News archive

HM Revenue & Customs has published fresh proposals to clamp down on dishonest tax agents.

The discussion document proposes compulsory access to the working papers of dishonest tax agents, even those in the possession of a third party, but only if sanctioned by the First Tier Tax Tribunal.  Civil penalties will also be available if there has been an illegitimate loss of tax.

The discussion document can be found here.

The UK Government’s Office of Budget Responsibility’s first annual “Fiscal Sustainability Report” was published this week.   The Report has warned that government debt will reach 100% of GDP by 2058 as a result of demographic changes within the population.

17% of the UK’s population is currently over 65, expected to rise to 26% by 2061.  The effect is likely to be particularly acute in Scotland which has received lower numbers of immigrants than England making the country’s age profile even older; the care costs associated with an ageing population here are expected to rise by 74% by 2031.

Two comments sum up nicely the debate that is currently ongoing on this issue.

“David Kern, chief economist at the British Chambers of Commerce, said: “Only greater productivity and higher growth in the private sector can pay for public-sector services and public-sector pensions in the future.”

“Michelle Mitchell, Age UK charity director, said: “If we plan sensibly and carefully calibrate long-term spending and taxation decisions, there is no need for national debt to increase alongside life expectancy.”

The report can be found here.

An article from the Scotsman on this issue can be found here.

Background

This appeal concerns the question of whether the Royal Borough acted unlawfully in seeking to amend Ms McDonald’s care package by substituting her night time carer with provision of incontinence pads or absorbent sheets when Ms McDonald was not in fact incontinent.

This case shows how cruel ill health can be.   Some 30 years ago Ms McDonald was the prima ballerina of Scottish Ballet.  In 1999 Ms McDonald suffered a stroke leaving her with severely limited mobility.  She also suffers from a small and neurogenic bladder which means she has to urinate two or three times a night.  Up until now she has dealt with this by using a commode with the help of a carer provided by the Royal Borough as part of her care package.

In November 2008 the Royal Borough proposed instead that the appellant should use pads, avoiding the need for a night-time carer.  The Royal Borough argued that this would provide Ms McDonald with greater safety (preventing the risk of injury whilst she is assisted to the commode), independence and privacy and in addition reducing the cost of her care by some £22,000 per annum.  Ms McDonald’s care plan was reviewed in November 2009 and April 2010.

Ms McDonald seeks to challenge this proposal.  Ms McDonald maintains that the thought of being treated as incontinent (which she is not) and having to use pads is an intolerable affront to her dignity.

Earlier judgments   

The High Court dismissed Ms McDonald’s arguments and held that it was open to the Royal Borough to meet Ms McDonald’s need, identified in her needs assessment as “assistance to use the commode at night”, in a more economical manner by the provision of pads.

The Court of Appeal disagreed holding that the clear language of Ms McDonald’s needs assessment could not be extended in a way proposed by the High Court and at the time proceedings were commenced the Royal Borough was in breach of its statutory duty.  However, as the Royal Borough did not implement the proposal outlined above and had reassessed Ms McDonald’s care plan Ms McDonald had no substantial complaint.

Supreme Court judgment

By a majority of 4-1 Ms McDonald’s appeal was dismissed.

Reasoning

Ms McDonald put forward four arguments (The Supreme Court’s reasoning is outlined below each heading):

1.       The care plan reviews did not in fact contain a reassessment of her needs

In accordance with the “Fair Access to Care Services” guidance issued by the Secretary of State, the care review plans could and did in fact incorporate a review of Ms McDonald’s needs.  Care plan reviews are usually drafted by social workers and not lawyers and thus should be construed in a practical way.

2.       The decision breached Ms McDonald’s rights under article 8 of the European Convention of Human Rights    

Ms McDonald had not established interference with her article 8 rights.   However, even if article 8 interference was established, it would be justified under article 8(2) on the ground that it is (a) necessary for the economic well-being of the Royal Borough and the interests of other service-users and (b) a proportionate response to Ms McDonald’s needs by affording her greater privacy and protection from injury.

