Crofton v National Health Service Litigation Authority

Personal injury damages administered by the Court of Protection must be disregarded when a local authority decides whether it is necessary to arrange domiciliary care, where those damages would be disregarded under the applicable means-testing regime. The capital value of such an award must also be disregarded when assessing direct payments.

Direct payments which the claimant will receive because of the injury must ordinarily be deducted from damages to prevent double recovery. Payments may be disregarded where their receipt is too uncertain. Where payments will be received for a predictable period but their long-term continuation is uncertain, the court should reflect that uncertainty by discounting the multiplier. A substantial issue concerning public funding should be particularised, costed and supported by cogent evidence before trial.

The claimant suffered profound brain injury because hospital staff negligently delayed treatment of a congenital heart condition. Liability was compromised at 67.5% of damages assessed on a full-liability basis. His Honour Judge Reid QC assessed his future care on the basis that he would live in private accommodation but deducted anticipated direct payments from Hampshire County Council.

The direct-payments case was introduced during the damages trial without prior particularisation. The judge found that the Council would contribute £68,018 annually throughout the claimant's life and applied the agreed whole-life multiplier to the reduced care costs.

The claimant appealed. The issues were whether the late argument should have been entertained, whether personal injury damages could affect the Council's duty or means assessment, whether direct payments should reduce tort damages, and whether the evidence supported the amount and duration attributed to those payments.

1. Appeal allowed and direct-payments issue remitted. The issue was sufficiently important for the judge to consider, but allowing it to proceed without an adjournment, properly served evidence and an amended schedule caused unfairness. Important care-funding proposals should be particularised and costed. Introducing such an issue by surprise is incompatible with modern case management.

2. When deciding whether it is necessary to arrange domiciliary care under section 29 of the National Assistance Act 1948 and section 2 of the Chronically Sick and Disabled Persons Act 1970, a local authority cannot take account of resources which it must disregard at the means-testing stage. Personal injury damages administered by the Court of Protection must therefore be disregarded. Otherwise, the statutory and policy protection of such damages would be undermined before the means test could operate.

3. The Fairer Charging Policy incorporated the CRAG rules governing capital. Accordingly, the capital value of personal injury damages held in trust or administered by the court had to be disregarded when determining charges or direct payments. The policy did not clearly prescribe the treatment of investment income derived from the award. The evidence did not establish how the Council would exercise its discretion concerning that income.

4. Direct payments which a claimant will obtain because of the injury are prima facie deductible from damages. Otherwise, the claimant obtains double recovery. No established exception applied. If the possibility of payment is too uncertain, it may be disregarded. If payments will be received for a period but their long-term continuation is uncertain, the uncertainty should ordinarily be reflected by discounting the multiplier.

5. The judge lacked sufficient evidence to assume that direct payments would continue unchanged throughout the claimant's remaining life. Applying the full whole-life multiplier was wrong. The amount, hourly rate, eligible hours, treatment of investment income and appropriate discounted multiplier were remitted for reconsideration. The Court stated that joining the Council would be highly desirable.

1. Court of Appeal (Civil Division): By [2007] EWCA Civ 71, allowed the claimant's appeal and remitted the whole direct-payments issue for further consideration.
2. High Court, Queen's Bench Division: His Honour Judge Reid QC assessed damages, held that Hampshire County Council would make annual direct payments of £68,018, deducted those payments from future care costs and applied the agreed whole-life multiplier. No citation is stated.