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R (B) v Cornwall Council [2010] EWCA Civ 55

Appeal by local authority against a judgement in judicial review proceedings that a local authority's decision to charge for community care services was unlawful. Appeal dismissed.

The appellant local authority had assumed responsibility for providing certain care services from the local NHS Trust in 2008. The NHS Trust did not recover costs but the local authority consulted with those affected, including the respondents to this appeal,  to determine how much should be charged. In May 2008 the weekly charge for the respondents was assessed at "nil", in the light of their income and the "disability-related expenditure" (DRE). However an authority-wide review of these new assessments was conducted and discrepancies with existing recipients of services meant that the decision was reconsidered. A letter sent on 8th August to the respondents informed them that the May assessment was no longer valid and the contribution would be £68.50, primarily on the grounds that the respondents should provide evidence of their DRE costs. Following the judicial review, the 8th of August decision was found to be unlawful.

In this appeal, counsel for the local authority abandoned any submissions to overturn the declaration that the decision was unlawful. Instead she narrowed the point to say that the council would need to take a fresh decision if the current one was declared unlawful and that would be disproportionate as the council had made several offers to review following the 8 August decision. In response counsel for the respondents submitted that the new decision would simply replace the unlawful one as at the date of the original decision. Waller LJ instead states that this was a fundamentally flawed decision and that the respondents could not be criticised for refusing an offer "which insists on reliance on a decision which is unlawful": that reason "would itself provide strong grounds for refusing to exercise a discretion in favour of the authority".


Neutral Citation Number: [2010] EWCA Civ 55
Case No: C1/2009/0834

Mr Justice Hickinbottom
[2009] EWHC 491 (Admin)

Royal Courts of Justice
Strand, London, WC2A 2LL

B e f o r e :
LORD JUSTICE WALLER (Vice-President of the Court of Appeal, Civil Division)
The Queen on the Application of B (Respondent)

- and -

Cornwall Council & Anr (Appellant)


Philip Coppel QC (instructed by Messrs Follett Stock) for the Respondent
Nathalie Lieven QC and Nick Armstrong (instructed by Cornwall Council) for the Appellant
Hearing date : 8th December 2009


Crown Copyright ©

Lord Justice Waller:
1. This is an appeal from the judgment of Hickinbottom J, handed down on 16th March 2009. By that judgment he found that the appellant authority's assessment of the respondent B's liability to contribute £30 from 1st October 2008 and £68.50 as from 1st October 2009 towards his costs of care made by a letter dated 8th August 2008 was unlawful. At the hearing of the appeal the authority challenged each of the grounds on which the judge had found the decision unlawful, but primarily argued that the offers made after the decision of 8th August to review that decision cured any illegality.

2. By the conclusion of the hearing however Miss Nathalie Lieven QC for the authority confined her challenge to the decision of the judge on one point and that was as to the relief he granted. She submitted that, as a matter of discretion, the judge should have refused to declare the decision unlawful. Her argument, in short, was that, if the decision was declared unlawful, the authority would be required to take a further decision which the authority could not "as a matter of policy" backdate to 8th August 2008 and, since the authority had made repeated offers to review that decision, it would not be proportionate or reasonable for the court to place the authority in a position of only being able to take decisions for the future by declaring the decision of 8th August 2008 unlawful.

3. In relation to what was now the only point taken, Mr Philip Coppel QC's primary answer was that in judicial review where decisions were declared unlawful and decision makers were directed to retake the decisions in accordance with any guidance given by the judgment of the court, any "new" decision simply replaced the unlawful decision and was thus effective from the date of the challenged decision. This was not accepted by Ms Lieven for the authority.

