[2024] UKUT 241 (AAC)

The decision made by the FTT in this appeal was on an assessment appeal under section 5(1) of the Pensions Appeal Tribunals Act 1943 against the Secretary of State’s decision to award an interim 60% assessment to the appellant. This interim assessment of 60% disablement was in respect of two conditions found to be attributable to service: shrapnel wounds abdomen, right arm, left leg and right thigh; and post-traumatic stress disorder.

The crucial aspect of this decision of the FTT was to reduce the interim assessment to 40%. The critical reasons for the FTT making this reduction on the appellant’s appeal are set out in paragraph 40 of its reasons for decision.

“40.

This was not a decision which the Tribunal had taken lightly. Further, at the outset of the hearing, the appellant and his representative, Mr Goff of counsel, were informed that the Tribunal had the power to increase an award, to leave the award as it is, or to remove it altogether. It was explained that whilst no decision had been made and would only be made after all the evidence had been heard, the papers indicated that the existing 60% award may be at risk if the appellant went ahead with the appeal. A short adjournment was allowed for the appellant to speak with his legal representative, following which it was confirmed that he did wish to proceed.”

In my judgement, the FTT erred in law at the outset of the hearing by failing to show that it acted lawfully in its decision to bring into issue on the appeal whether a lower percentage assessment of disablement may be awarded on the appeal.

The provision in section 5B(a) of the Pensions Appeal Tribunals Act 1943 applied on this appeal to the FTT. In all material particulars, it is an identical provision to that found in section 12(8)(a) of the Social Security Act 1998. One of the leading social security cases on the exercise of the power found in section 12(8)(a) of the Social Security Act 1998 is R(IB)2/04 (I take it that it is R(IB)2/04to which the FTT intended to refer as R(IB)2/05 is not on section 12(8)(a).) Although R(IB)2/04 does set out, as the FTT noted, that the First-tier Tribunal on an appeal can make any decision that it was open to the Secretary of State to take in the decision under appeal, the FTT failed to take account, and so direct itself properly, on what was said in R(IB)2/04 about the proper and fair exercise of the power to decide an issue the Secretary of State could have decided but did not decide (that is, reducing the percentage assessment).

In addressing the discretion to consider an issue not raised by the appeal, the Tribunal of Commissioners said the following in paragraph [94] of R(IB)2/04:

“94.

There must, however, be a conscious exercise of this discretion and (if a statement of reasons is requested) some explanation in the statement as to the reasons why it was exercised in the manner it was. In exercising the discretion, the appeal tribunal must of course have in mind, in particular, two factors. First, it must bear in mind the need to comply with Article 6 of the Convention and the rules of natural justice. This will involve, at the very least, ensuring that the claimant has had sufficient notice of the tribunal’s intention to consider superseding adversely to him to enable him properly to prepare his case. The fact that the claimant is entitled to withdraw his appeal any time before the appeal tribunal’s decision may also be material to what Article 6 and the rules of natural justice demand. Second, the appeal tribunal may consider it more appropriate to leave the question whether the original decision should be superseded adversely to the claimant to be decided subsequently by the Secretary of State. This might be so if, for example, deciding that question would involve factual issues which do not overlap those raised by the appeal, or if it would necessitate an adjournment of the hearing.”

On the face of the FTTs reasoning at paragraph 40 of its reasons for its decision, its concern to ‘warn’ the appellant at the outset of the hearing about its powers was not a general one that after consideration of the oral evidence an issue might arise about making a lower percentage assessment than 60% for disablement. Rather, the FTT’s concern was more concrete and based on the paper evidence indicating that the existing 60% award may be at risk if the appellant went ahead with the appeal. What the paper evidence indicated is not explained. Nor has the FTT made clear that an explanation was given to the appellant and his representative of what it was in the paper evidence that perhaps stood in favour of a lower percentage assessment than 60%.

Following case law such as Hooper –v- SSWP [2007] EWCA Civ 495 (R(IB) 4/07), BTC –v- SSWP [2015] UKUT 155 (AAC) and ET v SSWP(PIP) [2017] UKUT 478 (AAC), the FTT’s analysis should have started with whether the evidence in the papers brought into issue on the appeal whether a lower percentage award may be merited. On the face of it, neither the appellant nor the Secretary of State was making a lower award an issue on the appeal: the Secretary of State was supporting his 60% decision and the appellant was seeking a higher award. As the appellant has pointed out, in the decision letter to the appellant of 9 December 2019, the Secretary of State said that the appellant’s current assessment of 60% “has been maintained” and was “still correct”. If a lower award arose obviously from the paper evidence and so was an issue on the appeal, the FTT was obliged by section 5B(a) to consider it, if the appeal continued. Moreover, in order to make any ‘warning’ effective, following BTC the FTT ought to have pointed out to the appellant at the outset of the hearing what specifically it was in the paper evidence that brought the making of a lower award into issue on the appeal.

