R (on the application of ZYN) v Walsall Metropolitan Borough Council
| Jurisdiction | England & Wales |
| Judge | Mr Justice Leggatt |
| Judgment Date | 12 June 2014 |
| Neutral Citation | [2014] EWHC 1918 (Admin) |
| Docket Number | Case No: CO/4801/2013 |
| Court | Queen's Bench Division (Administrative Court) |
| Date | 12 June 2014 |
[2014] EWHC 1918 (Admin)
Mr Justice Leggatt
Case No: CO/4801/2013
IN THE HIGH COURT OF JUSTICE
QUEEN'S BENCH DIVISION
ADMINISTRATIVE COURT
Royal Courts of Justice
Strand, London, WC2A 2LL
Ian Wise QC and Maria Roche (instructed by Irwin Mitchell LLP) for the Claimant
David Lock QC (instructed by Walsall MBC) for the Defendant
Hearing dates: 14 April 2014
Introduction
The claimant, whom I will refer to as "ZYN", is severely disabled. She has a need for community care services, part of which is provided by the defendant local authority ("the Council").
ZYN has substantial capital assets, the present value of which is about £550,000, which derive from compensation paid in settlement of a personal injury claim. It is and has for many years been government policy that social care services are means tested and that people who have assets are required to contribute to the cost of services they receive from a local authority. However, there are certain exceptions to this policy.
The issue raised by this case is whether capital derived from a personal injury settlement which is managed by a deputy appointed by the Court of Protection must be disregarded by a local authority when deciding whether the injured person can be required to contribute to the cost of care services which he or she receives.
The Council's charging policy
With effect from 1 April 2011, the Council has sought to charge ZYN for the full cost of the social care services which she receives from the Council (currently £271.84 per week). The Council's published charging policy for non-residential care services, as revised on 31 July 2012, stated (in section 12):
"If a service user has over £23,250 in capital and savings, or chooses to fund their care themselves, or chooses not to disclose their financial circumstances to the council, they will pay the full cost of their care."
Although worded slightly differently, the policy applicable from 1 April 2011 until 31 July 2012 was to similar effect.
On 18 October 2012 the policy was again revised but an error was made in the wording of the relevant provision. The wording is about to be changed back to that quoted above. The Council has agreed that from 18 October 2012 until this happens it will not seek to recover the cost of the care services provided to ZYN. However, the Council is claiming such costs for the period from 1 April 2011 until 18 October 2012 and intends to do so again when the wording applicable during that period is reinstated.
There is no doubt that under the terms of the Council's charging policy quoted above the Council is entitled to charge ZYN for the full cost of the care services provided to her. It is her case, however, that the Council's policy is unlawful because in calculating the amount which ZYN has in capital the policy takes account of money derived from her personal injury settlement. ZYN maintains that, under the relevant legislation, the Council is required to disregard such capital. The Council disputes this.
The settlement
On 20 March 2003 the High Court approved a settlement in the sum of £500,000 of a clinical negligence claim brought on behalf of ZYN against Walsall Health Authority. After reimbursing certain costs of past care, the balance of the settlement money was transferred to the Court of Protection to be dealt with in the court's discretion.
The settlement was approved on the advice of eminent leading counsel, Mr Simeon Maskrey QC. A material consideration in deciding whether to accept the settlement offer, which represented only 20% of the value of the claim, was whether ZYN could be required by the local authority to contribute to the cost of her future care out of the funds received. Mr Maskrey QC advised that "on the current state of the legislation [ZYN] can expect to be cared for when the need arises without her settlement monies being touched."
It is agreed that (as would be expected) Mr Maskrey's advice, when given, was correct. The question which now arises, however, is whether the expectation that ZYN would be cared for without her settlement money being touched has been defeated by a subsequent change in legislation.
The relevant legislation is unduly complex and the path through it is convoluted. Before I can address the issues in this case, I must first chart the way through this legal maze.
