Funding care in Personal Injury cases
The question of who foots the bill for care expenses following a personal injury claim is an ongoing debate. It has severe financial impact on the defendant’s insurers and a long term effect on the claimant’s care which is why it is debated so fiercely.
At MyClaim we have a panel of solicitors who work closely with the private and public sector to enable victims to get the appropriate treatment and we look for the cost to be met by the insurers.
The basis of compensation for personal injury is to ensure that as far as possible the claimant is put in the position he/she would have been in had the injury not occurred.
It has been the defendant’s case that in order to mitigate loss the claimant should seek care from the NHS and local authority rather than opting for private care at an additional cost.
The issues in this debate are whether the claimant should be allowed to opt for private care rather than dependence on local authority provisions and if so, how can double recovery be avoided?
Statutory Background
The NHS has an obligation to provide for the ongoing nursing care needs of a claimant free of charge (with a few exceptions such as prescriptions) under section 1(2) NHS Act 1977.
The local authority has an obligation to provide residential accommodation for adults who require it due to “age, illness, disability or any other circumstances” under section 21(1) National Assistance Act 1948. Additionally, under section 29(1) National Assistance Act 1948 the local authority has a power to provide domiciliary welfare to residents in their area and where those residents can be cared for in their own homes.
Under section 22 National Assistance Act 1948 the local authority must recover the full costs for residential accommodation subject to means testing of the service user. Awards of damages will be treated as capital sums and would normally exceed the capital limit resulting in the claimant having to pay for residential services. There are circumstances where awards may be disregarded. These include where they are administered by the Court of Protection or the High Court, if they are held in a personal injury trust or if they are used to purchase an insurance annuity.
Similarly in relation to domiciliary care there is also a general power for the local authority to recover “such charge (if any) … as they consider reasonable” which is again subject to means testing. On the face of it, the same rules for capital disregard appear to apply to domiciliary care as for residential care.
Burden of proof
The onus is on the defendant to show that the local authority would meet the claimant’s reasonable care needs in the future as in the case of Walton v Calderdale Healthcare NHS Trust [2005] in which it was held that the defendant failed to discharge the onus as they called no evidence regarding what care the authority would provide. Similarly in the case of Godbold v Mahmood [2005] the defendant was ordered to fund all future care for failing to provide adequate evidence regarding the local authority’s eligibility criteria.
‘Top ups’
If the local authority levies a charge on the care that the claimant has to pay then previously this has been dealt with by way of a ‘top up’. In Sowden v Lodge [2005] the Court gave guidance on how to approach the interaction between state funded care and damages awards. They advised to look at what care the claimant reasonably requires and what care the local authority can provide. To the extent that the local authority provision is less that what is reasonable the defendant insurer could top up. The top up stance was also adopted in the case of Crofton v NHSLA [2006] where the local authority confirmed that it would continue to fund the basic care needs of the claimant which would be topped up by the defendant’s payments.
The claimant’s choice
The debate then developed in the case of Freeman v Lockett [2006] where the claimant had been receiving direct payments from the local authority whilst liability was in issue. The defendant argued that it would be failure to mitigate her loss if the claimant did not continue to claim local authority funded care and the defendant offered to pay the top up element. The claimant rejected this as she did not want to be dependant upon state funded care. Tomlinson J was astonished at the proposition that where there was an insured defendant able to meet the future care need, the claimant should instead be forced to accept an uncertain future with state funded care. He further stated that “I recoil from the notion that failure to avail oneself of a state benefit could in the circumstances be characterised as an unreasonable failure to mitigate loss. I should have thought that such conduct was praiseworthy and moreover calculated to contribute to the sense of wellbeing of the person concerned.”
The development of the case of Peters v East Midland SHA and Nottingham City Council [2009] has been a welcome one following the comments made by the Court of Appeal. This case was one of clinical negligence and the issue being whether the costs of the claimant’s care and accommodation should be borne by the health authority as tortfeasor, or by the local authority charged with the statutory duty of making arrangements for providing care and accommodation. The claimant was in a residential home which was more expensive that that of a local authority residence and the claimant’s future there was dependent on funding.
The Court of Appeal stated “we can see no reason in policy or principle which requires us to hold that a claimant who wishes to opt for self funding and damages in preference on the statutory obligations of a public authority should be not be entitled to do so as a matter of right”
Hopefully this case has settled the argument about the claimant’s choice in their own future care.
Double recovery
The issue that arises where damages are awarded for the cost of care is the prospect of double recovery. This will occur where the claimant is successful in obtaining damages for the future cost of care but is also entitled to rely on the care of the local authority. In the case of top ups the issue of double recovery is not relevant as the claimant is receiving the local authority care and the defendant is paying the additional top up.
In the case of Freeman v Lockett [2006] the claimant made it clear to the court that she was prepared not to claim local authority funding if the care was funded by the defendant so that there could be no double recovery which appeared to be satisfactory.
In the case of Peters v East Midland SHA and Nottingham City Council [2009] the case had been brought by the Deputy of the claimant. The Court of Appeal confirmed “…we would have held that the judge was entitled to take the view that the possibility of double recovery was effectively eliminated by his find that, if the tortfeasors paid the care and accommodation costs, (the deputy) and her successor(s) would not require the Council to discharge is statutory duty under section 21 of the NNA in the absence of some wholly unexpected development which compels her to abandon her stated intention to rely on private funding. “ The Court of Appeal further confirmed that this was the finding that was made in Freeman v Lockett [2006] and was said in Crofton v NHSLA [2006] “to be a proper finding to make”
In the case of Peters v East Midland SHA and Nottingham City Council [2009] in fact the court found that they could limit the event of double recovery by amending the court order pursuant to which the deputy was acting.
Practical conclusion
The case of Peters v East Midland SHA and Nottingham City Council [2009] is hoped to have put an end to the debate as the judge’s were very clear in their comments about care and the claimant’s reasonable needs and preferences. However, this is yet to be seen as it will be the financial implications on the defendant and local authority that will ultimately be at large. In cases involving serious injury where long term care is a factor, it is important that legal advice is taken as soon as possible. Early legal intervention will enable dialogue to take place with the third party insurers to ensure that the claimant receives private funded care and treatment and is not made reliant upon the state for such.
If you wish to discuss the issues raised in this Article please do not hesitate to contact us on 0800 731 2586