DECISION OF THE UPPER TRIBUNAL

(ADMINISTRATIVE APPEALS CHAMBER)

 

 

The DECISION of the Upper Tribunal is to allow the appeal by the claimant.

 

The decision of the Darlington First-tier Tribunal dated 3 November 2009 under file reference 224/09/00701 involves an error on a point of law.  The First-tier Tribunal’s decision is therefore set aside. 

 

The Upper Tribunal is not in a position to re-make the original decision under appeal.  It therefore follows that the claimant’s appeal is remitted to be re-heard by a different First-tier Tribunal, subject to the Directions below.

 

This decision is given under section 12(2)(a) and 12(2)(b)(i) of the Tribunals, Courts and Enforcement Act 2007.

 

 

DIRECTIONS

 

(1) The new tribunal should be before a different tribunal judge to the one who heard the case at Darlington on 3 November 2009.

 

(2) The Secretary of State should make a supplementary submission explaining how the diminishing capital calculation has been applied in this case (see paragraphs 29-44 below) and dealing with any other material matters.  This supplementary submission should be sent to the Tribunals Service regional office in Newcastle-upon-Tyne within one month of the issue of this decision.

 

(3) The new tribunal charged with hearing the claimant’s application is solely concerned with the issue of the correct calculation of the recoverable overpayment; it has no power to re-open the issue of liability.  Its jurisdiction is thus limited by the earlier tribunal decision on 26 June 2008.

 

These directions are subject to any later directions by a Tribunal Judge in the Social Entitlement Chamber of the First-tier Tribunal.

 

 

 

REASONS FOR DECISION

 

What this appeal is about

 

1. This appeal raises a number of issues.  They include the following questions: (1) how should a First-tier Tribunal respond if it makes a direction that a presenting officer should attend the hearing but on the day no such officer attends the hearing?; (2) what level of detail is required in the Department’s written submission to the tribunal?; (3) how does the diminishing capital rule operate?; and (4) how should a First-tier Tribunal deal with an appeal about a recoverable overpayment where further calculations are needed to work out the precise amount of the overpayment?

 

The sequence of events in outline

 

2. On 16 February 2006 one of the Secretary of State’s decision makers decided that the claimant had received an overpayment of income support between 20 December 2002 and 22 June 2005 as a result of his failure to disclose certain capital (in the form of shareholdings).

 

3. On 5 September 2007 a different decision maker decided that there had been an overpayment of income support amounting to £8,210.26 over the relevant period and that this overpayment was recoverable from the claimant.  The claimant appealed.

 

4. On 26 June 2008 an appeal tribunal confirmed the overpayment recoverability decision and dismissed the claimant’s appeal.  There has been no appeal against that tribunal decision and its merits cannot now be re-opened.

 

5. However, the appeal tribunal on 26 June 2008 did not confirm the amount of £8,210.26; nor did it specify any other exact amount for the recoverable overpayment.  Instead, the appeal tribunal directed that “a diminishing capital calculation be carried out and the appeal returned [to the tribunal] in the event of a dispute as to the final amount of the overpayment.”

 

6. On 24 September 2008 a decision maker issued a new decision, revising the earlier overpayment recoverability decision.  The new decision stated that the recoverable overpayment was £3,773.67.  In fact £9 had been repaid leaving a net recoverable overpayment of £3,764.67.  The claimant stated that he still did not agree with the re-assessed amount and wished to appeal.  The Department took the view that there was no right of appeal on the issue of whether the overpayment was recoverable, but conceded that the claimant had liberty to apply to the tribunal as to the amount.

 

7. On 26 June 2009 a First-tier Tribunal Judge agreed that the tribunal had jurisdiction. The tribunal judge also directed that (1) the claimant’s appeal should be listed, if possible, before the same tribunal judge who had heard the original appeal on 26 June 2008; and (2) “It is essential that a Presenting Officer attend to deal with any points raised by the Appellant in connection with the amount of overpayment now due”.  A copy of those directions was sent to the claimant.

