Thought this worthy of a new thread rather than tagging on to the ones below.

We are seeing a worring increase in so called common-law recovery of overpayments deemed "not recoverable under social security law". The first we had was about two months ago, but since then they are coming thick and fast. This week, we've had cases ranging from £200 to £50,000.

I know that CPAG were taking this up with the debt centre - there was an article in the WRB not so long ago. Does anyone know how far they got (presumably not that far).

I know what I would like to say to the debt centre, but so far, we've been able to deal with clients by empowering so we're not acting on behalf of anyone.

Obviously, the DWP, on the government's behalf, stand to gain a lot at the detriment of the 'little person' who finds themselves stamped on yet again - as if tax credit overpayments weren't bad enough!

What can we do about this? Whatever has gone on so far is obviously not sufficient; we need to get this stopped at the highest level. Work in individual cases is OK, but won't change the practice.

Has anyone any experience of DWP going to court? What is the court's view of the practice? CPAG suggests court action can't succeed.

Stewart Wright, CPAG's Legal Officer has contacted us to say -

'I have noticed that the use of common law recovery of overpayments is being discussed with increasing frequency on rightsnet, and today Tony Bowman has posted something about what CPAG is doing about it with reference to my article in WRB 196.

It may assist Tony and others to know that we have issued a letter before claim for judicial review to the DWP about the above. This has elicited an essentially negative response from the DWP and so we have instructed counsel to draft the relevant judicial review documents. We anticipate lodging the judicial review with the High Court in the next week or so This is a claim which will be brought in CPAG's own name given the wide public importance of the issue (e.g. the DWP have told us that they have issued 65,000+ common law recovery letters to claimants in the last year).

It is our case that where benefit is not recoverable under section 71 of the SSAA 1992 because the o/p arose on a validly made claim for benefit because of official error then there is no scope for the common law at all to pursue recovery. Accordingly we will be asking for the DWP DMC's to stop seeking recovery from people in this situation and to withdraw all relevant letters to this effect.

As part of the JR action it will be useful to gather evidence of the prevalence of the DMC practice of seeking recovery in official error cases, and I would ask any advisers who have such cases to email me about them.

CPAG would advise claimants/advisers where recovery is being sought on the above basis to refuse to pay the money on the basis that the demand is unlawful (of course the claimant can always choose if he or she so wishes to pay the money back voluntarily), and refer to out JR proceedings where necessary. If the DWP then sue for the money in the county court then the claim could be defended on the same basis (i.e. that the demand for repayment is unlawful - as long as it is an official error case), and the county court should be asked to stay/adjourn the proceedings until CPAG's JR has been concluded.

Best wishes.

Stewart'

SWright@cpag.org.uk

Thanks very much for this update Stewart.

It would be interesting to see CPAG's letter of claim. Would you be able to post it for us?

Have just re-read my post, I hope you didn't take it out of context; any negative undertones were directed towards the debt centre and DWP rather than CPAG.

65,000 is a frightening figure... They're obviously desperate for cash!

I will forward on case studies.

Tony

'frightening' being the operative word...i assume that these are not 65,000 court actions, but 65,000 letters dishonestly frightening people into making repayments which the Secretary of State has no legal entitlement to - i gather that if the claimant disputes, they don't follow through, but if the claimant does not dispute, they recover...

i've been very angry about this all day, but have been too busy to respond, being much occupied in trying to frighten the processing centre manager that if he doesn't do something about the unl-awful decision-making at his BPO blah blah, and hopefully i'll solve 4 cases by next week...i don't expect they'll let it get to JR...

this is the other side of the coin isn't it...between job cuts and CMS, the service to claimants has been wrecked, and people on poverty incomes have to pay the price of the Secretary of State's mistakes - he can't lose as long as bullying the weakest is acceptable...or kept quiet.

there are only 2 welfs here, and small pockets of case-workers throughout birmingham - much the same all over the country - we case worker's are swamped out - so total agreement with Tony Bowman's point about strategic action - and his 'what can we do about this?' question is a very good question to ask...

it is also good news to hear that CPAG are taking legal action...

