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How is the compensation awarded to a child with cerebral palsy managed and protected?


    In the last of our series of articles focussing on all aspects of legal claims for children with cerebral palsy, Tracy Norris-Evans explains what happens after a claim concludes and how compensation paid to a child with cerebral palsy is managed and protected.

    By Tracy Norris-Evans

In my role as a professional trustee/deputy I am frequently asked by parents of children with cerebral palsy what will happen to their child when they are gone.  It is the natural order of things to want your child to outlive you but the responsibility of bringing up a profoundly disabled child can be crushing and create an overwhelming sense of duty: parents worry about who will assume that responsibility following their death and want to avoid that burden passing to the siblings. Naturally, they seek reassurance that their child’s quality of life will continue to be optimised and that there will be someone who will look out for and protect their child in the years to come.

Peace of Mind

The mechanism for receiving the compensation does provide substantial comfort. My colleague, Richard Coleman, outlined in the previous article the flexibility of receiving the settlement award by way of periodical payments, in addition to the traditional lump sum payment.  Periodical payments provide a tax free, annual income which will continue for the child’s lifetime, however long that may be.  Periodical payments are guaranteed so they effectively eliminate the ‘mortality risk’ associated with a traditional lump sum settlement (which is based on a predicted life expectancy).

In claims for children with cerebral palsy, periodical payments are typically awarded to cover care costs which tend to constitute the most expensive head of loss in the claim.  They are linked to an earnings index with the advantage that the annual payment will beat inflation and will keep step with increases in pay for carers.

Management of the compensation – the Court of Protection

A child under the age of 18 cannot receive the compensation outright and the Court of Protection has jurisdiction over the award: the manner in which the compensation award is administered is determined by whether the child will have capacity to manage his or her financial affairs at the age of 18.


If the child will not have capacity at the age of 18, then for so long as the incapacity continues, the Court of Protection requires the compensation award to be administered by a financial deputy.  Typically, for children with cerebral palsy, because of the likely size of the award, the Court of Protection will insist on a professional deputy being appointed, who is accountable to the Court of Protection.  The Mental Capacity Act 2005 provides a detailed framework that is designed both to empower and protect vulnerable persons; the philosophy behind the Act being that those who suffer a disability shall be assisted to live normal lives and make choices about their life.  As a safeguard, the deputy is always required to make decisions in the best interests of the person they represent.  The lifetime cost of the professional deputyship is recoverable in the litigation claim so is not an additional cost the injured person will incur.

Personal Injury Trust:

If the child is likely to have capacity at the age of 18, in circumstances where the size of the award is significant, the Court will require the settlement to be established in a personal injury trust administered by a professional trustee.  The professional trustee must act within the parameters of the Trustee Act 2000 which has a similar philosophy to the Mental Capacity Act.  The role of the trustee is synonymous with that of a deputy.

Safety Net

As the child approaches adulthood, usually around the age of 17, their capacity to manage their finances should be reassessed.  If the child is deemed to have capacity an application for discharge will be made to the Court of Protection and, if approved, the Court will make an Order paying funds directly to the child following their 18th birthday; planning will be important in this context – educating the child that this is not a ‘windfall’ and advising that the funds should be diverted to a personal injury trust to assist with ongoing management, and to execute a Will.

In the absence of unequivocal evidence that the child will have capacity at the age of 18, the Court of Protection will continue to have jurisdiction and devolve the financial decision-making to the professional deputy.

The significance of the structure of deputyship and trusteeship is that it provides a blanket of protection: ensuring that the money is spent appropriately to meet the complex needs in the here and now but balancing this with the requirement to make the funds last for the lifetime of the child. Compensation is awarded on the basis that the money should run out on the last day of the child’s life; it is not intended to be inherited by the family.  Trying to balance expenditure with lifetime needs is intricate and the skill is ensuring that there is neither an underspend or overspend.  Certainly, having a detailed understanding of the medical and care needs and how the compensation was calculated during the litigation, is essential in performing this role.

Team Around The Child

The Clinical Negligence Team at Withy King Solicitors is able to assist clients to set up and administer personal injury trusts and deputyships.  We start by building a multi-disciplinary team around the child: first, by nominating a specialist professional trustee/deputy; second, by facilitating access to an expert independent financial adviser, who can advise on the best long term investment strategy.

Building the team also includes the appointment of a case manager, to manage and co-ordinate the care regime, therapeutic and medical input and equipment needs.

At various stages during the lifecycle of the administration of the compensation, we bring in other experts: we appoint specialist architects and occupational therapists to ensure the best design and functional outcome in adapting a home.  We communicate closely with the medical team to ensure that the child’s health and welfare needs are met and appropriate equipment is trialled and purchased.

Central to each decision is the child and his/her family.

Clients have direct access to the decision-maker as we understand the importance of a lasting trusted relationship with the professional trustee/deputy.

Going back to the original question that I am often asked by parents, I hope that this short explanation provides reassurance that following settlement of a clinical negligence claim, first the mechanism for receiving compensation and second the appointment of a professional trustee or deputy, ensures that a child with cerebral palsy will be provided with the best possible lifelong support and opportunities to maximise their quality of life, and that the compensation received is managed to ensure it lasts for the child’s lifetime.

If you have any questions about making a claim or anything you have read in this series of blogs relating to claims for injuries suffered around the time of birth, then please contact me or one of my colleagues.

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