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Crofton v National Health Service Litigation Authority, Court of Appeal, 8 February 2007

22 March 2007
The issues

Sowden v Lodge – National Assistance Act 1948 Section 29 – Chronically Sick and Disabled Persons Act 1970 Section 2 – care – Local Authority provision – whether Local Authority provision can be off set against future care costs.

The facts

The Claimant was born in 1979 and a few days after birth was suspected of having a condition known as Coarctation of the aorta. Proceedings were commenced alleging negligence and compromised on the basis that the Claimant would receive 67.5% of damages assessed on the basis of full liability. At the date of the Trial of the issues of quantum he was 26. Life expectancy would be about 40 years. At the date of Trial the Claimant was living in supervised accommodation with care as provided by the SeeAbility (the Royal School for the Blind) and paid for by Hampshire County Council. The Judge accepted the Claimant’s case that damages for future care should be assessed on the basis that it was reasonable for him to purchase his own accommodation and employ carers. The major issue at stake in the appeal was the extent to which damages should be reduced to reflect direct payments that the Council would or might make to the Claimant towards his care costs.

The Judge assessed the Claimant’s total yearly care costs at £122,602.00. He found that the Council would make yearly direct payments of £68,018.00 which should be offset against the total care costs producing an annual figure of £54,584.00. To this figure he applied the agreed whole life multiplier of 25.42 to arrive at an award for future care of £1,387,525.00 on the basis of full liability. There were 3 issues before the Court. The first issue was whether the Court should have considered the direct payments issue at all. The second issue was whether the Council would make direct payments in this case and consisted of 2 parts, namely the threshold question of whether the Council could be satisfied that it was necessary for it to meet the care needs of the Claimant and whether the Council could have regard to the Claimant’s damages at the means testing stage; and finally, the third issue, which concerned the Judge’s decision as to the amount of direct payments.

Section 29 of the National Assistance Act empowers the Local Authority, subject to Regulations, to make arrangements for promoting the welfare of persons to whom the Section applied. Directions given by the Secretary of State in 1993 provided that Authorities could make such arrangements in relation to persons ordinarily resident in their area for, amongst other purposes, the provision of social work service and such advice and support as might be needed for people in their own homes or elsewhere. Section 2 of the Chronically Sick and Disabled Persons Act 1970 provided that where an Authority has functions under Section 29 of the National Assistance Act 1948 in respect of, in this instance, the provision of practical assistance of that person in their home, then, subject to the Local Authorities Social Services Act 1970 Section 7(1) it should be the duty of the Authority to make those arrangements in exercise of their functions under Section 29.

Under Section 47 of the National Health Service and Community Care Act 1990, Authorities have a duty to assess a disabled person’s needs. Under Section 4 of the Disabled Persons (Services and Consultation and Representation) Act 1986 they also have a duty to assess a disabled person’s needs under certain circumstances. Making such assessments and providing such services Local Authorities had to act under the directions of the general guidance issued by the Secretary of State and, in particular, ÎFair Access to Care Services Guidance on Eligibility Criteria for Adult Social Care’, a Local Authority circular. It was common ground that the Claimant fell into the most serious of the 4 bands of eligibility given in that circular.

Section 17 of the Health and Social Services and Social Security Adjudications Act 1983 gave a Local Authority a discretion to recover charges from persons to whom services were provided under Section 29 of the National Assistance Act.

Guidance was issued by the Department of Health in September 2003 as to the exercise of a discretion in a document entitled ÎFairer Charging Policies for Home Care and Other Non-Residential Social Services’.

Section 57 of the Health and Social Care Act 2001 made provision for persons assessed as needing community care services by assessment under Section 47 of the National Health Service and Community Care Act 1990 to receive direct payments from Local Authorities in order to secure the provision of the relevant services instead of receiving the services directly from the Authority. The Department of Health had issued guidance in relation to direct payments in a document entitled ÎDirect Payments Guidance Community Care Services for Carers and Children’s Services (Direct Payments) Guidance England 2003′.

