High Court orders council to pay costs after it agreed to reconsider financial assessment for man with needs for care and support

Bolton Council must pay costs in a dispute over a care package and disability-related expenditure (DRE) after Mr Justice Fordham said he was “unpersuaded” by the council’s list of reasons why it should not.

The case concerned Michael Sherratt, and was brought by his mother and litigation friend Stephanie Sherratt.

A hearing of the judicial review claim had been due on 19 March, but on 15 March the parties agreed a consent order, with agreed recitals and a joint statement of agreed reasons, leaving the court to determine the contested issue of costs.

Fordham J said in Sherratt, R (on the application of) v Bolton Council [2024] EWHC 699 (Admin) that the case involved Mr Sherratt having been assessed by Bolton as needing a care package costing £321.07 per week.

He receives a gross weekly income of approximately £191.30 per week, made up entirely of state benefits including disability-related benefits and Bolton assessed him as being required to make a contribution of £39.92 per week.

Mr Sherratt contended Bolton should have excluded from its assessment his gym membership, his personal assistant’s petrol, the assistant’s parking fees, costs of specific food items and the assistant’s lunches as all being disability-related expenses.

Bolton had responded: “Unfortunately, the guidance we have received is that none of the expenses submitted could be attributed to the plan and, on this basis, we are unable to alter our assessment of charge.”

Mr Sherratt exhausted Bolton’s internal complaints and appeals processes and the council said his next step ought to have been a complaint to the Local Government Ombudsman, not judicial review.

He did though seek orders quashing the financial assessment and a declaration that Bolton acted unlawfully by finding the various costs claimed were not in the support plan and taking into account the irrelevant consideration of transport costs being 'allowed for’ within the mobility element of the Personal Independence Payment.

Under the agreement reached, Bolton will withdraw the challenged financial assessment and carry out a fresh one, reimburse any costs wrongly charged and review its policies to ensure their compatibility with the Care and Support Statutory Guidance.

Mr Sherratt sought an order for the whole of his costs, but Bolton submitted there should be no order, as that would depart from the general principle that costs follow the event.

Fordham J said: “I am satisfied that it is the claimant's representatives who have identified the correct costs order in the circumstances of the present case.”

This was because the agreed outcome was “in substance – the relief which was pleaded in the judicial review claim”.

The analytical route by which that outcome had arisen was “in substance squarely reflective of the pleaded judicial review claim”.

Fordham J added: “I am able to see a clear symmetry between what the defendant came to agree in the reasons and recitals, and what would have been embodied in a judgment on the legal merits, written by me.

“On the face of it, the defendant had breached its basic public law duty to ask the legally correct question. The decision needed to be retaken lawfully. The statutory scheme makes provision for the specified needs identified by a needs assessment, within a care plan.”

He said the whole point of the statutory disregard of disability-related expenses was “to recognise that there can be amounts within a disability benefit which are not counted as income, for the purposes of assessing affordability, in deciding the level of contribution towards a local authority's care costs.”

This disregard was not limited to what is necessary for care and support but included needs not being met by the local authority.

Fordham J concluded: “I have a high level of confidence that this claim, to which no defence has ever been entered, would have succeeded on its legal merits.”

Bolton argued there should be no costs order as Mr Sherratt should have first gone to the Ombudsman.

It also said the claim should not have been sent using an automated email system which its system mistook as junk and delayed.

Fordham J said: “I have not been persuaded by these submissions. The defendant had ample opportunity to raise the question of 'alternative remedy'. That is a classic issue which can be ventilated at the permission stage.”

He said there was “no basis on which the defendant can properly criticise the claimant or his representatives”.

Law firm Irwin Mitchell suggested that the ruling could have significant implications for other families.

Gerard Devaney-Khodja, Public Law and Human Rights Lawyer at Irwin Mitchell, said: ““The news that the council has accepted the family’s points in respect of DRE isn’t just a victory for Steph and Michael, but for the wider community of people who care for adult family members with special needs.

“Michael has complex needs and without support provided by his family, support services and a personal assistant, he wouldn’t be able to live the normal life that’s key to his and his family’s wellbeing.”

He added: “We’re pleased the council have now recognised all the issues raised in respect of the financial assessment and DRE and have agreed now to review and reconsider their policies, given their decisions in this case went against both statutory guidance and their own.

“Many families rely heavily on these services and any failure to take DRE into account when assessing contributions to care can be financially devastating. This case is an important step in clarifying the duty councils have to recognise the flexibility enshrined in the statutory guidance and, in many cases, their own guidelines.”

Mark Smulian