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Parliamentary Commissioner for Administration

First Report Session 1998-99

Volume 3 - 1st Report - Session 1998-99

DEPARTMENT OF SOCIAL SECURITY

Case No. C.87/97

Delay in obtaining child support maintenance

9.1. Mrs X complained of prolonged failure by the Child Support Agency (CSA), an executive agency of the Department of Social Security, to obtain child support maintenance (CSM) for her. She also complained that CSA had not compensated her for the loss of CSM arising from their mistakes.

9.2. My investigation into Mrs X's complaint began once the Ombudsman had obtained comments from the Chief Executive of CSA after the Member's referral of the complaint. 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. An annex to the report lists the abbreviations used and their meaning.

Background

9.3. CSA are responsible for the assessment, collection, and enforcement of CSM. A parent with care (PWC) receiving certain benefits is required to seek CSM from the absent parent (AP) through CSA. A PWC who does not receive benefit may apply for CSM under section 4 of the Child Support Act 1991 (the Act) and is referred to by CSA as a 'private client'. A PWC applies for CSM by completing a maintenance application form (MAF). The MAF provides information about the AP to whom CSA then send a maintenance enquiry form (MEF) to obtain a financial statement so that the amount of CSM can be assessed in accordance with a standard formula. CSA make statutory charges for their services. The Child Support Fees Regulations provide that the AP and the PWC shall both pay assessment and collection fees to CSA unless exempted. The exemptions listed are not relevant to Mrs X.

9.4. Maintenance assessments (MAs) are made by child support officers (CSOs) based in regional CSA centres (CSACs) which are supported by a network of field offices (FOs) which deal with enquiries, interviews, information gathering, visits and court action. Mrs X's case was dealt with by the CSAC in Dudley. Where an AP fails to supply sufficient information to permit a full MA to be made, a CSO has the power to make an interim maintenance assessment (IMA). An IMA takes no account of the AP's personal and family circumstances and is usually higher than a MA. Before imposing an IMA CSA must give the AP written notice of their intention to do so and 14 days to supply the missing information. When there is no court order in force the IMA may start on any day of the week after the 14 day period of notice has ended. The day chosen must be the same day of the week as the effective date of a full MA would have been.

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9.5. An IMA which has been shown to have been invalid because of a serious procedural error (for example, failure to give the AP a full 14 days to provide the missing information before imposing an IMA) can be cancelled and a new one imposed after correct procedures have been followed. Before February 1995, however, an IMA which proved to have been defective because of an adjudication error (for example, an incorrect effective date or an incorrect amount) could be cancelled only on written application from the AP. In the case of a defective IMA where the AP has not requested cancellation, CSM for the period covered by the IMA is unenforceable up to 16 February 1995 when amending legislation came into force which enabled a CSO to carry out a review of defective IMAs. The new legislation was not retrospective and it was introduced to enable adjudication errors to be corrected. CSA refer to such cases as 'IMA gap' cases and they have issued procedural instructions to their officials to refer to their headquarters (HQ) those cases where the PWC complained of financial loss so that compensation can be considered.

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9.6. If the AP fails to pay CSM, CSA may recover it by means of a deduction from earnings order. If that is not feasible, because the AP is self-employed, CSA may apply to a magistrates' court for a liability order. The Secretary of State for Social Security (S of S) must give the AP seven days notice of the intention to seek a liability order, and this notice must detail the amounts outstanding. The liability order must be made in the court having jurisdiction for the area where the AP lives. The CSAC enforcement section send the case papers to the local FO whose presenting officer (PO) applies to the court for a hearing.

9.7. A liability order does not enforce payment but enables CSA to take further enforcement action. They can recover the debt through bailiffs by distress and sale of the AP's goods; if subsequently registered in a county court, the liability order enables them to apply to the court for a charging order or a garnishee order (which requires a third party—for example a bank—holding money on behalf of the debtor to pay money to the creditor). A charging order may be made against property owned by the liable person so that, should that property be sold, the proceeds of the sale to the amount of the liability order would be passed to CSA. CSA can also apply to the courts for an order for sale. Where a charging order is sought, an affidavit giving full details of the case is sworn at the county court. If the district judge agrees to a charging order nisi that must be served on the AP and other interested parties, together with the affidavit in support. The charging order nisi sets down the date of the hearing for the charging order absolute. The district judge hears the case and if satisfied makes the nisi order absolute. CSA procedural instructions require CSA staff to consider levying distress as the first option for enforcement, then either a garnishee or charging order.

