[2004] UKSSCSC CCR_4065_2003 (28 May 2004)
CCR/4065/2003
DECISION OF THE SOCIAL SECURITY COMMISSIONER
- I allow the compensators' appeal. I set aside the decision of the Newcastle-upon-Tyne appeal tribunal dated 6 May 2003 and I refer the case to a differently constituted appeal tribunal for determination. I give the following directions:
(a) The compensators shall, within 14 days of this decision being sent to them, send to the clerk to the appeal tribunal details of the benefits deducted (if any) from the claimant's compensation (see paragraph 20 below);
(b) The Secretary of State shall, within 28 days of this decision being sent to him, make a supplementary submission dealing with the issues identified in paragraph 19 below;
(c) Before the case is listed for hearing, a legally qualified panel member shall determine, in the light of the information provided pursuant to my direction in subparagraph (a) above, whether the claimant is a party to the appeal and the clerk to the tribunal shall send her notice of that determination;
(d) The appeal shall be listed for oral hearing before an appeal tribunal whose members shall not include the members of the tribunal whose decision I have set aside or the legally qualified panel member who refused to set that decision aside.
A legally qualified panel member may vary the directions in subparagraphs (a), (b) or (c) above and may issue further directions.
REASONS
- The compensators appealed against a certificate of recoverable benefits requiring payment of £16,830.82. The case came before the appeal tribunal on 6 May 2003. The compensators did not appear and were not represented at the hearing, despite having asked for the hearing. The tribunal asked the clerk to telephone the compensators' solicitors and were told that they had not received notice of the hearing. Upon being assured by the clerk that the notices had been issued, the tribunal proceeded to hear the appeal in the compensators' absence and dismissed it.
- Not surprisingly, the compensators' solicitors asked for the decision to be set aside. The request was not opposed by the Secretary of State but, on 4 July 2003, a full time chairman – technically, a "legally qualified panel member" – refused it on the ground that notice of the hearing had been issued and as it had not been returned, he was not satisfied that it had not been received. Notice of that decision was issued on 9 July 2003. On 22 July 2003, the compensators wrote to say –
"We have today identified a miscellaneous item of correspondence from yourselves dated 9 July 2003. Your letter appears to relate to this claim, however you have omitted to quote any reference, or identifying name or details within the document. It really was a matter of chance that your letter came to arrive on the writer's desk.
"…
"The entirety of the correspondence held on our file, received from you, neglects to detail our reference, or indeed any reference. It appears that these items have been identified only by documentation attached or annexed to the correspondence. We attach copies of those letters.
"With the utmost respect, this firm is a large organisation with many practising fee earners. When items of correspondence arrive without references or other details which might identify the intended recipient, it is not always going to be possible to make the assumption that the item will have reached its intended destination.
"We again stress to you that the hearing notice was not received.
"To disallow the applicant's appeal on the basis of what appears to be an assumption, 'A proper notice was issued … I am not satisfied that it was not received', would be entirely unjust and wrong.
"The applicant is entitled to have its application heard. We respectfully request that you reconsider the stance adopted by your panel member, or alternatively provide us with full details of the authorities and statutory regulations which allow a panel member to summarily discharge a valid application without cause, reason, and without being heard."
They also faxed a copy of a letter dated 2 May 2003, i.e., four days before the tribunal hearing, saying that they were still awaiting details of the hearing date. The clerk responded on behalf of the full-time chairman on 4 August 2003 asking what procedures the firm of solicitors had in place for ensuring that correspondence with inadequate references reached its proper destination. An internal memorandum from the chairman to the clerk says:
"I note that all previous correspondence reached the appropriate file. The correspondence issued by the Appeals Service quotes a unique reference that enables the recipient to identify the Appellant. I would expect it to be known within the firm which fee-earner(s) dealt with Appeals Service work, if not a telephone call could identify the fee earner. I also note their letter of 2 May 2003 does not quote the correct reference."
However, none of those thoughts was communicated to the compensators.
