Handle with care

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A big part of any catastrophic injury claim relates to future care costs but, as Charles Brown explains, the complex nature of law in this area continues to confuse

The largest single element of almost any catastrophic injury claim will be the cost of future care of claimants. There has been a relentless rise in damages under this heading due to manual handling and working time regulations, not to mention the ingenuity of claimants' experts and lawyers.

The decision in Sowden (2004) appeared to show how future care costs might be reduced. However, this year's case law, in particular the contrasting decisions in Crofton v NHSLA and Freeman v Lockett, shows that the overlap between state funding and injury damages remains uncertain.

Future provision

Local authorities have a statutory duty to assess the needs of adults suffering from substantial disability and most seriously injured claimants should succeed in demonstrating eligibility for services or money. The duty to assess as well as offering guidance as to eligibility are the same whether the care is residential (Section 21) or domiciliary (s29).

However, there have been sharply contrasting judicial requirements as to the standard of proof required for future provision to be made. Sowden itself concerned a patient in residential care and the court accepted that the local authority contribution to care would continue.

Conversely, in Godbold v Mahmood - another residential care case - the court refused any credit for local authority funding, partly because of a lack of confidence that the authority would discharge its statutory duty and because other authorities were reluctant to discharge their duties. Less controversially, the judge was not persuaded that local authority funding would remain available throughout the claimant's lifetime.

In 2006, there have been three High Court decisions concerning domiciliary care. In Crofton v NHSLA, the claimant was a 'patient', that is, someone without the capacity to administer their own affairs, who already had some local authority funding. There was evidence from the local authority that its contribution would continue. The judge inferred that this contribution would last indefinitely at a level equivalent to the past funding.

However, in Freeman v Lockett, the claimant was a non-patient who had received substantial payments from her local authority for more than two years. The court decided there should be no deduction for the prospect of future funding because the claimant should not be expected to take any risk whatsoever on future provision - if damages could be awarded against a tortfeasor which would eliminate that risk - and because the level of funding in the medium to long-term was uncertain.

This approach was followed in A v B Hospitals Trust, where it was decided there was no principled basis on which to estimate future provision.

Charging claimants

The provisions for charging claimants for services or money provided are quite different based on whether the care is residential or domiciliary.

If the claimant is, and will remain, a patient in residential care (s21) - such as in Sowden - the capital sum of their damages and the income from it will as a matter of law (statutory instrument) be disregarded in assessing their means. However, if the claimant will receive domiciliary care (s29) or is not a patient, the position may be different and depends on ministerial guidance not law.

Freeman interpreted the statutory provisions and guidance as showing that even for damages held in a personal injury trust, income from damages would be taken into account; outside a trust, income and capital would be assessed and the claimant should not be compelled to keep their money in a trust (or be restricted to living within that local authority area).

However, in Crofton, the judge decided that capital and income from damages held in a PI trust or the Court of Protection would be disregarded in the assessment of the claimant's means.

This decision will be challenged on appeal later this year. The Freeman approach on this point was followed in A v B Hospitals Trust.

Final word

If claimants are patients likely to remain in residential care, their disability is likely to be severe enough to persuade a court that the local authority will continue to provide care and the regulations will prevent the local authority from taking capital or income from damages into account in deciding whether to charge.

Outside that situation, and subject to the outcome of the Crofton appeal, compensators are likely to face an uphill battle.

In Freeman, the judge stated that, notwithstanding the statutory duties and powers of local authorities, he "would have expected that the purpose of an award of damages against a tortfeasor would in these circumstances be to relieve the victim of his negligence of the necessity to resort to state funding of his or her care". That has been the instinct of most first-instance judges who have considered this issue.

The complexity of the statutory regime and the guidance given under it, together with this sort of judicial expectation, demonstrate how difficult it will be for defendants to obtain credit for future state funding in the assessment of care costs.

This explains the attraction of the sort of arrangement adopted in White v Eastman and several other cases, whereby the defendant agrees to underwrite future care costs in return for an undertaking that the claimant will claim, and account to the defendant for, whatever local authority funding is available.

This avoids the risk of double recovery and creates a balance between the tortfeasor's duty to compensate and the local authority's duty to provide care.

Some commentators argue that an insurer who has charged a premium should pay in preference to the local authority taxpayer but this rationale does not assist where the defendant is a self-insuring public body, nor where the claimant establishes less than full liability.

In Sowden, the Court of Appeal suggested that only legislation could bring any rationality to this unduly complex area of the law. The distinctions between domiciliary and residential care - and between patients and those with catastrophic spinal injuries but full capacity - seem hard to justify.

Uncertainties deriving from changeable ministerial guidance or from individual judicial inferences assist no one. Compensators, claimants and local authorities would all benefit from clear, fair and easily applicable rules.

- Charles Brown is in-house counsel at city law firm Barlow Lyde and Gilbert.

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