Home > Publications > Selected cases — Parliamentary > Selected Cases and Summaries of Completed Investigations - October 2000 to March 2001 - Case No. C.1693/00
Selected Cases and Summaries of Completed Investigations - October 2000 to March 2001
Volume 4 - 2nd REPORT - SESSION 2001-2002
Chapter 1
DEPARTMENT OF THE ENVIRONMENT, TRANSPORT AND THE REGIONS
3. Case No. C.1693/00
Vehicle Inspectorate: withdrawal of an authorisation to conduct MOT tests
Summary
Mr A complained, on behalf of his client company, that the Vehicle Inspectorate (the Inspectorate) had acted maladministratively in deciding to withdraw an authorisation allowing a business operated by the company to conduct MOT tests; in particular, that the Inspectorate had taken no account of explanations offered by the company for the alleged failings on which the Inspectorate’s decision relied. The Ombudsman criticised the Inspectorate’s area office for having issued warnings to the business in August 1994 and August 1997 which their engineer had subsequently found to have been unsupported by the required level of evidence, and for having given insufficient attention to the explanations offered by the company on those occasions. Those invalid warnings had led, following a further minor disciplinary incident in September 1998, to the unjustified withdrawal of the business’s authorisation in February 1999. The Inspectorate had restored the authorisation in April 1999 following an appeal by the company. On the Ombudsman’s recommendation, the Inspectorate’s Chief Executive agreed that an ex gratia payment be made to reimburse, with interest, the loss to the company’s business caused by the withdrawal of the authorisation (subject to the exclusion of a period of delay for which the Inspectorate had not been to blame), and associated costs.
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Full text
3.1 Mr A complained on behalf of his client company that the Vehicle Inspectorate (the Inspectorate), an executive agency of the Department of the Environment, Transport and the Regions, had acted maladministratively in deciding to withdraw an authorisation allowing X, a business operated by the company, to conduct MOT tests; in particular, that the Inspectorate had taken no account of explanations offered by the company for the alleged failings on which the Inspectorate’s decision relied. As a result, the company had suffered loss of revenue and incurred costs in pursuing reinstatement of the authorisation.
3.2 My investigation began in May 2000, once the Ombudsman had obtained the comments of the Inspectorate’s Chief Executive following referral by the Member in January. I have not put into this report every detail investigated by the Ombudsman’s staff but I am satisfied that no matter of significance has been overlooked. A related complaint by Mr A that the Inspectorate had refused to supply him with information which should have been made available under the Code of Practice on Access to Government Information was investigated separately by this Office.
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Statutory and administrative background
3.3 The Inspectorate are responsible for supervising the operation of the MOT testing scheme. That includes authorising testing stations and approving and training mechanics; monitoring their performance and advising, training, or disciplining where standards are not maintained; and investigating complaints about testing standards. The work is done by vehicle examiners and senior vehicle examiners working from area offices under the supervision of area managers.
3.4 Under regulation 10(5) of the Motor Vehicles (Tests) Regulations 1981 the Secretary of State may at any time give notice of withdrawal of an authorisation to carry out tests. There must normally be a period of notice of not less than 35 days, unless it is considered necessary that the notice should take earlier effect. The regulation allows for cancellation of a notice provided that takes place before the date on which it is to come into effect. It also provides that within 14 days from the date of the notice the authorised testing station, or any person acting on their behalf, may make written representations to the Secretary of State to the effect that the authorisation should not cease or should be restored.
3.5 The Inspectorate refer to such representations as ‘statutory appeals’. Such appeals are made through the area office responsible in the first instance for making the decision to withdraw the authorisation. The area manager sends the appeal with a report by the vehicle examiner and the testing station file to the MOT appeals branch at the Inspectorate’s headquarters in Bristol. A case officer in the appeals branch is responsible for studying the evidence provided by the area office, checking that procedures have been followed correctly and considering all the points raised by the appellant. If the appellant has asked to make representations in person rather than in writing, the case officer will arrange a meeting for that purpose. Where an appeal depends on technical evidence, an engineer in the appeals branch is asked to examine the evidence and prepare a technical assessment. Having considered all the evidence, the case officer makes a submission to the head of the appeals branch, setting out the facts, balancing the evidence against the Inspectorate’s policies and procedures, and (at the time of the company’s appeal) making a recommendation. In some cases the head of branch may in turn make a submission to the Chief Executive although some decisions are made without the involvement of the Chief Executive. On behalf of the Chief Executive, the head of branch sends the case officer a minute giving the decision and the reasons for it; that forms the basis for a letter by the case officer conveying the decision to the appellant.