If, on the other hand, the evidence at the outset of the hearing did not obviously raise entitlement to a lower percentage award as an issue on the appeal, this left the FTT with a discretion whether to bring a lower award into issue on the appeal. Following R(IB)2/04, that is a judicial discretion and proper reasons had to be given for exercising it. If this was the First-tier Tribunal’s analysis at the outset of the hearing of this assessment appeal, in my judgement it did not give adequate reasons for why it was exercising this discretion. Again, in order to make any ‘warning’ effective, following BTC the FTT ought to have pointed out to the appellant at the outset of the hearing what specifically in the evidence had led it to exercise its power to bring a lower percentage assessment into issue on the appeal.

It is unclear from the FTT’s reasoning which of these two alternatives under section 5B(a) it was taking.

Further, in my judgement the effectiveness of any ‘warning’ and the time given to the appellant and his representative to digest it, has to be gauge in the context, as BTC discusses, that if it had been the Secretary of State’s position on the appeal that the appellant should qualify for a lower percentage assessment of disablement, he would have needed to set out his reasons why that was so on the evidence and in advance of any hearing in his appeal response. Therefore, contrary to the above, even if the FTT by its reasoning had (or has) shown it properly thought through its approach to the appeal under section 5B(a) of the Pensions Appeal Tribunals Act 1943 and acted lawfully under that subsection, it erred in law in my judgement in failing to consider the need to give the appellant adequate time to consider the implications of continuing with his appeal. Following BTC, in my judgement, even if the FTT had made clear (which its reasoning does not) what either did or may give rise to a lower percentage assessment potentially arising on the evidence, a short adjournment on the day of the hearing was not sufficient. Or at least the FTT had to explain why a short adjournment was adequate and placed the appellant in a position sufficiently analogous to the position he would have been had the Secretary of State’s decision reduced the interim assessment to 40%.

I have referred a number of times above to the ‘outset of the hearing. That is not simply an observation about what the FTT did. A mere description at the outset of a hearing of a First-tier Tribunal’s powers (e.g., that it can make a lesser award than that under appeal) may not in and of itself engage the duties and powers (per paragraph 94 of R(IB)2/04) under section 5B(a) of the Pensions Appeal Tribunals Act 1943 and may be quite anodyne. However, if the oral evidence then heard by a First-tier Tribunal brought into question whether a lower award might result on the appeal, the powers and duties in section 5B(a) would arise on the appeal at that stage in the appeal proceedings and require the First-tier Tribunal to consciously address the exercise of the power in section 5B(a). In this appeal, however, what occurred at the outset of the hearing was not the mere description of the FTT’s possible powers and duties but a more focussed concern based on the written evidence which at least suggested that a lower award might result on the appeal. That required the FTT to engage properly with its duties and powers under section 5B(a) of the Pensions Appeal Tribunals Act 1943, and its failure to do so was a material error of law.

The Secretary of State opposes the appeal and argues, first, that the FTT’s “task…was to determine the appropriate assessment for the appellant’s disablement at the date of the Secretary of State’s decision”. This submission ignores the effect of section 5B(a) of the Pensions Appeal Tribunals Act 1943.By analogy with paragraph[16] of DT v SSWP (PIP) [2020] UKUT 156 (AAC), the law did not require the FTT to decide all and any issues that may arise on the evidence. Under section 5B(a) the FTT was only required to decide issues that were raised by the appeal and it had a discretionary power to decide other issues.

The Secretary of State further argues:

“8.

Furthermore, the terms of reference state (emphasis added):

“The appeal lies against the Secretary of State’s decision to award an interim assessment of 60% for the conditions Shrapnel Wounds Abdomen, Right Arm, Left Leg & Right Thigh (1982) and Post Traumatic Stress Disorder accepted as being caused by service.

The Tribunal is asked to decide if this assessment is correct and if not to substitute its own assessment for the period under appeal.”

9.

For these reasons, the Secretary of State does not consider that potential reduction of the assessment was a new issue that needed to be raised because it was already encompassed within the general powers of the Tribunal and the terms of reference for the appeal.

I am not persuaded by this submission either. As I explained in DT v SSWP (PIP) [2020] UKUT 156 (AAC), describing what a First-tier Tribunal’s powers are is different from the First-tier Tribunal actually exercising those powers, which must be done by all the members of the FTT convened to hear and decide the appeal.