Care Act conundrum: recovering care home fees
Has the Care Act granted an amnesty on care home fees? Jonathan Auburn reports.
Where a local authority has paid for an individual’s care home fees, and then seeks to take action to recover those monies, then the local authority is limited in how far back in time it can go in its claim. Prior to the Care Act, this was always taken as the normal limitation period for debt actions of six years. However, the Care Act provision on this issue looks rather different.
Section 69 of the Care Act 2014 provides for recovery of debts arising from care home fees which have been paid for by local authorities. Section 69(3)(b) applies to sums that fell due before the Act came into force on 1 April 2015, and sets the limitation period for those debts at three years, not six.
Why would Parliament set the limitation period thus, when care fees are recovered by way of ordinary civil debt claim, which attracted the usual limitation period of six years? That was always the limitation period applied to such fees recovery claims.
If Parliament had meant to halve the limitation period for these claims, this would have been mentioned during the consultation or Bill stage, surely?
It appears that the DoH believed that section 69(3) would bring no substantive change, and would simply keep the limitation period as it was.
The DoH’s October 2014 Care and Support Statutory Guidance states at page 387:
“Debt recovery
“23.25. … for any debts that have accrued prior to the commencement of the Care Act 2014 the time period for recovering that debt continues to be three years as previously set out under Section 56 of the National Assistance Act 1948 as any change to this would be retrospective and unfair. For any new debts that occur after the commencement of the Care Act 2014, the time period to recover debts has been extended to six years …” [emphasis added]
And further at page 439:
“Timing of debt recovery
“11. … For any debts that have accrued prior to the commencement of the Care Act 2014 the time period for recovering that debt continues to be three years as previously set out under Section 56 of the National Assistance Act 1948 as any change to this would be retrospective and unfair. For any new debts that occur after the commencement of the Care Act 2014, the time period to recover debts has been extended to six years …” [emphasis added]
The DoH’s subsequent guidance document “Update on final Orders under the Care Act 2014”, states at paragraph 20:
“20. Regarding transitional matters in relation to debt recovery, we will also clarify that:
– For debts that have accrued prior to the commencement of the Care Act 2014 and that would otherwise have been recovered under section 56 of the 1948 Act, the time period for recovering that debt continues to be three years from the date on which the sum in question became due, as previously set out under section 56 of the 1948 Act … [emphasis added]
This couldn’t be a simple mistake by the Parliamentary drafter’s office, could it?
If it was, they may perhaps have been confused by the pre-Care Act provision, Section 56(2) of the National Assistance Act 1948, which provides –
“(1) Without prejudice to any other method of recovery, any sum due under this Act … to a local authority (other than a sum due under an order made under section 43 of this Act) shall be recoverable summarily as a civil debt.
“(2) Notwithstanding anything in any Act, proceedings for the recovery of any sum in the manner provided by the last foregoing subsection may be brought at any time within three years after the sum became due.” [emphasis added]
True it is that subsection (2) referred to a three year period. But that was not the general limitation period. The Limitation Act period of 6 years for debt claims still applied. Section 56 did not mean that the general limitation period was only three years. That three year period was for a very specific and limited alternative form of recovery, namely summary enforcement of civil debts. The opening words of Section 56 expressly reserved the other methods.
Summary recovery / enforcement of civil debts is no stranger to the statute books. The term “recoverable summarily as a civil debt” appears in a huge number of statutes. These all relate to summary enforcement in the magistrates’ court. The matter was explained in Bulley (Officer of Revenue and Customs) v Hemmer Investments Ltd [2010] EWHC 938 (Ch). The issue also arose in Zissis v Lukomski [2006] EWCA Civ 341, para 58, per Brooke LJ.
The mechanism for summary recovery / enforcement of civil debts is provided for in the Magistrates’ Court Act 1980, sections 58 and 150. It is an action in that court brought on complaint and heard summarily. Also see section 127 of the same Act. One can understand why, for this very particular form of action, a shorter limitation period was appropriate.
As for section 69 of the Care Act 2014, could it be that those drafting this provision misread the old provision (section 56 of the 1948 Act), tried to replicate the then existing legal position, and got it wrong? If that is what happened, then in doing so Parliament halved the existing limitation period of six years, and may have granted a form of amnesty on debts accrued from 2009 to 2012, where the sums fell due before the Act came into force on 1 April 2015.
Finally, there is an obscure provision in Article 3(4) of the Care Act 2014 (Transitional Provision) Order 2015 (SI 2015/995) which could, on one reading, retain the limitation period from previous legislation, and seek to achieve a result the reverse of that provided for by primary legislation. However it is by no means clear that this is what the Order is seeking, nor that it achieves such an aim.
If the above is right, then local authorities may need to issue proceedings for outstanding care home debts as quickly as possible.
Jonathan Auburn is a barrister at 11 KBW specialising in public law, local government, community care and related areas. He can be contacted on emailja@11kbw.com or twitter @jonauburn11kbw
