UK: Local Authority National Assistance Act ´Deprivation Of Assets´ Procedures Ruled Incompatible With Human Rights Convention

The Administrative Court has ruled that local authority National Assistance Act 'deprivation of assets' procedures are incompatible with article 6 of the Convention, (fair determination of civil rights) and that the limited supervisory scope of judicial review is insufficient to cure that incompatibility.

The solution, which must be accepted by local authorities, for future determinations of a person's intention when giving their property away, is appointment of a 3-person independent panel. The judgment gives real teeth to such panels, by emphasising that they must be made fully aware that they are fact finding bodies, who must give clear reasons for accepting or rejecting evidence, and whose findings will have to be accepted by the authority, unless there is a very good reason why not. These changes to current panel practice will have an inevitable knock-on effect for the clout, constitution and training of Complaints Panels sitting as an 'appeal' body from such decisions, and possibly even the wider range of assessment and provision decision complaints within the social services field.

The facts were that a Mr Beeson owned and occupied his house, which was his only major asset. In 1997, at the age of 90, he suffered a stroke and was hospitalised. Shortly after his discharge, he gifted his house to his son, out of concern that his son, whose marriage had recently broken down, might otherwise become homeless. Mr Beeson continued to occupy his home and was keen to live independently, but in 1999 he suffered another stroke and was subsequently assessed by the council as needing residential care.

In considering Mr Beeson's application for assistance with the cost of his residential placement, the local social services authority decided that Mr Beeson had "deprived himself of an asset with which he could have funded his residential care" by gifting his house to his son. Section 21 of the National Assistance Act 1948 places a duty on local authorities to provide residential accommodation to those in need of care and attention not otherwise available. Section 22 requires local authorities to make a charge for the full cost of that accommodation unless the person satisfies the authority that they are unable to meet the costs. Regulation 20 of the National Assistance (Assessment of Resources) Regulations 1992 provides for the amount of capital to be disregarded (currently £18,500) when assessing someone's ability to pay, whilst regulation 25(1) states that 'a resident may be treated as possessing actual capital of which he has deprived himself for the purpose of decreasing the amount he may be liable to pay for his accommodation...'.

Mr B 'appealed' against the decision that he should be deemed still to own his house, through the council's social services complaints procedure (each authority is obliged to operate such a system). Mr Beeson's initial appeal was rejected by the Complaints Officer, as was his second level appeal. The third and final level of appeal was to a panel consisting of two councillors and an independent chairperson appointed by the council, as per the usual practice under the Complaints Procedure Directions 1990.

Although the evidence given to the panel by Mr Beeson's son was that neither he nor his father had been aware of the 'deprivation of assets' regulations when the house was transferred, and that his father planned to die in his own home, and not in residential care, the panel was of the view that "ignorance of the law is no defence and accordingly there had been a deprivation of assets..." That conclusion was ratified by the Director of Social Services who, in his decision letter, informed Mr Beeson that either he could pay the accommodation costs, or his son could agree to the council placing a charge on the property.

Mr Beeson's judicial review claim was successful, the judge finding that (a) the council's decision was based on a legal misdirection and (b) the complaints procedure was incompatible with article 6 ECHR.

In law, the test under regulation 25(1) of whether someone had deprived him or herself of an asset "for the purpose of decreasing or escaping liability to pay" was a subjective test which the council had failed to identify and apply with sufficient clarity, as indicated by the observation of a panel member that 'ignorance of the law is not an excuse'. The panel was not given as much assistance on this as it should have been; for example it did not appear to have been shown the Secretary of State's guidance on how to approach such decision-making.

Further, the evidence of Mr Beeson's son that the transfer took place at a time when his father intended to live, and ultimately die, in his home was of central importance; yet there was nothing in the panel's findings to show that, applying the correct subjective test, it was rejecting the son's evidence, which would have been necessary to underpin the finding it had gone on to make. In order to give an adequately reasoned decision, the panel would have had to explain precisely why it was rejecting that evidence. There was nothing in the Director's decision letter to indicate any awareness of a problem in the panel's decision-making process and in any event, it was doubtful whether the Director could have cured the flaw in the panel's finding without at least hearing the oral evidence of Mr Beeson's son.

