Court of Appeal rules on approach of Tribunals relating to lack of capacity or other compromising disadvantage suffered by litigant

Desmond Rutledge acted in a case where expert evidence obtained after a tribunal hearing showed that the Appellant had faced difficulties conducting her Housing Benefit due to a lack of capacity and this had not been recognised by the Tribunal at the time.

Background

DP (‘the Appellant’) had been granted a secure tenancy by Lambeth (‘the Respondent’) in 1984. In September 2014, DP notified the Respondent that her son had moved out of the property. The Respondent took the son’s name off DP’s Housing Benefit (‘HB’) claim and applied a single person’s discount to her Council Tax. Three years later, the Respondent opened an investigation into DP’s entitlement. DP was visited by representatives of the Respondent at her home, and in March 2018 she was interviewed under caution. The Respondent obtained documentary evidence which recorded the son’s address as being at DP’s property.

In October 2018, the Respondent issued a decision that a non-dependant deduction should be imposed retrospectively from September 2014 on the basis that DP’s son was still residing at the property. This resulted in an overpayment of HB in the sum of £16,342.32. The resulting reduction in DP’s ongoing entitlement to HB put the rent account into arrears and the Respondent subsequently initiated possession proceedings in the County Court.

First-tier Tribunal Appeal

DP appealed to the First-tier Tribunal (‘FtT’). The FtT adjourned the appeal in March 2020 and directed DP to provide copies of her son’s council tax bills for his accommodation and encouraged DP to attend with her son so he could give oral evidence. In August 2020, the FtT adjourned the appeal again, with directions that DP provide electoral register forms showing her son’s other residence. DP did not comply with these requests but instead wrote several handwritten letters to the FtT in which she repeated an unsubstantiated allegation that the Respondent made the overpayment decision in retaliation after she had obtained a Debt Relief Order (‘DRO) in 2017 in relation to her council tax.

On 28 January 2021, the FtT dismissed DP’s appeal, saying that in the absence of any satisfactory evidence from the Appellant, it accepted the Respondent’s case that DP’s son had been residing at the property during the period of the alleged overpayment. The FtT noted that DP believed the overpayment was linked to the DRO she had obtained some years earlier but held that it would have been “relatively straightforward” for the Appellant to provide documents demonstrating that her son lived elsewhere and drew an adverse inference accordingly.

After the Respondent initiated possession proceedings for rent arrears, DP instructed specialist housing solicitors. They became concerned about DP’s capacity to litigate as it was proving very difficult to take instructions or prepare a witness statement from her. The housing solicitors instructed an expert Consultant Psychiatrist, Dr Kumar, to prepare a report addressing DP’s capacity to conduct legal proceedings. In October 2021, DP’s solicitors applied to set aside the FtT’s decision of 28 January 2021 on the basis of their concerns about DP’s capacity to conduct litigation before the FtT. The set-aside application was dismissed by a FtT Judge because it was deemed out of time and, having listened to the tape recording of the hearing, the Judge concluded that there had been no procedural irregularity.

Upper Tribunal

With the assistance of counsel, DP made a late application for permission to appeal to the Upper Tribunal (‘UT’) on the basis that the FtT in January 2021 had erred in holding that it would have been a “relatively straightforward and simple matter” for DP to show that her son did not reside at her property. This was based on a mistake as to a relevant fact, namely that DP had the capacity to know what evidence would support her case. Reliance was placed on the principle in E&R v Secretary of State for the Home Department [2004] EWCA Civ 49, [2004] QB 1044. The UT (UT Judge Church) granted permission on this basis.

In June 2023, Deputy UT Judge Hocking issued a decision dismissing DP’s appeal. The Judge found that while Dr Kumar’s report established a lack of capacity in November 2021, when he assessed DP, it did not establish a lack of capacity at the time of the final hearing before the FtT held in January 2021. On this basis, the Deputy Judge held that a lack of capacity during the FtT proceedings was arguable but not established. The Deputy Judge also placed reliance on the FtT being experienced in dealing with litigants whose cognitive abilities may be compromised and that the FtT had the benefit of observing DP throughout the proceedings.  The Deputy Judge said he detected no hint of procedural unfairness: on the contrary the FtT had conducted itself with fairness towards DP, giving detailed directions and adjourning to allow her attendance.

