DP v London Borough of Lambeth ([2025] EWCA Civ 985)
A New Precedent on Procedural Fairness, Mental Capacity, and the Tribunal’s “Flexible Duty”

Introduction

In DP v London Borough of Lambeth the Court of Appeal overturned decisions of both the First-tier Tribunal (Social Entitlement Chamber) and the Upper Tribunal, remitting a long-running Housing Benefit dispute for rehearing. The judgment is significant far beyond its welfare-benefit facts. It clarifies the duty of tribunals to identify and address a party’s lack of litigation capacity (or other serious vulnerability) and confirms that a failure to do so can amount to procedural unfairness and a reviewable mistake of fact. It also provides guidance on:

• How psychiatric evidence should be evaluated on appeal;
• The relationship between capacity, vulnerability and the tribunal’s inquisitorial powers;
• The interaction between the “second-appeal test” and allegations of an unfair hearing.

The Parties

• Appellant: “DP”, a long-term Housing Benefit recipient whose entitlement was retrospectively reduced after Lambeth alleged her adult son had remained resident.
• Respondent: London Borough of Lambeth (“Lambeth”), the Housing Benefit authority.

Key Issues on Appeal

1. Whether the First-tier Tribunal’s finding that it was “straightforward and simple” for DP to provide corroborative evidence was mistaken once her mental disorder was taken into account.
2. Whether that mistake rendered the process procedurally unfair so as to satisfy the Court of Appeal’s jurisdiction for a second appeal (Article 2, Appeals from the Upper Tribunal Order 2008).
3. The proper approach to expert psychiatric evidence received only after the substantive tribunal hearing.

Summary of the Judgment

Lewis LJ (with Edis LJ and Newey LJ agreeing) held:

• Permission for a second appeal should be granted because a “compelling reason” existed: the FtT hearing was tainted by procedural unfairness flowing from an unrecognised lack of capacity.
• Dr Kumar’s unchallenged psychiatric report showed that DP suffered from a longstanding delusional disorder affecting her ability to understand, weigh and respond to tribunal directions. The Upper Tribunal erred in treating the report as relevant only to November 2021.
• The FtT drew adverse inferences from DP’s non-compliance without recognising her psychiatric impairment. That constituted a mistake of fact (per E & R) material to the outcome and undermined fairness.
• The appeal was allowed and the matter remitted to a differently constituted First-tier Tribunal for a full rehearing, with liberty to admit further evidence.

Analysis

1. Precedents Cited and Their Influence

• E & R v Secretary of State for the Home Department [2004] EWCA Civ 49 – Source of the four-part test for “mistake of fact giving rise to unfairness”. The Court applied each limb, finding (i) an established mistake (DP’s capacity), (ii) objective verifiability (unchallenged expert report), (iii) no blame on the appellant, and (iv) materiality.
• AM (Afghanistan) v SSHD [2017] EWCA Civ 1123 – Recognised the tribunals’ flexible power to appoint litigation friends even without an explicit Rules provision. DP’s case extends this principle, emphasising the tribunal’s proactive role in identifying incapacity.
• Tendring DC v CD [2024] EWCA Civ 1509 – Recent authority on vulnerable parties in tribunals, cited for the proposition that procedural flexibility replaces the formal CPR Part 21 regime.
• Griffiths v TUI (UK) Ltd [2023] UKSC 48 – Supreme Court guidance that a reasoned and unchallenged expert report should generally be accepted. The Court used this to reject Lambeth’s invitation to discount Dr Kumar’s evidence.
• Ladd v Marshall [1954] 1 WLR 1489 – Governs admission of fresh evidence on appeal. Lewis LJ accepted that, where the fresh evidence itself demonstrates why it could not have been adduced earlier (mental incapacity), strict application would be unfair (cf. Bean LJ in Hussain v SSWP ).
• Uphill v BRB (Residuary) Ltd [2005] EWCA Civ 60 – Recognised that procedural irregularity can itself constitute the “compelling reason” necessary for a second appeal.

