Re Various Applications in respect of ‘Direct Payments’

Summary[1]

In Lumb v NHS Humber & North Yorkshire ICB [2024] EWCOP 57 (T2), HHJ Hilder held that managing direct payments under the National Health Service (Direct Payments) Regulations 2013 did not fall within the ‘general authority’ of a property and affairs deputy, because complying with those Regulations required some decisions of a welfare type to be made.  She held that the Court of Protection could confer authority to manage such payments, but that authority would have to draw on both the welfare and the property and affairs ‘streams’ of its jurisdiction.

Those who hoped that Lumb would turn out to be a one-off, confined to NHS direct payments, will be disappointed by HHJ Hilder’s 70-page judgment in this case. That judgment has already prompted the Senior Courts Costs Office (SCCO) to issue guidance of its own, discussed at the end of this summary.

Seven professional deputies from four firms brought the applications. All were already managing direct payments in what they considered to be their capacity as deputies, and none was willing to do so outside a deputyship appointment. They “unanimously contend[ed] that the Lumb decision was wrong in its conclusion that welfare-decisions are involved in the process of managing Direct Payments in accordance with regulatory requirements”, and sought retrospective and prospective authority, if they did not already have it (paragraph 3). The applications were heard together but not joined. The Public Guardian was joined as respondent, and the Official Solicitor acted as amicus curiae.

HHJ Hilder referred to the person benefitting from the payments as P, to the public body which “foots the bill” as F, and to the person who receives and manages the payments as R. That identification is continued here.

The fundamental dispute

The deputies’ core argument was that the role of R is “operational.” On this view, R implements a care plan decided on by the public body, and the role is ancillary to property and affairs authority, falling within the proposition in Re ACC [2020] EWCOP 9 at paragraph 53.7(c) that a property and affairs deputy’s authority “does encompass the application of P’s funds to meet the costs of care arrangements.” The Public Guardian and the Official Solicitor both considered that some welfare-type authority was required, save possibly in the case of certain SEN nominees.

HHJ Hilder first concluded that, even if the deputies were acting purely operationally (which she doubted, noting the disputes about adequacy of funding in which several had become involved), management of direct payments could not fall within the ‘general authority’:

65. With the benefit of extensive argument, it seems to me difficult to say that management of Direct Payments within a regulatory scheme is an ‘ordinary’ part of managing property and affairs. Even viewed as a purely administrative function, ‘operational’ management of Direct Payments is a specific, distinct responsibility, easily identifiable, and involving complexities which are not of a ‘day to day’ type – such as deployment of funds within specific constraints, engagement with the paying public authority to satisfy that authority that the constraints are observed, and the repayment obligations. These (and other) aspects of managing Direct Payments are not ‘ordinary’ features of managing an estate, large or small. […]

67. Further and relatedly, I agree with the Public Guardian that, whether or not the applicant deputies have indeed been acting purely ‘operationally’, such description does not answer the fundamental dispute in these proceedings, which is what the role of R properly requires. If Direct Payments are to be managed via deputyship, the authority conferred by the Court of Protection must be sufficient to enable the Deputy to discharge the role fully as conceived by the relevant regulations, not how the applicant deputies say they have interpreted it to date.

HHJ Hilder declined to depart from Lumb in relation to the NHS Regulations. However, she recognised that the other three schemes are “much less prescriptive” about what is required of R. Ultimately though, the judge found that all of them are underpinned by the same ‘choice’ agenda. Paragraph 10.2 of the Care and Support Statutory Guidance was, she said, “particularly challenging to the approach of the applicant deputies” (paragraph 72(a)). Having looked at the care plans in each of the seven cases, she concluded:

73. […] I cannot agree with the applicant deputies that they are ‘prescriptive’ to the point of rendering R’s role simply a question of applying funds as directed. There is a great deal of leeway remaining as to how the specified extent of support is made manifest. The applicant deputies themselves acknowledge that this is the key advantage to Direct Payments. As the Official Solicitor notes, perhaps the decisions involved are not ‘high level’ and are being made in collaboration with others. Nonetheless, Rs are still making welfare-type decisions when, in accepting the role at all, they indicate their judgment that Direct Payments are an appropriate way of meeting P’s needs for care and support; and thereafter, when they actually deploy the Direct Payments.
74. I am concerned, with the Public Guardian, that a purely ‘operational’ interpretation of the role of R fails to recognise the underlying purpose of Direct Payments, renders the ‘choice’ agenda illusory, and thereby does P a disservice.
75. So I conclude that, in all of the Direct Payment schemes currently under consideration, some authority beyond what is incorporated in the ‘general’ authority of a property and affairs deputy, and beyond simply ‘operational’ management of money, is required if Direct Payments are to be managed within deputyship.

The 24 questions

HHJ Hilder then answered 24 questions that the parties had agreed. In summary:

Can deputies be authorised at all (Q1–Q2)? Yes, but only for P aged 16 or over. Acting as R involves some welfare-type decision-making. Since s.2(5) MCA 2005 prevents welfare powers being exercised in relation to under-16s, “[i]t is the substance of the authorisation that matters, and welfare-type decisions for under 16s are not the province of the Court of Protection” (paragraph 83).

