Date of decision: 29 Apr 2025
Summary
A complaint was made about Lambeth’s handling of care charges for a man with dementia, whose family could not access his funds until after his death, because they had no form of legal authority to do so. There was poor communication about charges, and no policy regarding charging of legal costs or interest. The Ombudsman required the Council to apologise, refund monies, and improve its processes.
What happened
In February 2020, Mr Y was hospitalised after a stroke. Upon discharge, the Council assessed Mr Y’s need for care and support. It concluded he would need four double-handed calls a day. The assessment identified no issues with his capacity to make decisions for himself. Mr Y was discharged under the COVID-19 ‘discharge to assess’ pathway, and he received six weeks of free care at home, paid for by NHS money.
The Council sent financial assessment forms in due course, but Mr Y did not return them. Due to this, the Council was entitled to treat him as a full cost payer, as long as his refusal was capacitated. However, this was not explained to him. As it happened, though, he did HAVE assets over the £23,250, so in one sense treating him as refusing to disclose his assets, made the question of his capacity irrelevant.
Lambeth then failed to send invoices or clarify charges and made errors in billing, including charging for care during the free period, although this was noted and records changed to reflect this. The care package was revised several times, but communication remained poor. The Council had no records of any contact from the family until the care plan was updated with differences to the evening and lunchtime calls in the autumn, which affected the charge. The Council started charging Mr Y £309.23 a week in November when it changed its policy and started charging for both care workers on double handed calls.
In 2021 there were no records the Council could offer to explain its charges, in relation to care plan changes.
In autumn 2022, the Council calculated that Mr Y owed significant arrears – over £32,813.32 in arrears. It said it would not consider direct payments with an unresolved debt of that size.
The Council sent a warning letter, giving 14 days to pay the outstanding debt. Ms X said that around this time her father had become more confused and less mobile due to Alzheimer’s disease. Mr Y was now receiving palliative care after returning home from hospital.
Mr Y’s son said they wanted to change care provider. The Council agreed to call to discuss this but there is no record of a further call. The Council cancelled the contract with the care provider and did not arrange for the family’s chosen care provider to take over the care package. Ms X says Mr Y stopped receiving support from the Council’s care provider in November.
In March 2023, solicitors wrote to Mr Y about the outstanding charges. They said a failure to respond would result in commencing legal proceedings against him. They said the Council was doing all it could to prevent that from happening but if it became “necessary to start the pre-action process our client will seek to recover statutory interest on the debt owed as well as the full legal costs they incur”. Interest amounted to £4,017.87 and would continue to increase by £7.39 a day at the statutory rate of 8%; the Council’s legal costs were currently £893.
In June, after adding legal costs and statutory interest, the debt now amounted to over £42,000 by the time of Mr Y’s death in 2023. The executors (his children) paid the debt to avoid further interest and legal action. Ms X paid the debt on 22 August. This comprised £36,351.62 in unpaid care charges, £1,786 in legal costs and £4,697.64 in interest payments. The family then complained, and the Council offered a goodwill payment but did not resolve the underlying issues until the Ombudsman intervened.
The Council said it did not have a policy on charging interest and legal/administrative fees on overdue charges for adult social care. It referred any debts to the solicitors to progress debt recovery on its behalf and that the legal basis for charging interest related to Section 69 of the County Court Act 1984 which explains that a claimant can seek statutory interest on unpaid debts. While the Council could have made a legal claim and added interest and court fees, the matter was resolved before that became necessary. Therefore, the Council pursued a settlement that included interest without going to court to avoid additional costs
What was found
The Ombudsman found the Council failed to deal properly with the charges for Mr Y’s care and that they were at fault for:
- Poor communication: Failing to explain charges (although officers had said that the man had been given a leaflet in hospital) and failing to explain the consequences of not returning financial assessment forms.
- Inappropriate charges: Adding legal costs and interest without clear authority.
- Administrative failures: Not responding to complaints promptly and causing significant distress and inconvenience to Mr Y’s family.
