Home > Publications > Selected cases— Parliamentary > Selected Cases and Summaries of Completed Investigations: April 2001 to September 2001 > Case No. C.89/01
Selected Cases and Summaries of Completed Investigations
PCA 6th Report – Session 2001-2002
Chapter 1
DEPARTMENT FOR WORK AND PENSIONS
Appeals Service and Benefits Agency: delay in handling a claim to industrial injuries disablement benefit leading to a loss of entitlement to reduced earnings allowance
In April 1995 Mr S claimed industrial injuries disablement benefit in respect of an accident in 1976. In October 1998, following his successful appeal to a medical appeal tribunal, Mr S was awarded industrial injuries disablement benefit backdated to January 1995. In April 1998, as a result of learning the medical appeal tribunal’s decision, Mr S claimed backdated reduced earnings allowance. Reduced earnings allowance was awarded but only from 9 January 1998 because of the statutory time limit on backdating. The Ombudsman found that, because of delays by the Benefits Agency (BA) and/or the Appeals Service, the medical appeal tribunal hearing had taken place seven months later than it otherwise would have done; and that those delays had correspondingly affected the date of Mr S’s reduced earnings allowance claim. After the Ombudsman’s intervention, BA made Mr S an extra-statutory payment of reduced earnings allowance totalling £1,253.64 for the period from 11 June 1997 to 7 January 1998 plus £172.47 interest on that sum.
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Full text
9.1. Mr S’s representative complained of delays by the Benefits Agency (BA), an executive agency of the then Department of Social Security (DSS), in their handling of his claim for industrial injuries disablement benefit. The representative said that the delays had in turn delayed Mr S’s claim to reduced earnings allowance; and he further complained that BA had refused to make a special payment in recognition of the resulting loss of benefit.
9.2. My investigation into the complaint began once the Ombudsman had obtained comments from the Chief Executive of BA. After my investigation had started I also sought comments from the Appeals Service, an executive agency of DSS with responsibility for administering appeals, about their involvement in Mr S’s case. At the time of the complaint the Appeals Service were called the Independent Tribunal Service and were an independent statutory body; but for simplicity’s sake I refer to them throughout this report as the Appeals Service.
9.3. I have not put into this report every detail investigated; but I am satisfied that no matter of significance has been overlooked. My investigation was hampered by the absence of papers in BA’s files documenting the action taken by them to obtain (a) medical evidence about Mr S between 19 September 1996, when an appeal tribunal hearing was adjourned for further evidence, and 22 April 1997 when the tribunal reconvened; and (b) the consultant’s report requested by the reconvened tribunal on 22 April 1997. I also had difficulty in investigating the Appeal Service’s actions because their papers have been destroyed under their normal procedures for retention and storage of documents. Such details as appear in the annex have been obtained from their computer records.
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Background
9.4. Industrial injuries disablement benefit is a cash benefit payable to those who suffer a continuing loss of mental or physical faculty as a result of an industrial accident or the onset of a prescribed industrial disease. In order to claim industrial injuries disablement benefit a person must first apply to BA for a determination that an industrial accident has occurred and that any resulting injury should be treated as one which arose out of or in the course of an employed earner’s employment. At the time relevant to the complaint such determinations were carried out by adjudication officers on behalf of the Secretary of State. When an adjudication officer had decided that the conditions were met, BA referred the claimant to an independent adjudicating medical authority to assess the degree of disablement - which is expressed in percentage terms - arising from the accident. Entitlement to benefit was then decided by an adjudication officer. Since 1 October 1986 industrial injuries disablement benefit is not payable (except in the case of certain diseases which are not relevant to Mr S’s case) if the assessment is less than 14 per cent.
9.5. Reduced earnings allowance is a cash benefit designed to compensate for loss of earning capacity. It is payable to those who, because of the effects of disablement of at least one per cent caused by an industrial accident or the onset of one of the prescribed industrial diseases, are no longer capable of continuing in their regular occupation or in some other suitable employment of an equivalent standard. Awards are based on a comparison of earnings between a person’s regular occupation and a suitable alternative occupation. Reduced earnings allowance was abolished for all new claimants from 1 October 1990 unless the relevant industrial accident occurred or the prescribed disease began before that date. At the time relevant to the complaint, medical questions arising on reduced earnings allowance claims were referred to an independent adjudicating medical authority for an opinion. Decisions on claims were then made by adjudication officers, taking into account the adjudicating medical authority’s opinion.
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9.6. Claim forms for industrial injuries disablement benefit have a box for those wishing to claim reduced earnings allowance to tick. The notes attached to the claim form explain the circumstances in which reduced earnings allowance is payable, and advise that a claim should be made as soon as a person has an earnings loss and not to wait until disablement has been assessed. The notes warn that a delay in making a claim may result in lost benefit. If a person ticks the box on the industrial injuries disablement benefit claim form, BA send him or her a reduced earnings allowance claim form for completion.
