Estoppel over payment

suzukipammy

My husband developed Myasthenia Gravis and was finished from work due to this life long disease he was a bus driver his boss came to see him at home and said he should get medical severance plus 3 months notice pay she said she would get back to him with the amounts the following week she came to our home and wrote down the amounts he would get subject to MD approval 3 weeks later he received a telephone call from his boss telling him the medical severance was going through and he would receive the payment the following week which he did obviously with him being unemployed now he paid off any debts he had which took most of his money he then received a letter two weeks later stating that he should not have received the severance pay and they want it back my question is can he claim estoppel. He still has the figures that his boss wrote down on headed paper which corresponds to the amount he received we are really concerned that bailiffs will be at the door 

BrownTrout

No one will call. Its a myth which needs putting to bed

TBagpuss

How much was the payment? 
To claim estoppel you have to be able to show that ALL of the below are true:

•  the employer led the employee to believe that they were entitled to treat the money as their own; and 
• the overpayment was not caused primarily by the fault of the employee and
  
• the employee has changed their financial circumstances in good faith 

I think your husband would be in a fairly strong position - there doesn't appear to be any element of fault at all, he was told verbally he would be entitled to severance and this was confirmed in writing, so he was led to believe he was entitled to the money (and as it was on his employment ending, it was a one-off, so unlikely wage overpayments, much harder for the employer to argue that he should reasonably have known or realised it was wrong) 

The one you might have a problem with is his having materially changed his position - he paid off debts, so would his position be materially changed if he were to owe the debt to his former employer rather than to the other creditors? it could be argued that if he paid the moneyback to the employer at the same rate as he had been paying down the debt, his position would be unchanged by the error (In Derby v Scottish Equitable, The Court of Appeal held that there was no change of position in simply paying a debt early (although left the door open to say there was if the borrowing had been on better terms than you could now get) 

So it's certainly worth raising it. The company could seek to pursue the money by making a claim through the court, so whether they think it is worth pursuing it may depend on how much we are talking about.