THE SOCIAL SECURITY COMMISSIONERS
Commissioner's Case No: CA/1014/1999
SOCIAL SECURITY CONTRIBUTIONS AND BENEFITS ACT 1992
SOCIAL SECURITY ADMINISTRATION ACT 1992
SOCIAL SECURITY ACT 1998
APPEAL FROM A DECISION OF AN APPEAL TRIBUNAL ON A QUESTION OF LAW
DECISION OF THE SOCIAL SECURITY COMMISSIONER
MR COMMISSIONER JACOBS
Decision:
- My decision is as follows. It is given under section 14(8)(b) of the Social Security Act 1998.
- .1 The decision of the Keighley Social Security Appeal Tribunal held on 2nd December 1998 is erroneous in point of law: see paragraph 14.
- .2 Accordingly, I set it aside and, as it is not expedient for me to give a decision on the claimant's appeal to the tribunal, I refer the case to a differently constituted tribunal for determination.
- .3 I direct the tribunal that rehears this case to conduct a complete rehearing in accordance with my analysis in paragraphs 16 to 48.
The appeal to the Commissioner
- This is an appeal to a Commissioner against the decision of the Social Security Appeal Tribunal brought by the claimant with the leave of a Commissioner. The adjudication officer supported the appeal. When the Social Security Act 1998 came into force in respect of Attendance Allowance, the Secretary of State replaced the adjudication officer as a party to the proceedings on this appeal.
Oral hearing
- I directed an oral hearing of this appeal. It was held in London on 8th May 2000. The claimant was represented by Mr D Reynolds, a Welfare Rights Officer. The Secretary of State was represented by Mr L Scoon of the Office of the Solicitor to the Departments of Health and Social Security. At the end of the hearing, Mr Scoon asked for a chance to make further submissions on some issues that had arisen. He did this in response to a Direction by me setting out the three issues to be covered. Mr Reynolds disclaimed any wish to comment further on the case. Mr Scoon's written submissions were made on 6th June 2000. I am grateful to Mr Reynolds and Mr Scoon for their arguments in this case.
The history of the case
- As the appeal documents have been produced in random order, I refer to the relevant pages for the convenience of the tribunal at the rehearing.
- This appeal concerns a recoverable overpayment decision. The overpayment arose like this. The claimant was in receipt of Attendance Allowance from 1992 (page 14). He suffered a severe stroke, which led to his admission to hospital and then to his transfer to a nursing home.
- The stroke caused the claimant to have problems with communication from which he has never recovered. It may also have affected his ability to understand, although this is uncertain in view of his communication difficulties. In May 1993, an assessment of the claimant's needs was made by the Directorate of Social Services (pages 90 to 97). It reported that he was unable to speak or communicate. It was recorded that his wife thought that he could comprehend, but that he could not respond. In November 1998, the deputy matron of the nursing home was asked about the claimant's ability to communicate. She wrote that he was unable to converse or to pass on information and that, although he could say "yes" and "no", he often got them the wrong way round (page 98).
- One of the directors of the nursing home was made the claimant's appointee in July 1993 (page 84). He signed a claim form for Income Support on behalf of the claimant (pages 70 to 73). The form gave the claimant's address as the nursing home and disclosed that he was in receipt of an Attendance Allowance. This appointee was replaced on 24th March 1999 (page 134).
- Payment of the Attendance Allowance should have ceased from and including 24th May 1993, as the claimant's fees were met from public funds. However, it remained in payment until 13th April 1997. The appointee says that he became aware of the continuing payment when letters addressed to the claimant were passed to the appointee. He says that he reported this to the Department of Social Security in 1995 and 1997 (pages 44 and 88).
- The claimant's daughter was made his attorney under an Enduring Power of Attorney executed on 30th November 1993 (pages 126 to 129). The Power records that it was
"SIGNED in the name of [the claimant] at his request and in his presence he being incapable through illness of writing his name ... after the nature of the above deed had been fully explained to him and he appeared perfectly to understand the same."
