Spreadborough v The Pensions Ombudsman & Anor

This is an appeal by Mr Spreadborough against a decision of the Pensions Ombudsman dated the 20^th March 2003 (“the Decision”) which rejected an allegation by him of maladministration by the Second Defendant Wandsworth London Borough Council (“the Council”) in that it refused to make an ill-health early payment of his preserved benefits under the Local Government Pension Scheme (“the Scheme”) retrospective to the date of his resignation from the Council, and in that as a result he had suffered injustice in the form of financial loss, distress and inconvenience. The Pensions Ombudsman was initially a respondent to the appeal but the appeal was discontinued against him.

This appeal raises questions of construction and application of Regulation D11 of the Local Government Pension Scheme Regulations 1995 SI No 1019 (“the 1995 Regulations”). The 1995 Regulations with effect from the 2^nd May 1995 replaced the Local Government Superannuation Regulations 1986 (“the 1986 Regulations”).

Regulation D11 of the 1995 Regulations (so far as material) provides as follows:

“(1)

If a member who ceases to hold local government employment –

(a)

is not entitled under regulation D5, D6, D7 or D9 to retirement benefits which are payable immediately on his ceasing to hold that employment; and

(b)

he fulfils one of the following requirements, namely -

(i)

he has a statutory pension entitlement; ….

then, subject to regulation D13, he becomes entitled in relation to that employment to a standard retirement pension with a standard retirement grant payable from the appropriate date; and in these regulations benefits to which a person becomes entitled under this paragraph by virtue of fulfilling one of the requirements mentioned in paragraph (b) and which have not yet become payable are called ‘preserved benefits’.

(2)

For the purposes of paragraph (1) ‘the appropriate date’ in relation to any person, is his 65^th birthday, or if earlier, the earliest of the following -

….

(b)

any date on which he becomes incapable, by reason of permanent ill health or infirmity of mind or body, of discharging efficiently the duties of the employment he has ceased to hold …. ”

The issue raised is at what date on the evidence available did Mr Spreadborough become incapable by reason of permanent ill-health of discharging efficiently the duties of his employment and accordingly as at what date did Mr Spreadborough become entitled to preserved benefits. The Pensions Ombudsman in the Decision upheld determinations that the date was the 1^st May 1998. Mr Spreadborough submits that the date was the 19^th August 1990, the date that he resigned.

Mr Spreadborough was employed by the Council as an arrears officer. Under the Scheme (of which he was a member) and the 1986 Regulations, Mr Spreadborough was entitled to payment of preserved benefits prior to the ordinary retirement date of his 65^th birthday on his becoming incapable by reason of permanent ill-health of discharging efficiently the duties of the employment which he had ceased to hold. He suffered the onset of Chronic Fatigue Syndrome (“ME”) in 1989. On the 30^th October 1989 he took leave of absence on the grounds of ill-health and he resigned from his post on the 9^th August 1990. In December 1994, he made his first application for the early payment of his retirement benefits under regulation E2(6) of the 1986 Regulations (the predecessor of regulation D11 of the 1995 Regulations). He was seen by the Council’s occupational health physician, Dr Cooper, in January and February 1995. She considered letters from the doctors treating him and concluded that there was insufficient evidence that Mr Spreadborough was then permanently unfit. The Council communicated its decision that he did not qualify for early payment of his benefits by a letter dated the 3^rd July 1995. That letter notified Mr Spreadborough of his right of appeal against that decision. He did not exercise that right. On the 15^th December 1995 Mr Spreadborough’s trade union requested a reconsideration of his case, but there was no change in view.

On the 14^th June 1996 the consultant physician then treating the appellant, Dr Kellett, wrote to him expressing the view that his illness would not last until his retirement and that even though his condition might last several years, ultimately recovery should take place. Only exceptionally would the condition last until retirement, and this was not such an exceptional case. He advised that Mr Spreadborough should have treatment at a specialist rehabilitation unit at the Maudsley Hospital and that Mr Spreadborough should request his doctor to refer him to the unit. In the light of this opinion, Dr Cooper maintained the view she had expressed earlier that Mr Spreadborough’s condition was not permanent. Mr Spreadborough did not seek the treatment advised for him. Mr Spreadborough says that this was on the advice of his doctor. There is apparently no independent evidence of that advice or of the reasons for it.

