In the matter of Mark Reeves

Summary: In another case that was determined some time ago (5.1.10) but which, again, has only recently come to the attention of the authors, Senior Judge Lush had cause to consider the consequences of the decision of the Court of Appeal in Peters v East Midland SHA & Ors [2009] EWCA Civ 145, and, in particular, the observations of Dyson LJ regarding double recovery in personal injury proceedings, where (at paragraphs 64 and 65), he stated that:

"Mrs Miles has offered an undertaking to this court in her capacity as Deputy for the claimant that she would (i) notify the senior judge of the Court of Protection of the outcome of these proceedings and supply to him copies of the judgment of this court and that of Butterfield J; and (ii) seek from the Court of Protection (a) a limit on the authority of the claimant's Deputy whereby no application for public funding of the claimant's care under section 21 of the NAA can be made without further order, direction or authority from the Court of Protection and (b) provision for the defendants to be notified of any application to obtain authority to apply for public finding of the claimant's care under section 21 of the NAA and be given the opportunity to make representations in relation thereto.

In our judgment, this is an effective way of dealing with the risk of double recovery in cases where the affairs of the claimant are being administered by the Court of Protection. It places the control over the Deputy's ability to make an application for the provision of a claimant's care and accommodation at public expense in the hands of a court. If a Deputy wishes to apply for public provision even where damages have been awarded on the basis that no public provision will be sought, the requirement that the defendant is to be notified of any such application will enable a defendant who wishes to do so to seek to persuade that the Court of Protection should not allow the application to be made because it is unnecessary and contrary to the intendment of the assessment of damages. The court accordingly accepts the undertaking that has been offered."

The matter came before Senior Judge Lush in the following circumstances. Mr Reeves had obtained a substantial judgment at trial in 2003 for personal injuries sustained in an accident during which he had suffered a traumatic brain injury. The Court had concluded that his future care would be best met at a rehabilitation unit, TRU, rather than in his own home, and an award was made in respect of future care. In December 2006, Mr Reeves' property and affairs Deputy approached the relevant local authority, St Helen's Council, to ascertain whether it was potentially liable to contribute towards the costs of Mr Reeves' care at TRU. In July 2009, St Helen's wrote to the Deputy, noting that Mr Reeves had been awarded a personal injury award on the basis that he would be paying for future care himself, and formally requesting (on the basis of Peters), that the Deputy apply to the Court of Protection for authority to make a request of St Helen's Council to make a request for public funding for future care. The Deputy did so.

Having set out the rival submissions, Senior Judge Lush concluded that the application was misconceived in seeking to apply the Peters decision retrospectively to a personal injury claim resolved some six years before Peters.

Senior Judge Lush noted that Mr Reeves' Deputy had a duty to act in his best interests, including "claiming all state benefits to which Mr Reeves may entitled and, if appropriate to do so, applying to a local authority under the National Assistance Act 1948." He found that, in most cases, the order appointing a Deputy would give sufficient general authority to them to allow them to apply for social security benefits and to a local authority for a care needs assessment without having to obtain specific authorisation; he noted that he considered that it was implicit in the judgment in Peters that the Deputy had such authority – the purpose of the undertaking given in Peters was therefore to remove this authority from the Deputy and give it to the Court. Senior Judge Lush considered that the Peters undertaking was specific to that case, and noted that no such undertaking had been given in Mr Reeves' case; further "there is no obligation upon the Court of Protection to adjudicate as between the claimant and defendant, or the claimant and local authority on the issue of double recovery."

Senior Judge Lush then outlined his views as to the general position regarding such undertakings and the consideration of double recovery as follows:

"Notwithstanding the undertaking that was approved in Peters and other undertakings of a similar nature, I am of the view that the Court of Protection is no longer really the appropriate forum to adjudicate on matters of this kind. Its primary function is to act in the best interests of a protected beneficiary and, even though it would strive to be impartial, there may be a perception of bias for this reason. Furthermore, the close links which the court had with personal injury litigants generally were effectively severed when the Mental Capacity Act 2005 came into force on 1 October 2007, and the court's approval was no longer required in cases involving settlements out of court on behalf of incapacitated claimants. Additionally, the court no longer supervises deputies: that is one of the functions of the Office of the Public Guardian.

In the absence of any order of the Court of Protection restricting the authority of a claimant's deputy from applying for public funding of the claimant's care under section 21 of the National Assistance Act, the correct procedure would seem to be for the deputy to apply to the local authority and, if he is dissatisfied with the response he receives, to consider the merits of an application for judicial review."

Senior Judge Lush ordered that there be a departure from the ordinary costs rules because the Deputy was compelled to make the application by St Helen's Council on a misconceived basis. In view of the Council's conduct before as well as during the proceedings, he ordered that the costs of both parties be paid by the Council.

Comment: This judgment reinforces the OPG guidance that was already in place to the effect that Peters undertakings are not retrospective. It further reiterates the obligations upon property and affairs Deputies to ensure the maximisation of P's assets by drawing upon the resources of the state where appropriate – creating tensions that are already apparent in cases before the Court of Protection and are only likely to increase as public funding is squeezed.

Furthermore, the question of the validity of so-called Peters undertakings and of the appropriate forum to adjudicate upon issues of double recovery is a fraught one, and this judgment provides some welcome clarification as to the nature of disputes upon which Court of Protection will not adjudicate in this regard. In the views of the authors, serious questions arise about the extent to which the undertaking given in Peters was one that was properly accepted by the Court of Appeal. Those concerns go beyond the scope of this newsletter, but can be explained upon application; in summary, they relate to the extent to which the Court of Appeal had fully in mind both the complexities of the legislation governing community care provision and the role of Deputies under the MCA 2005. However, for present purposes, it is clear that the forum in which disputes as to how to prevent double recovery in future should be conducted is the civil court in which the personal injury claim is being advanced, rather than before the Court of Protection on any subsequent application by the deputy in line with a Peters undertaking.