Upper Tribunal (Administrative Appeals Chamber)

IN THE UPPER TRIBUNAL Case No.  CAF/390/2012

ADMINISTRATIVE APPEALS CHAMBER

 

Before:  Judge S M Lane

 

Attendances:

 

For the Appellant: Mr Matthew Okey, Mr N Okey

 

For the Respondent Mr Thomann, of counsel, Mr Bell, Mr Hammond

 

 

A.  DECISION

 

1.     The appeal is allowed.

 

2.     This decision is made under section 12(1) and (2)(a) and (b)(i) of the Tribunals, Courts and Enforcement Act 2007.

 

3.     The decision of the tribunal heard on 22 July 2011 under reference AFCS000562011 is SET ASIDE because its making involved an error on a point of law.

 

4.     The appeal is REMITTED for rehearing. 

 

B.  DIRECTIONS

 

1.     The appeal is to be reheard by a freshly composed First-tier Tribunal for rehearing.

 

2.     Both parties accept that Achilles bursitis was caused by service and the correct ‘descriptor’ is currently subject to a further appeal.  The entitlement question for this condition should not be revisited.

 

3.     The questions for the First-tier Tribunal are (i) whether the appellant’s back pain and nerve damage were caused or predominantly caused by service and (ii) whether those conditions were independently caused by service or were sequelae of the appellant’s Achilles bursitis

 

 

 

C.  REASONS FOR DECISION

 

1.     An oral hearing of this appeal took place at Field House on 23 April 2013.  The appellant was represented by his father, their pro bono representative having let them down at the last minute.  Because of this, I only heard legal argument from Mr Thomann, for the respondent.  He appeared in place of Mr A Heppenstall, who had provided the written submission.  The appellant had seen those submissions.

 

2.     Mr Heppenstall’s written submission and Mr Thomann’s oral submission were of great assistance.  I thank them both and adopt Mr Heppenstall’s submissions to a large extent. 

 

3.     Permission to appeal from the First-tier Tribunal’s decision was granted by Judge Bano, (then) President of the War Pensions and Armed Forces Compensation Chamber on two grounds.  The grounds were not those of the appellant.  The first was the straightforward inadequacy of the First-tier Tribunal’s (F-tT’s) written reasons.  The second was a technical legal point on the scope of the decision making powers of the (‘F-tT’) when dealing with appeals under section 5(1)(b) of the Pensions Appeal Tribunals Act 1943 (‘PAT Act 1943’) in respect of awards under the Armed Forces and Reserve Forces (Compensation Scheme) Order 2005 (the AFCS’ or ‘the Scheme’).

 

4.     In a nutshell, the second issue is this:  If, contrary to the Secretary of State’s decision, a F-tT decides that a claimant has suffered an injury caused by his service with the Armed Forces, is it obliged to decide the amount of benefit to which the claimant is entitled, or is that a further, separately appealable, decision to be made by the Secretary of State? 

 

5.     It should be mentioned here that benefit under the Scheme is based on a tariff set out in Schedule 4 of the Order.  The tariff comprises tables of descriptions of injuries, which I will call descriptors (as they are in the Armed Forces and Reserve Forces (Compensation Scheme) 2011), and their levels of severity from which the decision maker (or Tribunal standing in his shoes) makes a selection.

 

6.     The Secretary of State supported the appeal on the first ground but submitted that the Tribunal did not have jurisdiction to decide the level of the award.  That was a separate decision to be made by the Secretary of State, and was separately appealable to the F-tT. 

 

7.     From a claimant’s point of view, the main difference between the process envisaged in Judge Bano’s permission and that described in the Secretary of State’s submission is that the former provides a ‘one-stop’ appeal whereas the latter may require two appeals. 

