CCR/2670/2009

DECISION OF THE UPPER TRIBUNAL

(ADMINISTRATIVE APPEALS CHAMBER)

Decision and Hearing

1. This appeal by the claimant succeeds. In accordance with the provisions of section 12(2)(b)(i) of the Tribunals, Courts and Enforcement Act 2007 I set aside the decision of the Social Entitlement Chamber of the First-tier Tribunal sitting at Northampton and made on 6^th May 2009 under reference 044/08/00679. I refer the matter to a completely differently constituted tribunal in the Social Entitlement Chamber of the First-tier Tribunal for a fresh hearing and decision in accordance with the directions given below.

2. The claimant should consider requesting the First-tier Tribunal to hold an oral hearing and in default of such request consideration should in any event be given as to whether an oral hearing should be held. The parties should regard themselves as being on notice to send to the clerk to the tribunal as soon as is practicable any further relevant written medical or other evidence. In particular, the claimant should obtain for the First-tier Tribunal copies of his army medical records, and in particular his discharge medical report. The new hearing must not take place until he has had a reasonable opportunity to obtain these documents. I also advise him to seek the assistance of an organisation with experience of dealing with such matters, such as the Royal British Legion.

3. The fact that the appeal has succeeded at this stage is not to be taken as any indication as to what the tribunal might decide in due course

4. I held an oral hearing of this appeal on 7^th June 2011. The claimant attended with his wife but was not represented. The Secretary of State was represented by Mr Clive Freedman of the office of the Solicitor to the Department for Work and Pensions. I am grateful to them for their assistance.

Background and Procedure

5. I set out the background to this case as I understand it so as to enable my decision to be seen in context, but I am not to be taken as making any findings relation to any disputed matters of fact. The claimant is a man who was born on 5^th December 1966. He served in the British Army from 1984 until his discharge (on medical grounds) on 27^th March 2000. He has a significant award under the war pensions scheme in respect of injuries incurred during his service (he states that he is assessed as 40% disabled in respect of those injuries). He had an HGV licence and following discharge he was employed as a driver/chauffeur. However, on 18^th June 2000 he was riding a motor cycle when he was involved in a collision that caused serious injuries to him. These included widespread burns, damage to his limbs (including in particular to his dominant right hand) and head injuries (necessitating the insertion of a shunt and resulting in a certain lack of co-ordination). He received lengthy and extensive hospital treatment as an in-patient, during the course of which he was unfortunate enough to incur an MRSA infection caused by hospital negligence. As a result of the infection (and not as a result of the motor cycle accident injuries) on 1^st December 2000 his left leg had to be amputated above the knee.

6. He claimed and was awarded disability living allowance (“DLA”) with effect from 4^th April 2001. Unfortunately nobody has been able to locate a copy of the initial claim form. The award was for a fixed period. There were subsequent renewal and supersession applications and at one stage the care component award was reduced to middle rate. On 20^th August 2003 a tribunal reinstated the highest rate. This had led me to believe that the award had only run from 2003, but it is now clear that the claimant has been in receipt of highest rate care component and higher rate mobility component since 4^th April 2001.

7. Civil proceedings for damages by the claimant against the hospital in respect of the negligence that led to the amputation were settled out of court for £275,000 as recorded in the amended order of the County Court dated 9^th January 2008. On 12^th November 2007 the Secretary of State issued a Certificate of Recoverable Benefit under the provisions of the Social Security (Recovery of Benefits) Act 1997, seeking recovery from the hospital (as compensator) of £23,578.90 in respect o the DLA paid to the claimant for the period 4^th April 2001 to 30^th November 2005 (the latter date marking the end of the five year period since the amputation). That amount was deducted from the compensation to be paid to the claimant and was paid to the Secretary of State by the hospital on 8^th January 2008.

8. On 25^th January 2008 the claimant appealed to the First-tier Tribunal against the contents of the Certificate on the grounds that the DLA did not relate exclusively to the effects of that amputation and to that extent should not be included in the recoverable amount. That has remained the issue throughout these proceedings.

9. The First-tier Tribunal considered the matter on 6^th May 2009 and confirmed the contents of the Certificate as issued by the Secretary of State. On 14^th September 2009 a judge of the First-tier Tribunal refused to give the claimant permission to appeal to the Upper Tribunal against the decision of the First-tier Tribunal. The application was renewed before the Upper Tribunal and, after an oral hearing held on 28^th May 2010, I gave permission on 1^st June 2010. I raised particular issues but that was never intended to limit the matters that could be considered in the appeal and the First-tier Tribunal is not bound in any way by the terms in which I gave permission.  On 21^st March 2011 I directed that there be an oral hearing of the substantive appeal. This took place on 7^th June 2011. The Secretary of State opposes the appeal and supports the decision of the First-tier Tribunal.

The 1997 Act

10. The Social Security (Recovery of Benefits) Act 1997 applies, by virtues of section 3 of the Act, in relation to compensation payments made on or after 6^th October 1997. Section 1(1) of the Act provides:

1 (1) This Act 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.

