Murdoch v Department for Work and Pensions [2010] EWHC 1988 (QB) (30 July 2010)

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Cite as: [2010] EWHC 1988 (QB), [2011] PTSR D3

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		Neutral Citation Number: [2010] EWHC 1988 (QB)
		Appeal No: AP 16/10

IN THE HIGH COURT OF JUSTICE
QUEEN'S BENCH DIVISION
NEWCASTLE DISTRICT REGISTRY
On appeal from Newcastle-upon-Tyne County Court
His Honour Judge Lancaster 8SR00350

Royal Courts of Justice
Strand, London, WC2A 2LL

30/07/2010

B e f o r e :

MR JUSTICE WALKER
____________________

Between:

	Robert Murdoch	Appellant
	- and -
	Department for Work and Pensions	Respondent

____________________

Paul Stagg (instructed by Ben Hoare Bell) for the appellant
Helen Bell (instructed by DWP/DH Legal Services) for the respondent
Hearing dates: Friday 23 April
____________________

HTML VERSION OF JUDGMENT
____________________

Mr Justice Walker :

Introduction

In early 2002 the claimant ("Mr Murdoch") was receiving payments from the defendant Department for Work and Pensions ("DWP") by way of incapacity benefit and income support. DWP stopped those payments in April 2002 when it decided that he had failed to attend a medical examination without good cause. Mr Murdoch eventually satisfied DWP that letters about the medical examination had been sent to the wrong address, and that he therefore had good cause for not attending. On 24 July 2002 DWP made a decision ("the July 2002 decision") that he was entitled to incapacity benefit from and including the date from which his entitlement had been brought to an end in April. In the ordinary course it was to be expected that this decision would be put into effect so that Mr Murdoch would receive future payments of incapacity benefit from shortly after 24 July 2002 onwards, along with a payment of arrears accrued until the date that the future payments began. It could also be expected that Mr Murdoch would receive similar payments of income support, entitlement to which in the circumstances of his case proceeded in tandem with entitlement to incapacity benefit. In the event neither of these things happened in the ordinary course. Regular payments of benefit did not start for some time, and in the meantime substantial arrears built up. Arrears of incapacity benefit amounting to £7,265.61 were eventually paid to Mr Murdoch on 11 March 2003. As to income support, there was a partial payment in the sum of £865.90 on 10 June 2004. This did not include payment in respect of housing cost arrears. Those arrears were not paid until 25 November 2004, by which time they amounted to £1,519.41.

In these proceedings Mr Murdoch says that the delay in receipt of these benefits caused him substantial loss because he had in the meantime found it necessary to resort to an unregulated lender from whom he borrowed £7,260 and to whom he was obliged to repay not only that sum but also a large amount of compound interest. He says he was able to pay £7,000 in March 2003, but was not able to make any further payments until November 2006. He adds that at that stage he was able to extinguish his liability for the remaining amount of principal and compound interest by paying a sum of £60,000.

Mr Murdoch complains that the delay in payment of benefit was the result of negligence on the part of DWP in sending letters about the medical appointment to the wrong address and in failing timeously to give effect to the July 2002 decision. He asserts that a duty of care was owed to him by DWP in this regard, and that accordingly he is entitled to sue DWP and recover his losses by way of damages for negligence. He accepts that he has received compensation from DWP in accordance with its Financial Redress for Maladministration Guide ("FRMG"). This is an extra-statutory scheme which is operated by DWP under delegated authority from HM Treasury. It enables DWP to make what are described as "special payments" to provide "fair and reasonable" redress for official error. Mr Murdoch has received special payments amounting to £799.34, but he says that this sum is nothing like enough to compensate him for the financial loss described earlier. He also concedes for the purposes of argument in the High Court that a claimant to benefit cannot sue DWP for a negligent "decision". I consider that the concession is rightly made, at least so far as this stage of the proceedings is concerned. Relevant in this regard is Jones v Department of Employment [1989] QB 1, where the Court of Appeal held that no duty of care arose in relation to an allegedly negligent decision as to unemployment benefit. That, however, Mr Murdoch says is to be distinguished from a case such as the present where no complaint is made about the relevant decisions themselves.

When filing a defence in these proceedings DWP applied to have the claim struck out, or for summary judgment against Mr Murdoch, and for this purpose asked the court to determine that there was in law no duty of care in relation to the matters complained of. His Honour Judge Lancaster accepted DWP's arguments and in a judgment dated 19 October 2009 he concluded that the claim should be struck out. With the permission of the judge Mr Murdoch now appeals.

A preliminary question?

Mr Paul Stagg appeared on behalf of Mr Murdoch, for whom he also appeared below. He identified a preliminary question: was it right for the court to entertain a strike-out application? Relying on statements of high authority Mr Stagg submitted that in a difficult and developing area of the law, such as the question of whether a public authority owes a common law duty of care, it is unsatisfactory to decide issues of law on assumed facts.

Ms Helen Bell appeared on behalf of DWP, for whom she also appeared below. Her answer to the preliminary question was that the test to be applied to determine the existence of a duty of care was well settled.

The judge agreed with Ms Bell in this regard and accordingly rejected Mr Stagg's contention that the case was unsuitable for a strike-out application. For my part, however, I doubt whether the "preliminary" question is in truth preliminary. A similar question arose in Rowley v Secretary of State for Work and Pensions [2007] EWCA Civ 598, [2007] 1 WLR 2861. The leading judgment in the Court of Appeal was given by Dyson LJ. Waller and Keene LJJ agreed with him and did not add any additional reasons. It is right to say that at a relatively early stage in his judgment Dyson LJ dealt with the question whether the case was appropriate for strike-out. At paragraph 22, having referred to the authorities now relied on by Mr Stagg, he said this:

… There are many cases where it is inappropriate to decide the question whether a public authority owes a common law duty of care without a full consideration of the facts which can only be undertaken at a trial. But there are some cases where it is possible to decide the question without a trial. Such a case is one where it is clear that, even if it is assumed in the claimant's favour that all the facts that he or she alleges are true, the claim must fail …

It follows that in order to decide whether I can accept Mr Stagg's submissions on the "preliminary" question I need to consider whether it is clear that Mr Murdoch's claim must fail, even if it is assumed that all the facts he alleges are true. In truth the "preliminary" question is bound up with the main question – if I consider that DWP are clearly right on the main question, then there is no bar to the court considering and determining a strike-out application.

Before turning to the main question I shall set out the admitted and alleged facts in more detail, describe key legislative provisions, give a summary of the judgment below, and discuss the concession described earlier, three authorities which were examined in detail by counsel, and the ability of those awarded benefit to sue in the County Court for amounts due to them.

The admitted and alleged facts

In this section I set out matters which for the most part are asserted in Mr Murdoch's particulars of claim and deal with events up to and including the July decision. Those matters which are common ground are described without qualification. The remaining matters are assertions which DWP does not accept. In such cases I use expressions such as "Mr Murdoch says".

Prior to and during 2001 Mr Murdoch was in receipt of incapacity benefit. He was also in receipt of income support, which included an amount payable in respect of housing costs. Mr Murdoch's most recent assessment under the personal capability test had been on March 8th 2000. He was found without medical examination to satisfy the test and hence was treated as "incapable of work" for the purposes of entitlement to incapacity benefit and income support.

In late 2001, following a report from Mr Murdoch's GP, DWP decided to require Mr Murdoch to attend a medical examination with Sema (UK) Ltd ("Sema"), an organisation used by DWP for this purpose. The medical examination was scheduled for 10.15am on January 5th 2002. Mr Murdoch did not attend the examination.

On January 7th 2002 DWP wrote to Mr Murdoch asking him why he did not attend the examination on January 5th. Mr Murdoch replied, stating:

I didn't receive any appointment for this examination. Would you please forward a copy of the original appointment as proof it has been sent to me.

DWP decided to give Mr Murdoch another opportunity to attend a medical examination. On February 20th 2002 Sema sent a letter to Mr Murdoch inviting him to attend an examination on March 7th 2002. Mr Murdoch says that the letter was sent to the wrong address and did not reach him.

On March 1st 2002 a reminder letter was sent. Mr Murdoch says it was presumably sent to the same wrong address. He did not attend the examination on March 7th 2002, and says this was because he was unaware of the appointment.

On April 8th 2002 DWP made a decision ("the April 2002 decision") that Mr Murdoch was to be treated as capable of work from 8 March 2002 onwards because he had failed to attend the examination on March 7th 2002 without good cause. As a consequence of that decision Mr Murdoch stopped receiving incapacity benefit and income support in mid April 2002. Mr Murdoch says he lacked any means to support his family, was unable to secure funds from any conventional lender, and was forced to borrow money from an unregistered lender to pay for the family's living expenses and his mortgage. He says he borrowed £280 and £380 on alternate fortnights on terms that he would be expected to pay back double the amount borrowed.

