R (CGT) v West Sussex County Council [2026] EWHC 293 (Admin)
The Administrative Court’s decision in R (CGT) v West Sussex County Council is an important restatement of principle in community care law. It decisively rejects attempts by local authorities to invoke ‘double recovery’ as a basis for refusing Care Act funding where a disabled person has received personal injury compensation which is held in trust for them. It also closes the door on the revival of ‘Peters undertakings’ by indirect means, and confirms that local authorities should not seek to involve the Court of Protection in disputes with deputies about care funding eligibility in these cases.
The judgment by HHJ Auerbach (sitting as a High Court judge) will be of considerable interest to practitioners in community care, personal injury, Court of Protection and public law. Above all, it confirms that local authorities must apply the Care Act statutory scheme as written – they cannot use common or public law principles to rewrite parliament’s chosen capital disregards.
Facts in outline
The claimant, CGT, suffered catastrophic brain injury as an infant and requires lifelong care. He lacks capacity in relation to property and financial affairs. In 2012, the Criminal Injuries Compensation Authority (CICA) made an award of over £3.5m, including more than £2.6m for future care costs. The award was paid into a discretionary personal injury trust (PI trust) of which the Official Solicitor was sole trustee.
As part of the award process, undertakings were given by the Official Solicitor and by CGT’s then deputy (his mother) that public funding would not be sought for care under the National Assistance Act 1948 without Court of Protection oversight. Those undertakings reflected the then prevailing anxiety about ‘double recovery’ following Peters v East Midlands SHA [2009] EWCA Civ 145.
However, CGT’s original deputy died in 2013. The Court of Protection order appointing the successor deputy (CGT’s father) did not include any restriction on applying for public funding, and he gave no undertaking.
In 2017–2019, CGT sought an assessment from West Sussex County Council. The council initially resisted, citing the 2012 undertakings by the original deputy to the CICA. In 2020, it began meeting CGT’s care costs on a ‘without prejudice’ basis, pending an application to the Court of Protection to vary the deputyship. That application was dismissed in 2023.
On 7 June 2024, the council issued a formal decision letter. It:
1. Refused to fund CGT’s care from 6 July 2024; and
2. Demanded repayment of £271,253.44 paid since July 2020.
The stated basis for the decision was that funding for CGT would amount to ‘double recovery’, because CGT had already received a CICA award including future care costs.
Judicial review proceedings on CGT’s behalf followed.
Statutory framework
The relevant statutory scheme was that set out under The Care Act 2014.
Under section 18, a local authority must meet eligible needs where the person’s capital is below the lower capital limit. Under section 17 and the Care and Support (Charging and Assessment of Resources) Regulations 2014, certain capital must be disregarded.
Crucially, schedule 2 paragraph 15 requires the disregard of: ‘Any amount which would be disregarded under paragraph 12 of schedule 10 to the Income Support Regulations (personal injury trusts).’
Paragraph 12 of schedule 10 to the Income Support (General) Regulations 1987 provides that where trust funds derive from a payment made in consequence of personal injury, both the value of the trust fund and the right to receive payments under it are disregarded.
By contrast, paragraph 16 (referring to personal injury payments not held in trust) excludes from disregard any payment ‘specifically identified by a court to deal with the cost of providing care’.
This difference in wording between these two provisions lay at the heart of the council’s case.
Local authority argument
West Sussex accepted that, if the PI trust were disregarded, CGT’s capital was below the threshold. However, it advanced two core arguments:
1. The 2014 regulations should be interpreted purposively, so that funds specifically allocated to care within a PI trust are not disregarded; and
2. The court should refuse relief to prevent ‘double recovery’.
The council also relied on the 2012 CICA undertakings and argued that it would be unconscionable to grant relief.
Statutory interpretation: a closed question
The court rejected the construction argument in emphatic terms.
At [57]–[61], HHJ Auerbach held that the language of paragraph 12 of the Income Support Regulations (as incorporated by paragraph 15 of the 2014 regulations) is ‘clear, unambiguous and unqualified’. It applies to ‘the whole of the fund’ and contains no carve-out for care elements.
The contrast with paragraph 16 of the 2014 regulations was decisive because it showed that parliament had expressly excluded care payments from disregard in one context but not the other. The court refused to infer legislative oversight, particularly given that Firth, Peters and Reeves had already exposed the issue prior to the 2014 act.