3.       The decision was taken in breach of section 21 of the Disability Discrimination Act 1995  

Under section 21 the Royal Borough may not operate any “practice, policy or procedure” which makes it impossible or unreasonably difficult for disabled persons to receive any benefit conferred on them.   Ms McDonald failed to show that the Royal Borough’s decision could properly be characterised as “practice, policy or procedure” and thus the Royal Borough did not breach its second 21 duty.   Even if that were not so, the Royal Borough’s acts would have been justified as constituting “a proportionate means of achieving a legitimate aim” within the mean of section 21D(5) of the 1995 Act.

4.       The Royal Borough failed to have due regard to the need to promote equality of opportunity of disabled persons under section 49A of the Disability Discrimination Act 1995 (now superseded by comparable provisions in the Equality Act 2010)

Where the Royal Borough is discharging its functions under statutes which expressly direct its attention to the needs of the disabled persons, it may be entirely superfluous to make express reference to section 49A of the 1995 Act.  It would be absurd on the facts of the present case to infer a breach of section 49A from an omission to refer to that section in any of the Royal Borough’s documentation.

Dissenting opinion  

The dissenting Justice would have allowed Ms McDonald’s appeal on a different basis outlined by Age UK in its intervention, namely that it was irrational for the Royal Borough to characterise Ms McDonald as having a need different from one she in fact has.

A full report of the decision is available from the Supreme Court here.

All we need is “ze fallen Madonna with ze big boobies” and it could be an episode of Allo, Allo. Instead, this is a case concerning an appeal by the Procurator Fiscal of Aberdeen against a sheriff’s decision on the grounds of bias.

The case involved Chief Inspector Thomas Forrester who was charged with dangerous driving[1] after allegedly instructing a constable driving a police car, in which he was travelling to catch a plane, to put the sirens on and move to the wrong side of the road. When the constable did so, a collision occurred between two cars travelling in the opposite direction.

During a delay in proceedings, the sheriff called the procurator fiscal’s depute and the defence counsel into chambers to inquire as to progress and was told by the procurator fiscal’s depute that, amongst other witnesses waiting to be called, were the police officers who interviewed Chief Inspector Forrester. The sheriff then remarked “Oh that will be the Gestapo!”

The sheriff ultimately found that the interview of Chief Inspector Forrester by the investigating officers was unfair and excluded it as evidence. The Procurator Fiscal appealed to the High Court on the basis that the sheriff’s remarks inferred bias and, his decision to exclude the interview as evidence, disclosed actual bias.

The High Court refused the Appeal.  In coming to its conclusion, the High Court referred to Wallace v Thomson (2009):

 “[18] Humour is not without its place in the criminal courts. No doubt, when used by a judge or sheriff, it requires to be used sparingly, with caution and not inappropriately. However, a Sheriff may consider that an element of levity might be temporarily introduced for a particular purpose; perhaps to put a nervous witness at his ease or to defuse a moment of unnecessary tension between procurators. No doubt, if the Court turned a trial into something akin to a comedy, an accused would have grounds of complaint were he to be convicted. Nothing of that kind has occurred in this case. The Sheriff appears to have made one flippant remark intended to be humorous. Perhaps it was; although it seems to have lost something in its translation to the printed page. The suggestion that an informed and reasonable observer would consider that this was an element demonstrating partiality is without foundation”.

Similar considerations, held the High Court, applied with regard to the sheriff’s comments in this case.  It was “bordering on the ludicrous” to suggest that the sheriff was actually comparing the behaviour of the police officers with that of the Gestapo during the Second World War. On hearing the words used in context, there was no prospect of a fair minded individual concluding that the sheriff was biased against the procurator fiscal and, having regard to the way the sheriff approached the objection to the admissibility of the interview and the reasoning he employed, there was also no prospect that a fair minded individual would form the view that the sheriff was biased when deciding the issue.

