-A A +A
Select color visibility that suits you Basic theme Dark theme Darker theme Text only

B v the United Kingdom [2012]

Summary

This European Court of Human Rights decision upholds the UK Court of Appeal decision allowing the Secretary of State to recover overpaid benefit where a claimant failed to disclose a material fact whether or not that disclosure was reasonably to be expected.

The case concerned a mother with a learning disability who did not inform the Department for Work & Pensions (DWP) until December 2001 that her children had been taken into care in October 2000 causing an overpayment of £4,626.74.

The appeal tribunal

At her appeal the tribunal found that the claimant..

“did not understand that the placing of her children in care was a material fact that she needed to disclose to the [Department]. Her mental problems prevented her from realising the significance of this event.”

It accepted that the claimant did not have the mental capacity to “appreciate the significance or materiality of the change in her circumstances, namely her children being taken into care and leaving her house”. Furthermore although the instructions in her order book, telling her to notify the DWP of any change of circumstances, were clear and unambiguous she would not have understood their meaning.

Past case law

The tribunal followed commissioner’s decision R(SB)21/82 which allows that a “failure to disclose” could occur only in circumstances in which, on moral or legal grounds, disclosure by the person was reasonably to be expected.

R(A)1/95, following Joel v. Law Union and Crown and Insurance Company 1908 states that the duty to disclose can only exist when someone is in possession of a material fact – “you cannot disclose what you do not know”. The mental state of a claimant is only relevant to whether he or she is aware of a material fact.

“mental capacity of a claimant must be considered by a tribunal if it is relevant to the question whether or not the claimant knew the material fact; however, once knowledge has been established, the claimant’s mental capacity ceases to be relevant."

The tribunal of commissioners

The tribunal of commissioners, in CIS/4348/2003 rejected the appeal tribunal's decision, particularly in relation to the “reasonably to be expected” argument outlined in R(SB)21/82.

They held, as summarised in paragraph 46, that:

  • No duty to disclose arises from section 71 of the Social Security Administration Act 1992 itself.
  • Two distinct duties to disclose arose from the old regulation 32(1) of the Claims and Payments Regulations 1987 (now arise from regulation 32(1), (1A) and (1B)).
  • There is no duty to disclose that which one does not know. However if a claimant was aware of a matter which he or she is required to disclose, there was a breach of that duty even if, because of mental incapacity, the claimant (a) was unaware of the materiality or relevance of the matter to his entitlement to benefit, and (b) did not understand an unambiguous request for information.
  • Where there was a failure to respond to a request for information in breach of regulation 32(1) or the amended regulations, benefit could be recovered under section 71 if the failure to disclose led to the payment of a benefit that would otherwise not have been paid.

Paragraph 61 of the decision follows R(A)1/95 (in part) in the consideration of a claimant’s mental capacity but only insofar that “mental capacity is relevant to whether the claimant knew of the matter not disclosed, capacity is not relevant to the issue of whether there was a failure to disclose.”

The court of appeal

The court of appeal (reported as R(IS)9/06) upheld the arguments in CIS/4348/2003. Attempts to use Article 1 and Article 14 of the European convention were rejected. It was held that Article 1 (the right to protection of property) did not apply because the property in question was an overpayment that did not belong to the claimant in the first place. Because Article 1 fell, Article 14 was not considered.

As a result of this decision, providing the DWP clearly inform a claimant of the requirement to report information that might affect his or her benefit the claimant will have failed to disclose if he or she does not do this. The only exception to this would appear to be in cases where someone is unable to act for themselves, in which case the duty would fall onto the agent or appointee.

The court was, however, mindful of the hardship that this decision might cause.

“The conclusion I have reached means that his [the Secretary of State’s] officials will have in a variety of cases to decide whether it is right to take advantage of his entitlement to recover overpaid sums which in all probability will have been spent, in cases like the present, by people who did not realise that they were being overpaid.”

It was stated on behalf of the DWP that there is a written policy used to decide whether it is fair to recover overpayments in certain cases. Paragraph 43 of the decision recommends that details of this policy be made available.

