DECISION OF THE UPPER TRIBUNAL

(ADMINISTRATIVE APPEALS CHAMBER)

 DECISION

This appeal by the claimant is dismissed.  The 6 decisions of the First-tier Tribunal sitting at Wigan and made on 14 August 2013 did not involve a material error of law and they remain in force.  

REASONS

1. These appeals are 6 in number but are in effect 3 pairs of appeals, each of which encompasses a disability living allowance (DLA) entitlement decision and a related overpayment decision.  The appeals concern DLA in payment to Mrs  H in her own right and as appointee for her children V and M.   
2. The respondent’s case at the first-tier tribunal (FTT), put shortly, was that the appellant had overstated the extent of her and her children’s needs in DLA claim forms to the extent that she had misrepresented those needs, and that those misrepresentations had founded the awards of benefit. 
3. The Regional Judge, who had heard the cases, refused permission to appeal, and the matter came before me.  I thought that the ground of appeal which concerned the terminal date upon which the overpayment could be said to have been caused by the misrepresentation was arguable.   Other matters were put forward but I did not accept that they had merit and I limited my grant of permission to appeal to that overpayment issue. I asked the question whether it might make a difference in relation to the time at which the Secretary of State might have acted to suspend payment whether he was in possession of erroneous information from a claimant (the misrepresentations), or whether that claimant had failed to notify him of a material fact.   The case law referred to at the FTT related to decisions as to failure to disclose and not misrepresentations of fact.
4. I made directions for the filing of submissions.  These are now to hand. No party has requested an oral hearing of the appeal; I am in a position to deal with the matter on the papers without further argument and it is fair for me to do so.

The overpayment question

5. Under section 71(1) of the Social Security Administration Act 1992, the Secretary of State is “entitled to recover the amount of any payment which he would not have made or any sum which he would have received but for the misrepresentation or failure to disclose”.  It is a question of fact for the decision maker, and on appeal for the FTT standing in the shoes of the decision maker, whether payment would have been made in the absence of the misrepresentation or failure to disclose.   That is often referred to as the causation issue, which may be framed as a question: did anything occur to break the chain of causation between the (in this case) misrepresentation and the payment of benefit so as to be able to say that the payment was not made as a result of the misrepresentation?

The position of the appellant

6. The representative argued that at the latest the causal link between any misrepresentation that may have been made and the payments of benefit was broken when the appellant was first interviewed under caution on the 17^th February 2011.  He said that was because any payments continued thereafter as a consequence of a failure of the Secretary of State to act on information that was then before him.  He cited in support of that contention the decision of Mr Commissioner Mesher (as he then was) in CDLA/1708/2001 which said 

At the stage when the investigating officer felt he had enough evidence to put to the claimant in an interview and heard her reactions or explanations. At that point, but not before, I accept the causal link to the claimant’s failure to disclose was broken. The Secretary of State’s powers to suspend payment of benefit could have been invoked but were not. From that point, but not before, the continuing overpayment was not as a consequence of the claimant’s failure to disclose.

        7. The argument went further than this, however, as to payments made in relation to the children, contending for a lack of causative link between misrepresentation (if any) and the payment of DLA back to 7 September 2007, the date upon which was available the summary of a record of a Child Protection Core Group meeting which had taken place.  It was argued that this showed that the social worker in the case had been in contact with the Department.  The issue that group was addressing seems to have been a concern as to the extensive medical input that was being provided to both the appellant’s children. The report to the meeting was that the department had not felt that there was evidence to initiate an investigation, and that the claims that were made on behalf of the children in support of DLA applications were “substantiated by written statements from medical professionals.” It was said that, given the social worker’s position of knowledge, the department should have acted on her concerns; the situation was not comparable to an anonymous “tip-off”. 

