R(CR) 3/03

Mr. M. Rowland  						              CCR/2320/2002
21.2.03

Claimant suffering from illnesses other than the relevant disease – whether benefits are recoverable when they would have been paid even if the relevant disease had not developed

The claimant was exposed to asbestos in the course of his employment and compensation was paid to him on the basis that he had developed asbestos-induced pleural thickening (“the relevant disease”). The Secretary of State issued a certificate of recoverable benefits under the Social Security (Recovery of Benefits) Act 1997 seeking recovery of all benefits paid to the claimant during the period from 8.7.94 to 7.7.99 (“the relevant period”) on the ground that they had been paid “in respect of” the relevant disease. These benefits comprised disablement benefit paid in respect of pneumoconiosis, sickness, invalidity and incapacity benefits, income support and disability living allowance. The compensators appealed against the certificate on the ground that the benefits had been paid otherwise than in respect of asbestos-induced pleural thickening. The medical evidence showed the claimant to have other disabling illnesses, in particular, heart disease and chronic bronchitis. The tribunal accepted that disablement benefit had not been paid in respect of the pleural thickening and was not recoverable. They found the other benefits to be recoverable because the relevant disease had been one cause of disablement that had properly led to entitlement to those benefits. They rejected as irrelevant the compensators’ argument that the claimant would have become incapable of work in any event by reason of his other illnesses. The compensators appealed. The Secretary of State did not challenge the tribunal’s decision regarding disablement benefit. 

Held, allowing the appeal, that:

1.	the evidence accepted by the tribunal showed that, during 1994, the claimant was incapable of work only due to the combined effects of all the conditions from which he was suffering, whereas, from the beginning of 1995, he would have been incapable of work even if he had never been exposed to asbestos (paragraph 14);	

2.	a compensator’s liability was to be confined to benefits the payment of which was caused by the relevant disease and the phrase “in respect of” was to be read in that sense, so that it was open to a compensator to avoid the recovery of benefits by showing that the Secretary of State would have paid them in respect of a pre-existing condition, even if the relevant disease had not been developed (paragraph 17);	

3.	therefore, as this was not a case where incapacity benefit or income support had been paid on a basis other than actual incapacity for work, sickness benefit, invalidity benefit, incapacity benefit or income support paid from 1 January 1995 until the end of the relevant period was not recoverable (paragraph 22);	

4.	the evidence did not show that the effects of the relevant disease ceased to be a vital factor in the claimant’s entitlement to the mobility component of disability living allowance before the end of the relevant period and so all the mobility component was recoverable, but it did show that the effects of the relevant disease had no relevance to the claimant’s entitlement to the care component and so none of the care component was recoverable (paragraphs 25 and 26).

The Commissioner substituted his own decision that the Secretary of State was to issue a fresh certificate of recoverable benefits.	

DECISION OF THE SOCIAL SECURITY COMMISSIONER

1.	I allow the appeal against the decision of the Whittington House appeal tribunal dated 13 December 2001. I set aside the decision of the tribunal and I substitute my own decision, which is that the Secretary of State must issue a fresh certificate of recoverable benefits listing as recoverable sickness and invalidity benefit (if any) and income support paid to the claimant from 8 July 1994 to 31 December 1994 and the mobility component of disability living allowance paid to the claimant from 15 February 1995 to 30 June 1999.

REASONS

2.	I held an oral hearing of this appeal, at which the compensators were represented by Mr. Brian Gallagher of counsel, instructed by Messrs. Berrymans Lace Mawer, solicitors of London, and the Secretary of State was represented by Mr. Jeremy Heath of the Office of the Solicitor to the Department of Health and the Department for Work and Pensions. The claimant, who was not a party to the proceedings, neither appeared nor was represented. I am grateful to both Mr. Gallagher and Mr. Heath for their helpful submissions.

3.	The claimant worked as a lagger for various employers during the 1950s, 60s and 70s and in the course of his employment with those employers he was exposed to asbestos. He was made redundant from his last job as a lorry driver in September 1992 when he was aged 56. I suspect that he was in receipt of income support thereafter, probably with unemployment benefit for the first 52 weeks, all paid on the basis that he was available for work.

