12.88One category consists of cases in which it is not permissible for the parties to compromise proceedings.

12.89The second category consists of cases in which a compromise cannot be imposed on the tribunal, but can be taken into account by the tribunal in deciding what order to make.

12.90The third category consists of cases in which it is permissible to compromise without the consent of the tribunal.

12.91The proper classification is determined by the nature of the issue that is involved. It is not determined by the nature of the parties or of the proceedings. Take the example of a public body. It cannot compromise a case to pay a social security benefit or grant planning permission in terms that conflict with the governing law. But it can compromise a case on an issue of interpretation of legislation, which then governs the case, or on a procedural issue.

12.93In order to be lawful, public expenditure involves a two-stage process: appropriation and authority.2[2003] 1 WLR 2623 at [131]. First, funds must be allocated to particular purposes by the annual Appropriate Act. Second, the expenditure of the funds must be authorised by prerogative, common law or statute.

12.94If legislation covers an area of expenditure comprehensively, any additional prerogative or common law that would otherwise exist is excluded.3[2003] 1 WLR 2623 at [127].

12.95The power of expenditure may be extended, subject to two provisos.4[2003] 1 WLR 2623 at [132]. First, it must not be inconsistent with legislation. Second, as a matter of constitutional practice, legislation is required if the expenditure will continue from year to year.

12.96In deciding whether legislation is comprehensive and whether a prerogative or the common law is inconsistent with it, section 3 of the Human Rights Act 1998 requires that legislation be interpreted so as not to infringe a Convention right.

12.97A statutory power of expenditure may be interpreted purposively in order to avoid anomalies and injustices that are not compatible with the general scheme of the legislation.5R (Wilkinson) v Inland Revenue Commissioners [2003] 1 WLR 2683 at [46]; this is not affected by the appeal to the House of Lords [2005] 1 WLR 1718. This can have the effect of authorising expenditure that is outside the literal wording.

12.98In addition to the powers of public expenditure, there are powers not to collect money due to the State. For example: the Commissioners of Her Majesty’s Revenue and Customs have the power of care and management of collection given to the Commissioners by section 1(1) of the Taxes Management Act 1970. This power can be exercised pragmatically in order to facilitate collection,6[2003] 1 WLR 2683 at [45]. with the effect that some sums properly due might not be collected.

12.99Likewise the discretion on recovery of social security benefits7Social Security Administration Act 1992 ss71 and 75. allows the Secretary of State and local authorities to refrain from collecting money that is properly recoverable.

12.100Although there may be no power to make general payments or to refrain generally from collecting payments,8But should there not be published guidelines on the circumstances in which overpayments will be recovered in order to comply with article 6(1)? it remains possible to compromise proceedings in individual cases.9R (Wilkinson) v Inland Revenue Commissioners [2003] 1 WLR 2683 at [56]; this is not affected by the appeal to the House of Lords [2005] 1 WLR 1718. There may be statutory authority to compromise: see the Taxes Management Act 1970 s1(1) and, for appeals, s54. Obviously, this must be consistent generally with the authority’s general power.

12.101If a public party has no power to make a formal compromise, it may also be possible to achieve the same effect by other means.

12.102First, if the public party does not challenge the facts put to the tribunal, the outcome will be determined by those facts.

12.103Second, the public party may be able to agree with the other parties on how a particular judgment should be exercised, such as the suitability of a particular school for a child with special educational needs.

12.104Third, the public party may exercise alternative powers to achieve the same effect. So, the Secretary of State for the Home Department may decline to compromise proceedings relating to asylum, but may grant instead exceptional leave to remain. And the Secretary of State for Work and Pensions may decline to compromise proceedings relating to a social security benefit, but may make an extra-statutory payment.

12.106The court takes account of an agreement reached by the parties as one of the circumstances of the case.13Edgar v Edgar [1980] 1 WLR 1410. The agreement may be made subject to the approval of the court. If it is, the parties cannot resile from it.14Soulsbury v Soulsbury [2008] Fam 1 at [44]–[45], disapproving of Xydhias v Xydhias [1999] 2 All ER 386. When the matter comes before the court, it will be able to consider any issue whether an agreement was reached.15Thorpe LJ in Xydhias v Xydhias [1999] 2 All ER 386 at 395.

12.108The terms of the agreement of the parties may be incorporated into a decision given by the tribunal with the consent of the parties. Alternatively, the agreement may operate as a freestanding contract with the proceedings brought to an end by withdrawal or dismissed by consent.