- The claimant's Attendance Allowance was paid into a building society account. His attorney controlled that account. She says that she believed the money was a pension. (Mr Reynolds told me at the oral hearing that he believed that a building society account shows a credit, but not the origin of the payment.)
- When the overpayment was discovered, an adjudication officer decided that Attendance Allowance had been overpaid. The original decision (page 43) was replaced (page 50). The officer who made that decision fixed the period of the overpayment as 24th May 1993 to 13th April 1997. The officer also decided that the overpayment was recoverable from the claimant on the basis of his failure to disclose.
- Two appeals against this decision were made on the claimant's behalf. One was made by his daughter (page 82), the other by his appointee (page 88). The tribunal service treated the former as the appeal, as it was made before the latter.
- The tribunal varied the adjudication officer's decision. It decided that the overpayment was only recoverable for the inclusive period from 28th November 1993 to 13th April 1997. The basis of the decision was that the claimant's daughter should have disclosed where the claimant was living from the date when she became his attorney. The tribunal's reasons were summarised in the full statement of its decision in this passage:
"We are satisfied that [the claimant] acting through his daughter was under an obligation to notify the Attendance Allowance Department that he was in a hospital or certain other accommodation. We are not satisfied that before 28 November 1993 his mental state would have permitted him to make the necessary disclosure but the Power of Attorney was executed on that date and certainly his daughter was able to and should have made that disclosure on his behalf."
Problems with the decision and reasoning
- There are a number of problems with the tribunal's decision and reasoning.
- .1 The tribunal did not specify from whom the overpayment was recoverable. As it based recoverability on the failure by the attorney, it should have made clear whether recovery could be made from the claimant or from the attorney. That was an error of law.
- .2 The tribunal's decision assumes that the claimant's daughter became his attorney on 28th November 1993. That is wrong. The Power of Attorney shows that it was executed on 30th November 1993. The tribunal may have been misled by the letter of appeal which said that the claimant's daughter was made his attorney following her mother's death on 28th November.
- .3 The tribunal referred to the claimant's mental state. There was very little evidence about the claimant's mental state. He obviously had difficulties in communicating, but his mental state was unclear. At the least, the tribunal should have explained how it made its finding about his mental state. Perhaps, there was no evidence to support the finding. That was an error of law.
- .4 The tribunal did not consider the possibility of a failure to disclose by the appointee. That was an error of law.
- .5 Finally, the tribunal did not investigate, and made no findings on, the earlier disclosure said to be made by the appointee. That was an error of law.
Directions of the rehearing
- I direct the tribunal as follows.
- The Social Security Act 1998 has abolished Social Security Appeal Tribunals, transferring their existing cases to the new and nameless Appeal Tribunal. The claimant's appeal will be reheard by the new Appeal Tribunal. It is differently constituted from a Social Security Appeal Tribunal. In this case, the tribunal is likely to consist of a legally qualified panel member sitting alone: see regulation 36(1) of the Social Security and Child Support (Decisions and Appeals) Regulations 1999.
The parties to the proceedings
- The tribunal has no jurisdiction to decide that an overpayment is recoverable from someone who is not a party to the proceedings. The only parties to the proceedings at the rehearing will be the Secretary of State and the claimant. So, the tribunal must decide whether an overpayment arose, and if so, whether it is recoverable from the claimant. It must not decide that the overpayment was recoverable from the appointee or the attorney as well as, or instead of, from the claimant. If it does, it would be in breach of natural justice and, from 2nd October 2000, in violation of the convention right to a fair hearing in article 6(1) of the European Convention on Human Rights.
- I raised this issue at the oral hearing. It is one of the points on which Mr Scoon made an additional submission. I agree with Mr Scoon's conclusion. My reasoning is this.
