Andrew Craig Collins (by his Litigation Friend Guy Petter Eskell) v Plymouth City Council [2009] EWHC 3279 (Admin)

The Claimant [‘C’] issued a judicial review against Plymouth City Council [‘the LA’] against their decision to charge him for non residential services, requiring the Court to consider (again) whether a local authority can lawfully take into account personal injury awards when determining whether to charge a service user for a particular type of social care provision.

C, who had suffered severe injuries in a road traffic accident as a young boy, was paraplegic with cerebral palsy requiring constant care. In this instance C’s personal injury award – administered by the Court of Protection through a receivership order (now deputyship) because of his mental impairment negating his capacity – had been used to purchase and adapt his home with the remainder of the award having been invested so as to provide him with an annual income of £26,000 + state benefits. He was in receipt of domiciliary care and day centre services provided by the LA under s.29 of the National Assistance Act 1948.

There is no requirement on local authorities to charge service users for non-residential services as there is for those services provided under s.21 of the National Assistance Act 1948, but s.17 of HASSASSA permits a local authority to charge a reasonable amount for non-residential services, provided it does not require the individual service user to “pay more than it appears to them that it is reasonably practicable for him to pay.” That is the background out of which a means assessment process and a charging review system are operated in most councils doing home care.

Local Authorities that do decide to charge for services must ensure that they comply with government guidance and, particularly the DoH circular revised in September 2003 ‘Fairer Charging…’. In accordance with this guidance the LA had devised a policy which required a full financial assessment, but made clear that all income and capital held would be taken into account. In line with the ‘Fairer Charging’ guidance it promised that any charges imposed would not diminish the services user’s income to a level below the basic level of income support plus a buffer of 25%.

C had originally paid the charges but from April 2008 withheld payment (although it was less than the maximum cost that he could lawfully be expected to pay, if his income was taken into account) and sought to challenge the lawfulness of the decision to charge C on the basis of principle that the LA had unlawfully fettered its discretion by having regard to the ‘Charging for Residential Accommodation Guidance’ [CRAG] which was asserted to be not relevant in this case. CRAG obliges a disregard of any capital from PI trusts or funds administered by the Court of Protection. Further, in relation to income, for the period in respect of which the dispute arose, CRAG *did  allow that when assessing the basis for charging for residential care, periodical payments from a trust whose funds were derived from a personal injury award were to be disregarded in full. The disregard was a full one, if the income was to be used to purchase something not covered by the local authority’s placement of the person in a care home. However, where the payments were not used to purchase something outside the care plan, a maximum of £20 was to be disregarded, and thereafter the payments were to be taken into consideration in full as available to offset the cost to the LA of paying for the provision. So, if the CRAG rules did apply, albeit in the non-residential field, the income could be considered, in full, or in the main, at least, and the client charged accordingly.

The LA’s own policy in charging for non residential provision set out that the charge to service users would be calculated from the amount of income they received and capital held. Those amounts would be calculated by reference to CRAG, because that was what Fairer Charging required – at least as to capital. As such the LA sought to defend their position on the basis that they were lawfully entitled to consider CRAG and by having had regard to this guidance they had in fact exercised discretion and applied no less generous terms in the assessment of C’s charges. They ensured that a £20 disregard for income payments not spent on things in the care plan but then took account of Mr Collins’ income from his PI damages fund.

Mindful of the decision of the Court of Appeal in Crofton v NHS Litigation Authority  (2007) EWCA Civ 71 the Judge was clear that any capital awarded as a result of the personal injury should be disregarded when looking to charge for residential and non residential services. That was because the Crofton case had established that since Fairer Charging incorporated and exhorted reliance on residential means assessment approach with regard to capital, authorities were in fact obliged to disregard PI trust capital awards even in the non-residential charging context.

In this case the parties were in agreement that this had been done. The judge then, in line with the Court of Appeal in Crofton, concluded that the treatment of investment income from a personal injury award was a matter of discretion for the LA, as the rules as set out for the taking account of income, in CRAG, had not been imported into the ‘Fairer Charging’ guidance. He concluded that when determining the level of charges to impose in respect of non residential services the LA was not required to follow CRAG but were entitled to consider that guidance when forming their own charging policy for non residential services. Further, as the LA’s policy was in line with ‘Fairer Charging’ guidance it was lawful, being, as it was, designed to make reasonable charges where it was permitted to do so. This included the LA’s policy to include income from personal injury damages awards. In respect of whether they could lawfully apply a disregard at all, despite no mention of this within its own policy the Court took the view that it was reasonable for a local authority to apply the rules as set out in CRAG when in doing so they were providing non-residential services on more favourable terms than they would otherwise.

*It is worth noting that the Judge did comment that a subsequent change in April 2009 to CRAG requires that, for the most part, income from personal injury awards must now be disregarded, in full, in the residential charging framework. That is because the provision about the ‘£20 only’ disregard for income payments not for things in the care plan, has been removed altogether, leaving the default position being income from PI trusts and Court of Protection cases is disregarded too. He suggested that the LA review their policy in respect of charging for non residential services in light of this change, but implicitly indicated that they could still operate lawfully without carrying over that treatment, if it still seemed reasonable, because Fairer Charging guidance has still not been changed.

LAs and those looking after the interests of incapacitated accident victims should take note that committed pro-active Deputyship counts for everything in this situation. If the Deputy simply relies on the authority to manage everything, a residential placement may be made by default, and then the fund will not be chargeable. If the LA and the Deputy work together to organise private care or state contracted care in the private sector (ie ordinary accommodation) the client will be chargeable, but that will increase their damages payment, in an ordinary case of full liability, and the insurers will be funding the cost of care, not the State and the public. The income rules are enough (where the fund is sizeable) to justify charging by an authority whilst charging guidance does not oblige an income disregard in the non-residential field, either directly or by implied incorporation of the CRAG rules and regulations. Any authority wanting to make the most of this should have a full cost policy (not merely a maximum cost policy) for assessing the income position of all those who have recovered a fund for the future cost of care, for so long as that can cover the cost of care.


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