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When the Court of Protection meets the CICA

23 April 2015

The case of re: PV gives us important clarification of what should happen in these sometimes complex cases.

PV was injured as a child.  It was accepted that the brain injury he suffered at five months old was non-accidental. He has significant intellectual, cognitive and behavioural problems.

Readers may be familiar with the Criminal Injuries Compensation Authority.  This is the organisation which awards payments to claimants who have been injured by criminal activity.  In 1996, the scheme moved from being one which paid out in a similar way to a litigation claim to one which capped any award at £500,000.  PV’s case was dealt with under the old pre-tariff scheme.

Why would the CICA insist on a trust?

Sadly, there are still a number of cases where an accidental injury, usually by a parent, causes extremely significant disability. In these cases, the CICA will often require a trust to be put in place.  The main reason for that is to avoid the rules of intestacy taking effect.  For a person who is not married and has no children, the beneficiaries on their death without leaving a Will would be their parents.  Awards are often made while the child is under eighteen so it is not possible to put a Will in place for them, even a Statutory Will through the Court of Protection.  It would be unconscionable for the CICA to pay money to, for example, a Deputy knowing that if the child died, the person who caused the injury would be entitled to half their estate.

The role of the Court of Protection in CICA trusts

PV was important clarification of the role of the Court of Protection in deciding the terms of the trust and approving awards of damages.
Readers may recall that prior to the Mental Capacity Act 2007 coming in, the Court of Protection used to approve damages settlements for people who lacked capacity.  Since the Mental Capacity Act that function was undertaken by the litigation Court. The important decisions made by this case are :

  • An application to the Criminal Injuries Compensation Authority will not bind the injured person unless it is made by an attorney acting under a registered Enduring Power of Attorney or a Lasting Power of Attorney for Property and Financial Affairs or a person authorised by the Court of Protection to conduct the application. That could be somebody authorised under a one off order or a Deputy for Property and Affairs.
  • The Court of Protection’s authority is not required in order to accept a CICA award.
  • There is no need for the Court of Protection to approve the amount of compensation to be received or the terms and conditions upon which it is awarded.
  • If the CICA proposes that an award should be subject to a trust, an application to create that trust must be made to the Court of Protection.
  • The Court of Protection is likely to approve the terms required by the CICA.
  • If the bulk of the incapacitated person’s funds are held in a trust imposed by the CICA, there may not be a need for a separate deputyship.  That will depend on the level of the incapacitated person’s other assets.
  • The Court would not have any objection to a Deputy for Property and Affairs also acting as trustee of the CICA trust.
  • The Court would want to be able to exercise the power through the incapacitated person to remove trustees and appoint new trustees.  That has been useful in the past.
  • If a Peters Undertaking, designed to prevent recovery of the same costs from the state as from the CICA, is required, the Court is free to decline to impose such an undertaking if that would not be in the incapacitated person’s best interests. The Court would give thought to whether a future deputy ought to have their powers restricted in the same way. A Peters Undertaking merely ensures that the matter is brought to the Court of Protection for consideration. It does not pre-judge whether the person can or cannot claim state funding which will be decided on the usual best interests criteria.  In most cases where an award is conditional upon the giving of a Peters Undertaking it is likely to be in the incapacitated person’s best interests for an award to be accepted and the undertaking to be given.
  • The terms of the undertaking should essentially be the same as those approved by the Court of Appeal in Peters v East Midland Strategic Health Authority but amended slightly to refer to the Care Act 2014.  This is a promise by a deputy to make an application to the Court of Protection to place restrictions on his power to seek public funding of P’s care.  There is no need to apply to the Court of Protection for permission to give this undertaking.  Where a trust is envisaged rather than a deputyship, the trust deed itself should contain provisions restricting the trustees’ powers to apply for public funding of the incapacitated person’s care without first obtaining the permission of the Court of Protection.

Comment

This was extremely welcome and helpful confirmation of what to do when an incapacitated person is the subject of a Criminal Injuries Compensation Authority claim and where a Peters style undertaking is required.  Of course, in post-tariff cases, those capped at £500,000, it would not be appropriate for such an undertaking to be sought as the award is not designed to meet all of the incapacitated person’s care needs.

Case: Newcastle City Council v PV and Criminal Injuries Compensation Authority [2015] EWCOP 22

If you would like to discuss any aspect of this article further, please contact Lynne Bradey or any member of the Wrigleys’ Court of Protection team on 0114 267 5588.You can also keep up to date by following Wrigleys Court of Protection team on Twitter hereThe information in this article is necessarily of a general nature. Specific advice should be sought for specific situations. If you have any queries or need any legal advice please feel free to contact Wrigleys Solicitors
Lynne Bradey View Biography

Lynne Bradey

Partner
Sheffield

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