Child Poverty Action Group, R (on the application of) v Secretary of State for Work and Pensions

This Court of Appeal held that section 71 of the Social Security Administration Act 1992 (as amended) provides the exclusive statutory regime for recovery of overpayments made pursuant to an award of social security benefits. The Secretary of State cannot, in respect of payments made in accordance with an award, rely on a common law claim in restitution to recover sums not covered by s.71. The court treated subsection (5)/(5A) of s.71 as the operative threshold: only where a relevant determination has been reversed, varied, revised or superseded does the statutory right to recovery arise. The court distinguished authorities about recovery of wrongly paid tax and emphasised the particular statutory scheme and finality of awards in social security law. The Department’s practice of sending letters asserting a common-law right of recovery for payments made pursuant to an award should be suspended and not resumed.

The appellant, Child Poverty Action Group, sought judicial review of the Department for Work and Pensions’ practice of writing to benefit recipients asserting a right to recover overpayments under the common law of restitution in cases where the overpayment was not said to arise from misrepresentation or non-disclosure. CPAG contended that, for payments made pursuant to an award, Parliament had provided the exclusive remedy in section 71 of the Social Security Administration Act 1992 and that no independent common-law recovery lay. The matter had first been considered by Michael Supperstone QC in the Administrative Court (the claim for declaratory relief failed there) and was before the Court of Appeal on CPAG’s challenge to the Department’s asserted entitlement.

The court identified the central legal issue as whether, where an overpayment arises from an award (and not from, for example, a payment made otherwise than pursuant to an award), the Secretary of State may choose to pursue recovery under the common law rather than under s.71. The court analysed the structure of the social security scheme, emphasising the finality of awards while they stand, the statutory powers of revision and supersession (notably under the Social Security Act 1998), and the specific recovery machinery and conditions in s.71 (including subsections (5) and (5A)).

The court reasoned that s.71 was enacted into a settled statutory scheme in which adjudication and administration were constitutionally separate and where Parliament had prescribed the incidents of entitlement and repayment. The operative threshold for recovery under s.71 is the successful reversal, variation, revision or supersession of the determination; where that occurs Parliament provided for recovery by s.71. The court rejected the Department’s submission that s.71 merely modifies the common law and leaves other restitutionary claims intact for awards: instead s.71 is exhaustive as to recovery of payments made pursuant to awards. The court distinguished tax cases (in which recent authority recognises a common law right to recover tax paid under mistake in some circumstances) on the ground that those involved payments by taxpayers to the state and are governed by different considerations.

Outcome: the appeal was allowed. The court suspended the Department’s practice of asserting a common-law right to recover overpayments made pursuant to awards and indicated that Parliament, not the common law, was the appropriate forum to consider any extension of recovery powers.

Appeal allowed. The Court of Appeal held that section 71 of the Social Security Administration Act 1992, read with its subsections (notably (5) and (5A)), provides the exclusive statutory regime for recovery of overpayments made pursuant to an award; the Secretary of State may not recover such sums by an independent common law restitutionary claim. The court grounded its conclusion in the statutory scheme, the finality of awards, and the role of Parliament in prescribing recovery; it distinguished tax jurisprudence and suspended the Department’s practice of asserting common-law recovery for award-based overpayments.

Appeal from the Administrative Court (High Court of Justice, Queen's Bench Division), Mr M. Supperstone QC, CO/4211/2007; first instance judgment cited at [2009] EWHC 341 (Admin). The appeal was decided in the Court of Appeal under neutral citation [2009] EWCA Civ 1058.