CI_1698_1997 [1998] UKSSCSC CI_1698_1997 (15 December 1998)

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    [1998] UKSSCSC CI_1698_1997 (15 December 1998)

    THE SOCIAL SECURITY COMMISSIONERS

    Commissioner's Case No: CI/1698/1997

    SOCIAL SECURITY ADMINISTRATION ACT 1992

    SOCIAL SECURITY CONTRIBUTIONS AND BENEFITS ACT 1992

    APPEAL FROM A DECISION OF A SOCIAL SECURITY APPEAL TRIBUNAL

    ON A QUESTION OF LAW

    DECISION OF THE SOCIAL SECURITY COMMISSIONER

    COMMISSIONER: MR J MESHER

    [ORAL HEARING]


     

    DECISION OF THE SOCIAL SECURITY COMMISSIONER

  1. The claimant's appeal is allowed. The decision of the Birkenhead social security appeal tribunal dated 6 February 1997 is erroneous in point of law, and I set it aside. It is expedient for me to substitute the decision which the appeal tribunal should have given on the facts it found (Social Security Administration Act 1992, section 23(7)(a)(i)). My substituted decision on the appeal against the adjudication officer's decision issued on 10 May 1996 is that the adjudication officer's decision issued on 24 August 1995 falls to be reviewed on the ground that it is erroneous in point of law (Social Security Administration Act 1992, section 25(2)) and that the revised decision on review is that the decision dated 26 February 1993 falls to be reviewed on the ground that there had been a revision of the decision of the medical authorities (Social Security Administration Act 1992, section 25(1)(d)) and the revised decision is that the claimant is entitled to disablement pension from and including 1 April 1992 at the rate appropriate to an assessment of the degree of disablement at 15% (before rounding-up), followed by 16% from 3 May 1995.

  2. The sequence and precise dates of the events in this case are crucial to its proper determination. The sequence of decisions is as follows.

    3. (a) On 19 November 1989 the claimant made a claim for disablement benefit in respect of prescribed disease A11 (vibration white finger). On 19 December 1990 disablement was finally assessed at 7% from 1 April 1985 for life. As the claim was treated as having been made on 30 September 1986, a disablement gratuity was awarded by an adjudication officer's decision issued on 25 February 1991.

    (b) On 26 May 1992 the claimant signed a disablement benefit claim form in respect of prescribed disease D4 (inflammation or ulceration of the mucous membrane of the upper respiratory passages or mouth). The initial adjudication officer's decision on 26 February 1993 was to disallow disablement benefit for D4, based on the adjudicating medical authority's (AMA's) decision. On appeal, a medical appeal tribunal (MAT) finally assessed disablement at 8% from 1 January 1960 for life. The adjudication officer in a decision issued on 24 August 1995 reviewed the decision of 26 February 1993 on the ground that there had been a revision of the decision of the medical authorities (Social Security Administration Act 1992, section 25(1)(d)). However, the existing decision was not revised because the assessment of disablement was still below 14%.

    (c) On 1 August 1995 the claimant had applied for a review of the assessment of disablement in respect of prescribed disease A11 on the ground of unforeseen aggravation. On 4 September 1995 an AMA found unforseen aggravation and on review assessed disablement at 8% from 3 May 1995 for life. In a decision issued on 19 September 1995 an adjudication officer decided that the claimant was not entitled to disablement benefit as disablement from prescribed disease A11 was less than 14%. Then on 15 February 1996 the following adjudication officer's decision was issued:

    "A disablement pension is not payable from 3.5.95 for life. The decision is made having regard to the aggregated assessment comprising the following assessed percentages of disablement decided by the adjudicating medical authority:-

    1

    Date of Onset of Pres Disease

    1.1.60 (D4)

    1.1.70 (A11)

    2

    Degree of Disablement

    8%
    8% (-7%)

    3

    Period of Assessment

    1.1.60 - life

    3.5.95 - life

    Disablement benefit is not payable because a disablement gratuity of £1552.00 based upon a 7% final assessment of disablement benefit from 1.4.85 for life has already been awarded and paid in respect of the prescribed disease vibration white finger and the above assessment relating to that disease has therefore been reduced by 7% for the common period 3.5.95 for life.