On April 29th 2002 Mr Murdoch signed an appeal form by which he appealed against the April 2002 decision. Mr Murdoch's grounds of appeal stated as follows:

I wish to appeal the decision to disallow me incapacity benefit/credits. I am unable to work because I suffer from severe depression and anxiety. Some days I cannot go out of the house. In your letter you state you have disallowed benefit because I did not go for an examination but I have never received notification of this. I have spoken to the postman but he said he was not aware of problems in the area but I definitely received no letter advising me of a medical otherwise I would have attended.

On June 26th 2002 DWP carried out a reconsideration of the decision of April 8th 2002 and did not change it. Mr Murdoch sought advice from the Grangetown branch of the Redcar & Cleveland Citizens Advice Bureau ("the CAB"), which wrote a letter to DWP on July 24th 2002 enclosing evidence supporting Mr Murdoch's account. The letter was faxed to DWP that day.

Upon receipt of the CAB's letter DWP revised the April 2002 decision and replaced it with the July 2002 decision.

There is an additional alleged fact which was strongly relied upon by Mr Stagg in oral submissions. The allegation is that Mr Murdoch as a result of his condition was a vulnerable individual who was not able to function normally. He says that he was significantly less able than the average recipient of Incapacity Benefit and Income Support to put himself forward for work.

In addition, Mr Stagg's skeleton argument on the appeal identified 5 areas where it was said that factual investigation would be needed at trial. These were:

(1) The relationship between DWP and Sema and how that may have led to the appointment letters being sent to the wrong address.

(2) The maintenance of records by DWP to enable the address to which appointment letters were sent to be checked, and the system for carrying out checks before a decision-maker is asked to make a decision that there had been a failure to attend a medical examination without good cause.

(3) The nature of the computer systems maintained by DWP and whether that might be an explanation for the misaddressing of the letters and the subsequent failure to put Mr Murdoch's benefit back into payment.

(4) The nature of the process under which decisions restoring benefit should be implemented by DWP.

(5) Whether there is, in reality, any reason to fear a flood of claims if a duty of care is found to exist.

Key legislative provisions

In 2002 entitlement to incapacity benefit was governed by s 30A of the Social Security Contributions and Benefits Act 1992 as amended ("the Contributions and Benefits Act"). At relevant times it stated:

30A.— Incapacity benefit entitlement.

(1) Subject to the following provisions of this section a person who satisfies—

(a) either of the conditions mentioned in subsection (2) below; or

(b) if he satisfies neither of those conditions, each of the conditions mentioned in subsection (2A) below,

is entitled to short-term incapacity benefit in respect of any day of incapacity for work ("the relevant day") which forms part of a period of incapacity for work.

(2) The conditions mentioned in subsection (1)(a) above are that—

(a) he is under pensionable age on the relevant day and satisfies the contribution conditions specified for short-term incapacity benefit in Schedule 3, Part I, paragraph 2, or

(b) on that day he is over pensionable age but not more than 5 years over that age, the period of incapacity for work began before he attained pensionable age, and—

(i) he would be entitled to a Category A retirement pension if his entitlement had not been deferred or if he had not made an election under section 54(1) below, or

(ii) he would be entitled to a Category B retirement pension by virtue of the contributions of his deceased spouse, but for any such deferment or election.

(2A) The conditions mentioned in subsection (1)(b) above are that—

(a) he is aged 16 or over on the relevant day;

(b) he is under the age of 20 or, in prescribed cases, 25 on a day which forms part of the period of incapacity for work;

(c) he was incapable of work throughout a period of 196 consecutive days immediately preceding the relevant day, or an earlier day in the period of incapacity for work on which he was aged 16 or over;

(d) on the relevant day he satisfies the prescribed conditions as to residence in Great Britain, or as to presence there; and

(e) he is not, on that day, a person who is receiving full-time education.

(3) A person is not entitled to short-term incapacity benefit under subsection (1)(a) above for the first 3 days of any period of incapacity for work.

(4) In any period of incapacity for work a person is not entitled to short-term incapacity benefit for more than 364 days.

(5) Where a person ceases by virtue of subsection (4) above to be entitled to short-term incapacity benefit, he is entitled to long-term incapacity benefit in respect of any subsequent day of incapacity for work in the same period of incapacity for work on which he is not over pensionable age.

(6) Regulations may provide that persons who have previously been entitled to incapacity benefit shall, in prescribed circumstances, be entitled to short-term incapacity benefit under subsection (1)(b) above notwithstanding that they do not satisfy the condition set out in paragraph (b) of subsection (2A) above.

(7) Regulations may prescribe the circumstances in which a person is or is not to be treated as receiving full-time education for the purposes of paragraph (e) of that subsection.

Whether or not an applicant was incapable of work for this purpose was to be determined in accordance with Part XIIA of the Contributions and Benefits Act: see section 171A. Initially an applicant was to be assessed pursuant to the "own occupation" test as set out in section 171B of the Contributions and Benefits Act. After 28 weeks of incapacity for work the own occupation test ceased to apply and instead the applicant became subject to the personal capability assessment: see section 171C of the Contributions and Benefits Act.

The personal capability assessment process was set out in Part III of the Social Security (Incapacity for Work) (General) Regulations 1995 ("the 1995 Regulations"). A points-based assessment process measured the extent to which a person with a specific disease or bodily or mental disablement was capable or incapable of performing certain prescribed activities.

In order to determine whether an applicant was incapable of work he or she could be called to attend for a medical examination: see regulation 8 (1) of the 1995 Regulations. An applicant who failed without good cause to attend such an examination was to be treated as capable of work provided written notice of the time and place for the medical examination was sent to him or her at least 7 days beforehand: see regulations 8(2) and (3) of the 1995 Regulations.

In 2002 entitlement to income support was governed by s 124 of the Contributions and Benefits Act. At relevant times up to and including 1 July 2002 it stated:

124.— Income support.

(1) A person in Great Britain is entitled to income support if—

(a) he is of or over the age of 16;

(b) he has no income or his income does not exceed the applicable amount;

(c) he is not engaged in remunerative work and, if he is a member of a married or unmarried couple, the other member is not so engaged;

(d) except in such circumstances as may be prescribed, he is not receiving relevant education;

(e) he falls within a prescribed category of person; and

(f) he is not entitled to a jobseeker's allowance and, if he is a member of a married or unmarried couple, the other member of the couple is not, and the couple are not, entitled to an income-based jobseeker's allowance.

…

(4) Subject to subsection (5) below, where a person is entitled to income support, then—

(a) if he has no income, the amount shall be the applicable amount; and

(b) if he has income, the amount shall be the difference between his income and the applicable amount.

(5) Where a person is entitled to income support for a period to which this subsection applies, the amount payable for that period shall be calculated in such manner as may be prescribed.

(6) Subsection (5) above applies—

(a) to a period of less than a week which is the whole period for which income support is payable; and

(b) to any other period of less than a week for which it is payable.

At relevant times after 1 July 2002 s 124 was in similar terms with additional provision to ensure that income support would not be paid to those directly or indirectly entitled to state pension credit.

At all relevant times prescribed categories under s 124(1)(e) included a person incapable of work under Part XIIA of the Contributions and Benefits Act: see regulation 4ZA and paragraph 7 of Schedule 1B to the Income Support (General) Regulations 1987 ("the 1987 Regulations").

As regards both incapacity benefit and income support, payment of benefit was dealt with by the Social Security (Claims and Payments) Regulations 1987, SI 1987 No. 1968 ("the Claims and Payments Regulations"). At relevant times regulation 20 stated:

20. Time and manner of payment: general provision

Subject to the provisions of regulations 20A to 27, benefit shall be paid in accordance with an award as soon as is reasonably practicable after the award has been made, by means of an instrument of payment or by such other means as appears to the Secretary of State … to be appropriate in the circumstances of any particular case.

Regulations 20A to 27 dealt with various matters of detail, setting out (or referring to Schedules setting out) circumstances in which payments were to be made in advance or arrears, how fractional payments should be dealt with, and the like.

It is important to note that an applicant for either benefit had a right to appeal against certain of DWP's decisions in respect of his or her entitlement to that benefit, and that decisions regarding entitlement to benefit could be revised or superseded by the DWP. Relevant provisions in this regard are summarised later in this judgment.

The judgment under appeal

In his judgment His Honour Judge Lancaster noted that under CPR 3.4(2) a statement of case may be struck out if it discloses no reasonable grounds for bringing a claim. Mr Murdoch had contended that the power should not be exercised because the law was in an uncertain and developing state. The judge disagreed. He noted that both parties were agreed on the factors which the court was required to consider, namely those set out in Customs & Excise Commissioners v Barclays Bank Plc [2007] 1 AC 181.

