London Borough of Islington v University College London Hospital NHS Trust

A public authority which incurs unrecovered care costs following injury to an individual is not, merely because those costs were reasonably foreseeable, owed a direct duty of care by the tortfeasor. A claim for such indirect economic loss must satisfy all stages of the Caparo inquiry.

Although the provision of unpaid local-authority care was foreseeable, there was insufficient proximity and it was not fair, just and reasonable to impose a novel duty. The common law should not reallocate the statutory cost of public services between public bodies where that change has broad and uncertain policy consequences. That is a matter for Parliament.

Mrs J suffered a disabling stroke through the respondent hospital trust’s admitted negligence. The appellant local authority was required to provide her residential care under the National Assistance Act 1948. Her means prevented it from recovering more than nominal charges. Her later personal-injury settlement did not alter that position because the damages were held on trust and had to be disregarded in the charging assessment.

The trust settled Mrs J’s claim without compensating her for care supplied free by the authority. The authority sought its net care costs directly from the trust in negligence. Douglas Brown J determined a preliminary issue in the trust’s favour, holding that no duty of care was owed to the authority. The issue on appeal was whether negligent treatment of Mrs J gave rise to a direct duty to compensate the authority for its unrecovered statutory care costs.

1. Appeal dismissed unanimously. The trust owed no duty of care to the local authority in respect of the authority’s costs of caring for Mrs J.
2. Buxton LJ held that the trust could reasonably foresee that negligent interruption of anticoagulant treatment might cause a disabling stroke, a need for care, and care supplied by a local authority unable to recover its cost. Foreseeability did not require knowledge that this particular authority, or Mrs J in particular, would require and be unable to pay for such care. The later trust structure for damages was irrelevant to that existing foreseeable burden.
3. Foreseeability was nevertheless insufficient. The claimed loss was consequential upon injury to another person. The law’s limits on recovery by voluntary carers and others economically affected by another’s injury demonstrated that the authority did not have the requisite direct relationship with the tortfeasor. Clarke LJ preferred to treat the absence of sufficient proximity as closely connected with the fair, just and reasonable inquiry.
4. The decisive consideration was that it was not fair, just and reasonable to create the proposed novel duty. The claim would require the common law to redistribute the costs of statutory public services between bodies with different functions and funding. It could have unpredictable consequences for education and other public services, private tortfeasors and insurers. It would also be difficult to reconcile with the absence of a direct common-law claim by voluntary carers or the NHS, whose recovery against tortfeasors required legislation.
5. Ouseley J agreed. Reasonably foreseeable loss incurred as a consequence of injury to another did not itself establish a duty. Parliament had selected the statutory bodies and circumstances in which recovery from tortfeasors was available. The policy issues concerning unrecovered statutory care costs made the asserted duty a leap too far.

• Court of Appeal (Civil Division): dismissed the local authority’s appeal and upheld the conclusion that the hospital trust owed no duty of care for the authority’s unrecovered care costs.
• High Court, Queen’s Bench Division: Douglas Brown J determined the preliminary issue against the local authority: [2004] EWHC 1754 (QB).