Local authority obliged to provide support under S.117 Mental Health Act despite damages fund

25 Nov 2016

Some will remember the 2005 catastrophic injury case of Tinsley v Sarkar[1]. The claimant suffered serious head injuries in a road traffic accident. He was left with an organic personality disorder which in turn resulted in his being detained under s.3 of the Mental Health Act 1983.

A particular issue was the extent to which the prospect of any support the claimant might receive from a Primary Care Trust (as then known) and/or a local authority, could be brought into account in assessing his damages. That support could arise under s.117 of the Mental Health Act (see below). 

It was held that no account should be taken of the prospect of that support. That was because account could be taken of the damages fund when deciding whether to provide and a decision made that the claimant could provide for his own care needs without state support. The claimant was awarded £3.5m of which £2.89m was in respect of future care without any adjustment for statutory support.

This case moves forward 11 years to when the claimant’s funds have been mismanaged such that the damages fund no longer sustain the cost of his care needs into the future.  The claimant sought assistance from the local authority under s.117 of the Mental Health Act 1983. This section provides that a person who has been compulsorily detained in a hospital for medical treatment for mental disorder under s. 3 of the Act, is entitled upon ceasing to be detained and leaving the hospital to be provided with after-care services by the relevant authorities (clinical commissioning body and local social services authority), until such time as they are satisfied that he is no longer in need of such services.

It has been established in the House of Lords decision of R v Manchester City Council ex p Stennet [2] that no charge could be made for the services provided under s.117 regardless of resources.

The local authority refused assistance. The grounds were that the local authority did not accept that the claimant could not fund his care needs from funds derived from his damages. The claimant brought judicial review proceedings.

The arguments and decision

The defendant local authority argued:

  1. S.117 should be interpreted so as to allow the local authority to have regard to any remaining funds derived from the personal injury damages when deciding if the claimant had a need for local authority support.

  2. That to allow the claimant to claim after-care services would offend the principle against double recovery decided in the personal injury field in particular the Court of Appeal cases of Crofton v NHSLA and Peters v East Midlands Strategic Health Authority.

    The judge accepted the claimant’s argument that s.117 did not permit the local authority to take into account personal injury damages when deciding whether to make provision and doubted the approach of the judge in the 2005 damages case. “Stennet” had resolved that point.

    The judge rejected the defendant’s arguments on the second point. In essence the argument was that a deputy seeking what amounted to double-recovery was acting unlawfully and therefore the Administrative Court should dismiss the claim for judicial review.  He took the view that a common law rule on the assessment of damages had no role to pay in the assessment under s.117. In particular he said:

“The deputy owes statutory duties under the Mental Capacity Act 2005 and duties at common law and in a fiduciary capacity in his capacity as receiver and manager, but only to the person lacking capacity upon whose behalf he acts. He does not owe duties to the local authority or to the defendant in the personal injury action. It is difficult to see how the Administrative Court could properly hold that such person should not be entitled to substantive relief in judicial review proceedings to which he was otherwise entitled because it considered that the deputy was acting contrary to some notional duty to such bodies or parties in making the application. I note that this did not seem to Dyson LJ[ in Peters] to be an obvious mode of policing the actions of the deputy.

The judge recognised the impact on hard pressed local authorities if deputies seek state funding where there are sufficient resources in the form of personal injury damages. However he felt that was a consequence of the statutory regime which equated s.117 with general non means-based healthcare provision under the NHS with no exception for personal injury claimants. If there was to be a change to that it would have to be brought about by Parliament, however it was noted an opportunity to do so through the Care Act 2014 was not taken.

The claimant succeeded and the proposed declaration wording was that: “the defendant may not have regard to the claimant’s ability to fund the cost of after-care services from damages awarded to him in his claim for personal injuries when determining whether or not to provide or arrange for the provision of after-care services under s.117 of the Mental Health Act 1983.”

The effect of that order may be that:

  • the local authority takes over, or makes provision towards, the care package for the claimant and

  • also has to pay damages representing the costs of care the claimant had met himself since release form detention in 2005 after receipt of damages.

These issues were left to be decided at a later time.

Relevance to catastrophic injury claims handling

  1. The case is a useful reminder of the availability of support to previously detained persons under s.117 and the basis on which the decision about provision should be made.

  2. Cases involving actual or risk of detention under the Mental Health Act arising from traumatic brain injury are not uncommon. If that point exists, the possibility of NHS or local authority support after release from detention should be considered. Funds from the personal injury damages will not, on the basis of this judgment, prevent the claimant receiving support. That could lead to double recovery and steps need to be taken against that.

  3. “Incarceration” clauses which appear in periodical payment orders suspend the payments during detention. However they need to be linked with Deputy undertakings and indemnities. This will ensure that the defendant is aware that a claim under s.117 is being made, and steps can be taken to prevent double recovery by ensuring that support or funding received leads to adjustment of the annual payments.

  4. As these judicial proceedings show, in that forum the statutory right alone is considered and the “common law” issue of “double recovery” is not taken into account. In the event that a claimant subject to an active reverse indemnity, with obligations to pursue funding, is met with similar arguments raised by the local authority, judicial review proceedings may be avoided by reference to the judges rejection of reliance on the “double recovery” and/or “other resources” arguments.

  5. It is worth noting too, that although this case arose from the lack of funds due to mismanagement by the Deputy, the circumstances leading to the need to seek funding did not play any part in the decision. In short, s.117 assistance could be sought by a claimant in full possession of his damages fund. The risk of double recovery is clear.

    Kerris, Emma and Jenny are members of the Capacity and Court of Protection Subject Matter Expert Group within BLM’s Catastrophic Injury Group.


    Kerris Dale



    Jenny Moates



    Emma Eccles



[1] [2005] EWHC 192 (QB) http://www.bailii.org/ew/cases/EWHC/QB/2005/192.html

[2] [2002] 2 AC 1127

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Disclaimer: This document does not present a complete or comprehensive statement of the law, nor does it constitute legal advice. It is intended only to highlight issues that may be of interest to customers of BLM. Specialist legal advice should always be sought in any particular case.

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