Plewa v. Chief Adjudication Officer

Factual and Procedural Background

This opinion concerns the interpretation and application of the recovery provisions under section 53 of the Social Security Act 1986 in relation to overpayments of benefits arising from acts or omissions before 6 April 1987. The case arose following a Social Security Appeal Tribunal (SSAT) decision that an overpayment of retirement pension had occurred in respect of the late Mr. Plewa, with a portion of the overpayment deemed recoverable under section 53. The tribunal applied section 53 rather than the previously applicable section 119 of the Social Security Act 1975, following the precedent set by the Court of Appeal in Secretary of State for Social Security v. Tunnicliffe. The appellant challenged this application, contending that section 53 should not apply retrospectively to overpayments arising before its commencement date. The House of Lords was asked to determine the correct statutory interpretation, particularly whether section 53 could be applied retrospectively, and to consider the implications of section 16 of the Interpretation Act 1978 on the continuity of recovery mechanisms. The House of Lords ultimately remitted the case for redetermination by a tribunal under the appropriate statutory provisions.

Legal Issues Presented

1. Whether the recovery provisions of section 53 of the Social Security Act 1986 apply retrospectively to overpayments resulting from acts or omissions before 6 April 1987.
2. Whether the presumption against retrospectivity should prevent section 53 from imposing new obligations and liabilities for past acts and omissions.
3. The correctness of the Court of Appeal’s decision in Secretary of State for Social Security v. Tunnicliffe regarding the retrospective application of section 53.
4. How section 16(1) of the Interpretation Act 1978 affects the continuity of recovery rights and obligations following repeal and replacement of statutory provisions.
5. The proper statutory framework under which overpayments should be recovered when payments span the commencement date of section 53.

Arguments of the Parties

Appellant's Arguments

• Applying section 53 retrospectively to overpayments arising before 6 April 1987 imposes new obligations and liabilities that did not previously exist, particularly as section 53 allows recovery from third parties, unlike section 119.
• Section 53 removes the defence of due care and diligence available under section 119, which would be unfair if applied retrospectively to claimants.
• The presumption against retrospectivity should apply, and therefore the Court of Appeal’s decision in Tunnicliffe was wrongly decided.
• Section 16(1) of the Interpretation Act 1978 preserves the application of section 119 to payments made on or after 6 April 1987 that arise from failures to use due care and diligence before that date, preventing any gap in recovery mechanisms.

Respondent's Arguments

The opinion does not contain a detailed account of the respondent’s legal arguments beyond acceptance by counsel that section 119 was generally more favourable to claimants than section 53, and acknowledgment of the legal framework governing the repeal and replacement of statutory provisions.

Table of Precedents Cited

Court's Reasoning and Analysis

The House of Lords undertook a detailed statutory interpretation analysis focusing on the commencement and retrospective application of section 53 of the Social Security Act 1986. It noted that section 53 replaced section 119 and section 20 but introduced significant changes, including the ability to recover overpayments from third parties and the removal of the defence of due care and diligence available under section 119.

The court emphasized the common law presumption against retrospective legislation that imposes new obligations or liabilities or impairs existing rights, relying on the Privy Council’s guidance in Yew Bon Tew. Applying section 53 retrospectively would impose new liabilities on persons who had no such obligations before 6 April 1987, including third parties who may have innocently caused overpayments.

The House of Lords criticized the Court of Appeal’s decision in Tunnicliffe for failing to consider the unfairness to third parties and claimants arising from retrospective application of section 53 and for not appreciating that section 119 provided a more protective regime for claimants.

It further analyzed section 16(1) of the Interpretation Act 1978, which preserves rights, obligations, and liabilities accrued under repealed enactments, concluding that section 119 continues to apply to payments made on or after 6 April 1987 in respect of acts or omissions before that date. This interpretation avoids any lacuna in recovery rights and ensures that overpayments arising before the commencement date are recoverable under the old regime.

The court clarified that overpayments arising from misrepresentations or failures to disclose after 6 April 1987 fall under section 53, while those arising from earlier conduct remain subject to section 119 or section 20. It acknowledged that in cases spanning the commencement date, tribunals must apply the appropriate statutory regime to each relevant period.

Given that the tribunal had applied section 53 in the appellant’s case where section 119 should have been applied, and that this misapplication could have materially affected the outcome, the House of Lords allowed the appeal and remitted the case for reconsideration under the correct statutory provisions.

Holding and Implications

The House of Lords allowed the appeal.

The core ruling is that section 53 of the Social Security Act 1986 does not apply retrospectively to overpayments resulting from acts or omissions before 6 April 1987. Instead, section 119 of the Social Security Act 1975 continues to apply to such overpayments, preserving the defence of due care and diligence and limiting recovery to claimants rather than third parties. Overpayments arising from misrepresentations or non-disclosures made on or after 6 April 1987 are recoverable under section 53.

The case was remitted to a tribunal for redetermination under section 119, or under both section 119 and section 53 if non-disclosure occurred after 6 April 1987. This decision clarifies the proper statutory framework for recovery of social security overpayments spanning the commencement of section 53 and reinforces the principle against retrospective imposition of new liabilities. No new precedent beyond this statutory interpretation was established, and the ruling directly affects the parties by requiring reconsideration of recovery claims under the correct legal provisions.