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Investigation

1993

9.8. On 21 April the CSAC in Dudley received a completed MAF and two wage slips from Mrs X who was applying for CSM as a private client for maintenance for her daughter. She named her husband as the father of her daughter. She said that divorce proceedings were under way and were expected to be finalised on 4 May. She provided details of her husband's address and said that he worked as a self-employed plumber. On 11 May Mrs X faxed to the CSAC details of her housing costs and a loan. On 20 May the CSAC sent a MEF to the AP (whom I call Mr X) and, when he did not respond, they sent him a reminder. On 4 June Mrs X telephoned the CSAC chasing progress on her case. She asked what action would be taken if Mr X did not cooperate. The CSAC said that they might impose an IMA. On 8 June Mr X telephoned the CSAC saying that he would not complete all parts of the MEF as he regarded some of the questions as an invasion of his privacy. He said that he had no intention of supporting his wife. On 7 July the CSAC wrote to the FO asking them to interview Mr X and obtain a completed MEF and supporting documentation. They also asked them to confirm that Mr X was living at the address that Mrs X had provided on the MAF. On the following day staff from the FO visited Mr X at that address. He told them that he was not prepared to divulge details of his earnings or mortgage. When told that CSA could impose an IMA if he did not cooperate, he said that he would return the completed MEF the following week and would appeal against any assessment. The FO told the CSAC that.

9.9. On 11 July Mrs X telephoned the CSAC complaining about delay in dealing with her case. She was told that the CSAC's customer services section would return her call. There is no record that that was done. On the following day Mrs X wrote to the customer services manager complaining about the handling of her case and CSA's failure to obtain CSM from Mr X. On 13 July the CSAC wrote to Mrs X apologising for the delay in dealing with her application. They said that a letter would be sent to Mr X that day warning him that, if he did not return the MEF, an IMA would be imposed. The CSAC sent that warning letter to Mr X. On 21 July Mrs X wrote to the CSAC asking a number of questions on the procedures they would follow in her case and when she could expect to receive CSM. On 23 July the CSAC wrote to Mrs X updating her on progress and saying that, if Mr X did not reply by 28 July, they would impose an IMA. They said that if Mr X failed to pay CSM they would take enforcement action.

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9.10. On 28 July the CSAC imposed an IMA of £95.40 per week effective from 19 May 1993. They told both parents that. On 29 July CSA sent an invoice for CSA's assessment and collection fees to Mrs X and to Mr X. Mrs X subsequently paid £78 in fees. The CSAC set up accounts and calculated as £1,117.58 the CSM due from Mr X for the period 19 May to 6 August. The regular payment was £95.40 per week starting on 13 August. The CSAC notified both parents of the amounts due and the proposed payment arrangements. On 10 August Mrs X telephoned the CSAC chasing progress. On 14 August the CSAC again wrote to the FO asking them to visit Mr X and obtain a completed MEF. On 18 August Mrs X telephoned the CSAC asking them to take immediate enforcement action as she had not received any CSM. They told her that that was not possible at that stage but that they would find out the current position and return her call. On 27 August the CSAC returned a further telephone call from Mrs X. They told her that the FO was trying to obtain a completed MEF.

9.11. On 31 August staff from the FO visited Mr X. He refused to complete a MEF. He said that he was winding up his business and that he could not pay arrears of CSM. The FO referred the case back to the CSAC. On 2 September Mrs X telephoned the CSAC complaining about the time it was taking them to obtain CSM. They promised to return her call. Later that day the CSAC telephoned Mrs X telling her what Mr X had told the interviewing officers. On the same day the CSAC wrote to Mrs X confirming that telephone conversation. They apologised that they were not in a position to take enforcement action. They said they expected to be able to do that in January 1994. On 3 September the CSAC wrote to Mrs X saying that they were able to take enforcement action and that it would begin immediately. On 9 September the CSAC wrote to Mr X saying that they would take enforcement action through the courts if he failed to make arrangements to pay CSM within 14 days. They wrote to Mrs X telling her that. On 23 September the CSAC wrote to Mr X warning him that they would apply to the court for a liability order if he did not pay the arrears of CSM, which stood at £1,785.38 plus interest of £7.47, within seven days.