4. We were not clear that counsel on either side had had a proper opportunity to consider the validity of Mr Coppel's concession and we asked that written submissions be exchanged after the conclusion of the hearing. In those written submissions Miss Lieven does not (as it seems to me) deal with the position in judicial review generally. She refers to the position which she suggests the authority is in, in this particular case, so far as charging is concerned. She refers to the National Guidance provided to authorities and particularly to paragraph 96 which provides "Charges should not be made for any period before an assessment of charges has been communicated to the user" and suggests that the only exception to this is "where the user has not co-operated with the assessment" (inapplicable in this case). She submits the guidance would have to be followed by the council.

5. But if Mr Coppel's concession is right and a decision now taken lawfully would be as if made on 8th August 2008, it seems to me that the guidance would be complied with. But the question is whether Mr Coppel's concession was rightly made. Mr Coppel in his written submissions maintains his position but is not able to cite authority clearly dealing with the point, as opposed to authority where the point might have been taken. I can see the force of his submission but it is not, as it seems to me, free from all doubt in a case such as the present. It is possible that circumstances in different cases might bring about different results and, having regard to the fact that the matter has not been fully argued out in this case, and because there are persons other than B who might be affected by the decision, it would not I think be right simply to rule in this case that any new assessment could have effect as if it were made on 8th August 2008.

6. What, however, I am clear about is that it would need special circumstances (e.g. a highly technical and understandable error), if a court were to be persuaded to exercise its discretion in favour of leaving in place an unlawful decision on the basis that the decision-maker would only be able to take a lawful decision for the future and suffer financial consequences from not having taken a lawful decision at an earlier stage. The circumstances of this case, as I shall briefly explain, do not approach such a special case.

7. B is a 48-year-old man with a moderate learning disability and who presents with challenging behaviour. Until 2008, the care costs of B (and other residents in a care home called C) were borne by the Cornwall Partnership NHS Trust. While the NHS Trust provided care on the NHS it did not recover any of the costs from the service users. In 2008 responsibility for the care of B and others in C moved from the NHS to the authority. The authority had traditionally charged those for whom they provided community care services into which category B and others at C now fell. Discussions took place between those responsible for B - Mr and Mrs B - about the charging policies and how they fitted with those receiving welfare benefits, which led to Mr and Mrs B asserting they had a legitimate expectation of no charges being made for B, but the judge rejected that case.

8. The important aspect of the case flowed from what occurred after the authority had taken over and in the way the authority went about assessing whether and what charges would be made. There are certain important points to emphasise. First the specific needs of a disabled adult are and were specified in a statutory "care plan" which the local authority of the area in which the adult lives must prepare and keep up to date, making assessments of ability to pay charges promptly thereafter. Paragraph 96 of the Department of Health's Guidelines provides:-

"Once a person's care needs have been assessed and a decision has been made about the care to be provided, an assessment of ability to pay charges should be carried out promptly, and written information about any charges assessed as payable, and how they have been calculated should be communicated promptly."

9. In paragraphs 23 to 29 of his judgment the judge reviewed and was critical of various care plans which formed the background to the critical period during which the challenged decision was ultimately made.

10. The second point to emphasise is that in assessing the needs of a person "The local authority must consult the person, consider whether the person has any carers and, where they think it appropriate, consult those carers". [See 'The Community Care Assessment Directions 2004' quoted in paragraph 9 of the judge's judgment].

11. Third, in making an assessment of what charge would be levied, net income was calculated on the basis of total income less sums allowed against that income, including "disability-related expenditure (DRE)". As will become apparent, it is the DRE element that differed as between the original assessment in May 2008 and the assessment in August 2008 that gave rise to the challenge.

12. The judge deals in detail with the assessments in May and how the challenged decision of 8th August 2008 came to be made from paragraph 29 through to 44. It is sufficient to summarise the position as follows. A first assessment was carried out by Ms Colliver, on behalf of the authority. She met Mr and Mrs B on 27th May 2008 at their home, thus fulfilling the requirement to consult carers. Ms Colliver had provisionally calculated that B should contribute £18 per week towards cost of care. However in line with the relevant guidance she discussed other elements of expenditure with Mr and Mrs B. The DRE figure was recalculated at the meeting, Ms Colliver placing in the designated column a "Y" for "yes" in relation to evidence seen to support the various elements. The DRE elements exceeded B's relevant income by £5.54 and in the result at the meeting the weekly charge was assessed as "nil" and the document was initialled by those present.

