This appeal raises two issues of law arising from the incapacity benefit legislation. They arise from decisions by the Secretary of State for Work and Pensions (“SSWP”) (i) to supersede an award of incapacity benefit to the appellant for the period 9 September 2002 to 20 April 2004 and replace it with a decision that there was no entitlement to incapacity benefit for that period, and (ii) that an overpayment of incapacity benefit in the sum of £6989.77 is recoverable from the appellant. These decisions were upheld by an appeal tribunal whose decision was in turn upheld by Mr Commissioner Jacobs. The appellant appeals with the permission of Sir Henry Brooke. Before I come to the statutory framework and the issues in more detail, I need to summarise the facts.

The appellant is 49 years of age. At the age of 8, he was injured in a road traffic accident, as a result of which he suffered significant brain damage. He was unemployed, and on 4 June 1987, a decision was taken under the then applicable legislation to award him invalidity benefit. In 1995, the invalidity benefit regime was replaced by a new regime by the Social Security (Incapacity for Work) Act 1994 (“the 1994 Act”). This introduced a new Part XIIA into the Social Security Contributions and Benefits Act 1992 and replaced invalidity benefit with incapacity benefit. Under the Social Security (Incapacity for Work) (Transitional) Regulations 1995 (“the Transitional Regulations”), an award of invalidity benefit took effect as an award of incapacity benefit. Central to the new regime was the “personal capability assessment”. On 22 August 1997, a personal capability assessment was carried out of the appellant. It was determined that he was incapable of work.

Until 2002, there were only limited circumstances in which claimants could continue to receive benefit while working. In April 2002, new rules for working while receiving benefit came into force. Work which did not disentitle a claimant from receiving benefit was “exempt work”: see regulation 17(1) of the Social Security (Incapacity for Work) Regulations 1995 (“the 1995 Regulations”). These rules required the claimant to notify the SSWP within 42 days of starting work.

In March 2002, the SSWP sent to all recipients of incapacity benefit a “factsheet” in which they explained the effect of the “new permitted work rules to be introduced from 8 April 2002”, i.e. exempt work that a claimant would be permitted to do without loss of entitlement to incapacity benefit. After describing what work would be permitted, the document contains a section headed “how does permitted work affect my benefit?” It states that “permitted work will not affect your incapacity benefit” and then:

The appellant received a copy of this factsheet. He read it and put it away. He was unemployed at the time. On 9 September 2002, however, he started employment as a school cleaner. He worked in that capacity for 13 hours per week until 20 April 2004. He was paid more than £20 per week. He did not complete the application form that had been referred to in the factsheet before he started his employment or at any time. He did not notify the SSWP either orally or in writing that he was working.

He stopped working on 20 April 2004. On 26 May 2004, his incapacity benefit was suspended. On 7 August 2004, the SSWP made a decision superseding the award that had been made on 4 June 1987 on the grounds that between 9 September 2002 and 20 April 2004, he had been doing work which was not exempt within the meaning of regulation 17 of the 1995 Regulations. The supersession decision was that the appellant was not entitled to incapacity benefit for that period. On 13 August 2004, the SSWP made a decision that the appellant had been overpaid £6989.77 and that this sum was recoverable from him because, in breach of regulation 32(1) of the Social Security (Claims and Payments) Regulations 1987 (“the 1987 Regulations”), he had failed to notify the SSWP of the fact that he had started working within 42 days of the day on which his work began.

On 14 September, the appellant gave notice of appeal against both the supersession and the overpayment decisions. On 18 October 2004, following a reconsideration, the SSWP maintained both decisions. In the reasons for this decision, the SSWP said that it was reasonable to expect the appellant to have disclosed the fact that he was working so that the overpayment “remains recoverable”. The supersession decision was not dealt with.

As I have said, the decisions of 7 and 13 August 2004 were upheld by the tribunal and the appeal from the tribunal’s decision was dismissed by the commissioner.

The substantive rules in relation to incapacity benefit which are material to this appeal are to be found in regulation 17 of the 1995 Regulations which defines “exempt work”. It is unnecessary to set these out. It is sufficient to note that, as I have said, one of these rules is that the claimant notify the SSWP within 42 days of starting work that he has started work.

