Re HNL [2015] EWCOP 77

​This case concerns an application by a deputy for the payment of a gratuitous care allowance from the patient’s (‘P’) estate

The Facts
P was born on 12th June 1962 and is a 53 year old unmarried woman. Since P was 9 months old she had suffered from epilepsy.  

In September 1994 and June 1995 P underwent brain surgery for the removal of the hippocampus and amygdala to relieve her epilepsy. The surgery was unsuccessful and P now suffers from profound memory loss, impaired executive functioning, and intermittent post-ictal psychosis. P sued North Bristol NHS Trust for clinical negligence. In addition to other terms, P received a lump sum of £600,000, plus periodical payments of £25,000 per annum linked to the Retail Price Index (‘RPI’). At the time of the hearing the annual payment was £32,637.84.

Adrian, who was P's brother, became P’s receiver (Prior to the Mental Capacity Act 2005 (‘MCA’)) and was eventually appointed P’s deputy on 28th May 2010.

£295,000 of P’s funds was used to purchase a property for her to reside. Adrian gave up his job as a team leader in a chemical manufacturing company to be P’s carer and full time manager.

Adrian made an application on 9th March 2015 seeking an order that he could be remunerated from P’s periodical payments, a retrospective order regarding the payments he had already received, along with other declarations. Adrian was seeking a payment of £23,000 pa.
 
Response of the Office of Public Guardian (‘OPG’)
The OPG consented to retrospective payments of £23,000 per annum when Adrian was appointed receiver from 2006 to 2010. The OPG however stated that the payments from 2010 were not authorised in accordance with section 19(7) of the MCA.

The OPG accepted that Adrian has given and continues to give P considerable amount of time and care.

The OPG was seeking an Order under section 16(5) of the MCA for payments from 2010 to 2015; and for the court to consider future payments.

Initial Hearing
The court initially heard the matter on 23rd July 2015. It made a retrospective order authorising payments from 2006 to 2nd November 2015.

The court requested that Adrian provide a report evaluation of his provision and care and case management by a professional brain injury case manager, the costs of the report to be met from P’s funds.

On 20th September 2015 Adrian provided a witness statement attaching the report from Judy Crocombe of Independent Living Solutions, along with her CV.

The OPG responded stating that the amount of £23,000 per annum that Adrian was seeking was reasonable.

The Law
The court considered section 19(7) (the remunerations for deputies in preforming their duties as deputies rather than carers), and the broader powers in sections 16(5) and 18(1) of the MCA.  

It referred to the decision in Re HC [2015] EWCOP 29 where the principles relating to gratuitous payments were set out (paragraph 37):
 
“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%.” 

The court also referred to Housecroft v Burnett [1986] 1 All ER 332, at 343e, 

“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 court referred to ESM4016 from HM Revenue & Customs’ Employment Status Manual regarding no tax or national contributions on payments made in caring duties for close families or defendants.

The court considered index linking in the case of Re HC above and Thompstone v Tameside and Glossop Acute Services NHS Trust [2008] EWCA Civ 5 where the Court of Appeal stated that payments in respect of care costs should be calculated by reference to actual care costs set out in the annual Survey of Hours and Earnings (‘ASHE’) rather than the RPI.

The court further considered paragraph 8.58 of the Code of Practice and the conflict of a deputy paying themselves with their fiduciary duty. 

Decision
The court authorised the payments as it was satisfied in was in the P’s best interests (paragraph 49). Even though Adrain did not request an order to have the payments indexed linked the court authorised it using the RPI.

The payments are to be reviewed in 2022.
 
Discussion
The court concluded that authorisation from the court should be obtained when a deputy wished to pay themselves an allowance so as to conflict with their fiduciary duties under the Code of Practice. It also stipulated that if the deputy is a lay deputy then payments to family members in relation to a gratuitous care allowance authorisation should be obtained by the court. 

Although the Court of Appeal stated that payments should be linked in accordance with ASHE 6145 or 6146, as the P’s payments were index linked to the RPI the court felt it was appropriate to link Adrian’s payments to the RPI also. 

The court made reference to a meeting that it had with the OPG on 20th August 2015 as another case regarding such payments came before the court on the same day as the July hearing from a professional deputy stating that there were an increasing number of these cases. The OPG will be providing a practice note on gratuitous care payments. The OPG suggested that the payments should be reviewed regularly. The court considered the likely costs in a review and in this case the review is not until another 7 years. This may well be to do with the fact that Adrian, as the court found, has acted in an exemplary manner and had consistently acted in good faith and in P’s best interests. The review may not be so long if the court is presented with a similar case but where the deputy has perhaps not come up to scratch.

Read the full text of the judgment on Bailii