9.7. Before March 1996 legislation provided that claims to industrial injuries disablement benefit and reduced earnings allowance could be backdated for three months, with a possible unlimited extension if good cause for the late claim was shown. From March 1996 to 6 April 1997 backdating in cases of good cause was limited to 12 months. Legislation coming into effect from 7 April 1997 removed the opportunity to show good cause for a late claim, and backdating was limited to a maximum of 3 months.
9.8. Claims to industrial injuries disablement benefit and reduced earnings allowance are dealt with by local BA offices. BA’s regional disability benefits centres (the centres) are responsible for gathering medical evidence and dealing with appeals.
9.9. The decisions of adjudicating medical authorities carried a right of appeal to a medical appeal tribunal while the decisions of adjudication officers carried a right of appeal to a social security appeal tribunal. In both cases there was an ultimate right of appeal to the Social Security Commissioners on a point of law. Under the Social Security Act 1998 new arrangements for decision making and appeals came into force on 5 July 1999 which do not affect Mr S’s case. It is not for the Ombudsman to determine a person’s entitlement to industrial injuries disablement benefit, reduced earnings allowance, or any other social security benefit. The decisions of adjudication officers and the appellate authorities are outside his jurisdiction. I refer to such matters in this report only to set in context the administrative handling of Mr S’s case.
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9.10 Under the DSS’s non-statutory compensation scheme, the scope of which the Ombudsman and his predecessors have accepted, compensation can be paid to those who have incurred actual financial loss as a result of clear and unambiguous departmental error. The scheme also allows for compensation in the form of interest to be paid in cases where, because of maladministration, payment of benefit has been significantly delayed or interrupted. The period of delay which triggers payment of compensation for the loss of use of benefit in the case of industrial injuries disablement benefit and reduced earnings allowance claims is 12 months plus, at the time relevant to the complaint, another 12 months where a case has gone to appeal. The overturning of a decision by a higher tier of authority is a routine event clearly envisaged in legislation and does not normally give rise to a compensatory payment. Exceptionally, compensation might be payable where the first decision was wholly unreasonable or clearly incorrect in the light of evidence held at the time; but it does not follow that a different view subsequently taken means that the original decision was clearly wrong.
Findings
9.11 Mr S did not tick the relevant box on the industrial injuries disablement benefit claim form which he completed in April 1995, which would have resulted in BA sending him a claim form for reduced earnings allowance. Instead, he waited until the adjudication of his industrial injuries disablement benefit claim reached completion with the appeal tribunal’s decision on 26 March 1998 before making a reduced earnings allowance claim. As a result, reduced earnings allowance became payable only from 9 January 1998. That was in accordance with the statutory provisions. If, however, maladministration by BA or the Appeals Service had delayed the resolution of Mr S’s industrial injuries disablement benefit claim, it seemed to me that there might be grounds for seeking compensation from DSS for the effect on his reduced earnings allowance claim.
9.12. As I have explained (paragraph 9.9), the decision of the adjudicating medical authority on 23 May 1996 - and the adjudication officer’s decision which followed it on 2 July 1996 - are outside the Ombudsman’s jurisdiction. Further, I found no evidence of maladministration in the way the special payments unit reached their decision on 14 February 2000 that the adjudicating medical authority’s decision had not been so clearly wrong as to amount to an error for the purposes of satisfying the rules of the compensation scheme (paragraph 9.10). That left the question of the general handling of Mr S’s industrial injuries disablement benefit claim; and my initial enquiries to DSS received the response that, in their view, there was no evidence that departmental error had caused or added to the delay in resolving the claim, rather it had been caused by the lack of medical evidence available. My investigation led me to a somewhat different view.
9.13 BA received Mr S’s industrial injuries disablement benefit claim on 13 April 1995. They sent the first payment of the benefit to him on 5 October 1998 at the end of the decision making process. That period of three and a half years exceeds by 18 months the combined period of delay for industrial injuries disablement benefit claims which go to appeal - as Mr S’s case did - which triggers payment of compensation if maladministration has been significantly responsible (paragraph 9.10). Mr S’s claim was undoubtedly a difficult one to determine given that the relevant industrial accident had happened some 20 years earlier. The problem which that caused meant that the enquiries which BA had to make were not straightforward; and it took seven months until 30 November 1995 before the adjudication officer was able to accept the accident as a qualifying one. The next step was to assess Mr S’s disablement; and the medical board was arranged promptly for 24 January 1996. However, the board adjourned for further medical evidence to be obtained.
