Care Act conundrum: Did Parliament legislate in error to mistakenly confer an amnesty on care home fees?

February 5th, 2016

As lawyers we all know that feeling when we read an opponent’s legal letter, court submission, or a judgment that looks just plain incorrect in legal terms. It’s a distinct and clear feeling. Like when your child is obviously lying to you to cover up for some misdemeanour.

You may get that feeling reading letters and opponent’s submissions, less so with judgments, but never with primary legislation, right?

Section 69 of the Care Act 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. Three years.

Why would Parliament set the limitation period thus, when care fees are recovered by way of ordinary civil debt claim, which atracted 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? Errr, no.

To the contrary, it is clear that the DoH promoted what became section 69(3) in the belief that it was effecting no change in the law. The Guidance states numerous times that there is no change to the pre-existing limitation period, as to do so would be “retrospective and unfair”: see the Care and Support Statutory Guidance, page 387, para 23.25:

“… 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 … the time period to recover debts has been extended to six years …”

Also see page 439 (to the same effect), as well as the DoH’s guidance document “Update on final Orders under the Care Act 2014”, paragraph 20.

Did someone in the Parliamentary drafter’s office get their limitation law wrong?

If so, 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) refers to a three year period. But that is not the general limitation period. The Limitation Act period of 6 years for debt claims still applies. 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 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.
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.

As for the Care Act, it looks like someone misread the old provision, tried to replicate the then existing legal position, and got it wrong. In doing so Parliament halved the existing limitation period of six years, and may have granted an 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, perhaps, on one reading, may retain the limitation period from previous legislation. However it is unclear whether this is what the Order is seeking, and whether it achieves such an aim.

If the above is right, then local authorities may need to issue proceedings for outstanding care home debts accrued during the period 2009 to 2012 as quickly as possible.

Jonathan Auburn
ja@11kbw.com
twitter: @jonauburn11kbw

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