Keywords: s117, private law claim, judicial review
FACTS: The claimant (Mr Richards) had sustained head injuries in a traffic accident in 1984 and had been diagnosed subsequently with frontal lobe damage and bipolar affective disorder. As a result of the accident he had received an insurance settlement which had enabled the private funding of a substantial package of care.
He spent a number of periods in hospital detained under the Mental Health Act 1983. The last of these began in August 2004, when he was admitted under s.2. This was converted to s.3 detention from 8th September and he remained in hospital until October 2004.
He was then discharged with a supervision order under the (now defunct) s.25 MHA which provided for him “to be supervised after he leaves hospital … with a view to securing that he receives the after-care services provided for him under section 117” (s.25A). s.25 required that the supervision application be accompanied by “details of the after-care services to be provided for the patient under section 117”, along with details of the requirements to be imposed on the patient “for the purpose of securing that the patient receives the after-care services provided for him under section 117”. Potential requirements specified in the section related to residence, attendance for medical treatment, occupation, education or training and access to the patient.
The supervision application completed in respect of Mr Richards by his responsible medical officer (Dr. Crellin) requested required him (amongst other things) to co-operate with his care plan.
Unfortunately, no copy of Mr. Richards’ care plan from that time had come to light. However, he had been discharged on 21st October 2004 on the basis that he would be subject to after-care under supervision. The bodies responsible for Mr Richards’ after-care under section 117 of the 1983 Act were identified as Worcestershire County Council (“the Council”) and Worcestershire Mental Partnership NHS Trust.
Between November 2004 and April 2006, Mr Richards lived at the Community of St Antony and St Elias in Devon. He then moved into a home of his own with full-time carers.
Dr Crellin periodically confirmed that Mr Richards needed to continue to be subject to after-care under supervision. In September 2006, Dr Crellin wrote:
“The Supervised Discharge Order requires [Mr Richards] to attend Studdert Kennedy at least 3 monthly; to attend at our request in case we have any concerns about him; it requires him to give access to members of the mental health team or myself with appropriate notice; it requires him to cooperate with his care plan as devised by his case manager, Rebecca Strange.
Unfortunately, it cannot require him to take medication as prescribed. In the past [Mr Richards’] mental state has had to deteriorate for quite some time before people have been willing to detain him for compulsory treatment. This has sometimes had fairly significant negative impacts on his finances and his relationships. The Supervised Discharge Order is a very definite statement that this man can be at significant risk of exploitation and self-neglect, as well as potentially dangerous to others when well.”
It was contended on behalf of the claimant that this letter and the supervision application indicate that the s.117 after-care plan included the care plan and was intended to ensure that he received the services specified in the care plan.
In 2009, Dr Crellin noted that Mr Richards had a “very comprehensive package of care, which is provided privately through the insurance settlement that was obtained following his accident”.
The issue of Mr. Richards’ potential entitlement to funding under s.117 had been repeatedly raised with the council from 2006 by those responsible for managing his finances, most recently his current deputy. In response the council repeatedly requested further information but appear to have taken no other action until 2012.
The defendants implemented a care plan for Mr. Richards under section 117 of the 1983 Act from 7 June 2013.
The issue of whether what was received was a s.117 service.
The judgement references the case law on s.117 which suggests that s.117 aftercare is a service which is:
(1) provided in order to meet an assessed need that arises from a person’s mental disorder; and (2) aimed at reducing that person’s chance of being re-admitted to hospital for treatment for that disorder.
The claim sought to recoup from the defendants more than £600,000 paid on Mr. Richards’ behalf for his care, including his placement at the Community of St Antony and St Elias and for the support he received in his own home between 2006 and 2013.
The council disputed that it had ever made a decision to the effect that the care which was provided privately to Mr. Richards was needed as an after-care service.
That dispute has yet to be resolved and will be the subject of subsequent hearings.
But FIRST wais there a private law claim?
The court sought to decide two issues:
1) Is it in principle possible for Mr Richards to bring a restitutionary claim?
A) The defendants contended that it had been established in Clunis v Camden and Islington HA  QB 978 that a private law cause of action could not arise from a failure to carry out actions under s.117. Failures to fulfil a statutory duty under s.117 could be remedied via judicial review.
However, on behalf of the claimant, it was argued that the present case was distinctly different from Clunis.
The Clunis case had involved a claim for damages on the basis of a failure to fulfil a supposed duty of care owed to the claimant under s.117 and the court had rejected the notion that any such common law duty of care existed. Mr Richards’ case, on the other hand, was seeking restitution on the basis that the private payments for his care by his deputy (operating under a mistake) amounted to a transfer of value from the claimant to the defendants and thus unjustly enriched the defendants by relieving them of the burden of paying for s.117 aftercare in accordance with their statutory duty.