13. Once the authority had done calculations for about 180 people who, like B, were transferring from the NHS to the authority, an internal assessment was carried out. The judge in his judgment then said this in paragraphs 35 to 37:-

 "35. Therefore, by 4 June (about a week after B's May assessment):

(i) The Authority had identified a major problem in the assessment to charging of those service users who had transferred over from the Trust. The levels of assessment were much lower than the levels for those service users who were already being provided similar services by the Authority.

(ii) Two reasons for this discrepancy had been identified by the Authority. First, the assessors had allowed as DRE items which could not fall within that category of expenditure. Second, the assessors had allowed as DRE items which could fall within that category but which were not evidenced as the Authority required from other users. Evidence was lacking in respect of both the identification of expenditure as reasonable DRE, and also quantum (receipts and bills).

(iii) Concern was expressed over the content of the care plans: as to what should fall within the care plan, and what should not.

(iv) In the circumstances, it was proposed that there be transitional arrangements to enable the Authority to do further work on the care plans, and also do further work on ensuring that DRE was properly evidenced.

36. It was agreed that every assessment would be reviewed as a paper exercise - and a letter would go out to all service users affected informing them that there would be no contribution before October 2008, and that assessed charges would be communicated by the end of July 2008.

37. That letter was sent out on 30 June, in the following terms: 

 "You have recently been visited, or very soon will be, by a person from the [DASC]. This person will look at how much you will need to pay towards your support.

Not long ago we met in Adult Social Care to think about how much money you may need to pay towards the cost of your support. You will not need to pay any money at all until October 2008.

We will send you another letter at the end of July to explain how much you will have to pay and how this will work.""

14. Mr and Mrs B said they did not receive the letter of 30th June but, as the judge pointed out, it would not have helped the authority's position if they had. He said:-

"38. Mr & Mrs B say that they never received this letter. In any event, had they received it, they would not have been discomforted by it nor gained much from it. They had been seen by Ms Colliver at the end of May: they considered her to be competent in making financial assessments: and B's contribution had been assessed at nil. In this letter there was nothing to suggest that that assessment was wrong - as the Authority considered it to be by this time - or that a fundamental review of the assessments was under way, or that the assessment might shortly change dramatically upwards. This letter was, at best, unhelpful: and at worst positively misleading as to the then current position. Had it been received, it would have done nothing to alert Mr & Mrs B as to what might be on the way."

15. An internal desk-top review then took place internal to the authority without any further consultation with and thus input from Mr or Mrs B. This led, without any warning or any explanation as to why the May assessment was no longer valid, to the letter sent on 8th August 2008, quoted in the judgment at paragraph 41, informing B that his contribution would be £68.50.

16. The letter itself contained absolutely no explanation for there having been an alteration between May and August 2008, and came as a complete shock to Mr and Mrs B. It seems that the calculation had been done by removing certain items as DRE "either due to lack of evidence or (because) they were not applicable as DREs". Thus, having in May accepted they had evidence to support the DRE elements, without any further consultation with Mr and Mrs B the authority had concluded, internally, that they had insufficient evidence and relied on that to send without explanation or apology the letter of 8th August 2008.

