Chantelle Peters (by her Litigation Friend Susan Mary Miles) v East Midlands Strategic Health Authority and Nottingham City Council (2009) EWCA Civ 145

This case concerned the question of whether a claimant’s care and accommodation costs should be borne by a tortfeasor or by the local authority that is charged with the statutory duty of making arrangements for providing care and accommodation for someone in need of care and attention.

The Claimant (P) had brought an action against the Health Authority in negligence for failing to ensure that her mother had received a rubella vaccination prior to becoming pregnant. As a result P had been born with congenital rubella syndrome and required full time, long term, care in residential accommodation. This accommodation had historically been jointly funded by the Local Authority and the Primary Healthcare Trust through s28A NHS Act 1977 subsidy of the social services’ costs of provision.

The judge, at first instance, had held that no reduction should be made to the accommodation and care element of damages to be awarded to P to reflect the local authority’s statutory duty to provide accommodation and care for her without its being able to treat the damages settlement as relevant for charging purposes. The appeal was by both defendants on a number of issues.

The Local Authority appealed against the determination by the judge that the correct interpretation of paragraph 44(2)A of the Income Support Regulations required that the full sum of any personal injury award should be disregarded by a local authority when ascertaining whether care and attention were ‘otherwise available’ for an individual.

Under s21(1) of the National Assistance Act 1948 [‘NAA’] a local authority, in determining whether care and attention is ‘otherwise available’, can look at a person’s means, but when doing so, must disregard any part of a person’s financial resources as is specified in relevant regulations.

The relevant regulations are the National Assistance (Assessment of Resources) Regulations 1992 [‘NAARR’] which require a local authority to carry out a means test on individuals who may qualify for services under s21 NAA, and disregard certain assets, including any capital listed within schedule 4 of the regulations. Also, the National Assistance (Residential Accommodation) (Disregarding of Resources)(England) Regulations 2001 are relevant, because they established that any capital below a threshold, currently set at £22,250, must be disregarded.

The crucial NAAR regulation about capital disregards includes the category: “any amount which falls within paragraph 44(2)(a), and would be disregarded under paragraph 44(1)(a) or (b), of Schedule 10 to the Income Support Regulations.”

Paragraph 44(2)(a) reads:  ‘an award of damages for a personal injury to that person….’

The Local Authority argued that the requirement for the full sum to be so disregarded was so unreasonable that it could not have been what Parliament intended and that therefore the Court of Appeal should find some way to construe the provision so as to allow a local authority to take account of at least that part of an award which would have been made to meet the long term future care and accommodation needs of the person.

However the Court of Appeal held that the actual wording of the regulation was so “clear, unambiguous and unqualified” that it was impossible to construe it as if it only referred to some of the heads of damages award (eg the damages for pain and suffering). They appreciated the common and moral sense in excluding from the disregard any sum awarded by a Court to meet the cost of care and accommodation and highlighted 10A of NAARR which affords the local authority the opportunity to disregard “any payment or any part of any payment that has been specifically identified by a court to deal with the cost of providing care.”  But the fact that Parliament had included this express exclusion from the concept of disregard, for damages awarded by the Court to meet the costs of care (including accommodation) justified the position of the Court that paragraph 44(2)(a) could not be interpreted in the same way, as the Local Authority had requested, and so its appeal was rejected.

The remaining issues were appealed by the East Midlands Strategic Health Authority. Their challenge was threefold: firstly, whether P was entitled as a matter of law to recover damages from a tortfeasor rather than rely on welfare provision as determined by a public authority’s statutory duty. The Court of Appeal commented that ‘it was trite law’ that a person who has a right of action against more than one party is permitted to initiate proceedings against both or either if they so choose, even where one party is an innocent public authority. The appellant argued that the claimant, or those responsible for his or her welfare, were under a duty to secure and maximise funding from public funds and, furthermore, where it was reasonable for support to be available from a public authority, then there was no loss for the tortfeasor to make good. The Court of Appeal dismissed the defendant’s argument that Crofton v NHS Litigation Authority (2007) provided support for this proposition, on the basis that the Crofton decision was dependant on the earlier factual finding that that particular local authority would continue to make direct payments to enable that claimant to pay for his care. It confirmed that there was a no duty on a Deputy, acting under powers conferred by virtue of the Mental Capacity Act 2005, or a case manager engaged by PI consultants, to apply for support under s21 NAA. So the Court of Appeal concluded 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 of a public authority, should not be entitled to do so, as a matter of right’. This is consistent with the apparently opposite outcome of Bell v Todd and South Tyneside Council,, another case in this field, because in that case the Receiver acting for the Defendant had not elected to arrange private care for the client and was not persuaded to do so for the future best interests of the man in question.

