September 2018 - MLP Law

Care Funding & Deprivation of Assets 

 

We are often approached by clients worried about having to pay for the cost of future care and how this may impact upon the assets which they wish to pass on to future generations.

When planning for the future there may be a temptation to simply give away assets of significant value such as houses, cars, jewellery etc in order to avoid having these assets taken into account if you need to pay for future care costs. This is not a decision which should be taken lightly (especially if this involves a transfer of ownership of your own home), and legal advice should ideally be sought as there can be many downsides which you have not considered.

Of particular concern is that a decision to give away significant assets can result in a future allegation by your local authority that you have deliberately deprived yourself of assets in order to obtain funding for your care needs. This is a growing occurrence as cash-strapped local authorities struggle to fund the cost of care for a growing elderly population. Allegations of deprivation by councils used to be rare, however they are taking a much harsher line these days which is aided by very loosely worded regulations and guidance.

In essence if a local authority believes that someone has intentionally reduced their assets (property, cash, possessions etc) with a significant intention to avoid these being included in a financial assessment for care home fees, then the local authority can assess them on the basis that they still own these assets.

A couple of recent decisions by the Ombudsman have shown how willing local authorities are to make allegations of deprivation against people who have made decisions to pass on money and assets to their children.

 

The South Gloucestershire Decision

 

A very recent decision concerned South Gloucestershire Council treating an elderly couple who gave money to their daughter to buy a house as having deliberately deprived themselves of this money in order to avoid paying for their care needs.

The background to the case was that the couple had four children and had previously helped three children onto the property ladder with cash gifts. Their daughter had been in employment tied accommodation and was buying her first property decades after her siblings. Her parent’s intention was to be fair to her and provide her with the same assistance as they had with their other children, however by this time the husband had some significant health conditions and was likely to need care. The council found out about the cash gift and immediately treated this as a deprivation and stated that the husband was not entitled to financial assistance.

The Local Government & Social Care Ombudsman found that the Council had not followed a suitable decision making process and had not given the wife the opportunity to provide evidence to counter their allegations, and had not provided a sufficient explanation of its reasons for deciding a deprivation had occurred.

 

The North Yorkshire Decision

 

An earlier decision in January 2018 involving North Yorkshire Council also criticised a finding that an elderly lady had deprived herself of capital when making gifts to her children over a number of years whilst she was in a care home.

The background to this complaint was that the lady had entered care in 2007 when she was 80 after a stroke. She paid the full cost of her care for 9 years until her capital reduced to levels where she could ask the council to assist with the funding of her care. The council then became aware that the lady had given cash gifts to her family whilst she had been in care and immediately decided that this was a deprivation. The gifts which had been given had followed a pattern of giving to family members which pre-dated the lady’s entry into care and which amounted to around 30% of the money which she had when she sold her home in 2007. She had spent the remaining 70% on her care fees.

The Ombudsman took the view that there was no evidence that the lady had made the gifts with the significant intention of avoiding paying for care, as she had been self-funding her care for many years and no-one could have predicted that she would have needed to pay for care for so long. At the time of making the gifts the lady had believed these to be entirely affordable.

 

Summary

 

Statutory Guidance on care funding clearly states that people should be treated with dignity and respect and are free to spend their income and assets as they see fit, including making gifts to friends and family. It is clearly the case that Local Authorities should not simply assume that a gift is a deprivation. There may be valid reasons why someone no longer has an asset and a local authority should ensure it fully explores the circumstances before making hasty conclusions.

However the risk that there will be an attempt to treat a gift as a deprivation becomes increasingly likely as a person becomes older, and is almost inevitable once a person does have care needs.

Accordingly, if you are considering making a sizeable gift or transfer of ownership please do consider obtaining legal advice so that you can make an informed decision on the best way forward.

 

Please contact us on 0161 926 5533 for a further conversation to see whether we can offer assistance.

 

 

 

GUIDANCE ON EXPERT CONTINGENCY FEES

 

Recent guidance on instructing experts in legal proceedings on a contingency (no win, no fee) basis has recently been given in the case of Gardiner & Theobald LLP v Jackson.

Those seeking to pursue a claim are, quite naturally, concerned about the costs of doing so.  The courts are keen to increase access to justice but must also ensure public trust in the system of justice and a delicate balance must be drawn.  Many cases, including those in the construction industry, turn on and are decided by the expert evidence.  However, the obtaining of proper expert evidence is not an uncostly exercise and claimants are keen to spread risk on costs.