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3.6 The requirements that must be met by those authorised to carry out MOT testing are set out in the MOT Testing Guide. At the time of the decision to withdraw X’s authorisation, the fourth edition of the Guide was in force. That edition set out circumstances under which an authorisation might be withdrawn as a result of a single act (such as the improper issue of a test certificate involving some act of fraud or dishonesty); in other cases an authorisation would not usually be withdrawn unless the testing station had received a written warning within the preceding five years. Similar arrangements applied in respect of approved mechanics.
3.7 The Inspectorate’s operations manual provides guidance for their staff on the procedure for withdrawing an authorisation. It says that a ‘contemplated withdrawal letter’ should be issued in all cases, to give the testing station an opportunity to make representations before any decision is made. The manual emphasises: ‘Representations from [authorised testing stations and approved mechanics] must be carefully considered and every point taken into account before the Department takes further action. Failure to give written indication on file (even if only a handwritten note) that such consideration has taken place could lead to an appeal being allowed. The Department must be able to demonstrate to an investigating authority that proper consideration of representations has taken place.’ If the testing station’s representations are not considered to be satisfactory, either a withdrawal letter or a warning letter will be issued. If a warning letter is not merited an advisory letter may be used to point out minor shortcomings. Before taking withdrawal action the area office should re-examine the merits of any previous warning letters. If an appeal is made, photographs of vehicle defects (particularly those involving corrosion) should accompany submission of the file. Where, exceptionally, photographs cannot be provided, the vehicle examiner’s report should contain a comprehensive and unambiguous description or sketch of the defects. In the case of incognito checks (in which a vehicle examiner presents a vehicle for testing and observes the test without revealing that he is employed by the Inspectorate), photographs illustrating the examiner’s view of the test area could be useful if his ability to see properly is challenged. Where a switch of vehicles is alleged, the testing station should be advised to contact the police and a check should be made on the progress of the police investigation before the file is submitted to the appeals branch; a statement outlining the progress made by the police should then be attached.
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Jurisdiction
3.8 Under section 12(3) of the Parliamentary Commissioner Act 1967 the Ombudsman may not question the merits of a discretionary decision taken without maladministration by a government department or other authority.
Summary of events
3.9 1994 On 25 January 1994 the senior vehicle examiner at one of the Inspectorate’s area offices sent the company a contemplated withdrawal letter (paragraph 3.7) in respect of a test certificate issued by X on 15 October 1993, which a vehicle examiner had concluded, following an examination on 5 November, had been incorrectly issued. On 1 February Mr Y, chairman of the company, replied that the vehicle in question had been involved in an accident between the issue of the certificate and the examination and that that had accounted for or exacerbated the defects that the examiner had found. On 16 August the senior examiner informed the company that X’s authorisation would not be withdrawn but that the letter should be regarded as a warning.
3.10 1997 On 24 April 1997 the area manager (the former senior vehicle examiner) sent the company a contemplated withdrawal letter in respect of a vehicle that had apparently been tested by X twice on 17 January. A vehicle examiner had examined the vehicle on 14 February and concluded that although the first of those tests had correctly resulted in failure, the tester concerned had failed to note all the relevant defects. The second test, conducted by a different tester, had resulted in the incorrect issue of a certificate. On 20 June Mr Y submitted by way of representation a report compiled by a firm of commercial investigators. The report said that the first tester had not failed to note relevant defects; one had become detectable only after he had tested the vehicle and the other had been recorded on the wrong part of the form. In respect of the second test, the report suggested that a second vehicle had been substituted for the original, bearing false number plates and identification details. On 8 August the area manager informed the company that X’s authorisation would not be withdrawn but that the letter should be regarded as a warning.
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3.11 1998 On 22 October 1998 the area manager sent the company another contemplated withdrawal letter. On 30 September a vehicle examiner had carried out an incognito check at X and had found shortcomings in the conduct of the test. On 2 December Mr Y submitted representations, which included a detailed statement by the tester concerned explaining why he believed he had carried out the test properly, and a report from the commercial investigators in which they criticised the way in which the examiner had carried out the examination and his subsequent interview with the tester. On 15 December the area manager gave the company notice that X’s authorisation would be withdrawn with effect from 5 February 1999. He invited written representations, or a request to make representations in person, by 29 January.