The judge turned to the factors in Customs & Excise Commissioners. The first concerned voluntary assumption of responsibility and reasonable reliance. He noted that DWP was subject to a legislative duty to administer the social security benefit scheme and could not pay or refuse to pay benefit contrary to its legislative obligations. In no sense could DWP be said to have been acting voluntarily and so to have assumed responsibility towards Mr Murdoch. It was no answer to say that DWP had a discretion as to whether to require Mr Murdoch to attend a medical examination. Similar discretions arose in relation to child support, for example the power to make an interim maintenance assessment, yet these had not been thought sufficient to show an assumption of responsibility in Rowley. The facts of cases where an assumption of responsibility had been held to exist in the past were removed from those of the present case. Moreover a mere assumption of responsibility by DWP would not suffice. There would also need to be reasonable reliance by Mr Murdoch upon that assumption of responsibility, and this had not been asserted by Mr Murdoch.

The second factor identified in Customs & Excise Commissioners involved an incremental test. Mr Murdoch had asserted that his case was closely analogous to the position in R (on the application of A and Kanidagli) v Secretary of State for the Home Department [2004] EWHC 1585 (Admin) – a case which I shall examine later in this judgment. Here, however, the judge noted, and implicitly accepted, distinguishing features identified by DWP: the statutory scheme was entirely different, the claim did not assert a general right of reparation for maladministration, but concerned only a very limited category of cases, and in the absence of imposition of liability the claimants would have been left without a remedy.

The final factor in Customs & Excise Commissioners involved consideration of the threefold Caparo test. There was no dispute that the first limb of the test was fulfilled: it could be foreseen that sending an appointment letter to the wrong address could result in temporary withdrawal of benefits and financial loss. As to the second limb, the judge held that there was "quite clearly insufficient proximity" between Mr Murdoch and DWP – he was in no different position to any other member of the public who made an application for social security benefit. The judge's conclusion on the third limb of the test was also adverse to Mr Murdoch. He concluded that it would not be fair, just or reasonable to impose a duty of care because this would be likely to result in a flood of claims, because alternative remedies were available to disappointed benefit claimants in cases of maladministration, and because the statute governing DWP's responsibility for the administration of benefit conferred no private law right of action for breach of statutory duty. The judge commented that the latter of these points was a strong indication that the imposition of a duty of care in these circumstances would be inconsistent with Parliament's intention. He added that the position in the present case was directly analogous to that in Rowley, where the matters of complaint included delay in carrying out a maintenance assessment, in enforcing the assessment, and in dealing with the claimant's appeal against that assessment. The Court of Appeal had concluded that it was neither fair nor just nor reasonable to impose a duty of care for loss arising from these delays: see paragraphs 18 and 84 of the judgment of Dyson LJ.

"Decision makers" under no duty of care

For the purposes of argument before me Mr Stagg conceded that a "decision maker" did not owe a duty of care. As I understood the concession, in broad terms a "decision maker" was intended to refer to both an individual making certain types of decision on behalf of the Secretary of State and to the Secretary of State as the person responsible for the decision whether vicariously or directly.

As to the types of decision, at relevant times the Social Security Act 1998 ("the 1998 Act") identified in s 8 certain decisions which were to be "for the Secretary of State". In particular it was for the Secretary of State to decide any claim for a "relevant benefit", an expression which included both incapacity benefit and income support.

By s 9 of that Act the Secretary of State was given a power to revise those decisions. Section 12 gave a right to appeal to an Appeal Tribunal. The right applied to some, but not all, decisions by the Secretary of State under s 8, whether as originally made or as revised under s 9. Sections 13 to 15 concerned appeals from a decision of an Appeal Tribunal. Such appeals lay on a question of law to a Commissioner subject to a leave requirement, and from a Commissioner to "the appropriate court", again subject to a leave requirement. On an application to a Commissioner for leave it was the duty of the Commissioner to specify as the appropriate court either the Court of Appeal of England and Wales, the Court of Session, or the Court of Appeal in Northern Ireland. Section 10 conferred on the Secretary of State power to make a decision superseding a decision under s 8, whether as originally made or as revised under s9 or as superseded under s10 itself, and certain decisions of Appeal Tribunal or a Commissioner.

All these matters were the subject of detailed provision in the Social Security and Child Support (Decisions and Appeals) Regulations 1999 ("the Decisions and Appeals Regulations"), made under the 1998 Act. Regulation 10 stated:

Effect of a determination as to capacity for work

10. A determination (including a determination made following a change of circumstances) whether a person is, or is to be treated as, capable or incapable of work which is embodied in or necessary to a decision under Chapter II of Part I of the Act or on which such a decision is based shall be conclusive for the purposes of any further such decision.

Section 17 of the 1998 Act, like ss 8 to 15, formed part of Chapter 1 of the 1998 Act. It provided:

17.— Finality of decisions.

(1) Subject to the provisions of this Chapter, any decision made in accordance with the foregoing provisions of this Chapter shall be final; and subject to the provisions of any regulations under section 11 above, any decision made in accordance with those regulations shall be final.

(2) If and to the extent that regulations so provide, any finding of fact or other determination embodied in or necessary to such a decision, or on which such a decision is based, shall be conclusive for the purposes of—

(a) further such decisions;

(b) decisions made under the Child Support Act; and

(c) decisions made under the Vaccine Damage Payments Act.

I understood Mr Stagg to identify decisions falling within s 17(1) as the type of decision which fell within the concession.

Three cases analysed in detail

The oral argument involved close analysis of three cases. The first two were decisions of the Court of Appeal mentioned earlier in this judgment: Jones and Rowley. The third was the decision of the High Court mentioned by HHJ Lancaster: R (A and Kanidagli). Below I give an account of the judgments in each of these three cases.

The Court of Appeal's two grounds of decision in Jones

Jones concerned a claim to unemployment benefit. Under the Social Security Act 1975 as amended provision was made for, among others, an Adjudication Officer to determine a claim to unemployment benefit. Where the claim had been determined adversely to the claimant, the claimant was given a right to appeal to a Social Security Appeal Tribunal, with onward appeal rights similar to those under the 1998 Act. Section 117(1) of the 1975 Act provided:

Subject to the provisions of this Part of this Act and to s 14 of the Social Security Act 1980 (Appeal from social security commissioners etc. on a point of law), the decision of any claim or question in accordance with this Act shall be final; …

Mr Jones put his case in two ways. The first concerned the making of the Adjudication Officer's original decision, and asserted a duty to make that decision "with all reasonable skill and care expected of a reasonable Adjudication Officer." The duty was said to have been broken either (a) because Mr Jones's entitlement to unemployment benefit was plain and unambiguous from the outset, or (b) on analysis the reasoning of the Adjudication Officer entitled Mr Jones to unemployment benefit from 28 August 1984 rather than 31 May 1985. The second way of putting the claim involved an assertion that particular circumstances warranted a review of the original decision, and that it was the duty of the department in reviewing the decision to exercise all reasonable skill and care in considering any entitlement that Mr Jones might have. Mr Jones said that this duty had been broken because the Department failed to review the original decision.

The Court of Appeal rejected a contention by the Department that the claim concerned things done or omitted to be done by a "person while discharging or purporting to discharge any responsibilities of a judicial nature… or … in connection with the execution of judicial process" so as to fall within the immunity conferred by s 2(5) of the Crown Proceedings Act 1947. The Adjudication Officer was performing an administrative function and not discharging responsibilities of a judicial nature.

The first and narrower substantive argument advanced by the Department was that the claim was prohibited by the terms of s 117(1) of the 1975 Act – for it sought to challenge the correctness of a decision which by that section was made "final". The Department acknowledged that such a decision could be the subject of judicial review, and that in the event of misfeasance the decision could be challenged on that ground by way of action. With those exceptions it was said that s 117(1) prohibited any claim. Mr Jones sought to answer this by saying that the action concerned matters which could not be dealt with by the statutory appeal process, e.g. the costs incurred by Mr Jones in fighting his appeal and general damages for anxiety and distress. The Court of Appeal rejected this assertion by Mr Jones. Glidewell LJ said at page 19C that the action, if it were to proceed, would necessarily involve a challenge to the correctness of the Adjudication Officer's decision. That would be a challenge to its finality, by a route other than that provided by the statutory provisions themselves, and was prohibited by s117. Slade LJ at pages 24-25 noted that for the protection of aggrieved claimants the 1975 Act laid down an elaborate system of rights of appeal by which aggrieved claimants could seek redress. Mr Jones's right to receive unemployment benefit was simply that conferred by the 1975 Act. It would be contrary to both the wording of s117(1) and the intention of the Act of 1975 as a whole to hold that an Adjudication Officer owed any duty of care at common law to a claimant such as was alleged by Mr Jones. Caulfield J agreed with both judgments.