In R (on the application of Factortame) v Secretary of State for Transport, the court indicated that the general proposition of the provision of evidence on a contingency fee basis (giving a significant financial interest in the outcome of the case) is highly undesirable with the threat to an expert’s objectivity posed by a contingency fee agreement possibly carrying greater dangers to the administration of justice than would the interest of an advocate or solicitor acting under a similar agreement.  The court advised that the party seeking to retain an expert on a contingency fee basis must advise the court of this with the court then deciding whether to permit that expert to give evidence.

In the Gardiner & Theobald LLP case, the court provided some further guidance on how the court would determine the issue of whether to allow expert evidence to be given on a contingency or conditional fee basis.  The court stated that the requirement to act objectively and independently applies all every stage of an expert’s involvement in a case.  The court might consider what the other party was intending to do in relation to the appointment of experts.  However, it is difficult to conceive how both parties retaining experts on a contingency or conditional fee basis overcomes the underlying and fundamental concerns.  Further, the court must carefully consider the weight to be given to the evidence of an expert retained on such a basis.

What is clear is that any such arrangement must be disclosed to the other party and the tribunal at the earliest possible opportunity.  Openness is essential.

Beware the ‘offer of help’ from recruiters!

Recruiters can be loved or loathed but if they are not approached with care, you can be left with a hefty bill for little or no benefit.

Businesses are increasingly bombarded with CV’s from recruiters on a purely speculative basis and it is common to receive a CV for the same candidate from several recruiters.

The problem comes when a candidate is hired.  A finder’s fee is payable to the recruiter but which recruiter?   Increasingly, businesses are facing invoices from several recruiters for the same candidate.

Even if you have not asked for a CV or contacted the recruiter to enlist their help, it is surprisingly easy to find that you have, in law, engaged them by accepting their standard terms and conditions via a series of email exchanges.

Recruiters want to protect the value of the service they offer and they do this through their standard terms and conditions which will say you have to pay (1) a finder’s fee; or much worse (2) a multiple of the finder’s fee if you hire the candidate without telling them.  This may well be because you considered the candidate was introduced by a different recruiter or you did not think you had engaged the recruiter as you had not signed anything with them.

Recruiters try to ensure that you accept their standard terms as soon as possible, usually via email footers which refer to, or attach, or embed a link to, their standard terms.  Once you have exchanged a few emails with the recruiter you may be found to have accepted their terms even though you haven’t signed anything.

What can you do?

  • Keep a spreadsheet of CV’s and the recruiters who sent them so you can cross check.

 

  • Consider replying to unsolicited emails stating that the CV was not requested and that you are not engaging the recruiter and you do not accept their standard terms.

 

  • If you do want to engage with the recruiter, have total clarity on the terms. If you want to change their standard terms, get the change confirmed in writing at the very start.  Do not continue to exchange emails with the recruiter whilst you are waiting for this confirmation. It will muddy the waters.

 

It can be very stressful when your business is being overwhelmed by offers of help by recruiters.  We can work with you quickly to resolve any difficulties and help you avoid them in the future. Contact our dispute response team at MLP Law on 0161 926 9969

 

Social Care Under Scrutiny by Parliament – what is the future for care funding?

The state of the social care system is never far from the news these days. Whilst the NHS is to receive a significant increase in funding, the Government is yet to grasp the mettle regarding the crisis in funding for social care with the recent Green Paper due to be published this summer having already been delayed by months.

In the meantime the House of Commons Health and Social Care Committee and Housing, Communities and Local Government Committee have just published their own joint report on their recommendations for the long-term funding of adult social care.

The report finds that the current social care system is in a perilous state. Despite some additional funding coming from the Government, and increases in council tax revenue which contributes towards spending in social care, there is currently a circa £2.5 billion annual shortfall in funds, which on current figures could be closer to £8 billion by 2030. The fact that this is an escalating shortfall comes due to the almost perfect storm of an ageing population, increasing occurrence of long term illness and co-morbidities resulting in complex care needs, at a time when we are in a prolonged era of austerity and significantly decreased public spending.

As a result of this financial pressure we find that more and more people with care needs are either going without care, or are only having care needs met which are essential for basic survival as opposed to the aspirations of the Care Act 2014 which sought to also cater to general wellbeing. Those with care needs, who do not meet the financial eligibility criteria for financial support (which rates are extremely low in the first place and have not been increased since 2010) are left having to face potentially catastrophic care fees.