For younger Ps, such as children who sustained brain injuries at birth, public bodies, families and case managers may therefore need to consider the alternative identified in Lumb, under which a case manager acts as R.

Under the NHS and Care Act Regulations, a deputy cannot simply “stand in the shoes of P” to request direct payments. Instead, the deputy must use the route provided by the regulations for an incapacitated person. Under the SEN and Children Act Regulations, however, an appropriately authorised deputy can make the request for a P aged over 16.

What does standard authority cover (Q3–Q5)? Very little in relation to direct payments. A standard-terms property and affairs deputy is not generally authorised to request direct payments, negotiate whether they are sufficient, or use and manage them. The exception is the preparation of employment contracts for directly employed carers, which has been within general authority since Re ACC.

HHJ Hilder rejected the deputies’ attempt to rely on Re ACC as authority for two broader tasks: negotiating public funding and arranging private care packages. As she put it, “‘negotiating sufficiency’ cannot sensibly be described as an administrative task” (paragraph 94).

What form of authority is required (Q6–Q10)? The authority is a mixture of property and affairs and health and welfare powers. A trust corporation cannot therefore be given the authority, because s.19(1)(b) MCA 2005 permits a trust corporation to be appointed only in relation to property and affairs. Nor would it be appropriate to confer the authority on an individual director of a trust corporation deputy, given the practical difficulties of having two decision-makers.

HHJ Hilder set out model wording in Schedule 1 to the judgment:

The deputy is authorised to consent to, receive and manage Direct Payments made for the benefit of [P] by any statutory body, in accordance with the requirements of relevant regulations. In order to give effect to this authority the Deputy is in particular authorised to:

(i) request a statutory body to carry out an assessment of [P]’s needs;

(ii) request a Personal Budget or a Personal Health Budget for P;

(iii) request Direct Payments as a means of a statutory body meeting its obligations to provide care and/or support for [P];

(iv) make representations to the statutory body making or proposing to make Direct Payments for the benefit of [P] as to i. whether [P]’s welfare would be best promoted by that statutory body making direct payments or not, and/or ii. whether the statutory body’s decision as to the level of direct payments or nature of the services included in any care plan is sufficient for [P];

(v) exercise any rights which are available to the recipient of Direct Payments within the relevant regulations to seek and/or participate in a review or re-consideration of the statutory body’s decision(s) or care plan;

(vi) to use or apply the Direct Payments, which may include by way of direct employment of carers, in the best interests of [P] and subject to compliance with any conditions applicable as specified by the relevant statutory body or/or the relevant regulations.

(For the avoidance of doubt, nothing in this order authorises the deputy to appeal, or instigate proceedings for judicial review of, any decision made by the statutory body in respect of Direct Payments without further order of the Court.)

Where this authority is included in a new deputyship order, the words “AND MANAGEMENT OF DIRECT PAYMENTS” should be added to the title. An existing deputy can instead apply for a free-standing order.

Agency, indemnity and remuneration (Q11–Q12). A deputy can act as principal when employing carers. This enables the deputy to meet the requirements of the NHS and SEN Regulations while remaining entitled to an indemnity from P’s estate under s.19(6). The usual rules on expenses and remuneration continue to apply.

HHJ Hilder nevertheless repeated her observation in Lumb that a capacitous person receiving direct payments would not ordinarily pay someone to manage them. It is therefore difficult, at least as a starting point, to see why P should bear the cost of doing so.

Case managers (Q13). A standard property and affairs deputy cannot appoint a case manager as R under the regulatory schemes. The case manager must obtain that role independently. The deputy can, however, engage a case manager and pay them from P’s funds to manage the direct payments. The deputies told the court, with some candour, that very few case managers were willing to take on this role.

Applications and best interests (Q14–Q15). An application should address the alternatives and P’s best interests. Schedule 2 to the judgment identifies 13 matters that should be addressed in the evidence. Before applying, a deputy should consider whether someone else could act as R and ask F whether it will meet the deputy’s costs. F’s response is not, however, a precondition to making the application.

HHJ Hilder was emphatic that deputyship management is not a “last resort.” Where more than one person could act as R, the decision should be made in P’s best interests, “without hierarchy other than that which follows from the regulations themselves” (paragraph 151). Relevant considerations include familiarity with P, the cost to P, and administrative competence and convenience.

F does not need to be formally notified. HHJ Hilder endorsed an agreed, non-exhaustive list of best interests factors but declined to set a financial threshold below which an application would automatically be disproportionate. As she explained, “[s]uch thresholds always age poorly as costs rise over time” (paragraph 162).

Retrospective authority and costs (Q16–Q21). Deputies who have managed direct payments without specific authority, and charged for doing so, must seek retrospective authorisation. Such an application is “in substance an application for relief from liability” (paragraph 164).

A current deputy does not need to seek ratification of a former deputy’s management. The deputy should, however, consider whether it would be in P’s best interests to apply to recover the former deputy’s costs.