Mr Spreadborough saw Dr Weir, a consultant physician, in September 1997 and again on the 1^st May 1998. In May 1998 the appellant made a further request for the early payment of his deferred pension benefits. He was seen by Dr Cooper on the 12^th June 1998. On the 16^th June Dr Cooper sought a report from Dr Weir and thereafter Dr Cooper obtained from Dr Weir a report dated the 18^th September 1998 (“the First Report”). In the First Report Dr Weir stated that the symptoms and incapacity apparent on the 1^st May 1998 continued, referred to the Guidelines recently issued by the Department of Health, which stated that a patient suffering from the symptoms of ME for more than 4 years has a tendency to chronicity, and concluded that on the balance of probability it was unlikely that Mr Spreadborough (then aged 47) would recover sufficiently before the age of 60 in order to return to his previous employment on a full-time basis. In the light of this report, on the 22^nd September 1998 Dr Cooper reached a “closely balanced decision” that Mr Spreadborough could then be considered “permanently unfit” and gave a certificate indicating her view that Mr Spreadborough had become permanently incapable of discharging the duties of his former employment by reason of ill-health with effect from the 22^nd September 1998. The Council communicated this decision to Mr Spreadborough by a letter dated the 23^rd September 1998.

Mr Spreadborough appealed against this decision so far as it dated his incapacity from the 22^nd September 1998. By the time of his appeal, the provisions for the resolution of disputes in Chapter IV of Part IV of the Local Government Pension Scheme Regulations 1997 (“the 1997 Regulations”) had come into force. These gave Mr Spreadborough a right of appeal in the first instance to the “appointed person”, in this case Mr Walker, the Borough Solicitor.

By a memorandum dated the 17^th February 1999 Mr Walker requested the Council to seek further advice from Dr Weir. The memorandum (so far as material) read as follows:

“… (d) Bearing in mind that his report on 18^th September 1998 is the first medical evidence of which I am aware to conclude that it was unlikely that Mr Spreadborough would recover sufficiently before the age of 60 in order to return to his previous employment on a full time basis, is Dr Weir able to provide an opinion as to the date on which it could reasonably be said that objective medical evidence indicated that, on a balance of probabilities, Mr Spreadborough had, in fact, become permanently incapable by reason of ill health of discharging efficiently the duties of his previous employment?”

The Council communicated this request to Dr Weir by letter dated the 5^th March 1999. By letter dated the 10^th June 1999 (“the Second Report”) Dr Weir replied:

“(e)

The history obtained by Dr Konforti and subsequently confirmed by me suggests that Mr Spreadborough’s illness started in October 1989. In corroboration of this is a letter from Dr Tom Burns, a Consultant Psychiatrist at St George’s Hospital. This letter is dated 18^th July 1990; Dr Burns describes him as having a ‘temporary post viral syndrome which become complicated by all the changes in his life …… which led to his prolonged sickness’. With the power of hindsight it is quite apparent that Mr Spreadborough has Chronic Fatigue Syndrome. It is also likely that the incapacity due to this commenced in October 1989.

I understand that Mr Spreadborough is keen to have his ill-health pension backdated to reflect the genuine period of incapacity he has experienced. I would think that this is perfectly reasonable; in my view there are a number of points to consider: firstly there is no doubt in my mind that his symptoms are genuine and secondly I am afraid that his illness is likely to continue at least until the age of 60 in view of its established duration. This is a view that I expressed first in my letter of the 11^th May [1998]. I hope that this information is of help.”

Mr Walker’s determination was given by a letter dated the 28^th July 1999. After a careful and detailed account of the facts, legal framework, the medical evidence and the parties’ contentions, Mr Walker set out his decision and his reasons. Mr Walker began by stating that perfectly reasonably and properly, Dr Cooper and Dr Kellett prior to the First Report of Dr Weir had taken the view that it was not right to regard Mr Spreadborough as permanently impaired until he had had the opportunity to participate in all sensible efforts at rehabilitation and that included the opportunity to attend at the Maudsley unit, an opportunity which Mr Spreadborough had declined. He went on to hold that prior to the First Report there existed no medical evidence upon which the Council could reasonably have relied on to conclude that Mr Spreadborough was permanently unfit and that he did not read the Second Report as stating that Mr Spreadborough was permanently unfit prior to the 1^st May 1998. He went on to hold that the date of onset of permanent incapacity should be backdated to the date of Mr Spreadborough’s meeting with Dr Weir on the 1^st May 1998.