The first issue.
Should the Court have considered the direct payments issue at all in the assessment of damage?
The issue had arisen in the course of the evidence given by a Local Authority employee who was not cross examined on it. It is unfortunate that the issue had arisen in the way that it had but the Judge could not be criticised for allowing the Respondent to take the point given the potential impact on the amount of the award. However, it had been unfair to allow the point to be taken at the time rather than to adjourn. It is particularly so given the comments of the Court of Appeal in Sowden v Lodge in which the Court had emphasised the importance of placing before the Court cogent evidence as to how the regime is proposed by the parties for the care and accommodation of Claimants would operate.

The second issue.
Would the Council make direct payments in this case?
The threshold question: could the Council be satisfied that it was necessary for it to meet the care needs of the Claimant.

When addressing the threshold question a Local Authority could not take account of resources which it might not take into account at the means testing stage. There are a number of reasons why this was the case. Firstly, it was hard to see why personal injury damages should be left out of account for the purposes of deciding whether care and attention was to be regarded as “otherwise available” (the Section 21 question) but, that they should be taken into account when deciding whether it was necessary to provide welfare services to meet a person’s care needs (the Section 29 / Section 2 question).

There were obvious policy reasons for ring fencing a person’s personal injury damages when they were under a disability but no policy reason had been suggested to justify ring fencing such a person’s personal injury damage in relation to the cost of care and attention in accommodation provided by a Local Authority, but not ring fencing the damages in relation to the cost of meeting such a person’s care needs in his own home.

Secondly, a system requiring person injury damages to be taken into account at the threshold stage but disregarded at the means tests stage made little sense.

Thirdly, the Fairer Charging Policy (for the purpose of Section 29 of NAA) and the Assessment of Resources Regulations (for the purposes of Section 21 of NAA) contained complex and detailed rules for determining which resources are and which are not to be taken into account by a Local Authority when it decides whether to charge for a service or to make a direct payment in its place. The policy embodied in the Assessment of Resources Regulations and the Fairer Charging Policy was that personal injury damages, administered by the Court of Protection, should be ring fenced. That policy would be undermined if the Local Authority could require that such damages be exhausted before it might be satisfied that it was necessary for services to be provided. Although the approach in relation to Section 29 NAA is intended by the Fairer Charging Policy to be discretionary, the guidance sets out minimum requirements.

Fourthly, if personal injury damages can be taken into account at the threshold stage undesirable distinctions arise. The Court would therefore conclude that a Local Authority was obliged to disregard personal injury damages administered by the Court of Protection in deciding the threshold question.

Could the Council have regarded the Claimant’s damages at the means testing stage?
Guidance issued by the Department of Health in September 2003 as to the exercise of discretion under the Health and Social Services and Social Security Adjudications Act 1983 Section 17 provided that the capital value of personal injury damages administered by the Court of Protection was to be disregarded in the means testing exercise. The position regarding income deriving from capital was more problematic. The Judge had not had sufficient information before him to come to a view as to whether the income would be take into account by the Council and the Court was in no better position to do so than the Judge.

Generally the Court accepted that there might be cases where the possibility of a Claimant receiving direct payments was so uncertain that they should be disregarded altogether in the assessment of damages. It would depend on the facts of the particular case. If the Court found that a Claimant would receive direct payments for at least a certain period of time, and possibly for much longer, this finding had to be taken into account in the assessment. In such a case the correct way to reflect the uncertainties was to discount the multiplier.

The third issue – the Judge’s decision as to the amount of direct payments.
The Judge was wrong to apply the agreed whole life multiplier to the direct payments. He had himself identified uncertainties. They should have led him to conclude that a substantial discount to the multiplier was necessary. It was not 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 would change. There was insufficient material available to the Court to determine the correct multiplier.

The appeal would be allowed and the matter remitted to the Judge.

Comment.
The Court expressed its dismay at the “labyrinthine nature of the relevant legislation and guidance, as well as (in some respects) its obscurity”.

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The content on this page is provided for the purposes of general interest and information. It contains only brief summaries of aspects of the subject matter and does not provide comprehensive statements of the law. It does not constitute legal advice and does not provide a substitute for it.

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