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

A statutory recovery scheme for social security overpayments does not, by necessary implication, exclude common-law restitution. Section 71 of the Social Security Administration Act 1992 provides an additional route where payment resulted from misrepresentation or failure to disclose a material fact. It does not remove common-law recovery where payment was made by mistake of fact or law, subject to ordinary defences. A recovery demand should accurately state that recovery depends on payment having been made by mistake.

The claimant sought judicial review of the Secretary of State’s practice of seeking repayment of benefit overpayments outside section 71 of the Social Security Administration Act 1992. The practice concerned cases where the recipient had not misrepresented or failed to disclose a material fact.

The central issue was whether section 71 formed an exhaustive statutory code excluding common-law recovery, including recovery of payments made by mistake of fact or law. It was common ground that an overpayment could be recovered only after the relevant award had been revised or superseded.

1. Claim dismissed. The practice of asking for repayment of benefit overpaid by mistake was not unlawful.
2. Section 71 of the Social Security Administration Act 1992 provides an augmented statutory entitlement where a person has misrepresented or failed to disclose a material fact and the payment resulted from that conduct. It neither expressly nor by necessary implication removes common-law rights of restitution in other cases.
3. The relevant benefit award must first have been revised or superseded under the statutory machinery. Retrospective revision does not prevent the overpayment from being characterised as money paid by mistake. Common-law recovery remains subject to ordinary defences.
4. R (Steele) v Birmingham City Council [2006] 1 WLR 2380 concerned benefit paid without a claim and did not establish that section 71 necessarily excluded common-law recovery outside its scope. Jones v Department of Employment [1989] 1 QB 1 did not apply because recovery after correction of the Secretary of State’s own decision was not a collateral challenge.
5. Munro v Revenue and Customs Commissioners [2009] Ch 69 and Deutsche Morgan Grenfell Group Plc v IRC [2007] 1 AC 558 supported the conclusion that common-law rights are not excluded unless Parliament has legislated for the same circumstances.
6. The correspondence should make clear that common-law recovery is based on payment by mistake. Declaratory relief would in any event not have been just and convenient.