, it must be a fact which he would properly have taken into account.'

'Applying that approach, I would hold that the correct test is whether the medical board was in ignorance of a fact to which it would have wished to direct its mind.'

Nicholls LJ did not mention insurance, but came to the same conclusion (page 172):

'The Act contains no definition of "material", but the context is of a threshold which the claimant must surmount before a decision can be reviewed. In this context, in my view a material fact is a fact which would have been material to the determination of the medical board which is sought to be reviewed. In general a fact will satisfy this test if it is one which, had it been known to the medical board, would have called for serious consideration by the board and might well have affected its decision.'

It is clear that the Court of Appeal treated a review as a process which was initiated, undertaken and then concluded. It was concerned with the first stage and interpreted 'material' in that context. At that stage of the process, it made sense, and was probably inevitable from a practical point of view, to treat materiality as a threshold criterion, not an outcome criterion. I note that Nicholls LJ actually referred to a threshold.

In In re Medicaments and Related Classes of Goods (No 3) [2001] ICR 306, the Restrictive Practices Court took the same analytical approach to review as in Saker, but added the practical consideration of how any other interpretation would operate. This case concerned an application under section 17 of the Resale Prices Act 1976. Section 17(2) provided:

'(2) No application shall be made under this section except with the court's leave, and that leave shall not be granted except upon prima facie evidence of a material change in the relevant circumstances since the court's last decision in respect of the goods in question.'

Buckley J said (page 309):

'As to "material change" Mr Oliver submitted, and we accept, that it means a change which, sensibly regarded, might have led the court to a different result. We believe that to be the natural meaning of the words, in context. To adopt Mr Cran's submission would involve the court in, virtually, a full assessment of the case … in order to judge whether the change or changes in question would have led to a different result, and all that at the leave stage.'

A staged analysis of the review process did not fit easily in the context of the social security legislation. The review was on the basis of ignorance or mistake as to material fact and a fact is not established until the evidence on which it is based has been analysed and assessed. (Contrast the legislation in In re Medicaments, which allowed a review on production of prima facie evidence.) In practice, the key questions on any review for error were (i) had the error occurred and (ii) what was its effect? Once (i) had been answered, (ii) was usually clear. If the existence of the fact was a condition precedent to the review, there was little or no scope for a review that involved more than a reconsideration of the outcome. Be that as it may, Saker determined the meaning of 'material' under the social security review process.

Conclusion on 'some material fact'

I have to interpret this expression in the context of the grounds for supersession, which the Court of Appeal has decided are outcome criteria. The decision in Saker was made in the context of the staged process of review, where the statutory criteria operated both as threshold criteria for a review and outcome criteria for a revision. Saker interpreted 'material' in the context of the first stage of review, for which 'material' was a part of one of the threshold criteria. In that context, it made sense. In the context of the outcome criteria of supersession, it makes no sense. In this new statutory context, a fact is material if it would justify a different outcome. It is a fact that makes a difference.

This effectively restores the position that obtained in respect of review in the early authorities. In R(I) 56/54, in the context of a review on a relevant change of circumstances, the Commissioner said (paragraph 28): 'A relevant change of circumstances postulates that the decision has ceased to be correct.' That is clearly applying an outcome criterion.

At the outcome stage, there is less force in the practical difficulties anticipated by Buckley J in In re Medicaments than at the threshold stage. To the extent that they are a valid consideration, they are mitigated, for both the Secretary of State and the appeal tribunal, by provisions that limit the extent to which they have to undertake 'a full assessment of the case'. Section 10(2) of the Social Security Act 1998 provides:

'(2) In making a decision under subsection (1) above, the Secretary of State need not consider any issue that is not raised by the application or, as the case may be, did not cause him to act on his own initiative.'

And equivalent provision is made for an appeal tribunal by section 12(8) of the 1998 Act:

'(8) In deciding an appeal under this section, an appeal tribunal-

(a) need not consider any issue that is not raised by the appeal'.

This does not mean, as I shall show, that an issue of fact can necessarily be resolved in isolation from the other evidence, but the provisions do have a practical effect on the extent to which 'a full assessment of the case' is required.

The proper approach to regulation 6(2)(c)(i)

With this interpretation, it is possible to see how the Secretary of State and the second tribunal should have approached the application of this provision.

The process began with an application. It identified the basis on which the claimant sought a supersession. This was the material, not before the first tribunal, showing different addresses for the claimant's husband. The Secretary of State was entitled under section 10(2) to consider only that issue and, when the same case was presented on appeal, the second tribunal was entitled to limit itself to that issue.

The second tribunal was right to treat the material now presented as evidence and to distinguish between evidence and fact. Evidence is material that is presented as, or in furtherance of, proof of a fact; it is not itself a fact. It is presented to the tribunal as part of the process of investigating and fact-finding, whereas a fact is found by the tribunal at the end of the process.

As the material was merely evidence, the tribunal had to identify the relevant fact of which the first tribunal had been ignorant. The first tribunal had found that the couple were living together in the same household as husband and wife. This is an example of a finding of compound fact (Sir George Jessel MR in Erichsen v Last (1881) 8 QBD 414 at 416). This means that it is a finding that involves the overall effect of a number of constituent facts each of which has to be analysed in the context of all the other facts. The tribunal's finding could be analysed as a single compound fact or as a package of three related compound facts. I prefer the former, but the choice makes no difference. The claimant was challenging this compound finding and also one of the important constituent findings on which it was based – the place where the claimant's husband was living.

On that analysis, the claimant's case should have been based on mistake rather than ignorance. The first tribunal made a finding that the claimant's husband was living with the claimant. What the claimant was challenging was the correctness of that finding. She did not identify a new fact of which the first tribunal had been ignorant. She identified additional evidence of which that tribunal had been unaware, which (she argued) showed that the tribunal had been mistaken in the facts it found.

However, I do not hold this against the claimant or the second tribunal. It affected the terminology of the issue rather than its substance.

The chairman's reasoning is not entirely clear on how she interpreted 'material'. Paragraph 3 suggests that she took the Saker approach to whether the documents were material, although in paragraph 11 she appears to have judged their actual relevance. Overall, however, I am satisfied that she decided the key issue before her: did the new evidence make any difference to the decision of the first tribunal?

As a material fact is one that would have made a difference, the issue was whether the additional evidence should have resulted in a different outcome, not whether it would have. By this I mean that the second tribunal had to decide for itself whether the additional evidence showed that the claimant's husband was living elsewhere. It did not have to decide how the first tribunal would have decided if it had had the additional evidence.

I must now return to the compound nature of the issue decided by the first tribunal. Each piece of evidence had to be considered in the context of the evidence as a whole. The new evidence could not be considered in isolation. Its relevance and reliability had to be considered in the context of the evidence considered by the first tribunal. That meant that the second tribunal was entitled to take evidence on cohabitation and to take account of how the first tribunal had assessed the evidence before it. Having done so, the chairman concluded that, while the documents showed the claimant's husband had used different addresses for official purposes, they did not show that he had lived at those addresses rather than with the claimant. That was a rational analysis. It was determinative of the appeal and I find no error of law in it.

Conclusion and disposal

The tribunal did not go wrong in law. There is some doubt whether the chairman directed herself correctly on the interpretation on 'material' and it may be that she should have analysed the case as one of mistake rather than ignorance. However, she dealt rationally with the key issue of fact which she had to determine and I am satisfied that neither mistake affected the outcome of the appeal. She was entitled to analyse the significance and effect of the new evidence as she did.

I dismiss the appeal.

Signed on original
on 10 March 2008

Edward Jacobs
Commissioner