Regular

posted 9 Oct 2002 in Volume 7 Issue 6

Case digest

Public law

Final Decision on S117
Mental Health Act 1983 after care
R v Redcar & Cleveland BC ex parte Armstrong:
R v Manchester City Council ex parte Stennett R: Harrow London BC ex parte Cobham.
House of Lords 25.7.02

See www.publications.parliament.uk for transcript.

This case was the appeal of the decision of the Court of Appeal, which held that local authorities were not allowed to charge for residential accommodation provided pursuant to their statutory duty to provide after-care services under section 117 to patients who had been detained under section 3 of the same Act for treatment.

Section 117 provides:

“This section applies to persons who are detained under section 3 above, or admitted to a hospital in pursuance of a hospital order made under section 37 above, or transferred to a hospital in pursuance of a hospital direction made under section 45A above or a transfer direction made under section 47 or 48 above, and then cease to be detained and (whether or not immediately after so ceasing) leave hospital;
It shall be the duty of the health authority and of the local social services authority to provide, in co-operation with relevant voluntary agencies, after-care services for any person to whom this section applies until such time as the health authority and the local social services authority are satisfied that the person concerned is no longer in need of such services; but they shall not be so satisfied in the case of a patient who is subject to after-care under supervision at any time while he remains so subject.”

After-care services are not defined in the Act but were confirmed by the Court of Appeal as including:

Residential and day care facilities;
Social work and support in helping an ex-patient find employment, accommodation and help with family problems;
Domiciliary care.

The councils argued that s.117 was not a free-standing duty but a ‘gateway’ section and imposed a duty to ensure that after-care services were provided under other enactments, in this case s.21 National Assistance Act 1948, (S.21 creates a duty on local authorities to arrange residential accommodation for those who by reason of age, illness, disability or any other circumstance are in need of care and attention, which is not otherwise available to them).

They argued that if the accommodation was provided under s.21 of the 1948 Act it could attract a charge under s.22 of the same Act. S. 22 requires local authorities to recover the cost of providing the accommodation provided under s.21.

The councils put forward evidence that approximately two-thirds of local authorities charged for after- care services, that the annual sum recovered was in the region of £31 million and the repayment of charges made since 1983 would be in the region of £80 million. They argued that if s.117 was ambiguous, then regard should be given to policy considerations and statements made in Hansard.

The Department of Health has consistently taken the view that health authorities and social services authorities may not charge for after-care services. A circular under the heading Advice Note for Use by Social Services Inspectorate issued by the Department of Health in January 1994 confirmed the point.

HELD:

If parliament had intended by section 117(2) to provide that after-care services would be provided under other statutory provisions, one would have expected section 117(2) to specify the statutory provisions to be triggered. Such a gateway provision would require appropriate wording. Section 117 is free-standing;
The statutory provision is not anomalous. The persons referred to in section 117(1) are an identifiable and exceptionally vulnerable class. To their inherent vulnerability they add the burden, and the responsibility for the medical and social service authorities, of having been compulsorily detained. It is entirely proper that special provision should be made for them to receive after-care, and it would be surprising, rather than the reverse, if they were required to pay for what is essentially a health-related form of care and treatment;
The Hansard material relied on throws no light whatever on the question of construction.

Points of interest on this outcome

Interestingly, if you have a client who has been in residential care on a self-funding basis and then is section for treatment, when they are eventually discharged from hospital, the residential care will be provided under s.117 and so should not be charged for.

The funding can end if the person is no longer in need of mental health care but this point is believed in practice to affect very few.

For dementia patients it seems difficult to see how the funding could end. Check if you act for clients who are wrongly being charged for their care.

It would appear that many people have been wrongly charged in the past and some will still be charged and if this is the case you will need to make contact with the local authority.

Public law case digest compiled by Caroline Bielanska is a solicitor, TEP, lecturer and freelance consultant. She can be contacted at caroline.bielanska@ntlworld.com.

Private law

1. Younger -v- Saner (2002) Court of Appeal 25 July 2002 (unreported)

This case was an appeal against a dismissal of a professional negligence action brought against a senior probate partner in a London firm who was acting as solicitor administrator in an estate. The case concerned the extent to which a personal representative should attempt to recover assets due to the estate.

The facts to the case were complex but involved three siblings (the children of the deceased), four companies and a significant amount of hostile litigation. Following the death of the deceased intestate in 1996, his three adult children became entitled to their father’s estate in equal shares. The deceased was involved in the management of a hotel which in its turn involved the companies.

Following the death of Mr Younger, one of the children who took over the business and the directorships of the related companies received significant sums of money from the hotel business without accounting to the estate. Litigation ensued and it was initially ordered that the estate be administered by the court. The beneficiaries, however, subsequently agreed to appoint a single independent professional administrator. The solicitor concerned had advance warning of the complex corporate structures and the ongoing litigation between the siblings. The administrator encountered very significant difficulties in the administration of the estate in trying to liquidate its assets and action was brought against him by the beneficiaries.

In the first instance, it was held that although a professional trustee was required to show a degree of care and skill to be expected of an experienced solicitor, such a professional was under no obligation to use his own or his firm’s money to finance the administration or to expose himself to the risk of personal liability without adequate protection. On appeal, Lord Justice Robert Walker did find that breaches of duty had occurred but that they had not caused any loss to the estate. The administrator had applied to the court for directions and having so applied, he then took no action while he awaited the court’s guidance as to how he should proceed. The Court of Appeal, however, said that: “It would be wrong for this Court to form its own ideas with the invaluable benefit of hindsight, as to what more effective course of action [the administrator] might have taken and to hold him in breach of duty because he did not take it”. This comment will be comforting to an executor who finds himself in similar difficult circumstances.

2. Nathan -v- Leonard + Others (Chancery Division) (28 May 2002)

The testatrix directed that her residuary estate be divided into three parts; two thirds to two individuals and the remaining third to be held on discretionary trusts for the third beneficiary, his issue and two charities. A Codicil was subsequently executed containing the condition that if a beneficiary wished to contest or disagree with the Will, the Will would be over-ridden and the whole estate would then go to the two individual beneficiaries who already inherited the two third shares.

Following the death of the testatrix, one of the beneficiaries under the discretionary trust brought a claim under the 1975 Act. Mr John Martin QC determined as a preliminary issue whether the condition subsequent was valid in law. He held that a condition subsequent, as in this case, the effect of which was to remove the benefit from any beneficiary who challenged the Will, was not void contrary to public policy simply because that condition might deter the beneficiary from applying under the 1975 Act. The condition did not actually prevent a claim being made under the Act and any consequent loss of beneficial entitlement under the Will would be something which the Court could taken into account in determining the 1975 Act claim. That having been said, the condition in this particular case was in fact void for uncertainty and unforceable and therefore the disposition under the Will was not affected.

3. McIlwraith -v- McIlwraith + Others (Chancery Division) (24 July 2002) (unreported)

This case concerned the trial of a preliminary issue in an appeal against a decision refusing a beneficiary’s application to have solicitors’ costs (as incurred by the executor) assessed under Section 71(3) Solicitors Act 1974. At first instance, the Master had ruled that the beneficiary (among other matters) could not have taxed bills which had been paid more than twelve months before the application was made, relying on Section 70(4) Solicitors Act 1974.

On appeal, however, it was held that although twelve months had elapsed since the payment of the costs, this was only a factor to be considered in exercising the Court’s discretion and was not to be treated as an absolute bar to granting the application of a beneficiary.

Private law case digest was compiled by Julia Abrey, partner at Withers Solicitors. She can be contacted at: julia.abrey@withers.co.uk