Estate of mentally incapacitated man may not be liable for outstanding care home fees under s7 Mental Capacity Act 2005

06 Feb 2014

The High Court has recently allowed an appeal against the decision in Aster Healthcare Limited v The Estate of Mr Mohammed Shafi (by its representative Mrs Batool Shafi) that his estate should pay outstanding care home fees to the care home.

The case involved Mr Shafi who had dementia who was detained under section 2 Mental Health Act 1983 for an assessment of his condition after his behaviour became erratic and aggressive. He was also non-compliant with care and would not take his medication. His wife was struggling to care for him.

Mr Shafi was discharged from the hospital to a care home arranged by Brent local authority. A financial assessment was undertaken by the local authority who established that Mr Shafi had sufficient assets in bank accounts to pay for his care privately.  The local authority therefore refused to pay the care fees and suggested to the care home that perhaps a family member or even someone from the care home should apply to the Office of the Public Guardian to deal with Mr Shafi's affairs and access his funds.

The care home tried to get Mrs Shafi to sign a third party agreement whereby she would be responsible for Mr Shafi's fees. She refused.  Mr Shafi died and the care home was owed approximately £62,000 in outstanding fees.

In the appeal the High Court considered that section 7 Mental Capacity Act 2005 (S7) does not apply where the provider of services considered that a third party would pay for them.

S7 provides that if necessary goods or services are supplied to a person who lacks capacity to contract for the supply, he must pay a reasonable price for them. However the High Court considered that this should only apply if at the time of the contract the supplier can show that they intended the recipient to pay for them.

In this case the original admission forms were dealt with by the local authority and it was only afterwards that it was established by the local authority that Mr Shafi would be a 'private payer'. Therefore it was considered that the care home could not have intended at that time for Mr Shafi to pay their fees. Further the attempt by the care home to have Mrs Shafi sign an agreement to pay the fees demonstrated that the care home was not intending Mr Shafi to pay the fees. S7 could therefore not apply.

It was argued that the claim should be against the local authority who in turn may have a claim against the estate of Mr Shafi, but there was no right of action under S7 as against Mr Shafi's estate by the care home.

Kelly  Greig, Associate and Head of the Private Client Team at Trethowans, commented “Dealing with legal matters when a loved one moves into care can be a stressful time.  A qualified solicitor can assist and help relieve the stress by providing advice regarding funding arrangements, care home contracts and consideration as to whether an individual may be eligible for NHS Continuing Healthcare which is free irrespective of means. They can also assist with applications for a Deputy to be appointed to manage the affairs of a loved one.”