Public money and double recovery

The Divisional Court in R. (on the application of CGT) v West Sussex CC [2026] EWHC 293 (Admin) has driven a further nail into the coffin containing arguments over whether local authorities may refuse statutory funding in cases where victims of injury have previously recovered awards said to compensate their care needs.

Following a catastrophic brain injury at the age of 3 months the claimant had been awarded over £3.5m by the Criminal Injuries Compensation Authority (of which £2.6m specifically related to future care). The payment was conditional upon C’s mother and litigation friend undertaking to the CICA that she would not apply for public funding unless the PI Trust could no longer provide for the claimant’s reasonable care needs.

C’s mother died. His father took over the deputyship and, on advice, applied for local authority funding. The local authority considered that the claimant’s care needs should be met by the PI Trust, which had not been depleted. Further the local authority applied to the Court of Protection for a restriction (designed to limit the father’s deputyship powers) similar in terms to the mother’s undertaking. In the meantime it did make some discretionary payments. The CoP subsequently refused the application.

The local authority sought to cease the discretionary payments and sought recovery of those paid on the grounds that, because compensation for care costs had been included in the CICA award, there would be double recovery.

Notably (unlike most PI claims) both sources of funds were from the public purse.

The claimant applied for judicial review on the ground that the local authority had acted unlawfully because its decision was contrary to the express terms of the regulatory framework (Care and Support (Charging and Assessment of Resources) Regulations 2014 Sch.2 para.15, Guidance issued pursuant to the Care Act 2014 s.78) which stipulated a disregard of funds available in the PI trust when assessing his capital resources.

The local authority sought to argue that,

(1) on its proper interpretation, the disregard in Sch.2 para.15 of the 2014 Regulations did not apply to funds identified as relating to care needs.

(2) relief should be refused because the court should seek to avoid double recovery: it would be unconscionable to grant the claimant a remedy in view of the mother’s undertaking and the claimant had suffered no harm or prejudice as the PI trust was available to fund his care needs.

The local authority’s arguments failed and C’s application for judicial review (quashing of the LS’s refusal to fund) was granted.

On the issue of statutory interpretation the High Court found against the local authority, unsurprisingly given that this path has been trodden before in relatively well known cases such as Peters v East Midlands SHA [2009] EWCA Civ 145, Firth v Geo Ackroyd Junior Ltd [2001] P.I.Q.R. Q4, [2000] and R. (on the application of Tinsley) v Manchester City Council [2017] EWCA Civ 1704, [2018] Q.B. 767. The statutory language was clear, unambiguous and unqualified and required totality of the PI trust (ie even that part specifically identified as care damages) to be disregarded.

Further, it was found that the undertaking given by C’s mother made no material difference because it was given in good faith, there was no deception being practiced by the father (because he had acted on advice) and such undertakings (which in any event had been given to the CICA not the local authority) had since been recognised as inappropriate and ineffective.

The second limb of the local authority’s argument also failed to find favour. The Court found no support in the authorities for the suggestion that it was the function of a local authority, when in receipt of a claim, to concern itself with the potential issue of double recovery. The Court also rejected the suggestion in relation to protection of the public purse, that different public bodies, with different sources of public funding, governed by different funding regimes, should be treated as if they were one.

Points of interest for practitioners

(1) Whilst guarding scarce resources is a laudable aim, the legal reality in cases where a local authority face an application for a care needs assessment is that they may not take account of any funds lying within a PI trust (irrespective of the fact that such sums were awarded in relation to future care).

(2) The control mechanisms against double recovery lie within the damages assessment process and not at some later stage. The key mechanism is to reduce the assessed damages to account for the risk of some local authority funding being obtained. This helps the tortfeasor but not any third party local authority.

(3) In a settled case (the majority of conclusions?) there can be contractual terms that provide a mechanism for repayment of state funding. Again this does not help any third party local authority.

(4) A further route has been canvassed in the form of seeking to limit the deputy’s power to apply for local authority funding without applying to the CoP – but such a mechanism has been deprecated – see Knight (BJB) v Barnsley Hospital NHS Foundation Trust [2024] EWCOP 59 (T2).

(5) Unless parliament chooses to intervene and amended the statutory language, local authorities remain exposed to compensated claimant’s seeking nonetheless to apply for state funding.

Gabriel Farmer is a barrister at Guildhall Chambers.