New High Court decision confirms claimants can seek means tested social care while holding damages in a personal injury trust
The High Court’s decision in R (CGT) v West Sussex County Council [2026] EWHC 293 (Admin) provides welcome clarification on how local authorities must treat damages held in a personal injury trust when determining eligibility for social care funding under the Care Act 2014 (which is means tested).
This judgment is of significant reassurance to claimants as it confirms the principles of PI trusts, ie, that compensation held in such trusts is protected and preserved for the claimant’s needs, is not to be treated as ‘savings’ for the purposes of statutory financial assessments, and that there is no obligation to utilise such funds before seeking statutory funding.
Personal injury trusts
Following an injury claim, a person may receive substantial sums of money by way of damages. These damages are assessed to meet specific current and long term needs – such as suitable accommodation, therapy, and equipment.
A personal injury trust is a legally binding arrangement for holding and managing funds received as a consequence of an injury. The trust must be managed according to specific rules and with money held separately from any other funds owned by the claimant.
Sometimes, damages received may not be sufficient to cover all outgoings that a claimant has – particularly if they are not working or if the damages award was a negotiated settlement at less than the full value of the claim.
This can mean that even with a substantial award of damages, a claimant will still need to access means-tested benefits and funding for care services. It is important that the person is able to claim all of the state benefits and care funding that they may be entitled to, both now and in the future, and that the person has a suitable structure in place to manage their funds.
Funds held in the trust are disregarded when assessing eligibility for some means tested state benefits and services (such as residential care). As a result, a claimant can continue to receive these benefits and/or services in the future. A personal injury trust helps to define and ‘ring fence’ the funds that have arisen from a personal injury, keeping them separate from other assets.
However, despite previous case law and guidance on this issue, from time to time local authorities who are aware of the existence of a personal injury trust do seek to argue that the funds should be considered when carrying out means testing.
Background to the case
CGT, a severely disabled adult with lifelong care needs resulting from a catastrophic brain injury sustained in infancy, received a Criminal Injuries Compensation Authority (CICA) award exceeding £3.5 million in 2012. These funds were placed in a discretionary personal injury trust and were being managed with a view to trying to ensure the funds would last to meet CGT’s long term needs.
CGT’s father later sought for his local authority (West Sussex County Council – WSCC) to provide care to CGT. The council resisted on the basis that the damages in the trust should fund all care, and later demanded repayment of previous care provided (a sum of over £200,000).
CGT’s father brought a judicial review, arguing that the council’s refusal was unlawful because PI trust capital should be fully disregarded in financial assessments and that to both pay for care and reimburse WSCC would threaten the ability of the funds in the trust to meet CGT’s long term needs.
The court’s decision
The High Court agreed unequivocally with CGT’s father, ruling that:
- PI trust funds must be completely disregarded in Care Act assessments – if funds originate from an award in an injury claim and are held in a qualifying trust, the local authority must ignore them in full. WSCC could not lawfully treat the trust as capital available for care costs;
- the council’s refusal to fund care and its demand for reimbursement were unlawful;
- the ‘double recovery’ doctrine has no place in Care Act assessments – the court rejected the council’s argument that public funding would lead to ‘double recovery’ since CGT had already been compensated for care, on the basis that the double‑recovery principle applies only to damages in tort and assessment of the same, and has no relevance to statutory duties under the Care Act.
Conclusion
The ruling in CGT v West Sussex County Council is not necessarily a change in the position regarding personal injury trusts and statutory funding but it does provide clarity and certainty – which is welcome.
It reinforces the protective purpose of PI trusts, reaffirms statutory obligations under the Care Act 2014, and brings much‑needed clarity to an area fraught with tension between compensation principles and public funding duties. Above all, it ensures that vulnerable individuals like CGT who have compensation designed to meet their long term needs in all respects do not end up being forced to use it on care provision that they would otherwise be entitled to receive from statutory services, and that potentially exceeds the value of any damages recovered for care.