Court of Appeal

DP applied to the Court of Appeal for permission to appeal. DP argued that the Deputy Judge had misinterpreted Dr Kumar’s report. The Deputy Judge should have concluded that DP was suffering from a mental disorder that adversely affected her ability to represent herself adequately.  Specifically, her mental disorder meant that it was not a relatively straightforward and simple matter for DP to be able to show that her son resided elsewhere during the overpayment period. Had DP’s actual mental state been recognised at the time, steps could and should have been taken to remove or ameliorate the unfairness.

The Court adjourned DP’s application for permission to appeal and held a rolled-up hearing. In a reserved judgment, Stuart-Smith LJ, with whom Newey LJ and Edis LJ agreed, granted permission and allowed DP’s appeal.

Stuart-Smith LJ said the following principles were applicable. First, that procedural unfairness can constitute a discrete head of challenge in an appeal on a point of law: E & R v SSHD (supra) at [66]. Secondly, that it is a cardinal feature of the tribunal system that the procedure a Tribunal chooses to adopt should be flexible: Tendring DC v CD [2024] EWCA Civ 1509 at [62], AM (Afghanistan) v SSHD [2017] EWCA Civ 1123, [2018] 4 WLR 78, at [41]-[42], [44] and DTM v Kettering (CTB) [2013] UKUT 625 (AAC) at [63], considered. At paragraphs [47]-[48], the Court contrasted the procedure rules in Tribunals with the Civil Practice Rules (‘CPR’) used in the courts:

“47. It is entirely in keeping with this flexible approach that there is no equivalent in the Tribunal Procedure Rules to CPR Part 21.  In particular, there is no equivalent in the Tribunal Procedure Rules to CPR Parts 21.2(1) and 21.3.4, which in civil litigation provide that a person who lacks capacity must have a litigation friend to conduct proceedings on their behalf and that, as least as the default position, any step taken before a person who lacks capacity has a litigation friend has no effect. What matters in the exercise of the Tribunals’ jurisdiction where a person is either vulnerable or compromised in their ability to participate fully in the proceedings is that procedural unfairness must be avoided. 

In my judgment, the concerns expressed in the first sentence of the footnote to Ground 1, which I have set out at [23] above, are misplaced; and I did not understand the Appellant to be contending for a principle that any and every mistake as to capacity would amount to procedural unfairness.  In my judgment, where a litigant in Tribunal proceedings is found to have lacked capacity (or to have been compromised in their ability to participate fully in the proceedings) after the event, it may be relatively easy to conclude that there has been a mistake of fact. 

However, it will always be necessary to decide what, if any, impact their lack of capacity (or compromised state) has had or may have had upon the fairness of the proceedings, applying the criteria I have briefly summarised above. Only once that issue has been resolved can it be decided whether or not there has been procedural unfairness that requires the Tribunal or the Court on an appeal from the Tribunal to intervene. There is an almost limitless spectrum of potential procedural unfairness and the response of the Tribunal to it should be proportionate to the facts of the case and guided by the overriding objective.  These principles are not confined to a formal finding of lack of capacity: they apply with suitable calibration to any case where a litigant’s ability to participate fully in proceedings is compromised or adversely affected in other ways.

48. There will be cases where the experience of Tribunal Judges will enable them to recognise the inability of the litigant to participate in proceedings fully. Where it is recognised, the Tribunal Judge will be well placed to decide what, if any, provision must be made to enable full and fair participation. However, there may be other cases where even a specialist Tribunal Judge will not be alerted to the difficulties that the litigant is facing.  Where that is recognised at a later date, either on a set aside application or on an appeal, the full extent of the Tribunal’s powers is available, up to and including setting aside or allowing the appeal, to ensure that the final outcome is fair.”

Applying these principles to the facts in DP’s case Stuart-Smith LJ concluded:

“64. Adopting the approach that I have set out at [47] above, it is plain that the FtT’s mistake had a significant impact on the Appellant’s ability to participate fully in the proceedings which gave rise to material procedural unfairness. Had the true position been appreciated, I do not doubt that the Tribunal had sufficient powers that it could and should have exercised to render the proceedings fair.

For a start, due allowance would have been made for the Appellant’s condition so that the adverse inference from her failure to comply with the Tribunal’s previous directions would not have been made. Beyond that, the Tribunal may have investigated why her son was not present and why he had produced no documents as contemplated; and it may have taken steps that would lead to a litigation friend (or some other person willing to assist her) being appointed.  That would at least have increased the chances of the hearing being attended by her son, her neighbours and the son’s putative landlords.  What seems to me abundantly plain is that the outcome of the proceedings may well have been different if the FtT had appreciated the true position as now revealed by Dr Kumar’s evidence.”

Judgment: DP v London Borough of Lambeth [2025] EWCA Civ 985