4.	On a form received on 12 July 1994, the claimant claimed sickness benefit, stating that on 1 July 1994 he had been diagnosed as suffering from asbestosis and that he “became sick” on 8 July 1994. Reading between the lines of the certificate of recoverable benefits, it would appear that sickness benefit was awarded from 8 July 1994, being duly followed by invalidity benefit after 28 weeks and by incapacity benefit from 13 April 1995, with income support being paid in addition throughout the relevant period. (It looks as though sickness and invalidity benefit and incapacity benefit up to 28 August 1996 are included under the heading “income support” and that income support from 29 August 1996 is included under the heading of “incapacity benefit”.) He claimed disablement pension in respect of pneumoconiosis (asbestosis) on a form received by the Department of Social Security on 9 August 1994 and benefit appears to have been awarded in December 1994 with effect from late 1992 (based on 1 August 1992 being the date of onset), arrears of £1,994.96 being paid on 20 December 1994. Disablement was assessed at 20% until 1 January 1999 and at 25% thereafter. In March 1995, the claimant claimed disability living allowance. The claim was treated as having been made in the previous month and the middle rate of the care component and the higher rate of the mobility component were awarded with effect from 15 February 1995.

5.	The claimant sued those of his former employers whom he said had caused him to be exposed to asbestos. On 16 August 1999, the action was settled on the payment of £20,000 plus costs.

6.	The Secretary of State had issued a certificate of recoverable benefits under the Social Security (Recovery of Benefits) Act 1997, seeking recovery of all the benefits paid to the claimant during the “relevant period” of five years from 8 July 1994 to 7 July 1999. This consisted of £34,915.53 “incapacity benefit” and “income support”, which, as I have said, probably included sickness benefit and invalidity benefit, £7,043.35 disablement benefit, including all the arrears paid on 20 December 1994, and £15,374.95 disability living allowance, amounting to £57,333.83 in all.

7.	The compensators, acting though their insurers, appealed against the certificate of recoverable benefits under section 11(1)(b) of the 1997 Act on the ground that the benefits had been paid “otherwise than in respect of” the relevant disease. Mr. Gallagher appeared on their behalf before the tribunal on 13 December 2001. He submitted that benefits were not recoverable because they had been paid in respect of asbestosis and the compensation had been paid on the basis that the claimant had not suffered from asbestosis but from asbestos-induced pleural thickening, which was a different disease, and that even that disease was not a cause of the claimant’s incapacity for work.

8.	The tribunal accepted that the claimant had not been suffering from pneumoconiosis, including asbestosis. In respect of disablement benefit, the tribunal accepted the argument that the benefit had therefore not been paid “in respect of the … disease” in consequence of which the compensation had been paid and so did not fall within the scope of section 1(1)(b) of the 1997 Act. However, in respect of the other benefits, the tribunal reasoned that the cause of disablement had not been relevant to entitlement and that if the asbestos-induced pleural thickening had in fact been a cause of disablement that had properly led to entitlement to benefit, those benefits had been paid in respect of that disease. On their view of the evidence and the law, they found that condition to have been met and so held that all the benefits, other than disablement benefit, were recoverable. The compensators now appeal with the leave of a Commissioner on the ground that the tribunal’s decision was not supported by the evidence and that they misapplied the law.

9.	Mr. Gallagher submits that the implication of the evidence upon which the tribunal relied was that the asbestos-induced disease was an effective cause of the claimant being incapable of work only during 1994. As actual incapacity for work was not the determining factor in entitlement to all the benefits under consideration, it is not, strictly speaking, right to focus on the test suggested by Mr. Gallagher. However, as the relevant medical evidence was expressed in those terms, presumably because that was what was primarily relevant to the claim for compensation for loss of earnings, it is convenient to start by considering what the evidence reveals about the cause of actual incapacity for work and then to consider later the implications that has for a more technically accurate approach to the issues arising on this appeal.

10.	Although there were a number of medical reports before the tribunal, only those of Dr. D. Davies MD FRCP and Dr. Richard Page DM FRCP MFOM dealt directly with the issue of causation. To the extent that the opinions of Dr. Davies and Dr. Page differed, the tribunal preferred the opinion of Dr. Davies because he had first examined the claimant in March 1995 whereas Dr. Page first examined him in November 1997. It is common ground before me that the tribunal were entitled to take that approach and that this appeal should be determined on the basis that Dr. Davies’ opinion is correct, although Mr. Gallagher submitted that Dr. Page’s evidence is not as different as the tribunal appeared to believe.