9.12. On 21 October the Member wrote to the then S of S asking what powers CSA had for dealing with uncooperative self-employed APs. On the same day the CSAC wrote to Mr X warning him that they would apply to the court for a liability order if he did not pay the arrears of CSM which then stood at £1,880.78 plus interest of £7.97. On 2 November Mrs X wrote to the then Chief Executive complaining that CSA appeared to be powerless to obtain CSM for her. On 3 November the CSAC wrote to Mrs X telling her that a court hearing would take place on 6 December. (It was later adjourned to 16 December). On 9 November Mrs X telephoned the CSAC asking for information about the enforcement procedures. After consulting their solicitors, the CSAC telephoned Mrs X and explained the enforcement options that were open to them. On 7 December the then Chief Executive wrote to the Member in reply to her letter to the then S of S. She said that if Mr X was uncooperative CSA could make an IMA and if Mr X failed to pay CSM, CSA could apply to a magistrates' court for a liability order. The then Chief Executive said that enforcement of a liability order might be made either by levying the appropriate amount by distress and the sale of the liable person's goods, or by taking enforcement action in a county court to obtain a charging order. On 16 December a magistrates' court granted a liability order for £1,888.75. The CSAC wrote to Mr X telling him that and saying that if he did not pay the amount within seven days they would instruct bailiffs. On 16 December the FO informed the CSAC that they had told Mrs X the outcome of the hearing. On the following day the CSAC referred the case to their HQ for them to instruct bailiffs.

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1994

9.13. On 4 January the CSAC wrote to Mrs X in reply to her letter of 2 November 1993 to the then Chief Executive. They said that a liability order had been obtained and that the case had been referred for action by the bailiffs. They said that, if that was not successful, other enforcement measures would be considered. On 1 March the bailiffs visited Mr X and levied distress by taking possession of a van and a three-piece suite of furniture. On 5 April the bailiffs again visited Mr X who said that he had been on income support since November 1993 and that all the goods in the house belonged to his daughter, except the suite. On 22 April Mrs X telephoned the CSAC chasing progress. She was told that someone would speak to her on 26 April. She wrote to CSA's HQ complaining that she had not received any CSM some 12 months after applying, despite having paid £78 for CSA's services. She said that Mr X had remortgaged his house. A charging order would be little sanction. If the property were sold, there would be insufficient equity to meet Mr X's liabilities. On 26 April the CSAC telephoned Mrs X saying that they were doing everything possible to obtain CSM for her. She said that she had not yet received a report from the bailiffs. On 3 May the CSAC received an undated letter from Mrs X enclosing bank statements for Mr X's business account covering the period 20 October to 29 November 1993.

9.14. On 11 May Mrs X wrote to the CSAC complaining that she had not received a reply to her letter dated 22 April. On 18 May the CSAC wrote to Mrs X apologising for the delay in dealing with her case. They said that when they had further information they would let her know. On 4 June the CSAC telephoned Mrs X asking her for information about Mr X's assets and debts. She told them that there were several county court judgements against him for tax debts. Ownership of the house where he lived, which was the former matrimonial home, was in his name. She had left all the furniture behind. She promised to send a copy of an affidavit by Mr X that he had filed during the divorce proceedings. On 5 June the CSAC telephoned the bailiffs with that information. The bailiffs said that, in view of the information provided by Mrs X, they were prepared to visit Mr X again although in their view there was little of value in the house. On 7 June Mrs X telephoned the CSAC asking what the next course of action would be. The CSAC said that they were not sure, as action by the bailiffs had been unsuccessful. On 4 July the CSAC identified the following options for further action: to refer the case back to the bailiffs; to establish the ownership of Mr X's property; to register the judgment in the county court; and to obtain a charging order. On 6 July Mrs X wrote to the CSAC enclosing a copy of Mr X's affidavit which was dated 3 March. In that document Mr X had stated that his property was valued at £55,000 and the outstanding mortgage was £46,209. Mrs X also provided information about Mr X's employment. On 8 August the CSAC told the bailiffs to take no further action. On 20 October the CSAC wrote to Mr X warning him that they would apply to the court for a liability order for £5,151.60 (which was by then the amount of the arrears). On 9 November the CSAC sent the case to the FO asking them to obtain a second liability order for that amount.

