Paying for care: local authorities or defendants?
Introduction
1. This
article examines two recent decisions in the High Court which have thrown into
full relief the thorny issue arising in personal injury cases where a severely
disabled claimant contends that:
(a) He/she should be cared
for and accommodated in a private care regime rather than in a residential
home; and,
(b) The tortfeasor/defendant
should pay for the whole or part of the cost of such care, notwithstanding the
duty upon local authorities under the National Assistance Act 1948 (“the
NAA”).
2. The
judgments in Crofton v National Health Service Litigation Authority (2006)
Lloyd’s Law Reports 168 and Maria Freeman v Christopher
Lockett [2006] EWHC 102 (QB) and (2006) Lloyd’s Law Reports 151 were handed down within weeks of each other but the conclusions drawn were
diametrically opposed, casting doubt on the application of the principles set
out in Sowden and Crookdake [2004] EWCA Civ 1370; [2005] 1 WLR.
Background
3. In Sowden the general area of law under consideration was the effect of section 21 of the
NAA upon the liability of tortfeasors/defendants. This section provides that a
local authority shall make arrangements to provide for residential
accommodation for persons aged eighteen or over who by reason of age,
disability, or any other circumstances are in need of care that would not
otherwise be available to them.
4. The
local authority may potentially recover any amount from the recipient of such
services, depending on his/her ability to pay. However, resources such as personal injury trusts and compensation administered
by the Court are to be disregarded for the purposes of assessing means. Consequently, severely injured claimants
may be entitled to local authority care without recoupment of any cost, giving
rise to potential double recovery.
5. Seeking
to avoid the risk of double recovery, the approach commended by the Court of
Appeal in Sowden may be summarised as follows: -
(a) Determine the care regime
the claimant reasonably requires.
(b) Compare this care regime
with what the local authority are likely to provide under section 21 of the
NAA.
(c) If the statutory
provision meets the claimant’s reasonable requirements, the defendant need not
pay anything.
(d) If the statutory
provision falls significantly short of the claimant’s reasonable requirements,
the defendant should contribute the difference in cost between the two care
regimes.
6. According
to this approach, the tortfeasor/defendant is only ever likely to “top up” the
local authority care regime and should not be required to pay for all such care
services. This means that, whilst double recovery may be avoided, the claimant
suffers in two regards: -
(a) He/she is deprived of any
opportunity to choose how their care is provided; and,
(b) He/she may lose out financially
if local authority care is later withdrawn as a result of altered statutory
provisions or policy objectives.
7. Bearing
these two factors in mind, the cases of Crofton and Freeman make interesting reading.
Crofton and Freeman
8. The
claimant in Crofton had been born with a congenital heart defect
in 1979. Corrective surgery was not undertaken in time, causing a severe brain
injury. He was described as having the mental age of a young child. He also
required considerable support to stand and walk; had limited use of his arms;
experienced difficulty articulating; and suffered from poor vision (he was
registered as partially blind) and epilepsy. At the time of trial, the local
authority had been providing his care and accommodation needs in a special facility
for persons with visual and other disabilities. It was contended on his behalf
that a move to his own home was reasonably required.
9. The
claimant in Freeman had suffered upper body paralysis in a road
traffic accident for which the defendant had admitted liability. She was
described as an intelligent, strong-minded and self-willed person. Her
cognitive and intellectual powers had been unaffected by the accident, but she
was wheelchair dependant and would require long-term future care. She had
expressed a clear desire not to be beholden to the local authority to fund her
future care needs even though, shortly before trial, it had decided not to seek
to recover from any award of damages the direct financial payments that had
already been made.
10. In
both Crofton and Freeman the trial judge considered
that private domiciliary care, as opposed to residential care, would be
appropriate. Funding for such care would ordinarily be provided by the local
authority pursuant to its duty under section 29 of the NAA and section 2 of the
Chronically Sick and Disabled Persons Act 1970 (the CSDPA), provided it was
necessary in order to meet the recipient’s needs. The regime for recovering
charges is different, however, to that under section 21 of the NAA. Local
authorities are simply able to recover such charges for private domiciliary
care as they consider reasonable, having regard to the means of the recipient. This means that they have more discretion
as to whether personal injury compensation, whether held in trust or administered
by the Court, is taken into account.
11. Notwithstanding
these differences, in Crofton the Court still held that: -
(a) The local authority would
be likely to provide a sizeable contribution by way of direct payments towards
the cost of providing such care, irrespective of any award of damages.
(b) Applying the principles
in Sowden, the defendant should therefore only pay the shortfall
between this likely contribution and the additional cost of private care and
accommodation.
12. By
contrast, in Freeman the Court concluded that there should be no
deduction from the claimant’s compensation for future care to take account of
potential payments from the local authority. In summary, Tomlinson J reasoned
as follows: -
(a) Any estimation as to the
level of funding that Ms. Freeman might receive from the local authority in the
future was purely speculative.
(b) The long-term position as
to recoupment by the local authority was a matter of policy or discretion and
might change in the future.
(c) There was unlikely to be
any double recovery because Ms. Freeman intended to withdraw her application
for local authority funding.
(d) Sowden set down no new
principle of law and, in any event, related to the direct provision of
residential care under section 21 of the NAA rather than private domiciliary
care, which is more vulnerable to adjustment in order to save costs.
Conclusion
13. In
light of the decision in Freeman it would appear that the way is
clear once more for claimants to recover full compensation from
tortfeasors/defendants in respect of their reasonable care needs, particularly
if seeking private domiciliary, as opposed to residential, care and
accommodation. The Court is likely to be receptive to such arguments if: -
(a) The claimant, though
physically disabled, retains sufficient mental faculties to express clear
preferences as to his/her future care; and,
(b) He/she has the express
intention not to seek local authority funding.
14. Nonetheless,
it is significant that the claimant in Crofton, as in Sowden,
clearly did not have sufficient cognitive capacity to choose an alternative
private regime of care to that which the local authority could provide. This
suggests that where the claimant has sustained a severe brain injury the
approach set out in Sowden is likely to be followed, reducing the
financial liability of defendants.
Lionel Stride
1 Temple Gardens