Mr Spreadborough exercised his right under regulation 102 of the 1997 Regulations to refer the dispute for reconsideration by the Secretary of State. By a decision dated the 19^th April 2000 the Secretary of State confirmed Mr Walker’s decision for the reasons set out in the annex to the decision. The Secretary of State expressed the view: (1) that the question for him to decide was whether by the 23^rd September 1998 Mr Spreadborough had become permanently incapable and, if so, at what date his permanent incapability became established as a matter of medical fact; (2) that the decision had to be based on evidence which became available since the Council’s decision of the 3^rd July 1995 on the 1994 application for deferred benefit, because that decision took account of medical evidence available until then; (3) that in making decisions under the regulations at various times, administering authorities must reasonably rely on evidence that is broadly contemporaneous, in the light of what is then the current state of medical knowledge; (4) that there are no provisions, apart from those permitting appeals, which enable administering authorities to review decisions once made; (5) that later medical evidence could only be relevant in exceptional circumstances; (6) that the First Report was the first medical evidence which indicated that the condition was permanent. The Secretary of State concluded that on the balance of probability Mr Spreadborough’s ME started in 1989, but he did not accept that this meant that the condition could have been shown to be permanent then: the earliest date when the condition became permanent was the 1^st May 1998. The critical passage in his decision is paragraph 15 which reads as follows:

“The Secretary of State accepts from this evidence that on the balance of probability your ME started in 1989. He does not read Dr Weir’s opinion as saying that your condition could have been established as permanent at that time. In the Secretary of State’s view Dr Weir’s report, which post-dates your termination of employment by more than eight years, is so far from contemporaneous with your cessation of employment that no such conclusion could reasonably be drawn from it. He notes Dr Weir’s reference to the ‘benefit of hindsight’ and that he ‘first’ expressed the view that your condition was permanent on 11 May 1998. He notes this followed a consultation on 1 May 1998. He also notes that Dr Weir’s opinion suggests that a prognosis of permanence is dependent on duration of symptoms. The Secretary of State concludes in all the circumstances that your condition can first be reasonably said to have become conclusively established as permanent on 1 May 1998. That is therefore the date on which you are entitled to early release of your retirement benefits.”

Mr Spreadborough appealed to the Pensions Ombudsman. In the Decision dated the 20^th March 2003, the Ombudsman dismissed the appeal. After briefly setting out the facts, he expressed his conclusions as follows:

“14.

CFS is a controversial area of medicine which has only received recognition in recent years. By 1996, when Mr Spreadborough’s case was reconsidered by the Occupational Health Physician and the Consultant Psychiatrist, both shared a view that he was suffering from CFS. However, both were guided by the appropriate medical literature about CFS available at that time which indicated that the condition was not of a permanent nature and recovery would eventually be made. The evidence did not support Mr Spreadborough’s case that he was permanently incapable because of CFS at that date.

15.

Mr Spreadborough has asserted that more up-to-date literature was available to the medical professionals in the form of the DWP information bulletin published in May 1996. However, even if the Occupational Health Physician and the Consultant Psychiatrist were aware of the existence of that bulletin in June 1996, the Consultant Psychiatrist were aware of the existence of that bulletin in June 1996, the Consultant Psychiatrist was of the opinion that Mr Spreadborough’s individual case was not one in which he could state that Mr Spreadborough’s condition would continue until retirement. The Consultant suggested that he should seek specialist treatment. The Occupation Health Physician agreed. I do not see any reason to criticise their opinions that Mr Spreadborough should not be found at that time to have been permanently incapacitated, as required under Regulation D11(2)(b) of the Scheme.

16.

By the time of the Consultant Physician’s medical report to the Occupational Health Physician dated 18 September 1998, the Department of Health guidelines that related to the assessment of prognosis of CFS had become available. The Consultant Physician stated that Mr Spreadborough clearly fell within the indicated chronicity category of CFS and that he would be unlikely to recover sufficiently to return to his previous employment on a full-time basis before retirement date. The Occupational Health Physician agreed.

17.

Rule 11D(2) provides for the early payment of preserved benefits with the ‘appropriate date’ being from ‘any date on which a member becomes permanently incapable’. In my judgement, this means the date on which a member’s medical condition was found to have met that criteria. It does not mean the date on which the incapacity may have first occurred, as there is no provision in the Regulations which allows for the retrospective payment of preserved benefits from the Scheme. Mr Spreadborough was first found by the Consultant Physician as being ‘permanently incapable’ on 1 May 1988. I concur with the Council’s final decision that, properly, the Appropriate Date for the early payment of Mr Spreadborough’s preserved benefits was 1 May 1988.

18.

I do not uphold the complaint.”

It is not my role on this appeal to decide the substantive dispute between Mr Spreadborough and the Council as to the date when Mr Spreadborough became permanently incapacitated. I am only concerned whether the Decision is flawed in law. This does however require me to identify the issues raised and consider whether they have been properly and sufficiently addressed.