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1995

9.15. On 17 February Mrs X telephoned the CSAC chasing progress. On 20 February the customer services manager wrote to the Member saying that a court hearing had been arranged for 22 February to obtain a garnishee order. (He meant a liability order.) On 22 February the magistrates' court granted a second liability order and on the following day the FO told the CSAC that. On 6 March the case was referred to the enforcement section to consider a charging order on Mr X's property. Mrs X telephoned the CSAC chasing progress. On 13 March the CSAC telephoned Mrs X telling her the action that was being taken. On 15 March the CSAC asked the Land Registry for details of Mr X's property. (When the CSAC received those details is not known). On 7 April the CSAC wrote to CSA's solicitors asking them whether they could apply for a charging order and if so what action they should take. On 24 April the CSAC telephoned Mrs X updating her on the action being taken. On 1 May the CSAC received advice from their solicitors to go ahead with a charging order. The CSAC telephoned Mrs X to update her. On 14 June Mrs X telephoned the CSAC chasing progress. On 21 July the CSAC wrote to the FO asking them to swear two affidavits at the county court so as to obtain charging orders against Mr X's property, for £1,888.75 and £5,151.60. On 15 August Mrs X telephoned the FO chasing progress on the charging order. They told her that someone would return her call on 21 August.

9.16. On 21 August the FO telephoned Mrs X. She said that she herself had a charging order against Mr X's property and that her solicitors were attempting to force the sale of the property to recover the debt arising from the divorce settlement. She agreed to CSA liaising with her solicitors in order for CSA to obtain a charging order before the sale of the property. On the same day the CSAC telephoned Mrs X's solicitors who agreed to suspend the action they were taking until CSA had obtained a charging order. On 19 September the FO's PO telephoned the CSAC's enforcement section who told the PO to have the liability order registered in the county court and to swear affidavits in support of the charging orders being sought. The CSAC said that the court would set a time limit for Mr X to pay. If he did not do that, a hearing date for a charging order absolute would be arranged. On 20 September the FO telephoned Mrs X telling her the current position. On the same day Mrs X's solicitors telephoned the FO saying that she had instructed them to await CSA's charging order before forcing the sale of Mr X's property. On 11 October Mrs X telephoned the FO chasing progress. They told her that they were dealing with her case as a matter of urgency. On the same day the PO telephoned the court to check the procedures for obtaining a charging order, in particular whether CSA could register the debt and apply for a charging order at the same time. The court told the PO to register the debt. A district judge would have to decide whether CSA could simultaneously apply for a charging order. The FO telephoned the CSAC and Mrs X telling them that. Mrs X gave the FO details of Mr X's creditors. On 2 November the PO made a note to the effect that a district judge had said that CSA could register the debt and apply for a charging order at the same time. The PO told the CSAC and Mrs X that. On 3 November the PO swore an affidavit and on 28 November the court sent a copy of a charging order nisi to the FO. That set a hearing date for 14 February 1996 for the charging order absolute. Mrs X was told that. On 13 December the FO received a letter from the court asking them to serve copies of the charging order nisi and the affidavit on Mrs X and Mr X.

