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Extent of tribunals decision making powers
Saw a client yesterday at outreach and was wondering if anybody has any thoughts.
Client has an ESA appeal ongoing concerning capital she had in the past. Client was on ESA when she received capital taking her over the limit in 2012. Client was called in for compliance interviews at the end of 2014 and decision was made cancelling her entitlement from the date of her receiving the capital. In February she returned the capital to the person who had given it to her.
Client has appealed against this decision on the basis that the capital was a loan to set up a business, which she was unable to do because of her ill health.
Client has since reclaimed JSA and HB and these claims are in payment.
I don’t think client has a very good chance of succeeding with her appeal - there is very little evidence in her favour. However in the normal run of things I would advise her to give it a go anyway in the hope that the tribunal is sympathetic and is able to accept her account despite the lack of evidence.
What I am worried about in her case though is the risk that an unsympathetic judge could not only find that the capital did count but also that she intentionally deprived herself of it in order to remain entitled to benefits. Client had been ill for a long time and had taken no steps to set up the business but still held onto the capital. It was only when she started having problems with the DWP that she returned the money. Such a finding would be pretty disastrous for her.
Is the question of intentional deprivation within the remit of the Tribunal? I know that in the DWP submission no reference was made to intentional deprivation - they simply stopped her benefit. Unfortunately I did not check whether client disposed of the capital before or after the decision ending her claim. Thinking about it this seems important - if she had already disposed of the capital then DWP decision should have either only held her to not be entitled for the period where she had the capital (and reinstated her entitlement from the point she gave the money back) or the decision should have stated that she continued to not be entitled to ESA due to intentional deprivation. If that is the case but the DWP have failed to do this, can the Tribunal consider this issue?
If the decision was made before the client disposed of the capital then it would seem to me that the Tribunal cannot intervene on the deprivation issue as at the point of the decision the client still had the capital and her ESA stopped from this point. Although even in this situation is it possible for the Tribunal to put ‘obiter’ remarks in their decision to the effect that had it been in issue they would have held client to have intentionally deprived herself?
On the other hand though part of me wonders whether if client withdrew her appeal this could cause to DWP to reinvestigate her claim and possible make a fresh decision dealing with intentional deprivation?
Any advice would be greatly appreciated - the overpayments are very big and I don’t want to be hasty in advising client to withdraw the appeal due to being overly risk-averse. But the client is also very vulnerable and would be put in a far worse position than she currently is in if a finding was made that she had intentionally deprived herself of the capital.
I think I would argue that the decision under appeal was only that she was overpaid because she has allegedly failed to declare capital (plus any appeal on the separate matter of the exact amount that is recoverable) and that if the Tribunal wants to consider any matter not put forward by either of the parties in the case then they should warn the lady that they want to do so and adjourn to give time for her to consider her position and/or make separate submissions to address the new matter.
The scope of the tribunal as regards the decision before it is quite broad. The s10 decision is an entitlement decision based on actual capital is it not? I don’t think that the tribunal has the jurisdiction to also turn it into a deprivation of capital case of its own volition and decide the matter there and then. This is different from perfecting the supersession ground. As to the issues then the following might be relevant to your client.
A specific purpose loan does not become part of the claimant’s resources until the purpose of the loan is carried out.
Quistclose Investments LtD v Barclays Bank (1970) House of Lords.
..Thinking about it this seems important - if she had already disposed of the capital then DWP decision should have either only held her to not be entitled for the period where she had the capital (and reinstated her entitlement from the point she gave the money back) or the decision should have stated that she continued to not be entitled to ESA due to intentional deprivation. If that is the case but the DWP have failed to do this, can the Tribunal consider this issue?
Agree with your analysis and yes I think the tribunal can. The tribunal has the power to make any decision that a DM could have legally made at the date of the decision under appeal. So if the DM didn’t realise that the capital had been disposed of by that date the tribunal standing in his/her shoes could put that right - see paras 24 & 25 of R(IB) 2/04. We’re assuming of course that the capital is first found by the tribunal to be beneficially owned by the client and, if so, not capable of being disregarded. In practical terms, if the tribunal found the client had not intentionally deprived herself of it then it seems it would have to make a closed period supersession, ie no entitlement from date capital was beneficially owned to the date she gave it back, and then a further decision awarding ESA from the day after.
..If the decision was made before the client disposed of the capital then it would seem to me that the Tribunal cannot intervene on the deprivation issue as at the point of the decision the client still had the capital and her ESA stopped from this point.
Agree. Incidentally, I think it’s a moot point whether evidence of the capital being handed back after the date of the decision under appeal could allow an inference to be drawn by the tribunal about its beneficial ownership from the outset. See the commentary to section 12(8)(b) SSA 98. Although, I think it would be a little absurd if it couldn’t.
..Although even in this situation is it possible for the Tribunal to put ‘obiter’ remarks in their decision to the effect that had it been in issue they would have held client to have intentionally deprived herself?
