Hinchy v Secretary of State for Work and Pensions

The House of Lords considered the Secretary of State's right to recover an overpayment of income support under section 71 of the Social Security Administration Act 1992 where the claimant had not notified her local office that a disability living allowance award had ceased. The court endorsed the established Commissioners' approach that the duty to disclose arises under regulation 32 of the Social Security (Claims and Payments) Regulations 1987 and is a duty to notify the appropriate local office or official, not the abstract entity of the Secretary of State. It rejected the Court of Appeal's wider approach of treating departmental knowledge as imputed across the department so as to relieve the claimant of the obligation to disclose.

Background and facts:

• Miss Maureen Hinchy, an income support recipient, had received a middle‑rate disability living allowance (DLA) award for five years which expired on 13 October 1998. She applied for renewal but was refused and the refusal was upheld on appeal.
• Her local Social Security Office, however, continued to pay an income support premium dependent on DLA for nearly two years, producing an overpayment of £3,555.40 discovered in July 2000.

Nature of the claim and procedural posture:

• The Secretary of State sought recovery of the overpaid sums under section 71 of the Social Security Administration Act 1992 on the basis that Miss Hinchy had "failed to disclose" the cessation of her DLA.
• The Appeal Tribunal found that she had not told the local office and that she could reasonably have been expected to do so; following further proceedings she obtained permission to appeal to test the Commissioners' jurisprudence and the Court of Appeal reversed, holding the claimant need not disclose where the information could be assumed to be known within the Department. The matter was brought to the House of Lords ([2005] UKHL 16) on the Secretary of State's appeal.

Issues framed by the court:

• Whether a claimant "failed to disclose" a material fact within section 71 where the claimant did not notify her local office of a change in another benefit.
• Whether the duty to disclose is to the Secretary of State as an abstract entity or to the relevant local office or official and whether departmental knowledge in another office can be treated as knowledge of the decision‑maker so as to negate the claimant's duty to disclose.
• Whether the instructions in the claimant's order book and regulation 32(1) imposed an obligation to notify the cessation of DLA.

Court's reasoning and disposition:

• The majority approved the Commissioners' longstanding approach (for example R(SB)15/87 and CG/4494/99) that the legal duty to disclose arises in the statutory/regulatory scheme (not merely as a moral duty) and that the claimant must communicate material facts to the appropriate office or person handling the claim (regulation 32 and the Secretary of State's published instructions).
• The court held it was not permissible to treat the Secretary of State as a single omniscient entity such that knowledge in one office conclusively relieves a claimant of the duty to notify another office; administrative realities and variable communications systems mean disclosure to the relevant local office remains primary.
• The Court of Appeal's reasoning imputing departmental knowledge too widely was rejected and the Commissioners' approach restored. The majority therefore allowed the Secretary of State's appeal.

Subsidiary findings and context:

• The decision emphasises practical administration: claimants normally know their own benefits and the statutory scheme places the primary onus on them to notify changes to the appropriate office, subject to the limits discussed in the opinion and the proper construction of any prescribed notices.
• The opinion noted unresolved finer points about the precise content and standard of the "reasonably to be expected" test and acknowledged a dissenting opinion (Lord Scott) who would have found the order book wording ambiguous and dismissed the appeal.

Appeal allowed. The House of Lords held that the duty to disclose for the purposes of section 71 is a legal duty arising from the statutory and regulatory scheme (not merely a moral duty) and is to the appropriate office or official identified under regulation 32 and by departmental directions; knowledge in a different part of the Department is not automatically to be treated as knowledge of the decision‑maker so as to absolve the claimant of that duty. The Court of Appeal’s contrary approach was therefore wrong.

Appeal to the House of Lords from the Court of Appeal ([2003] EWCA Civ 138). Prior steps included an Appeal Tribunal decision and proceedings before the Social Security Commissioner (permission to appeal was given). The House of Lords restored the decision of the Commissioner and allowed the Secretary of State's appeal.