UK: Maladministration

Last Updated: 1 March 2007
Article by Nicholas Dobson

When the High Court recently held that the Secretary of State for Work and Pensions had been wrong to reject a finding of the Parliamentary Ombudsman, the decision was underpinned by local government jurisprudence.

The Ombudsman in her first finding had indicated that official information provided by a number of government departments and other public bodies about the degree of protection that the law provided in respect of accrued pension rights was 'sometimes inaccurate, often incomplete, largely inconsistent and therefore potentially misleading, and that this constituted maladministration'. Bean J held in the Administrative Court on 21 February 2007 that this finding was well open to the Ombudsman on the evidence (see R (Bradley) v Secretary of State for Work and Pensions [2007] EWHC 242 (Admin)). Furthermore, in the case of one leaflet (PEC3) the Court considered that no reasonable Secretary of State could rationally disagree with that view.

On 15 March 2006 Ann Abraham, the Parliamentary Commissioner for Administration (the Ombudsman) had published a special report to Parliament entitled 'Trusting in the Pensions Promise'. This found that the Department of Work and Pensions (DWP) had been guilty of maladministration which was one of a number of factors that had caused injustice to over 75,000 people who had lost all or part of their final salary occupational pensions on the winding up of their pension schemes. As Bean J pointed out, in a written statement to Parliament on 15 March 2006 and a more detailed oral statement by the Secretary of State in the House of Commons the next day, the Government rejected all but one of the Ombudsman's findings and recommendations. The Claimants consequently (amongst other things) applied for judicial review of the decision to reject the Ombudsman's first finding of maladministration.

As mentioned, Bean J in his judgment considered the local ombudsman jurisdiction under Part III of the Local Government Act 1974 and referred to the observations of Lord Donaldson in R v Local Commissioner for Administration ex parte Eastleigh Borough Council [1988] 1 QB 855. These included:

'. . .the Parliamentary intention was that reports by Ombudsmen should be loyally accepted by the local authorities concerned. . .Whilst I am very far from encouraging councils to seek judicial review of an Ombudsman's report, which, bearing in mind the nature of his office and duties and the qualifications of those who hold that office, is inherently unlikely to succeed, in the absence of a successful application for judicial review and the giving of relief by the court, local authorities should not dispute an Ombudsman's report and should carry out their statutory duties in relation to it.'

Bean J indicated that it was clear to him that in saying that local authorities should 'loyally accept' an LGO's report Lord Donaldson only intended to refer to findings that maladministration had occurred and not to recommendations. This was since the 1974 Act gives the Ombudsman no power to make mandatory orders it would be 'extraordinary if an LGO could do so by the back door in the form of recommendations'. He therefore found that Eastleigh was authority for the proposition that in the absence of a successful application for judicial review the findings of an LGO are binding on the relevant local authority.

And Bean J rejected a submission that differences between the two statutory regimes in the Parliamentary Commissioner Act 1967 (which contains the Parliamentary Ombudsman's jurisdiction) and the 1974 Act which has the Local Ombudsman regime) render Eastleigh distinguishable. For if that were correct the effect must be:

'. . .that an elected local authority such as Birmingham City Council, in the absence of a successful application for judicial review, must loyally accept the findings of an LGO (Eastleigh); whereas a quango such as the British Potato Council is free simply to disagree with any adverse findings of the Ombudsman unless its disagreement is itself flawed in law or Wednesbury unreasonable, which would be for the complainant to establish by an application for judicial review.'

Bean J could see 'neither logic nor constitutional principle in such a distinction'. In the circumstances, unless the Ombudsman's findings are objectively shown to be flawed, irrational, peripheral or whether there is genuine fresh evidence to be considered (see R v Secretary of State for the Home Department ex parte Danaei [1997] EWCA Civ 2704) then (per Eastleigh for local authorities) the Ombudsman's findings of fact are binding.

This case is of interest to local government since it serves as a useful reminder of some of the core legal principles concerning Ombudsman findings. However, since the outcome will clearly have been an embarrassment for the Government, there could well be an appeal. Nevertheless, following the Administrative Court decision, Pensions Secretary John Hutton apparently indicated that 'the precise grounds' for any such appeal were then undetermined.

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