NHS Pensions Agency v Suggett

For permanent injury benefits, a decision-maker cannot infer that an employment injury was not wholly or mainly causative merely because similar symptoms preceded it. It must explain the significance of earlier symptoms and address alternative causes. The Pensions Ombudsman’s power to direct reconsideration is wide but must be exercised judicially. A direction may require a medical adviser from outside an existing provider where repeated advice displays a consistent error and creates a perception of unfairness, even without actual bias. The direction must not unreasonably fetter the Agency’s discretion. An appellate court may vary an irrationally overbroad direction while preserving justified restrictions.

The NHS Pensions Agency appealed against Etherton J’s dismissal of its appeal under section 151(4) of the Pension Schemes Act 1993 from a determination of the Pensions Ombudsman. The Ombudsman had found that the Agency had misdirected itself when rejecting Ann Sheila Suggett’s claim for permanent injury benefits and remitted the claim for reconsideration.

The Ombudsman directed the Agency to obtain advice from a medical practitioner unconnected with the previous medical advisers, subject to Mrs Suggett’s consent or further selection by the Ombudsman. Etherton J upheld the remittal but varied that direction by removing the consent and selection requirements. The appeal concerned the construction of the Agency’s final decision letter, the extent of the Ombudsman’s power to direct the choice of medical adviser, and the judge’s power to vary the direction.

Lord Justice Gage gave the judgment of the court. Lord Justices Latham and Mummery agreed.

1. Agency’s decision. The final decision letter was properly read as recording the opinion of the third medical adviser in light of the earlier medical records and evidence, but not as adopting the opinions of the two previous advisers. Each decision was effectively taken afresh by the individual medical adviser.
2. Error of law. The reasoning was flawed under the National Health Service (Injury Benefits) Regulations 1995. Earlier symptoms did not automatically establish a pre-existing degenerative condition or show that the 1975 injury was not wholly or mainly responsible. The Agency had failed to explain why the earlier symptoms were degenerative rather than continuing symptoms from the earlier work-related injury. It had also failed to address whether any earlier symptoms were work-related or had resolved, and the resulting question of causation.
3. Ombudsman’s directions. The power to give directions under section 151(2) of the Pension Schemes Act 1993 was not confined to cases involving proved maladministration or a risk of maladministration. It was nevertheless subject to limits. The Ombudsman could not require conduct beyond the Agency’s powers or contrary to a legal obligation, had to act judicially, and could not unreasonably fetter the Agency’s discretion. Perceived bias or unfairness could properly be considered even without actual bias.
4. Application and variation. The direction requiring advice from outside Schlumberger was justified because the three previous advisers had adopted the same erroneous approach and came from a relatively small panel. It did not imply actual bias by other Schlumberger doctors. The additional requirement for Mrs Suggett’s consent, or selection by the Ombudsman in default, fettered the Agency’s discretion more than reasonably necessary and was irrational. The judge had power under CPR 52-11 and Part 52.10-(2) to vary the direction. The appeal was dismissed. The decision had no wider implication concerning the Agency’s use of Schlumberger beyond the particular facts.

• Court of Appeal (Civil Division): The appeal was dismissed. The court upheld the finding that the Agency’s reasoning was legally flawed and upheld the restriction requiring a medical adviser from outside the previous provider, while confirming the judge’s variation removing the consent and default-selection requirements.
• Chancery Division: Etherton J dismissed the Agency’s appeal against the Ombudsman’s remittal and varied the principal direction.
• Pensions Ombudsman: By written determination dated 22 October 2004, the Ombudsman found that the Agency had proceeded on a mistaken basis and remitted the claim for further consideration with directions.