but is it enough on it's own? particularly when the response from DWP has so far been negative...i always prefer a multi-pronged approach to an all eggs in one basket strategy, and when the law (eg section 71) can as easily be made redundant as jobs, by administrative fait accomplis...especially if you privatise the administrative jobs.

as i said on another thread, i'm not a debt adviser, but i've found my energies much taken up with the recovery policies of both the local authority and HMRC - both of whom are a lot bigger than me...

the break -through with HMRC on off-sets is good news for advisers, but while write-offs are negotiated with HMRC solicitors on individual cases by advisers in the know, and the HMRC recovery machine churns on regardless, it isn't yet good news for tax credit claimants... likewise, individual turn-arounds before court action, but no policy changes...

there are limits to what the law can achieve, and it's obvious to me that welfare 'reform' in all it's dis-guises is highly political, and a campaign issue...

it can be very difficult for swamped out case-workers with no campaign funding and other restrictions and goodness knows what other considerations to engage in a collective action, and some facilitation and organisation may be needed...but still people do what they can...sometimes a well-aimed press release can achieve much more than months of sweated case-work...which, let's face it, it the tip of an unmentionable elephant...

does anyone know what happened to Action for Benefits...? somebody told me it was still going, but obviously not in it's original form...this was a collaboration involving civil service unions, CPAG and local groups, in the 80's...passe i expect...

turning the poor into a cash crop for any lunatic fringe government is not my idea of welfare 'reform'...

sod it, i'm going home...

I'm not sure what they mean by "common-law" anyway. The normal (if you can call it that) way to get money back from someone who has been paid it under a mistake of law or fact is to seek restitution through the courts. Whether a court will order repayment normally depends of the equitable doctrine of "unconscionability". A person who has had an overpayment in circumstances where he knew or ought to have known that he was not entitled to it, but takes it anyway, in effect holds the property on a constructive trust and has to compensate the rightful owner for the breach. This includes where they have spent it.

An "innocent volunteer" can usually only be compelled to repay the money if they still have it< but this is a broad oversimplification. I used to teach this stuff a few ago and it was so complicated I ahve now forgotten it. But if someone ahs innocently received money and relying on the receipt spent it in a form which isn't replaced by an object or asset with value (eg on daily living expenses), then it is generally considered not fair to compel them to repay it.

This is largely down to equitable principles, which as all lawyers know are something quite different form anything that would be called "common law": restitution itself is an equitable remedy, the common-law remedy being damages. So common-law has nothing whatever to do with it.

Right, got that off my chest. As a former equity lawyer, I hate seeing the common law usurping my patch.

"65,000 is a frightening figure... They're obviously desperate for cash!"

Besides which, it is also a very good indicator of the incompetence of the DWP. 65,000 letters sent out, for overpayments caused by something other than a claimants misrepresentation or failure to disclose. And these are only the ones they've sent...

What follows is the text of a strongly-worded letter I sent to the debt centre complaining about this practice. We are now using it as a standard template. Please feel free to use, modify or whatever:


Debt Centre Manager
Debt Management (BF)
PO Box 171
MITCHELDEAN
Gloucestershire
GL17 0XG


(insert date)


Dear Sir
COMPLAINT
Re:
Ref:

We are acting on behalf of (insert client); his/her authority is attached.

We are writing to complain, in the strongest possible terms, about the attempted recovery of the overpayment of £(insert amount), notified to our client on (insert date) – and about your wider policy of recovery of these debts.

As your letter acknowledges the overpayment is not recoverable under social security law and seeks recovery at common law. We refer you to the court of appeals decision R(Steele) v Birmingham city Council and the SoS for Work and Pensions (2005) EWCA Civ 1824, where it was held that the DWP is not entitled to recover overpayments, not recoverable under s.71 SSAA 1992, under common law.

Therefore, your actions, in continuing to issue these letters to claimants are contrary to higher legal opinion and are unlawful.

The threat of court action in the notes accompanying the letter, in our opinion, amounts to bullying and intimidation and is not the conduct that citizens of this country should expect from government departments.

