Judicial Review Confirms Full Disregard of Personal Injury Trusts for Social Care Funding

A recent judicial review in CGT, R (on the application of) v West Sussex Council [2026] EWHC 293 (Admin) has reaffirmed that all funds held within a properly constituted personal injury (PI) trust must be fully disregarded when a local authority (LA) assesses eligibility for social care funding. 

Although not a case that Irwin Mitchell were involved in, our teams (both personal injury and public law) have been involved in significant cases relating to double recovery. 

Case Overview

The claimant sustained a brain injury as an infant and received a Criminal Injuries Compensation Authority (CICA) award exceeding £3.5 million, including £2.6 million earmarked for future care, all of which was placed into a PI trust. The claimant’s mother was originally appointed as deputy for property and financial affairs and had agreed to an undertaking to account for any public funding sought. Sadly, the claimant’s mother passed away and his father was appointed deputy without any restriction on seeking public funding.

The LA was asked to conduct a care needs assessment but they insisted that care should be funded from the trust, asserting:

• the PI award included future care costs
• seeking LA funding amounted to double recovery
• the deputy should have repaid CICA
• discretionary payments already made should be reimbursed

The LA sought directions from the Court of Protection (CoP); the application was dismissed, but it still refused ongoing funding.

The Court’s Findings

The High Court held:

• The Care Act 2014 and the supporting Regulations governing means testing are clear, unambiguous and unqualified: the value of funds held in the PI trust fund must be disregarded in full, including sums referable to future care costs;
• This aligns with the long‑standing distinction between:  
  • PI awards not in trust (future care costs can potentially be partially counted), and
  • PI awards safeguarded in a trust (capital is fully disregarded).

Concerns of double recovery should be addressed at the point of settlement of PI damages, consistent with the more recent case of Knight (as property and affairs deputy for BJB) v Barnsley Hospital NHS Foundation Trust & Anor [2024] EWCOP 59 (T2)

The Court quashed the LA’s decision to cease funding and demand repayment. The Claimant retained their right to access statutory care.

Implications for Deputies

• Deputies can be reassured that LA funding cannot be refused simply because future care costs formed part of a PI award, if that award is in a PI trust. The judgment reinforces that deputies must explore publicly funded care where appropriate.
• However, deputies must still:
  • disclose the trust
  • provide full transparency on trust assets
  • ensure the trust is properly constituted and administered
  • consider whether a different approach may be taken in respect of periodical payment settlements

Additional Considerations for Litigation Lawyers

1. Settlement Drafting to Avoid Double Recovery Disputes 

• Make explicit whether the award includes:
  • future care costs
  • statutory funding assumptions
  • contingencies for means-tested support
• Clearly record discussions with defendants about public funding expectations;
• Consider the best approach to avoid double recovery. The case of CGT didn’t address the position if periodical payments were part of the settlement. However, our personal injury and public law teams have formulated a mechanism to address double recovery issues involving periodical payments in a way that ensures that the settlement is used before any public funding and benefits the claimant as there is no upper limit imposed for future care needs. It requires a modified reverse indemnity whereby the claimant confirms on a yearly basis that:
  • they have used any periodical payment on care,
  • any direct payments have either been used to top up or have been repaid; and
  • only where the periodical payment has not been used for care would there be a surplus due to the insurer (WNA v NDP [2023] EWCH 2970 (KB)) 

2. Advising on Trust Structures

• Litigation lawyers should ensure:
  • PI trusts are recommended where future means-testing may arise
  • clients understand the implications for benefits and care funding
  • clients understand that failing to place the award into a PI trust may expose funds to LA assessment.

3. Collaboration With CoP and Public Law teams 

• Early joint working ensures:
  • statutory care legal expert evidence is obtained
  • That a mechanism can be found as in WNA v NDP;
  • settlement structure supports deputyship decisions;
  • future funding disputes are minimised;
  • evidence on future care needs is aligned between PI and CoP teams