A client brought in a letter from the DWP Debt Management Centre.

The letter read:
"Although this money is not recoverable under Social Security law we are asking for it back as it was money that should not have been paid."

It then listed a number of questions, one of which was

"Why should I have to repay this money if the overpayment was not my fault"

Answer

"Under common law anybody who receives money which they are not entitled to can be asksed to pay it back"

Another question

"What if I dont agree that I should pay this money back?

Answer

"This money is recoverable under common law as you were not entitled to receive this money. We are aloowed to ask for the money backmon this basis and could seek recovery through the courts if necessary"

I called Debt Management on my clients behalf and argued that by its very nature statute law must override common law. The person agreed that recovery of the overpayment could not be enforced and agreed to write it off.

How many innocent people are being intimidated by these letters and are bullied into paying money that they dont have to?

One phone call on my part saved my client over £2.5k

These have been doing the rounds for years, and AFAIK, every time anyone challenges the DWP, they back down and admit that they can't reclaim O/P's in this way.

The argument for this is that there has been a loss to public funds which should be recouped where possible (it comes under Treasury Accounting Guidance).

However, an important point to note is that the existence of an O/P has to have been proved first. I say this because I have an ongoing case that I am advising on, where this just isn't the case in my view (the tribunals use of phrases such as 'alleged O/P' are a bit of a giveaway'.

I would be interested in seeing exactly what the argument for recovery under common law would be ......

I am aware of what CPAG have to say on this, i.e. arguing that recovery through social security law ‘replaces’ recovery under common law.

But to play devil’s advocate for a moment. One argument might be is that a common law right is only ousted (or curtailed) by a statutory removal (or limitation) of that right and not by an adding of a further right towhich covers different territory.

The statutory right of recovery is contained in section 71 of the Admin Act and is limited to cases of failure to disclose and misrepresentation. It is not concerned with overpayments arising for other reasons. Thus there is no overlap between cases where statute law has application and where common law may still have application, under the doctrine of unjust enrichment in cases of official error for example (which there is a common law defence to).

One approach to statutory interpretation says that statute laws are enacted to cure mischiefs, or deficiencies, in the common law. Thus since the right to recover overpayments under common law and statue are on different grounds, or are available to cure different mischiefs, some may argue that the common law right of recovery for official error remains. I personally don’t know enough to say one-way or the other.

I think CPAG’s other point may be stronger: that a decision as to whether there has been an overpayment should be made by a decision maker, carrying a right of appeal and thus the courts have no jurisdiction.

Of course I would try all possible arguments on behalf of clients but I would not be entirely confident about the point about the right of recovery under common law until the courts finally decided the point one way or the other. Unless they already have of course!

I would be interested in other people’s views on this. Like others I get annoyed by these types of letters, designed to make people think that they must, as a matter of course, pay money back.

hi Paul

social security legislation gives the Secretary of State various powers of recovery - section 71, section 74 and interim payments - these are over and above common law rights. imo, there should be no question of common law action on any overpayment which has been adjudicated, and found not recoverable. there should also be no question of seeking recovery of official error overpayments - the SoS has a clear and established policy of writing off offical errors, for very good reasons, and recovery action of oficial errors through the courts would be in conflict with this policy, indicating incoherence in public policy which is highly undesirable.

historically, a letter _requesting_ rather than requiring repayments has been issued post-adjudication, on overpayments designated 'M' for mistake by claimant - i expect there a much fewer of these now that 'failure to disclose' has been greatly closed down by CDs, and other reasons, and the wording of such letters has always been slightly misleading and a bit of a try-on - but - no follow up action was in operational instructions after the issue of 1 draft letter- repayment was entirely voluntary. the text of the letter never contained any threat of legal action whatsoever.

there are some types of overpayments which were not reviewable - these are concerned more with payments than awards - for example - duplicate payments where the claimant is paid twice for the same period - eg an order book and clerical giros - doesn't happen so much now, or an instrument of payment erroneously carries an additional nought on the payment amount etc...
there may or may not be an element of official error in these cases, but a request for repayment would normally be made, and if the person is unresponsive, common law recovery would be considered where the person could be expected to know that they weren't entitled to the payments, if the sum is large enough to justify lagal action, if it was a particularly blatant appropriation etc...

the letter stainsby refers to is shabby debt recovery pressure and intimidation of a kind which never used to occur, as it was not befitting the dignity and integrity of a government department to threaten citizens dishonestly. of course, this was back in the days before claimants became customers and government became a business...

"Under common law anybody who receives money which they are not entitled to can be asksed to pay it back"

It's interesting that a government department will make this trivially true statement to a social security benefit claimant, but not to a pensions fund which folds with the money going who knows where...?

"This money is recoverable under common law as you were not entitled to receive this money. We are aloowed to ask for the money backmon this basis and could seek recovery through the courts if necessary" - the wording suggests that they are fully aware that they are exploiting the power of their position as a government department, and it has been sanctioned.

Hi Jan

Duplicate payments or payments, which a person was not entitled to are what I was thinking of and it seems you agree with me that there are circumstances were common law recovery may be used.

This kind of recovery would be done under the doctrine of unjust enrichment. However, there is a defence to this. That is where the claimant genuinely believed s/he were entitled and has spent the money.

This defence may not work so well in many cases of duplicate payments but as you say the sums may be so low as to be not worth pursuing.

Regards
Paul

yep. and it really was very rare for that kind of action to be taken - i only came across one case in many many years, and in fact, it was fairly rare for those kind of mistakes (duplicate payments)to be made.

going back to debt recovery - had a case today where 5 seperate o/p decisions on pension credit were made, and notified over 1/11, 2/11 and 7/11/06, and on 8/11/06 recovery by deduction starting on 13/11/06 was notified by nuneaton - still in the appeal period, obviously. there is no overpayment schedule to enable checking of the overpayment, so not sure at this stage whether we will appeal or not. phoned debt recovery - they will send breakdown of the overpayment calcs, and remove the deductions - no argument whatsoever, so again, they are fully aware of what they are doing, but are prepared to go ahead and leave it to the claimant to object...presumably there's a business case...and the DWP board of directors (huh?) don't have to get elected...

did not spot immediately - on this case most of the o/ps are recoverable - the letters state "The amount that has been overpaid must be paid back under social security law." One however, includes an amount which is not recoverable as it was due to official error and the letter is similar to the one Stainsby saw and states "This is not recoverable under Social Security Law, but we are asking for this back because it should not have been paid." There is a Q & A sheet headed "Questions you might have about our decision", but it is NOT the one referred to in the original post, and is uncontroversial. It looks like there may be a different letter issued when there is a non-recoverable overpayment only, unless somebody's going above and beyond to achieve targets ??? this letter is issued by debt recovery Nuneaton at Darlington btw...lol!

the debt recovery letter (as opposed to the o/p decisions) refers to the total amount of overpayment, and the official error has not been included in the total, so it's not as bad as it could have been...i had to use my calculator to make head and tail of the notification letter, but it's impossible to check the overpayment calculations on the information provided, which doesn't even include the weekly rate paid...the format of overpayment notification letters used to be specified in the legislation at one time, but that has fallen by the wayside...