11. Relevant benefits include both components of DLA. The “relevant period” ends when the compensation is paid or when certain types of agreement are reached, or after 5 years from the date of the accident or injury if none of those events have happened by then. The 5 year rule has been applied in the present case and has been counted from the date of the amputation.

12. Section 6(1) provides:

6(1) A person who makes a compensation payment in any case is liable to pay to the Secretary of State an amount equal to the total amount of the recoverable benefits.

13. Section 11(1) provides (my emphasis):

11(1) An appeal against a certificate of recoverable benefits may be made on the ground –

(a)   that any amount, rate or period specified in the certificate is incorrect, or

(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.

14. It is important to appreciate that in the present case the “accident, injury or disease” is the incurring of the infection that led to the amputation. If DLA was paid in respect of the injuries incurred by the claimant during his army career, or as a result of the motor cycle accident, or a combination of these, then it was paid otherwise than in respect of “the accident, injury or disease”.

The First-tier Tribunal

15. The First-tier Tribunal had a great deal of evidence before it. In addition to oral evidence and written statements from the claimant, this included renewal DLA claim forms (which did not really contain much detailed information), a report of 20^th December 2005 from a consultant forensic occupational therapist, a report of 21^st November 2006 from a consultant neurophysiologist and neurologist, a report of 27^th November 2006 from a consultant psychiatrist, and a report of 15^th December 2006 from a consultant neuropsychologist.

16. The First-tier Tribunal accepted that it was difficult to disentangle the effects of the motor cycle accident from those of the amputation but took the view that the claim for DLA rested mainly on the effects of the amputation (although, in the absence of the original claim form, I am not quite clear that this view was justified) and relied on the reports from the occupational therapist (although this was mainly directed to the requirements and costs of rehabilitation rather than diagnosis) and from the consultant neurophysiologist and neurologist. I note, however, that the comments of the latter on the effects of the head/brain injury were underplayed by the tribunal although such injury would presumably have operated independently of the amputation.

17. Similarly the tribunal made no overt reference to the reports from the consultant psychiatrist and the consultant neuropsychologist. However, their comments on the effects of the head/brain injury could have been regarded as very significant in the context of entitlement to the care component of DLA.

18. More significant is that the tribunal seems to have overlooked the effect of the injuries sustained by the claimant during his army career. Repeated reference is made to these in the papers but the papers contain no official documentation. It is the experience of the Upper Tribunal (in hearing appeals from the Armed Forces Chamber of the First-tier Tribunal) that the army keeps extensive medical records and that these are available to those who claim war pensions. The First-tier Tribunal focussed on the road traffic accident and the amputation, but the army records would have enabled a proper assessment to be made of the claimants condition (a) before the motor cycle accident and, therefore,(b) before the amputation, and this would have led to a more sophisticated analysis of the award of DLA, especially in relation to the care component. The failure to investigate the availability of the army medical records was in my opinion such a failure of the tribunal’s inquisitorial function as to amount to an error of law.

The Hassall Case

19. Mr Freedman relied on the decision of the Court of Appeal in Hassall v Secretary of State and Pether v Secretary of State [1995] 3 All ER 909. The claimants had been in receipt of social security benefits on the basis that they were unemployed but were available for and actively seeking work. They were then injured in (separate) road traffic accidents and entitlement to social security benefits continued on a different basis – that they were incapable of work and therefore not required to be available for or actively seeking work. They each received compensation to settle civil claims in respect of the accidents (which did not include any amount for loss of earnings because they had been unable to find work even before the accidents). In each case the Secretary of State recovered the relevant amount of benefit from the payment of compensation and the claimants challenged this on the grounds that the benefits had been paid not as a consequence of the accidents but because the claimants continued to be unemployed with no other source of income. The Court of Appeal (upholding the decisions of the Social Security Commissioner in favour of the Secretary of State) held that the benefits paid after the accident had been paid on the basis of incapacity to work because of the accidents and that this was a new basis of payment that arose as a consequence of the accidents.

20. In my opinion the present case is totally different. In Hassall there was no evidence that the claimants could have been entitled to benefit before the accidents on the basis of incapacity to work. In the present case, the claimant argues that he would have been entitled to DLA (especially the care component) on the basis of his needs irrespective of the amputation. The amputation might well have increased those needs but (unlike the facts of the Hassall case) would not have changed the basis on which benefit would have been awarded, which would have been the satisfaction of exactly the same statutory test.

21. This point can be demonstrated by imagining that DLA care component had been awarded to commence after the motor cycle accident but before the amputation and that the amputation had not led to any different award of care component. It could not then be said that the basis of the award of care component had changed for the purposes of recovery of benefit from the compensation for the amputation.

Conclusions

22. The new tribunal will have to consider (as did the previous tribunal) whether the evidence shows that there would probably have been entitlement to any rate of either component of DLA irrespective of the amputation. It will have to do this on the basis of all of the relevant evidence (which in my view the previous tribunal did not do). If there would probably have been such entitlement, the amount of that entitlement during the relevant period must be deducted from the amount of benefit recoverable from the compensation.

23. For the above reasons, this appeal by the claimant succeeds.

H. Levenson

Judge of the Upper Tribunal

8^th June 2011