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  4. Wrongly claimed benefits not "unjust enrichment" for time bar, court rules

Wrongly claimed benefits not "unjust enrichment" for time bar, court rules

13th December 2016 | civil litigation , welfare/benefits

The obligation to repay state benefit obtained by misrepresentation is not based on redress of unjustified enrichment, and enforcement is therefore not time barred after five years, a Court of Session judge has ruled.

Lord Armstrong in the Outer House dismissed a petition by Audrey Cullen for judicial review of a decision to impose a direct earnings attachment regarding an alleged overpayment of £20,836.96 in benefits prior to 2008. In March 2008 the Secretary of State issued a decision that he was entitled to recover that sum, but despite correspondence, no relevant claim was made until 2016.

The claimant denied making misrepresentations, but the issue did not fall to be decided in the present proceedings. Instead it was argued that on the basis that there had been misrepresentation, any obligation to repay had prescribed.

While recovery was sought under s 71 of the Social Security Administration Act 1992, the section did not create the obligation to make redress but simply empowered the DWP to take certain steps for recovery. Further, it should be viewed as providing an equitable remedy because it involved an exercise of discretion.

Lord Armstrong said it would be "artificial" to assess the nature of the obligation to repay without reference to the nature of the remedy available. On the case law, the effect of s 71 and its predecessors was to create new obligations where previously there had been none, and on that analysis, "it would be wrong to characterise s 71 as simply an enabling provision".

He concluded: "The purpose and effect of s 71 and its predecessors was to create rights and obligations referable to the statutory powers conferred. In these circumstances, I conclude that, in contrast to redress for unjustified enrichment, which is a common law remedy grounded in equity..., the power conferred by s 71, and the corresponding obligation to repay, are creations of public law."

The judge added that although in terms of an official guide, s 71 recovery might be subject to the exercise of discretion, it was plain that there was no legal requirement in that regard, and "On that basis it cannot be said to provide an equitable remedy."

Click here to view the opinion.

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