Tribunals may be quite suceptible to a Reg 27(b) argument in cases of people who are recovering from a more-or-less severe mental illness and do not by the date of a PCA medical score 10 or more points, but are still vulnerable to a setback if faced with the stress of having to look for work.
There is a substantial difference between someone being afraid of work - they may never have worked or their fears may be based on something groundless, such as the belief that they would have to go back to 60 hours a week in the job that clobbered them in the first place - and the risks from being found fit for work, which in practice means compulsory work-seeking.
Where you have medical evidence of an actual setback since the decision the argument is all the stronger. I've always thought that this particular fact pattern is the most plausible scenario for the use of Reg 27, and tribunals on which I have sat have on occasion used this as a ground for allowing an appeal.
Brigid
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