As to the relevant cut-off date, HHJ Hilder held:

170. […] The Lumb [2024] decision was the first occasion when the Court was called upon to consider, and deputies were put on notice of the Court’s view as to, the scope of deputyship authority required for management of Direct Payments. In my view, the proportionate approach is to regard the date of the Lumb judgment – 11th October 2024 – as the long-stop date from which applications for retrospective authority are required in respect of cases involving Direct Payments from any of the various schemes.

Accordingly, the answer to Q19 was that, subject to case-specific factors arising from the judgment, retrospective approval is not required for steps taken or costs incurred before 11 October 2024.

For costs already finally assessed by the SCCO, the answer to Q20 was ‘no’: it is neither necessary nor proportionate to seek to reopen the assessment. The only available route would be an appeal out of time, and “it is likely to be a rare case in which it is in P’s best interests to re-open an assessment” (paragraph 175).

Bills already awaiting assessment should not be withdrawn. Instead, HHJ Hilder suggested that deputies notify the SCCO which outstanding bills contain claims requiring retrospective authorisation.

The costs of managing direct payments should be identified on a “but for” basis. Thus, for example, the employment costs of a care team that was already privately employed before direct payments began are not costs incurred in managing the direct payments.

Supervision (Q22–Q24). Full welfare supervision by the OPG is not required. The welfare elements of the authority are “circumscribed by the relevant regulations” (paragraph 192). The deputy’s supervision report should nevertheless explain what decisions have been made about direct payments and why.

The OPG estimated that around 750 property and affairs deputies are currently involved in managing direct payments (paragraph 189). Its supervision extends only to deputyship functions. It does not, therefore, supervise a person who manages direct payments in their personal capacity.

HHJ Hilder concluded with an observation of wider significance:

201. It is within the jurisdiction of the Court of Protection to appoint a deputy with authority to make decisions of a type which involve a mixture of both the property and affairs, and the health and welfare, streams of the Court’s jurisdiction. The separation of work streams in the Mental Capacity Act 2005 and in court processes is only a matter of workability and convenience. It does not reflect how people lead their lives, and it does not restrict the Court’s ability to respond to lived experience.

The individual applications were not finally determined. The parties were invited to agree a draft order setting out the further directions required in light of the judgment.

The SCCO guidance

As HHJ Hilder anticipated, the SCCO has now issued its own guidance, Senior Courts Costs Office Guidance. It proceeds on the basis that retrospective authority is required where a deputy has claimed costs for managing direct payments from 11 October 2024 onwards. Where a final costs certificate has already been issued, it simply refers practitioners to Q20 of the judgment. Otherwise the guidance provides clarity on what would happen.

Comment

HHJ Hilder’s central reasoning is hard to fault. Direct payments exist to give choice and control to the person receiving care, or to someone properly authorised to act for them. If whoever controls the payments is treated as doing no more than paying for a care package someone else has designed, that choice becomes “illusory”. The deputies’ own case also contained a tension. They wanted to manage direct payments because of the flexibility and continuity of care those payments allow. But someone has to exercise that flexibility, and doing so inevitably involves judgements about how P is cared for.

Paragraph 201 is a welcome recognition that the line between property and affairs and health and welfare is drawn for administrative convenience, not because people live their lives that way. It may prove relevant wherever the two jurisdictions overlap, and deputies and the OPG will need to think through its implications. The judgment does not expressly address s.16(4) MCA 2005. However, the tightly drawn model wording, and the emphasis on the welfare element being “circumscribed by the relevant regulations”, go some way to meeting any concern that welfare decision-making is being handed to deputies too readily.

The practical consequences are nonetheless considerable:

• On the OPG’s estimate, some 750 property and affairs deputyships involve direct payments. Each will need specific prospective authority and, for the period from 11 October 2024, may need retrospective authority as well. The cost will generally fall on P’s estate.
• Trust corporation deputies, common in the personal injury field, cannot hold the authority at all. They will have to hand the role to an individual deputy or rely on the case manager route in Q13. The deputies’ evidence was that few case managers are willing to take that role on.
• Deputyship is not available for under-16s, so solutions will have to be found outside the court, along the lines identified in Lumb.

The SCCO guidance sensibly follows HHJ Hilder’s suggestion at paragraph 179 that affected bills be paused rather than withdrawn. Two points arise:

• The guidance treats 11 October 2024 as a bright line. The judgment, however, qualified its answer to Q19 with the words “unless there are case-specific factors which become apparent in light of this judgment”. Deputies should not treat the guidance as conclusive on whether earlier periods need retrospective authority.
• It is to be hoped that the model wording and the Schedule 2 checklist will allow most applications that now need to be made to be dealt with quickly on the papers. Deputies can help by applying promptly and addressing Schedule 2 in full from the outset.

Finally, HHJ Hilder was clear that management of direct payments by a deputy is not a “last resort.” Where more than one person could act as R, choosing between them is itself a best interests decision, with no hierarchy beyond what the regulations provide. The judgment undoubtedly adds a significant procedural burden. Its purpose, though, is to ensure, in the Official Solicitor’s words, that “the machinery of the MCA does not have the effect of inhibiting or restricting choice of individuals in so important a domain as care provision.”

[1] Tor and Arianna having been involved in the case, they have not contributed to this note.