Important decision on management of personal injury damages and payment for social care

17.06.14 | |

The High Court finds that a local authority was not entitled to take account of capital which was administered by a deputy appointed by the Court of Protection when calculating whether a disabled person should contribute to the cost of social care services provided to her.


Z was severely disabled and community care services were provided to her by the local authority. Z had received £550,000 in settlement of a clinical negligence claim. The settlement had been reached in March 2003 on the basis that she would not be required to contribute to the cost of her future care. A receiver had been appointed by the Court of Protection in March 2002 to manage Z's affairs. On October 1, 2007 a new Court of Protection replaced the previous one by virtue of the Mental Capacity Act 2005. A fresh order was made in November 2008 changing the receiver's functions to those of a deputy under the 2005 Act. The order allowed Z's deputy to withdraw up to £50,000 per year from Z's funds without obtaining the prior approval of the Court of Protection. Under the local authority's policy, service users who had over £23,250 in capital and savings had to pay the full cost of their care. The Income Support (General) Regulations 1987 Sch.10 para.44 stated that certain amounts were to be disregarded from assessments, including sums which were "administered on behalf of a person by the High Court or the County Court ... or by the Court of Protection and, which "could only be disposed of by order or direction of any such court".


In allowing the claim Leggatt J accepted the claimant’s case that money derived from the settlement should be disregarded under Sch.10 para.44. In doing so he rejected the local authority’s argument that the "Court of Protection" in para.44 referred to the old court, not the new one constituted under 2005 Act. He also rejected the local authority’s argument that the deputy administered property on behalf of Z rather than on behalf of the court and that since Z's deputy could dispose of £50,000 without an order of the court, that sum did not fall within para.44(1).

Ian Wise QC and Maria Roche (instructed by Irwin Mitchell) appeared for the claimant.  A copy of the judgment can be found here.


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