30/03/2009
The Court of Appeal has given further guidance on
how the availability of state funding should be taken into account
when an award of damages is made. See ’Care at what Price?’ in the
August 2008 edition of Claims-on-line Peters –v- East Midlands
SHA & Others confirms the view that it is the tortfeasor that
should pay and rejects any argument that a Claimant who does not
access available state funded care has been unreasonable and
questions of mitigation of loss do not arise. However, the
principle that it is necessary to protect against double-recovery
survives and thus the public purse is protected.
Chantelle Peters is severely disabled with a low IQ and significant behavioural problems arising from the failure of the Defendants to ensure that her mother received a Rubella vaccination before she became pregnant. She lives in a private care home called “the Spinnies” and receives 24 hour care. The cost of her accommodation and care is borne 50:50 by the Council and the Primary Care Trust (“PCT”). Applying an agreed whole life multiplier of 28.94, Chantelle was awarded the total sum of £3,893,766 in respect of the costs of her future accommodation and care which, it was agreed, reasonably meet her current needs at The Spinnies.
The question to be decided therefore was who should pay for the costs of her future care and accommodation? The judgment was unanimous and delivered by Lord Justice Dyson. This was perhaps a little surprising as Lord Justice Dyson had also been a part of the bench in Crofton–v- NHSLA 2007 (see April 2007 edition of Claims-on-line).
Neither was Crofton of assistance because although in that case the award of damages was reduced to reflect the state provision it was “predicated on the Judge’s finding that the Council would in fact make direct payments to the Claimant to enable him to pay for his care”. In short, if there is no real risk of double-recovery, the Court could see no reason why the Claimant should give up her right to damages to meet her wish to pay for her care needs herself rather than to become dependant on the state.
It was argued, with evidence from the Chantelle Peters’ case manager and the Defendant’s care expert, that a Deputy would be under a duty to “secure and maximise funding available from public funds” and as such the risk of double recovery would always exist. However, the Court did not consider that the general nature of the duty of a case manager carried much weight and that there was “no basis in law, fairness or common sense to require the case manager or deputy to seek full public funding which would result in a double recovery.”
The Court then considered whether double recovery could be avoided through the use of an undertaking or agreement from the Deputy as had been offered in this case. They found that it could by the Deputy giving an undertaking to amend the terms of the Court of Protection Order. The Court of Protection Order will set out in careful detail the scope of a deputy’s authority and it was perfectly feasible to restrict that authority such that no application for public funding of the Claimant’s care can be made without a further order, direction or authority from the Court of Protection. This mirrors the common practice of including such a provision in the contractual indemnities which Defendants and Claimants have used to avoid double recovery.
It was accepted that there was a right of judicial review if the Local Authority did not meet its statutory obligations but even though the Claimant was assessed as being “critical in four of the seven eligibility criteria and as having the highest level of need” it was not accepted that any reduction in provision would necessarily amount to a breach of duty which would be sufficient to establish a successful judicial review challenge.
It was also considered right to have regard to the risk of legislative change as a relevant factor in deciding whether it was reasonable for those representing the Claimant to opt for private funding rather than rely on the Council. Endorsing the view of its own Lord Justice Dyson in Crofton the judgment is that “it is by no means far fetched to suggest that at some time in the future, the ministerial policy of ring fencing personal injury damages and/or the Council’s approach to that policy will change”.
With the exception of Crofton, the Courts have not been prepared to hold that the availability of state funding is certain or likely to continue for the Claimant’s lifetime. This is so even when the Claimant falls into the category of the most severely disabled and is likely to have first call on the resources of the Local Authority. In Sowden –v- Lodge the evidential burden was placed firmly upon the Defendant to prove the availability of state funding. As a matter of instinct, it must be right to suggest that these are the very people who are likely to be cared for by the Local Authority or PCT. However, it is a question of risk and the Court of Appeal has made it clear that the risk of under-compensation as a result of provision determined by legislation which can change and which is informed both by the resources of the Local Authority and the needs of the community as a whole, will generally be too great to persuade a Court to take.
There will however be many cases where state funding by way of direct payments or otherwise has been in place for some time and, in some cases such as in Crofton, it will remain available to the Claimant. In those cases, a Claimant may well not elect to rely on self-funding alone. We are then likely to see the continuing use of indemnities so that proper account is taken of those payments and double recovery is avoided.
The decision in Peters provides protection for the public purse against double recovery but will provide less comfort to the privately funded tortfeasor. It is however to be welcomed as providing clarity on the issue. The purpose of the assessment of damages is to provide for the needs of the damaged Claimant. Despite our best efforts, litigation can be a lengthy and imperfect process and families so often need support long before a claim form is issued. Too often state help is not in place and it cannot be disputed that in the normal course of events one wishes to see that “the Claimant had available to her all services, equipment or funding that could be made available from whatever source, whether it was the local authority, the health authority or whatever”.
