The recent Court of Session decision in Smart’s Guardian v Fife Council [2015] CSOH 183 is likely to be of interest to local authorities, trustees, and beneficiaries of personal injury trusts (PI trusts).

The petitioner was the guardian in financial and property matters for an adult who suffered serious brain damage as a result of a motor accident. An action was raised against the driver of the motor vehicle and was settled for £5.1 million. The settlement funds were placed into a PI trust.

In 2013 the Council carried out an assessment of the adult’s needs under Section 12A of the Social Work (Scotland) Act 1968. Section 12A provides that where a person for whom a local authority has a duty or power to provide community care services appears to need such services, the local authority must assess whether there is any unmet need.

The Council carried out its assessment, and made two decisions. The first was that the adult’s needs did not call for the provision of any community services as defined under Section 5A of the 1968 Act, as there was no unmet need. The second, under Section 12B of the 1968 Act, was that no payment was appropriate, as means were available to pay for her care for the foreseeable future. Both decisions were the subject of this judicial review.

The Outer House dismissed the petition and in its decision made several interesting observations:

  1. Firstly, the assessment under Section 12A is not whether the person requires services to be provided by the local authority. The correct question is whether the assessed person requires the provision of care services (regardless of whether there is a need for the local authority to provide them). The next part of the assessment is whether there is any unmet need in relation to the requirement for services.
  2. This construction of Section 12A did not result in the decision of the Council being struck down. In this case the Council did not ask itself the wrong question. It took the view that the adult did require the provision of care services. However, the Council then decided that there was no requirement for provision of services by the Council, as there was no element of unmet need. The court held that the Council had gone through the assessment in the correct manner as required by the 1968 Act.
  3. The test under Section 12B did require a local authority to make such payment towards care services as appropriate. However, it did not then mean that the local authority was required to make payment in the absence of a means test. The key provision of Section 12B(1) was that which allowed the authority to pay such amount as deemed appropriate. This then meant that the local authority could determine that the payment of no amount was appropriate.

The key point arising out of this judgement is that local authorities have to ensure that they are asking themselves the correct question when carrying out assessments of the need for care and an adult’s means to pay. Local authorities must ask whether the person being assessed demonstrates a need for care services, and then whether there is any element of unmet need in their current care provision. After that, they should assess what the appropriate sum is to contribute towards the provision of care.

At the present time there is not a national approach to means-testing for social care in relation to PI trusts – each local authority has its own policy and approach. Trustees and beneficiaries of PI trusts should be aware that this case could lead to other local authorities re-visiting their own arrangements on means-testing for beneficiaries of PI trusts – potentially with adverse financial consequences.