- The right to appeal to an Appeal Tribunal is governed by section 12 of the Social Security Act 1998. This right is given to, amongst others, three classes. They are:
19.1 The claimant. See section 12(2)(b).
- .2 Any person from whom the Secretary of State has determined that an amount is recoverable under or by virtue of section 71 or 74 of the Social Security Administration Act 1992. See section 12(4). In this case, that person was the claimant.
- .3 Such other person as may be prescribed. See section 12(2)(b). These other persons are prescribed "for the purposes of section 12(2)(b)" by regulation 25 of the Social Security and Child Support (Decisions and Appeals) Regulations 1999. An appointee is one of those persons: regulation 25(a).
- The parties to the proceedings before an Appeal Tribunal are specified by regulation 1(3) of the Social Security and Child Support (Decisions and Appeals) Regulations 1999. A person who has the right to appeal to an Appeal Tribunal is not necessarily a party to the proceedings before the tribunal on the appeal. This is because the parties to the proceedings are defined by reference to sections 13 and 14 of the Social Security Act 1998 rather than to section 12. Section 14(3)(b) includes "such other person as may be prescribed". But that must mean prescribed for the purposes of section 14. No one has been prescribed. Regulation 25 does not apply, because it prescribes only for the purposes of section 12(2)(b).
- This is not as strange as it appears at first sight. The persons specified in regulation 25 are given the right to appeal because the claimant is not personally able to act. In making an appeal, they are acting not in their personal capacity but in the interests of the claimant. (The same point applies in the case of pension schemes, which are also covered by regulation 25). The appeal is nonetheless the claimant's appeal. It is appropriate that the claimant should be the party to the proceedings rather than the person who made the appeal, although that person may (and probably will) represent the claimant. So, although the appointee made an appeal to the tribunal, he is not a party to the proceedings.
- Under regulation 1(2) of the former Social Security (Adjudication) Regulations 1995, the chairman had power to add any person interested in the proceedings as a party. There is no equivalent power under the new legislation.
- So, an Appeal Tribunal is only concerned with the recoverability of an overpayment from the person specified in the Secretary of State's decision. That person may or may not include the claimant. The tribunal may give its opinion that another person is solely or additionally liable, but it cannot decide that that person is liable. That can only be done by the Secretary of State.
The claimant's personal liability
- The claimant was under a personal duty to disclose. The burden of proving a breach of that duty was on the adjudication officer and is now on the Secretary of State. In order to show a breach, it is necessary to show that the claimant knew of the fact that had to be disclosed. There are difficulties in communicating with the claimant and, consequently, in learning how much he knows about where he is and what has happened to him. Those difficulties make it effectively impossible for that burden to be discharged. I am sure that the tribunal will have no difficulty in concluding that the claimant was not personally in breach of his duty to disclose.
- So, the question for the tribunal will be whether there was a failure by someone else which is attributable to the claimant.
The claimant's liability through the appointee
- The appointment was made under regulation 33(1) of the Social Security (Claims and Payments) Regulations 1987. It was made because the claimant was unable to act. The appointee was appointed
"to exercise, on behalf of the person who is unable to act, any right to which that person may be entitled and to receive and deal on his behalf with any sums payable to him."
In the context of a person who is unable to act, those are duties rather than mere powers.
- An appointee is under a duty to disclose. Apart from a moral duty that may arise, there are two sources for that duty.
- A duty arises from the terms of regulation 32(1) of the Social Security (Claims and Payments) Regulations 1987. This provides that
"every beneficiary and every person by whom or on whose behalf sums payable by way of benefit are receivable shall furnish in such manner and at such times as the Secretary of State may determine such certificates or other documents and such information or facts affecting the right to benefit or to its receipt as the Secretary of State may require (either as a condition on which any sum or sums shall be receivable or otherwise), and in particular shall notify the Secretary of State of any change of circumstances which he might reasonably be expected to know might affect the right to benefit, or to its receipt, as soon as reasonably practicable after its occurrence".
- The appointee was a "person by whom ... sums payable by way of benefit are receivable" by virtue of regulation 33(1). In this case, the Attendance Allowance was paid into an account managed by his attorney. However, it was the appointee's duty to receive and deal with it. So, the duty applies to him.