The position of the Secretary of State

        8. Before me the Secretary of State seeks to support the decisions made by the FTT, arguing that Upper Tribunal Judge Lane’s decision in JM-v-SSWP (IS) [2011] UKUT 15 (AAC) (JM) supported a lack of the suspension of DLA, concerning as it did a situation where investigation was continuing, the Secretary of State explaining that in the current appeals investigations were ongoing following the first interview under caution on 17/2/2011. In each case further evidence was gathered, and to illustrate this reference was made to some 70 odd pages of evidence in the FTT bundle which related to those investigations.  The Secretary of State argued that causation itself was a matter of fact for the FTT, which in this case had accepted that the Secretary of State had no obligation to suspend payment of benefit in these circumstances, where the appellant was still maintaining her full entitlement. That being so the Secretary of State argues that only if the conclusion drawn by the FTT was perverse could it be attacked, and that it was a reasonable conclusion on the basis of the evidence before them.

My conclusions

     9. The decisions cited before the FTT concerned failure to disclose.   These appeals turned upon the issue of misrepresentation.  As I have said earlier I raised the question whether that distinction was material.  I am not persuaded that there is any practical difference between the two concepts in the circumstances of these cases; the essence of the overpayment issue relates to the state of knowledge of the Secretary of State in relation to the continuance of payments whether the original ignorance of the true state of affairs was caused by misrepresentation or a failure to disclose. 

The power to suspend

10. The appellant’s representations rely heavily on the power of the Secretary of State to suspend or revoke benefit, and his failure to exercise those powers in this case.

11. The suspension of benefit under regulation 16 Social Security and Child Support (Decisions and Appeals) Regulations 1999 is a discretionary power.  Under paragraph 1 the Secretary of State may suspend payment where he has received information that a claimant is being overpaid benefit.   It is a power not a duty, and the power must be exercised reasonably; given the general position that an award of benefit is unconditional (although for DLA it may as a matter of fact be time limited) and the complexity of the provisions that permit a change to be made to an existing award, when making a decision to use the powers to suspend, from which there is no right of appeal, it seems to me important that the Secretary of State is appropriately circumspect.  As Judge Lane observed in JM [11]

Even where he contemplates the suspension of benefit (which is not applicable), the Secretary of State acts on the basis of cautious guidelines. It is important for the Secretary of State to satisfy himself that he has a reasonable case that taking action by presenting the evidence to the claimant and getting his reply (in so far as that is possible) before taking the drastic step of interfering with his benefit.”

        12. In my judgement it would be wrong to expect the Secretary of State to use those powers too early in an investigation by too narrow an interpretation of the causative question in relation to the continuance of payments; there should not be pressure to act prematurely when the information comes into his possession. 

        13. Additionally the stance taken by the claimant may be of importance.  Where the subject of the investigation accepts the contrary information then in the absence of suspension the causal link between an original misrepresentation or failure to disclose may indeed cease, there being in those circumstances no argument as to the correct position; the department’s new state of knowledge is an agreed matter.

        14. The position differs, however, where the subject of the investigation continues to contend for entitlement, putting forward matters which are later found to be misrepresentations.  The position of the department in such circumstances is that they are faced with competing versions of the facts which may reasonably require further investigation.  Contrast with the situation above, where the newly discovered position is entirely accepted by a claimant and the payment is suspended, or if it is not continuation of payment may cease to be their responsibility on the basis of a break in the causative link.

        15. There is no principle of law that a failure to exercise the discretion to suspend payment converts an overpayment which is caused by a misrepresentation or failure to disclose, and which is therefore recoverable provided the criteria in S 71A Administration Act 1992 are met, into one which is not recoverable.  Upper Tribunal Judge Rowland said in JA v Secretary for Work and Pensions (DLA) [2014] UKUT 44 (AAC) (28 January 2014) [37]

“Whether or not the Secretary of State could have put an end to the payments earlier by suspending them, the claimant could also have done so by disclosing the material new facts that she knew, or ought to have known, should be reported.  Her failure to disclose the material new facts therefore remained a cause of the overpayment, even if not the only cause.”

        16. It is settled law that the misrepresentation or failure to disclose does not have to be the sole cause of the overpayment.  In Duggan v Chief Adjudication Officer reported as an appendix to R(SB) 13/89 the claimant failed to inform the relevant office that his wife had begun to claim unemployment benefit; the information was with the Department and was therefore available to the adjudication officer, who had failed to discover it. The Court of Appeal held that there were two causes of the overpayment, May LJ saying

“As a matter of common sense… if one poses the question: did the failure of the claimant to disclose the fact that his wife was in receipt of unemployment benefit have as at least one of its consequences the overpayment of the supplementary benefit?, the only reasonable answer that one can give is “yes”.”