    This is because when a final assessment in respect of which a gratuity has been paid is increased as a result of a review on the grounds of unforeseen aggravation, only the amount of any such increase is available for aggregation, that is to say 1%."

    (d) On 26 March 1996 a MAT confirmed the AMA's assessment of disablement in respect of prescribed disease A11.

    (e) On 10 May 1996 the following adjudication officer's decision was issued:

    "I have reviewed the decision dated 24/08/95 of the Adjudication Officer disallowing Disablement Benefit from 01/01/60 for life. The decision has subsequently become erroneous in law. That is that from and including 24/07/95 Commissioner's Decision CI/522/93 must be applied.

    My revised decision only from and including 24/07/95 is as follows:-

    A Disablement Pension at the weekly rate of £19.06 from 24/07/95 to 09/04/96, and £19.80 from 10/04/96 for life (all dates included) based upon an aggregated assessment comprising the following assessed percentages of disablement decided by the Adjudicating Medical Authority:

    (1)

    Date of Accident or Date of Onset of Prescribed Disease

    01/01/60

    01/01/70

    (2)

    Degree of Disablement

    8%
    8%

    (3)

    Period of Assessment

    01/01/60 - life

    03/05/95 - life

    the aggregate of which gives a rounded assessment of 20%."

    Among the legislation referred to was section 69 of the Social Security Administration Act 1992.

  3. It was the decision issued on 10 May 1996 against which the claimant appealed, through his representative Mr Richard Atkinson of Wirral Welfare Benefits Advice Unit. It was submitted that disablement benefit was payable from 1 October 1986 and that section 69 of the Social Security Administration Act 1992 did not apply since the decision under review was not erroneous in point of law in consequence of CI/522/1993.

  4. Before coming to the appeal tribunal's decision, I need to explain briefly what was decided by Mr Commissioner Henty in CI/522/1993. There the claimant had been awarded and paid disablement gratuities in respect of final assessments of disablement for four industrial accidents, of which only three were in the end relevant. For accident 1 the assessment was of 2% from (I think) 4 January 1973 for life. For accident 3, the assessment was of 4% from (I think) 13 December 1980 for life. For accident 4, the assessment was of 5% for the period from 23 September 1981 to 22 June 1982. The claimant made applications for review of the assessments on the ground of unforeseen aggravation, which were successful in respect of accidents 1, 3 and 4. The revised assessments were 7%, 7% and 3%, from various dates for life, respectively. The adjudication officer initially decided that the percentages available for aggregation were 5% on accident 1 (7% - 2%), 3% on accident 3 (7% - 4%) and 3% on accident 4. That made a total of 11%, so that disablement benefit was not payable as the assessment was below 14% (Social Security Act 1975, section 57(1); Social Security Contributions and Benefits Act 1992, section 103(1)). The Commissioner held that that analysis was wrong and that, in the light of regulation 85 of the Social Security (Adjudication) Regulations 1984 and Commissioner's decision R(I) 11/67, gratuities for life or for more than seven years "expired" after seven years. Thus the full amounts of the new assessments on review for unforeseen aggravation were available for aggregation. Since the assessments totalled at least 14%, a disablement pension was payable. The decision was signed on 24 July 1995.

  5. Regulation 85(1) and (2) of the 1984 Adjudication Regulations provide:

    6. "(1) Subject to the provisions of paragraph (4), any sum on account of industrial injuries benefit which has been paid to any person in pursuance of a decision which is afterwards revised on a review or reversed or varied on an appeal shall be treated as paid on account of any benefit which it is decided is or was payable to him in respect of the same period (in this regulation referred to as `the common period').