By way of remedy, our client is seeking an assurance for her/himself that recovery will not be sought, and an assurance that the debt centre will cease this ashamedly inappropriate and unlawful policy that causes unnecessary anxiety and distress to individuals and families; some of whom, are the most vulnerable people in our society.

We look forward to your considered response within 1 month from the date of this letter.

Yours sincerely

Tony - When (if?) you get a reply, it would be helpful to know what they say.

Here's the reply:


"...

As you have correctly stated the overpayment is only recoverable under common law as this particular overpayment arose though official error. In such cases the DWP request repayment but do not enforce it. The point you have raised regarding the threat of court action has been hightlighted in previous complaints and the wording of such is currently under investigation at our policy section, if they agree re-wording of the letter will commence.

Folowing the necessary information provided by you that (your client) is not willing to pay back the money I am able to begin action to write off the overpayment to ensure no further correspondence should be sent from the debt centre regarding this overpayment.

although correct procedures have been followed please forward my apologies on behalf of the debt centre for any anxiety and distress caused.

..."


I haven't decided what to do yet. The statement about following the correct procedures suggests that following the complaints procedure will be futile. I might send the complain directly to the SoS and ask for the 'procedure' from debt centre via FoI Act. Will keep this forum updated.

Although the context was very different, there *may* be a useable point or two in LB Waltham Forest v ROBERTS (2004) EWCA Civ 940. On the offchance, it is useful, the link is:

Roberts: www.bailii.org/ew/cases/EWCA/Civ/2004/940.html

In summary (oversimplified!), it was found that a county court cannot go behind a benefit decision.

There is also a CD relating to this case; CH/0704/2005.

Funnily enough a memo was distributed to debt centre staff about this earlier in the week. We have a section of DM, the enforcement team. And any untraceable debtors would be referred to them. However, if a debt is 5yrs old or older, we are unable to refer to enf team and just have to badger hopefully to the point of a repayment plan agreed with the customer. Im sure a lot of you will find this info useful.

"However, if a debt is 5yrs old or older, we are unable to refer to enf team and just have to badger hopefully to the point of a repayment plan agreed with the customer. Im sure a lot of you will find this info useful."

well once it gets to that age you start to fall foul of the limitation act and can't recover anyway....more than 6 years from date of debt means you're out of time for court proceedings ..

"badger". Is that a legal term then?

a technical term, methinks, meaning "entice playfully" or given it's practical meaning "bombard with gazillions of letters until you wear 'em down".

a synonym of Margie's "practical meaning" is: 'COMPLAINT'

It appears that the DWP is currently attempting to assert common law rights of recovery of overpayments in two ways:

(1) where a s71 decision is reversed on reconsideration or appeal and the overpayment found to be not recoverable, by not paying benefit which had been withheld by way of recovery of the overpayment prior to the decision being issued.

(2) simply without making any s71 decision at all.

CPAG's judicial review is, I understand, at the pre-permission stage.

I have just advised on the sending of a protocol letter in a case falling within category (1). I have a feeling that it would be a good idea to bring some further cases before the Administrative Court so that the court has some concrete facts on which to examine the legal issues that arise here.

If anyone has a case where, despite a letter challenging ongoing common law recovery or asserting a right to retain deducted benefit, the DWP has maintained its position, they should feel free to contact me for a discussion as to whether it could be taken further.


DISCLAIMER: The above is a general contribution to the issues under discussion. It is not intended to be relied upon as legal advice. Any person with an identical or similar problem should contact a solicitor or adviser with expertise in welfare rights law.

Has anyone any news of the CPAG JR - it would be really helpful to know where things stand when writing to challenge this dubious practice.

A recent response from DWP to Tony's template letter of complaint. It is from Shared Services Debt Management Operational Policy, Advice & Correspondence (OPAC)based in Leeds.

...'It is correct to say that paragraph 16 of the Judgement Court of Appeal judgement in Steele, Sir Martin Nourse made the following statement: " Once a claim is made, the machinery of section 71 is invoked abd there is no room for recovery at common law, whether by way of resitution or otherwise".