11.	In his first report, dated 25 April 1995, Dr. Davies found that the claimant had bilateral asbestos-induced pleural thickening but not asbestosis, although he expected that the criteria for a diagnosis of asbestosis would be satisfied in the future and he stated that exposure to asbestos had reduced the claimant’s life expectancy, due to the anticipated asbestosis, a risk of mesothelioma and an increased risk of lung cancer. He also said:

“The only symptom that can be attributed to his two asbestos-induced conditions is shortness of breath. The others – cough, sputum and wheezing, and the need for inhalers – are due to chronic bronchitis.

“He has not worked since 1992. The original reason was redundancy but I estimate that he has been unfit for any type of work since the end of 1993. In my view disablement can be assessed at 50 per cent, with 20 per cent each being attributed to asbestos-induced conditions and chronic bronchitis and 10 per cent to obesity.

“The pleural disease may increase in extent and cause more shortness of breath. Progression of asbestosis is inevitable. It is also probable that his chronic bronchitis will get worse, even though he is a non-smoker now.”

However, when he received further chest x-rays, Dr. Davies wrote on 20 May 1995 that it appeared “that heart disease may be contributing to his severe shortness of breath”. Arrangements were therefore made for a reassessment in 1996. Meanwhile, in June 1995, the claimant was admitted to hospital and found to have pancreatitis, liver disease, a hiatus hernia and a small inguinal hernia.

12.	Dr. Davies saw the claimant again on 9 May 1996. In his report dated 10 June 1996, he assessed the claimant’s disablement at 70 per cent, attributing 20 per cent each to heart disease, asbestos-induced disease and chronic bronchitis and 10 per cent to obesity. He mentioned that he had also found evidence of diabetes. The presence of diabetes was subsequently confirmed.

13.	In 1998, Dr. Davies was asked to comment on the other medical reports in the case, including Dr. Page’s. In the light of the other opinions, he said:

“I over-estimated the contribution made by heart disease at 20 per cent with an added 10 per cent attributed to obesity. I now reduce the combined assessment to 20 per cent, leaving 50 per cent for the other conditions. I apportion 25 per cent to asbestos-induced disease and 25 per cent to chronic bronchitis.”

As to capacity for work, he said:

“When I saw [the claimant] in March 1995 he had clearly been unfit for a considerable time. I estimate that he had become unfit for any kind of work by the end of 1993 due to the combined effects of all the disorders. I also estimated that if he did not have asbestos-induced disease he would have been able to go on working for about another year and this remains my opinion.”

14.	Thus, the evidence is that during 1994, the claimant was incapable of work only due to the combined effects of all the conditions from which he was suffering, whereas from the beginning of 1995, he would have been incapable of work even if he had never been exposed to asbestos. On that basis, Mr. Gallagher submits that only benefits paid up to the end of 1994 are recoverable and that the tribunal erred in deciding otherwise. Mr. Heath, however, supports the tribunal’s reasoning, which was as follows:

“The tribunal did not accept the submission made by counsel for the Appellants that the decision of Commissioner Rowland in CCR/5336/1995 (and in particular the last sentence of paragraph 9 of that decision) compelled it to reach the opposite conclusion. In that paragraph, the learned Commissioner stated as follows:

‘9.	In the present case, the question for the tribunal was whether invalidity benefit paid from about May 1991 was paid “otherwise than in consequence of the accident”. It is clear that it was not necessary that the relevant accident be the sole cause of the payment of benefit (see Hassall v. Secretary of State for Social Security [1995] 1 WLR. 812 [now reported also as R(CR) 1/95] in which the Court of Appeal upheld the decisions of the Commissioner in CCR/2/93 and CCR/1/93 to which the tribunal referred). However, it was necessary that the relevant accident be an effective cause of the payment of benefit. Invalidity benefit is not payable merely because a claimant has a reduced capacity for work. It is payable only if a claimant is incapable of any work which it would be reasonable to expect him to do. Invalidity benefit is therefore recoverable under Part IV of the Social Security Administration Act 1992 only from a claimant who is incapable of any such work in consequence of the relevant accident. The effect of Hassall is that, if a claimant is rendered permanently incapable of work by an accident and then suffers from an unrelated illness which would have rendered him incapable of work even if the accident had not occurred, the claimant is still to be regarded as incapable of work in consequence of the accident. Similarly, a claimant is to be regarded as incapable of work in consequence of an accident if neither the accident nor an unrelated illness would individually have rendered him incapable of work but where their combined effect does so. However, where, in consequence of an accident, a claimant suffers disablement which is not itself incapacitating and then suffers from an unrelated illness which would, by itself, have rendered him incapable of work, it cannot be said that the relevant accident is an effective cause of the incapacity. In such a case, the claimant’s incapacity is solely due to the unrelated illness.’