 

The Facts

 

8.     On 26 March 2009 the appellant made a claim for benefit for injuries under the 2005 Scheme.  He claimed that lower back pain, nerve damage and Achilles bursitis which he suffered were caused by service within the meaning of the Scheme.  The Secretary of State rejected the claim on 21 October 2009.  On 22 July 2011, a F-tT allowed his appeal in relation to the Achilles bursitis but rejected the appeal in relation to lower back pain and nerve damage.  The appellant was content with the decision that the Achilles bursitis was caused by service but appealed against the F-tT’s further decision that his back pain and nerve damage were not caused (wholly or predominantly) by service.  His view was that the lower back pain and nerve damage were either sequelae of the Achilles bursitis or independent injuries caused or predominantly caused by service.

 

9.     The Secretary of State went on to make a separate decision on the level of benefit payable in respect of the Achilles bursitis.  Having found that the condition did not fall within the descriptors, no benefit fell to be paid.  The appellant has appealed separately against the assessment decision.  It forms no part of this appeal. 

 

The Grounds

 

The inadequacy of the written reasons

 

10. The F-tT considered it sufficient to deal with the hotly disputed issue of whether the back pain and nerve damage were caused by service as follows:

 

(a)            ‘There are eleven pages of Record of Proceedings which state the relevant information.  The appellant claimed that problems associated with his back and consequential sequelia [sic] were predominantly caused by service.  The contentions of pre-service pre-existent back problems are referred to and disposed of in the Record of Proceedings.’

 

11. The Record of Proceedings did not dispose of anything.  It did no more than record the evidence given by the appellant and his belief that the Secretary of State’s medical evidence was wrong.  The finding of fact in the written reasons that nerve damage and back pain were not caused by service was no was no more than an assertion.  The written reasons were manifestly inadequate.

 

The scope of the appeal

 

12. To understand the issue, it is necessary to have a basic understanding of the schemes by which pensions and benefits are awarded to injured service personnel.  The two types of scheme are represented by Service Pensions Orders (‘SPO’) and Armed Forces and Reserve Forces Compensation Schemes (‘AFCS’), which replaces SPOs for new claims by service personnel for injury or death caused by service on or after 6 April 2005. 

 

13. The Naval, Military and Air Forces etc. (Disablement and Death) (Service Pensions) Order 2006 is the most current SPO in force in force, while the  Armed Forces and Reserve Forces Scheme 2005 is the version applicable to the appellant’s case.  The Secretary of State for Defence administers both types.

 

The SPO and PAT Act 1943

 

14. Under Article 5(1) of the SPO it is a condition for the grant of a war pension that the claimed disablement is "due to service."  

 

15. Part V (articles 38 – 44) of the SPO relates to adjudication.  Article 40 deals with the question of whether an injury was caused by service (‘the entitlement question’).  Article 42 deals with the degree of disablement suffered by the claimant (‘the assessment question’).  Article 43 deals with matters which must be certified by the Secretary of State (through medical experts in some cases) or tribunals (if so decided) with respect to the entitlement and assessment questions.

 

16. Article 40 insofar as relevant provides that:

 

40. Except where paragraph 2 applies, where, not later than 7 years after the termination of the service of a member of the armed forces, a claim is made in respect of a disablement of that member, … such disablement … shall be accepted as due to service for the purposes of this Order provided it is certified that—

 

a.   the disablement is due to an injury which

 

(i) is attributable to service, or

(ii)  existed before or arose during service and has been and remains aggravated thereby; or

b.     …/

 

Article 41 deals with the entitlement question for claims made more than seven years after termination of service.

17. The assessment of the degree of disablement is dealt with in Article 42, which provides as follows:

42(2) Subject to the following provisions of this article—

(a) The degree of the disablement due to service of a member of the armed forces shall be assessed by making a comparison between the condition of the member as so disabled and the condition of a normal healthy person of the same age and sex, without taking into account the earning capacity of the member in his disabled condition in his own or any other specific trade or occupation, and without taking into account the effect of any individual factors or extraneous circumstances;

…/

(d) the degree of disablement shall be assessed on an interim basis unless the member's condition permits a final assessment of the extent, if any, of that disablement.

(5) The degree of disablement assessed under the foregoing provisions of this article shall be certified by way of a percentage…

18. It is not expressly stated in the SPO that the entitlement and assessment questions are legally separate decisions.  Had there been any doubt on this, the position is made clear under of the PAT Act 1943, which contains the appeal right regime for SPO and AFCS appeals. 

