Spreadborough v The Pensions Ombudsman & Anor

Under the Local Government Pension Scheme, entitlement to early payment of preserved benefits depends on the date when permanent incapacity arose, not merely the date when it was diagnosed or formally certified. Permanent incapacity means incapacity for which there is no reasonable prospect of recovery, having regard to available treatment, possible courses of the condition and potential outcomes. A previous final or unappealed determination should not ordinarily be reopened on the same evidence. It may, however, be reconsidered in exceptional circumstances where important new evidence or developments in medical knowledge make that necessary in the interests of justice. Where medical evidence is ambiguous about the onset of permanent incapacity, the decision-maker should obtain clarification before determining the claim.

The appellant challenged a decision of the Pensions Ombudsman rejecting his complaint about the refusal to backdate payment of preserved benefits under the Local Government Pension Scheme. He had developed ME, left his employment with Wandsworth London Borough Council in 1990, and later sought early payment on the basis of permanent ill-health. The Council and subsequent decision-makers treated 1 May 1998 as the relevant date, based principally on medical evidence then available. The appellant contended that permanent incapacity had arisen by 1990. The appeal concerned whether an earlier determination could be revisited in the light of later medical evidence and what date governed entitlement under regulation D11.

1. The appeal was allowed in substance and the Ombudsman’s decision was set aside. The matter was remitted to the Pensions Ombudsman to reconsider the complaint in accordance with the judgment.
2. A member should not ordinarily be entitled to reopen a previous final or unappealed determination on the evidence then available. However, reconsideration may be justified in exceptional circumstances where important new evidence or developments in medical knowledge or understanding make it necessary in the interests of justice. The need for caution does not impose a requirement that the earlier conclusion be displaced only by evidence that is conclusive rather than established on the balance of probabilities.
3. For regulation D11(2)(b), permanent incapacity means incapacity for which there is no reasonable prospect of recovery. The assessment must take account of available treatment, the possible courses of the condition and potential outcomes. A reliable diagnosis may require the decision to be deferred, and a later diagnosis may be retrospective or prospective.
4. The critical question was the date on which permanent incapacity arose. The date on which the condition was diagnosed or formally certified was of secondary significance. The Ombudsman therefore erred in treating the appropriate date as the date when the medical condition was found to satisfy the criterion, rather than the date when the incapacity arose. The Ombudsman also incorrectly stated that the Regulations contained no provision permitting retrospective payment of preserved benefits.
5. The medical evidence, particularly the Second Report of Dr Weir, was ambiguous. The Ombudsman had to reconsider whether the ambiguity should be resolved by obtaining clarification, including clarification addressing treatment previously available but not undertaken and the views of the other medical practitioners.

The appeal was from the decision of the Pensions Ombudsman dated 20 March 2003. The Ombudsman’s decision was set aside and the complaint was remitted for reconsideration.