In those circumstances it was not strictly necessary for the Court of Appeal to examine what Glidewell LJ described as a "second and broader proposition" argued by the Department. This wider proposition was that the duty of an Adjudication Officer lay in the field of public law, and was enforceable only by the statutory appeal procedure or by the public law remedy of judicial review. There was no remedy available to the applicant in private law as opposed to public law. The answer advanced by Mr Jones to that proposition was that the relationship between the Adjudication Officer and the claimant to unemployment benefit was sufficiently close or proximate to give rise to a duty of care. In his judgment at pages 20-22 Glidewell LJ discussed what had been said by the House of Lords in a series of cases beginning with Anns v Merton London Borough Council [1978] Ac 728 and ending with Yuen Kun Yeu v Attorney General of Hong Kong [1988] AC 175. This examination led him to conclude that the Adjudication Officer's decision was not susceptible of challenge at common law unless misfeasance were shown. Glidewell LJ added at page 22D:

Indeed, in my view, it is a general principle that, if a government department or officer, charged with the making of decisions whether certain payment should be made, is subject to a statutory right of appeal against his decisions, he owes no duty of care in private law. Misfeasance apart, he is only susceptible in public law to judicial review or to the right of appeal provided by the statute under which he makes his decision.

Slade LJ at page 25 said that if it were necessary or appropriate to consider whether it was just and reasonable that the alleged duty of care should be held to exist, he would hold without hesitation that it would not be just and reasonable. First, the appeal procedure itself for practical purposes provided a disappointed claimant with a perfectly adequate remedy for recovery of unemployment benefit properly due, though, it is true, without costs, interest and general damages for anxiety and distress. Secondly, a common law duty of care would mean that immediately following an arguable negligent and erroneous decision of an Adjudication Officer, a claimant would have the right to pursue an action in negligence against the Adjudication Officer or the Department without even pursuing the statutory right of appeal (albeit at the risk of having any award of damages reduced, though not necessarily eliminated, on the grounds of failure to mitigate by appealing). In the context of legislation under which there were likely to be many thousands of citizens who rightly or wrongly considered themselves aggrieved, it made no sense to hold that it was open to a disappointed citizen to challenge the decision in this particular manner. In more general terms Slade LJ agreed with the proposition of Glidewell LJ quoted above.

Caulfield J, as noted earlier, agreed with both judgments. He added that he had reached his conclusions by testing the arguments in relation to the Adjudicating Officer himself and had concluded that it could not be right in law that the isolated Adjudicating Officer should have so many hundreds, possibly thousands, of neighbours to whom the common law said he owed a duty of care when Parliament had provided the whole scheme of legislation to protect these so called neighbours against a mistake by the Adjudicating Officer.

The Court of Appeal considers Child Support: Rowley

In Rowley complaints were made about (i) the way in which child support maintenance was assessed (i.e. decisions as to the amount of the assessed liability); (ii) the time taken to assess maintenance (including the conduct of appeals); and (iii) the collection and enforcement of the obligation to pay maintenance. Those complaints formed the basis of claims for damages for negligence, but those claims were struck out by Judge Grenfell QC in the High Court because the common law duty of care asserted by the claimants would be inconsistent with the statutory scheme created by the Child Support Act 1991. The Court of Appeal dismissed the claimants' appeal. In a judgment with which Waller and Keene LJJ agreed, Dyson LJ identified two important authorities. One was Jones. The other was R (Kehoe) v Secretary of State for Work and Pensions [2006] 1 AC 42.

In Kehoe a mother with care was dissatisfied with the performance of the Child Support Agency ("CSA") both in relation to its assessment of the amount to be paid by the non-resident father and its attempts at enforcement against him. Under section 8 of the 1991 Act she was unable to bring civil proceedings against the father for the maintenance of the children. In judicial review proceedings she sought a declaration under section 4 (2) of the Human Rights Act 1998 that section 8 of the 1991 Act was incompatible with article 6 (1) of the Convention. The House of Lords (Baroness Hale dissenting) held that there was no such incompatibility. The essential reasoning of the majority (Lords Bingham, Hope, Walker and Brown of Eaton-Under-Heywood) was summarised by Lord Brown in paragraph 79:

The 1991 Act introduced, for all of those voluntarily or compulsorily seeking the CSA's help, an entire scheme, substituting for whatever rights the parent with care (or, indeed, qualifying children) might otherwise have had, the benefit of this scheme itself (with, necessarily, any incidental dis-benefits). The only right now enjoyed by those in Mrs Kehoe's position is to look to the CSA for the proper discharge of its public law obligations under the statute, a right which of course is itself sustainable under the courts' supervisory jurisdiction.

It may be noted that at the time of the decision in Kehoe the 1991 Act contained a provision in materially identical terms to section 17 of the 1998 Act. Indeed the relevant provision (section 46A of the 1991 Act) was inserted by paragraph 44 of schedule 7 to the 1998 Act.

The Secretary of State in Rowley placed considerable reliance upon the decision in Jones. The arguments advanced in that regard were dealt with by Dyson LJ at paragraphs 58 to 59 of his judgment, and for convenience I take them out of order. Paragraphs 58 and 59 dealt with the question whether the imposition of a duty of care would be an incremental development of the law. The claimants in Rowley for this purpose likened the role of the CSA to that of a solicitor acting on behalf of a parent with care prior to the 1991 Act. Dyson LJ accepted that the position of the adjudication officer in Jones was closer to that of the CSA than was the position of a solicitor acting in the pre-1991 Act era. Even so, Dyson LJ would not have decided the question of duty of care on an application of the incremental test. He commented:

59. … Jones's case was concerned with an allegation of negligence in the making of a decision by an adjudication officer. It was not concerned with other defects in the administration of a social security benefit. The present case is not only concerned with an allegation of negligence in the making of the maintenance assessments. That is an important point of distinction, because in Jones's case the court regarded the existence of a right of appeal as determinative. The 1991 Act gives no right of appeal against a refusal or failure to collect maintenance or enforce obligations to pay. …

At paragraphs 47 to 50 Dyson LJ dealt with the general approach. He suggested that the most helpful general statement as regards a common law duty of care not to cause pure economic loss was that of Lord Bingham in Customs & Excise Commissioners v Barclays Bank Plc [2007] 1 AC 181:

The authorities disclose three tests which have been used in deciding whether a defendant sued as causing pure economic loss to a claimant owed him a duty of care in tort. The first is whether the defendant assumed responsibility for what he said and did vis-à-vis the claimant, or is to be treated by the law as having done so. The second is commonly known as the threefold test: whether loss to the claimant was a reasonably foreseeable consequence of what the defendant did or failed to do; whether the relationship between the parties was one of sufficient proximity; and whether in all the circumstances it is fair, just and reasonable to impose a duty of care on the defendant towards the claimant (what Kirby J in Perre v Apand Pty Ltd (1999) 198 CLR 180, para 259, succinctly labelled 'policy'). Third is the incremental test, based on the observation of Brennan J in Sutherland Shire Council v Heyman (1985) 157 CLR 424 , 481, approved by Lord Bridge of Harwich in Caparo Industries plc v Dickman [1990] 2 AC 605 , 618, that: 'It is preferable, in my view, that the law should develop novel categories of negligence incrementally and by analogy with established categories, rather than by a massive extension of a prima facie duty of care restrained only by indefinable "considerations which ought to be negative, or to reduce or limit the scope of the duty or the class of person to whom it is owed".'

Dyson LJ noted that Lord Bingham went on to make five general observations at paragraphs 4 to 8:

4.… First, there are cases in which one party can accurately be said to have assumed responsibility for what is said or done to another, the paradigm situation being a relationship having all the indicia of contract save consideration… I think it is correct to regard an assumption of responsibility as a sufficient but not a necessary condition of liability, a first test which, if answered positively, may obviate the need for further inquiry. If answered negatively, further consideration is called for.

5. Secondly, however, it is clear that the assumption of responsibility test is to be applied objectively… and is not answered by consideration of what the defendant thought or intended… The problem here is, as I see it, that the further this test is removed from the actions and intentions of the actual defendant, and the more notional the assumption of responsibility becomes, the less difference there is between this test and the threefold test.

6. Thirdly, the threefold test itself provides no straightforward answer to the vexed question whether or not, in a novel situation, a party owes a duty of care…

7. Fourthly, I incline to agree with the view… that the incremental test is of little value as a test in itself, and is only helpful when used in combination with a test or principle which identifies the legally significant features of a situation. The closer the facts of the case in issue to those of a case in which a duty of care has been held to exist, the readier a court will be, on the approach of Brennan J adopted in Caparo Industries plc v Dickman, to find that there has been an assumption of responsibility or that the proximity and policy conditions of the threefold test are satisfied. The converse is also true.