 

8. On 4 August 2009 a different tribunal judge issued further directions.  These were to the effect that (1) the case should be listed before the original judge without any further submission; and (2) “Presenting Officer to attend”.  A copy of those directions does not appear to have been sent to the claimant.

 

9. On 3 November 2009 the original tribunal judge heard the new appeal (or technically the application made under the liberty to apply provision).  She confirmed the Secretary of State’s decision of 24 September 2008, as modified in the light of the small repayment, and so confirmed the recoverable overpayment as £3,764.67.

 

10. It is clear from the tribunal judge’s Record of Proceedings that it was a fairly fraught hearing, even if it only lasted 17 minutes.  The claimant (C) was plainly unwilling to accept the explanation provided by the tribunal judge (TJ), who in turn found it difficult to understand the claimant’s point of view.  The immoveable object met the irresistible force. The impasse was summed up in the tribunal’s judge’s note of an exchange towards the end of the hearing as follows:

 

“(TJ) “My view was you should not be here today as you don’t understand my first decision.  Only here if amount is disputed.”

(C) It is – should be nothing.”

 

What the Upper Tribunal has decided in summary

 

11. I am allowing the claimant’s appeal to the Upper Tribunal against the decision of the First-tier Tribunal.  Mr Wayne Spencer, the Secretary of State’s representative in the present proceedings, supports the claimant’s appeal to the Upper Tribunal in a very helpful submission.  

 

12. The decision of the Darlington First-tier Tribunal involves an error on a point of law.  The tribunal’s decision is therefore set aside; this means it has no further effect.  However, the Upper Tribunal is not in a position to re-make the decision. The claimant’s liberty to apply application on the amount of the overpayment needs to be re-heard.  This means the case must be subject to a fresh hearing before a different tribunal judge in Darlington.

 

13. The new tribunal will be starting with a “clean sheet”.  It may or may not reach the same result on the calculation of the recoverable overpayment as the previous tribunal.  It all depends on what the new tribunal makes of the case.

 

Why the First-tier Tribunal decision involves an error of law

 

14. The First-tier Tribunal erred in law because (I am sure inadvertently so far as the tribunal judge was concerned) the claimant did not get a fair hearing.  The tribunal may well have come to the right result as to the amount of the overpayment.  However, it did not do so in a way which ensured that the claimant had a fair hearing.

 

15. In short, the claimant was denied a fair hearing for two reasons.  The first concerned the tribunal’s decision to go ahead on 3 November 2009 in the absence of a presenting officer.  The second concerned the inadequacy of the Secretary of State’s written submission to the tribunal, which meant that the claimant could not reasonably be expected to understand the case that he had to meet.  I will deal with each of these points in turn, before returning to the third and fourth questions outlined at paragraph 1 above.

 

The absence of a presenting officer

 

16. It will be recalled that a tribunal judge initially directed that “It is essential that a Presenting Officer attend to deal with any points raised by the Appellant in connection with the amount of overpayment now due”.  A different tribunal judge later directed “Presenting Officer to attend”.   The first of these directions, but apparently not the second, was sent to the claimant.

 

17. At the hearing the tribunal judge’s Record of Proceedings stated as follows:

 

“10.00 a.m. Unable to begin.  Fraud officer only.  Was waiting for PO (presenting officer).  Wrong venue. 

10.03 a.m.  None here [presumably meaning no presenting officer available at the venue]. Proceed in their absence.  10.03 a.m.”

 

18. The tribunal’s Statement of Reasons itself made no reference to the absence of a presenting officer.  However, there seems to be no dispute that the presenting officer in question attended at the wrong venue but the tribunal decided to proceed in his or her absence.

 

19. After the hearing the claimant first applied for the tribunal decision to be set aside.  He argued that the absence of a presenting officer in the face of the express direction of 26 June 2009 was a procedural irregularity.  A District Tribunal Judge refused that application, giving as her reason that “Although the judge had on 4.8.09 directed the attendance of a Presenting Officer, it was within the discretion of the judge to proceed without such officer.  (The direction had not stated that it was essential for a Presenting Officer to attend).”

