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Are care rates about to get even more expensive for insurers?

Care rates are already rising rapidly (almost 20% in the last three years). The Supreme Court has been hearing arguments in respect of night time…

Care rates are already rising at an alarming rate (almost 20% in the last three years) and for the last two days (12 and 13 February 2020) the Supreme Court has been hearing oral arguments in the joint appeal of two cases in respect of night time care rates: Royal Mencap Society v Tomlinson-Blake and Shannon v Rampersad and another (T/A Clifton House Residential Home). This is the appeal from the 2018 decision of the Court of Appeal which can be found here: [2018] EWCA Civ 1641.

Whilst this case is technically an employment case in respect of the applicability of the minimum wage, it may have a wide reaching knock on effect on care rates awarded in catastrophic personal injury litigation.

In both cases a support worker provided ‘sleep-in’ overnight care. The issue being considered is whether they should have been paid the minimum wage whilst they were asleep. Both were paid significantly less (£29.05 per night and £90 per week respectively) on the basis that they were asleep and only on call if required. Both were provided with facilities to sleep at no additional costs. No specific tasks were required other than to respond if needed.

The Court of Appeal categorised sleepers-in as available for work rather than actually working (by reference to the National Minimum Wage Regulations) and concluded that they have no access to the minimum wage unless they are undertaking specific tasks (i.e. actively providing care and assistance). Both appeals were dismissed and the cases have now come before the Supreme Court for determination.

In personal injury cases the care rate depends mainly on the level of care that is required and when that care is provided. This results in higher rates of pay for more skilled care provision and when it is provided at unsociable times such as evenings, weekends and overnight. However, sleep-in care is almost always paid at a lower rate than the daytime care rate.

If the Supreme Court decides that the minimum wage is applicable to sleep-in care this could cause a significant increase in the rate in those cases where less than the minimum wage is being paid at night. Unless Parliament legislates to reverse the decision, not only would this make some cases more expensive, it would also mean existing settlements may now have a shortfall in funding.

The effect on the highest value cases where awake at night care is being provided is likely to be nil or limited on the basis that the rate is already much higher than the minimum wage and day rate. However, the band of cases where only sleeping ‘listening-ear’ care is required may see a significant increase in cost.

It is therefore a decision that all involved with such cases should await with interest. The recordings of the oral hearings in the Supreme Court can be found here: https://www.supremecourt.uk/cases/uksc-2018-0161.html

If this case raises any issues or you would like to discuss, please liaise with Dave Cottam or Phillip Bratt.

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