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1996

9.17. On 11 January the FO wrote to Mrs X enclosing a copy of the charging order nisi and the affidavit. They also sent copies of those documents to Mr X. On 14 February the county court granted a charging order absolute for £7,080.35. (That included court costs of £40.) On 18 February the CSAC realised that the IMA was invalid as the effective date was wrong. Enforcement action could not continue. On 20 and 21 March the CSAC spoke to Mr X by telephone. He agreed to complete a MEF and to pay £120 per month from 7 April. On 22 March the CSAC telephoned Mrs X telling her that the charging order would have to be 'removed' as the IMA was invalid. They said that they could not consider compensation until a full MA had been made. They also told her about the agreement they had reached with Mr X. Mrs X said that she doubted whether Mr X would keep to it. On 25 March the CSAC wrote to Mrs X saying that an IMA would be effective only from 16 February 1995. They could not enforce arrears that had accrued before that date. On 28 March Mrs X wrote to the CSAC asking for compensation. On 2 April the CSAC wrote to Mrs X saying that they could not send her claim for compensation to their special payments unit (SPU) until a MA had been made. On 9 April the CSAC wrote to Mr X warning him that they would impose an IMA if he failed to return the MEF. They informed Mrs X of that.

9.18. On 10 April the CSAC telephoned Mr X who said that he would make the first payment on 7 May. They told him that, if he failed to keep to the agreement or to return a completed MEF, they would take immediate enforcement action through the courts. He said that he had not received a MEF. The CSAC sent him another form by recorded delivery. On the same day Mrs X telephoned the CSAC asking them why she had been sent details of the IMA warning letter. The CSAC said that as the original IMA was invalid they had to go through the IMA procedure again. On 11 April the CSAC telephoned Mrs X saying that the IMA warning notice should not have been sent as an IMA was already in place. The CSAC adjusted the accounts to reflect the fact that arrears in respect of the period from 19 May 1993 to 15 February 1995 were unenforceable. The arrears arising from 16 February 1995 to 7 April 1996 totalled £5,683.13. Mrs X wrote to the then Chief Executive complaining that CSA had failed to secure payments of CSM and had refused to consider her claim for compensation until a MA had been made. She asked for a detailed plan of action to ensure that a MA was made and CSM paid to her. On 12 April the CSAC wrote to Mr X warning of their intention to apply for a liability order for arrears of CSM totalling £5,683.13. On 16 April a CSO imposed an IMA of £82.32 per week effective from 16 February 1995. The CSAC adjusted the accounts to reflect that revised IMA. They calculated that for the period from 16 February 1995 to 14 April 1996 arrears of £4,986.24 were due. On 21 April the CSAC faxed a note to Mrs X saying that they had warned Mr X that, if he failed to keep to the agreement to pay £120 per week, they would take enforcement action through the courts. On 22 April the CSAC wrote to Mr X warning of their intention to obtain a liability order for arrears of CSM totalling £4,986.24 if he did not pay within 7 days. On 23 April the Member wrote to the then Chief Executive saying that she was astonished that, after three years, the case was no further forward.

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9.19. On 9 May Mrs X telephoned the CSAC chasing progress. They told her that the hearing date for obtaining the liability order was 11 June. On 24 May the customer services section of the CSAC wrote to Mrs X replying to her letter of 11 April. They apologised for the errors that had occurred in the handling of her case. They explained that they were taking action to recover arrears of CSM that had accrued under the revised IMA. They said that compensation could not be considered until a MA had been made. On 11 June a magistrates' court granted a liability order. On the following day Mrs X telephoned the CSAC who told her that the liability order had been granted and that they could now take action to impose a charging order. On 13 June the then Deputy Chief Executive wrote to the Member enclosing a copy of the CSAC's letter to Mrs X dated 24 May. The then Deputy Chief Executive said that he hoped that the Member would accept that letter as a full response to her own letter of 23 April. On 24 June Mrs X telephoned the CSAC urging them to obtain a charging order against Mr X's property, together with a second liability order. On 25 June the CSAC wrote to Mr X warning of their intention to apply for a further liability order for £823.32. The Member telephoned the CSAC asking whether a liability order had been granted. They told her that it had. On 26 June the Member wrote to the CSAC chasing progress. On 8 July the CSAC's manager wrote to the Member saying that they had obtained a liability order and that, once the arrears exceeded £5,000, they would apply for a charging order and force the sale of Mr X's house.