17. The judge's findings are summarised in paragraphs 64 to 73. In these paragraphs he also refers to the responses of the authority relevant to the point being argued before him that the authority's offers to review cured any unlawfulness. He furthermore makes clear that the form of relief remained to be considered:-

"64. First, in my judgment, the Authority acted unlawfully in failing to engage with Mr & Mrs B as they ought to have done, and as the Community Care Assessments Directions 2004 and 2003 Guidance in particular required them to do. As Ms Colliver at least apparently sought to do in May 2008, with Mr & Mrs B, they ought to have identified B's needs and the actions that they proposed to take to alleviate those needs, and then considered the question of whether the costs of such steps were properly DRE. The May assessment form indicated that Ms Colliver (an experienced Senior Financial Officer, used to making such assessments) was satisfied that the expenses identified in the form were reasonable DRE and were expenses that had been or were going to be incurred. She came to that view with the benefit of having met both Ms Curnow and Mr & Mrs B, and discussed the relevant needs and steps with them. In July/August, the Authority were in breach of the relevant Directions and guidance in performing an assessment without engaging with Mr & Mrs B at all, particularly as the reassessment increased the charges considerably. In the light of the May assessment - and Ms Colliver's views on what of B's expenditure constituted DRE - that breach cannot be considered immaterial. To be fair to Dr Armstrong, he did not seek to defend this lack of engagement. His submission went to the steps the Authority took after the decision, which (he submitted) rescued them in terms of merits. The Authority quickly realised that they had not done enough to communicate with service users in relation to the charges, and they sent out a statement from Mr Fripp apologising and arranged a meeting to address concerns (see Mr Fripp Statement 11 February 2009, Paragraph 12). But those post-decision steps cannot make valid an unlawful decision. In any event, I do not accept that B has not suffered prejudice, for the reasons I give below.

65. Second, there is no doubt that the Authority's approach to their decision of 8 August was, at least in part, defective. Although Dr Armstrong said that the Authority's view now was that they merely required evidence that expenditure in each of the claimed categories was DRE and they would allow it, that was not their approach at the time. In his letter of 1 October 2008 to B's solicitors, Mr Fripp said this of the holiday item:

"As you will see from our [DRE] guidance, holidays and trips out are not specifically mentioned. This is because the Department does not consider either as essential expenditure needed for independent living and is treated as a discretionary purchase."

That is of course a reference to the pre-December 2008 guidance of the Authority, (referred to in Paragraph 15 above). In this letter, Mr Fripp was clearly referring to the additional costs of a holiday as the result of a service user's requirement for a carer (i.e. the costs of a carer's travel, accommodation, food, etc, and a charge relating to that carer's wages), and not the service user's own costs of travel, accommodation, food etc - because he was responding to the letter of 11 September from B's solicitors which made clear that the former were the only holiday costs being claimed.

66. Mr Fripp's letter betrays a number of errors of approach. First, as the Authority accepted through their Counsel Dr Armstrong at the hearing before me, additional expenses of a holiday (such as those of an accompanying carer) which are all that B claims, may be DRE: and before me Dr Armstrong accepted that there was probably enough evidence in this case so to classify them Certainly it is not correct to say, as Mr Fripp did, that such expenses are incapable of being DRE, irrespective of the evidential basis. Second, the Authority's guidance is only guidance. As I indicate above (Paragraphs 15-16), the Authority's guidance before December 2008 had no reference to holidays: after November 2008, there was reference to one week and a maximum cost of £500. But each of these guides can be no more than that: they must be capable of being overridden if (for example) a service user has evidence, perhaps from a medical practitioner, that two weeks of holiday is necessary for a particular individual as needed for independent living. The discretion - and proper judgment - that lies in the Authority cannot be bound by the guidelines, as Mr Fripp suggests. Third, the indication that holidays can never be regarded as DRE at least heavily suggests that Mr Fripp's approach to the parameters of "essential expenditure needed for independent living" is flawed - because on any proper view such expenditure must be capable of being DRE. 