Decision-making and appeals are governed by the Social Security Act 1998 (“the 1998 Act”) and the Social Security and Child Support (Decisions and Appeals) Regulations 1999 (“1999 Regulations”). An indefinite award of incapacity benefit is not automatically terminated from the date that conditions of entitlement are no longer met. The ways in which an award can be altered are prescribed by detailed statutory provisions.

Where a change of circumstances has occurred, section 10 of the 1998 Act gives the SSWP the power to “supersede” the award. Section 10 also provides:

Thus the general rule is that a supersession takes effect from the date on which the decision to supersede is made. The prescribed exceptions are set out in regulation 7 of the 1999 Regulations. So far as relevant, regulation 7 at the material time provided:

Regulation 7A(1) provides so far as material:

Where an award of benefit is the subject of a supersession decision that the claimant did not have entitlement during a period for which benefit was paid, an overpayment results. Section 71 of the Social Security Administration Act 1992 (“the 1992 Act”) deals with the circumstances in which such an overpayment can be recovered. It provides:

In B v SSWP EWCA [2005] Civ 929, reported at R(IS) 9/06, this court held that a person “fails to disclose” for the purposes of section 71(1) if he or she breaches the requirement of regulation 32(1) of the 1987 Regulations. This is so, even if (as in B) the claimant lacks the mental ability to recognise the breach.

At the time when the appellant started work, regulation 32(1) of the 1987 Regulations provided so far as material:

The decisions of the SSWP were brief. The supersession decision was made because there had been a relevant change of circumstances in that the appellant had worked for the period from 9 September 2002 until 20 April 2004 and the work did not fall into the category of “exempt work”. Accordingly, with immaterial exceptions, he was treated as capable of work between 9 September 2002 and 20 April 2004 and was not entitled to incapacity benefit for that period. This meant that the decision was to take effect from 9 September 2002. The decision to recover the overpayment was made because, in breach of Regulation 32(1) of the 1987 Regulations, the appellant had failed to notify the SSWP of a change of circumstances which he might reasonably have been expected to know might affect his right to benefit, viz that he had started to work.

The appellant appealed against both decisions. The appeal tribunal agreed with the SSWP (i) that the work was not “exempt work” because the appellant had not notified the SSWP that he was working as required by regulation 17 of the 1995 Regulations; and (ii) that he had been in breach of Regulation 32(1) of the 1987 Regulations, so that the SSWP was entitled to recover the overpayment that had been made in consequence of the appellant’s failure to disclose the change of circumstances. They said that, if the appellant had notified the SSWP within 42 days of his commencing work, there would have been no overpayment. They also said that the appellant has a mental disability and that he had acted as he did “owing to a misunderstanding and not through dishonesty”. They strongly recommended the SSWP not to recover the overpayment in respect of any period in which the appellant’s earnings did not exceed the prescribed limit “as recovery would appear to be unduly punitive in the circumstances”.

The supersession decision was not “advantageous” to the appellant so that, on the face of it, regulation 7(2)(c) was potentially relevant. The tribunal did not, however, address the question whether (a) regulation 7(2)(c)(ii) required the supersession decision to take effect from the date when the appellant “knew or could reasonably have been expected to know that the change of circumstances should have been notified”, or (b) regulation 7(2)(c)(iii) applied, so that the decision took effect from the date of the change of circumstances. I shall refer to these questions as “the Regulation 7(2)(c) issue”. If neither regulation 7(2)(c)(ii) nor (iii) applied, then on the facts of this case the decision would take effect as from the date on which the decision was made: see section 8(5) of the 1998 Act.

The SSWP did not accept the tribunal’s recommendation and the appellant appealed to the commissioner. Mr Commissioner Jacobs recorded that the only issue before him concerned the correctness of the decision that the SSWP was entitled to recover the overpayment (“the overpayment issue”). That issue crystallised into the question whether the appellant had notified the SSWP of the change of circumstances “as soon as reasonably practicable” in the light of the fact that he had received the factsheet. There was no argument before him about the Regulation 7(2)(c) issue.