- On 11 September, the solicitors wrote back, saying –
"Thank you for your letter of 4 August 2003, which once again fails to provide details of our reference or any identifying information, such as a matter description.
"You will appreciate it has taken almost six weeks for the letter to be identified and reach its intended recipient. We again ask you please update your records so as to include our full reference when corresponding.
"In reply to the query raised by your chairman, we confirm that when an item of post arrives without a reference or quoting an incorrect reference, we have in place a system whereby a search will be conducted of our database in order to locate the correct reference from all active cases.
"On occasions where the search fails to produce a reference, a generalised e-mail is then sent to all fee-earners and secretaries stating what item of correspondence is and which parties it concerns. At this point the fee-earner with conduct will hopefully recognise the matter.
"You will appreciate that all items of correspondence from yourselves have historically arrived without any reference or identifying features whatsoever. Identification therefore proves to be a difficult task.
"When an item has not been recognised after both searches it will be filed. An assumption will be made that the item has either been sent incorrectly, or relates to a matter which is no longer active.
"You will hopefully appreciate the importance of including reference details/information on communications, because as you will be aware problems can and do occur when a reference is not provided.
"We respectfully submit that our client should not be penalised because of the failure of your administration to quote correct, or any, reference details in communications.
"We now ask that the chairman please consider the stance he has adopted and arrange for the hearing of our client's appeal to be relisted."
The chairman was unmoved. A letter from the clerk, this time with the reference number on it, said simply that the chairman's decision "still stands". The chairman's reasons, which so far as I can see where again not communicated to the compensators were –
"Having read the letter of 11.9.03 I am not satisfied that on the balance of probabilities the notice of hearing was not received. In all probability it is in the file referred to by the representative in the final paragraph of page 1 of the letter. I find it incredible that the telephone was not used to trace the reference – by ringing the Appeals Service and asking for a reference. My decision is unchanged."
- The compensators complained that the decision refusing the request for setting aside had been made without an oral hearing and indicated that they wished to appeal to a Commissioner. They also asked for information as to the authority upon which the tribunal had summarily struck out the appeal and upon which the full-time chairman had refused to relist the case. In making these requests, the compensators were acting under a misapprehension because the tribunal had not summarily struck out the appeal. Rather, the appeal had been heard in the absence of the compensators but only a summary decision notice had been issued. The full-time chairman treated the letter as a request for a statement of the reasons for the tribunal's decision but it was late and he refused to extend the time for making the request.
- The compensators then applied for leave to appeal which was refused by the full-time chairman, as it had to be because there was no statement of reasons. When the application was made to me, I granted leave. The Secretary of State supports the appeal.
- I find it slightly surprising that the tribunal proceeded to hear the case, having been told that the compensators' solicitors had received no notice of it, but I accept that they did not have the full background before them and they may have taken the view that someone had probably failed to act on a notice that had been received and that, if not, any injustice could be cured on an application for the setting aside of their decision. Furthermore, if a request for their reasons had been made and the reasoning had satisfied the compensators, the compensators might have been content simply to take no further action. For reasons I shall explain below, the Secretary of State's submission to the tribunal was less than compelling and the tribunal might have taken the view that they could provide more persuasive reasons for reaching the same conclusion. Therefore, I am not persuaded that the tribunal's decision to go ahead with the hearing was one they were not entitled to take in the exercise of their discretion.
- I see no reason not to accept that the notices were issued by the Appeals Service. The Secretary of State's representative had obviously received notice of the hearing. However, although separate notices were notionally sent to the compensators as well as their solicitors, the notice to the compensators was sent c/o the solicitors and so added nothing save that it carried the compensators' name. I do not suppose that the minor spelling error in the address will have prevented the notices from reaching the offices of the solicitors, although, of course, non-delivery remains a possibility. For the purpose of this decision, I am prepared to accept that the notices did reach the offices of the solicitors but did not reach the person actually dealing with the case.
