Judge: Administrative Court (HHJ Stephen Davies sitting as a judge of the High Court)
Citation:  EWHC 2855 (Admin)
In this case P had received a large personal injury award in 2005 as a result of a serious brain injury. He had been compulsorily detained under the Mental Health Act 1983 so under s. 117 of the Act he was entitled to aftercare services on his discharge which the relevant authorities were not entitled to charge him for. (R v Manchester City Council ex parte Stennett  2 AC 1227).
At the trial of his claim, the defendant had argued that in the light of that, P could not claim damages for the sums that he needed for such after care. The judge at that trial (Leveson J as he then was) at paragraph 126 of his judgment held that it was not unreasonable for the claimant to refuse to accept local authority provision and so he was able to claim the full cost of private care (Tinsley v Sarkar  EWHC 192 QB).
At paragraph 122 of his judgment, however, Leveson J had appeared to suggest that the local authority could take into account a person’s resources when assessing their need for care under section 117.
After the award, P went into private care funded from his damages. Unfortunately, because of possible mismanagement of the award, P’s resources were not going to be adequate in the long term and so a new deputy applied to the relevant local authority and CCG for the provision of aftercare under section 117. They refused citing the fact that P had an award for that purpose. P brought proceedings for judicial review.
HHJ Stephen Davies upheld P’s claim, holding that the defendants could not use the fact of P’s award to refuse to provide for his admitted needs (see paragraph 26). It seems that he differed from Leveson J’s view that a local authority (or CCG) could take account of a person’s resources in the light of the Court of Appeal’s decision in Crofton v NHSLA  1 WLR 923. That was a decision on s.2 Chronically Sick and Disabled Persons Act 1970 and by reference to its functions under s.29 National Assistance Act 1948 but the judge held that the same principles applied, namely that the providing authority cannot take into account the personal injury award.
The defendants also argued that it was an abuse or against public policy to allow what in effect would be a double recovery. The judge rejected these arguments (paragraphs 36 and 39), interpreting Peters v E Midlands Strategic Health Authority  QB 48 as simply holding that it was no part of a deputy’s duty to make all applications for state funding and not authority for the proposition that a deputy should refrain from making such applications (see paragraph 35).
In Peters the Court of Appeal endorsed a method of avoiding double recovery by seeking an undertaking from a deputy not to seek state funding. Later Senior Judge Lush in Re Reeves  WTLR 509 held that in a case where there had been no Peters undertaking, there was no question of the Court of Protection restricting a deputy’s right to apply for all statutory benefits even where P had an award of damages to cover the care.
The practice in the Queen’s Bench Division now is that on a settlement that includes periodical payments, the defendant asks for and the court will approve what is known as a reverse indemnity. The deputy undertakes to inform the defendant’s insurer if he gets benefits that cover an aspect of the award (for example the funding of care) and in those circumstances, the insurer is entitled to reduce the periodical payments by the amount or value of the funding. In cases where there has not been a full award (because, say, of contributory negligence) the reduction is pro rata.
This only works where there are periodical payments and would not cover the problem that arose in this case (a shortfall because of mismanagement). Mismanagement of funds, however, is less of a danger where there are periodical payments.