8. Fifthly, it seems to me that the outcomes (or majority outcomes) of the leading cases cited above are in every or almost every instance sensible and just, irrespective of the test applied to achieve that outcome. This is not to disparage the value of and need for a test of liability in tortious negligence, which any law of tort must propound if not to become a morass of single instances. But it does in my opinion concentrate attention on the detailed circumstance of the particular case and the particular relationship between the parties in the context of their legal and factual situation as a whole.

At paragraph 49 Dyson LJ identified two additional matters for consideration in a case where the question was whether a public authority owed a common law duty of care. The first was whether imposition of a duty of care would be inconsistent with the statutory scheme under which the public authority was acting. The second matter for consideration was the relevance of the fact (if it be the case) that the statute conferred no private law right of action for breach of statutory duty.

At paragraph 50 Dyson LJ emphasized two points. First, it was common ground that the statutory duty created by the 1991 Act did not give rise to a private law right to sue for a breach of statutory duty. Secondly, no facts were relied on in support of the duty of care beyond the statutory scheme itself and the Secretary of State's performance of his functions under the scheme.

At paragraphs 51 to 55 Dyson LJ rejected a contention that merely because a parent with care was not obliged to have recourse to the 1991 Act it followed that the Secretary of State assumed a responsibility in cases where maintenance was sought under that Act. Dyson LJ observed that whether the Secretary of State voluntarily assumed responsibility did not depend on whether the parent chose or was obliged to make an application for a maintenance assessment.

In paragraphs 52 and 53 Dyson LJ noted observations by Lord Bingham and Lord Walker in Customs & Excise Commissioners that a bank doing things which the law required it to do had not voluntarily assumed responsibility. Lord Mance made observations to similar effect and drew attention to two categories of case identified by Lord Browne-Wilkinson in White v Jones [1995] 2 AC 207, 274. These were (i) where there is a fiduciary relationship and (ii) where the defendant has voluntarily answered a question or tenders advice or services in circumstances where he knows or ought to know that an identified person will rely on his answers or advice. The involuntary nature of the bank's involvement with the commissioners made it impossible to regard the situation as one "akin to contract".

Dyson LJ observed at paragraph 54 that when a person with care applied for a maintenance assessment the Secretary of State was obliged to make that assessment. It was true that the 1991 Act conferred on the Secretary of State discretionary powers. Nevertheless Dyson LJ concluded that a decision to exercise or not to exercise such a statutory power was not a voluntary assumption of responsibility. That decision was not "akin to contract". Determination of whether or not (and if so how) to exercise such powers often involved difficult and sensitive decisions. Such decisions were amenable to judicial review. They were far removed from a voluntary assumption of responsibility.

At paragraph 55 Dyson LJ rejected a contention that the exercise of skill and judgment by caseworkers meant that they were voluntarily assuming responsibility to those foreseeably affected by what they did. To focus on the elements of skill and judgment was to ignore the requirement that the assumption of responsibility be voluntary in order to found the common law duty of care.

Dyson LJ then turned to the incremental test. As noted earlier, the claimants' argument in this regard was that the role of the CSA was sufficiently close to that of a solicitor acting prior to the 1991 Act to justify imposing a duty of care on an application of the incremental approach. Dyson LJ noted substantial differences between the role of such a solicitor and the role of the CSA. A duty of care, far from being an incremental development of the law, would be a massive extension of it. It was in this context that Dyson LJ made the observations about Jones cited above. He added that he would in any event adopt the fourth of the observations of Lord Bingham in Customs & Excise Commissioners: the incremental test is of little value as a test in itself.

As regards the threefold Caparo test, Dyson LJ recorded at paragraph 60 that argument had focussed on the third limb, namely whether it was fair, just and reasonable to impose a common law duty of care on the Secretary of State. At paragraphs 61-63 Dyson LJ noted that a duty of care must not be inconsistent with the presumed intention of Parliament, and explained that at the first stage of analysis of this point he would leave s 46A out of account, since it had only been inserted into the 1991 Act by the 1998 Act. At paragraphs 64 - 66 he identified factors in Kehoe which provided strong support for the argument that no common law duty of care was owed by the Secretary of State.

Even putting Kehoe on one side, Dyson LJ thought it clear that a common law duty of care would be inconsistent with the statutory scheme created by the 1991 Act. At paragraphs 68 – 70 he noted that substantial remedies were provided by the scheme, among them rights of appeal against a refusal to make an assessment and against the amount of an assessment or the date from which it took effect. As to the complaint that such rights of appeal gave no effective remedy for delay in making a decision, or failure to collect maintenance or enforce payment of arrears, Dyson LJ noted that the person with care could issue judicial proceedings to compel the CSA to act. As to deficiencies in the appeal process, for example failure to notify the person with care of the response by the absent parent, nevertheless what was significant was that Parliament had provided a means of challenging a refusal to make a maintenance assessment and the amount of the assessment and the date from which it took effect. The question was whether Parliament was to be taken to have intended that there should coexist a right of action at common law to recover damages for negligent refusal to make an assessment or to make an assessment in a certain amount or to take effect from a certain date. It was not to the point that a more effective appeal process could have been devised: the merits of the scheme were not for the courts to evaluate.

At paragraphs 71 and 72 Dyson LJ noted that the 1991 Act as originally enacted included a power to prescribe circumstances in which an absent parent would be liable to make payment of interest with respect to arrears of maintenance. That, combined with the existence of the right of appeal, when taken in conjunction with the right to seek judicial review of failures to collect or enforce arrears of maintenance, meant that the 1991 Act provided the person with care with substantial protection against incompetence on the part of CSA. Dyson LJ said at paragraphs 73 – 75 that the mere fact that there was an alternative remedy was not necessarily a reason for denying the existence of a common law duty of care. It was important to see how comprehensive a remedy was provided and to consider it in the context to the statutory scheme as a whole. The more comprehensive the remedy provided by Parliament, the less likely it was that Parliament should be taken to have had the intention that there should be a right to damages for negligence. On this basis the 1991 Act taken in conjunction with the right to seek judicial review provided a sufficiently comprehensive remedy to lead Dyson LJ to conclude that a duty of care would be inconsistent with the statutory scheme. There would be cases when a claimant would undoubtedly suffer loss in cases where the CSA had acted incompetently, loss which would be recoverable in law if he or she had a right of action. In most cases of allegedly negligent delay the loss would be sufficiently compensated by payment of interest, which was provided for by the 1991 Act. There would be some cases where payment of interest would not make good all losses claimed to have been caused by the alleged negligence. That was not a sufficient reason to impose a duty of care. Parliament had provided a rational scheme whose effect was that victims of the CSA's incompetence would in fact recover their losses in most cases, although the losses were not expressed as compensation for its incompetence. Even in cases where the provision for interest would not compensate for loss, a complainant might be able to obtain redress by means of the Ombudsman.

At paragraphs 76 and 77 Dyson LJ noted detailed provisions setting out the respective spheres of responsibility of the courts and the Secretary of State. In particular s 8 of the 1991 Act identified areas in which the court retained its power in relation to the making, varying and revoking of maintenance orders. This was a further indication of the narrowly circumscribed role of the court, subject always to its supervisory public law jurisdiction. For all these reasons Dyson LJ concluded that a common law duty of care would be inconsistent with the statutory scheme.

Additional points were noted at paragraphs 77 to 84. The FRMG had no relevance as it did not come into force until 1997. It must, nevertheless, have been in the contemplation of Parliament when the 1991 Act was enacted that complaints about maladministration by the CSA could be referred to the Ombudsman. This was relevant to the adequacy of the remedies provided by the statute, to the presumed legislative intention and to whether it was fair, just and reasonable to impose a duty of care. Secondly, the sums usually at stake would be small relative to the costs of litigating to recover them as damages for negligence, litigation which might involve a detailed examination of the history and an attempt to determine what result an earlier or different attempt to collect or take enforcement action might have had. It might not always be the right course to take the most aggressive approach to enforcement. It was a matter for judgment whether, for example, the remedy of commitment to prison should be sought in circumstances where that might make the payment of arrears of maintenance less likely. While in some contexts difficulty in making a determination of negligence had not precluded the existence of a duty of care, the position was different where questions of proportionality were in play. As regards the 1991 Act, if a duty of care were recognised to exist on the part of the Secretary of State, there would be likely to be a flood of (mainly small) claims whose costs would often be out of proportion to what would realistically be at stake in most cases. For all those reasons Dyson LJ considered that is was not fair, just and reasonable to impose a duty of care on the Secretary of State to avoid pure economic loss. He added at paragraph 85 that these arguments applied with equal force to a claim for negligence for damages for personal injury.

