New Judgment: CPAG v SSWP  UKSC 54
08 Wednesday Dec 2010
On appeal from:  EWCA Civ 1058
Considers whether the Secretary of State was entitled to recover sums overpaid in cases of social security benefit awards mistakenly inflated due to a calculation error, under the common law of unjust enrichment or whether the Social Security Benefits Act 1992, s 71 provided the only route to recovery. S 71 allowed the Secretary of State to recover any overpayment resulting from misrepresentation or the non-disclosure of a material fact by the benefits claimant. The Secretary of State’s practice was of writing to benefit claimants who he considered have been overpaid, but where there had been no misrepresentation or non-disclosure, indicating that his Department had a common law right of action to recover the overpayment. Although no common law claim for repayment was ever in fact brought in the courts, the letters led to the recovery of substantial sums. CPAG brought this legal test case on behalf of social security claimants to challenge the Secretary of State’s practice on the basis that it was based on a false legal premise.
The Supreme Court unanimously dismissed the Secretary of State’s appeal: s 71 provides the only route to recovery of social security benefits overpayments to the exclusion of any common law rights. The section and its predecessors created a power of recovery when otherwise, due to the division of adjudication and payment functions up until 1998, there would have been none. By statutory interpretation, a common law remedy would be incompatible with the statutory scheme and therefore could not have been intended to co-exist with it (Sir John Dyson).