Direct Payments, Double Recovery and New Developments in the Court of Protection

Victoria Butler-Cole KC, Nicola Greaney KC and Arianna Kelly discuss the recent decision in Re Various Applications in respect of ‘Direct Payments’ [2026] EWCOP 42 (T2), a matter considering seven applications for authority to manage direct payments for people lacking capacity.  This judgment followed on from Lumb v. NHS Humber & North Yorkshire ICB [2024] EWCOP 57 (T2), in which Senior Judge Hilder found that it was outside of the general authority of property and affairs deputies to manage direct payments for people entitled to public funding through NHS Continuing Healthcare.

The Court of Protection has confirmed that

1. Managing direct payments involves a mix of financial and welfare decision-making,
2. The general authority of a property and affairs deputy does not include authority to manage direct payments,
3. The Court can provide authority to manage direct payments notwithstanding it requires a mix of financial and welfare decision-making, and
4. A trust corporation cannot be authorised to make welfare decisions.
5. It is only possible to provide welfare authority once P has reached aged 16 years.  Authority to manage direct payments cannot therefore be granted where P is under age 16 years.

This podcast discusses the implications of this judgment for PI practitioners, particularly where issues of reverse indemnities (or other means of managing double recovery) arise in litigation. The judgment highlights the need to have a clear plan and understanding for who can manage public funding on behalf of a person who is lacking capacity where this is a component of a settlement agreement, and the restrictions and limitations on professional deputies in doing so.