- Another duty arises from the terms of the undertaking signed by the appointee in the application for appointment:
"I apply for appointment by the Secretary of State for Social Security to exercise on behalf of the person named above any right which he/she may have under the above Acts. ... I undertake to the best of my ability to give the Department's officer all the information required by him about the circumstances of that person and if there is any change in those circumstances to let him know at once."
Those terms are very similar to the duties in regulation 32(1).
- Of course, the appointee could not disclose something of which he was not aware. He was certainly aware that Attendance Allowance was in payment in April 1995, because he says he opened a letter showing this. He also signed the claim for Income Support in July 1993, which showed that the claimant was receiving Attendance Allowance. He may not have completed the form, but he signed it on the day that he applied to be made an appointee. The tribunal may find as a fact that he was aware of its contents. It would be surprising if he signed it without reading it.
The claimant's liability through the attorney
- Fortunately, I do not have to decide whether the grant of the Power of Attorney was valid. The understanding necessary for this was set out by Mr Justice Hoffmann in In re K [1988] 1 All England Law Reports 358. There must be grave doubts whether that test was satisfied in view of the difficulties of communicating with the claimant. However, it is not necessary to deal with this issue, because the inaction by the attorney in this case cannot be attributed to the claimant.
- The Power of Attorney conferred on the attorney general authority to act on behalf of the claimant in relation to his property and affairs. In simple terms, that allowed the attorney to act on the claimant's behalf, but it did not impose on her a duty to act. An attorney's duty to disclose and the consequences of a breach of that duty are governed by the law of agency. There is no authority that an attorney's failure to disclose at all in circumstances like this case is a breach of duty. So, that failure cannot be attributable to the claimant. The position would be different if she had made a partial disclosure to the Department of Social Security. In that case, she would be under a duty to make complete disclosure and her failure to do this would be attributable to the claimant. That proposition is supported by authorities on the law of agency. See Blackburn, Low & Co v. Haslam (1888), 8 Queen's Bench Division 144 and Morrision v. The Universal Marine Insurance Company (1873) 8 Exchequer Division 197. On the information before me, that duty did not arise.
- It may be that the attorney was personally aware that her father was receiving Attendance Allowance. It may be that she was under a moral duty to report this. However, a breach of that duty would be a personal breach of a duty owed by her. Her failure is not attributable to the claimant.
- In his written submissions after the oral hearing, Mr Scoon argued that the attorney was covered by regulation 32(1), because the claimant's benefit was receivable by her. I have decided that benefit was receivable by an appointee by virtue of regulation 33(1): see paragraph 29. So, if there was an appointee, the benefit was not receivable by the attorney. This raises another issue argued by Mr Scoon at the hearing and in his later submissions.
The relationship between the appointment and the Power of Attorney
- Mr Scoon argued that there could not, as a matter of practice or of law, be both an appointee and an attorney at the same time. His arguments were set out most fully in his later written submissions. In summary, they are:
- .1 A grant of an Enduring Power of Attorney conferring general authority supersedes an appointment.
- .2 If both existed at the same time, problems could arise if the appointee and attorney acted inconsistently in dealing with the claimant's benefit.
- .3 If the Power of Attorney was restricted to exclude matters covered by the appointment, this would frustrate the claimant's intentions in granting the Power.
- .4 If an appointment is made after the grant of a Power and the Secretary of State is aware of the existence of the Power, the appointment displaces the Power in the matters that it covers.
Mr Scoon conceded that he could cite no authorities for these proposition.
- I accept that there can be an overlap between the authority of an appointee and of an attorney under an Enduring Power of Attorney. The appointee's authority is limited by regulation 33(1). The attorney's authority may be limited, but this case is typical in that the attorney was given general power to act on the claimant's behalf in relation to all his property and affairs. That is wide enough to cover the matters over which the appointee has authority under regulation 33(1).