 

20. True, the direction of 4 August 2009 had not in terms stated that it was essential for a presenting officer to attend.  However, that direction has to be seen in context.  The earlier direction of 26 June 2009 had made it clear that it was so essential.  The claimant was clearly expecting one to attend.  There is, moreover, no evidence from the file that he was ever sent a copy of the later direction of 4 August 2009. 

 

21. I have not delayed this case further by making inquiries as to whether the claimant was in fact sent a copy of the direction dated 4 August 2009.  If he was sent a copy, it would have been reasonable for him to understand that direction as merely repeating (rather than diluting) the earlier direction.  If he was not sent a copy – as I suspect was the case – then as a starting point he was perfectly entitled to expect there to be a presenting officer in attendance at the hearing to answer his questions, in accordance with the first direction.  If the claimant was not sent a copy of the second direction, then presumably neither was the Secretary of State.  The fact that the presenting officer appears to have attended, albeit at the wrong venue, suggests that the Secretary of State was seeking to comply with the terms of the first direction, however ineptly.

 

22. There have been a series of decisions in which the Social Security Commissioners and now the Upper Tribunal have stressed the importance of presenting officers attending the hearings of First-tier Tribunals in appropriate cases.  A Tribunal of three Commissioners made the point forcefully in decision R(IS) 17/04.  The point has been reiterated in other decisions, such as Secretary of State for Work and Pensions v KM [2009] UKUT 85 (AAC) (at paragraphs 26-29), RF v Child Maintenance and Enforcement Commission [2010] UKUT 41 (AAC) (at paragraph 12) and in the decision of Mr Commissioner Mullan in the Northern Ireland decision of CSC3/07-08 (at paragraphs 68-71).  I simply endorse, rather than repeat, the comments and sentiments set out in those decisions.

 

23. Mr Wayne Spencer, the Secretary of State’s representative, points out that where a party has failed to comply with a tribunal direction then rule 7(2) of the Tribunal Procedure (First-tier Tribunal) (Social Entitlement Chamber) Rules 2008 (SI 2008/2685) comes into play.  Rule 7(2) provides that the tribunal “may take such action as it considers just”, including waiving the requirement or requiring the failure to be remedied, as well as other possibilities.  By analogy with Commissioner’s decision R(IB) 2/04 (at paragraph 94), Mr Spencer argues that the tribunal must consciously exercise this discretion and give some explanation as to why it has been exercised in the manner chosen.  I agree with that analysis.

 

24. I also agree with Mr Spencer that there are a number of generic factors that must be considered in deciding which course of action best serves the interests of justice.  These include the role the presenting officer might be expected to play, the effect that the absence of a presenting officer may have both on the tribunal’s position in hearing the appeal and on the claimant’s ability to formulate and present a critique of the decision under appeal.  Such factors will inevitably carry different weight in different circumstances.  Sometimes they may point to it being just for the tribunal to press on and so to proceed in the absence of a presenting officer.  In other situations they point to it being just for the tribunal to adjourn the hearing.  Where a party’s failure is particularly egregious, it may point to it being just for the tribunal either to strike out a party’s case or prohibit the party from further involvement in the proceedings.  It all depends.

 

25. I further agree with Mr Spencer that in considering which course of action best serves the interests of justice it is also important to take into account any specific considerations that arise from the particular circumstances of the individual case in question.  In the present case there were two important factors that the tribunal needed to consider. 

 

26. The first was the express direction that “it was essential” for a presenting officer to attend.  As Mr Spencer fairly points out, given that first direction, “any reasonable person would wonder how a tribunal could properly proceed in the absence of such an officer.  The claimant was entitled to a clear explanation as to why a presenting officer was no longer considered essential”.  I agree.

 

27. The second factor concerned the adequacy (or rather the inadequacy) of the explanation which the claimant had been given by the Department about the effect of the diminishing capital rule.  I return to this point below.