This was orthodox but powerful statutory reasoning: where parliament has spoken clearly, purposive interpretation cannot be used to insert a limitation that is not there.
Another argument run by the local authority based on the planning case of Welwyn Hatfield [2011] UKSC 15 and the ‘benefit from wrongdoing’ principle was also rejected. There had been no deception, no abuse, and no immoral conduct by CGT’s deputies. Parliament had chosen to disregard PI trusts; the court would not rewrite the scheme to reflect local authority concerns about fiscal fairness.
Failure to assess
The High Court held that the council had also failed to conduct a proper financial assessment under section 17 of the Care Act. It attempted to rely on section 31(2A) of the Senior Courts Act 1981 (the ‘highly likely’ provision). The court rejected this – it could not rely on a counterfactual in which it would still have acted unlawfully.
Double recovery and the limits of judicial discretion
The council argued that even if it had erred in law, relief should be refused to prevent double recovery and protect the public purse. The court rejected this submission in strong terms.
At [75]–[83], HHJ Auerbach analysed the authorities on double recovery – including Peters, Tinsley [2017] EWCA Civ 1704, WNA v NDP [2023] EWHC 2970 (KB), and Knight (BJB) [2024] EWCOP 59 (T2). The consistent theme was that the double recovery principle operates at the stage of assessing or approving damages against a tortfeasor. It is not a principle governing the discharge of statutory duties by local authorities.
In Tinsley, the Court of Appeal had made clear that even where damages are awarded, that does not preclude later application for statutory services. The local authority’s role is to apply the statutory scheme, not to police perceived unfairness between public bodies.
The Administrative Court’s function was not to correct perceived systemic imbalances in funding between CICA and local authorities, which is a matter for parliament alone. If parliament considers the regime unsatisfactory, it can amend it.
At [93], the judge rejected the submission that public bodies (in this case the local authority and the CICA) should be treated as a ‘single purse’ so that a loss to one is a loss to the other. Different bodies operate under different statutory schemes.
Remedy
The court:
- Quashed the decision;
- Declared it unlawful;
- Ordered repayment of £66,979.15 paid from the PI trust after the unlawful decision (subject to lawful charging contributions); and
- Awarded costs on the standard basis.
The repayment order is particularly significant. The court did not merely quash; it restored the trust to the position it would have been in had the council complied with its statutory duty.
Implications for practice
1. PI trusts are fully disregarded — even for care elements
This case confirms that local authorities must disregard the entirety of a PI trust, even where the award explicitly included future care costs.
Attempts to distinguish between care and non-care elements within the trust are unlawful under the current regulations.
2. Double recovery is not a Care Act concept
The ‘double recovery’ principle belongs to tort law assessment of damages. It does not empower local authorities to refuse to comply with Care Act duties.
Practitioners should be alert to councils framing refusals in moral or fiscal language rather than statutory terms.
3. Peters undertakings are obsolete
The judgment reinforces the direction of travel already evident in Tinsley and Knight (BJB): the Court of Protection is not the venue for regulating double recovery. Nor should deputyship restrictions be used to achieve that end. Where no restriction exists in the deputyship order, the deputy may apply for public funding without seeking Court of Protection approval.
4. Relief will not be refused lightly
The court rejected arguments that no prejudice arose because funds were available in the trust. Depletion of a lump sum award is real prejudice. Public bodies cannot rely on the claimant’s private resources to escape statutory duties.
5. Legislative reform?
The structural anomaly remains: personal injury payments not held in trust can have care elements excluded from disregard, but PI trusts are wholly disregarded. Parliament has chosen that scheme, but fiscal pressures may prompt reconsideration. Until then, local authorities must comply with the current regime.
Conclusion
R (CGT) v West Sussex CC is a clear and principled reaffirmation of the rule of law in community care.
The Care Act scheme is not to be rewritten by appeals to fairness between public bodies. Where parliament has mandated disregard of personal injury trusts, local authorities must apply that rule. Double recovery concerns are a matter for the courts assessing personal injury damages, not for the Care Act assessor.
For practitioners, the message is simple: PI trusts remain (at least for now) sacrosanct in means-testing under the Care Act. Attempts to circumvent that position are unlawful.
Rachel Burley-Stower, a solicitor at Martin Searle Solicitors, represented CGT in judicial review proceedings. Katharine Elliot of Landmark Chambers was counsel for CGT and contributed to this article
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