Judge rules fundamental principle that NHS care should be free to all

Date: 10/11/10

In an important decision for the insurance industry and for claimants, Judge Pelling QC, sitting as a Judge of the High Court, in the Administrative Court in Manchester, has rejected Oldham PCT’s argument that, as Ms Booker had already received a multi-million pound payout on a personal injury claim from her insurer, it was entitled to withdraw care and funding for her case. He ruled that, despite the payout, she was still entitled to free care and services on the NHS.

Background

Alyson Booker was seriously injured in a road accident in January 2001 when she was 9 years old. She sustained a catastrophic spinal injury which left her tetraplegic and dependent upon a ventilator. Liability for the accident was not disputed and therefore, following the commencement of proceeding, judgment was entered on a 100% basis.

Upon her discharge from hospital, Ms Booker’s care needs were met by a combination of her parents and staff provided by the PCT via its specialist children's home ventilation team. The PCT assessed that the claimant required two carers, 24-hours a day.

At the time of settlement, in October 2009, Ms Booker was in the process of transferring from the children's team to the adult team. All parties agreed that she was entitled to have a private care regime, funded by a Periodical Payments Order (PPO). However, they agreed that there was a need for a transitional period during which the PCT’s adult team would become solely responsible for her care needs – this could then become the template for a private regime.

Due to the number of carers involved and the fact that her ongoing care would be a lengthy process, it was agreed that the PPO would start in December 2011. An additional fund was set up to cover the cost of recruiting carers in readiness for the handover. An indemnity was also provided by the insurer in the event that PCT funding was withdrawn prior to December 2011

However, Oldham PCT refused to be bound by the terms of the settlement and argued that it was entitled to withdraw its services and informed Ms Booker that it intended to do so from September 2010 (later extended to October).

Following this, Ms Booker’s legal team launched an application for judicial review with the support of insurers, Direct Line who were joined in the proceedings as an interested party.

Oldham PCT’s argument

The PCT argued that, because Ms Booker had chosen to be treated privately in the future; that she could have been treated privately straight away; and due to the fact she had an indemnity, she no longer had the need for its services.

In reaching its decision, Oldham PCT argued that the ‘tortfeasor pays’ principle was an exception to the fundamental principle that the NHS should be free to all, regardless of means. It saw that the lump sum settlement and PPO of £247,500 per year effectively gave it an opt-out to payment.

It also suggested that as it had not been involved in the settlement, it was not bound by its terms and therefore was entitled to consider what the claimant could have claimed for.

The PCT stated that it had ‘target duty’ under the legislation and was therefore entitled to take into account other cost demands made upon it.

The judgment

Rejecting all the PCT’s arguments, Judge Pelling QC, found that the PCT’s decision was not lawful or rational, as it was based upon Ms Booker’s ability to pay. He stated that the tortfeasor pays principle was irrelevant to the PCT’s position and later identified how undesirable it was for PCTs to become involved in personal injury litigation.

Whilst he agreed that target duty was relevant to whether a PCT could fund a particular type of treatment, this was not a case where the PCT had deemed Ms Booker’s ongoing healthcare provision as low priority. He saw this as an attempt to exclude her from her entitlement as a direct result of her compensation payout which was unlawful.

 The judgement’s significance

In this case the principle of NHS healthcare being free at the point of delivery was re-affirmed. However, the real importance of the judgment lies in what could have happened had Oldham PCT’s argument been successful.

The PCT stated that it could take account of what Ms Booker’s ‘entitlements as against a tortfeasor’ were, however, its argument was not restricted to care provision. The PCT also argued that Ms Booker should pay for the maintenance of her ventilators and also the costs for replacements of these and all other consumables.

If the judge had agreed with Oldham PCT, this would have had implications well beyond the serious injury claims arena, although its impact would have been greatest in this area. According to Judge Pelling, in every case where the claimant was left with a requirement for some sort of future NHS assistance, no claimant “could safely conclude settlement…other than on terms that the future assistance was privately funded and so funded from the date of settlement, without the prior consent…of the PCT.”

This would mean that claimants would be forced to include claims even though (as in this case) the intention was to rely upon NHS provision – significantly increasing the cost of claims. The legal process would be significantly drawn out due to the claimant’s desire to involve the PCT in the negotiations. This would therefore increase costs considerably.

Additionally, the PCT made no distinction between full liability and split liability cases. A claimant entitled to only 10% of his damages would, under the PCT’s logic, lose 100% of their NHS entitlement.

Permission to appeal on this case has thankfully, been refused.