Legal: Who pays for accident victims’ long-term care?

When accident victims can claim against an insured wrongdoer then the local authorities are not liable to pay care costs says Ed Mitchell

The case: Peters v East Midlands Strategic Health Authority

What was the issue?

Care costs money. The greater the care needs, the greater the cost. Where the needs arise because of an accident, who should pay? Until the decision of the Court of Appeal in Peters v East Midlands SHA (March 2009), local authorities often had to pay, even where the wrongdoer was fully insured. This should change as a result of that decision. In the current economic climate, these are significant matters. In this case, for example, lifetime care costs of £4m will not have to be met by a local authority.

Why do local authorities pay?

As a result of changes made in 1998 to the residential care charging rules, the courts have sometimes not awarded compensation for the costs of future care where it is likely that local authority provided care would meet a catastrophic accident victim’s reasonable requirements.

Therefore, these accident victims have been left to rely on local authority services. Normally, the care is provided free of charge at great expense.

How did this case arise?

The claimant argued (through a litigation friend) that the NHS had negligently failed to immunise her mother against rubella. Her mother caught rubella when pregnant and, as a result, the claimant was born severely disabled. It was clear that she would meet any local authority’s eligibility threshold for residential care.

The NHS admitted liability and so the remaining issue was damages. The claim came before the High Court for determination. The NHS argued that it should not be ordered to pay any damages in respect of the claimant’s future care because these would be provided free of charge by a local authority. The High Court rejected this and awarded £4m for future care. The NHS appealed to the Court of Appeal, but the appeal was rejected.

Why was this a good decision?

Happily, the Court of Appeal held that the claimant was free to decline local authority provision and insist instead on damages to cover future care and accommodation to be purchased on the open market.

The court said that “there was no reason in principle why the claimant should give up her right to damages to meet her wish to pay for her care needs herself, rather than to become dependent on the state”. Accordingly, we should no longer see the financial burden for the future care of catastrophic accident victims shifting from the wrongdoer to a local authority.

Can claimants still claim care?

There is the possibility that, despite payment of compensation for lifetime care costs, a claimant’s representatives will nevertheless seek local authority residential care. This is a worry for local authorities because the compensation award is treated, for charging purposes, as if it did not exist.

The concern is that a claimant will receive free local authority care because they are deemed penniless for charging purposes – and keep a multi-million pound damages award. The Court of Appeal devised a sensible solution to prevent this. The claimant’s affairs were managed on her behalf, as they often are in such cases, by a Court of Protection-appointed deputy. The terms of the deputy’s appointment will be altered to prevent her from seeking local authority-funded care without the permission of the Court of Protection.

Ed Mitchell is a solicitor and editor of Social Care Law Today

• Read more: www.bailii.org/ew/cases/EWCA/Civ/2009/145.html 

• More legal updates at www.communitycare.co.uk/legalupdate

This article is published in the 23 April issue of Community Care magazine under the heading Who is responsible for long tem care of those in serious accidents?