Claimants or their advisers who may have feared the impact of agreeing to a S47 assessment of need no longer worry. They can access available state funded care from the outset and then make an election at the point that damages are awarded. Putting it another way, an adviser who does not advise his client of the availability of state funding and direct payments in particular may need to justify that decision. Success in litigation should never be taken for granted and the opportunity to fund care privately by interim payments may be years away even in the stronger cases and where there is no risk on life expectancy. In litigation the availability of statutory provision is now just a question of fact and the Claimant’s election – this definitive judgment is to be welcomed for that.
Chantelle Peters is severely disabled with a low IQ and significant behavioural problems arising from the failure of the Defendants to ensure that her mother received a Rubella vaccination before she became pregnant. She lives in a private care home called “the Spinnies” and receives 24 hour care. The cost of her accommodation and care is borne 50:50 by the Council and the Primary Care Trust (“PCT”). Applying an agreed whole life multiplier of 28.94, Chantelle was awarded the total sum of £3,893,766 in respect of the costs of her future accommodation and care which, it was agreed, reasonably meet her current needs at The Spinnies.
The question to be decided therefore was who should pay for the costs of her future care and accommodation? The judgment was unanimous and delivered by Lord Justice Dyson. This was perhaps a little surprising as Lord Justice Dyson had also been a part of the bench in Crofton–v- NHSLA 2007 (see April 2007 edition of Claims-on-line).
Capital Disregards
An important preliminary question as to the meaning of the current regulations was answered. Were the capital disregards incorporated in the “labyrinthine” regulations known as the National Assistance (Residential Accommodation) (Disregarding of Resources) (England) Regulations 2001, amongst others, limited to general damages for pain, suffering and loss of amenity or did they capture the whole of the capital award including that for future care and accommodation? Had the cost of future care and accommodation been excluded from the capital disregard, Chantelle Peters would have been required to pay for her care and accommodation from her award of damages. This point was argued by Nottingham County Council who had been joined as Part 20 Defendants. Lord Justice Dyson, gave the argument short shrift and came to the view that it had not been Parliament’s intention to make such an exclusion and therefore the whole of the damages award in consequence of a personal injury would fall to be disregarded.The Claimant is entitled as of right to choose damages rather than provision by the Council
Lord Justice Dyson then dealt with the rather troublesome relationship between the common law requirement that a Claimant must take all reasonable steps to mitigate the loss cause to him by a Defendant’s wrong and his right to recover against any wrongdoer or exert a statutory right to recover the same loss against an “innocent public authority”. Edward Faulks QC, for the Appellant SHA, argued that a Claimant (and those responsible for the Claimant’s welfare) were under a duty to secure and maximise funding available public funds and to the extent that it is reasonable for support from the Local Authority to be sought, there is no loss for the tortfeasor to make good. He relied on Sowden –v- Lodge 2004 but having reviewed the authorities the Court found that there was no reason “in policy or principle which requires us to hold that a Claimant who wishes to opt for self funding and damages in preference to reliance on the statutory obligations for public authority should not be entitled to do so as a matter of right.”Neither was Crofton of assistance because although in that case the award of damages was reduced to reflect the state provision it was “predicated on the Judge’s finding that the Council would in fact make direct payments to the Claimant to enable him to pay for his care”. In short, if there is no real risk of double-recovery, the Court could see no reason why the Claimant should give up her right to damages to meet her wish to pay for her care needs herself rather than to become dependant on the state.
Double Recovery
It is not a contentious point to state that a Claimant cannot recover twice for the same loss. The risk of double recovery in current or past circumstances can easily be addressed by a Court or in negotiations. However, the difficulty of guarding against future double recovery is less easily managed. Hence, the practice of agreeing appropriate indemnity arrangements should a Claimant subsequently recover payment or services in kind from the state.It was argued, with evidence from the Chantelle Peters’ case manager and the Defendant’s care expert, that a Deputy would be under a duty to “secure and maximise funding available from public funds” and as such the risk of double recovery would always exist. However, the Court did not consider that the general nature of the duty of a case manager carried much weight and that there was “no basis in law, fairness or common sense to require the case manager or deputy to seek full public funding which would result in a double recovery.”
The Court then considered whether double recovery could be avoided through the use of an undertaking or agreement from the Deputy as had been offered in this case. They found that it could by the Deputy giving an undertaking to amend the terms of the Court of Protection Order. The Court of Protection Order will set out in careful detail the scope of a deputy’s authority and it was perfectly feasible to restrict that authority such that no application for public funding of the Claimant’s care can be made without a further order, direction or authority from the Court of Protection. This mirrors the common practice of including such a provision in the contractual indemnities which Defendants and Claimants have used to avoid double recovery.