The commissioner referred to the decision of this court in B’s case said that, in the light of that decision, he had to “disregard the claimant’s mental state and his memory difficulties, and any impact that they may have had on his ability to understand and comply with the duties on him to report relevant matters to the Secretary of State”. He then referred to the passage in the factsheet to which I have referred at para 4 above, and said at para 7:

He declined to follow the decision of Mr Commissioner Mesher in CIB/3925/2003 on this issue. He said that Mr Commissioner Mesher was applying the law as it was before B’s case. He considered that B’s case undermined Mr Commissioner Mesher’s reasoning. The appeal tribunal had not erred in law on the overpayment issue and the appeal was dismissed.

The first issue is whether this court has jurisdiction to decide the Regulation 7(2)(c) issue and if it has, whether it should exercise its discretion to deal with it. This includes the question whether the Regulation 7(2)(c) issue was raised by the appeal to the tribunal. The second issue is whether, if the tribunal were in error in not dealing with the Regulation 7(2)(c) issue, they should have held that the decision to supersede took effect from the date on which the decision was made (as contended by Mr Cox on behalf of the appellant) or from the date when the appellant started work (as contended by Mr Chamberlain on behalf of the SSWP). The third issue is whether the decisions below disclose an error of law in relation to the overpayment issue.

The first question that arises is whether the tribunal erred in law in failing to deal with the Regulation 7(2)(c) issue. Section 12(8)(a) of 1998 Act provides that an appeal tribunal “need not consider any issue that is not raised by the appeal”. It is clear that the effect of section 12(8)(a) is that the appeal tribunal may inquire into any issue not raised by the appeal, but is not obliged to do so.

What is meant by “an issue raised by the appeal”? In addressing this question, it is necessary to keep in mind that, as is common ground, the process before the tribunal is inquisitorial and not adversarial: see the comments at paras 14, 56 and 61 in Kerr v Department for Social Development [2004] UKHL 23, [2004] 1 WLR 1372 in an analogous context. It seems that this question has not been the subject of decision by this court, but it was considered by the Northern Ireland Court of Appeal in Mongan v Department of Social Development [2005] NICA 16 reported as R4/01 (IS). That decision was concerned with the meaning of article 13(8)(a) of the Social Security (Northern Ireland) Order 1998 which is identical to section 12(8)(a) of the 1998 Act. The court gave valuable guidance as to what is meant by “an issue raised by the appeal”. It is desirable that I should set it out in full:

Mr Cox submits that we should adopt this guidance without qualification. Mr Chamberlain accepts the guidance with one qualification. He submits that “not raised by the appeal” means “not raised by the appellant”. He says that an injunction to the tribunal that it need not consider issues not raised by the appeal would be otiose, since issues not raised by the appeal are irrelevant and should not be considered in any event. But Mr Chamberlain concedes that the tribunal should adopt a broad, generous and non-legalistic approach to deciding whether an issue has been raised by the appellant. Thus, it may be sufficient for the appellant to appeal against a decision without stating the grounds relied on, provided that he or she places before the tribunal sufficient facts for the issue to be clear.

Section 12(8)(a) refers to an issue raised by the appeal. I see no reason not to give the statute its plain and natural meaning. But in view of the way in which Mr Chamberlain suggests “raised by the appellant” should be interpreted, it seems to me that there is no real difference between “raised by the appeal” and “raised by the appellant” as interpreted by him. The starting point will always be the decision of the SSWP that the appellant is seeking to challenge. But it is clear that the fact that an issue is not identified by the appellant in his appeal notice or even during the oral argument does not mean that it is not “raised by the appeal”.

I would endorse the valuable guidance given in Mongan. The essential question is whether an issue is “clearly apparent from the evidence” (para 15 in Mongan). Whether an issue is sufficiently apparent will depend on the particular circumstances of the case. This means that the tribunal must apply its knowledge of the law to the facts established by them, and they are not limited in their consideration of the facts by the arguments advanced by the appellant. I adopt the observations of this court in R v Secretary of State for the Home Department ex p Robinson [1998] 1 QB 929 at p 945 E-F in the context of appeals in asylum cases. But the tribunal is not required to investigate an issue that has not been the subject of argument by the appellant if, regardless of what facts are found, the issue would have no prospects of success.