3.12 1999 On 26 January 1999 Mr A wrote to the area office; he said that the company had instructed him to appeal against the withdrawal of the authorisation and that he intended to make representations in person. On 3 February Mr A asked the area office to provide him with copies of all documents that they intended to submit to the appeals branch; details of all incognito checks and complaints received in respect of X; and explanations of how they had reached their decisions. On 4 February the area office sent the file to the appeals branch. On 8 February Mr A wrote to the area office raising further queries about their decisions. On 9 February the appeals branch arranged for Mr A to make representations in person on 2 March. During the remainder of February correspondence took place between Mr A and the appeals branch regarding his requests for information and the procedure to be adopted for the appeal, in particular the information that would be placed before the Chief Executive. On 4 March the appeals branch agreed to extend to 17 March the time for Mr A to submit written representations; they also agreed that on receipt of those representations they would make available to him all the papers up to that point that were to be placed before the Chief Executive. On 5 March Mr A and the appeals branch agreed upon a list of documents that were to be placed before the Chief Executive.
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3.13 On 17 March Mr A submitted his representations to the appeals branch. On 18 March the appeals branch asked an Inspectorate engineer to prepare a technical assessment (paragraph 3.5). That assessment was completed on 22 March. In respect of the warning of 16 August 1994, the engineer considered that the representations that Mr Y had made at the time had cast severe doubt on the vehicle examiner’s conclusions; technical evidence to support the warning was almost non-existent and the warning had been completely unfair and invalid. In respect of the warning of 8 August 1997, he considered that regarding the first of the two tests under review on that occasion, the area office had been over zealous, and that an informal warning would have been more appropriate. Regarding the second test, he said that an excellent case had been made for believing that a substitute vehicle had been presented and he was astounded that a warning had been issued without robust evidence to the contrary. In respect of the shortcomings found by the incognito check of 30 September 1998, he considered that those should have been dealt with informally, there being no evidence on file of continuing disregard for road safety. The engineer concluded that the file evidence did not support the withdrawal of X’s authorisation.
3.14 On 14 April Mr A examined the papers that were to be placed before the Chief Executive. On the same day the appeals branch prepared a submission for the Chief Executive in which they endorsed the engineer’s conclusion and recommended that the appeal be allowed. On 20 April the Chief Executive allowed the appeal and the appeals branch notified Mr Y and Mr A accordingly.
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3.15 On 22 April Mr A wrote to the appeals branch saying that Mr Y had instructed him to recover from them revenue lost as a result of the withdrawal of the authorisation and costs in pursuing the appeal. On 23 April the appeals branch replied that it was not their policy to meet such claims unless a court had found them to have acted beyond their powers. Following further representations by Mr A, on 24 June the Inspectorate obtained legal advice from the Department which concluded that the errors that had ostensibly occurred on the file since 1994 might well be found to constitute maladministration; if the engineer’s observations could be substantiated, the Inspectorate should seriously consider making an ex gratia payment to X. On 27 July the Chief Executive wrote to Mr A saying that the Inspectorate had acted within their powers so he did not consider that an ex gratia payment was appropriate.
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The Chief Executive’s comments on the complaint
3.16 In his comments to the Ombudsman the Chief Executive said that once the notice of withdrawal of X’s authorisation had been issued on 15 December 1998, the Inspectorate had acted speedily at each stage and had kept delay to a minimum. He pointed out that although X had been asked to submit representations by 29 January 1999, representations had not been submitted until 17 March. In a telephone call to the appeals branch on 25 February, Mr A had said that he was not concerned that the appeal was being delayed, and that Mr Y fully supported him in his intention to get the appeal procedure changed. Mr A had also requested that the appeal should not be considered until he had examined the papers, which he did on 14 April; the appeal decision was issued on 20 April. The Chief Executive accepted that the considerations that had led the area office to issue warnings to X had not been recorded on file and apologised for that. He said that in allowing the appeal he had accepted that the withdrawal of X’s authorisation had not been justified. However, he considered that the Inspectorate had provided a remedy for those shortcomings through the appeal, which had removed all the warnings and reinstated X’s authorisation.