Was it reasonable for the Claimant to Opt for Self-Funding?
Having found that the Claimant had a right to opt for self-funding it was not necessary to go on and consider whether to do so was reasonable. However, the Court opted to do so. The Court agreed with the judge at first instance that The Spinnies was unlikely to provide a home for life and similarly found that it could not be said that the Council and the PCT would provide the Claimant with a home for life at The Spinnies or an equivalent institution. The evidence from the Council was that “It is far from certain that she will have a home for life there even if privately funded, but her chances of achieving that or its equivalent are much greater if she is able privately to fund her care.”It was accepted that there was a right of judicial review if the Local Authority did not meet its statutory obligations but even though the Claimant was assessed as being “critical in four of the seven eligibility criteria and as having the highest level of need” it was not accepted that any reduction in provision would necessarily amount to a breach of duty which would be sufficient to establish a successful judicial review challenge.
It was also considered right to have regard to the risk of legislative change as a relevant factor in deciding whether it was reasonable for those representing the Claimant to opt for private funding rather than rely on the Council. Endorsing the view of its own Lord Justice Dyson in Crofton the judgment is that “it is by no means far fetched to suggest that at some time in the future, the ministerial policy of ring fencing personal injury damages and/or the Council’s approach to that policy will change”.
With the exception of Crofton, the Courts have not been prepared to hold that the availability of state funding is certain or likely to continue for the Claimant’s lifetime. This is so even when the Claimant falls into the category of the most severely disabled and is likely to have first call on the resources of the Local Authority. In Sowden –v- Lodge the evidential burden was placed firmly upon the Defendant to prove the availability of state funding. As a matter of instinct, it must be right to suggest that these are the very people who are likely to be cared for by the Local Authority or PCT. However, it is a question of risk and the Court of Appeal has made it clear that the risk of under-compensation as a result of provision determined by legislation which can change and which is informed both by the resources of the Local Authority and the needs of the community as a whole, will generally be too great to persuade a Court to take.
The Multiplier
The fourth issue considered by the Court was the question of whether it was appropriate to reduce the multiplier to take into account the possibility of payment by the Local Authority or PCT. In Crofton it was accepted that there may be cases where “the Court finds that a Claimant will receive direct payments for at least a certain period of time and possibly for much longer” and this might influence the assessment of the appropriate multiplier. The Court noted that this was not a case where it is the position that the Claimant will receive state provision for at least a certain period of time and possibly much longer and it is not envisaged that the Claimant will receive state funded care at all unless the Deputy is authorised by the Court of Protection to apply for public funding. As such it was held that the principles in Crofton had no application to the instant case and there were no grounds upon which to consider reducing the multiplier.Commentary
The judgement does not end the need to take into account the ability of the Claimant to access state funded care and accommodation. What it requires is that the Claimant makes an election at the point an award is made. When Chantelle Peters receives her award of damages, her right to apply for state funding will be very significantly limited by the undertaking provided by her Deputy and the terms of the Order of the Court of Protection which prescribes the Deputy’s powers.There will however be many cases where state funding by way of direct payments or otherwise has been in place for some time and, in some cases such as in Crofton, it will remain available to the Claimant. In those cases, a Claimant may well not elect to rely on self-funding alone. We are then likely to see the continuing use of indemnities so that proper account is taken of those payments and double recovery is avoided.
The decision in Peters provides protection for the public purse against double recovery but will provide less comfort to the privately funded tortfeasor. It is however to be welcomed as providing clarity on the issue. The purpose of the assessment of damages is to provide for the needs of the damaged Claimant. Despite our best efforts, litigation can be a lengthy and imperfect process and families so often need support long before a claim form is issued. Too often state help is not in place and it cannot be disputed that in the normal course of events one wishes to see that “the Claimant had available to her all services, equipment or funding that could be made available from whatever source, whether it was the local authority, the health authority or whatever”.
Claimants or their advisers who may have feared the impact of agreeing to a S47 assessment of need no longer worry. They can access available state funded care from the outset and then make an election at the point that damages are awarded. Putting it another way, an adviser who does not advise his client of the availability of state funding and direct payments in particular may need to justify that decision. Success in litigation should never be taken for granted and the opportunity to fund care privately by interim payments may be years away even in the stronger cases and where there is no risk on life expectancy. In litigation the availability of statutory provision is now just a question of fact and the Claimant’s election – this definitive judgment is to be welcomed for that.