“It is axiomatic in modern government that a lawful policy is necessary if an executive discretion of the significance of the one now under consideration is to be exercised, as public law requires it to be exercised, consistently from case to case but adaptably to the facts of individual cases. If – as seems to be the situation here – such a policy has been formulated and is regularly used by officials, it is the antithesis of good government to keep it in a departmental drawer. Among its first recipients (indeed, among the prior consultees, I would have thought) should be bodies such as the Child Poverty Action Group and the Citizens Advice Bureaux. Their clients are fully as entitled as departmental officials to know the terms of the policy on recovery of overpayments, so that they can either claim to be within it or put forward reasons for disapplying it, and so that the conformity of the policy and its application with principles of public law can be appraised, although two such policies were evidently described or shown to Newman J in R (Larusai) v Secretary of State for Work and Pensions [2003] EWHC 371 Admin: see §15 and 19.”

The guidance in question appears to be the Overpayment Recovery Guide which available from the link below.

Appeal to the House of Lords

Appeal to the House of Lords has been refused so the claimant petitioned the European Court of Human Rights.

European Court of Human Rights decision

The European Court of Human Rights held that although the claimant did not have an assertable right to the overpaid benefit (which was therefore not a possession for the purposes of Article 1 of Protocol No. 1) she did have an assertable right to the receipt of income support at a reduced rate. This reduction of the award to which the claimant was entitled, albeit to recover overpaid benefits, could be said to have interfered with a “possession” for the purposes of Article 1 of Protocol No. 1 of the Convention. As a result her case fell within the scope of Article 1 of Protocol No. 1, which also rendered Article 14 applicable.

However the Court then went on to uphold the reasoning of the Court of Appeal in relation to the reasonable requirement to report a change of circumstances. The Court also considered this approach justified as consistent with the smooth operation of the decision making process. A Government is entitled to correct ‘mistakes’ within the benefits system provided the claimant concerned is not required to bear an excessive burden as a result of a measure divesting him or her of a benefit.

"57. In the present case the applicant has claimed that the difference in treatment between persons who could not reasonably be expected to report a material fact because they were not aware of the fact and those who could not reasonably be expected to report a fact because they were not aware of its materiality was discriminatory. However, the Court agrees with the Court of Appeal that these two groups could not be said to be in analogous, or relevantly similar, situations. On the contrary, although neither could be said to be “to blame” for the failure to report, the Court considers the situation of persons who are not aware of a fact to be qualitatively of a different nature to that of persons who are aware of a fact but who are not aware of its materiality. As the Court of Appeal found, the proposition that you cannot report something that you do not know is a simple proposition of logic, whereas the proposition that you cannot report something you do not appreciate you have to report depends on difficult questions of cognitive capacity and moral sensitivity which vary from person to person.

58. The Court considers the applicant’s alternative formulation, namely that, as someone who did not have the capacity to understand the obligation to report, she should have been treated differently from someone who did, to be somewhat more persuasive. It appears to the Court that the situation of these two groups is sufficiently different to require the respondent State to objectively and reasonably justify its failure to treat them differently.

59. That being said, the Court accepts that requiring decision-makers to assess levels of understanding or mental capacity before deciding whether or not overpaid benefits were recoverable would hinder their recovery and thereby reduce the resources available within the social security fund. It therefore considers that the decision not to treat the applicant differently from someone who had the capacity to understand the requirement to report pursued a legitimate aim, namely that of ensuring the smooth operation of the welfare system and the facilitation of the recovery of overpaid benefits.

60.  With regard to the question of proportionality, the Court recalls that in the context of Article 1 of Protocol No. 1 it has held that public authorities should not be prevented from correcting mistakes in the award of benefits, even those mistakes resulting from their own negligence. Holding otherwise would be contrary to the doctrine of unjust enrichment, would be unfair to other individuals contributing to the social security fund, and would amount to sanctioning an inappropriate allocation of scarce public resources. However, the Court has observed that the above general principle cannot prevail in a situation where the individual concerned is required to bear an excessive burden as a result of a measure divesting him or her of a benefit (Moskal v. Poland, cited above, § 73).

61.  In the present case the Secretary of State took a number of steps to ensure that the applicant was not required to bear an excessive burden. In particular, the Court observes that she was not required to pay interest on the overpaid sums, there was a statutory limit on the amount that could be deducted each month from her award of income support, and the amount to be repaid was in fact reduced to reflect the fact that during the material time she was entitled to, but had not been in receipt of, a disability allowance. Indeed, the Court observes that it would have been open to the applicant to request that the Secretary of State waive his right to recover the overpaid benefit if there was evidence that recovery would be detrimental to her health or welfare. As she did not make any such request, the Court cannot accept that the recovery would have had such a detrimental impact."