There were two issues raised in this case before the Council, Mr Walker, the Secretary of State and the Pensions Ombudsman. The first was procedural, namely whether it is open to Mr Spreadborough to seek to establish that the onset of his permanent incapacity was prior to the date of determination of his earlier unsuccessful application on the 3^rd July 1995. No direct guidance is provided in the 1997 Regulations beyond what may be inferred from the Scheme and timetable for appeals. As it seems to me, common sense and good administration require that a member of the Scheme shall not be entitled to contend that a previous final or unappealed decision was wrong on the evidence then adduced; but that he may be entitled to revive an earlier failed claim on new evidence in exceptional circumstances where justice so requires. Justice may so require when important new evidence comes to light or a relevant development has taken place in medical knowledge or understanding. Caution may be required in revisiting earlier decisions made on the basis of contemporary material, but the need for caution is not the same thing as permitting a different conclusion to be reached (as the Secretary of State appears to have thought) only if “conclusively” established as opposed to established on the conventional balance of probabilities, still less as ruling out such an exercise altogether. It does seem to me that developments in the field of ME reflected in the First and Second Reports are capable of being considered such as to justify reconsideration whether Mr Spreadborough’s permanent incapacity dated back to 1989, notwithstanding the determination to the contrary in 1995.

The second was whether, assuming that it was open to Mr Spreadborough to seek to establish that the onset of his permanent incapacity was in or before 1990, Mr Spreadborough established that this was so. For this purpose incapacity by reason of permanent ill-health or infirmity means incapacity in respect of which there is no reasonable prospect of recovery, taking account of the available treatment and the various possible courses that a condition may take and the potential outcomes. A reliable diagnosis may require the decision to be deferred over a period of time, and the eventual diagnosis may or may not be retrospective or prospective.

The diagnosis in the case of Mr Spreadborough very much turned (though not exclusively turned) on the Second Report, read in the light of the previous letter sent to Dr Weir. There is plainly a degree of ambiguity arising from the terms both of the question and the answer whether Dr Weir did or did not intend to say that the incapacity was permanent in 1989. There are indications both ways. In the circumstances of this case, contrary to what was suggested to me it would be quite wrong to assume that Dr Weir deliberately intended any equivocation. It must scarcely be just to resolve Mr Spreadborough’s claim without an effort to obtain clarification from Dr Weir. It is essential that he spells out unequivocally when in his judgment any reasonable prospect ceased of recovery of full capacity, taking full account of the treatment available in the past but not availed of, and the views expressed in this regard by Dr Cooper and Dr Kellett.

There are passages in the decisions of Mr Walker and the Secretary of State which occasion me anxiety how far they properly addressed the two distinct issues which I have identified and how far they concentrated on the dates on which advice was obtained or conclusions reached at the expense of the critically relevant dates on which the medical condition arose. It is apparent that the decisions were (at least in substantial part) reached on the basis of a reading of the Second Report adverse to Mr Spreadborough.

I need not however go further into these questions because it seems to me on any basis that the Decision cannot stand and the matter must be remitted to the Pensions Ombudsman. He must reconsider the complaint made to him and in that context the sufficiency of the reasoning of Mr Walker and the Secretary of State and whether and how any ambiguity in the Second Report should be resolved. The Decision cannot stand because of the erroneous and unsatisfactory character of the second and third sentences of paragraph 17. The Pensions Ombudsman states in the second and third sentence that under Rule D11(2) the “appropriate date”, being the date on which a member becomes permanently incapable, “means the date” on which the member’s medical condition was found to have met that criteria and not the date on which the incapacity first occurred, because there is no provision in the Regulations which allows for the retrospective payment of preserved benefits from the Scheme. The fourth sentence gives this as the reason for upholding the 1^st May 1998 as the appropriate date. But with respect, assuming that the first issue is decided in favour of Mr Spreadborough, the critical issue is indeed the date of onset of permanent incapacity: the date that this condition was diagnosed is very much of secondary significance. Further there is indeed provision in the Regulations allowing retrospective payment of preserved benefits from the Scheme: this was common ground at all stages of the present dispute. I am comforted in reaching this conclusion by the fair and sensible acceptance by counsel for the Council in the course of her valuable submissions that the paragraphs in the Decision to which I have referred are unsatisfactory.

I accordingly direct that this matter be remitted to the Pensions Ombudsman and that he determines the complaint in accordance with the guidance provided in this judgment.