19. SPO entitlement appeals are dealt with in section 1.  This provides (italics added):

‘(1) …where any claim in respect of the disablement of any person made under any such Royal Warrant, Order in Council or Order of His Majesty as is administered by the Minister…is rejected by the Minister on the ground that the injury on which the claim is based –

(a) is not attributable to any relevant service; and

(b) does not fulfil the following conditions, namely that it existed before or arose during any relevant service …

The Minister shall notify the claimant of his decision, specifying that it is made on that ground and thereupon an appeal shall lie to the appropriate tribunal on the issue whether the claim was rightly rejected on that ground.’

SPO assessment appeals are dealt with in section 5.  This provides:

‘5(1) Where, in the case of any such claim as is referred to in section 1 … of this Act in respect of the disablement of any person, the Minister makes an interim assessment of the degree of the disablement, he shall notify the claimant thereof and an appeal shall lie to the appropriate tribunal from the interim assessment…and the appropriate tribunal on any such appeal may uphold the Minister’s assessment or may alter the assessment in one or both of the following ways, namely –

(a)  by increasing or reducing the degree of disablement it specified; and

(b)    by reducing the period for which the assessment is to be in force.

In this section the expression interim assessment’ means any assessment other than such a final assessment as is referred to in the next following subsection.

(2)        Where, in the case of any such claim as is referred to in section 1…in respect of the disablement of any person it appears to the Minister that the circumstances of the case permit a final settlement of the question to what extent, If any, the said person is disablement and accordingly –

(a) he decides that there is not disablement or that the disablement has come to an end or, in the case of any such claim as is referred to in section 3 of this Act, that the disablement is not or is no longer serious and prolonged; or

(b)  he makes a final assessment of the degree or nature of the disablement;

he shall notify the claimant of the decision or assessment stating that it is a final one, and thereupon an appeal shall lie to the appropriate tribunal on the following issues, namely –

(i) whether the circumstances of the case permit a final settlement of the question aforesaid;

(ii) whether the Minister’s decision referred to in paragraph (a) hereof or, as the case may be, the final assessment of the degree or nature of the disablement, was right

and the appropriate tribunal on any such appeal may set aside the said decision or assessment on the ground that the circumstances of the case do not permit such a final settlement or may uphold that decision or assessment, or may make such final assessment of the degree or nature of the disablement as they think proper…’

Other types of SPO appeals (such as backdating and supplementary allowances) are dealt with in section 5A.

 

The AFCS

20. Under the AFCS 2005 (and the subsequent AFCS 2011), benefit is only payable if the injury from which the serviceman suffers is caused wholly or partly (in the sense of predominantly) by service (Article 7(1)).  The mechanism for calculating an award is in Part Ill.  Article 14(1) provides for the benefits to include a lump sum and a guaranteed income payment calculated by reference to the tariff set out in Schedule 4 (Article 14(2)).  For the present purposes, it is sufficient to note that the benefit to be awarded depends on the type of injury suffered, and where this features on the tariff scale.

21. The manner in which the AFCS deals with adjudication, however, does not appear to adopt the two stage approach in the SPOs.  This is because Article 43 (in Part VII of the AFCS on adjudication) simply gives the Secretary of State the power ’to determine any claim for benefit and any question arising out of the claim.’  From this formulation, it is arguable that the entitlement and assessment determinations may be made at the same time and be treated as part of a single stage.  If so, it would then be open to an F-tT which overturned the Secretary of State’s decision on entitlement to go on to identify the appropriate descriptor of its own initiative thereby bypassing the Secretary of State’s duty to do so. 

22. I am persuaded by the Secretary of State submission that this was not intended and that the rights given under the PAT Act 1943 require a two stage approach to be taken to decision making, as with the SPO.  In my view, it remains the case that there are two distinct rights of appeal in relation to (i) the Secretary of State's decision as to whether a benefit is payable at all (i.e. in the instant case, whether causation by service has been established); and (ii) his decision on the amount of benefit that is payable (i.e. the selection of the appropriate descriptor from the tariff. 

