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Cite as: [2009] UKUT 69 (AAC)
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he Secretary of State for Defence v Lance Corporal (now Corporal) AD & Anor [2009] UKUT 69 (AAC) (21 April 2009)
War pensions and armed forces compensation
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    IN THE UPPER TRIBUNAL Case Nos CAF/2162/2007

    ADMINISTRATIVE APPEALS CHAMBER and CAF/1412/2007

    Appellant: The Secretary of State for Defence

    Respondents: Lance Corporal (now Corporal) AD and Marine MM

    Heard at: London (Harp House)

    Date of Hearing: 2 April 2009

    Date of Decision: 2 April 2009

    Before: Mr Justice Hickinbottom CP and Upper Tribunal Judge Elisabeth Jupp

    Attendances:

    For the Appellant: Natalie Lieven QC instructed by Treasury Solicitor

    For the Respondents: Hugh Lyons of Lovells Solicitors

    APPROVED DECISION

    Mr Justice Hickinbottom CP

  1. We understand that the Secretary of State proposes to make an application to the Court of Appeal for expedition of the substantive appeal in relation to these two cases, and the issues raised today relate to interim relief sought by the Secretary of State pending the ultimate resolution of that appeal. The Secretary of State proposes to make an application to the Court of Appeal for expedition next week, which we understand will be supported by the Respondents to the appeal. Given the urgency of the matter - which will be apparent from what we will say shortly - we propose using our power (under Rule 40(1) of the Tribunal Procedure (Upper Tribunal) Rules 2008 ("the Rules")) to give an oral decision today. Short written reasons will be provided in due course in accordance with Rule 40(3), but in terms of reasoning, we hope that this oral decision will assist. We confirm that the parties are entitled to rely upon reasons set out in this decision, as well as those in the formal document that will follow.

  2. On 5 February 2009, a three judge panel of the Administrative Appeals Chamber of the Upper Tribunal (the Chamber President, and Judges Mesher and Jupp), gave a reasoned decision, following an appeal by the Secretary of State of Defence against a decision of the Pensions Appeal Tribunal awarding compensation to two serving members of the Armed Forces under the scheme set out in the Armed Forces and Reserve Forces (Compensation Scheme) Order 2005 ("the 2005 Scheme").

  3. Both Claimants had suffered leg injuries during the course of service. Their appeals gave rise to a number of fundamental issues on the construction of the 2005 Scheme which had not previously been subject to detailed judicial scrutiny, including the meaning of "injury" under the Scheme and the effect of medical treatment of an initial injury. Those issues of principle that were considered are set out in full at paragraph 18 of the decision of 5 February 2009.

  4. On 27 February 2009, the Secretary of State applied to this tribunal for permission to appeal to the Court of Appeal. This was granted on the papers on 3 March 2009 by the same three-judge panel, on the grounds that "the decision seeks to set out some fundamental foundations for the interpretation of the Scheme for the first time, rather than representing a mere incremental step in the development of the relevant jurisprudence. The application in our view therefore raises important points of principle which are arguable and which warrant consideration by the Court of Appeal."

  5. At the same time (on 27 February 2009), the Secretary of State made an application for interim relief, requesting an order under Rule 5(3)(l) of the Rules that the effect of the decision of 5 February be suspended pending the decision on the appeal. That rule provides that the Upper Tribunal may "suspend the effect of its own decision pending an appeal or review of that decision".

  6. The application for suspension of the effect of the decision was perfunctory comprising one paragraph in the application (paragraph 22), which stated that the tribunal "is requested to suspend the effect of its decision pending the appeal of this decision, pursuant to Rule 5(3)(l)…". The application notice also indicated in support that the 5 February judgment potentially affected a large number of other claims at various stages in the decision-making process and appellate structure.

  7. On 3 March 2009, in addition to giving permission to appeal on the papers, this tribunal refused the application to suspend the effect of the decision, but invited the Secretary of State to make a full considered application setting out the precise order sought and the precise grounds, should he wish to pursue it. The Secretary of State did wish to do so. The application was renewed on 10 March, and was heard this afternoon.

  8. In the helpful skeleton of Ms Nathalie Lieven QC it is made clear that the scope of the order sought is wide and seeks to suspend not merely the effect of the decision on the two individual cases that are before us, but also to suspend the precedential effect of the decision on other claims pending the outcome of the appeal to the Court of Appeal. In other words, despite the decision of 5 February, the Secretary of State wishes to continue to process claims under the 2005 Scheme on the basis of his own interpretation of the Scheme which this tribunal has been found to be wrong: and he also wishes us to make an order requiring the First-tier Tribunal (and, as we understand it, this tribunal) to adjudicate upon appeals on the same basis.