In Clunis the court had concluded that s.117 MHA was not intended to confer a private law right. However, in this case, the question was whether s.117 MHA excluded a private law claim in unjust enrichment. On behalf of the claimant it was argued that it did not.
The court was of the view (on the basis of Deutsche Morgan Grenfell Group plc v IRC  UKHL 49,  1 AC 558 and R (Child Poverty Action Group) v Secretary of State for Work and Pensions  UKSC 54,  2 AC 15) that a statute can only be taken to exclude a common law claim for unjust enrichment where it provides for a comprehensive and exclusive system for the resolution of mistaken payments. The Mental Health Act 1983 did not exclude such a claim.
B) A claim of unjust enrichment requires establishing an “unjust factor” in order to succeed. Failure to perform a public law duty has never of itself been held to be an unjust factor for the purposes of a claim in unjust enrichment or a sufficient basis for any other restitutionary claim and the court was not referred to any prior case law on that point.
‘Mistake’ has been established in law as an “unjust factor”. However, this was not a conventional case seeking to retrieve funds mistakenly paid to the defendants in a case. In this case, the payments were to third parties who were rightfully recompensed for the care provided and the mistake alleged related to the source of the funds rather than the recipient.
However, Newey J took the view that it was seriously arguable on the facts and for the purposes of a claim of unjust enrichment that the defendants have been enriched at the claimant’s expense. Thus it was in principle possible for Mr. Richards to bring a restitutionary claim.
2) If so, can the present claim be pursued otherwise than by way of judicial review?
It is established law that challenges to decisions made by public authorities must normally be made by way of judicial review (O’Reilly v Mackman  2 AC 237.) However there are exceptions to the general rule. The judgement quotes Lord Bridge:
“”It is appropriate that an issue which depends exclusively on the existence of a purely public law right should be determined in judicial review proceedings and not otherwise. But where a litigant asserts his entitlement to a subsisting right in private law, whether by way of claim or defence, the circumstance that the existence and extent of the private right asserted may incidentally involve the examination of a public law issue cannot prevent the litigant from seeking to establish his right of action commenced by writ or originating summons, any more than it can prevent him from setting up his private law right in proceedings brought against him.” (Roy v Kensington and Chelsea and Westminster Family Practitioner Committee  1 AC 624 at 628-629)
and Pill LJ:
“a duty to pay it arises upon compliance by the applicant with the statutory requirements and the duty is in my view enforceable by an ordinary money claim” (Trustees of the Dennis Rye Pension Fund v Sheffield City Council  1 WLR 840 at 851)
It was argued on behalf of the claimant that he was not seeking to challenge the council’s decisions under s.117, rather that his case relied on those decisions. The claimants’ position was that there was a mismatch between what was decided and what was provided and on this basis a claim in private law rather than by way of judicial review was legitimate.
The council argued that the claim depended on an allegation of a failure to perform statutory duties and its monetary nature did not legitimise bringing civil proceedings rather than a judicial review, particularly since claims for judicial review can now include claims for damages or a sum due. The council contended that the striking out of a private law claim for restitution of amounts paid in respect of care home bills in Jones v Powys Local Health Board  EWHC 2562 (Admin), (2009) 12 CCLR 69 provided a close analogy to the present case.
However, it was pointed out that the two cases could be clearly distinguished. In Jones v Powys the claimant had been found ineligible for public funding and sought to challenge the decision of a public body to that effect. In the present case, both parties agreed that Mr. Richards was entitled to aftercare services under s.117 throughout the period in question. The issues in dispute lay elsewhere.
Newey J also pointed out that whilst it is now possible for restitution to be claimed within a judicial review application, such applications cannot be for restitution alone. In addition, he concluded, that it was far from clear that a private law claim for restitution should be subject to the strict time limits for judicial review applications rather than the limitation periods laid down for private law claims generally.
Therefore, it was held that the claim in private law could proceed. The defendant’s application to have the proceedings struck out was denied.
ANALYSIS: Councils and CCGs should be checking their records carefully for similar cases which are festering in the back of the filing cabinet. It seems that, under certain circumstances, they can be sued for failure to fulfil a statutory duty.
The key distinctions here would seem to be:
- Where a public body has made a decision that an individual is eligible for something which it is required to provide under a statutory duty but fails to actually provide it
- Where, as a result, the claimant has valid basis for a private law claim (e.g. unjust enrichment)
s.117 is a particularly strong basis for such a claim because of the automatic trigger for the duty following discharge from a s.3 detention and the lack of means testing.
Full judgement: http://www.bailii.org/ew/cases/EWHC/Ch/2016/1954.html