- I also accept the point made by the full-time chairman that the solicitors could, with reasonable diligence, have acted on the notices. It seems unwise to file a letter when the e-mail to fee-earners and their secretaries has not elicited a response but a telephone call to the sender of the letter could identify the intended recipient, especially when the letter appears to give notice of a hearing. The notices contained a telephone number and a sender's reference number and a telephone call would have at least have led to the claimant being identified (assuming, as the full-time chairman obviously considered was the case, that that information would have been given over the telephone). I presume that a person answering the telephone would not have been able to call up on a computer screen the solicitors' reference number because had that information been put in the computer it would have appeared on letters sent to the solicitors. The solicitors' reference number was, however, in the tribunal file.
- On the other hand, the solicitors' systems had included the sending of a letter chasing up the Appeals Service when it appeared that no notice had been received. I do not accept the full-time chairman's criticism of that letter. It is true that it did not include the proper reference number but that is because the solicitors quoted a "case code" instead. That case code appeared prominently on the form TAS 1 sent to the solicitors, which did not include the proper reference number. Even if the solicitors had at some time received a letter with the proper reference number on it (and their letter of 2 May 2003 suggests that they had not received any correspondence since the TAS1 had been returned), their belief that the case code was the relevant number to be quoted seems eminently reasonable. I also note that the full-time chairman did not suggest that the Appeals Service should have telephoned the solicitors to obtain the correct reference number and that the letter included the name of the claimant and the fact that the appeal was a "CRU appeal", which might in any case have enabled the Appeals Service to link the letter to the file had they acted as diligently as the chairman expected the solicitors to act.
- Furthermore, the solicitors' systems also included having a reference number for each case, which those corresponding with them about the case could reasonably be expected to use. The Compensation Recovery Unit had passed that number to the Appeals Service when forwarding to them the appeal. They had included it as part of the address. It appears that it is necessary for the Appeals Service also to include a reference number within an address if they wish it automatically to appear on letters they are issuing. The root cause of the compensators' non-appearance at the hearing was the failure of the Appeals Service to include that reference number in the solicitors' address when entering the details into the computer system.
- In my judgment, the principal blame for the notices not reaching the person dealing with the compensators' case lies squarely on the Appeals Service. This is not a major criticism. Minor errors of this sort are bound to occur from time to time in any large organisation, whether it be a government agency like the Appeals Service or a private sector business or a firm of solicitors. What is important is that a proportionate and appropriate response should be made to such errors. Regulation 57 of the Social Security and Child Support (Decisions and Appeals) Regulations 1999, permitting the setting aside of a decision made in the absence of a party or where a document has not been received provides for such a response. I agree with the Secretary of State's representative that, in the light of the material available to the full-time chairman, he should have set aside the tribunal's decision. However, no appeal lies against his decision (see regulation 57A(2)).
- Where, then, is the compensators' remedy, given that the notices were deemed under regulation 2(b) of the 1999 Regulations to have been sent, the tribunal acted reasonably in proceeding in the absence of the compensators in the light of the material before them and no appeal lies against the decision of the full-time chairman not to set aside the tribunal's decision ? I had to consider similar questions in CIB/303/99, where I held there was a breach of natural justice if a person was given no notice of a hearing, that the forerunner of regulation 2(b) would be ultra vires if it permitted such a breach without there being an adequate remedy (see Regina v. Secretary of State for the Home Department, ex parte Saleem [2001] 1 WLR 443), that the forerunner of regulation 57 provided an adequate remedy and, if in any case that provision did not provide an adequate remedy, because a setting aside was refused, the claimant had a remedy in an appeal to a Commissioner. It is well-established that a breach of the rules of natural justice may be remedied on an appeal on a point of law "for it has generally become a safe working rule that the substantive grounds for intervention [on an appeal on a point of law] are identical [to those on judicial review] (E v. Secretary of State for the Home Department [2004] EWCA Civ 49 at [42] and that there may be a breach of the rules of natural justice notwithstanding that the tribunal was not at fault (see Regina v. Leyland JJ, ex parte Hawthorne [1979] Q.B. 283 and Regina v. Criminal Injuries Compensation Board, ex parte A [1999] 2 AC 330).