  9. Two main reasons are given for this request. First, Ms Lieven submits that to act in a way other than that proposed by the Secretary of State may cause hardship to individual claimants, in this way. The Secretary of State wishes to deal with all claims on the basis of his own interpretation of the 2005 Scheme, a construction which is generally less generous to claimants than if a decision were to be made on the basis of the decision of 5 February: and he wishes to avoid any hardship to claimants which might arise in the event that the Court of Appeal should conclude the Secretary of State's asserted construction was the correct one, if he were then to seek to recoup payment or withdraw awards.

  10. Second, Ms Lieven submitted that to implement the 5 February decision would cause real practical and administrative difficulties. She submits that the Court of Appeal may find that in its decision of 5 February this tribunal was correct in every relevant particular, or incorrect in every particular, or somewhere in between. In relation to that submission, she could pray in aid that this tribunal stated when granting the permission to appeal that the issues raised by the Secretary of State on appeal are at least arguable. The Secretary of State accepts that if the decision of 5 February were to be found to be the proper construction of the 2005 Scheme (or, indeed, if the Court of Appeal decide that his construction of the 2005 Scheme is not correct in every particular) then he would have to review any claims processed on the basis of his construction in the meantime and would therefore have to face these administrative difficulties at that stage, but it is submitted on his behalf that he should not have to do so prior to the Court of Appeal decision. In particular, to change the decision-making administration would take some time. It would require changes to processes, and to computers.

  11. Ms Lieven strongly emphasised that the Secretary of State does not make this application simply out of a wish to maintain an entrenched position following the 5 February decision. His main concern (she submitted) is not to stock pile claims until the ultimate disposal of the appeal (which, even with expedition, is likely to take some time) but rather to continue to process claims under the 2005 Scheme, so as to not deny servicemen any and all compensation to which they might be entitled over what may be several months. That aim is of course laudable.

  12. Mr Lyons represents the Claimants - the Respondents to the appeal - through The Royal British Legion ("the RBL"). He made clear that the RBL is also anxious that claims continue to be processed, and claimants who are clearly entitled to some compensation under the 2005 Scheme are not denied all of their entitlement until the law is settled by the ultimate disposal of these appeals. He described that as an imperative. However, he submitted that, pending that resolution, claims should be processed in accordance with the current law, as set out in the decision of 5 February.

  13. The order sought by the Secretary of State to suspend the precedential value of the decision of 5 February is both novel and bold.

  14. The novelty lies in the fact that the order seeks not merely to suspend the effect of the decision as between the Secretary of State and the two Respondents, but also as between the Secretary of State and all other claimants under the 2005 Scheme whether or not those claimants proceeded to appeal to a tribunal, and without those other claimants having been put on notice of this application or being given an opportunity to be heard (although Ms Lieven accepted that such claimants must have the right to apply for the suspension to be lifted, although presumably not on the ground that they wish the law as set out in the 5 February decision to be applied). The assiduous researches of Ms Lieven and Mr Lyons have failed to find any circumstances in which such order has been made, or even sought, in any tribunal or court. If there were such a case, we are confident they would have found it. Mr Lyons suggested that this absence of authority is because neither court nor tribunal has the power to make such an order. Ms Lieven contended that the reason for the dearth of authority is that usually in such cases the relevant arm of the government takes a stance of simply stock piling decisions, which the Secretary of State does not consider appropriate in this case. Although she accepts that the order sought is without precedent and is hitherto unknown to English Law, Ms Lieven submits that the Tribunals, Courts and Enforcement Act 2007 (the "2007 Act") and the 2008 Rules made under it are a new scheme. Novelty alone is not sufficient to dismiss this application.

  15. The submission is bold because the Secretary of State wishes this tribunal to make an order allowing him to process claims (and the First-tier Tribunal to process appeals) on the basis of a construction of the 2005 Scheme which has been found by this tribunal to be wrong, and therefore to make lawful that which the Secretary of State considers otherwise would be unlawful. Bold as the submission is, Ms Lieven accepted that it has its limits. As indicated above, she accepted in debate that (i) unless the Secretary of State is wholly successful on appeal, he will be under a duty to review the decisions made on the basis of his construction in the meantime, and (ii) non-parties affected by such an order (notably other claimants under the 2005 Scheme) must have the right to apply to have the order lifted in their particular case, although we are uncertain as to the grounds on which such an application might succeed on the basis of Ms Lieven's submission.

  16. The first question at issue is whether this tribunal has jurisdiction to make an order under the provisions of Rule 5(3)(l). Is this wide enough to suspend the effects of a decision pending appeal in the manner sought by the Secretary of State?