 

28. In the present case, once she had been advised that the presenting officer had gone to the wrong venue, the tribunal judge simply noted “Decided to proceed” on the Record of Proceedings.  There was no explanation, either on that note or in the Statement of Reasons, as to why the tribunal had decided to press ahead.  Perhaps the tribunal judge had formed the view that there was little a presenting officer could have usefully added to the proceedings.  Perhaps she had concluded that the claimant would not have been prejudiced by the presenting officer’s absence.  Perhaps she took the view that the case had been dragging on for long enough.  However, this is all speculation.  The tribunal erred in law either by failing to exercise its discretion or, if it did, by failing to give adequate, albeit brief, reasons for the exercise of that discretion.  Such reasons need not be extensive: see e.g. Carpenter v Secretary of State for Work and Pensions [2003] EWCA Civ 33, also reported as Social Security Commissioners’ decision R(IB) 6/03), and KP v Hertfordshire CC (SEN) [2010] UKUT 233 (AAC).

 

 

 

The (in)adequacy of the Department’s submission

 

29. Social security law is highly complex.  Many claimants are not able to understand its intricacies. With that context in mind, the Department’s written submission to the tribunal should aim to explain the background to the case and set out the material facts and the relevant law.  In short, the submission should explain why the decision was taken in such a way that, so far as is possible, claimants understand the case they have to meet. 

 

30. The Department’s own guidance to staff puts it this way: “The main purpose of the written appeal response is to provide the FtT [First-tier Tribunal] and the claimant with a comprehensive explanation of the reasons for the DM’s [decision maker’s] decision” (Decision Makers Guide, Vol 1, para 06330). Furthermore, “The facts of the case should also include an explanation of the reasons for the decision and the reconsideration process where appropriate. The explanation of the decision should cover the outcome and how the issues under appeal were decided” (para 06343).  In practice those Departmental staff responsible for writing submissions for tribunals are under competing pressures, including resource constraints.  The First-tier Tribunal and Upper Tribunal judiciary see, on a daily basis, the whole spectrum of submissions; some are very good; some are very poor, and some are in between.

 

31. Mr Spencer, for the Secretary of State, has frankly and rightly conceded that the Departmental submission to the First-tier Tribunal in the present case fell at the very poor end of the spectrum.  The total submission ran to 134 pages, most of which was evidence (e.g. duplicate bank statements).  In fact the pagination went awry at an early stage, with pages numbered with odd numbers only up to page 117.  Close scrutiny of the file suggests that this was not a case (as sometimes happens) where the even pages had not been photocopied; rather the even numbers appear to have been allocated to the blank reverse of every sheet of paper.  So there was plenty of evidence, even if the numbering was rather confusing.

 

32. There was, however, previous little by way of explanation as to why the recoverable overpayment had now been calculated at £3,764.67 rather than the original figure of £8,210.26.  The schedule of evidence was preceded by a short seven paragraph submission which set out the background to the claimant’s application, noted that the 26 June 2008 tribunal had directed a diminishing capital calculation and reported that “the diminishing capital calculation was done and the overpayment recalculated accordingly”.  It did not explain what the diminishing capital calculation was.

 

33. The only other relevant document was the revision decision of 24 September 2008.  The decision itself said little more than that the recoverable overpayment was £3,773.67.  Appended to this decision was a four-page schedule entitled “Diminishing Capital Calculation 20/12/2002 to 22/06/2005.  This schedule comprised a table with 15 separate columns, the last headed “cumulative total”.  One column was headed “Reduced by DCC”, presumably an abbreviation for diminishing capital calculation.  But the claimant would search in vain for any explanation as to what that term meant.  There was certainly no mention of any legislative provision governing the diminishing capital calculation.

 

34. Mr Spencer explains the position in terms on which I cannot improve:

 

“... the written submission to the tribunal by the Secretary of State had completely failed to identify and discuss the statutory provisions applicable to the diminishing capital point in dispute.  The claimant could hardly be expected to uncover these for himself.  The Secretary of State’s submission left him, therefore, ignorant of the case against him.”

 

35. As Mr Spencer further submits, there is no evidence that the basis and operation of the diminishing capital calculation was explained to the claimant in the course of the short tribunal hearing.  Rather, it appears that the claimant and the tribunal judge both became frustrated at the inability of the other to see their point of view.  Mr Spencer concludes: “It thus appears that the appeals process may well have run its entire course without the claimant ever [being] told that there was a regulation that governs the diminishment of capital for overpayment purposes.  In my submission, this is unacceptable and amounts to an error of law.”  I have to agree.