It was noted (the court’s opinion being delivered by Lord Carloway):

“An allegation that a judicial office holder is biased against the Crown, in the form of the local procurator fiscal, and investigating police officers is an extremely serious one. It should only be made where there is evidence to support it.  Such evidence is not present in this case..”

With regard to the interview, the issue was whether the sheriff had erred in determining that the Crown had failed to demonstrate that the interview had been fair and that admissions made had been spontaneous and voluntary. The sheriff had rejected evidence of the detective chief superintendent who conducted the interview to the effect that the interviews purpose had been to allow the chief inspector to tell his side of the story. Instead the sheriff concluded, from the manner of the interview and the surrounding circumstances[2], that the true intention had been to prompt the chief inspector into making an admission. On reaching that conclusion the sheriff was bound to sustain the objection to the interview as evidence. Authority for that finding came from Chalmers v HMA (1954) and the words of Lord Justice General (Cooper):

 “It is not the function of the police… to direct their endeavours to obtaining a confession from the suspect to be used as evidence against him at the trial”

 Herr Flick would not have approved.

A full report of the decision is available from Scottish Courts here.

Two local authorities in central Scotland are set to begin sharing more services.  Clackmannanshire and Stirling councils have been jointly running education and social service departments since March 2011.  Now, a report due to be submitted on 11 August will recommend that the authorities begin sharing IT and personnel services as well.

The report from the BBC can be found here.

Health Secretary Nicola Sturgeon said: 

“We are working on a strong presumption – supported by the landlords, and underpinned by our contingency arrangements – that older people will not be moved.  The welfare of all the residents will be maintained with minimum possible disruption. 

“The Scottish Government is working with COSLA and other partners such as ADSW [Association of Directors of Social Work] and SCSWIS [Social Care and Social Work Improvement Scotland] to ensure continuity of care for all residents in Southern Cross care homes in Scotland.

“This formal announcement signals the start of a process to break up the southern cross group on a consensual basis, it does not mean that the business has gone into administration, or that any care homes will close in the immediate future.”

The background to this statement is the announcement on Monday of this week that Southern Cross is to transfer all of its care homes to other operators.   

The Scottish Government has issued two revised codes of practice under the Adults With Incapacity (Scotland) Act 2000.

Code of Practice for Continuing and Welfare Attorneys.  The revised code can be found here.

Code of Practice for persons authorised under intervention orders and guardians.   The revised code can be found here.

The Adults with Incapacity (Scotland) Act 2000 was introduced to protect individuals with incapacity and to support their families and carers in managing and safeguarding the individuals’ welfare and finances.

The latest SDLT Bulletin is now available from HMRC here.

It contains guidance on the following:

• New SDLT online system
• Introduction of the 5 per cent rate for residential property
• Overpayments of tax due to a mistake in the return
• First-time buyers
• Multiple dwelling acquisitions
• Preventing avoidance

“The Report of the Commission on Funding of Care and Support” was published last week.  Although this report looks at the situation in England, and was commissioned by the UK coalition Government, the issues raised and the recommendations made are of direct relevance to us here in Scotland.

Extracts from the four key findings:

1. The current adult care funding system in England is not fit for purpose and needs urgent and lasting reform.
2. The current system is confusing, unfair and unsustainable.  People are unable to plan ahead to meet their future care needs.  Eligibility varies depending on where you live.
3. A major problem is that people are unable to protect themselves against very high care costs.   The current availability and choice of financial products to support people in meeting care costs is very limited.
4. Most people are realistic about the need for individuals to make some contribution to the costs of care in later life, but they want a fairer way of sharing costs and responsibility between the state and individuals.

