PJV v Assistant Director Adult Social Care Newcastle City Council [2015] EWCOP 87, [2015] MHLO 138

"The appeal before me ... relates to the part, if any, that the Court of Protection must play in the finalisation of an award of compensation under the relevant scheme that the Second Respondent (CICA) has decided and the applicant has agreed is to be held on trust."

Related judgments

PJV v Assistant Director Adult Social Care Newcastle City Council [2016] EWCOP 7, [2016] MHLO 28

ICLR

The ICLR have kindly agreed for their WLR (D) case report to be reproduced below.

Court of Protection — Incapable person — Criminal compensation award — Incapacitated person awarded criminal injuries compensation — Compensation authority deciding award should be held on trust — Whether application to Court of Protection necessary to set up trust for incapacitated person — Mental Capacity Act 2005, ss 16, 18, 20

PJV v Director of Adult Social Care Newcastle City Council and another

[2015] EWCOP 87.; [2015] WLR (D) 560

Ct of Protection: Charles J: 18 December 2015

There was no need for an application to the Court of Protection to finalise an award to an incapacitated person that the Criminal Injuries Compensation Authority decided should be held on trust, since a deputy appointed by the Court of Protection could be authorised to negotiate and finalise the terms of such an award.

Charles J, sitting in the Court of Protection, so held when allowing an appeal by the applicant, PJV, by his litigation friend the Official Solicitor, against part of an order made by Senior Judge Lush sitting in the Court of Protection dated 26 March 2015 whereby he had held that where an award of compensation had been made by the second defendant, the Criminal Injuries Compensation Authority (“CICA”) to be held on trust for the applicant, the Court of Protection was required to set up the trust on the basis that the applicant for the award was the settlor and so, if the applicant lacked capacity, an application had to be made under section 18(1)(h) of the Mental Capacity Act 2005 for an order under section 16 of the 2005 Act settling the incapacitated person’s (“P’s”) property. The applicant had suffered non-accidental head injuries when a baby and his significant neurophysical deficits related to and could be explained by those injuries. The first defendant, the Director of Adult Social Care Newcastle City Council, took no part in the proceedings.

CHARLES J said that a deputy could be appointed to pursue and finalise an award from the CICA and in so doing could agree and so accept on behalf of P that the moneys awarded were to be paid to trustees on defined trusts. The result was that the award moneys and thus the trust property never became P’s property and so the trust was not a settlement of P’s property. The finalisation of the award by a deputy was not precluded by section 20(3) of the 2005 Act since it did not involve a settlement of any of P’s property or the exercise of a power referred to therein. Section 20(3)(c) (and so section 18(1)(j)) was not directed to abilities and to powers that anyone had, for example, a power to make and accept a claim for compensation made under a statutory scheme or on some other basis. When the applicant did not have the capacity to make that decision, someone else (ie the Court of Protection, a deputy or an attorney) could do it for him just as they could make a range of decisions relating to P’s property and affairs on behalf of P. His Lordship did not agree that, on acceptance and finalisation of an award that the CICA had decided should be placed in a trust, the applicant obtained title to the award and so to the money representing it. Rather, the process by which such an award was decided on, offered, accepted and so finalised and then paid, meant that the award and the money representing it had never been the applicant’s property; it had always been the trust property. On the correct analysis of the implementation of the CICA schemes a clear distinction existed between cases (i) where the CICA had determined that an award should be paid to P absolutely and a proposal was subsequently made (by the deputy or some other person) to settle it on trusts and (ii) those where under the scheme the CICA had determined that the award was to be held on trust and that condition or term of the award was accepted by or on behalf of the applicant. There was no need for an application to the Court of Protection to finalise an award that the CICA, in the proper exercise of its powers under the relevant scheme, decided should be held on trust. A deputy appointed by the Court of Protection could be authorised to negotiate and finalise the terms of such an award and so of the trust and to enter into the “Acceptance of Final Award” or the equivalent document for an interim award on behalf of P and thereby finalise the claim. There were number of ways by which such trusts could be declared and evidenced and so by which the result could be achieved that the award moneys were paid to, and from the outset were held by, trustees on terms properly required by the CICA and wanted by the applicant. A convenient and sensible way was that adopted in practice by the CICA when the applicant had capacity, ie a declaration of trust by original trustees setting out the trusts over the award which would start to operate on payment.

Appearances: David Rees (instructed by Official Solicitor) for the applicant; Timothy Lyons QC (on 2 October 2015) and Nicola Greany (instructed by Criminal Injuries Compensation Authority) for the CICA; the first defendant did not appear and was not represented.

Reported by: Jeanette Burn, Barrister

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