At this point in his judgment Dyson LJ returned to s 46A of the 1991 Act and the decision in Jones. He noted at paragraphs 88 to 90 that it was difficult to see any material difference as a matter of language between s 117(1) of the Social Security Act 1975 and s 46A(1) of the 1991 Act. But Jones was a decision on a different statute and was not binding as to the meaning and effect of s 46A(1) of the 1991 Act. Dyson LJ noted that it had not been submitted for the Secretary of State that a duty of care was owed prior to introduction of s 46A in 1999. In those circumstances, Dyson LJ would not decide the appeal on the basis of s 46A or the first ground on which Jones was decided. He added that as regards the second ground of decision in Jones, the general principle enunciated by the court was "subject to the particular provisions of the relevant statute", and must be viewed with some caution in the light of statements of high authority to the effect that the existence of alternative remedies may not be a reason for holding that a public authority does not owe a duty of care.

Finally at paragraphs 91 to 93 Dyson LJ mentioned a wider submission on behalf of the Secretary of State that no duty of care should be imposed because the 1991 Act gave no right of action for breach of statutory duty or failure to exercise a statutory power. Dyson LJ did not find it necessary to decide whether the appeal should be dismissed for those wider reasons.

The decision of the High Court in A & Kanidagli

The decision of Keith J in R (A & Kanidagli) v Secretary of State for the Home Department [2004] EWHC 1585 (Admin) concerned claims by Mrs A and Mr Kanidagli. These two cases were factually unrelated. They had both begun as claims for judicial review, but were in the event treated as ordinary claims for damages. The court was asked to decide whether on assumed facts the Secretary of State owed a duty of care to the claimants. The assumed facts in the case of Mrs A were that she had been granted entry clearance as spouse of a recognised refugee. It was the practice of the Secretary of State to permit such a spouse to be eligible to take employment and to receive welfare benefits. The Secretary of State had not intended to depart from that practice in her case. However the terms of the entry clearance granted to her and endorsed on her passport mistakenly prohibited her from having any recourse to public funds. During a period of nearly a year she had been unable to claim benefits, calculated on her behalf to amount to £1,945. In Mr Kanidagli's case the assumed facts were that it would have been a breach of article 3 of the Convention to remove him to his country of origin. It was the Secretary of State's practice to grant a status letter in such a case permitting the recipient to take employment and to receive welfare benefits. The Secretary of State did not intend to depart from this practice in Mr Kanidagli's case, but he failed to send the relevant status letter, owing to administrative error. Lost benefits were said to amount to £3,150. Keith J noted at the outset of his judgment that neither claimant sought to establish that there was general right of reparation for maladministration. In both cases attempts to have the matter dealt with by the Parliamentary Commissioner for Administration ("the Ombudsman") had been unsuccessful: Mr Kanidagli's MP refused to refer his case to the Ombudsman, while in Mrs A's case by the time a reference took place her claim for judicial review had been issued, leading the Ombudsman to conclude that there was no longer jurisdiction to investigate the case. Keith J conducted a detailed examination of the statutory scheme of immigration. He concluded that the mistakes which were made in the two cases were administrative failures to implement decisions which had been made pursuant to practices which the Secretary of State had decided to adopt for determining how he should exercise his statutory power to grant persons who are not British citizens leave to enter and remain in the UK and on what conditions. Second, there was nothing in the statutory scheme which showed that it was intended to prohibit a right to compensation for administrative failures of the kind which occurred.

At paragraphs 20-22 Keith J rejected a preliminary argument advanced on behalf of the Secretary of State. This was that the claimants would not have suffered any loss as a result of the mistakes which had occurred if DWP had had the power to backdate the payment of income support and jobseekers allowance to them. It was submitted that the fact that Parliament had not given DWP such a power showed that Parliament must have intended that liability to pay compensation consisting of the loss of those benefits should not be imposed even if mistakes had resulted in those benefits not being paid. Keith J rejected the argument, for what the regulations did was to acknowledge that there were a number of common situations in which late claims for benefits might be made, which should not result in the claimants being deprived of those benefits for a limited period. That did not mean that the regulations manifested a Parliamentary intention to prohibit claims of negligence in respect of benefits which were not covered by the circumstances expressly provided for by the regulations. If such claims were to be prohibited, it would have to be because the law of negligence – in particular the need to show the existence of a duty of care – prohibited such claims.

Keith J identified three features. First, the Secretary of State would have been aware of the effect which the maladministration in the two cases would have. Secondly, mistakes made were purely administrative in nature. Once the decision had been made to grant Mrs A entry clearance and Mr Kanidagli exceptional leave to remain in the UK, no decision making of any kind nor the exercise of any discretionary judgment was called for: merely the operational implementation of practices which were well established. Third, in the absence of the imposition of liability, the claimants would be left without a remedy. As to competing considerations, Keith J was not troubled by the fact that the loss was said to have arisen as a result of pure omissions. Cases where this was treated as significant were cases where there was no duty to take affirmative action of any kind at all. In the present case the immigration officers and officials had taken action but had carried it out so imperfectly that they had not managed to achieve the results which had been intended. A second competing consideration was that the loss which the claimant suffered was purely economic loss. In such cases the courts had taken a more restrictive approach, but that was for particular reasons. The duty was more likely to be owed to an indeterminate class of people, and liability could be established for an indeterminate amount. Economic loss usually arose in circumstances where the parties had a greater opportunity to use contracts to determine the level of risk which they needed to take and the degree of protection which they required. The third competing consideration was that the claimants' loss was caused by persons performing statutory functions.

In this context Keith J analysed and rejected an argument on behalf of the Secretary of State similar to the wider argument noted, but not dealt with, by Dyson LJ in Rowley. At paragraphs 42 and 43 Keith J examined whether it would be just, fair and reasonable for the law to impose a duty of care on those responsible for the administrative implementation of immigration decisions of the kind made in the case of the claimants. He dealt specifically with four points raised by Mr Wilken on behalf of the Secretary of State:

(i) It is said that the claimants had viable alternative remedies by way of judicial review. Mrs A could have sought judicial review of the endorsement on her passport of an inappropriate condition on her entry clearance, and Mr Kanidagli could have sought judicial review of the failure to provide him with a status letter. Mandatory orders could have been made to put the mistakes right. For my part, I do not think that judicial review was a comparable remedy at all. By having the mistakes put right, Mrs A and Mr Kanidagli would have had their entitlement to benefits restored. But it would have done nothing for the benefits which they lost in the meantime. Mr Wilken's response is that Mrs A at least could have applied for judicial review before she came to the UK. But I question how realistic it would have been for the impoverished spouse of a refugee — assuming that she had appreciated the significance of an inappropriate condition endorsed on her passport — to obtain public funding while still overseas to commence a claim for judicial review for the removal of that condition. In any event, she may well have thought that she could not come to the UK until the question of her entitlement to benefits had been sorted out. In that case, any claim for judicial review would have significantly delayed her arrival in the UK and prolonged her husband's separation from her and their children.

(ii) It is said that imposing a duty of care would hamper the effective performance of the system of immigration control. I do not agree. Being required to take care in the administrative implementation of immigration decisions would enhance public confidence in the system, and the administrative implementation of immigration decisions is not an area of human activity in which the fear of being brought to account for one's mistakes is likely to affect performance.

(iii) It is said that imposing a duty of care would trigger further claims, which (a) would require funds to be diverted and time to be devoted to enable them to be resisted, and (b) would be a drain on public resources if the claims were successful. I am unimpressed by these assertions. If the claims are successful, it is only right that compensation should be paid. And I doubt whether very many further claims would be triggered. We are, after all, talking about a very limited category of claims, namely claims over mistakes in the administrative implementation of immigration decisions. Even if it were appropriate to take a "floodgates" argument into account, it is unlikely that the floodgates would be significantly opened.

(iv) It is said that section 8 of the Human Rights Act 1998 arguably permits a wider range of claims than the common law for which damages may be awarded. The claimants were claiming damages under section 8, a claim which they subsequently abandoned. If they cannot succeed under section 8, they should not be permitted to succeed under the common law. I disagree. Claims for damages under section 8 can only succeed if the unlawful act of the public authority is an act which is incompatible with a Convention right. No breach of a Convention right has been alleged to arise as a result of the consequences flowing from the mistakes which were made in these cases.

