Islington London Borough Council v University College London Hospital NHS Trust
| Jurisdiction | England & Wales |
| Judge | Lord Justice Clarke,Mr Justice Ouseley |
| Judgment Date | 16 June 2005 |
| Neutral Citation | [2005] EWCA Civ 596 |
| Court | Court of Appeal (Civil Division) |
| Docket Number | Case No: B3/2004/1723 |
| Date | 16 June 2005 |
[2005] EWCA Civ 596
IN THE SUPREME COURT OF JUDICATURE
COURT OF APPEAL (CIVIL DIVISION)
ON APPEAL FROM
THE HIGH COURT OF JUSTICE
QUEEN'S BENCH DIVISION
MR JUSTICE DOUGLAS BROWN
Lord Justice Buxton
Lord Justice Clarke and
Mr Justice Ouseley
Case No: B3/2004/1723
Mr A Underwood QC and Mr K Rutledge (instructed by Director of Law and Public Services, London Borough of Islington)
for the Appellant
Mr S Miller QC and Miss C Neenan (instructed by Hempsons) for the Respondent
Buxton LJ:
The nature of the case
Mrs J, as I will call her, was injured through the negligence of the defendants [UCH] and as a result of that disability was provided with residential care by the claimants [Islington], acting under their statutory duty to persons in Mrs J's position. A local authority is under a duty to charge for such accommodation unless, as was the case with Mrs J, the accommodated person is unable to pay. She remained in such care from 18 June 1998 until September 2003, when she moved to live with, and be cared for by, her daughter. In November 2002 UCH reached a settlement with Mrs J for the payment to her of substantial damages in respect of its negligence; which damages necessarily did not include any compensation for Mrs J for care which she had received free of charge. It was Islington that bore the cost of Mrs J's care, and Islington now seeks to recover that cost from UCH by an action in negligence. Douglas Brown J, hearing a preliminary point, held that as a matter of law Islington has no claim. The appeal from his ruling has raised a number of difficult issues, which it is necessary to expound in some detail.
Background
The history of the case, and an account of the relevant legislation, was very accurately set out by the learned judge, to the extent that it is not necessary for me to do more than quote it verbatim:
"1. This case concerns the care costs for a lady who it is agreed should be called Mrs J. She was born in April 1923 and in 1995 was diagnosed with rheumatic mitral valve disease and in January 1996 began taking Warfarin, an anticoagulant. The purpose of treating her with Warfarin was to reduce the risk of a cardiac embolus. She was due to be admitted to Middlesex Hospital on 13 th February 1998 for mitral valve replacement and she was told at the hospital to stop taking her Warfarin a week before the operation in readiness for that. The operation was cancelled and she was told of that on the 11 th February 1998 and told by the cardiac surgeon's secretary not to recommence her Warfarin. Shortly after that she developed pains in her legs and enquired of the hospital by telephone as to whether that could be connected to the lack of Warfarin. She was told that it could not be and she should not start taking it again.
2. On 22 nd February 1998 Mrs J suffered a large right hemisphere cerebral infarct (a stroke) following a cardiac embolus. The result of the stroke was that Mrs J became dependant on others for her care.
Mrs J's Litigation
3. On 7 th February 2001 Mrs J commenced proceedings against the Defendant Hospital Trust and for the purposes of those proceedings she was a patient. In its defence dated 5 th July 2001 the Defendant Hospital Trust admitted in these proceedings that her stroke was caused by its negligence. The evidence for the Defendant in the instant proceedings is that negligence was that of a temporary secretary working for the cardiac surgeon.
4. A structured settlement of Mrs J's claim was entered into on 28 th September 2003. Up to then she had been cared for by the Claimant Local Authority in residential care under the provisions of Section 21 of the National Assistance Act 1948. In summary the structured settlement enabled Mrs J's daughter to buy a house in which to care for her together with the sum of £40,000 a year payable so long as she remained in the care of her daughter. All the sums payable under the settlement are paid into the Court of Protection.