The legal framework for charging for community care services
Local authorities have a duty to assess a disabled person's need for community care services under section 47 of the National Health Service and Community Care Act 1990. The Council has assessed ZYN under this provision and determined that she is entitled to receive such services under section 29 of the National Assistance Act 1948.
Section 17 of the Health and Social Services and Social Security Adjudications Act 1983 ("HASSASSA") confers on the local authority a discretion to recover charges from people to whom services under section 29 of the 1948 Act (amongst other provisions) are supplied.
The Secretary of State has issued guidance to assist local authorities in exercising their discretion under section 17 of HASSASSAA. This guidance, originally published in 2003, is called "Fairer Charging Policies for Home Care and other non-residential Social Services" ("the Fairer Charging Policy"). The Fairer Charging Policy deals in Section VIII with how and to what extent a local authority should take into account capital assets. The Council accepts that this is guidance under which it is required to act by section 7 of the Local Authority Social Services Act 1970.
The Fairer Charging Policy (June 2013 edition) states:
"61. Councils may take account of a user's savings or other capital in assessing their resources, but are not obliged to do so. …
62. Savings may be taken into account to calculate a tariff income on the same basis as set out in the Charges for Residential Accommodation Guidance (CRAG) in LAC(99)9. Users with savings of more than the upper limit may be asked to pay a full charge for the service. These savings levels will be updated automatically in line with any uplifts in CRAG. Councils may wish to set higher savings limits or more generous charging policies than those specified in CRAG for users with savings, but should not set lower limits.
63. The value of the main residence occupied by the user should not be taken into account for charges for non-residential services, but other forms of capital may be taken into account, as set out in CRAG."
The effect of these provisions was considered by the Court of Appeal in Crofton v NHS Litigation Authority [2007] 1 WLR 923, where Dyson LJ said at para 76:
"This wording is not happily expressed. But in our view it means that the CRAG rules for determining what capital should be taken into account are imported in their entirety, on the footing that local authorities have a discretion to treat a person's capital more generously. It follows that, if CRAG stipulates that certain items of capital are to be disregarded, then the Fairer Charging Policy requires the local authority to exercise its discretion in the same way."
The reference to "CRAG" is a reference to the "Charges for Residential Accommodation Guidance" which contains detailed guidance on how charges should be calculated for the purposes of the provision of accommodation under section 21 of the 1948 Act. Although this is a different regime from the provision of services under section 29, the effect of the Fairer Charging Policy, as interpreted by the Court of Appeal, is that the CRAG rules are to be applied in both cases.
Paragraph 1.012 of CRAG requires the local authority to assess a person's ability to pay by using The National Assistance (Assessment of Resources) Regulations 1992 ("the 1992 Regulations"). Regulation 21 of the 1992 Regulations provides that the whole of a person's capital is to be taken into account, save that there shall be disregarded any capital, where applicable, specified in Schedule 4.
Schedule 4 to the 1992 Regulations sets out various categories of capital that must be disregarded. These categories include personal injury trusts and certain personal injury payments, which are not relevant in this case. They also include, in paragraph 19:
"Any amount which—
(a) falls within paragraph 44(2)(a), and would be disregarded under paragraph 44(1)(a) or (b), of Schedule 10 to the Income Support Regulations;"
The reference to the "Income Support Regulations" is a reference to the Income Support (General) Regulations 1987 (as amended). Paragraph 44 of Schedule 10 to the Income Support Regulations refers to:
"(1) Any sum of capital to which sub-paragraph (2) applies and—
(a) which is administered on behalf of a person by the High Court or the County Court under Rule 21.11(1) of the Civil Procedure Rules 1998 or by the Court of Protection; [or]
(b) which can only be disposed of by order or direction of any such court …
(2) This sub-paragraph applies to a sum of capital which is derived from—
(a) an award of damages for a personal injury to that person; …"
The issues in this case all turn on the meaning of this provision (which I shall refer to simply as "paragraph 44").
The Court of Protection
Paragraph 44(1) includes a reference to the "Court of Protection". At the time when the High Court approved the settlement of ZYN's personal injury claim, the Court of Protection was established under Part VII of the Mental...
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