Although that finding alone was a sufficient basis for quashing the council's decision, the judge went on to consider the Convention points in full as these could "affect the procedure to be followed when the decision is retaken", as well as providing an additional basis for a finding in the claimants' favour.

Article 6(1) provides:

The judge found that, in as much as Mr Beeson was claiming an entitlement to have his house left out of account in the determination of his liability to pay, and, therefore, of the extent to which the council would provide funding, Mr Beeson had "suffered an interference with his means of subsistence and was claiming an individual, economic right flowing from specific rules laid down in a statue", so as to come within the meaning of an article 6 "civil right" as set out by the ECtHR in Salesi v Italy.

The result of the assessment of need was to generate a duty under the statute to provide accommodation and a separate duty to recover payment for it in accordance with the provisions of s22 and s26 NAA 1948. The various duties and entitlements arose directly through the operation of the statute, not by way of offer and acceptance, and the discretionary element in regulation 25 was not fatal to this analysis.

It could be said that there was a "determination" of that civil right, either at the stage of the final decision by the council, or that the decision triggered a dispute which was the subject of a determination by the court. The fact that there was a very real dispute between Mr Beeson and the council as to the purpose for which he gifted his house to his son indicated that the ultimate decision could properly be characterised as the resolution of a dispute, rather than as the mere exercise of a legal power by the council.

The complaints procedure by itself was inadequate to secure the requisite degree of independence and impartiality. There was only one independent member on the panel, the other two members of the panel being members of the defendant council and, in any event, the actual decision was taken by the council's own Director of Social Services. The council's decision clearly had resource implications and the risk of this influencing the panel members and the Director was obvious and could not be dismissed as negligible. The question therefore was whether the judicial review process could compensate for the lack of an independent element in the decision-making process so as to ensure overall compliance with art. 6(1).

The judge concluded that it could not. This case could be distinguished from the Alconbury case where it was held that judicial review was capable in principle of providing sufficient judicial control of a planning decision by the Secretary of State. There was sufficient independence vested in the role of the planning inspector, who was an expert tribunal, to make it unnecessary that the High Court should have a broad jurisdiction to review his decisions of fact. The same could not be said of a councillor who is directly connected to one of the parties to the dispute, ie the council, and it was impossible for the court to cure the often imperceptible effects of the influence of the connection between the fact-finding body and a party to the dispute, since the court has no jurisdiction to reach its own conclusion on the primary facts; still less any power to weigh the evidence.

It would be neither appropriate nor permissible for the court seek to cure the article 6 deficiency by expanding its fact-finding functions so as to become an appellate court, rather than one of review: the jurisdiction of the Administrative Court is supervisory except where a right of appeal has been specifically conferred by statute.

The judge however went on to say that no declaration of incompatibility with Convention Rights would be made, under the Human Rights Act 1998, because it would not require much, or anything outside the existing powers of local authorities, to make the decision-making process into one which was art. 6 compliant. The appointment of a fully independent panel, (which the authority has the power to do, under the Complaints Procedure Directions, 1990) when combined with the supervision of the court on judicial review, would provide a sufficient procedural safeguard. The directions require 'at least' one independent person, and thus provide current lawful scope for the provision of three. The final decision-maker (usually the Director of Social Services) would have to give reasons, and if the authority's decision departed from the panel's findings, it would have to disclose a properly reasoned basis for doing so, which would enable the court to exercise effective supervision. No change in legislation was therefore necessary to achieve article 6 compliance: it simply required a change of practice.

We cannot imagine that Authorities would want to have complaints panels with three independent members solely for these relatively rare 'deprivations of assets' decisions, and retain the one independent member for the rest. The court said that ordinary complaints about assessment of needs and provision would not attract article 6 obligations (because they are not about the determination of civil rights as such, depending as they largely do on discretionary decisions). But if 3-independent member panels become the norm, it may be that this case will bring about a new era in complaints determination whereby complaints panels play a very much enhanced role in ensuring satisfaction and equitable service delivery.