Crofton v NHSLA - The No Loss Defence for Care
Crofton v NHSLA - The No Loss Defence for Care
Crofton represents a turnaround for defendants running the “No Loss Defence”: the defendants won.
Pursuant to s21(1)(a) of the National Assistance Act 1948 a local authority has to provide residential accommodation and ancillary care to someone who by reason of age, illness, disability or other circumstances need care and attention not otherwise available to them. By way of section 29 of the National Assistance Act 1948 as amended by the Chronically Sick & Disabled Persons Act 1970 local authorities are under a duty to provide care services for those not living in local authority provided residential care. The assessment of whether care should be provided is undertaken pursuant to section 47 of the National Health Service and Community Care Act 1990. The local authority can provide care services directly, or make payment direct to the service user pursuant to s57 of the Health & Social Care Act 2001. In carrying out their duties local authorities are to act under the general guidance of the Secretary of state (s7 Local Authority Social Services Act 1970). Various circulars have been issued. In Sowden v Lodge and Drury v Crookdale [2005] 1 All ER 581, CA the Court of Appeal considered whether defendants could successfully argue that their liability to compensate should be reduced to the extent the local authority had and would provide accommodation/care services. It was held that so long as the defendant could prove the provision then in principle the offset could be made, and the term “No Loss Defence” was coined.
Sowden v Lodge elided sections 21 and 29. There has been considerable debate about whether that is appropriate, based on the ability or otherwise of a local authority to take the client’s financial resources into account. Suffice to note that in respect of section 21 accommodation/care services whether personal injury funds are held in the court of Protection or a Personal Injury Trust they will be disregarded: there is a statutory disregard by way of schedule 10 of the Income Support Regulations 1987. So the No Loss Defence can work smoothly.
In Crofton the Claimant was residing in accommodation provided by a voluntary body under the auspices of Hampshire County Council (the local authority). That set-up enabled charges to be made by a parallel route to section 21, and thence the statutorily provided disregard.
The NHSLA sought to raise the No Loss Defence both on the basis of the existing arrangements remaining in place and in the event of a move to own accommodation. The claimant’s legal team raised the issue of what would happen to local authority funding if the claimant moved into his own accommodation (and thus section 29 kicked in). HH Judge Reid sitting as a Deputy Judge of the High Court held that by reason of the circulars the personal injury award in respect of Mr Crofton would be ring fenced even if he moved into his own accommodation. He held that although there is no statutory disregard a combination of “Fairer Charging Policies for Home Care and other non-residential Social Services (Part VIII, section 58) provides that savings`can be taken into account in setting charges on the same basis as set out in “Charges for Residential Accommodation Guidance”, paragraph 6.028 of that guidance excluding personal injury funds. He further relied upon paragraph 86 of “Fairer Charging Policies for Home Care”.
The Court in Crofton was very much assisted by fulsome evidence from Hampshire County Council that they understood themselves to be obligated to provide funding whether by direct payment or otherwise if the Claimant left his residential accommodation.
However there should be considerable concerns as to whether Crofton is very much more than a case on its own facts.
(1) The judgment does place considerable reliance on the evidence of the local authority;
(2) As observed by Tomlinson J in Freeman v Lockett [2006] EWHC 102 (QB), 7th February 2006 it is not easy to discern any clear Parliamentary intention on the question whether direct payments made to assist with domiciliary care are intended to be for the benefit of the tortfeasor/the insurers: if anything the existence of a separate statutory scheme for s21 accommodation/care points the other way;
(3) As noted in Kemp the Department the published guidance does not necessarily represent its views
(4) Guidance is no more than that, it is not immutable, and nor is it a matter of secondary let alone primary legislation. The local authority can (see R v Islington ex parte Rixon [1998] 1 CLR 119) depart from the guidance where there` is good reason to do so within broad limits.
(5) The guidance provided allows wide-ranging interpretation of resources and eligibility criteria. For an illustration under section 29 see R v Wandsworth LBC ex parte Spink [2004] EWHC 2314.
(6) It might be thought to be rare for a local authority to so freely volunteer its views of the future as occurred in the Crofton case, so even if the Court was willing to hold that section 29 should be treated in the same way as section 21 there may be very substantial evidential problems.
Nonetheless there may be circumstances in which it is potentially beneficial for a claimant to work with an insurer to obtain local authority funding, particularly where liability is in issue.