Benefit fraud: claim/review forms

This is the second of four articles prompted by the case of Coventry City Council v Vassel 2011 EWHC 1542 Admin. In particular, it looks at mens rea and the difficulties that arise when local authorities fail to give adequate information to benefit claimants on how to notify a change in circumstances.

It is clear that the notification information, as described in part 1 of the article must be brought to the attention of the claimant in a manner which complies with the regulations. This presents problems for local authorities in many respects.

To appreciate the nature and extent of the problem it is necessary to look at the processes in more depth.

Local authorities may be processing claims based on forms which are not the standard forms generated by that authority. In addition to applicants acquiring claims forms from the DWP either in person or via the internet, some local authorities are now treating review forms as claims forms.

Here is a recent example: a claimant made a claim for benefit as a single person living alone. Six months later there was a review. On that review a co-habitee was mentioned on the form. The co-habitee also signed the review form. That review form was treated as a claim for benefit in respect of both persons even though it was not described as a claim form and benefit was paid out on the basis of the information contained on the form.

The difficulty for the local authorities in this situation is that the prescribed information may not be fully set out on the review form. Furthermore, any further changes in circumstances will be linked to this form and not the earlier claim form.

While not every local authority operates in this way, it is important that solicitors who are reviewing evidence in these cases do not assume that the claim form included in the case file is necessarily the form from which the change in circumstances is based on. As is so often the case, proceedings which involve public authorities can turn on information that is not contained in the case file. In a long-standing benefit fraud claim, there are often numerous claims and reviews. Furthermore, the unused schedules will rarely mention these other forms. That alone could give rise to another satellite application, which merits a discussion all of its own.

For the time being, solicitors who defend benefit fraud should routinely ask to be supplied with these documents whether or not they have been mentioned in the unused schedules.

As a rule of thumb, expect a review to take place every six months. Should the review form be treated as a fresh claim form and the prescribed information is not included, there has to be serious questioning as to whether or not a 'failure to notify' offence has been committed at all. In this respect, there may be some solace for prosecutors who might argue that the dicta in Vessel suggests that there may be circumstances in which the claimant is deemed to know the prescribed information if he deliberately fails to make inquiries the answers to which he does not care to have. I have set out that paragraph in Vessel and the preceding paragraph for reasons which will be apparent:

66. However, cases may arise where, despite a clear indication to the benefit claimant of how to notify a change of circumstances, he may contend that he did not in fact have the requisite knowledge, for example because he did not read the literature given to him and possibly signed by him. That does not of course arise on this appeal, because the justices found that the literature was not sufficiently clear (see paragraph 25(iv) above). When the issue does arise, whether the defendant had the requisite knowledge will be always an issue for the tribunal of fact (usually, the justices) to decide.

67. In approaching that issue, there should be borne in mind the words of Lord Bridge in Westminster City Council v Croyalgrange Ltd [1986] 1 WLR 674 at page 684E:
'… that it is always open to the tribunal of fact, when knowledge on the part of a defendant is required to be proved, to base a finding of knowledge on evidence that the defendant had deliberately shut his eyes to the obvious or refrained from inquiry because he suspected the truth but did not want to have his suspicion confirmed.'

If one looks at paragraph 67 in isolation, there is a danger that prosecutors may argue that if the local authorities fail in their obligation to include the prescribed information on the claim form, the knowledge aspect of the offence may be inferred if the defendant fails to make enquiries. Whereas each case is likely to turn on its own facts, it is apparent from the preceding paragraph that Mr Justice Hickinbotton is referring to cases in which the prescribed information is clearly indicated on the claim form. He is not referring to a case in which the prescribed information is either absent or defectively set out. It should therefore follow that any prospect of the court inferring knowledge where the claim form is defective in that respect has to be slim, although not impossible, on the facts.

The 'One' logo and Gateway offices
These are additional offices from which claimants may apply for benefit and notify changes, depending on the arrangements at each local authority. In the event that there are additional offices to which the claimant is entitled to notify changes and that these offices are not included on the claim form, there would be an argument that the local authority has not set out the prescribed information in clear terms. There might also be a case to argue in favour of the defendant if the local authority has included this information on the claims forms without having the relevant paperwork in support.

A Gateway office in regulation 2 of the 2006 regulations is defined as: '.... an appropriate DWP office or an office designated by the appropriate authority which is nominated by the Secretary of State as a gateway office and referred to in a notice upon or attached to a form approved by the appropriate authority for the purpose of claiming housing benefit.'

It is apparent from the above definition that for there to be a valid Gateway office there must be approval from the secretary of state. Solicitors reviewing case file should therefore ask firstly whether the local authority operates a Gateway facility and secondly for evidence of nomination by the secretary of state. This information should be asked well in advance of the trial. Prosecutors who are faced with these questions on the day of the hearing are likely to rely on the 'presumption of regularity' and cite cases in support such as R v Richards [1999] Crim LR 598 and Westley v Hertfordshire CC (1960) JP 813.

The position with regard to the 'One logo' is similar. Regulation 5 of The Social Security (Claims and Information) Regulations 1999 3108 inserts a new regulation 4A into the Social Security (Claims and Payments) Regulations 1987. The effect of this is that there is a schedule of local authorities that use the One Logo system at schedule 1 of the above regulations and the postcode of those areas covered by the One logo within the aforementioned local authority in schedule 2. It is likely that the list will alter from time to time. A complete list is available from the DSS, WtW1, 2nd Floor, Adelphi, London WC2N 6HT.

There are therefore a number of enquiries that can be made to determine whether or not the 'One' logo facility has been adopted and whether its use is valid. This should include a visual check of the outside of the One logo office.

Less obvious, is the question as to whether the logo was in place at a time when the claimant was duty bound to notify changes. It is apparent from the above that there could be a number of places to which notifications of a change in circumstances may legitimately be sent. From the claimant's perspective there may be others which seem obvious to him, such as the DWP office that gave him the forms, or perhaps the housing office, city hall or finance department. Given that there are so many possibilities in the mind of the claimant, there will be even greater confusion if the forms are not entirely accurate. Against that background, it would be difficult for the prosecution to prove dishonesty within the meaning of section 111 of the act.

In some cases the original claim for benefit may have been many years prior and the claimant might genuinely have forgotten how to notify changes. Some local authorities have a notification form to tear off and keep. Evidence of this can be found in the Vassel case at paragraph 26. In the event that a section 111 offence is charged the following questions will become relevant to the issue of dishonesty:

1. How old is the claim?
2. Is there a reminder on the Review forms and do they set out the prescribed information in clear terms?
3. Ask for a copy of all review forms to check for evidence of the prescribed information
4. Has the claimant been provided with a tear off slip to facilitate notification?
5. If a tear off slip was attached to the claim form was it retained by the claimant or did it remain on the form?
6. Does the tear off slip contain the designated office and all other offices who receive notifications?
7. Does the local authority have a copy of the tear off slip in use at the relevant time?

The article continues next time with a resume of specific checks that solicitors should make when reviewing benefit fraud cases.

Jack Henriques is a Solicitor and Trainer, and co-author of Local Authority Investigations and Prosecutions