HNL, Re

This is an application regarding the payment of a gratuitous care allowance. To describe the allowance as ‘gratuitous’ is slightly incongruous, as it is a payment towards the cost of maintenance of a close relative, who provides care and case management services to someone who is severely incapacitated because of an impairment of, or a disturbance in the functioning of, the mind or brain.

It is not a type of application for which permission would normally be given for a judgment to be published. Paragraph 16 of the Practice Guidance: Transparency in the Court of Protection: Publication of Judgments [2014] COPLR 78, however, states that “permission to publish a judgment should always be given whenever the judge concludes that publication would be in the public interest.”

The Public Guardian is currently reviewing all gratuitous care allowances paid by deputies to family members, particularly in cases where the person to whom the proceedings relate has been awarded damages for clinical negligence or personal injury. Because the number of families who are receiving allowances of this kind and are affected by the Public Guardian’s review runs into thousands, I have concluded that it would be in the public interest to publish this judgment.

These proceedings relate to Helen, who was born on 12 June 1962, is unmarried and used to work as a secretary.

Before she became incapacitated, she lived with her parents in Yeovil, Somerset.

She has a younger brother called Adrian, who was born on 19 November 1964 and is the applicant in these proceedings. He is married and has two children, aged 22 and 16.

Helen has suffered from epilepsy since she was nine months’ old. Initially, her condition took the form of petit mal seizures, which lasted between fifteen and twenty seconds on average, but in 1989 she experienced her first grand mal fit.

In September 1994 and June 1995 she underwent brain surgery at Burden Neurological Hospital in Bristol for the removal of the hippocampus and amygdala to relieve her epilepsy.

Unfortunately, the operations were unsuccessful and, as a result, she continues to suffer from intractable epilepsy and now also has:

She sued the North Bristol NHS Trust for clinical negligence.

Andrew Hannam of Foot Anstey Solicitors, Taunton, acted for her in the claim and Andrew Spink QC of Outer Temple Chambers and Duncan Pratt of Hailsham Chambers were her counsel.

The claim settled on 6 March 2006 for a lump sum of £600,000 plus periodical payments of £25,000 a year linked to the Retail Prices Index (‘RPI’). The effect of the index-linking can be seen from the most recent periodical payment which she received on 15 December 2014. Over a period of eight years it had risen from £25,000 to £32,637.84.

In addition, the NHS agreed to indemnify Helen in the event that the current Primary Care Trust funding of her care and accommodation needs is withdrawn or reduced, subject to an annual cap on this indemnity of £79,470.04 index linked to the RPI and an overall lifetime cap of £2.5 million. Her care is funded by Somerset Clinical Commissioning Group.

At the time of the settlement, the gratuitous past care provided by Helen’s family was valued at £105,000. However, in their opinion dated 3 March 2006, counsel remarked that:

“We note that this sum will not actually be paid out to the claimant’s family, who have chosen not to receive any compensation to reflect their huge efforts in caring for the claimant since 1995, preferring to leave this money within the claimant’s fund.”

Helen’s brother, Adrian, was appointed as her receiver by a first general order dated 3 April 2006 and was reappointed as her receiver under a restricted general order dated 27 July 2007, during the build-up to the implementation of the Mental Capacity Act 2005. He was subsequently appointed as her deputy for property and affairs by an order dated 28 May 2010.

On 3 August 2006 Andrew Hannam and Helen’s parents and Adrian attended what used to be known as a ‘handover meeting’ with me in the court’s former premises at Archway Tower, London N19. The purpose of the meeting was:

At that time Helen was living at The Woodmill in Cullompton, Devon, which is a specialist rehabilitation centre run by the Brain Injury Rehabilitation Trust.

The intention was that she would move in the following month from The Woodmill to the house in which she now lives in Bognor Regis, West Sussex, which had just been bought for £295,000 from her damages award, and that her brother, Adrian, would give up his job in order to work full time as her carer and case manager. Adrian and his family also live in Bognor Regis.

Adrian has an MSc in advanced manufacturing technology and an HND in mechanical engineering. The job he gave up was that of a team leader in a chemical manufacturing company.

The following matters were agreed at the handover meeting:

On 9 March 2015, acting on the instructions of the Office of the Public Guardian (‘OPG’), Adrian applied to the court for an order:

The application was accompanied by a witness statement, in which Adrian described what he does to justify a payment of £23,000 a year from his sister’s income. One of the exhibits he produced was a report by Dr Nick Medford, a consultant neuropsychiatrist, who said that:

“[Helen] has been largely dependent on carers and unable to live independently. She continues to suffer from periods of acute psychosis. … In addition to all this, she unfortunately continues to experience frequent seizures. Her family brought a record of recent seizures covering approximately a 6 year period. This suggests that on average she continues to experience 4 or 5 seizures per month of varying length and severity.

