Thousands of banned motorists have been wrongly charged for a medical check when getting their licences back.
Drivers who have lost cash through this legal loophole could be especially infuriated because as a result of their transgressions they probably endured highercar insurance costs as well.
Medical examinations are compulsory for disqualified drivers who are deemed to be "high risk offenders". To qualify for this label they must have been caught drink-driving on at least two occasions, have been well over the limit or have failed to provide a specimen.
The DVLA had previously made these offenders pay for the costs of the examination, but it has now discovered that the law does not allow for this in a number of cases, including drink-drivers who failed to provide a specimen.
Around 3,000 drivers have been wrongly charged over the last 20 years.
Transport minister Mike Penning said: "Yet again this Government is having to clear up the mess left to us by Labour.
"This was a timebomb that Labour ignored for 13 years, which we are determined to sort out in our first year."
A Department of Transport source said: "On identification of the problem last December, we changed our administrative processes.
"We no longer charge the medical fee (currently £90 plus VAT) to these applicants and we are refunding the £25 administration premium built into their application fee that covers the set up of the medical and consideration of its results.
"We have identified 3,415 cases involving around 2,800 drivers which qualify for consideration of a refund and are confident that these records can now be used as the trigger for action."
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