    (2) For the purpose of paragraph (1)--

    (a) a gratuity under section 57 of the [Social Security Act 1975] shall be treated as a periodical payment payable in respect of the period (in this regulation referred to as `the gratuity period') taken into account by the relevant assessment of the degree of disablement (that period, where it is more than 7 years or is not limited by reference to a definite date, being deemed to be one of 7 years); and"

    [the remainder of paragraph (2) does not need to be reproduced]

  6. The appeal tribunal on 6 February 1997 awarded disablement pension to the claimant from 3 May 1995, as on that date both the 8% assessments were available for aggregation. It held that section 69 of the Social Security Administration Act 1992 did not apply, because Commissioner's decision CI/522/1993 did not create any new law, having relied on the earlier decision R(I) 11/67. The claimant now appeals against the appeal tribunal's decision, with leave granted by its chairman. It was submitted that disablement pension should have been made payable from 26 May 1992. The adjudication officer's written submission did not support the appeal.

  7. There was an initial oral hearing of the appeal, which was adjourned to enable the adjudication officer to investigate whether it was correct that regulation 85 of the 1984 Adjudication Regulations had not been revoked, as had been asserted before Mr Commissioner Henty in CI/522/1993. At the resumed oral hearing, the claimant attended and was represented by Mr Atkinson. The adjudication officer was represented by Mr Sriskandarajah of the Office of the Solicitor to the Department of Social Security. I am grateful for the submissions at the hearing, which have enabled me to identify what I hope are the central issues in this complicated case.

  8. Some points can be cleared out of the way immediately. The first is section 69 of the Social Security Administration Act 1992. The decision which was reviewed for error of law in the adjudication officer's decision under appeal was that issued on 24 August 1995. Since decision CI/522/1993 was signed on 24 July 1995, the condition in section 69(1)(b)(i) - that the decision under review was made before the Commissioner's or court decision which reveals it to be wrong in law - is not met. Section 69 cannot apply in the circumstances of the present case in relation to CI/522/1993 and the decision issued on 24 August 1995.

  9. The second point is about regulation 85 of the 1984 Adjudication Regulations. The revocation of that regulation was first provided for in the Schedule to the Social Security (Payments on account, Overpayments and Recovery) Regulations 1986 (SI 1986/2217), which were to come into force on 6 April 1987. Then the Social Security (Industrial Injuries) (Reduced Earnings Allowance and Transitional) Regulations 1987 (SI 1987/415), also to come into force on 6 April 1987, were made. Regulation 9 provides:

    10. "9. For the purpose [of] offsetting any amount paid by way of gratuity under an award which is subsequently varied on appeal or revised on review, regulation 85 of the Social Security (Adjudication) Regulations 1984 shall have effect after 5th April 1987 as if made under section 53(5)(b) of the [Social Security Act 1986]."

    However, subsequently it was considered that SI 1986/2217 had been invalidly made. It was replaced by the Social Security (Payments on account, Overpayments and Recovery) Regulations 1987 (SI 1987/491), to come into force on 6 April 1987. The Schedule to those Regulations also provided for the revocation of regulation 85 of the 1984 Adjudication Regulations, and nothing was said in the Regulations about SI 1987/415.

  10. In those circumstances, it might well be that, despite the saving for the continuing effect of regulation 85 in SI 1987/415, the regulation was revoked by the later provision in SI 1987/491. But I have concluded that it does not matter for the purposes of the present case. I respectfully disagree with the view of Mr Commissioner Henty in CI/522/1993 that regulation 85 holds the key and is applicable to the situation of aggregation. Regulation 85 is concerned with the offsetting of the amount paid in a gratuity against a subsequent award of benefit in respect of the same accident or disease. Prior to the amendments to the industrial injuries benefit legislation with effect from 1 October 1986, there was no provision for the aggregation of percentages of disablement awarded in respect of different accidents or diseases. It seems to me that regulation 85 cannot simply be applied to the different exercise of aggregating percentages of disablement, which exercise takes place in the context of establishing the assessed extent of disablement, before the question is reached of what amount of benefit might be payable. The primary focus must be on the terms of the new legislation on aggregation. Regulation 85 does though remain, whether or not its legislative effect continues beyond 5 April 1987 or not, an important element in determining the nature of gratuities awarded on claims made or treated as made before 1 October 1986.