She now lives in Bognor Regis where she has 24 hour care, which is carried out by a group of 8-10 carers, who work shifts. Her family, particularly her brother Adrian, have been very involved in her care and it is clear that they have campaigned long and hard to get her the best possible care in the circumstances.”

On 8 May 2015 I made an order:

On 9 June 2015 District Judge Susan Jackson made an order appointing Adrian as Helen’s personal welfare deputy.

In a witness statement dated 17 June 2015 Ellen Pickworth of the Office of the Public Guardian (‘OPG’) responded to the application on behalf of the Public Guardian and said that:

In the final section of her witness statement, Ellen Pickworth summarised the Public Guardian’s position as follows:

The hearing took place on Thursday 23 July 2015 and lasted about an hour. It was attended by Nadia Dhillon and Latoya Thompson of the OPG and Adrian.

I made the following order, in which I referred to Adrian as ‘the deputy’:

On 20 September 2015 Adrian made the following witness statement:

“I have obtained a report from a professional brain injury case manager in respect of the provision of care and case management services that I provide to my sister, Helen. Please see this report attached at exhibit ATL1.

I instructed Judy Crocombe of Independent Living Solutions Ltd (‘ILS’) and Judy’s CV is attached as exhibit ATL2. As directed by the court, Judy attended with myself to fully assess the care and case management I provide to Helen, as if I were doing this as a professional.

Patricia Wass of Foot Anstey LLP has assisted me with obtaining the necessary report and information for the Court of Protection. I understand that Patricia unfortunately had some difficulty in locating a suitable professional case manager who was willing and available to prepare such a report for Helen’s case. Judy Crocombe was recommended by Phil Perry, Senior Operations Manager of ILS. Please note the invoice for the work attached at exhibit ATL3.

Section 2 of Judy’s report details the duties and estimated costs of case management input required by Helen per month. The court will see that the total estimated costs per annum where a suitable qualified, experienced and supervised care team leader is not available equals £47,565.60. The estimated costs per annum where a suitable qualified, experienced and supervised care team leader is available, and pharmacy visits and supervision can be provided by him/her, equals £36,138.40.

Section 3 details the care support required by Helen per week. The total estimated costs per annum based on the hours identified for the usual care support that I provide, equals £9,705.00. The estimated costs per annum including hours that can be completed by a case manager or care team leader equals £10,657.30. In sections 2 and 3 it is noted that 24 hour on call costs are not included in the calculations.

At the post-settlement meeting held with Senior Judge Lush in 2006, I was authorised to withdraw £23,000 a year at that stage as Helen’s primary carer and her case manager. I confirm that this payment has continued since 2006. However, the matter has now been referred back to the court for their review and authorisation.

I can confirm that in respect of future payments for the care and case management services I provide, I would not seek to ask the court for more than £23,000 per annum, which is significantly lower than the total amounts detailed in Judy Crocombe’s report. If Helen were to receive care and case management services from a professional, then I wholly agree with Judy that the duties detailed in her report would be necessary to ensure Helen is safe and well. A couple of times historically I have tried to decrease the amount of care and case management that I provided to Helen, as I wanted to see whether this was possible and whether I could try and have paid employment as well. Unfortunately, there was an almost immediate clear deterioration in Helen’s physical and mental well-being and I could not bring myself to continue at the decreased hours. I found that I was soon providing the same amount of hours as I had been previously.

Historically, it has been difficult for me to undertake privately employed work, as well as to ensure that Helen’s needs are met sufficiently. I would always wish to prioritise Helen’s well-being and it has only been recently that I have been able to commence private tuition for a few hours each week, earning approximately £50 per week term time (approximately £20 per hour). I am teaching adult GCSE Maths Class Wednesday evenings for 2½ hours and attending college Wednesday afternoons for 4 hours to do a PGCE. I am therefore not available for Helen during these times and I have had to reschedule a couple of her medical appointments already. I will be monitoring any effect on Helen’s well-being closely, but this is less demanding on time than previous attempts.

I have previously made the court aware of my personal situation in respect of the amount of time I spend with Helen, both providing direct care to her and also in the administrative work that she is unable to do herself. I can confirm that I am not asking the court to authorise payments to me for the total amount stated by Judy Crocombe in her report.

I confirm that I am in agreement with Judy’s report insofar as the background and current situation is described. I do not propose to comment on the estimated hours that she has detailed, as this is very much outside my expertise and is within the remit of Judy Crocombe herself.”