Further developments
3.17 On 26 June 2000 the Ombudsman’s staff asked the Inspectorate to look again at their decision to refuse an ex gratia payment. On 19 July they wrote to the Ombudsman’s staff confirming their decision. They said that the company’s loss of revenue had been the result not of any avoidable delay on the Inspectorate’s part, but of their having granted an extension, requested by Mr A, to the time allowed for the submission of representations, and having allowed Mr A to examine the papers to be placed before the Chief Executive. Although their engineer had felt that the area office had acted harshly, his report had confirmed that there had been a case to answer. The area office had not recorded the considerations that had led to the warning of 8 August 1997, but only one previous warning had been needed to allow consideration of withdrawal of the authorisation. It had been considered during the appeal process that some of the judgments were finely balanced, and it had been decided on balance that the case was not sufficiently robust to warrant the withdrawal. Nevertheless, the area office had had the right to make a judgment; they had not acted ultra vires.
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Findings
3.18 The Inspectorate’s operating instructions (paragraph 3.7) require written indication on the area office file that careful and comprehensive consideration has been given to representations from authorised testing stations in response to contemplated withdrawal letters. The Inspectorate have conceded that that was not done in respect of the incidents that led the area office to issue warnings to X on 16 August 1994 and 8 August 1997. That repeated omission was in itself maladministration which leaves the merits of the decisions taken on those occasions open to question. When the Inspectorate’s engineer considered those decisions, he found an almost complete lack of evidence to support them – again in clear contradiction to the operating instructions. His assessment identified other significant weaknesses in procedure and judgment. Above all, he found nothing to refute what he regarded as for the most part strongly convincing representations on behalf of X, and he firmly rejected the opinion expressed by the senior examiner on receipt of the appeal that X’s case in respect of the warning of 8 August 1997 was flawed. In that connection, the impression that the area office gave wholly insufficient attention to X’s representations is reinforced by the fact that they did not take the action that the operating instructions required them to take regarding involvement of the police in connection with the alleged switch of vehicles. It is hardly surprising that the engineer concluded that the warnings were invalid. That conclusion was endorsed by the appeals branch and accepted by the Chief Executive. I strongly criticise the area office for their inept handling of the matter.
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3.19 The engineer’s report strongly suggests that if the area office had properly weighed up the evidence in relation to the 1994 and 1997 incidents, the most they ought to have issued in terms of disciplinary action against X was an advisory letter. If so, the question of withdrawing X’s authorisation following the incognito check of 30 September 1998 could have arisen only if the shortcomings identified on that check were considered sufficiently serious in themselves to warrant withdrawal, which no-one has suggested they were, or if reliance were to be placed upon a warning issued on 23 December 1993, which in the event the area office discounted. Indeed, the engineer, although not asked to advise specifically on the incognito check, recorded his view that that incident should have been dealt with informally; that view was endorsed by the appeals branch and accepted by the Chief Executive. The file notes made by the senior examiner at the time of the withdrawal give the impression that the incognito check was no more than a make-weight which served to confirm a withdrawal that relied largely on the preceding warnings. I conclude that the unjustified withdrawal of the authorisation was the direct result of the area office’s maladministration in relation to the preceding warnings.
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3.20 The approach that the Ombudsman considers correct is that a person who has suffered injustice as a result of maladministration should as far as possible be put back in the position in which he would have been had the maladministration not occurred. On that basis the case for the Inspectorate making good on an ex gratia basis the losses and costs incurred by the company as a result of the withdrawal is clear. The Inspectorate have contended that those losses and costs could have been substantially reduced if Mr A had permitted the appeal to proceed as swiftly as it might have done. I accept in principle that if unreasonable action by Mr A unduly prolonged the process by which X’s authorisation was restored, the ex gratia payment to the company ought to be reduced to take account of that. However, for the most part, I do not find Mr A’s actions in connection with the appeal to have been unreasonable. Those actions were directed primarily towards ensuring that he had sight of, and a say in, the evidence that was to be placed before the Chief Executive. The Inspectorate may well have considered that unnecessary in the circumstances, but Mr A had no way of knowing that there was not substantial evidence or argument on the area office’s file in support of their refusal to accept the substantial representations made on behalf of X, which it would be in his client’s interest for him to obtain the opportunity to challenge. Moreover, since his client had been subject to two previous decisions which appeared unfair, it would have been remiss of him not to approach the appeal in a combative fashion, and to challenge any points of procedure that appeared to put his client at a disadvantage. In the event, Mr A was successful in obtaining disclosure by the Inspectorate of the file notes made by the senior examiner at the time of the withdrawal and the time of the appeal. That enabled Mr A to raise legitimate queries about the way in which the area office had arrived at their decision, which would otherwise have remained largely obscure to him at the time when he most needed to understand it. (For example, the file notes indicated that X had not been given credit for a satisfactory incognito check on 16 March 1995 because the Inspectorate considered that the examiner who had carried out that check had been recognised at the time; Mr A was subsequently able to cast doubt on that conclusion.) I consider that the difficulties that prolonged the appeal process were an inevitable outcome of a justifiably forceful challenge by Mr A to the bad decisions made by the area office and that, regardless of whether Mr A had a wider agenda relating to the Inspectorate’s procedure on appeals generally, his approach in this instance was commensurate with the obstacles that he appeared to be facing and no different from that which any diligent representative would have taken in the circumstances. For that reason I regard the appeals branch’s letter of 20 April 1999, in which they said that the delay in deciding the appeal had been largely a result of prevarication and vacillation by Mr A, as having been unjustified and uncalled-for.