  11. Accordingly, I turn to the legislation on aggregation. The fundamental provisions are in section 103(1) and (2) of the Social Security Contributions and Benefits Act 1992:

    12. "(1) Subject to the provisions of this section, an employed earner shall be entitled to disablement pension if he suffers as the result of the relevant accident from loss of physical or mental faculty such that the assessed extent of the resulting disablement amounts to not less than 14 per cent. or, on a claim made before 1st October 1986, 20 per cent.

    (2) In the determination of the extent of an employed earner's disablement for the purposes of this section there may be added to the percentage of the disablement resulting from the relevant accident the assessed percentage of any present disability of his--

    (a) which resulted from any other accident after 4th July 1948 arising out of and in the course of his employment, being employed earner's employment, and

    (b) in respect of which a disablement gratuity was not paid to him after a final assessment of his disablement,

    (as well as any percentage which may be so added in accordance with regulations under subsection (2) of section 109 below made by virtue of subsection (4)(b) of that section)."

    Regulations made under section 109 make equivalent provision for cases of loss of faculty due to industrial disease, rather than accident. In particular, regulation 15A(1) of the Social Security (Industrial Injuries) (Prescribed Diseases) Regulations 1985 provides:

    "(1) After the extent of an employed earner's disablement resulting from the relevant disease has been determined, the Adjudication Officer shall add to the percentage of that disablement the assessed percentage of any present disablement of his resulting from--

    (a) any accident after 4th July 1948 arising out of and in the course of his employment, being employed earner's employment, or

    (b) any other relevant disease due to the nature of that employment and developed after 4th July 1948,

    and in respect of which a disablement gratuity was not paid to him under the [Social Security Act 1975] after a final assessment of disablement."

    Although regulation 15A uses the word "shall" instead of "may", it effectively prescribes the same rules for entitlement to disablement pension and for aggregation of percentages of disablement as section 103(1) and (2). I shall refer below only to section 103.

  12. An initial problem is whether, since the initial claim for disablement benefit (in relation to prescribed disease A11) was treated as made before 1 October 1986, the threshold for entitlement to disablement pension should remain 20%, rather than 14%. A related problem is whether, on the revised assessment on review for unforeseen aggravation of the disablement resulting from prescribed disease A11, the claimant could be entitled to a further disablement gratuity under paragraph 9 of Schedule 7 to the Social Security Contributions and Benefits Act 1992. In both cases, I am satisfied that the answer is in the negative. Without going into all the potential complications, it seems to me that where there has been a final assessment of disablement on a claim made or treated as made before 1 October 1986 and in respect of which a disablement gratuity has been paid, any further assessment made on an unforeseen aggravation review for a period starting on or after 1 October 1986 should not be regarded as made on the pre-1 October 1986 claim, but should fall within the new regime with the 14% threshold. The Social Security (Industrial Injuries and Diseases) (Miscellaneous Provisions) Regulations 1986 contain transitional provisions dealing with other circumstances. Regulation 8 covers provisional assessments of disablement and regulation 12 covers unforeseen aggravation reviews, but not reviews of final assessments where the period taken into account begins on or after 1 October 1986. That leaves other circumstances to fall under the new regime. Similarly, I am satisfied that when a claimant who has already had a final assessment on a pre-1 October 1986 claim puts forward after 1 October 1986 a new accident or disease, the assessment on the new accident or disease (including aggregation) is to be carried out under the new regime.

  13. In my view, under section 103 aggregation of percentages of disablement resulting from other accidents or diseases must be considered on each occasion when the assessed percentage of disablement resulting from a particular accident or disease (which I shall call the primary accident or disease) is being determined. The starting point is the assessed percentage in respect of the primary accident or disease. However, there seems to me to be no room in section 103(1) for any deduction (either generally or in the subsequent process of aggregation) of a percentage on the ground that a gratuity had previously been paid on the basis of a final assessment of disablement, even for life. Section 103(1) requires whatever is the actual assessed percentage of disablement in respect of the primary accident or disease to be taken into account in determining whether disablement pension is payable. Thus, in the circumstances of the present case, the process followed by the adjudication officer in the decision issued on 15 February 1996 was wrong. Following the final assessment in respect of prescribed disease A11 of 8% from 3 May 1995 for life on the finding of unforeseen aggravation, that 8% should have formed the starting point for any aggregation. The fact that a gratuity had been awarded on the basis of the 7% final assessment from 1 April 1985 for life was irrelevant. There is no legislative provision allowing the conclusion that in such circumstances only 1% was "available for aggregation". If I am wrong about this interpretation of section 103(1), I am satisfied that, for consistency with what I decide below, no deduction should be made for the 7% assessment after the expiry of seven years from 1 April 1985.

