Kemp (a Patient), R (on the application of) v Denbighshire Local Health Board & Anor

In judicial review proceedings, a claimant who obtains repayment under an administrative scheme does not automatically recover costs or common-law interest. The court must assess whether the proceedings would probably have passed permission, whether the substantive challenge was likely to succeed, and whether the ancillary restitutionary claim had realistic prospects.

Section 35 A of the Supreme Court Act 1981 permits interest on a restitutionary sum where proceedings have been instituted and payment follows a sufficient causal connection with those proceedings. The jurisdiction is distinct from the discretionary decision whether to award interest and at what rate. A policy providing compound RPI interest is an important consideration but does not fetter the discretion.

The claimant challenged an All Wales Special Review Panel decision that he was not entitled to continuing NHS funding for residential nursing care. After judicial review proceedings were issued, further review panels and a multidisciplinary assessment led to agreement that his past and future care should be funded or reimbursed.

The substantive challenge was therefore not pursued. The remaining issues were whether the claimant should receive additional interest under Supreme Court Act 1981, section 35 A, and whether he should recover the costs of the proceedings, including expert and hearing costs. The court also considered a proposed amendment challenging the lawfulness of the defendants’ RPI-based interest policy.

1. Costs. The court assessed the likely outcome rather than treating repayment under the later review process as proof that the judicial review would have succeeded. The absence of a pre-action protocol, the availability of further review, and the unresolved evaluative question whether NHS responsibility existed throughout the whole period meant that permission would probably have been refused. If permission had been granted, the procedural challenge based on the absence of a multidisciplinary assessment probably would have succeeded, at least to secure a fresh review. The restitutionary claim probably would have succeeded for part, but not necessarily all, of the period. This was not the very clear or exceptional case required for costs before permission. There was no order as to the claimant’s costs.
2. Interest jurisdiction. Restitution of a liquidated sum may fall within “debt” in section 35 A of the Supreme Court Act 1981. The claimant’s judicial review claim, including its ancillary restitutionary claim, constituted proceedings when the claim form was lodged. Payment following the further review panels had a sufficient causal relationship with those proceedings. The court therefore had jurisdiction to award interest, even though no judgment had been entered and the principal was paid pursuant to the policy.
3. Discretion. Jurisdiction did not create an entitlement. The defendants’ compound RPI policy was a relevant factor, as was any social security or allied benefit retained because the claimant had paid the care charges. If no such additional benefit had been received, the judge was inclined to award special-account-rate interest from the midpoint of the loss to payment. Further evidence and submissions were directed before the discretion was finally exercised.
4. The proposed amendment challenging the RPI policy was refused as disproportionate and unnecessary. The issue of the defendants’ costs of the oral hearing was reserved.