 

The diminishing capital calculation

 

36. My reading of the case file and the grounds of appeal leads me to the conclusion that the claimant has probably not understood the purpose and operation of the diminishing capital calculation.  This is entirely understandable, for the reasons set out in the immediately preceding paragraphs.

 

37. In his original grounds of appeal to the First-tier Tribunal, the claimant described the overpayment demand of £3,764.67 as a “fine”.  He explained that he had been advised that he should have sold his shares in the first place, lived off the proceeds and then claimed income support once his capital fell below £3,000.  He continued: “I believe that by stopping my Income Support and making me live off the proceeds of selling the shares I held until my total assets were less than 3000 pounds fully corrected the overpayment and that there is nothing left to repay”.  He repeated that argument at the tribunal hearing.

 

38. In his submission to the Upper Tribunal, Mr Spencer points out that the relevant statutory provision is regulation 14 of the Social Security (Payments on Account, Overpayments and Recovery) Regulations 1988 (SI 1988/664).  This appears to be the first direct reference to regulation 14 in the papers.  As Mr Spencer explains, regulation 14 provides for the capital that a person actually possesses (in the claimant’s case, his shares) to be reduced every 13 weeks by the amount of income support overpaid within those same 13 weeks.

 

39. In the present case, the position appears to be as follows.  The Secretary of State paid the claimant income support for a period of some 2½ years in ignorance of the fact that the claimant had various shareholdings.  That much is not in dispute.  The total amount of income support paid during this period appears to have been £8,210.26.  Again, this figure is apparently not in dispute.  The principle that there was a recoverable overpayment (but not the precise amount) was confirmed by the tribunal on 26 June 2008.

 

40. However, the total overpayment figure of £8,210.26 failed to take account of the fact that had the claimant not been receiving income support during this whole period of 2½ years, he would necessarily have been living off his capital.  So the diminishing capital calculation is a means of giving him some credit for that fact.  The total figure is accordingly reduced by way of an offset, calculated in accordance with regulation 14.  In essence, regulation 14 provides a degree of limited relief.  It assumes that the claimant’s capital is reduced on a quarterly basis by the amount overpaid in that quarter – by no more and by no less.

 

41. From the schedule in the papers it appears that during some periods between 2002 and 2005 the claimant’s capital was above the then upper limit (£8,000), with the effect that in those weeks he was not entitled to income support at all.  In those weeks all the income support paid was overpaid. For other periods his capital was below the £8,000 limit, with the result that he remained entitled to some benefit albeit at a lower level once the effect of tariff income was factored in. “Tariff income” is where a person is treated as having income by way of interest on their savings.  In those weeks only some of the benefit paid was overpaid.  This explains why the total overpayment was reduced from £8,210.26 to £3,773.67 (or £3,764.67 net).

 

42. The claimant describes the revised calculation as an “objectionable double correction”.  He appears to think that he has in effect repaid the overpayment in full.  He accuses the Department and tribunal of “confiscating my allowed £3000 and also fining me the sum of £3,773.67”.  The difficulty with this argument is that it cannot be sustained under the regulations.  The fact remains that he was overpaid income support for a period of more than two years.  The total overpayment has been adjusted downwards by the operation of regulation 14(1) (accurately or otherwise, which is for the new tribunal to ascertain).  There is no other basis for reducing the amount of the overpayment for that period (regulation 14(2)).  The fact that the claimant may have made a mistake and had no intention to defraud the Department does not affect the recoverability or the amount of the overpayment.

 

43. The operation of regulation 14 was explained in decision CIS/2287/2008 by Mr Commissioner (now Judge) Jacobs in these terms (at paragraph 43):

 

“Regulation 14 applies to reduce the amount of a recoverable overpayment that has arisen on account of the amount of the claimant’s capital by making a quarterly diminution of that capital equivalent to the amount of benefit overpaid. This is a concession to the claimant. It works on the assumption that the claimant would have drawn on the capital if the benefit had not been paid. By its terms, it only applies for the purposes of the overpayment decision. It is notional in its effect. It does not treat the capital as reduced for any other purpose, let alone for all purposes. It is a notional reduction that applies for a particular purpose only. If the claimant claims benefit later, that claim must be decided on the circumstances obtaining at that time, including the amount of capital actually held by the claimant.”