  17. We are firmly of the view that the Upper Tribunal has no such power. Rule 5(3)(l) uses modern terminology to empower the tribunal to stay the effect of a decision as between the parties, but not so as to affect non-parties (i.e. persons who have no extant matter before any tribunal). We agree with Mr Lyons that the wording of Rule 5(3)(l) points to that construction. First, we consider that, in the context of Rule 5(3)(l), "suspend" means no more and no less than "stay". Second, we agree that the rule merely gives the tribunal the power to suspend "the effect of its own decision", rather than the power to suspend the decision itself. If the rule were intended to have the novel, broad and powerful effect contended for by Ms Lieven, then we consider the Rules Committee would have been careful to make that abundantly clear. Furthermore, as Mr Lyons submitted, the power contended for by the Secretary of State would be wider than the powers given to the Court of Appeal under the Rule 52.7 of the Civil Procedure Rules. The Court of Appeal does not have the power to suspend the precedential effect of a decision in the manner suggested on behalf of the Secretary of State, and we consider it is inconceivable that it was ever intended that the Upper Tribunal should have a wider power than that of the Court of Appeal. For these reasons, we consider that Rule 5(3)(l) on its face and in its proper context does not give power to this tribunal to suspend the precedential effect of a decision so as to bind non-parties, even with the caveats (as to temporality and ability of non-parties to apply) accepted by Ms Lieven.

  18. In any event, we do not consider that the 2007 Act would enable the Rules Committee to make a rule that has the extent suggested by the Secretary of State for Rule 5(3)(l). As we have indicated, we are not persuaded by the submissions of Ms Lieven that the courts have such powers but have never used, and have never considered using, them. Given its novelty and its potential effect on non-parties, we would have expected such a power to be set out clearly in the primary legislation. We do not consider that that Section 22 of and Schedule 5(2) to the 2007 Act provide such a power.

  19. For these reasons, we find that we have no jurisdiction to entertain the application.

  20. However, even if we had such jurisdiction, we would not have exercised it in this case. The Secretary of State of course wishes to act lawfully, but Ms Lieven stressed that he also wishes to act appropriately bearing in mind that the claims made under the 2005 Scheme are usually made by acting armed servicemen who have suffered injury in the course of that service. The Secretary of State does not wish to stockpile claims - by simply not processing them - until the appeals in these claims are ultimately disposed of, and the law thereby clarified. The RBL likewise accept that the continued processing of claims is a practical imperative. However, on whatever basis claims are processed, following the conclusion of these appeals it may turn out that that basis will have been wrong and the claims will have to be reconsidered. Over and above that, whatever the law is eventually declared to be, unless that law is identical to that asserted by the Secretary of State, it will require a reorganisation of the decision-making process by the Secretary of State. He does not wish to begin such a reorganisation (that will take several months) on the basis of the 5 February decision, only to find that the law is not exactly as set out in that decision.

  21. We have substantial sympathy for the Secretary of State: but, even if we are wrong and we do have jurisdiction to consider this application, we would not be persuaded that we should exercise our discretion to make the order sought. Whatever legal basis for the processing of claims is adopted, there is a risk that some claimants will be found to have been overcompensated. We do not consider that claimants would be significantly harmed by a failure to suspend the effect of this decision. Nor were we persuaded that the practical difficulties of implementing the 5 February decision were such that the effect of the decision should be suspended.

  22. Unless and until a higher court determines otherwise - and of course a higher court in due time may do so - the law in relation to the 2005 Scheme is as set out in the 5 February decision. The challenge which the Secretary of State faces is practical, and one for which the Upper Tribunal can give relatively limited assistance. It cannot declare that a particular course of action that the Secretary of State might adopt would be safe from challenge in tribunals or other courts. Until the ultimate conclusion of these appeals, the Secretary of State is at risk of a challenge that he is deciding claims on a basis which may not ultimately be found to be legal. However, he can limit this risk in practice; for example by making clear in any decision letters that all decisions will be reviewed in the light of the law as ultimately declared to be in these appeal and that no time limit will be taken in relation to any appeals by claimants pending that ultimate declaration. By taking such steps in the decision letter itself, the Secretary of State may make challenges to any decisions less likely in practice. Although this is entirely a matter for the Secretary of State, given the common view of the Secretary of State and the RBL as to the importance of continuing to process claims under the 2005 Scheme pending ultimate clarification of the law, he may consider that a challenge is less likely if those who represent servicemen are informed of the way in which the Secretary of State proposes to process the claims between now and the ultimate conclusion of the appeals.

  23. We therefore dismiss this application on the basis that we have no jurisdiction to make the order sought. This application may be renewed in the Court of Appeal. We understand that the Secretary of State is planning to make an application to the Court of Appeal next week to expedite the appeal. Although expedition is a matter for the Court of Appeal we feel that there are extremely compelling reasons why this appeal should be brought on as soon as is reasonably practicable, to provide certainty for both the Secretary of State and claimants in relation to the 2005 Scheme in which they are both interested. Any application to renew the suspension order could sensibly be made at the same time as the application to expedite is made.

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