- It is true that there is generally no breach of the rules of natural justice where the cause of the alleged breach is the fault of a party's solicitors Regina v. Secretary of State for the Home Department, ex parte Al-Mehdawi [1990] 1 AC 876, but in that case the whole of the blame for the failure to comply with a time limit lay with solicitors who had incorrectly addressed a letter to their client. In my judgment, the question is whether the party or their solicitors can "fairly be held responsible for the error", a phrase used in a slightly different context in E v. Secretary of State for the Home Department [2004] EWCA Civ 49 at [63]. In the present case, I am satisfied that the compensators' solicitors cannot fairly be held responsible for the failure of the notices to reach a person who would have acted upon them. I agree with the Secretary of State that the notices issued in the present case were inadequate. Accordingly, I allow the compensators' appeal.
- I have not been invited to consider the substantive appeal against the certificate of recoverable benefits. I have, however, had a brief look at the issues, mainly in order to satisfy myself that neither the compensators' appeal against the certificate of recoverable benefits nor the possible response to it was not so devoid of merit that the appeal should not be remitted to another tribunal. The appeal appears arguable, the contention being that the claimant was not as disabled as she said she was when claiming benefits and that such disablement as there may have been was attributable, at least in part, to a different accident from the one in respect of which the certificate was issued. There are, however, two comments I wish to make.
- Firstly, the Secretary of State's submission is not very satisfactory. It summarises the evidence submitted by the compensators and then dismisses it in what appears to be a standard sentence –
"Whilst there is no doubt that Mr Robinson, Mr Pooley and Dr John are all expert in their own fields, entitlement to benefits are [sic] decided by bodies of Independent Statutory Authorities".
It then summarises the adjudication history and says, in what I think is another standard paragraph –
"The Secretary of State relies on the decision of Commissioner Goodman's decision [sic] numbered CCR/8023/1995 in which he considered whether the recoupment of Reduced Earnings Allowance (REA) should be limited to reflect the common law claim for damages. In that case the Commissioner determined that, as this benefit is only payable because there was an underlying assessment for the purposes of Disablement Benefit, which was made following the accident, the allowance was paid in consequence of the accident. It follows that Disablement Benefit, which was paid as a result of the accident, must also be recoverable."
The submission is defective on three counts.
- I have some difficulty in seeing how the Secretary of State can reasonably describe those making decisions at first instance on entitlement to benefit as "Independent Statutory Authorities". That may have been an appropriate term before the Social Security Act 1998 came into force but now the functions of adjudication officers (and of adjudicating medical authorities) have been transferred to the Secretary of State himself and decision-makers act in his name. I accept that some of the decisions in the present case were made before that Act came into force but not all of them were.
- More serious is the reliance of CCR/8023/95. In Eagle Star Insurance v. Department for Social Development (reported as R 1/01(CRS)), the Court of Appeal in Northern Ireland held CCR/8023/95 to have been wrongly decided. In Great Britain, the Tribunal of Commissioners in R(CR) 1/02 did not suggest that CCR/8023/95 was wrongly decided but I would have thought it fairly plain from the reasoning of the Tribunal that CCR/8023/95 has little bearing on a case like the present. In CCR/8023/95, the appeal was brought by a claimant under the scheme for recovery of benefits that existed before the Social Security (Recovery of Benefits) Act 1997 came into force. Plainly, as Mr Commissioner Goodman held, benefit had been paid on the understanding that the relevant disablement had been caused by the relevant accident. The claimant, not surprisingly, did not suggest that he should not have been paid the benefit in respect of that accident. It therefore followed that the claimant failed to show that the benefit was not paid in respect of the accident and was not recoverable. However, it is wholly different where a compensator appeals precisely on the ground that benefit was not payable in respect of the relevant accident. The compensator's argument may well imply that the benefit should not have been paid at all. It was made absolutely plain in R(CR) 1/02 that such an argument may properly be advanced.