2. The Court’s Legal Reasoning

1. Capacity as a Factual Predicate. The Court treated DP’s psychiatric condition not as a discretionary fairness factor but as an existing fact; misunderstanding that fact infected the FtT’s reasoning.
2. Objective Verifiability of the Expert Opinion. Dr Kumar’s report drew on contemporaneous letters and interviews, establishing a temporal bridge back to 2018–2021. In the absence of contradictory evidence, the Court held it was “objectively verifiable”.
3. Materiality. Because the FtT’s adverse inference lay at the heart of its dismissal, a correct appreciation of DP’s impairment “may well have” altered the outcome; that threshold is sufficient (material, not necessarily decisive).
4. Second-Appeal Jurisdiction. Applying Article 2 of the 2008 Order, the unfairness itself constituted a “compelling reason”, even if prospects of ultimate success remain uncertain.
5. Tribunal Flexibility. Drawing from AM, the Court emphasised that tribunals possess “ample flexibility” – adjourning, appointing a litigation friend, varying evidence directions – to avoid unfairness once vulnerability is apparent.
6. Approach to Fresh Evidence. Bean LJ’s caution in Hussain was applied: the decisive question is potential impact. Here, the psychiatric evidence was at least “potentially decisive”.

3. Likely Impact of the Decision

• Tribunal Case-Management Culture. FtT and Upper Tribunal judges must be alert to indicators of incapacity or entrenched delusional thinking. Mere familiarity with unrepresented or “difficult” appellants is no answer; active inquiry may be required.
• Expert Evidence Timing. Parties (and advisers) will be encouraged to commission psychiatric or psychological assessments where capacity is in doubt. Tribunals may feel obliged to adjourn to obtain such evidence rather than relying on lay impressions.
• Litigation Friend Appointments. Although not mandated, the judgment underlines that appointment or alternative safeguards (e.g., suitable representatives, directed assistance) are available and sometimes necessary in the social-security context.
• Expanded Use of “Mistake of Fact”. Practitioners can now rely on post-hearing capacity evidence to challenge tribunal findings that assumed competent participation, provided the E & R criteria are met.
• Second Appeals. DP demonstrates that procedural unfairness grounded in vulnerability can satisfy the otherwise stringent second-appeal gateway, potentially opening the Court of Appeal to more such challenges.

Complex Concepts Simplified

• Housing Benefit (HB): A UK social security payment that helps low-income tenants meet rent. Entitlement reduces if a non-dependent adult (e.g., adult child in work) lives in the household.
• First-tier Tribunal (FtT): The first level of specialist adjudication for social-security disputes. Informal, partly inquisitorial.
• Upper Tribunal (UT): Hears appeals on points of law from the FtT.
• Second Appeal Test: Under the 2008 Order, the Court of Appeal grants permission only if the appeal raises an important principle/practice point or a compelling reason.
• Litigation Capacity: Ability to understand, retain, weigh information and communicate decisions in legal proceedings (Mental Capacity Act 2005 criteria).
• Mistake of Fact (E & R): A tribunal error about an objectively verifiable fact that materially affects the outcome can found an error of law if it causes unfairness.
• Quasi-Inquisitorial: Tribunal judges have an active role in identifying issues and seeking evidence, unlike purely adversarial courts.
• Ladd v Marshall Criteria: Fresh evidence on appeal must (i) be reasonably unobtainable at trial, (ii) probably have an important influence, and (iii) be credible. DP tempers criterion (i) where incapacity explains non-production.

Conclusion

The Court of Appeal’s decision in DP v Lambeth cements a principled yet pragmatic approach to fairness in tribunal proceedings:

1. Tribunals must be vigilant for signs of incapacity or serious vulnerability, even if not formally raised.
2. Failure to recognise such incapacity can constitute a “mistake of fact” leading to procedural unfairness and resulting in the setting-aside of decisions.
3. Unchallenged, reasoned expert evidence – even if produced late – should ordinarily be accepted and can unlock the second-appeal gateway.
4. The decision accentuates the tribunals’ flexible toolkit – adjournments, tailored directions, litigation friends – to secure meaningful participation.

Practitioners and judges alike should treat DP v Lambeth as a leading authority on safeguarding litigants with mental disorders, ensuring that the quest for efficient justice never trumps the foundational requirement of a fair hearing.

© 2025 – Commentary prepared for educational purposes.