I think there’s nothing to stop the tribunal doing that. However, if the capital was disposed of in between the date of the decision under appeal and the date of the JSA claim, it’s not clear whether the JSA could be revised anyway in the, have to say unlikely, event that the JSA section receive the tribunal’s reasons that include the obiter comments re capital. The question would be whether the original JSA DM was aware of the capital but decided the client hadn’t deprived herself of it, or whether the DM wasn’t aware of the capital at all (ignorance of material fact) or, if aware of it, hadn’t gone on to consider the issue of deprivation (mistake of MF). You probably won’t know that for sure so I can see why you’re being cautious. Of course, if the first scenario above applied, the fact another JSA DM who received the tribunal’s obiter comments disagreed with the first JSA DM re deprivation would not be evidence of mistake/ignorance of MF. All it would show is that another DM would have made a different inference of fact, ie deprivation, from the one made by the original JSA DM. And an inference of fact is not a material fact for revision purposes.
I think there’s nothing to stop the tribunal doing that. However, if the capital was disposed of in between the date of the decision under appeal and the date of the JSA claim, it’s not clear whether the JSA could be revised anyway in the, have to say unlikely, event that the JSA section receive the tribunal’s reasons that include the obiter comments re capital. The question would be whether the original JSA DM was aware of the capital but decided the client hadn’t deprived herself of it, or whether the DM wasn’t aware of the capital at all (ignorance of material fact) or, if aware of it, hadn’t gone on to consider the issue of deprivation (mistake of MF). You probably won’t know that for sure so I can see why you’re being cautious. Of course, if the first scenario above applied, the fact another JSA DM who received the tribunal’s obiter comments disagreed with the first JSA DM re deprivation would not be evidence of mistake/ignorance of MF. All it would show is that another DM would have made a different inference of fact, ie deprivation, from the one made by the original JSA DM. And an inference of fact is not a material fact for revision purposes.
Thanks all for your thoughts so far, Tom I’ve quoted the above as for background client is in my layman’s opinion still not well enough to work and she may well have to claim ESA again. I’ve suggested she speak with her doctors. At the moment the Jobcentre are telling her that if she sets up as self employed running a vintage clothing stall in a local community centre they will give her a grant to help. My gut feeling is that this would be an accident waiting to happen but as above I’ve suggested she speak to the people who know her better and are better qualified to advise on her health.
So the worry would be that even if the JSA DM has not picked up on it an ESA DM may be more likely to see all of the tribunal stuff that has been going on with her previous claim.
My thinking at the moment is that withdrawing could actually be a riskier strategy. There is such a lot of money at stake and client (under a different advice agency) has been pursuing this for some time. The only explanation I could give would be that the stress of the appeal is causing her health to deteriorate and so she has decided to abandon it but given the amount of money at stake I still think that suspicions may be raised that there is something she does not want to come out at the tribunal and it might prompt somebody at the DWP to take another look at it and clock the deprivation issue.
Whilst the client is very vague and there is very little written evidence I do think that she would get sympathy from the tribunal - she has been through some extremely traumatic experiences in her past. I think that if I send in a really tight and focused sub most judges would be fairly reluctant to both turn down her appeal and then actively start digging up trouble for her.
Even if intentional deprivation did come up I think she has an argument to say that she was hanging onto the money in the hope that her health would improve and she could set up the business - when it then started to cause problems with her benefits this focused her thinking on the likelihood of this happening in the short term and concluding that she was unable to be do this and would need to continue on benefits client returned the money.
I’m going to try and speak to the person who lent her the money and assess whether he would also come across well at tribunal. I’m also going to speak to the previous adviser to see if she has any additional background or advice.
In the meantime if people have further thoughts it’d be really helpful to hear them :)
..Even if intentional deprivation did come up I think she has an argument to say that she was hanging onto the money in the hope that her health would improve and she could set up the business - when it then started to cause problems with her benefits this focused her thinking on the likelihood of this happening in the short term and concluding that she was unable to be do this and would need to continue on benefits client returned the money.
Sam,
My above post largely concerned the extent of the tribunal’s powers. On the substantive issue of whether she owned the capital I think nevip’s point above re Quistclose is obviously important. The alternatives to finding that the claimant held the capital merely as trustee until she set up her business are that the capital was a gift or an ordinary loan, ie without restriction on how the money should be spent. In the absence of evidence of the express wishes of the person providing the money, it’ll come down to proving on balance that it was a Quistclose type purpose trust.
Edit: I had thought that your above deprivation argument was logically flawed if you lost the argument about the capital being held on trust re the business start up, ie if the tribunal/DM found the money wasn’t given for the specific purpose of the business then they’d be unlikely to be persuaded that the reason for its return was also related to the business, ie the claimant’s realisation that it wouldn’t be set up after all. However, I suppose even if the tribunal found that the money had simply be ordinarily loaned without a specific purpose in mind and, therefore, was beneficially hers, she could still have genuinely intended to only ever use it for the purpose of starting a business. In which case, even though she might not be under an immediate obligation to re-pay the money, her handing it back could credibly be presented as not being related to increasing or securing entitlement to means-tested benefits. So yes, good argument.
[ Edited: 12 Sep 2015 at 11:43 am by Tom H ]