The Present Proceedings
5. The total net cost of caring for Mrs J to the Local Authority was £81,210.94. I will refer to the statutory provisions shortly but in summary under the 1948 Act the Local Authority were under a duty to provide residential care for her if she needed it and it was not otherwise available. The Local Authority were under a statutory duty to charge Mrs J for the care provided to her or at least to assess her ability to pay for that care but in so doing they were bound to disregard the compensation under the settlement for the purposes of calculating her liability to pay. In consequence Mrs J could not recover the care costs from the Defendant because she was not herself liable to pay them. She therefore suffered no loss resulting from these care costs and indeed made no claim in her proceedings for those costs. The Local Authority's case is therefore based on the assertion that the Defendant Hospital Trust has escaped liability to pay for Mrs J's care costs because her means were such that she had to rely on Local Authority care. If her care provision had been otherwise available to her from her family or as a result of her own financial ability to pay for her residential care she would have been able to recover the care costs from the Defendant and the Local Authority would not have borne the care costs. In these proceedings the Local Authority seek to recover the care costs from the Defendant basing its claim in the tort of negligence. The Defendant denies liability primarily on the ground that there was no duty of care. Accordingly, by agreement, Master Yoxall on 4 th February 2004 ordered the trial of a preliminary issue, namely:
"Whether a duty of care was owed to the Claimants by the Defendant not negligently to injure Mrs J so as to cause damage in the form of care costs"
The Law in Relation to Care Provision
6. Section 21 (1) of the National Assistance Act 1948 provides:
"Subject to and in accordance with the provisions of this part of this Act, a Local Authority may with the approval of the Secretary of State, and to such extent as he may direct shall, make arrangements for providing (a) residential accommodation for persons aged eighteen or over who by reason of age, illness, disability or any other which is not otherwise available to them…"
7. This power was converted into a mandatory duty by directions given by the Department of Health in 1993 [LAC (93) 10]. By paragraph 2(1)(b) of this directive the Secretary of State directed Local Authorities to make arrangements under Section 21(1)(a) of the Act in relation to "persons who are ordinarily resident in their area and other persons who are in urgent need thereof". It is not necessary to refer further in detail to the statute or to the regulations made under it. (The National Assistance (Assessment of Resources) Regulations 1992 and the Income Support (General) Regulations 1987). For the purposes of this litigation the position can be summarised in this way.
i) A Local Authority must provide residential accommodation to a person they consider to be in need thereof who is ordinarily resident in their area and which is not otherwise available to him. See National Assistance Act 1948 Section 21 (1)(a): L.A. C.(93) 10 paragraph 2(1)(b).
ii) The accommodation provided in accordance with that duty should normally be in premises managed by the Local Authority but may be in premises of voluntary organisations or other persons: National Assistance Act 1948 Section 21(4) and Section 26. It is the case that Mrs J was in fact cared for in premises other than those managed by the Local Authority.
iii) In deciding whether a person is "in need" for the purposes of the 1948 Act and if so in determining what type of accommodation could meet such need, the Local Authority may have regard to it's resources: see R v Gloucester County Council ex parte Barry [1997] A.C. 584. Further the Local Authority may also treat resources as relevant to deciding between types of accommodation provided that each meets the individual's need: see e.g. R (Mokoko Batantu) v Islington LBC [2004] C.C.L.R. 445.
iv) Where accommodation is provided to a person in accordance with the 1948 Act the Local Authority providing it must recover from him payment for that accommodation either at the standard rate or at such other rate as the Local Authority shall determine: National Assistance Act 1948 Section 22(1) and 22(3).
v) In assessing a person's ability to pay, the Local Authority must disregard in calculation of both his capital and income the funds of any trust which are derived in payment made in consequence of any personal injury to that person, the value of the trust fund and the value of the right to receive any payment under that trust including sums administered by the Court of Protection: see National Assistance Act 1948 Section 22(5); National Assistance (Assessment of Resources) Regulations 1992, Regulations 21(2) and Schedule 4 paragraphs 10 and 19: The Income Support (General) Regulations 1987, Schedule 10 paragraphs 12 and 44(a)."
The issue shortly stated
Although Islington has a statutory duty to recover the cost of care where it is possible to do so, it could only recover virtually nominal amounts (related to her payments of income support) from Mrs J. That was the case in any event before an agreement was reached between Mrs J and UCH as to the payment of damages to her. And it remained the case after that agreement. Islington could not count those damages as part of Mrs J's capital or income because, under the...
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