I now turn to consider whether the Regulation 7(2)(c) issue was raised by the appeal to the tribunal in the present case. The appellant appealed against the supersession decision of 7 August 2004. Mr Cox submits that the tribunal ought to have recognised that the SSWP had not identified any legal basis for altering the incapacity benefit award with retrospective effect. The tribunal found that the appellant had a mental disability and that he acted as he did “owing to a misunderstanding and not through dishonesty”. Had they sought to do so, the tribunal would have recognised that, on their findings of fact, the requirement in regulation 7(2)(c)(ii), that the appellant could reasonably have been expected to know that the change of circumstances (the fact that he had started to work) should have been notified, was not made out. They should then have decided that the case was excluded from regulation 7(2)(c)(iii) because it concerned an incapacity benefit decision where there had been an incapacity determination. Accordingly, the tribunal should have allowed the appeal against the supersession decision and held that, in accordance with section 10(5) of the 1998 Act, the decision took effect from the date on which it was made.

Mr Chamberlain meets this argument by submitting that the Regulation 7(2)(c) issue was not raised by the appeal because the decision superseded was not an “incapacity benefit decision” within the meaning of section 7A(1) of the 1999 Regulations. It is convenient to repeat the relevant parts of the definition:

“Relevant benefit” was defined at the material time in section 8(3) of the 1998 Act to include incapacity benefit, but not invalidity benefit. Mr Chamberlain submits that the decision being superseded in the present case was not an “incapacity benefit decision” within the definition of regulation 7A(1) because (i) it was not a decision to award a “relevant benefit” as defined and (ii) in any event, it did not embody a determination that the appellant was or was to be treated as incapable of work under Part XIIA of the 1992 Act; nor was such a determination necessary to the decision.

The response of Mr Cox is based on regulation 17 of the Transitional Regulations. So far as material, it provides:

This question has been considered by commissioners in two cases. In CSIB/501/03 (a decision of 21 January 2004), Sir Crispin Agnew of Lochnaw Bt QC said:

In the later decision in CSIB/695/04 (published in September 2005), Mrs L.T. Parker adopted the reasoning of Sir Crispin Agnew. She also said:

Mr Cox submits that the decisions of these two commissioners are clearly wrong so that the Regulation 7(2)(c) issue was an issue that was raised by the appeal.

He relies on regulation 17 of the Transitional Regulations and adopts the arguments that were rejected by Sir Crispin Agnew and Mrs Commissioner Parker. In short, he submits that regulation 17 means that an award of invalidity benefit is to be treated as if it were an award of incapacity benefit for all purposes. The clear aim of regulation 17 was to ensure a continuity of benefit based on incapacity for work despite the changes effected by the replacement of invalidity benefit with incapacity benefit. The regulation ensured that a decision on invalidity benefit was deemed to be a decision on incapacity benefit and that it attracted the same treatment as a decision on incapacity benefit made under the new regime.

At first sight, there seems to be force in these submissions. There is the added point that no rationale has been suggested by the SSWP to justify treating decisions on invalidity benefit as if they were decisions on incapacity benefit for some purposes, but not for the purpose of regulation 7 of the 1999 Regulations.

At para 8 of his decision, Sir Crispin Agnew refers to the words “shall have effect” (in regulation 17(1) of the Transitional Regulations) and accepts that they mean that the award falls to be treated “as if it were an award of long-term incapacity benefit”. But he says that “it is only to “have effect” as, but it is not to “become”, incapacity benefit”. I am not persuaded by this argument. If a regulation says that A is to take effect as B, then it is to be treated as if it is B. It does not have to say that A shall “become” B.

But I find the other reasoning of Sir Crispin Agnew and the reasoning in paras 20 and 22 of Mrs Commissioner Parker’s decision convincing. In my view, Mr Cox was unable to provide any satisfactory answer to it. It is not sufficient simply to say that, on a purposive interpretation, it is clear that the intention of regulation 17 of the Transitional Provisions was that awards of invalidity benefit should be treated for all purposes and in all circumstances as awards of incapacity benefit. If that had been the intention, it would have been simple enough to say so. I acknowledge that the interpretation adopted by the two commissioners is unsatisfactory in the sense that it produces a result for which no rationale has been suggested and which is contrary to that for which the Secretary of State argued in the two cases. But it seems to me that, for the reasons given by the two commissioners, regulation 17 does not have the effect for which Mr Cox contends.