The Court of Appeal gave guidance on how to protect against double recovery, recommending that where a person’s affairs were being administered by the Court of Protection then any court order and judgment relating to the personal injury award (where this provided that a tortfeasor should fully fund any future care and accommodation needs) should be made available to the Court of Protection so that this Court could make an order prohibiting the claimant or the Deputy from applying for publicly funded assistance under the NAA without further order from the Court. In addition the Court of Appeal suggested that any order could allow that the defendants be notified if such an application were to be made.

The second issue, bought by the SHA, was whether the judge was correct to find that P was acting reasonably when she elected to opt to self fund rather than rely on the local authority’s statutory duty to provide for her long-term care needs. The Court of Appeal, rejecting the appellant’s criticisms of the decision below, determined that on the evidence before it and the earlier court, and on the balance of probabilities, P would be in a better position to safeguard her future care were she to be a self- funder than rely on the statutory duties of the public authority. The Court accepted that, were she to have opted to rely on the local authority she could initiate judicial review proceedings if her care needs were not being met adequately, but this would succeed only if the level of provision had fallen below that which could not reasonably (in the public law sense of irrationality) be considered to be sufficient to discharge these duties. Further, they held the judge was right to conclude that future legislative changes could, potentially, negatively affect her entitlement.

Finally the Court of Appeal refused the SHA’s third challenge: a request to reduce the multiplier, previously agreed between the parties, as to do so would be based on pure speculation. The SHA had argued that as P would be entitled to be state-funded care for at least a period into the future Crofton was relevant in this instance. The Court of Appeal again distinguished Crofton as irrelevant in this instance because the claimant in Crofton was in receipt of statutory support in the forms of direct payments and would continue to be so in the future, P would not even seek to be so entitled unless such an application was authorised by the Court of Protection.

Comment

This case has significant and interesting implications for local authorities in the era of helping people to help themselves, against the background of Putting People First and personalisation/transformation.

Where a person chooses to pursue a tortfeasor (or lacks capacity to determine not to) the local authority would now, we think, be able to rely on this case as lawful authority to propose an alternative to reliance on the local authority’s provision under s21 NAA to a Deputy who was minded to work with it, rather than through it and the community care legal framework.

Following the Court of Appeal’s reasoning, a Deputy could apply for an interim payment, in cases where there is a clear case on liability, and make private provision in a care home or a privately owned assisted living setting. The provision would be private from the outset. In cases where there is no clear case on liability, or a very strong case on contributory negligence, such that the insurers are not inclined to make an interim payment, the Deputy could go to the Local Authority and ask for a well-being grant under s2 of the Local Government Act so as to enable the pump-priming of a private package of care. A local authority would have to show that it was consistent with its well being strategy overall, but this would not be difficult, given the saving to public moneys in the long term. In cases where there is no-one willing to be a Deputy, or to make the effort required to ensure that private provision is made, the Local Authority, by taking Deputyship itself, is potentially able to make what will then be private provision, and not a formal placement under the National Assistance Act, anywhere where it is needed. But note that this may amount to a conflict of interest. In Nottinghamshire County Council v (1) Emma Kate Bottomley (By Her Litigation Friend Helen Ryan) (2) East Midlands Strategic Health Authority [2010]  the Court of Appeal did allow for a local authority to be added as a party to be heard on the issue of how damages should be awarded to minimise their own liability.

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