  14. The more difficult question is what is the effect where a gratuity has been paid in respect of another accident or disease, and the aggregation of the disablement in respect of that accident or disease with the disablement in respect of the primary accident or disease is in issue. The terms of section 103(2)(b) at first sight seem clear. If a gratuity has been paid in respect of the disability resulting from the other accident or disease, there can be can be no aggregation. However, Mr Atkinson correctly pointed out that what must be aggregated under section 103(2) is the assessed percentage of any present disability in respect of another accident or disease and that aggregation is only precluded by section 103(2)(b) when a gratuity has been paid in respect of that present disability.

  15. Certain situations pose no problems. Suppose a gratuity had been paid following a final assessment for a period of five years. Subsequently, on a review on the ground of unforeseen aggravation, there is a final assessment starting after the end of the five-year period. The whole of that assessment is available for aggregation with the disablement resulting from the primary accident or disease. The gratuity was not paid in respect of the assessed percentage of the present disability resulting from the other accident or disease. Or suppose that a gratuity has been paid in respect of a final assessment of 7% for life. Subsequently, on a review on the ground of unforeseen aggravation, there is a final assessment of 10% for life. From the starting date of the new assessment, at the very least (subject to what is decided below) 3% is available for aggregation with the disablement resulting from the primary accident or disease. The gratuity had not been paid in respect of that element of the present disability resulting from the other accident or disease.

  16. How does the principle apply to the case where a gratuity was paid in respect of a final assessment for life or for at least seven years and the question of aggregation arises more than seven years after the beginning of the period of assessment? Mr Atkinson submitted that it followed from the method of calculation of gratuities, from regulation 85 of the 1984 Adjudication Regulations and from Commissioners' decisions R(I) 11/67 and CI/522/1993 on the "expiry" of gratuities after seven years, that in such a case the whole percentage assessment is available for aggregation. The same maximum gratuity was paid whether the assessment was for life or was for any period of at least seven years. Therefore, he said, a gratuity should only be regarded as having been paid in respect of the disability occurring in the first seven years of the assessment. If the question of aggregation with the disablement resulting from a primary accident or disease arose after the expiry of the seven years, aggregation was not precluded by section 103(2)(b), because the gratuity had not been paid in respect of the present disability resulting from the other accident or disease.

  17. The difficulty with that submission is that it has to rest on the words of section 103(2). It seems to me that the legislative scheme for aggregation of assessments of disability is a very sketchy one. The rule in section 103(2) is not in the present context fleshed out by regulations. For the reasons given in paragraph 10 above, I am satisfied that, if regulation 85 of the 1984 Adjudication Regulations remained in force after 5 April 1987, it does not have the effect of extending its deeming to the question of aggregation. For the same reason, Commissioner's decision R(I) 11/67, which was solely concerned with a predecessor of regulation 85, is not of direct relevance. The Regulations mentioned in paragraph 12 above do not contain anything dealing with the present circumstances. Thus, there is no express legislative provision for the purpose of aggregation to produce the deeming which was considered necessary for the purpose of the offsetting of amounts of benefit. In the present case, the initial assessment of disablement in relation to prescribed disease A11 was clearly made for the whole period from 1 April 1985 for life. It would appear to be the most natural reading of section 103(2) that the resulting disablement gratuity was paid in respect of that whole period.