23. The rights of appeal in claims under AFCS are dealt with in s5A of the PAT Act 1943 and in the Pensions Appeal Tribunals (Armed Forces and Reserve Forces Compensation Scheme) (Rights of Appeal) Regulations 2005, which were in force at the material time. 

24. Section 5A provides:

‘5A - Appeals in other cases 

(1)    Where, in the case of [a claim to which this section applies], the Minister makes a specified decision—

(a) he shall notify the claimant of the decision, specifying the ground on which it is made, and

(b) Thereupon an appeal against the decision shall lie to the appropriate tribunal on the issue whether the decision was rightly made on that ground.’

 

(1A) This section applies to –

(a) any such claim as is referred to in section 1, 2 or 3 of this Act;

(b) a claim under a scheme mentioned in section 1(2) of the Armed Forces (Pensions and Compensation) Act 2004 (compensation schemes for armed and reserve forces).;

A specified decision is defined in section 5A(2):

(2) For the purposes of subsection (1), a ‘specified decision’ is a decision (other than a decision which is capable of being the subject of an appeal under any other provision of this Act) which is of a kind specified by the Minister in regulations...

25. The relevant regulations as regards the AFCS are the Pensions Appeal Tribunals (Armed Forces and Reserve Forces (Compensation Scheme) (Rights of Appeal) Regulations 2005 (‘the Regulations’).  Reg 3 provides:

3 New appeal rights - Armed Forces and Reserve Forces Compensation Scheme

(1)      Subject to paragraph (2), a decision which determines—

(a) whether an award of benefit is payable,

(b) the amount payable under an award of benefit, or

(c) whether a permanent award is made,

is a specified decision.

26. It is plain that the regulation breaks down the general words in Article 43(1) (‘any claim for benefit and any question arising out of the claim’) into separate and independent decisions, each of which is a specified decision in its own right carrying it own right of appeal. 

 

27. The interaction of Section 5A and reg 3 results in a structure for AFCS appeals that mirrors the structure in SPO appeals in which the questions of entitlement and assessment must be considered by the Secretary of State before the F-tT has jurisdiction to do so.

 

28. I accept (though perhaps without using as emphatic language) the Secretary of State’s submission that

 

‘if, on allowing an appeal in relation to the Secretary of State's decision as to the cause of an injury, the F-tT were to proceed automatically to the second stage of the process and to determine the degree of disablement/amount of benefit payable, this would render entirely nugatory the distinct right of appeal to the F-tT provided for under reg 3(1)(b) of the 2005 Regulations.  Indeed, the result would be that, in all appeals against findings by the Secretary of State that causation is not established, the subsequent question of the amount of award (if the appeal is successful) will be determined by the F-tT - with any appeal against that determination necessarily going to the Upper Tribunal, on a point of law only;’ and

‘… it is entirely consistent with the legislative scheme that a claimant should be afforded two separate rights of appeal to the F-tT in relation to the decisions as to causation and as to the amount of award respectively.  A claimant who is successful in an entitlement appeal to the F-TT cannot be deprived of his statutory right of appeal to the F-tT, on the facts, in relation to the amount awarded. Similarly, the Secretary of State cannot be deprived of his power to determine the amount of benefit payable where an appeal is successful, simply by reason of the fact that his original decision was negative on the issue of causation.

‘Whilst the prospect of an all-encompassing F-TT appeal may have the attraction of speed and efficiency, in that the entirety of the claim (causation and amount of award) is disposed of in one sitting, in the Secretary of State's submission, it is preferable that parties should only be required to present evidence and argument as to how much should be awarded by way of benefit if this is in fact in issue between the parties. In other words, an appeal in relation to amount of benefit should only be heard once causation is established and once a determination of the level of award has been made by the Secretary of State.’

 

 

[Signed on original] S M Lane

Judge of the Upper Tribunal

[Date] 29 April 2013