- Injustice: The Council’s actions caused injustice by charging Mr Y’s estate for costs not lawfully permitted, and by failing to follow proper procedures for debt recovery and communication.
The Ombudsman recommended the Council:
- Apologise to Ms X for failure to deal properly with her father’s care charges and for the time and trouble in pursuing the complaint.
- Refund the legal costs and interest paid by Mr Y’s estate.
- Improve procedures for communicating about care charges and for charging interest and legal costs on unpaid care charges.
- Pay Ms X £250 for the time and trouble caused to the family.
Points to note for councils, professionals, people using services and their carers, advocacy groups and members of the public
We have mixed feelings about this report.
On the one hand for a significant period, the Council only charged for one care worker because of “challenges” with its information technology. In effect this halved the weekly cost of Mr Y’s care package, although there is no evidence the Council explained this to him. It was a considerable time when the Council decided to do what the Care Act allows it to do, which is to choose to charge the person the cost of the services subject only to the charging assessment, even if the double handed service costs twice as much.
On the other hand, the Ombudsman says nothing about the decision by omission of the adult offspring regarding deputyship, which would have meant that they were able to disclose his assets, and pay his charges as and when they arose.
Then again, the Guidance is clear that relatives aren’t able to be punished for failing to take deputyship, and the regulations make it clear that refusal to make financial disclosure only leads to a right to treat the person as a full cost payer, if it is capacitated. The report underplays the need for proactive support and advocacy for those lacking capacity. The Guidance does so as well, because taking on financial authority is a burden, but the thrust is clear:
8.18 At the time of the assessment of care and support needs, the local authority must establish whether the person has the capacity to take part in the assessment. If the person lacks capacity, the local authority must find out if the person has any of the following as the appropriate person will need to be involved:
- enduring power of attorney (EPA),
- lasting power of attorney (LPA) for property and affairs,
- lasting power of attorney (LPA) for health and welfare,
- property and affairs deputyship under the Court of Protection,
- any other person dealing with that person’s affairs (for example, someone who has been given appointeeship by the Department for Work and Pensions (DWP) for the purpose of benefits payments).
8.19 People who lack capacity to give consent to a financial assessment and who do not have any of the above people with authority to be involved in their affairs, may require the appointment of a property and affairs deputyship. Family members can apply for this to the Court of Protection or the local authority can apply if there is no family involved in the care of the person. While this takes some weeks, it then enables the person appointed to access information about bank accounts and financial affairs. A person with dementia for example should not be ‘forced’ to undertake a financial assessment, to sign documents they can no longer understand and should not be punished for any incomplete information that is elicited from them. The local authority should be working with an EPA, an LPA or a deputy instead.
If this man had been impoverished this report should have said he should not have been regarded as a full cost payer. However, that was not significant in this matter because the man’s assets made him a full cost payer anyway and there is no suggestion he was regarded as lacking in capacity in the early stages of this charging saga. One can well imagine that he was still capacitated, knew he had plenty of money, and could not see the point in messing about with the forms.
But his more abiding problem at the heart of this report lay in nobody acknowledging deterioration of cognitive functioning before it was too late to appoint an attorney or do anything regarding even considering deputyship, given his death.
We think the bit about the report that is positively wrong in law is the Ombudsman’s line on the charges and interest. The Ombudsman did not find that it was actually unlawful, for want of a policy, as such. The fact that the legal charges and interest were added to the claim, and referenced for settlement purposes is wholly normal for any creditor in a money claim, and not something for which there needs to be statutory authority. The scope for this sort of offer to settle and its legality is implicit in the charging functions and the fact that the money can be recovered as a civil debt.
Please use the following link if you want to read the original Local Government and Social Care Ombudsman’s London Borough of Lambeth (24 003 551) report. If you are affected by the issues in this report, please consider asking a free, one-off question, anonymously, at a level of principle, here. Our experts’ response will give you an opinion which may then help you and the broader community, when posted.
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