9.20. On 27 July Mrs X wrote to the CSAC's manager complaining that her letter to the Member had not dealt with the issue of compensation. She complained about CSA's refusal to consider her claim saying it seemed unlikely that a MA would ever be made. On 5 August the CSAC wrote to Mrs X saying that the question of compensation in cases such as hers was under discussion. On 6 September Mrs X telephoned the CSAC chasing progress. On 1 October the CSAC telephoned Mrs X telling her that a court hearing in respect of the application for a second liability order had been arranged for 21 November. On 21 November a magistrates' court granted a second liability order. On the following day Mrs X wrote to the CSAC asking whether it had been granted. On 2 December the Member wrote to the then S of S asking him to look into Mrs X's request for compensation.

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1997

9.21. On 15 January the then Parliamentary Under Secretary of State for Social Security wrote to the Member saying that compensation was still under consideration and that CSA would tell Mrs X as soon as a decision had been made. On 21 January, following a telephone call from Mrs X the CSAC faxed a note to her outlining the current position on her case. On 22 January the Member referred the case to the Ombudsman. On 5 February Mrs X wrote to the CSAC asking them what action they proposed to take and whether there had been any progress on her claim for compensation. On 17 February the CSAC faxed a letter to Mrs X saying that, as a result of a check on her case, the IMA made on 16 April 1996 had been found to be incorrect. Therefore the liability orders were invalid. They said that the matter of compensation was still being considered. On the same day Mrs X faxed a letter to the CSAC asking why the IMA was incorrect and when a decision would be made on compensation. On 19 February the CSAC faxed a letter to Mrs X apologising for the mistakes that had been made, and saying that they had referred her question about the IMA to the appropriate section. They told her that they had no power to hasten a decision on compensation as it was being decided at ministerial level. On the same day Mrs X's case was designated 'fast-track'. On 20 February a CSO recorded that the IMA made on 28 July 1993 had been invalid as Mr X had not been given sufficient warning. That IMA was cancelled. On 25 February a CSO formally recorded that the IMA made on 16 April 1996 was also invalid, as the legislation did not allow an IMA that had been the subject of procedural errors to have its effective date corrected. On 27 February the CSAC wrote to Mr X warning them of their intention to impose an IMA. They wrote to Mrs X and to Mr X saying that the IMA made on 28 July 1993 had been invalid as Mr X had not been given sufficient warning about the intention to impose an IMA. On 3 March Mrs X telephoned the CSAC asking who had the authority to cancel an IMA and why the error had not been picked up before enforcement action had been taken. She asked for a written answer. On the same day the CSAC faxed a reply to Mrs X explaining about the need for the period of warning prior to the making of an IMA. On the 4 March the CSAC telephoned Mrs X explaining the reasons why the IMA made on 28 July 1993 had been cancelled and the action being taken.

9.22. On 18 March a CSO imposed an IMA of £97.47 per week effective from 20 March. The CSAC sent details of the IMA to both parents. On 2 April the CSAC set up accounts and calculated as £320.25 the CSM due for the period from 20 March to 11 April. On 3 April the CSAC asked Mrs X for information about Mr X's finances and employment and whether she had received any payments of CSM from him. On 9 April the CSAC wrote to Mrs X telling her that the first payment should reach her by 18 April. That letter said that CSM was payable 'to' Mr X, contained a mis-spelling of her daughter's name and gave the date from which CSM was payable as 20 March 1977. The CSAC also told Mrs X that they had asked Mr X to pay an initial amount of £320.25 direct to her by credit transfer. On 16 April Mrs X wrote to the CSAC with the information they had requested concerning Mr X. She also wrote to them complaining about the errors in their letter. She asked how Mr X could pay money direct to her bank when she had not told him the details of her account. She asked for an immediate assurance that they had not divulged any of her personal details to Mr X. On 18 April the Member wrote to the manager of the CSAC asking when the liability order would be enforced. The CSAC wrote to Mrs X apologising for the errors in their earlier letter and for any misunderstanding that they had caused. They said that Mr X would pay CSA who would in turn pay the money into Mrs X's account. They explained the action they were taking and assured her that they were fully aware of their responsibilities under the Data Protection Act.

