Law Report: No retrospective recovery: Plewa v the Chief Adjudication Officer. House of Lords (Lord Templeman, Lord Bridge of Harwich, Lord Woolf, Lord Lloyd of Berwick, Lord Nolan), 7 July 1994

Where new statutory provisions for recovering overpaid benefits created rights against third parties and removed the claimant's defence of due care and diligence, the presumption against the retrospective operation of the statute applies.

The House of Lords unanimously allowed an appeal by Gladys Plewa from the Court of Appeal's decision that overpaid benefit was recoverable under section 53 of the Social Security Act 1986. Section 53, which came into force on 6 April 1987, enables the Secretary of State for Social Security to recover overpayment of both means-tested and non means-tested benefit. It replaced section 119 of the Social Security Act 1975, which applied to non means-tested benefits, and section 20 of the Supplementary Benefits Act 1976 which applied to means-tested benefits.

Prior to Mr Plewa's death, a social security tribunal held that overpayment of retirement pensions of pounds 5,145 for the period January 1982 to October 1987 was recoverable from Mr Plewa under section 53. The tribunal accepted that Mr Plewa was 'quite innocent' and that he might have been under no liability if section 119 applied. However, the tribunal, following Secretary of State for Social Security v Tunnicliffe (1991) 2 All ER 712, applied section 53 and determined that Mr Plewa was liable to make repayment.

Richard Drabble (Child Poverty Action Group) for Mrs Plewa; Michael Beloff QC and JR McManus (Treasury Solicitor) for the Chief Adjudication Officer and Secretary of State.

LORD WOOLF said that section 53 could require a third person, who had been guilty of misrepresentation or failure to disclose, to make a repayment while that was not possible under section 119, although it was possible under section 20. In Tunnicliffe, the Court of Appeal were not addressed on the possible effect on third parties of the change in machinery.

In the case of the claimant, section 53 removed the defence of due care and diligence. This was a situation where the presumption against retrospectivity should apply. Not to give a retrospective effect to section 53 did not create a lacuna.

The position after April 1987 was as follows: 1. An overpayment was only recoverable from a third party under section 53 where the overpayment was made after April 1987, and in other cases, if at all, under section 20. 2. An overpayment was only recoverable from a person to whom it was made under section 53 when payment had been made after April 1987 in consequence of a misrepresentation or failure to disclose any material fact. 3. Where section 53 did not apply, an overpayment might be recovered in accordance with section 119 or section 20 if the Secretary of State was in a position to comply with the requirements of those sections, which would still be effective after 6 April 1987 in respect of payments to which the new regime did not apply.