17. That passage was cited with approval in Morrell v Secretary of State, R(IS) 6/03 by Richards J (sitting with Sedley and Thorpe LJJ who agreed).  He continued

“For the same reason the misrepresentation on the appellant’s review forms could properly be considered to be a cause of the overpayments, so that the overpayments were made “in consequence” of the misrepresentations, even if a further cause was a failure on the part of the Benefits Centre to take due account of the information provided by the local authority…..

 At most the failure to act on the information would seem to have been an additional cause of the overpayments as from the date of receipt of the information; but that would not preclude recovery of the overpayments.  “

        18. That line of authority also leads to the conclusion that the issue before the FTT in this series of appeals was not whether or not payments should have been suspended but, given that they were not, whether the appellant’s misrepresentations remained a cause of them continuing to be made. 

        19. For the avoidance of doubt I will deal with the three-judge panel decision Secretary of State for Work and Pensions -v-JL [2012] AACR 14.  That differs from the circumstances of this case in that the questions there did not relate to DLA entitlement but to payability. The case concerned a recipient of DLA who then took up residence in a care home, which then became a placement that was funded out of public funds. There was a later question of retrospective self funding, and difficulties arose because the entitlement to DLA had been superseded, that is to say that it ended, due to the change of circumstances in respect of funding.  The judges concern in that case was as to the use of supersession rather than suspension, since had payability been suspended it would have been an easy task to reinstate any back payments of DLA once the claimant was again funding his residential placement. The case is not authority that suspension is a proper or even a preferable course in the circumstances of these appeals.

        20. Here it was for the FTT to answer the question whether, or at what particular point, the continued payment of benefit was for reasons other than those relating to the original (and continuing) misrepresentations.  Upper Tribunal Judge Mark in Secretary of State for Work and Pensions-v- SS [2013] UKUT 272 (AAC) at [5] put it in this way

The question of causation is one of fact, and requires an analysis of the relevant facts in order to determine whether any failure by the DWP to act on information received was sufficient to break the chain of causation resulting from the original misrepresentation or non-disclosure or was merely a concurrent cause of the overpayment. 

        21. The issue then, being a factual one for the FTT, the question for me is did it address it properly in these cases?  My conclusion is that it did, and I illustrate that by an example from one of the cases.

        22. The statement of reasons in relation to V states at paragraph 35, following the finding that the appellant had an obligation to provide an accurate description of V’s circumstances and did not do so, “no improvement has been admitted or accepted at any time up to and including the date of the hearing. [The representative] confirmed that his clients view was that there had been no improvement so none needed to be notified and there had been no misrepresentation”.   There was a clear issue as to whether there had been functional improvement or original misstatement which was found against the appellant; the matter then moves towards the question of the recoverability of any payments made.

        23. The statements of reasons indicate that the representative’s submissions as to the breaking of the causal link were heard and rejected. In the cases relating to V the tribunal “noted that [the appellant] had not co-operated at the interview under caution, had refused to discuss V’s problems with the investigating officer and continued to claim entitlement down to the date of the hearing. On that basis the overpayment was confirmed for the full period of the payment of the award.”  The tribunal clearly found that the applicant’s conduct in maintaining her position as to the factual correctness of her original claims at the interview under caution and beyond was persuasive in the department’s decision to continue to pay the benefit.

        24. As that is a factual issue it is not for me to say that their decision on that point was wrong unless it was outside the range of rational outcomes, given the evidence.  Here, given the continuing nature of what the FTT found to be misrepresentations the decision made was clearly available to the FTT on the evidence that it had accepted and I do not interfere with it.

        25. The issue of whether the chain of causation is broken, and if so at what point, must be a matter of fact for the FTT.  Whilst there is helpful case law in relation to the principles, and I have cited some in this decision, the primary issue is a factual one which must be decided by the tribunal given the particular circumstances.  That precludes there being a legal principle that an interview under caution will of itself break the chain of causation. That the position of such an interview is fact sensitive is well illustrated by the circumstances in the cases that comprise this appeal.

Upper Tribunal Judge   Paula Gray

Signed on the original on 4 March 2015