 

The recommendations in the report are laudable, and it will be of no surprise that increased funding is paramount. In the absence of the magic money tree, the Joint Committees suggest that additional funding should come from a combination of sources such as:

  • increased local revenue raising through a revamp of the existing Council Tax banding and retention of 100% of local business rates
  • increased national revenue raising through increased tax payments, including income tax and inheritance tax. A popular concept would be a model similar to existing National Insurance premiums which is also contributed to by employers.

Assuming that sufficient funding could be raised, the report considers what an optimal social care system would look like for the individual. Good quality care would mean increased integration of health and social care systems,  increased pay and status for care workers, the provision of free personal care (akin to the Scottish System) with only accommodation costs being subject to means assessment, with the introduction of a cap and an increased floor in this assessment. A cap would mean an absolute limit to the amount an individual would have to pay for their care, and a floor would be the amount of capital the individual was able to own before they would have to contribute to the cost of their care.

 

Importantly the Joint Committee’s acknowledge that cross-party support is vital to reform. We have too often seen that it can become politically toxic for one party to suggest tax reform to fund social care – we only have to think back to the Conservative Manifesto of 2017 and the furore over the ‘Dementia Tax’. Progress therefore needs to be made across party lines to ensure consensus and long-term stability for what would have to be a long-term program of change.

The system is undoubtedly at a cliff edge. NHS funding has been addressed and we now wait to see what the future holds for social care. In the meantime navigating the health and social care system can be a minefield especially if you are concerned for the wellbeing of a relative with significant care needs. As recognised experts who act for older and vulnerable clients, we can help you to understand the best way forward, and our advice often can save you from making decisions which you may come to regret from both a financial and a service provision perspective.

Please contact us on 0161 9626 1533 for a further conversation to see whether we can offer assistance.

 

 

Do you know about .eu?

As the UK has voted to leave the EU, organisations and businesses that are established in the United Kingdom, but not in the EU, will no longer be able to register .eu domain names, or renew current .eu domain names that they own.

This will be imposed on 29 March 2019 if there is a no deal Brexit and on 1st January 2021 if a deal is reached.

The consequences of this will be greater on UK businesses that use a .eu domain name for their main, or only, website or business email addresses as after the specified dates this will no longer be allowed.

So, what can I do?

It is important to be pro-active if this is something that will impact your business as if a plan is not put in place now you could find yourself without a website, online presence or email system. With people depending so heavily on the internet and websites to gather information and contact details these days as well as email being one of the main methods of communication, the ramifications of this could be disastrous.

If you do not change your domain name, your email will not work and you will not be able to send or receive any emails. This would mean loss of emails, missed communication and loss of business which could also have severe consequences on your business. You will need to contact your businesses email hosing provider, web developer or IT support service to find out how you can change your emails over to a .co.uk, .uk, .com or other domain name that you purchase. Don’t forget to communicate this to all your clients and contacts so you don’t miss anything.

If your domain name is revoked, or your domain renewal refused, nothing will be able to be redirected to that domain whether it be emails, enquiries or visibility of your website and online presence. Users will simply receive an error message when visiting your website and so vital business could be lost.

Only businesses or companies that have their registered office, central administration, principle place of business, or who are established in the EU will be able to renew and/or register a .eu domain name. If these criteria are not met, renewal or registration will not be permitted. The .eu registry will be entitled to revoke .eu domain names affected immediately on 29 March 2019 if no deal is reached.

 

When should I take action?

It would be dangerous to assume, or hope, that a deal will be struck and not take any action on this basis. This decision needs to made based on how your business operates and the potential risk posed to it by the revocation of .eu domain names.

If you rely heavily on .eu domain names, run your main website from one or your business email then it would be a good idea to start putting a plan in place and make the necessary changes in order to protect your business as much as you can.  

What changes can I make?

You can purchase alternative domain names now, such as .co.uk, .uk or .com domain names and start taking the necessary steps needed in migrating your website and/or business emails over to a new domain name. It is important to realise that these things take time and careful planning depending on the complexity of your website, online presence and email system. You should get in contact with your IT support, web developer or hosting provider for help and assistance in planning such moves.

If you would like to know more about how we can help you, our team would be happy to discuss this with you further. Please contact our Corporate, Commercial and Intellectual Property team on 0161 926 9969 or by email on Corporate@mlplaw.co.uk