- As a matter of general law, it is possible for a principal to appoint agents with overlapping authority. So, there is nothing in law that makes an overlap of authority between an appointee and an attorney objectionable in principle.
- There is no legislative provision by which an appointment can be terminated either by the granting of a Power or by the exercise by the attorney of authority under that Power. Nor is there a legislative provision by which the authority of an attorney granted by a Power can be limited by the existence of an appointment. I know of no legal mechanism in the general law by which these effects could be achieved.
- The mere granting of an Enduring Power of Attorney cannot immediately and impliedly terminate an appointment. If this were the law, it would create problems if the Secretary of State was not aware of the grant of the Power. In that case, the Secretary of State would continue relying on the appointee but actions taken by the appointee would be without legal authority.
- Nor should notification to the Secretary of State of the grant of the Power displace the appointment. These Powers are often granted in anticipation of future need. So, granting a Power to an attorney does not mean that there will immediately be an overlap between the actions of the attorney and an appointee. It would be strange if the granting of an "anticipatory" Power had the effect of making it operate immediately in relation to the claimant's benefit.
- There are two other points. They are not decisive, but they support my analysis.
- .1 If Mr Scoon's argument is correct, regulation 25 of the Social Security and Child Support (Decisions and Appeals) Regulations 1999 is incomplete. It allows an appointee to make an appeal against a decision. If an attorney automatically, or as a matter of practice, replaced an appointee, I would expect an attorney to be included in regulation 25.
- .2 The duties on an attorney are lower than those on an appointee. If the attorney is not made an appointee, there is no legal duty on the attorney to disclose, although any disclosure that is made must be complete. If the claimant is unable to act and the attorney displaces the appointee, this may mean that there is no one under a duty to disclose. It would be surprising if the Secretary of State had left himself in so vulnerable a position.
- I accept that the existence of both an appointee and an attorney could create problems if they act in contradictory ways. If necessary, the Secretary of State would no doubt find a practical solution. The most obvious would be to give priority to the actions of the appointee. Another possibility would be to revoke the existing appointment and make the attorney also the appointee.
- So far as disclosure is concerned, no problem arises from the existence of both an appointee and an attorney. Disclosure by either of these, or for that matter by anyone else, would be effective.
- It may or may not be the Department's practice to revoke an appointment when it learns that a Power of Attorney has been executed. If it is, I can only say that that has not been my experience and it did not happen in this case.
When was disclosure made?
- The tribunal must decide when disclosure was first made.
- One possibility is that disclosure was made when the appointment was made in July 1993. When that appointment was made, all other departments were notified of it. See the letter from the Manager of the Benefits Agency at page 134. I do not know what departments were informed or the terms in which they were informed. This was discussed at the oral hearing, but no conclusion was reached. The tribunal must investigate (i) the procedures that exist, (ii) the terms in which notification is made and (iii) whether there is a record of the relevant office being notified of the appointment. The appointment is not significant for itself. It is relevant, because the terms of the notification might have included the claimant's address, which would have shown that he was in a nursing home.
- Another possibility is that disclosure was made at a later date by the appointee. The details are given in the appointee's letters at pages 44 and 88. The letter at page 88 is very precise about dates. It is possible that the appointee has records which will help the tribunal. The claimant's representative should try to obtain these for the rehearing.
Summary
- The Social Security Appeal Tribunal's decision is erroneous in law and must be set aside. Further investigation of the facts is needed. So, it is not appropriate for me to give the decision that it should have given on its findings of fact and it is not expedient for me to make further findings of facts. There must, therefore, be a complete rehearing of this case before a differently constituted Appeal Tribunal. The Appeal Tribunal will decide afresh all issues of fact and law on the basis of the evidence available at the rehearing in accordance with my directions. As my jurisdiction in this case has been limited to issues of law, my decision is no indication of the likely outcome of the rehearing, except in so far as I have directed the Appeal Tribunal on the law to apply.
Signed on original Edward Jacobs
Commissioner
14th June 2000