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9.23. On 21 April the CSAC wrote to Mr X confirming an agreement that they had been made with him on the telephone, under which he would provide details of his income and pay £100 per month starting on 9 May. Mrs X telephoned the CSAC chasing progress on her claim for compensation. On 6 May the manager of the CSAC wrote to the Member saying that the liability order granted in June 1996 could not be enforced as the IMA in respect of which it had been granted had been invalid. The manager said that CSA had made a new IMA, effective from 20 March, and that Mr X had made an agreement to pay £100 per month. The manager said that if Mr X failed to keep to that agreement CSA would obtain another liability order. On 28 May Mrs X telephoned the CSAC chasing progress. As a result of that call the CSAC realised that Mr X had failed to keep to the agreement. On 26 June the Member wrote to the then Minister of State for Welfare Reform asking about progress on compensation. On 30 June Mrs X wrote to the S of S repeating the question that the Member had asked.

9.24. On 1 July the CSAC wrote to Mr X warning of their intention to apply for a liability order if he failed to pay arrears of CSM for the period 20 March to 27 June totalling £1,392.42 within seven days. On 22 July the manager of the customer services section at the CSAC wrote to Mrs X replying to her letter to the S of S. The customer services manager said that the issue of compensation remained unresolved and that they would notify Mrs X as soon as any decision had been made. On 23 July the Chief Executive wrote to the Member replying to her letter to the then Minister of State. She said that a decision on Mrs X's claim for compensation had not yet been made. On 22 August the CSAC noted that the IMA effective from 20 March was correct and that they could apply for a liability order. On 28 August the CSAC sent a summary of the case to the FO for them to arrange a court hearing. On 31 October a court granted a liability order for £1,392.42.

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CSA's response to the complaint

9.25. In her comments on the case, the Chief Executive of CSA said:

'This case has been handled poorly. I apologise for the errors made when the original IMA was imposed and when [the CSAC] tried to put matters right in February 1996. All IMAs are now subject to a full check by section supervisors and this should obviate the risk of similar mistakes in other cases'

'You may be interested to know that when [CSA] applied for a liability order in December 1993, Mrs X's case was the first in which such a step had been taken. The CSAC had no experience of these matters, nor when it came to applying for a charging order on Mr X's property. On several occasions it was necessary to take solicitors' advice which also contributed to the delays in enforcement action. I am satisfied that [CSA] now handle enforcement far more effectively than they did four years ago.'

'The mistakes made with the IMAs mean that [CSA] cannot enforce any liability prior to 20 March 1997 and Mrs X's requests for compensation will be considered by [CSA's] special payments team.'

9.26. CSA again instructed bailiffs, but action to recover the debt was unsuccessful. On 5 December 1997 CSA wrote to Mr X warning him that they intended to apply for a further liability order for £2,144.34 in respect of CSM due for the period 28 June to 28 November. In January 1998 SPU decided to award Mrs X an ex gratia payment of £298. That comprised a consolatory payment of £200 in recognition of the gross inconvenience which she had suffered, £20 for her out-of-pocket expenses and a refund of CSA's fees amounting to £78. On 10 February the CSAC wrote to Mrs X enclosing a cheque for £298. They apologised for the inconvenience she had suffered and said that they could not make a special payment for financial loss, as that had to be based on a MA. They said that once a MA had been made they would reconsider her claim. On 10 March the department told the Ombudsman's staff that CSA were trying to obtain a charging order and that it was their intention to pursue an order for sale, subject to the approval of their policy section and solicitors. They said that a hearing date for the liability order had been arranged for 3 April.

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Findings

9.27. It was three and a half years before CSA discovered the full extent of the flaws in the IMA made on 28 July 1993. That IMA was procedurally invalid, because it had been made before the warning period had expired. It was also defective because it had been made effective from the day preceding the one on which the CSAC had sent the MEF to Mr X. On 18 February 1996 the CSAC identified the mistake concerning the effective date and changed it to 16 February 1995. They failed to realise, however, that the IMA was also invalid for procedural reasons. Another year went by before they discovered that error. They then had to cancel the IMA and start the whole process again. It was March 1997 before they had in place a valid IMA. I strongly criticise those mistakes which removed the possibility of enforcing CSM payments due to Mrs X for a period approaching four years. The Chief Executive apologised for the errors and has said that improved checking procedures are now in place.