 67. Third, I do not consider that the Authority's approach to B's care plans, in context, was lawful. Care plans cannot be viewed in isolation, as Mr Coppel invited me to do. They have to be viewed in the whole context of a case. That is what Sedley J referred to in Rixon (see Paragraph 12 above), and there are reflections of the same point in the judgment of Hallett LJ in (e.g. at Paragraph 72). Mr Coppel is of course right that, with the benefit of hindsight, the care plan documents could have been fuller. Indeed, they do not fully comply with the guidance in terms of content. Ms Harvey appears to have recognised that the relevant care plans needed work doing on them, before a full charges assessment could be made, e.g. (see her email to Mr Fripp of 6 June 2008 quoted at paragraph 36 above). The responsibility for doing that further work fell upon the Authority. Whilst I appreciate - and endorse - the comments of Hallett LJ about the caution with which adverse judgment should be passed upon a particular care plan (Ireneschild, Paragraph 71), in my judgment it was not open to the Authority in this case to refuse to accept expenditure as DRE on the basis that the required need was not evidenced in B's care plan, whilst at the same time identifying defects in that plan and failing in their duty to consult Mr & Mrs B who may have been able to provide the evidence lacking in the care plan itself.

68. Fourth, it is for the Authority to assess eligible needs. That is their statutory duty under Section 47 of the 1990 Act. Of course, if requested to do so, a service user must provide evidence that DRE has actually been expended (by the provision of receipts, bills etc), and that is the specific reference to the provision of evidence in the 2003 Guidelines (see Paragraph 13(ix) above). Furthermore, it is right that the views of the service user and family carers are sought as to his needs and the steps the authority propose to take in respect of those needs. The relevant guidance requires that. The user may of course also be able to produce evidence of a particular need. But the authority cannot avoid its obligation to assess needs etc by failing to make an appropriate assessment themselves, in favour of simply requiring the service user himself to provide evidence of his needs. In this case, so far as the August assessment is concerned, I am afraid the Authority appears to have abrogated its obligation in that way. Ms Harvey appears to have accepted that the care plan fell short. In any event, I consider the Authority acted unlawfully by disallowing expenditure as DRE on the basis that B had failed to evidence the expenditure as DRE to their satisfaction whilst they gave B (effectively Mr & Mrs B) no opportunity to make good that perceived evidential deficit. In the Authority's own guidance, it is suggested that, if evidence is not forthcoming, then the Finance Officer should ask for it to be produced at the next charges review. Whilst that appears to be concerned with evidence of expenditure (receipts, bills etc), there is no suggestion in that guidance that a failure to produce evidence should be fatal, and that no opportunity should be allowed to correct evidential deficits.

69. Fifth, even looking at the care plan documents alone - i.e. without the benefit of any input from Mrs & Mrs B, or Ms Curnow - I do not accept that there is no evidence supporting the relevant heads of expenditure as DRE. Homestay costs is the largest item (£32.31 per week). The Authority's own guidance presupposes claims will be made by family carers (see Paragraphs 15-16 above). The care plan documents are replete with indications that B's family is important to him with regard to relationships: and also that he needs 24 hour support (for example, in the October 2007 document, see Paragraph 26 above: and the February 2008 Care Plan makes clear that: "Other than when he needs medical treatment [B] needs a support worker with him"). There is evidence that the money payments are indeed made to Mr & Mrs B. Whilst I appreciate that weight of evidence is for the Authority as decision maker, it is not right to say there is no evidence in support of this item in the care plan documents: and they have not indicated why this evidence is inadequate and what further evidence they require before accepting this item as DRE. That is why engagement with Mr & Mrs B, required by the guidance, is so important.

70. I accept that the evidence in the care plan documents in relation to some of the other items is not as strong. However, for example, in the April 2008 document, there is reference to his swimming 1-3 times per week, under the heading "Details of changes/progress" in relation to his physical well-being. Whilst there does not seem to be any written evidence from medical practitioners about the benefits of reflexology and aromatherapy, one does not know what evidence Mr & Mrs B or Ms Curnow may be able to give, particularly if as presaged in the care plan documents Ms Curnow has seen B's medical practitioner about his depression. These are enquiries the Authority ought to have made before making their August 2008 assessment.

