Personal injury compensation awards - double recovery concerns

Local authorities (LAs) often find themselves responsible for cost of social care services even when personal injury (PI) compensation awards include cost of future care.


Recently, in the case of R (Damien Tinsley (by his litigation friend and property and affairs deputy, Hugh Jones) v Manchester City Council and South Manchester Clinical Commissioning Group [2016] EWHC 2855 (Admin) 2005, the claimant had been awarded substantial personal injury compensation which included an element for cost of future care due to him having suffered a severe brain injury caused by a road traffic accident. The claimant was entitled to aftercare services under s. 117 of the Mental Health Act 1983 on his discharge fully funded by the LA and the NHS. However this after care package was refused by the LA on the basis that the claimant had been awarded damages which included the cost of future care, and that it was an abuse of public policy to allow what in effect would amount to a double recovery.


The claimant brought proceedings by way of judicial review challenging the decision of the LA. The court found that it was not open to the LA to refuse to make provision for the claimant under section 117 on the basis that he was in receipt of damages for PI which included the cost of future care. HHJ Stephen Davis stated:


“It does not seem to me to be possible to deny a remedy to a claimant, otherwise entitled to complain that the relevant authority has refused to provide aftercare services under s.117 by wrongfully relying on his receipt of personal injury damages, on the basis that his deputy ought not to be entitled to advance this claim because it would offend a common law rule as to the assessment of damages which has no role to play in the assessment under s.117”


It is also worth mentioning that in the case of ZYN v Walsall MBC [2014] EWHC 1918 (Admin) the High Court decided that capital derived from PI damages which is held by a Court of Protection appointed deputy is disregarded for means testing purposes.

The effect of these rulings is that LAs will have to fund after care services under s117 even where compensation awards include cost of future care.


These rulings may be difficult for LAs to accept due to their cost implications. It is lickley that solutions will be sought to try and reduce the impact of what could be seen as a double recovery situation. It may be that any solutions will require a change in legislation prompted by lobbying from LAs.

LAs could lobby for the recovery of the cost of care services in cases where PI compensation has been paid (just like the Benefits and NHS Recovery Scheme where the NHS and the DWP through the Compensation Recovery Unit can recover cost of treatment and cost of benefits in cases where PI compensation award is made). In effect, this will prevent compensation twice for care services that have already been covered for in a PI compensation award.


Alternatively LAs could lobby for a change in legislation for PI compensation to be no longer exempt for charging purposes in respect of s117 after care packages, and to ensure that where PI awards have been made including an element of cost for future care that compensation should indeed cover the cost of future social care needs.


It will be interesting to see whether LAs will take any steps to bring about the relevant changes to the current legal provisions push for the introduction of a recovery scheme as suggested above.

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