“The tribunal is bound to accept that paragraph as a correct statement of the law but the final sentence has no application to the present appeal on the facts found. On Dr. Davies’ evidence (which, as stated above, is preferred) [the claimant] was incapable of work at the end of 1993 and asbestos-related pleural thickening was responsible for more than a third of the disability which made him so incapable (i.e., 25% of a 70% disablement). It was a real and effective cause of that incapacity. It is therefore not relevant that if [the claimant] had not suffered from asbestos-related pleural thickening he would subsequently have become incapable of work in any event by reason of the other conditions from which he suffered. Even if that is the case, the pleural thickening would have remained a real and effective cause of the incapacity.”

15.	Although Mr. Gallagher reiterated the argument advanced to the tribunal, I agree with the tribunal that the present case is distinguishable from that contemplated by me in the last sentence of paragraph 9 of CCR/5336/1995. In particular, the asbestos-related disease in the present case might have been expected to become incapacitating in itself in due course and Dr. Davies’ evidence did not exclude the possibility that that would have happened during the “relevant period”, although, as Mr. Gallagher points out, he did not express disagreement with Dr. Page’s view that the claimant would have remained capable of work until his normal retirement age had he suffered from the asbestos-induced condition alone.

16.	The question that arises in this case is whether benefits paid in respect of incapacity for work can be said to have been paid “in respect of” a disease if the claimant would have been incapable of work even if he had not developed the disease.  The phrase “in respect of” as used in sections 1(1)(b) and 11(1)(b) of the Social Security (Recovery of Benefits) Act 1997 is potentially ambiguous. One ambiguity was considered in R(CR) 1/02, where it was held that a benefit that ought not to have been paid was not to be regarded as having been paid in respect of an accident even where the benefit had been awarded expressly on the basis that the accident had caused the relevant disablement. The Tribunal of Commissioners reasoned that it had not been intended to place upon compensators a liability to compensate the Secretary of State for the cost of paying benefits that ought not to have been paid.

17.	A different ambiguity arises in the present case. The asbestos-induced disease was undoubtedly a contributory factor in the overall disablement from which the claimant was suffering throughout the relevant period. That disablement rendered the claimant incapable of work and benefits were undoubtedly paid in respect of that incapacity for work. In that sense, it can be said that the benefits were paid in respect of the asbestos-induced disease. That was the tribunal’s approach. However, as in R(CR) 1/02, it is legitimate to consider whether that is what Parliament intended. I can see no reason why a compensator should pay compensation to the Secretary of State for the cost of paying a benefit that the Secretary of State would have had to pay in any event in consequence of a pre-existing condition. On the contrary, it seems to me probable that Parliament intended that a compensator’s liability was to be confined to benefits the payment of which was caused by the relevant disease and that the phrase “in respect of” is to be read in that sense. Thus, ordinary principles of causation apply and it is open to a compensator to avoid the recovery of benefits by showing that the Secretary of State would have paid them in respect of a pre-existing condition, even if the relevant disease had not been developed.

18.	Mr. Heath drew my attention to the distinction between the phrases “in consequence of” and “in respect of”, used respectively in section 1(1)(a) and 1(1)(b) of the 1997 Act. I suspect the phrase “in consequence of” was used in section 1(1)(a) for linguistic reasons because the phrase “in respect of” had already been used in that paragraph in relation to “any other person”. It may also be seen that, in Part IV of the Social Security Administration Act 1992 (which the 1997 Act has replaced), the phrase “in respect of” was used in section 82(1) (where it is explained which benefits could be recouped) but “in consequence of” was used in section 98(1)(b) (the equivalent of section 11(1)(b) of the 1997 Act). The phrases appear to be interchangeable.