 

44. That analysis was adopted by Judge Ward in MP v Secretary of State for Work and Pensions [2009] UKUT 193 (AAC) at paragraph 24.  I also agree.

 

The tribunal’s decision to remit the precise calculation of the amount of the overpayment with liberty to apply

 

45. The original tribunal appears to have been put in a difficult position by the inadequacy of the Department’s decision-making process.  The tribunal judge is to be commended for spotting that the total overpayment took no account of the likely reduction required by the diminishing capital calculation under regulation 14.  She then made the decision with liberty to apply in the terms set out at paragraph 5 above.

 

46. There is a well-established practice under which the First-tier Tribunal (and its predecessor bodies) can, in appropriate cases and subject to certain safeguards, send the narrow issue of calculation back to the decision maker to be agreed with the claimant, but with a right to apply to the tribunal to resolve any disagreement (see e.g. Social Security Commissioners’ decisions R(SB) 11/86 and R(SB) 15/87).  The tribunal on 26 June 2008 did just that.

 

47. Mr Spencer, for the Secretary of State, questions whether that approach was correct.  Section 71(1) of the Social Security Administration Act 1992 provides for determinations on the recoverability of overpayments of social security benefits.  Mr Spencer points to section 71(2)(a) of the 1992 Act (as amended), which provides that (with emphasis added by Mr Spencer):

 

“(2)     Where any such determination as is referred to in subsection (1) above is made, the person making the determination shall in the case of the Secretary of State or the First-tier Tribunal, and may in the case of the Upper Tribunal or a court —

(a)     determine whether any, and if so what, amount is recoverable under that subsection by the Secretary of State, and

(b)     specify the period during which that amount was paid to the person concerned.”

 

48. Mr Spencer suggests that this implies that the First-tier Tribunal did not actually have the authority to refer the diminishing capital question to the Secretary of State.  Rather, he argues, the tribunal should have decided what it could decide and then left the Secretary of State to make any additional determinations and issue a new outcome decision with its own appeal rights.  He relies in support of that argument on the decision of the Tribunal of Social Security Commissioners in R(IS) 2/08 (at paragraphs 43-49).

 

49. I am not presently persuaded by Mr Spencer’s argument.  The decision in R(IS) 2/08 was helpfully analysed by Judge Mesher in JH v Secretary of State for Work and Pensions [2009] UKUT 1 (AAC) in the following terms:

 

“33. As noted in paragraph 22 above, the Secretary of State relies on the decision of the Tribunal of Commissioners in R(IS) 2/08 for the proposition that on an appeal against an outcome decision (ie a decision that an claimant is not entitled to benefit for a period or is entitled to benefit at a specified rate) an appeal tribunal is not obliged to substitute another outcome decision. The Tribunal of Commissioners did indeed decide in paragraph 48 that, in the light of section 12(8)(a) of the Social Security Act 1998 (appeal tribunal need not consider an issue not raised by the appeal), when:

 

"an appeal against an outcome decision raises one issue on which the appeal is allowed but it is necessary to deal with a further issue before another outcome decision is substituted, a tribunal may set aside the original decision without substituting another outcome decision, provided it deals with the original issue raised by the appeal and substitutes a decision on that issue. The Secretary of State must then consider the new issue and decide what outcome decision to give."

 

In that case, the Tribunal of Commissioners accepted that that principle applied when an appeal tribunal decided that the claimant did not have notional capital, on which the disallowance of benefit had been based, but did have actual capital, which had not been valued because that had not previously seemed necessary to the Secretary of State. But part of its general guidance to appeal tribunals was as follows (paragraph 55(3):

 

"The tribunal's decision, as recorded on the decision notice issued at the conclusion of the hearing, should explicitly record what has and has not been decided. In particular, the decision notice should make it absolutely clear whether the tribunal has made an outcome decision (subject, in some cases, to the precise amount being calculated by the Secretary of State) or has remitted the final decision on entitlement to the Secretary of State."