Extracts from some of the main recommendations:

1. To protect people from extreme care costs we recommend capping the lifetime contribution to adult social care costs that any individual needs to make at between £25,000 and £35,000.   We think £35,000 is an appropriate and fair figure.
2. Not everyone will be able to afford to make their personal contribution, and those currently just outside the scope of eligibility for means-tested support are not currently protected.   To address this, means-tested support should continue for those of lower means, and the asset threshold for those in residential care beyond which no means-tested help is given should increase from £23,500 to £100,000.
3. Those who enter adulthood already having a care and support need should immediately be eligible for free state support to meet their care needs, rather than being subject to a means test.
4. Universal disability benefits for people of all ages should continue as now.
5. People should contribute a standard amount to cover their general living costs, such as food and accommodation, in residential care.   We believe a figure in the range of £7,000 to £10,000 a year is appropriate. [1] 
6. In reforming the funding of social care, the UK Government should review the scope for improving the integration of adult social care with other services in the wider care and support system.   In particular, we believe it is important that there is improved integration of health and social care.  [2]

Estimated cost

The estimated cost of these proposals is £1.7bn per year rising to £3.6bn by 2025.

Two examples from the Report may help explain how this would work in practice.  

Example 1:

Alice lived alone in her own home worth £180,000.  She had dementia and needed to go into a residential care home when she was 83 for the last 5 years of her life.

Under the current system

Alice’s daughter needed to arrange for Alice’s home to be sold in order to be able to use the money to pay for Alice’s care.   Alice had to pay for all her care and living costs in full until she died, spending £165,000 from her pension income and housing wealth.

Under Dilnot

Alice would initially need to contribute in full to her care and general living costs.  After two years she would have contributed £35,000 towards her care and reached the cap.   From then on, the state would pay Alice’s annual care costs of £18,500.  Alice’s general living costs would be paid out of her pension income.  Alice would be able to keep 80% of her wealth.

Example 2:

John has a stroke at the age of 85.  He could no longer manage at home and entered a care home costing £28,500 a year.   He lived in the care home for four years before he died.  Prior to this, he lived on his own, in a house which he owned outright and was worth £140,000.  He had £220 a week from his own pension and the state pension.

Under the current system

John had to contribute all his income except for £22.60 a week and use his housing assets to pay for his care.   He continued to pay for his care in full until he died, spending £74,000 from the value of his home.

Under Dilnot

John would pay the first £35,000 of his care costs and after two years he would reach the cap and then receive all his care without charge.  He would continue to contribute £10,000 a year towards his general living costs.  This would be done through his pension income.

John could choose to use his housing assets to pay for the £35,000 (taking out a deferred payment from the local authority), and still have £105,000 left, three-quarters of his wealth.

Reaction to this report in England

UK Government Ministers responded cautiously.  The health secretary, Andrew Lansley, described the Dilnot report as “an immensely valuable contribution” but warned that the UK Government needed to “consider carefully” the “significant costs” of reform.

Age UK welcomed the proposals. [3] Michelle Mitchell, Charity Director at Age UK, said: “Age UK welcomes the Dilnot Commission recommendations, which set out a clear blueprint for the long term sustainable reform of social care.

The Guardian said:  “Life is littered with potential financial catastrophes, from costly-to-treat illnesses to house fires, but in most cases the risks are pooled, whether through the state or the insurance market.    When it comes to care those with more than £23,500 are on their own, facing potentially unlimited liabilities.   The results are dire.  One in five retirees will clock up costs of more than £100,000.  Some 20,000 people are forced to sell their homes every year.  So Dilnot’s plan is very welcome as a way of staving off ruin for an unlucky minority.”

The Daily Mail took a different view: “The £35,000 doesn’t cover charges for bed and board; those could reach £10,000 per year.  And anyone wanting more than bog standard levels of care will pay extra.  So the middle classes will still face massive costs – while those on benefits will pay nothing.”

 Conclusion

This is a good and more importantly a timely report that points to the questions that we in Scotland also need to ask and answer.

In my next article I will look at latest thinking on this issue in Scotland and in particular what our main political parties said prior to the recent Scottish General Election.

James Aitken
Legal Knowledge Scotland

The article from the Scotsman can be found here.