19.	Of more importance is whether there is anything in the Court of Appeal’s decision in Hassall to support Mr. Heath. It may be that my reference to that case in CCR/5336/1995 was misplaced because, on reflection, it seems to me that that case was not concerned with dual causation at all. Before the relevant accidents, the claimants had been in receipt of income support paid on the basis that they were capable of, and available for, work. Following the accident, they received income support on the basis that they were incapable of work. The Secretary of State recouped the post-accident benefits. Under the scheme then in force, the compensators had reduced the amount of compensation paid to the claimants by the amount of the recouped benefits. In the Court of Appeal, the claimants submitted, inter alia, that the post-accident benefits had not been paid “in consequence of” the relevant accidents, because the same amount was paid after the accident as before, and that the income support element of the post-accident benefits was in reality still being paid because the recipients were still unemployed with no income, and not because of the accident. Henry LJ, with whom the other members of the Court agreed, said of these points:

“[These] submissions are easily dealt with. The post-accident benefits that were paid were clearly paid on the strength of the medical certificates dealing with the injuries caused by the accident and the applicant’s recovery from those injuries.  Because of those medical certificates, only the post-accident form of benefits could be claimed.  As Mr. Commissioners Skinner QC said:

‘But because of the accident the basis of the claimant’s entitlement to income support changed … [He] was [as a result of his doctor’s statement in support of his claim] no longer required to be available for employment …, nor was he required to be actively seeking employment …  He was relieved of his obligation to be available for work and that was in consequence of his accident.’

It seems to me to be clear beyond argument that the post-accident benefits recouped were not ‘benefits paid otherwise than in consequence of the accident.’ They were clearly paid as a direct consequence of the accident. No other construction is possible.”

The Court’s reasoning is firmly based on the change in the “form” of the benefit. There is nothing to suggest that, had the claimants been entitled to income support on the basis of incapacity before the accident, the Court would still have held that recoupment was possible while that cause of incapacity continued. 

20.	Accordingly, I accept Mr. Gallagher’s submission that the Secretary of State is not entitled to recover from compensators benefits that would have been paid to claimants on the same legal basis even if the relevant disease had not been developed or the relevant accident had not occurred. It follows that the tribunal’s decision is erroneous in point of law and it is necessary for me to consider the facts and substitute my own decision.

21.	In the present case, Hassall has the effect that, even if I am right in suspecting that the claimant was entitled to income support before he claimed sickness benefit, income support paid subsequently on the basis of his incapacity for work as a result of the asbestos-induced disease is nonetheless recoverable from the compensator. However, on the basis of Dr. Davies’ evidence, benefits payable in respect of actual incapacity for work would have been paid to the claimant after 1994 even if the claimant had not been exposed to asbestos. My acceptance of Mr. Gallagher’s submission means that such benefits paid from 1 January 1995 cannot be regarded as paid in respect of the relevant disease and are therefore not recoverable.

22.	Sickness benefit, invalidity benefit and income support paid before 13 April 1995 are benefits that were payable in respect of actual incapacity for work. So are incapacity benefit and income support paid after that date under transitional provisions made in connection with the coming into force of the Social Security (Incapacity for Work) Act 1994 (see R(CR) 2/02). Mr. Heath conceded that there is no evidence in this case that an “all work test” assessment was ever carried out during the “relevant period”. Nor is there any evidence that the claimant was treated as being incapable of work under regulation 10 of the Social Security (Incapacity for Work) (General) Regulations 1995 during that period, although it appears that such a decision may have been made under regulation 10(2)(e)(iv) in December 1999. I therefore infer that benefit was paid under transitional provisions from 13 April 1995 until the end of the “relevant period”. It follows that this is not a case where incapacity benefit and income support were paid on a basis other than actual incapacity for work. Accordingly, I accept Mr. Gallagher’s submission that sickness benefit, invalidity benefit (if any) and income support paid in respect of the period from 8 July 1994 to 31 December 1994 is recoverable but that any sickness benefit, invalidity benefit, incapacity benefit or income support paid from 1 January 1995 until 7 July 1999 is not recoverable.