At paragraph 43 Keith J said that he had not discerned any other reason why it would not be fair, just or reasonable for a duty of care to be imposed. Indeed, it would be unjust if Mrs A and Mr Kanidagli did not have a remedy enabling them to claim the benefits which they had lost. His conclusion at paragraph 44 was that the Secretary of State owed a duty of care to Mrs A to ensure that an inappropriate condition on her entry clearance was not endorsed on her passport, and therefore did not include a prohibition on her having recourse to public funds. He owed a duty of care to Mr Kanidagli to ensure that Mr Kanidagli received a status letter which he could use to obtain welfare benefits.

An action for debt in the County Court

During the course of oral argument I asked Mr Stagg and Ms Bell whether, once a decision had been taken that a claimant was entitled to a particular benefit under the 1998 Act, there might be an entitlement to sue if payment were not received within the time contemplated by the statute. After the oral hearing I was helpfully supplied with written submissions dealing with this point among others.

The principle which I had in mind when asking counsel this question is found in Booth v Trail (1883) 12 QBD 8. The plaintiff had obtained judgments against a number of defendants. One of them had been a police constable employed by a Sunderland corporation, and upon retirement had been awarded a statutory pension. An application was made that the corporation pay the plaintiff a sum of £10, being the quarterly pension which had accrued and remained unpaid, and all amounts to become due in respect of the pension as they fell due from time to time until the judgment debt was satisfied. A divisional court of the Queens Bench Division (Lord Coleridge CJ and Stephen J) held that so much of the pension as had already accrued could be attached. Lord Coleridge CJ, with whom Stephen J agreed, said:

A sum in the hands of [the corporation], which they in some way or other can presently be compelled to pay to the judgment debtor, seems to me to be a debt within the rule and therefore attachable. It appears to me to be nonetheless a debt because no particular mode of enforcing the payment is given by the statute. When there is a statutory obligation to pay money, and no other remedy is expressly given, there would be a remedy by action.

A modern application of the principle can be seen in Trustees of the Dennis Rye Pension Fund v Sheffield City Council [1998] 1 WLR 840.

Both sides agreed that this principle has long been recognised to apply to social security benefits. Thus in a decision dated 28 June 1990, reported in the published series of Social Security Commissioners' decisions as R(IS) 7/91, Mr Commissioner Hallett held that neither an adjudication officer, nor a social security appeal tribunal, nor a Commissioner had jurisdiction to decide whether or not the Secretary of State had implemented an award of benefit under the Social Security Act 1975. He added:

An "award" (of benefit) is not defined in the Social Security Acts. But its meaning is clear. It is simply a decision that benefit (a word defined in Schedule 20 to the 1975 Act) is payable. Such a decision confers a statutory right to payment; cf Morton v. Chief Adjudication Officer, reported in the appendix to decision R(U) 1/88 per Lord Justice Slade, page 22, paragraph D.

Applying that principle to the present case, it is common ground that regulation 20 of the Claims and Payments Regulations imposed a statutory obligation to pay benefit. Neither those regulations nor any other statutory provision provide an express remedy for the recovery of unpaid benefit. It follows that it is open to a claimant who can prove that there is an award of benefit in his favour which is unpaid to sue for the unpaid amount in the County Court.

Mr Stagg submits, however, that an action in the County Court would not have been a practical or realistic remedy for Mr Murdoch. He adds for good measure that it would not be a practical or realistic remedy for claimants generally. First, the remedy is only of utility if the beneficiary is aware that a decision maker has taken a decision to award or restore benefit. Second, in the present case, the July decision did not restore Mr Murdoch's entitlement to income support. A further decision was needed for that purpose, and until there had been such a decision Mr Murdoch could not have sued for unpaid income support. Third, calculation of the amount owed is not necessarily straightforward. Benefit rates can fluctuate for any number of reasons. For example, a claimant for income support receives differing amounts for the needs of children of different ages which will increase on certain birthdays. Benefit rates do not necessarily remain constant. DWP's submissions had referred to claims for stolen giros, but in such cases the unpaid amounts were matters of record. They were claims of an entirely different nature to a claim for several months' unpaid benefit due under an award. In claims such as Mr Murdoch's, the calculation of arrears was often a complex process, generally carried out by computer and sometimes by trained staff. It was unrealistic to suggest that the average social security claimant will be in a position to calculate benefit accurately, even with assistance from a CAB.

A duty of care consistent with the statutory scheme?

It is clear from the decision in Rowley that in relation to the operation of a statutory scheme the common law can only impose a duty of care where to do so would be consistent with that statutory scheme. Ms Bell submits that the duty of care alleged by Mr Murdoch would be inconsistent with the statutory scheme for the relevant benefits. My task in this regard involves consideration of the extent to which a legal entitlement to sue for damages for negligence would be incompatible with the statutory scheme.

An important feature of the statutory scheme is the finality which is sought to be achieved by s 17(1) of the 1998 Act. It is in terms which are substantially similar to s 117(1) of the 1980 Act, and it will be recalled that the narrower ground of decision of the Court of Appeal in Jones was that s 117(1) precluded a duty of care in relation to the taking of decisions within that section.

The wording of both these sections is also similar to s 46A of the 1991 Act in relation to child maintenance. In that context however it was inserted 7 years after the creation of the statutory scheme and for that reason Dyson LJ in Rowley found it unnecessary to consider its effect. By contrast in relation to social security benefits s 17(1) of the 1998 is simply a continuation of a series of provisions in predecessor statutes, among them s 117(1) of the 1975 Act. Mr Stagg accordingly accepts that what was said in Jones about s 117(1) of the 1975 Act must be applicable to s 17(1) of the 1998 Act. It is no doubt for that reason that he makes the concession I have discussed earlier. It has the result that negligence in the taking of decisions within s 17(1) cannot be actionable on the basis of a common law duty of care. For convenience I shall refer to such decisions as "protected decisions." It is common ground that they include both the April decision and the July decision in the present case.

How would the duty of care alleged by Mr Murdoch affect protected decisions? As regards matters prior to, and potentially relevant to, a protected decision, it seems to me that examination by a court of what may or may not have gone wrong is inextricably bound up with an examination of the protected decision. In the present case Mr Murdoch wants to inquire, for example, into the checks that were in place to ensure that letters were correctly addressed. However whether Sema's letters were incorrectly addressed is something which was germane to both the April and the July decisions. Further, this aspect of Mr Murdoch's claim inevitably involves identifying what negligence prior to the protected decision can be proven and asking whether but for the proven negligence the protected decision would have been different. Once it is acknowledged that the statutory scheme seeks to protect these decisions from examination in a court (otherwise than by way of statutory appeal, judicial review or action for misfeasnace) in my view it must follow that this aspect of Mr Murdoch's claim is incompatible with the statutory scheme.

The remainder of Mr Murdoch's claim is concerned with failure to put the July decision into effect. As regards income support this may have involved the taking of a further protected decision (to which regulation 10 of the Decisions and Appeals Regulations would apply), and to that extent then for the reasons in the preceding paragraph it would be incompatible with the statutory scheme to hold that a duty of care arises.

That leaves those aspects of DWP's role which were concerned simply to ensure that Mr Murdoch received the benefits due to him under the July decision. Here it seems to me that Parliament must be taken to have been aware of the well established right of action in the County Court. The scheme established by Parliament thus is one which contemplates a simple and straightforward remedy where a person entitled to benefit does not receive that benefit. It is in my view incompatible with the scheme to complicate matters by adding a right of action for negligence. I accept that a claimant needs to know of the decision before proceedings can be commenced, but in most cases this can be expected to be a matter of record and readily identifiable. I do not accept that there is likely to be great difficulty in calculating the amount in a case such as Mr Murdoch's – for the amount he was receiving in the past will be known. Nor is the County Court an unsuitable forum for resolving any issue as to calculation.

The statutory schemes in cases relied upon by Mr Stagg lacked any equivalent to s 17(1). In any event those cases are of little assistance to the present question as the statutory schemes they were concerned with lacked the substantial protection in relation to financial matters found in the 1998 Act and the clear delineation in that Act of the role of DWP, statutory appellate bodies, and the courts. In relation to those key features the scheme in the 1998 Act is similar to that in the 1991 Act, and they – along with the fact that FRMG was in place in 1997 prior to enactment of the 1998 Act - provide further reason for concluding that the duties asserted by Mr Murdoch would be incompatible with the statutory scheme.

For all these reasons I conclude that Mr Murdoch's claim is unsound in law.

Duty if there is no incompatibility with statutory scheme?

My conclusion that the common law duty of care asserted by Mr Murdoch would be incompatible with the statutory scheme has the consequence that for that reason alone no such duty of care can arise. Observations as to what the position would be if the alleged duty of care were compatible with the statutory scheme are, therefore, not strictly necessary to this decision. I shall make brief observations on this aspect in deference to the detailed arguments advanced on each side. I make these observations with an important caveat: if it were to be held that the duty of care alleged by Mr Murdoch would be compatible with the statutory scheme, then the reasons for reaching that conclusion might have an important impact on the discussion which follows.