Judy Crocombe is both a professional brain injury case manager and an occupational therapist. She carried out her assessment on 14 August 2015 and completed her report, which ran into fifteen pages, on 20 August 2015.

She distinguished between the functions of a ‘case manager’ and a ‘carer’ and described the ‘usual case management duties’ as follows:

Of all these duties, number (9) is perhaps the most significant in this case. Adrian manages a team of eight to ten support workers.

When assessing the commercial value of the services provided by Adrian, as if he were a professional carer and case manager, Judy Crocombe applied the following hourly rates:

She concluded her report by saying:

“As detailed above, Adrian is providing an incredible service to his sister Helen, acting as her deputy, case manager, care support worker and care team leader. I have no doubt, from the information I am party to, that he completes this to a very high standard, which can only be an absolute asset to Helen.

Adrian is in the difficult position of juggling many roles both for/with Helen, and his own family, whilst ensuring that he is able to care as he wishes both for her and his own family.

Whilst what Adrian does naturally cannot be fully quantified, this report aims to identify his many different roles and quantify his input in order to inform the court as requested above.”

The cost of report was £942.60, which was broken down as follows:

On 28 October 2015 Nadia Dhillon of the OPG filed a witness statement in response to Adrian’s, in which she said:

“In 2006, as P’s primary carer, the deputy’s allowance was authorised to be £23,000 per year and the deputy, in his witness statement, has stated that he would not seek more than the £23,000 per annum.

The Public Guardian submits that the deputy has given and continues to give a considerable amount of his time to care for P. The Public Guardian submits that the amount claimed by the deputy appears reasonable when relying on the information provided.”

In Re HC [2015] EWCOP 29, which was published on the BAILII website on 23 April 2015, I summarised the principles relating to gratuitous care payments as follows :

“When it calculates a ‘gratuitous’ care allowance for family members who provide care to someone with an acquired brain injury, the Court of Protection broadly applies the criteria applied by the Queen’s Bench Division of the High Court in quantifying this head of damages in personal injury litigation. Accordingly, as long as such an allowance is affordable, the court will take the commercial cost of care as the ceiling and reduce it by 20%.”

In Housecroft v Burnett [1986] 1 All ER 332, at 343e, Lord Justice O’Connor held that:

“In cases where the relative has given up gainful employment to look after the plaintiff, I would regard it as natural that the plaintiff would not wish the relative to be the loser and the court would award sufficient to allow the plaintiff to achieve that result. The ceiling would be the commercial rate.”

The 20% reduction from the commercial rate largely reflects the fact that no income tax is payable in respect of a gratuitous care allowance. HM Revenue & Customs’ Employment Status Manual describes the tax status of such an allowance as follows:

“ESM4016 – Particular occupations: care workers – payments under Court of Protection Order or from trust fund

Payments towards the cost of maintenance of a husband, wife or other close relative or dependant out of the income of a severely incapacitated person who receives funds under an order of the Court of Protection are regarded as voluntary payments and not as income of the recipients. Therefore, there will be no tax or National Insurance Contributions consequences on such payments made for caring duties. Similarly, where payments emanate out of a Trust Fund set up for this purpose there is unlikely to be an enforceable contract, therefore, there should be no question of tax being assessable as employment income or of a liability for Class 1 NICs. Caring activity under these circumstances would not be gainful employment so there will be no liability for Class 2 NICs. The services provided are unlikely to be regarded as commercial in nature or amount to valuable consideration so there will not be a charge to tax on trade profits or on income not otherwise charged to tax.”

In Re HC I also referred to the index-linking of gratuitous care payments in the following terms:

“Earnings are usually affected by inflation and, to avoid the need for repeat applications to the court to recalculate a care allowance, there needs to be an appropriate form of indexation. Traditionally, in personal injury litigation, a carer’s allowance was linked to the Retail Prices Index (‘RPI’). However, in Thompstone v Tameside and Glossop Acute Services NHS Trust [2008] EWCA Civ 5, [2008] 2 All ER 553, [2008] WLR 2207, the Court of Appeal held that the periodical payments payable to the claimant in respect of his care costs should be calculated by reference to the actual cost of care, as set out in the Annual Survey of Hours and Earnings (‘ASHE’), rather than the RPI.

The ASHE data are broken down into numerous Standard Occupational Classifications (‘SOCs’). ASHE 6115, which was approved by the Court of Appeal in Thompstone, was formerly the SOC relating to the earnings of care assistants and home workers. In 2012 the Office for National Statistics reclassified the SOCs and split ASHE 6115 into two new codes: ASHE 6145 – care workers and home carers; and ASHE 6146 – senior care workers.”