23.	Different considerations apply in respect of disability living allowance, which is not paid in respect of incapacity for work. Many people are incapable of work but are not entitled to disability living allowance and some people are entitled to disability living allowance but are not incapable of work. In this case, the Secretary of State has provided copies of evidence upon which disability living allowance was awarded but has failed to provide any evidence as to the actual basis of any award. In respect of the mobility component that is not important because it is plain that benefit was awarded on the basis that the claimant was virtually unable to walk. However, in respect of the care component, I cannot be sure whether the award was made on the basis that one of the “day” conditions was satisfied or that one of the “night” conditions was satisfied (see section 72(1)(b) and (c) of the Social Security Contributions and Benefits Act 1992). A factual report from the claimant’s own general practitioner dated 14 September 1998 would not have supported any award of the care component. The claimant’s own claim forms did not reveal much in the way of day-time needs, save in respect of preparing a meal which qualifies for the lowest rate rather than the middle rate. I can only presume that the award was made in respect of the night-time needs revealed in the forms completed by the claimant, which the doctor’s report did not really contradict.

24.	The question I have to determine in respect of both components is whether they would have been awarded to the claimant even if he had not developed an asbestos-induced disease. The burden of proof rests on the compensators. None of the medical evidence directly addresses the point.

25.	In respect of the mobility component, I am not satisfied that an award would have been made during the “relevant period” if the claimant had not developed the asbestos-induced disease. That disease was a significant cause of the claimant’s breathlessness. Plainly, when the claimant first qualified for the mobility component, the effects of that disease must have tipped the balance in favour of entitlement. In 1998, the claimant’s own estimate of the distance he could walk without severe discomfort was still 100 yards, although he said that he would take 10 minutes to walk that distance. His general practitioner thought he could walk only 50 yards without severe discomfort. Dr. Davies’ evidence implies that the claimant would have been able to walk significantly further had he not suffered from the asbestos-induced disease. Had he been able to walk 100 yards at a reasonable speed before suffering from severe discomfort, the claimant probably would not have been awarded the mobility component. Without the asbestos-induced disease, he might well have been able to manage that. I am therefore not satisfied that before 8 July 1999, the effects of the asbestos-induced disease ceased to be a vital factor in the claimant’s entitlement to the mobility component. The mobility component is therefore recoverable.

26.	By contrast, the effects of the asbestos-induced disease do not appear to have had any relevance to the claimant’s entitlement to the care component. He seems to have been able to cope with most activities during the day, albeit with some difficulty, and at night the main help he required was with using his inhaler. Dr. Davies says that the inhaler was required due to the claimant’s chronic bronchitis rather than his asbestos-induced disease and it seems to me to be improbable that his asbestos-induced disease made it significantly more difficult for him to use it. I am therefore satisfied that the care component was paid “otherwise than in respect of” the asbestos-induced disease and is therefore not recoverable.

27.	The Secretary of State has not argued that the tribunal erred in holding the disablement benefit to be irrecoverable. Mr. Heath suggested at the oral hearing before me that that part of the tribunal’s decision could have been challenged, but he accepted that by then it was too late to raise the point before me. In the circumstances, I will leave the tribunal’s decision in respect of disablement benefit undisturbed and say nothing about its merits. That makes it unnecessary for me to consider the propriety of including in a certificate of recoverable benefits benefit paid during the “relevant period” in respect of a period before the “relevant period” began.

28.	My decision is set out in paragraph 1 above.

29.	Finally, I wish to make two suggestions for the future preparation of appeals brought under the 1997 Act. Firstly, it will be apparent from this decision that it would be helpful if the Secretary of State were to provide evidence of the decisions awarding incapacity benefit and disability living allowance, as is already done in respect of disablement benefit. It is not always possible to discern the basis of an award from the evidence taken into account by the decision-maker. Secondly, it would be helpful if a rough index to the documents were to be provided by the Secretary of State, as is done in ordinary social security appeals. I appreciate that that can be time-consuming but there is usually a substantial bundle of documents in this sort of case and an index would enable tribunals and Commissioners to deal with cases more efficiently and would also help those appearing before them.

Date:  21 February 2003	                            (signed) Mark Rowland
Commissioner