In an important ruling, the High Court has lifted the threat of compensation payouts awarded to severely disabled victims of negligence being whittled away by the costs of local authority care.

When a woman had agreed to settle her clinical negligence claim against an NHS Trust for £500,000 in the light of litigation risks, the settlement she received was insufficient to meet the full cost of her care and she therefore remained in need of social care funded by the local authority. The settlement had been reached on the basis that such care would be provided free of charge.

The relevant council’s policy was that those with capital and savings in excess of £23,500 would be required to pay the full cost of their care. The woman’s capital assets came to about £550,000 and, on that basis, the council sought to charge more than £270 per week for looking after her.

However, in upholding the woman’s legal challenge, the Court ruled that, on a true interpretation of the National Assistance (Assessment of Resources) Regulations 1992, the settlement could not be taken into account when assessing her entitlement to free social care and that settlements received for personal injuries are to be treated as ‘disregarded capital’ for the purposes of assessing eligibility for means-tested benefits where the funds are managed by a deputy appointed by the Court of Protection.

The whole of the capital sum was administered for the woman’s benefit by the Court of Protection and could only be disposed of by an order or direction of that Court. The fact that the woman’s legal deputy could withdraw £50,000 from her capital for her benefit without obtaining permission from the Court did not change that position. In those circumstances, the council’s policy was unlawful.


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