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Mayor & Burgesses of Islington London Borough v University College London Hospital NHS Trust, High Court, 23 July 2004

17 August 2004
The issues

Care – Recovery of Care Costs by Local Authority from Tort Feasor

The facts

Mrs J suffered a stroke whilst in the care of Middlesex Hospital. By its defence the hospital trust admitted that the stroke was caused by its negligence. A structured settlement of her claim was entered into on 28th September 2003. Until that date she had been cared for by the Claimant local authority in residential care under Section 21 of the National Assistance Act 1948. The structured settlement enabled Mrs J’s daughter to buy her a house in which to care for her together with the sum of £40,000.00 per year payable as long as she remained in the care of her daughter.

The cost of care caring for Mrs J to the local authority was £81,210.94. The local authority were under a statutory duty to charge Mrs J for the care provided to her or to assess her ability to pay for that care. In so doing they were bound in law to disregard the compensation under the settlement for the purpose of calculating her liability. As a result she could not recover the care costs from the Defendant because she was not herself liable to pay them. She suffered no loss resulting from these care costs and made no claim in her proceedings for those costs. The local authority asserted that the Trust had escaped liability to pay because her means were such that she had to rely on local authority care. They sought to recover the care costs from the Defendant in negligence.

The decision

1. The claim was for pure economic loss unrelated to any damage to property.

2. It was common ground that in order to establish a duty, the Defendant had to show foreseeability of the loss coupled with the necessary degree of proximity between the parties and moreover that in all the circumstances it was fair, just and reasonable for a duty to be imposed in respect of the economic loss.

3. As to foreseeability the Judge noted that there were a series of “layers” of foreseeability. At the time of breach of duty it was foreseeable that as a result of the breach Mrs J would suffer a stroke; as a result of the stroke it was probably foreseeable that she would require care; it was foreseeable that in respect of that care it might have to be provided by the local authority but equally it was possible that the care would be provided at home or in a private nursing home; the next question was whether if the local authority provided care, Mrs J would be able to pay for it. This seemed an impossible question for the Trust to answer at the time. The answer was clearly that the hospital Trust had no sufficient knowledge or means of knowledge and it was not reasonably foreseeable that the local authority might suffer damage as well.

4. As to proximity, there was no relationship between the hospital trust and the local authority at all at the time of the advice. They were not aware of each other in the context of Mrs J and were not brought in to a proximity relationship by reason of the fact that the local authority were the statutory care providers for Mrs J if she made an application to them.

5. Strictly it was not necessary to provide a view as to whether it was fair, just and reasonable to impose a duty given the failures of the Claimant on the issues of foreseeability and proximity. The Claimant had argued that there was a lacuna in the law which needed to be filled by the Courts. It did not appear to the Judge that there was any unjust situation calling for remedy. Parliament had set up a statutory scheme and had chosen in this case not to intervene to give assistance to the authority.

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