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Claimant wins case over personal injury damages and social care charging policy

A council’s charging policy for social care services has been found unlawful because it took account of capital derived from a claimant's personal injury settlement.

In ZYN, R (On the Application Of) v Walsall Metropolitan Borough Council [2014] EWHC 1918 Mr Justice Leggatt said Walsall Metropolitan Borough Council had been wrong to take account of some £550,000 held by local resident ‘ZYN’, who was severely disabled and had most of the money from compensation paid in settlement of a personal injury claim.

The judge said the High Court in 2003 approved a settlement of £500,000 in a clinical negligence claim brought on behalf of ZYN against Walsall Health Authority.

After reimbursement of certain costs of past care, the balance of the settlement was transferred to the Court of Protection to be dealt with in the court’s discretion.

The settlement offer, representing 20% of the value of the claim, was accepted in March 2003 on the basis that ZYN could expect to be cared for when the need arose without the settlement monies being touched.

The Court of Protection had appointed a receiver in March 2002 to manage ZYN’s affairs.

“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 judge said.

He added: “The relevant legislation is unduly complex and the path through it is convoluted.”

A court order in 2008 transferred the functions of the receiver to those of a deputy under the Mental Capacity Act 2005.

The deputy was permitted to withdraw up to £50,000 a year from ZYN’s monies without prior approval from the court. However, Walsall’s policy was that service users with over £23,250 in capital and savings should pay the full cost of their care.

Paragraph 44 of Schedule 10 to the Income Support Regulations 1987 said that certain amounts should be disregarded from assessments. These included sums “administered on behalf of a person by the High Court or the County Court….or by the Court of Protection” and which “could only be disposed of by order or direction of any such court”.

Walsall’s case in part was that the reference to the ‘Court of Protection’ in the relevant legislation was to the now defunct Court of Protection constituted under the Mental Health Act 1983 and not its successor under the Mental Capacity Act 2005, which is a different body with the same name.

But the judge said Parliament must have left the term unchanged advisedly and “any ambiguity…should be resolved by construing it in a way which accords with Parliament's presumed understanding of its meaning and which treats it as having current effect rather than as an empty legacy of an earlier regime which has been left uselessly on the statute book.”

Finding that the settlement monies should be disregarded, Mr Justice Leggatt concluded the term ‘Court of Protection’ in paragraph 44 of Schedule 10 to the Income Support Regulations was “apt to refer to the current Court of Protection”.

The judge also rejected the authority’s argument that the deputy administered property on behalf of Z rather than on behalf of the court and that since the deputy could dispose of £50,000 without an order of the court, that sum did not fall within paragraph 44.

Ian Wise QC and Maria Roche of Doughty Street Chambers acted for the claimant, instructed by Irwin Mitchell. The council instructed David Lock QC of Landmark Chambers.

Mark Smulian

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