In reaching this conclusion, I also bear in mind what Hale LJ said in Cooke v Secretary of State for Social Security [2001] EWCA Civ 734, [2002] 3 All ER 279. What she said at paras 15-17 was in relation to whether or not permission to appeal should be granted by the Court of Appeal against decisions of the social security commissioner. But her observations have some relevance in the present context as well. At para 16, she said that the ordinary courts should approach appeals from commissioners “with an appropriate degree of caution”. She continued:

These observations fortify me in the view I have expressed that the two commissioners reached the right conclusion on the meaning of regulation 7 of the Transitional Provisions. The decision of Sir Crispin Agnew (which pre-dated the decision of the tribunal in the present case) was in any event binding on the tribunal.

It follows that, although the tribunal did not consider the Regulation 7(2)(c) issue, if they had done so, they would have been bound to decide that regulation 7(2)(c)(ii) did not apply because the decision being superseded was not an “incapacity benefit decision” within the meaning of regulation 7A(1) of the 1999 Regulations; and that for the same reason, regulation 7(2)(c)(iii) did apply. They would, therefore, have been bound to dismiss the appeal against the supersession decision.

I conclude, therefore, that the tribunal was not in error in failing to consider the Regulation 7(2)(c) issue, because it was not an issue raised by the appeal. The issue was not the subject of argument by the appellant. The tribunal was not required to investigate the facts which would or might be relevant to the issue, since the decision superseded was not an “incapacity benefit decision” and the appeal against the supersession decision was bound to fail.

There was debate before us as to the extent to which the commissioner is required to decide a point of law which has not been articulated by a party before him or her. It was common ground between counsel that the correct approach is that propounded at p 846B-D in Robinson in relation to applications for leave to appeal. In that passage, the court identified the circumstances in which it might be appropriate for the Immigration Appeal Tribunal to grant leave to appeal on the basis of a point not argued before the special adjudicator. Because the rules place an onus on the asylum-seeker to state his grounds of appeal, the court considered that mere arguability of the point was insufficient. They said that, in deciding whether to grant leave to appeal, an appellate authority should focus primarily on the arguments adduced before them (whether to be found in the oral argument before the special adjudicator or in the written grounds of appeal to the IAT). They are not required to engage in a search for new points. But if there is “readily discernible an obvious point” which favours the applicant, although he has not taken it, the appellate authority should apply it in his favour. There is no obligation to ask for submissions on points which have not been taken, but which are merely “arguable” as opposed to “obvious”. By an “obvious point”, the court meant “a point which has a strong prospect of success if it is argued”.

It can be seen that the guidance given was coloured by the context of an application for leave to appeal. I am not convinced that this is necessarily the correct approach in relation to substantive appeals to the commissioner. An appeal can only be “on the ground that the decision of the tribunal was erroneous in point of law”: section 14(1) of the 1998 Act. This suggests that there must be a question of law as formulated by the appellant or at least in the way that he puts his case before the commissioner. The jurisdiction of the commissioner is circumscribed in a way in which the jurisdiction of the tribunal is not. But it is not necessary to reach a concluded view about this, since, for the reasons I have given, if the Regulation 7(2)(c) issue had been considered and decided correctly by the commissioner in the present case, he would have dismissed the appeal against the supersession decision.

It follows that the appeal to this court against the supersession decision must be dismissed.

In the light of my conclusion on the first issue, the second issue does not arise.

The question that arises here is whether the appellant had “failed to disclose a material fact” in breach of section 71(1) of the 1992 Act. It is common ground that, in the light of the decision of this court in B’s case at para 37, a person “fails to disclose” for the purposes of section 71(1) if he or she breaches the requirement of regulation 32(1) of the 1987 Regulations. This is so even if the claimant lacks the mental ability to recognise that he or she is in breach of that requirement (para 40 of B).

Regulation 32(1) requires the appellant to “….furnish in such manner and at such times as the Secretary of State may determine….such information or facts affecting the right to benefit or its receipt as the Secretary of State may require.”

The question that arises for decision is whether the terms of the factsheet were sufficient to amount to a “requirement” that the appellant should notify the Secretary of State that he was starting work before he started work. The tribunal noted that the appellant was paid by order book and that the order book unambiguously instructed him to notify any change of circumstances, including the doing of any work. Of the factsheet, they said (para 9) that it “contained an instruction to fill in an application form before doing any permitted work”. They concluded that the appellant’s failure to notify the Secretary of State of the change of circumstances was a breach of regulation 32(1) of the 1987 Regulations.

