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Personal injury awards and care costs

Cutbacks iStock 000013353612XSmall 146x219A High Court judge has backed the Local Government and Social Care Ombudsman’s decision on the ‘double recovery’ of care costs. Virginia Cooper explains why.

Councils facing mounting care costs for vulnerable people will need to take account of a key decision published by the Local Government and Social Care Ombudsman which has now received full backing from the courts.

The Local Government and Social Care Ombudsman investigated a complaint brought on behalf of a severely disabled woman who complained that Wokingham Borough Council, in Berkshire, left her without critical funding required to meet her eligible needs.  

The complainant, who was awarded nearly £1.3m in a personal injury settlement for medical negligence 43 years ago, complained that the council took her personal injury award into account, in direct contravention of the law, when deciding whether it would provide funding for her care needs.

The council argued that it was entitled to take account of the award of damages for personal injury, notwithstanding the wording of the Care and Support (Charging and Assessment of Resources) Regulations 2014 which govern financial assessments, to avoid ‘double recovery’ – a situation in which a person receives money for the same injury twice (e.g. where a person is awarded damages for future care needs via a civil claim, but also receives council funding for ongoing care).

However, the Ombudsman found that the law was clear. The Care Act 2014 and the associated guidance and regulations make it clear that while councils can expect people with capital over £23,250 to pay for their own care, some forms of capital must be disregarded including:

  • Capital derived from an award of damages for personal injury which is administered by a court or which can only be disposed of by a court order or direction; or
  • The value of the person’s main or only home where the person is receiving care in a setting that is not in a care home.

The Local Government Ombudsman's investigation found, in a report dated 8 February 2017, that the council's failure to disregard the complainant's personal injury award and backdate payments to before October 2015 amounted to maladministration. The Ombudsman concluded that the maladministration also led to an injustice in that a disabled and vulnerable person suffered financial loss that should have been avoided.

Wokingham Borough Council challenged the Ombudsman's decision and applied for a judicial review, but the Honourable Mr. Justice Fraser sitting in the Administrative Court of the High Court of Justice considered the council's application and ruled that it was both out of time and “totally without merit”.

Mr Justice Fraser further cited the Court of Appeal's decision in R (on the application of Tinsley) v Manchester City Council (2017) that he said made the council's application for judicial review "even more hopeless". That case arose from a road accident in which a cyclist was injured and needed mental health care as a result. Lawyers on behalf of Mr Tinsley submitted that Manchester City Council’s refusal to provide him with after-care services unless it was satisfied that earlier damages awarded to him had run out was unlawful.

Manchester argued that under s.117 of the 1983 Mental Health Act, it was not obliged to provide free after-care services if the claimant had been awarded damages for future care and, in a similar vein to Wokingham Borough Council, argued that to do so would permit  ‘double recovery’ (relying on decisions in Crofton v NHSLA (2007) and Peters v East Midlands Strategic Health Authority (2010).

However, when considering Manchester City Council's appeal (in which the Local Government Association also intervened in support of the council's position), the Court of Appeal rejected the council’s case as an “impossible argument” on the basis that: “a refusal to pay for such services is effectively the same as providing such services but charging for them”.

The Court of Appeal also dismissed arguments about double recovery saying: “there is nothing wrong or immoral about a claimant who has received damages for future care from a tortfeasor then applying to the state for care”.

The judge who first considered Mr Tinsley's application in the High Court said he entirely accepted that hard-pressed local authorities will be ‘extremely frustrated’ by applications for full state care funding in circumstances where there are sufficient resources from the proceeds of personal injury claims specifically awarded in relation to the cost of future care available to the claimant. However, he held that the law was clear and if it was thought that existing control mechanisms are not sufficient to ameliorate the problem then that was a consequence of the statutory regime which must be changed, if at all, by Parliament and not the courts. The Court of Appeal upheld his judgment and dismissed Manchester City Council's appeal.

All authorities involved in outstanding litigation over care costs will now need to take full account of these latest judgments – and that personal injury settlements must be disregarded in future financial assessments in accordance with the Charging Regulations.

Virginia Cooper is a partner in the law firm Bevan Brittan that advised the Local Government and Social Care Ombudsman during its investigation into the complaint against Wokingham Borough Council. Virginia can be contacted on 0370 194 7991 or This email address is being protected from spambots. You need JavaScript enabled to view it..


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