- This brings me to my third criticism of the submission. In the light of R(CR) 1/02, it is not appropriate to dismiss evidence produced by a compensator merely on the ground that entitlement for benefit is determined by the Secretary of State. It is permissible to say that experts relied upon by a compensator did not consider issues relevant to entitlement to benefit and that the Secretary of State's decision-makers did, but even that does not necessarily answer the compensator's appeal. Assuming that the Secretary of State takes the view that the decision-maker's decision was correct on the evidence available at the time, one issue that must be addressed in a submission to a tribunal is whether the evidence that has been produced by the compensator and which was not considered by the decision-maker suggests that the decision-maker's decision should now be regarded as wrong. If, in the light of the new evidence, the Secretary of State does consider that the decision of the decision-maker was wrong, or that the cause of incapacity or disablement should be attributed to a different accident, the Secretary of State should review the certificate of recoverable benefits. If he does not consider that the decision-maker was wrong and remains of the view that the benefits were payable in respect of the relevant accident, he should explain why he takes that view despite the new evidence. The submission made to the tribunal in the present case completely fails to address that issue and, in my view, a supplementary submission is required. It should explain why either the evidence advanced by the compensators has not been accepted by the Secretary of State, despite the authors being "expert in their … fields", or why the evidence, although accepted, has not led the Secretary of State to conclude that the incapacity or disablement that led to benefit being paid was not attributable to the relevant accident. I do not mean to imply that the Secretary of State may not have a perfectly good case – I have not considered the evidence in any detail – but my view is that, if he does have a good case, it has not been properly laid before the tribunal.
- My second major comment on the substantive appeal concerns the position of the claimant, whom I have not mentioned so far and who has expressed her dissatisfaction with the compensation she received from the compensators and her unwillingness to be involved in these proceedings. She is statutorily a party to the proceedings only if her compensation was reduced under section 8(2) of the 1997 Act so that she would have had a right of appeal (see the definition of "party to the proceedings" in regulation 1(3) of the Social Security and Child Support (Decisions and Appeals) Regulations 1999). It is difficult to see how she can have a right to appeal unless she accepted the payment on the understanding that a deduction had been made. In the present case, it is said by the compensators' solicitors that her solicitor "decided to accept our offer of £7,500 damages on the understanding that it was net of recoverable benefits" but there is no evidence that the compensator ever carried out a proper calculation under section 8, rather than simply offering a global figure, and there is no evidence as to the basis on which the offer was accepted. The phrase "net of recoverable benefits" appears to mean different things to different people and it certainly gives no indication of the amount of any deduction under section 8(2). As I have pointed out elsewhere, a compensator is entitled to deduct only benefits that they accept were paid in respect of the relevant accident and, if it is held by a tribunal that those benefits were not paid in respect of the relevant accident, the compensator must make a refund to the claimant out of the money recovered from the Secretary of State (see regulation 11(4) and (5) of the Social Security (Recovery of Benefits) Regulations 1997, R(CR) 2/03 and CCR/427/03 (to be reported as R(CR) 2/04)). It seems to me that, before a claimant is treated as a party to an appeal, information should be obtained showing the amount of any deduction under section 8(2) so that the respective financial interests of the parties in the appeal can be seen. That information should be provided by the compensators before this case is reheard. The compensators' submission that none of the benefits listed in the certificate of recoverable benefits was paid in respect of the relevant accident appears, at first sight, to be inconsistent with the suggestion that they made a deduction under section 8(2).
- I would also point out that the inadequacy of the Secretary of State's submission means that the claimant has no real idea whether he intends to support decisions that gave her entitlement to benefits or whether he is likely to turn round after the tribunal hearing and supersede decisions made in her favour. She would, of course, have a separate right of appeal against any supersession (which is why I do not find it easy to see why a claimant should be made a party to a compensator's appeal) but it may be thought that a claimant who is made a party to a compensator's appeal would be assisted in his or her decision whether to play a part in the proceedings by knowing exactly what the positions of both the other parties are.
- As things are, I quite understand the claimant's incomprehension as to why she is involved in these proceedings at all. My directions should result either in her being told that she is no longer involved or else in her being told why she is involved.
(Signed) MARK ROWLAND
Commissioner
28 May 2004