 

50. The issue in R(IS) 2/08 was not quite the same as in the present case, and the Tribunal of Commissioners’ guidance at paragraph 55(3) certainly appears to contemplate that remittal of certain issues may be appropriate.  Certainly the precise issue of the appropriateness (or otherwise) of a remittal of the calculation of the amount of an overpayment, with liberty to apply, does not appear to have been addressed by the Tribunal of Commissioners in R(IS) 2/08.

 

51. The argument that section 71(2)(a) of the 1992 Act precludes the practice adopted by the tribunal in the present case may also be misplaced.  Section 71(2)(a) is in all material respects simply the modern version of what was section 53(1A) of the Social Security Act 1986 (as amended).  The argument that section 53(1A) prohibited the practice of remittal, as sanctioned by Commissioners’ decisions R(SB) 11/86 and R(SB) 15/87, was given short shrift by Mr Commissioner Rice in CIS/442/1992 at paragraph 8:

 

“Now, the suggestion has been made, in Decision CSB/083/91, at paragraph 8, that the effect of this new provision was to outlaw the previous practice of remitting the quantification question. I do not think that is the effect of subsection (IA). In my view, it deals with the situation which would obtain if a tribunal, or for that matter a Commissioner, merely stated that the overpayment was recoverable, without specifying the amount of such overpayment or making any provision for its determination. For in that event the whole matter would be left in the air. The new sub-section does not, however, forbid the convenient practice of referring such issues, which are often merely arithmetical, to the parties to determine themselves if they can, reserving to the relevant adjudicating authority the ultimate determination if they cannot. In cases where this practice has been adopted, the relevant adjudicating authority will have provided for determination of the amount of the overpayment, and, as explained earlier, the decision will become full and final when the amount has been finally fixed, whether by agreement between the parties, or on final adjudication by the tribunal or Commissioner, as the case may be. There is no question of the matter having been left in limbo. Accordingly, I do not consider that subsection (lA) has done anything to disturb the existing practice of remitting matters of quantification.”

52. In the present case the claimant, understandably, has not addressed this rather esoteric jurisdictional point.  I have not had full argument on the point and indeed it is not necessary to decide the issue in order to resolve this particular appeal.  However, it does appear to me that the practice outlined by Commissioners’ decisions R(SB) 11/86, R(SB) 15/87 and CIS/442/1992 remains an option open to tribunals in appropriate cases and subject to the usual safeguards, notwithstanding the line of authority on “outcome decisions” exemplified by R(IS) 2/08. Those safeguards include referring back to the same tribunal which dealt with the issue of liability.

 

 

Conclusion

 

53. The tribunal’s decision involves an error of law and must be set aside.  Mr Spencer, for the Secretary of State, invites the Upper Tribunal to re-make the decision with one in the same terms as the Secretary of State’s revised decision as to the amount of the net overpayment after the application of the diminishing capital rule.  He makes that submission subject to the proviso that the claimant agrees that the schedule in the papers does indeed correctly reflect how his capital falls to be diminished.  The claimant has indicated that he does not agree with that calculation.

 

54. Given the history of this case, it would not be right for me to re-make the decision in the terms suggested by Mr Spencer.  A new tribunal must decide that matter.  The remit of the new tribunal is confined solely to the issue of the calculation of the recoverable overpayment; it has no standing to re-open the issue of liability.

 

55. For the reasons explained above, the decision of the tribunal involves an error of law.  The Upper Tribunal therefore allows the appeal and sets aside the decision of the First-tier Tribunal (Tribunals, Courts and Enforcement Act 2007, section 12(2)(a)).  The Upper Tribunal is not able to re-make the decision and so directs a re-hearing before a different First-tier Tribunal, subject to the Directions above (section 12(2)(b)(i) of the 2007 Act).  

 

 

 

 

 

 

Signed on the original Nicholas Wikeley

on 18 October 2010 Judge of the Upper Tribunal