As I have already said, Mr Commissioner Jacobs interpreted the relevant passage in the factsheet as containing an instruction to the appellant to report that he was going to start work.

Mr Chamberlain supports the commissioner’s reasoning. He submits that the factsheet contained an instruction which would have been clearly understood by a layman as meaning that he was obliged to notify the SSWP before starting work and that if he did not do so there would be adverse consequences. Mr Chamberlain does not rely on the instruction contained in the order book as being the relevant instruction.

The meaning of the material part of this factsheet has been considered by two commissioners. In CIB/3925/2003, Mr Commissioner Mesher said at para 23:

In CIB/1985/2004, having agreed with para 23 of Mr Commissioner Mesher’s decision, Mr Commissioner Howell QC said:

There is no hint in the reasoning of Mr Commissioner Mesher that, in reaching his decision, he was influenced by a consideration of how the factsheet would be understood by a person suffering from a mental disability (an approach which B’s case shows would have been wrong). The decision of Mr Commissioner Howell postdated the decision of the commissioner in B’s case, which was upheld by this court on the mental disability point. He agreed with the reasoning of Mr Commissioner Mesher and held that the factsheet did not contain a clear requirement to notify the SSWP office that deals with the benefit before a claimant starts work.

I agree with the reasoning of both of these commissioners. Read in the context of the factsheet as a whole, I do not consider that the words “you should tell the office… before you start work” and “you should fill in an application form before you do any permitted work” are the language of clear and unambiguous mandatory requirement. The consequences for a claimant of not complying with a requirement in accordance with regulation 32(1) can be very serious. That is why in my view, if the Secretary of State wishes to impose a requirement on claimants within the meaning of regulation 32(1), it is incumbent on him to make it absolutely clear that this is what he is doing. There should be no room for doubt in the mind of a sensible layperson as to whether the SSWP is imposing a mandatory requirement or not.

Mr Commissioner Jacobs said that the word “should” in the factsheet was a “polite way of wording an instruction”. There may be contexts where the dictates of politeness are such that “should” means “must”. Even in a social context, “should” may not mean “must”. As Thomas LJ pointed out in argument, “you should go to the doctor” does not mean the same as “you must go to the doctor”. The former is more the language of “you would be well advised to go to the doctor”. The latter is an instruction. But there is no reason why the Secretary of State should have felt inhibited from using the clear and unambiguous word “must” in the present context. The context is not one which demanded politeness at the expense of clarity.

For these reasons, which are essentially the same as those given by Mr Commissioner Mesher and Mr Commissioner Howell QC, I would allow the appeal on the third issue.

I agree with the judgment of Dyson LJ. I also agree that it is not necessary to express a concluded view on the issues set out in paragraph 44 and 45 of that judgment, but in so agreeing, I would prefer to leave the issue entirely open without expressing even a provisional view. It is important, in my opinion, to bear in mind that members of the public seeking to appeal in relation to this legislative scheme of great complexity and technicality, do not have the benefit of legal aid. Although a member of the public will generally have highly skilled assistance from workers in the voluntary sector, the fact that a member of the public is not entitled to legal aid may be a factor to be taken into account in determining not only the extent of the inquisitorial duty that the tribunal and the Commissioner have, but also the duty the Tribunal and Commissioner have to be sure that the decision made is one which correctly applies the law to the facts, even where points on these very complex regulations are not raised by the member of the public. The extent of the duties is an issue which requires very careful consideration in a case where the issue arises directly. It may be necessary when considering the legislation to consider how Parliament intended an independent tribunal should, where legal aid was is not available, in fact administer justice to members of the public, and in particular those with disabilities such as the appellant, in respect of this highly technical and complex legislative scheme.

I agree with the judgment of Dyson L.J.

Exactly when and how a Commissioner may fall into error for not dealing with a point of law which had not been taken before him is a difficult question to answer. Having carefully considered paragraphs 44 and 45 of Dyson LJ’s judgment and the judgment of Thomas LJ, I think it better to say no more than that the point should be left open for decision when it properly arises.