Section 19(7) of the Mental Capacity Act 2005 provides that:

“The deputy is entitled -

(a)

to be reimbursed out of P’s property for his reasonable expenses in discharging his functions, and

(b)

if the court so directs when appointing him, to remuneration out of P’s property for discharging them.”

I believe that section 19(7) relates solely to the functions performed by the deputy as a deputy, rather than to the functions performed by him in any other capacity, such as a carer or case manager.

The court has broader powers under sections 16(5) and 18(1) of the Act, which enable it to set a level of remuneration for carer or case management services.

If a deputy were to remunerate himself without obtaining a court order authorising him to do so, there would be a conflict with his fiduciary duty, which is described in paragraph 8.58 of the Mental Capacity Act Code of Practice in the following terms:

“A fiduciary duty means deputies must not take advantage of their position. Nor should they put themselves in a position where their personal interests conflict with their duties. … Deputies must not allow anything else to influence their duties. They cannot use their position for any personal benefit, whether or not it is at the person’s expense.”

Because of this conflict of interests, a deputy should always apply to the court for authority to pay himself or herself a gratuitous care allowance. A lay or non-professional deputy should also apply to the court for approval if he or she intends to pay a gratuitous care allowance to any other member of the family.

I must explain why I made various provisions in the order of 23 July 2015. The first paragraph was a retrospective authorisation of “all payments in respect of the provision of care and case management services made by the deputy to himself from Helen’s funds from the accounting year 2006/7 to the accounting year which ended on 2 February 2015.”

I did this because:

Paragraph 2 of the order of 23 July 2015 provided for the continued payment of the gratuitous care allowance at the present rate for the next three months, by the end of which it was anticipated that we would have received a professional valuation of Adrian’s services.

Paragraph 3 of the order looked ahead to the future. The Public Guardian had expressly asked the court to consider whether the payment being made to Adrian is in Helen’s best interests, and I felt that the best way of ensuring transparency, so that justice could be seen to be done for everyone involved in this case, was to commission an up-to-date, independent, professional valuation of Adrian’s services.

In considering whether the continued payment of a gratuitous care allowance to Adrian is in Helen’s best interests, I am satisfied that:

Having regard to all the circumstances, therefore, I am satisfied that it is in Helen’s best interests for Adrian to continue to provide care and case management services to her and that until further order he should be paid an allowance of £23,000 a year, tax-free in accordance with ESM4016.

Even though Adrian has not specifically requested it, I propose to give him the option of index-linking future payments of the allowance. As Helen’s case settled prior to Thompstone, her periodical payments were linked to the RPI. In 2013 the Office for National Statistics (‘ONS’) concluded that the formula used to produce the RPI doesn’t meet international standards and decided no longer to classify it as a ‘national statistic’. I understand that the ONS still calculates the RPI in order to provide a consistent historic sequence and it seems appropriate that Adrian’s gratuitous care allowance should be linked to the same index as Helen’s periodical payments, rather than to ASHE 6145 or 6146.

The hearing in this case was one of several applications I have received over the last twelve months relating to the approval of a gratuitous care allowance. On the same day as the hearing, 23 July 2015, I received an email from a professional deputy, who said:

“At present we are seeing an increasing number of requests from the OPG asking us to apply to court for approval of gratuitous care payments we are making to parents (usually as a result of their child suffering from clinical negligence and thus having a large award looked after by a deputy). My understanding of the situation is that this is/ was unnecessary where there is a professional deputy involved?”

This prompted me to request a meeting with the OPG to discuss the way forward in these cases. The meeting took place on 20 August 2015 and I understand that the Public Guardian will shortly be issuing a practice note on gratuitous care payments.

In our initial discussions, the OPG suggested that these payments should be reviewed regularly. However, a review process of this kind is not cheap and, inevitably, it will have a knock-on effect on the amounts sought by claimants in respect of Court of Protection costs in future claims for damages for personal injury and clinical negligence. In this case, I would be surprised if the total bill came to less than £2,500. In addition to the court’s application fee of £400, Judy Crocombe charged £942.60 for her report, and no doubt Foot Anstey will shortly be presenting Adrian with an invoice for their advice and assistance in this matter, if they haven’t done so already.

In Helen’s case, because of the wide gulf between the commercial value of the services Adrian is providing and the actual payment he is receiving, I consider that it would be disproportionate to go through this process too frequently, and I suggest that Adrian’s gratuitous care allowance should be formally reviewed again in 2022 or earlier, if necessary, because of a change in his or Helen’s circumstances.