Correcting an obvious error on SPS claims

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10 June 2011

The complex application forms for the Single Payment Scheme have long been a source of frustration for farmers. A recent case has once again highlighted the problems farmers have encountered in completing the forms and the potential unfairness when innocent mistakes are made. 

By mistakenly using a start date of October 1 rather than December 1, which is when some of the land on which a claim was made had been acquired, Grimsby farmer Peter Strawson Ltd failed to satisfy the 10-month rule (which applied in 2007 but which has now been abolished). The RPA spotted the error, noting the overlap with the claim by the previous owner of the land in 2006.

The company was told that they could write to correct it but, despite doing that, the RPA ultimately imposed a penalty of £36,000 as well as disallowing just over £14,000 of the company’s SFP claim.

The company brought a judicial review of the decision in the Court of Appeal. The two key arguments advanced before the Court were:

(a)  That the error was an obvious one and the company should be allowed to correct it without penalty. The RPA handbook on the Single Farm Payment Scheme for 2007 provided that ‘obvious errors’ could be corrected provided the farmer had acted in good faith and there was no risk of fraud. The handbook gives some example of the types of mistake which may be classified as obvious errors. One of the examples given included anomalies which were apparent by checking the application against databases. 

(b) That the RPA had actually drawn the company’s attention to the mistake and given the company the opportunity to make the amendment. The company was told that if they wrote to the RPA to clarify the mistake the claim would be rectified without further problems. That led to a legitimate expectation that the error could be corrected. The company relied on that and did not consider alternatives such as withdrawing the application.

The Court of Appeal found for the company on both the above points and the RPA’s decision was overturned.

Does the case offer any comfort to farmers who have made a mistake in more recent years?  Whilst the current guidance on obvious errors in the current Single Farm Payment Scheme handbook does differ slightly from the guidance in 2007, the case is still likely to be of help as it gives a practical example of what an obvious error is. 

The case may however be more important in guiding the RPA in how it decides to deal with errors in the future. It will be interesting to see if they become less inclined to give guidance when problems arise because of the risk of a legitimate expectation being created that the error can be corrected.

For further information contact Edward Venmore on (0117) 307 6917 or email edward.venmore@burges-salmon.com

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