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3.21 However, I cannot disregard the fact that there was a delay of almost a month between 18 March 1999, when the appeals branch told Mr A that the documents to be put before the Chief Executive were available for viewing, and 14 April, when he examined the documents. The appeal was decided within a week of the latter event. I recognise that in dealing with the case the appeals branch were faced with an antagonistic situation which was not of their making, and they made genuine and substantial efforts to respond appropriately. In the circumstances, I do not hold them to blame for the delay from 19 March to 13 April inclusive, and accordingly do not consider that an ex gratia payment in respect of that delay is merited.
3.22 I consider finally the Inspectorate’s handling of Mr A’s claim for compensation for the company for the financial effects of the withdrawal of the authorisation (paragraph 3.16). I find it dismaying that, in the face of the strong advice received from the Department on 24 June 1999, the Inspectorate simply maintained their view that compensation was not appropriate because they believed that the area office had not acted ultra vires. I see no justification for such a narrow view of the circumstances in which compensation should be paid – indeed, the Inspectorate admitted when making their submission to the Department on 18 May 1999 that evidence of maladministration could be grounds for compensation, but they appear to have retreated from that after the Department pointed out that there might well be such evidence on the Inspectorate’s file. I note also that the Department advised that it was arguable that the area office’s decision was indeed ultra vires. That is a point which is ultimately for the courts, not the Ombudsman, to decide, but the Department’s advice on it should have made the Inspectorate all the more unwilling to continue to defend their position. I understand their concern that paying compensation to X might be taken to mean that compensation was available whenever an appeal was upheld, which would clearly be wrong. However, the Department gave sensible advice as to why X’s case might be viewed as exceptional. If the Inspectorate had taken the Department’s advice and seriously considered making an ex gratia payment in June 1999, the need for Mr A to complain to the Ombudsman, and the additional expense that that incurred for the company and for the taxpayer, might have been avoided. I criticise the Inspectorate for their resistance to paying compensation, which led to their failing to take the opportunities presented to them to resolve the company’s legitimate grievance in a more cost-efficient way. That was maladministrative in itself.
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3.23 My investigation has shown that Mr A’s complaint was fully justified. I therefore asked the Chief Executive if he could now agree to make the company an ex gratia payment to reimburse, with interest, the loss to their business caused by the withdrawal of the authorisation (subject to exclusion of the period 19 March to 13 April 1999 – paragraph 3.22); their costs in pursuing reinstatement of the authorisation since 15 December 1998 (including those relating to the pursuit of alternative means whereby testing on the site might continue); and their costs in pursuing compensation, up to and including submission of the complaint on 25 January 2000 to the Member for referral to the Ombudsman. I suggested that in order to calculate the amount of the payment the Inspectorate might wish to invite Mr A to submit a fully documented claim, and undertake in the event of any dispute to refer the matter at their expense to suitably qualified independent assessors. The Chief Executive replied that he accepted that the area office had exercised poor judgment and been unduly harsh. He accepted my recommendation that an ex gratia payment be made to the company in accordance with this paragraph.
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Conclusion
3.24. Poor handling by the Inspectorate’s area office led to an unjustified withdrawal of X’s authorisation to conduct MOT tests, with consequent losses and costs to the company. The Inspectorate have now agreed to provide appropriate redress. I regard that as a satisfactory outcome to a justified complaint.
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