9.28. The errors in the making of the IMA and in later correcting it were particularly regrettable because the CSAC had initially dealt with Mrs X's application satisfactorily, both by the speed of their action and in the way they had kept her informed of progress. However, after that reasonable start, matters deteriorated badly and, as I have recorded, there were many delays and much poor service and periods of inaction.

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9.29. I now consider the question of redress due and whether CSA are justified in maintaining that, unless and until a MA is made, further compensation cannot be paid to Mrs X. In this case there must be a strong doubt whether CSA will ever reach the stage of making a MA. I accept that CSA cannot be held responsible for the tactics employed by Mr X to frustrate their attempts to obtain CSM and that it is probable that Mr X would have been equally un-cooperative even if CSA had not made the errors identified earlier in this report. So it is likely that, even if matters had been properly handled, CSA would have had to proceed to a liability order and a charging order. The fact remains that early in 1996 CSA had been granted a charging order absolute for £7,080.35. That would have been enforceable had it not been for the maladministration by CSA who ought to have been able to enforce payment of that amount by an order for sale of Mr X's property. Although, as Mrs X pointed out, Mr X had other liabilities and she doubted whether they could be met in full from the proceeds of a sale of Mr X's property (paragraph 9.13), the affidavit she produced on 6 July 1994 indicated that Mr X's own equity in the property (that is to say the value of the property less the amount owed to the mortgage lender) was approximately £9,000 in March 1994. That suggests that CSA would have received at least some of the CSM due to Mrs X had they been in a position to enforce a charging order as they should have been. It is also possible that the threat of the forced sale of the property might have induced Mr X to cooperate with CSA. I therefore asked the Chief Executive if she would have the matter of compensation reconsidered with a view to compensating Mrs X for the probable loss to her arising from CSA's inability to proceed with action under the charging order. (I accepted that the Chief Executive would wish to take account of any more recent experience in connection with a charging order insofar as that was relevant to the earlier period.) In reply the Chief Executive said that CSA had decided to award Mrs X an ex gratia payment of £7,032.38 to cover her financial loss. That had been calculated using the amount that would have been payable under the original charging order (paragraph 9.17) had it been enforceable, less court costs of £40 which were due to CSA and less £7.97 which was the interest previously charged on a portion of the sum covered by the charging order (paragraph 9.12). The Chief Executive said that CSA had also decided to award Mrs X £1,376.60 for loss of use. She said that CSA had sent Mrs X the payments on 14 July 1998.

9.30. How did CSA go on to handle matters once a valid and enforceable IMA was finally imposed? They made careless errors in the letter they sent to Mrs X on 9 April 1997 which caused her confusion, and alarm that her personal details might have been divulged to Mr X. She had to write to the CSAC to clarify matters. When Mr X agreed to pay £100 per month from 9 May, the CSAC did not monitor that agreement. When he failed to make the first payment eight weeks went by before the CSAC started enforcement action. On 1 July they wrote to Mr X warning him that they intended to apply for a liability order. When the warning period expired, however, a further six weeks elapsed before they sent the case to the FO asking them to arrange a court hearing. Given the fact that Mrs X had waited over four years for CSM and that her case had been designated 'fast track' that was a woeful performance.

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9.31. Finally, I consider the manner in which CSA dealt with Mrs X's claim for compensation. She first raised the matter in March 1996, after the original IMA had been found to be defective. Instead of acting on their instructions and sending the case to the SPU for consideration, the CSAC told Mrs X that they could not consider compensation until they had made a full MA. As at that stage the CSAC considered the case to be an 'IMA gap' case, that decision was wrong and the case should have been referred to HQ (paragraph 9.5). I criticise CSA for failing to follow their own instructions.

Conclusion

9.32. I found that because of the errors by CSA Mrs X had lost the opportunity of obtaining CSM for a considerable period. CSA made Mrs X ex gratia payments totalling £8,408.98 to cover the financial loss she had suffered. I considered that and the earlier ex gratia compensation totalling £298, together with the apologies Mrs X received from the Chief Executive, as a satisfactory outcome to a fully justified complaint.

20 August 1998

Annex

Abbreviations used and their meaning

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Last updated: 26 April 2006