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9.14 The medical evidence was gathered reasonably quickly; and four months later on 23 May 1996 the adjudicating medical authority assessed Mr S’s disablement. The adjudication officer’s decision on his entitlement to benefit was delayed while his local BA office (the office) made enquiries of Mr S about the reasons for his late claim. Those enquiries were unnecessary because Mr S had twice before answered similar enquiries: at the time of his claim in April 1995, and again in October 1995. Fortunately, Mr S replied quickly and only about ten days were lost. The office sent Mr S the decisions of the adjudicating medical authority and the adjudication officer on 12 July 1996, 15 months after he had made his claim. I am satisfied that the long time taken to reach that point was due to the particular circumstances of Mr S’s case and not to significant failures on the part of BA.
9.15 That brings me to the period following Mr S’s appeal on 19 July 1996. The medical appeals section sent the necessary paperwork to the Appeal Service on 23 August 1996; and the first appeal hearing took place quickly thereafter on 19 September. It was at this point that action on the case began to suffer delays. It appears that the appeal tribunal sitting on 19 September adjourned for further medical evidence to be produced. The hearing was not rearranged until seven months later on 22 April 1997. The absence of papers (paragraph 9.3) prevented me from establishing to what extent, if any, that period was prolonged by delays on the part of either BA or the Appeals Service. I know from other cases that obtaining medical evidence from hospital records or consultants is frequently a difficult and time-consuming process. Notwithstanding, seven months seemed to me an excessively long time between the two hearings. Moreover, I am aware that tribunal hearings were being delayed at the time because of difficulties within the Appeals Service. I consider it more likely than not that some of the delay was caused by departmental tardiness.
9.16 The appeal tribunal sitting on 22 April 1997 adjourned for a second time for a consultant psychiatrist’s report to be obtained. BA returned the papers to the Appeals Service within about three months; but there was then a delay of eight months in arranging a new hearing. That was far too long.
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9.17 The appeal hearing on 26 March 1998 resulted in an award of industrial injuries disablement benefit to Mr S; but BA did not send him the payment due until more than six months later on 5 October 1998. That delay was partly due to mistakes made by the tribunal in recording their decision and - to a lesser extent - by the need to calculate how much income support should be recovered from the arrears due. Those matters apart, action was slower than it should have been. In particular, there was a two month delay after the tribunal hearing in returning the file to the office (the papers do not show whether responsibility for that delay rested with BA or the Appeals Service); and the tribunal’s recording error was not picked up as soon as it should have been.
9.18 The absence of documentary evidence (paragraph 9.3) made difficult the task of assessing the total time which maladministration by BA or the Appeals Service contributed to the three and a half years it took to conclude Mr S’s industrial injuries disablement benefit claim. After careful consideration, I have reached the view that it probably amounted to about nine months, concentrated in the period after Mr S made his appeal on 19 July 1996 (paragraphs 9.15 to 9.17). That would not normally be regarded as sufficiently significant in the overall time span of the case to bring it within the rules of the Department’s scheme (paragraph 9.10) for paying compensation in the form of interest on the industrial injuries disablement benefit arrears; and I see no grounds for seeking compensation on that basis. There remained the question of the effect on Mr S’s reduced earnings allowance claim.
9.19 Mr S waited for the outcome of his industrial injuries disablement benefit appeal on 26 March 1998 before making his claim to reduced earnings allowance. By doing so, he lost the opportunity of receiving reduced earnings allowance for any period before 9 January 1998. My investigation has indicated that the appeal hearing took place some seven months later than it otherwise would have done had there been no maladministration. As I saw it, therefore, maladministration had delayed Mr S’s reduced earnings allowance claim by the same period thereby leading to a possible loss of benefit. I asked BA to consider that aspect and, if appropriate, to make Mr S an extra-statutory payment of reduced earnings allowance (taking into account any income support which he had received in the same period).
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9.20 I am pleased to report that BA agreed to pay Mr S extra-statutory reduced earnings allowance for the period from 11 June 1997 to 7 January 1998. They have paid him the full benefit due amounting to £1,253.64, making no offset against income support. In addition, at my request, BA have made Mr S an ex gratia payment of £172.47 to compensate him for the late payment of the reduced earnings allowance.
Conclusion
9.21 Mr S waited, unnecessarily, for his industrial injuries disablement benefit claim to be determined on appeal before making a claim for reduced earnings allowance. The appeal hearing took place later than it otherwise would have done because of departmental delays. BA accepted that, but for the delays, Mr S would have claimed reduced earnings allowance seven months earlier than had been the case; and they put that right by making him an extra-statutory payment of reduced earnings allowance totalling £1,253.64 plus interest of £172.47 on that sum. I regard those payments as a satisfactory response to a justified complaint.
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