The Department's own solicitors advise that the statement cannot be regarded as part of the ratio (the principle/s of law on which the court reached its decision). In Steele, Arden LJ expressly stated that in her judgement it was not necessary to express a view on the question whether section 71 supersedes any remedy at common law. May LJ giving the third judgementb after Arden LJ, stated simply, "I agree". May LJ cannot therefore be taken to have agreed any more that that which was common ground in the judgements of Sir Martin Nourse and Arden LJ, which expressly did not include Sir Martin's conclusion about section 71.

As a result of the advice received, action is taken to recover overpayments which are classified as not recoverable under social security law'...

They then go onto write off the overpayment on the grounds that the client is unwilling to repay it.

Shaun

Thanks for posting. I'm awaiting for info from debt centre which might yield more valuable information.

In the meantime, I am given to understand the court will be considering the admissability of CPAG's claim this month. If successful, the case will then (I presume) proceed to a full JR hearing...

Any news on the CPAG legal action?

Saw a woman in her late sixties yesterday who was very worried to have been asked to repay nearly £700. Letter from DWP Debt Recovery says:
"We are writing to let you know that a mistake has been made and we have paid you too much Pension Credit
This is because of your receipt of incorrect payments due to a computer error.
This was our mistake and we are sorry it has happened. However, you have been paid public money that you were not entitled to and it should be paid back. The law allows us to ask you to pay back money that should not have been paid.
If you cannot pay this amount in full or would like to discuss the matter, please contact us on 0845 850 0293."

It then says the person can seek advice at a CAB or law centre and asks for a response within 14 days.

The attached Q&A sheet is a gem.

"Q. Why should I have to repay this money if the overpayment was not my fault?
A. Under common law anybody who receives money to which they are not entitled can be asked to pay it back. We are asking for it back because we have a right to recover this money and a duty to protect public funds."
"Q. What if I don't agree that I should pay this money back?
A. This money is recoverable under common law, as you were not entitled to receive this money. We are allowed to ask for the money back on this basis and could seek recovery through the courts if necessary.
In some circumstances we would not ask for the money back. For example where you thought you were entitled to the money and all of the money has now been spent.
If you think this is relevant in your case then contact us and we will considerwhether to continue to seek recovery of the money."

The woman felt strongly that she could not have known she had been paid too much, and pointed out that she has spent the money - which she received in the first half of 2007. But she felt threatened by the reference to recovery through the courts. We drafted a letter for her saying she has been advised that this money is not recoverable by DWP, she could not have known there was an overpayment and she has spent the money, and asking DWP to confirm they will be taking no further action.

Hopefully this will do the trick, but it is disgraceful that DWP has dealt with her in this way.

“In some circumstances we would not ask for the money back. For example where you thought you were entitled to the money and all of the money has now been spent”

At least they got this bit right. This is a solid and legitimate defence in court against a claim for restitution on the ground of unjust enrichment. She should stick fiercely to this line.

Any-one know how CPAG's JR case is going?

for update on cpag's challenge, see the rightsnet new story

Power to recover an official error overpayment under common law: DWP suspends action following CPAG challenge (15 July 2008)

CPAG have a hearing date in January. They will be updating their website (if not done so already).

CPAG are still looking for case studies where the SoS asks for repayment of overpayments that are not recoverable under social security law, following the SoS's undertaking not to do so.

Tony

Decision in CPAG's JR case given today - common law recovery permissable - ie they lost.

http://news.bbc.co.uk/1/hi/uk/7914708.stm

Leave to appeal granted, however.

Mon 02-Mar-09 09:21 AM by shawn

(edited to shorten link)

Judgement

http://www.bailii.org/ew/cases/EWHC/Admin/2009/341.html

summary in rightsnet news too @

Power to recover official error overpayments under common law: New High Court judgment

CPAG@s response,

'We brought this case because we know that letters sent to vulnerable claimants threatening court action if they do not repay have caused considerable distress and recovery can cause hardship. We are not aware that the DWP considered the claimant's circumstances before these letters were sent.'

No, they didn't. But they also didn't attempt common law recovery. And they certainly didn't attempt recovery of overpayments found non-recoverable at tribunal. Whether that will remain the case if CPAG loses the appeal remains to be seen.....I shouldn't wonder if actual court action proves considerably more distressing than the mere threat of it.