  18. However, Mr Atkinson's reading of section 103(2) is also a tenable one. I have concluded that it is more in accord with the overall scheme of the legislation and is therefore to be preferred. The overall scheme of aggregation of assessments of disablement, which is a replacement of the previous scheme of gratuities and pensions and in some sense a compensation for the loss of the entitlements to separate gratuities, should if possible operate in a rational and fair way. In the present case, if Mr Atkinson's submission were rejected, the result would be that the claimant was entitled to disablement pension from 3 May 1995. From that date, the assessment for the primary accident or disease (prescribed disease A11) was 8%, following the unforeseen aggravation review, and the 8% for prescribed disease D4 was to be aggregated, as no gratuity had been paid in respect of that assessment. However, if the claimant had been successful on the unforeseen aggravation review before the assessment was made for prescribed disease D4, the result would have been different. No pension could be awarded in respect of prescribed disease D4 on its own, because the assessment was below 8%. And the 8% assessment for prescribed disease A11 could not be aggregated under section 103(2) if the gratuity that had been paid was said to have been paid in respect of the claimant's present disability resulting from prescribed disease A11. The claimant would not be entitled to a disablement pension, although the extent of his disablement from the two causes was exactly the same as in the actual circumstances of the present case. Such a result cannot be right and would affront the sense of fairness of any ordinary person. It is avoided by the adoption of Mr Atkinson's submission. My conclusion also has the advantage that it is consistent with the result of Commissioner's decision CI/522/1993.

  19. That conclusion must now be applied to the circumstances of the present case. The question of aggregation first arose when the adjudication officer issued the decision on 24 August 1995, following the assessment of disablement resulting from prescribed disease D4 at 8% from 1 January 1960 for life. That assessment on its own, being less than 14%, was not enough to qualify the claimant for disablement pension. There was also in existence the final assessment for prescribed disease A11 at 7% from 1 April 1985 for life. Although a disablement gratuity had been awarded in respect of this assessment, the gratuity is to treated as having been paid only in respect of the period from 1 April 1985 to 31 March 1992. Therefore, on the interpretation of section 103(2) which I consider correct, that assessed percentage was available for aggregation for the period after 31 March 1992. The 8% for the primary accident or disease plus the 7% for the other accident or disease came to 15%, enough to entitle the claimant to disablement pension. Thus the adjudication officer was wrong, because of the error of law in failing to consider aggregation, in the decision issued on 24 August 1995 not to revise the decision that the claimant was not entitled to disablement pension. Following the increased assessment for prescribed disease A11 from 3 May 1995 on unforeseen aggravation, the aggregated assessment was 16%, which, because of the rules on rounding, would not make any practical difference to the appropriate rate of disablement pension.

  20. There is a small, but potentially difficult, point about the date from which the claimant became entitled to disablement pension. It is debateable whether, in the circumstance that the claim for disablement benefit treated as made on 30 September 1986 had been satisfied by the final assessment of disablement resulting from prescribed disease A11 and the award of the gratuity, the disablement benefit claim form signed on 26 May 1992 was making a claim or applying for a review. However, the time for claiming disablement benefit under paragraph 3 of the Social Security (Claims and Payments) Regulations 1987 was three months from any day of entitlement. And under regulation 66(1) of the Social Security (Adjudication) Regulations 1986 a revision on review to make industrial injuries benefit payable was to have effect from the date of the application for review or from such earlier date as appears reasonable. In either case, in the light of the period of the assessment for prescribed disease D4, I see no reason why entitlement to disablement pension should not be awarded from the first date on which the threshold of 14% disablement was reached through aggregation. That is 1 April 1992.

  21. The decision under appeal to the appeal tribunal, ie that issued on 10 May 1996, was therefore right to find that the adjudication officer's decision issued on 24 August 1995 fell to be reviewed on the ground that it was erroneous in point of law. The appeal tribunal was right (although not for the right reason) to reject the restriction said by the adjudication officer to be imposed by section 69 of the Social Security Administration Act 1992. However, it erred in law in deciding that the claimant was entitled to disablement pension only from and including 3 May 1995. Nor did it explain why, on the basis of the submissions which had been made, entitlement did not start any earlier than that date. For those reasons, I set aside the appeal tribunal's decision of 6 February 1997 as erroneous in point of law. I substitute a decision giving effect to my conclusions of law above, which is set out in paragraph 1 above.

    22. (Signed) J Mesher

    Commissioner

    Date: 15 December 1998

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