It is common ground that mere compatibility with the statutory scheme does not of itself demonstrate that the common law will impose a duty of care. Both sides agree that the matters which arise for consideration in this regard are those identified in Customs & Excise Commissioners and discussed by Dyson LJ in Rowley.

Voluntary assumption of risk

Mr Stagg submitted that the DWP was not obliged to call Mr Murdoch for a medical examination: it had a discretion, and it was DWP's choice as to whether or not to require such an examination.

The judge accepted that calling Mr Murdoch for medical examination was a matter of discretion rather than duty. However that exercise of discretion did not involve a voluntary assumption of responsibility. To my mind the judge was plainly right to hold that the analysis by Dyson LJ of the exercise of discretion at paragraph 54 of his judgment in Rowley compelled that conclusion. In suggesting the contrary Mr Stagg relied on Carty v Croydon London Borough Council [2005] EWCA Civ 19, [2005] 1 WLR 2312, and Sandford v Waltham Forest London Borough Council [2008] EWHC 1106 (QB), (2008) 11 CCLR 467. These cases, however, were not concerned with pure economic loss and thus the question of voluntary assumption of responsibility was not crucial to the decision.

I add that Mr Stagg's distinction between discretion and obligation would in any event break down at the stage after the July decision. Unless some reason arose for thinking that the July decision needed to be revisited – and none is suggested here – it is unclear to me how it can be said that DWP had any substantial discretion as to the carrying out of the July decision.

In those circumstances I do not need to go into the question whether reliance was sufficiently asserted in the particulars of claim.

The incremental approach

Mr Stagg submitted that the present case was very closely analogous to A and Kanidagli. In that case administrative errors by the Home Office led to loss of benefit payable by DWP. Mr Stagg submitted that the judge was wrong to distinguish A and Kanidagli on the basis that the statutory scheme was different.

In my view the judge was right to conclude that the statutory scheme in A and Kanidagli was very different from the scheme in the present case. I have identified important features of the scheme for social security benefits earlier in this judgment when analysing whether Mr Murdoch's alleged duty of care could be compatible with the statutory scheme. For present purposes I must assume that those features would not make the scheme incompatible with Mr Murdoch's alleged duty of care. Nonetheless, to my mind they would still constitute very significant differences. I would add that there is a further important difference: the purpose of the statutory scheme for immigration is to decide whether an important personal status should be conferred upon the would-be immigrant. The grant of such a status would carry with it certain economic advantages. It seems to me that is very different from a scheme whose purpose is to provide funds rather than any particular status. In my view Ms Bell is right to contend that the present case is more closely analogous to Rowley than it is to A and Kanidagli. Almost all the factors identified by Dyson LJ in Rowley are found in the present case. Mr Stagg observed that A and Kanidagli was cited in Rowley but no comment was made upon it by Dyson LJ in his judgment. I do not think any significance attaches to this. All that can be inferred is that Dyson LJ did not consider it necessary to say anything about A and Kanidagli.

Mr Stagg stressed that Dyson LJ placed reliance on the presence in the statutory scheme in Rowley of a power to make regulations concerning payment of interest in prescribed circumstances. By contrast the relevant statutes governing the administration of incapacity benefit and income support did not confer any such power. I do not consider that this argument assists Mr Murdoch. As noted earlier, once DWP has taken a decision to award benefit then the person in whose favour that award is made will have a statutory right of action. Parliament must be taken to have contemplated that this would be so, and equally to have contemplated that the court's power to award interest would then be engaged. It might well be that if DWP had paid all relevant sums prior to the commencement of proceedings a civil action could not be brought for interest alone – but in that regard the claimant would be in no different position from any other creditor whose debt had been paid prior to the commencement of proceedings.

The Threefold Caparo Test

The first element in the threefold test is foreseeability that the claimant would suffer damage as a result of the defendant's negligence: this is conceded by DWP in the present case. The second aspect of the threefold test concerns a relationship of sufficient proximity between the claimant and the defendant. On this DWP said that Mr Murdoch was in no different position to any other member of the public who makes an application for social security benefit. The Judge agreed. In my view he was right to do so. All relevant matters relied upon arose from discharge by DWP of its statutory functions. As noted earlier, Mr Stagg urged on Mr Murdoch's behalf that as a result of his condition he was a vulnerable individual who was not able to function normally, and significantly less able than the average recipient of incapacity benefit and income support to put himself forward for work. I cannot think that a criterion of this kind offers any satisfactory basis for distinguishing between categories of applicants for social security benefits. Some applicants will be at the most severe end of the spectrum. Others will have far less powerful claims to assistance from the state. The statutory scheme identifies the tests which will determine whether benefit is payable. It is difficult to see how a court when deciding whether a duty of care arose could differentiate between claimants by identifying the degree of vulnerability of an "average" recipient of the relevant benefit and contrasting that with the vulnerability of the claimant in question.

Here, too, reliance was placed by Mr Stagg on the decision in Carty. For the reasons given when discussing voluntary assumption of responsibility above I conclude that Carty has no bearing on the present case.

The third aspect of the threefold Caparo test concerns whether it is fair, just and reasonable to impose a duty of care. Mr Stagg relied on three factors in this regard. The first was that, "the first consideration of the law is that wrongs are remedied". On his account of events, Mr Murdoch was severely financially embarrassed by a catalogue of errors on the part of those responsible for administering his social security benefits. The remedying of wrongs, however, at least when those wrongs arise in the carrying out of a statutory scheme, has to be considered in the context of that scheme for the reasons given above. Even if the scheme is not incompatible with a duty of care, its main features are in my view such that this factor is deprived of any significant weight. The second factor relied upon is that the alleged errors did not involve the making of difficult decisions, but rather concerned failures of administrative practice. Here, too, for the reasons given earlier it seems to me that the statutory scheme points away from a distinction of this kind. The final factor was the vulnerability of individuals such as Mr Murdoch. If it is suggested here that Mr Murdoch can place reliance upon his particular vulnerability, for the reasons given earlier it seems to me that such reliance cannot be justified: it is impractical to distinguish Mr Murdoch from others who meet the test for entitlement to benefit. If it is intended to refer to the vulnerability of all those entitled to benefit, the short answer is that their vulnerability has led Parliament to enact the statutory scheme. That being so, it does not appear to me that it is fair, just and reasonable to add another extra-statutory legal entitlement on to the provision already contemplated by Parliament.

The "Preliminary" Question Revisited

In the discussion thus far I have put on one side the five areas where it was suggested in Mr Stagg's skeleton that investigation of the facts would be necessary at trial. I now return to those five matters said to need investigation.

The first matter said to need investigation was the relationship between DWP and Sema and how that may have led to the appointment letters being sent to the wrong address. The second concerned maintenance of records by DWP to enable checks of addresses, and the system for carrying out checks before concluding that there had been an unreasonable failure to attend a medical examination. The third concerned whether the computer systems maintained by DWP might explain administrative failings in Mr Murdoch's case. The fourth concerned the nature of the process under which decisions restoring benefit were to be implemented by DWP. In my view Ms Bell is right to say that, at least as regards these four matters, they all concern matters which might be relevant if the court were investigating whether there had been a failure to exercise reasonable care. I cannot discern any logical basis for these matters to need to be investigated in order to decide whether a duty of care arises.

The fifth factor said to need investigation concerned whether there was, in reality, any reason to fear a flood of claims if a duty of care were found to exist. It is true that DWP's arguments relied in part on alleged undesirable consequences of a duty of care, including a substantial number of claims in the County Court. I do not regard this as a critical part of the analysis. Evidence has in fact been lodged by DWP, without objection on the part of Mr Murdoch, which to a limited extent only deals with the number of County Court claims and applications for redress under FRMG. However, concerns as to precisely how many additional claims would arise in the County Court do not appear to me to be material to my decision.

The result is that I conclude that this case meets the test in paragraph 22 of Dyson LJ's judgment in Rowley. It is clear that, even if it is assumed in Mr Murdoch's favour that all the facts that he alleges are true, the claim must fail. The preliminary question must therefore be answered in favour of DWP: this is a case where it is possible to decide the relevant question of law without a trial.

Conclusion

Accordingly this appeal must be dismissed. I ask the parties to seek to agree the terms of any consequential orders.

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You are here: BAILII >> Databases >> England and Wales High Court (Queen's Bench Division) Decisions >> Murdoch v Department for Work and Pensions [2010] EWHC 1988 (QB) (30 July 2010) URL: http://www.bailii.org/ew/cases/EWHC/QB/2010/1988.html Cite as: [2010] EWHC 1988 (QB), [2011] PTSR D3