On behalf of the Defendant Trust, David Froome of Kennedys, recently settled a claim brought by a mother for the “wrongful birth” of her disabled child (i.e. she was claiming the additional costs of bringing up a disabled child) where we achieved significant savings relating to recoverable benefits. The mother’s CRU Certificate was nil but the CRU certificate for the child included substantial recoverable benefits.

The issues that arose were:

  • Should the mother give credit for the receipt of benefits paid to her in her child’s name?
  • If so, would the Trust be liable to repay the child’s benefits on paying the mother compensation? In other words, could the DWP argue that, but for the negligence of the Trust, the mother’s disabled child would not have been born and that, as in reality the child's benefits were paid direct to the mother, the Trust should repay those benefits?  

Liability to repay the child’s benefits

The parties agreed there was no liability on the Trust to pay the child’s benefits.

The recovery of benefits is governed by the Social Security (Recovery of Benefits) Act 1997 (“the Act”) with s.1 determining when the recovery mechanisms apply. In a similar case, Rand v East Dorset Health Authority [2000], Mr Justice Newman held that the Act did not apply because the parent’s claim arose from negligent misrepresentation and not as a consequence of any physical injury suffered by them. Accordingly s.1(1)(a) was not engaged.

Credit for benefits

We successfully argued that the mother should give credit for the benefits she received from the DWP for her disabled child.

In Rand, Newman J held that the child’s received benefits should not be offset against the parents’ claim for damages. He referred to the House of Lords’ decision in Hodgson v Trapp [1989] in which it was held:

“If, in consequence of the injuries sustained, the plaintiff has enjoyed receipts to which he would not otherwise have been entitled, prima facie, those receipts are to be set against … the plaintiff’s losses and expenses.”

However, Newman J went on to hold that:

“The Rands have not received these benefits in reduction of the wrong done to them. These benefits have been received by them on behalf of and for Katy. The defendant has not compensated Katy and I can see no reason for these benefits being brought into account as deductions.”

Whilst Newman J was technically correct (the Defendant was not compensating the child) we considered that he had failed to consider the actual impact of the child’s benefit payments. The mother is being compensated for her additional financial costs of bringing up a disabled child. If she does not suffer a particular loss because that potential cost is met from elsewhere, we consider her actual loss is in fact reduced and so compensatory damages should also be similarly reduced. Accordingly, our clients distinguished Rand on this point.

Comment

Defendants faced with wrongful birth claims should be alert to the particular issues these cases raise in relation to recoverable benefits. In particular, any arguments that the child’s benefits should be repaid should be strongly resisted. In addition, credit for benefits paid for the child should be sought. Significant savings can be achieved.