71. For these reasons, I find that the charging decision in the letter of 8 August 2008 was unlawful.

72. That takes me on to appropriate relief.

73. I will certainly hear submissions in relation to relief, if and when appropriate, and in relation to directions in the meantime. However, the most important and urgent thing is for a proper charging assessment to be made by the Authority in relation to B, on the basis of the legal guidance contained in this judgment. That should not be difficult for them, because during the course of these proceedings, they appear to have recognised at least some of their deficiencies in making the August assessment. They will need to engage properly with Mr & Mrs B, who will, I am confident, cooperate with the Authority in the exercise. If necessary, I can give directions to ensure that that engagement is productive. However, I understand that meetings have already been arranged between Mr & Mrs B and the Authority. In the circumstances, subject to any further submissions, I would propose to stay this claim until 1 May 2009 with permission to apply, to allow those discussions to proceed. I reserve any further application in relation to this matter to me."

18. Before us (as I have already indicated) Ms Lieven ultimately rightly abandoned any argument challenging the judge's finding of unlawfulness and also rightly did not pursue an argument that this was one of those cases where the decision being attacked was part of an on-going process so that offers to review or continue with a decision making process might cure any unfairness at an earlier stage of the process, as in R (Ireneschild) v LB Lambeth [2007] EWCA Civ 234. That case was not concerned with a final determination but with the lawfulness of a community care assessment plan. It was concerned with an assessment as part of an on going process "which by its very nature was capable of further review".

19. The instant case is concerned with a decision to impose a charge where the previous decision correctly taken after consultation had been for a nil charge. It is true that the quantum of that charge might be kept under review but the unlawful decision to impose a charge is the very decision that the authority wishes to persuade the court, as a matter of discretion, to keep in place.

20. It is not absolutely clear what argument was addressed to the judge seeking to persuade him as a matter of discretion not to declare the decision of 8th August 2008 unlawful. We do not have a transcript of the judge's ruling on the relief he was prepared to grant. Mr Coppel suggests the point was not taken at all but he argues in the alternative that if it was taken then it was eminently a matter for the exercise of the judge's discretion.

21. I do not find it necessary to get into any argument as to whether the point was open to the authority on an appeal; nor do I need to consider further how the judge dealt with the point (if it was taken) because it seems to me that only one answer to the point is possible. This was a decision to make a charge which was fundamentally flawed. The authority did, it seems, offer an apology for the way in which they had acted but did not offer to start again in order to put matters right; they sought to maintain their assessment asking those acting for B to come up with evidence to establish that the authority's assessment was wrong [see for example a note prepared for the meeting on 15th September page A34]. They offered a review but maintained they were not going to postpone the levying of the £30 as from 1st October 2008 [see letter dated 1st October 2008 page A 37]. If the authority had accepted that the decision should be set aside and had offered to commence the process again that might have provided a basis for exercising a discretion in favour of the authority, particularly as a fresh decision could have been taken before or very close to 1st October 2008, the date from which charging was intended to commence. But an offer which insists on reliance on a decision which is unlawful is not one which a party can be criticised for not accepting. This insistence and non-recognition of the unlawfulness would itself provide strong grounds for refusing to exercise a discretion in favour of the authority.

22. In addition however there was also a dispute as to the methodology used by the authority in relation to the calculation of DRE, particularly in relation to additional costs of a holiday as the result of B's requirement for a carer. Those advising B were not prepared to have the matter reviewed by reference to what they suggested was a flawed approach. That was a legitimate stand to take, particularly as the judge ultimately held that the authority's approach was flawed [see paragraph 66 of the judge's judgment].

23. In my view the judge was bound to refuse to exercise a discretion in favour of the authority and was bound to declare the decision unlawful. I would dismiss the appeal.

Lord Justice Hooper :
24. I agree.

Lord Justice Moore-Bick :
25. I agree that the appeal should be dismissed for the reasons given by Waller LJ