Case Update: Lumb Update in Respect of Direct Payments

Lumb v NHS Humber & North Yorkshire ICB & Anor [2024] EWCOP 57

In the matter of various applications in respect of ‘Direct Payments’ [2026] EWCOP 42 (T2)

Read the full judgement here

Her Honour Judge Hilder has now handed down judgment in relation to 7 applications brought by 4 Deputy firms where clarification was sought as to the authority of a property and affairs deputy to manage Direct Payments (DPs) following the 2024 Lumb judgment.

The Official Solicitor was appointed as amicus curiae in these proceedings and the Public Guardian was joined as respondent.

WHAT DID THE 2024 LUMB JUDGMENT SAY?

This judgment concerned the management of DPs under a personal health budget pursuant to The National Health Service (Direct Payments) Regulations 2013 (NHS DPs). The decision did not consider management of DPs under any of the other DP legislative regimes.
Managing NHS DPs is not the same as managing state benefits. State benefits form part of P’s estate and can be spent as they wish. DPs can only be spent in accordance with the care plan; they are not P’s property (para 54).
Meeting the regulatory requirements to manage NHS DPs involves both financial and welfare decisions (para 73).
Pursuant to s19(1)(b) MCA, a trust corporation can only be appointed as deputy for property and affairs (para 74). It is not, therefore, possible for a trust corporation to be appointed with welfare decision-making authority.
An ICB can appoint a property and affairs deputy to act as representative, but if appointed, the work completed to discharge the representative role, would be conducted outside of the deputy’s general authority (para 80).
The Court can appoint a deputy with specific authority to manage NHS DPs, notwithstanding that would include both welfare and property and affairs authority (para 95).

39 Essex Chambers summary of the judgment is available here – Lumb v NHS Humber and North
Yorkshire ICB & Anor | 39 Essex Chambers

WHAT FURTHER CLARIFICATION WAS SOUGHT?

The applicant deputies made applications for prospective and retrospective authority to manage direct payments on behalf of seven people who had been receiving direct payments for many years (in the event that the court considered this was not already within their general authority as deputies). All of the individuals had care packages which were managed by case managers, and were jointly funded through the direct payments and P’s own funds.

Her Honour Judge Hilder was invited to provide clarification on a number of issues arising from the 2024 Lumb judgment.

Whilst the 2024 Lumb decision only concerned NHS DPs, the 7 applications also involved DPs paid in accordance with:

The Care and Support (Direct Payment) Regulations 2014,
The Special Educational Needs (Personal Budgets) Regulations 2014, and
The Community Care, Services for Carers and Children’s Services (Direct Payments) (England) Regulations 2009

The Court was invited to consider several questions arising from the 2024 Lumb judgment, including:

What authority a deputy needs to manage DPs under the different DP legislative schemes,
Whether the general authority of a property and affairs deputy included authority to: Request DPs from the statutory authority and make arrangements for them to be paid, and Negotiate with the statutory body as to the sufficiency of the DPs.
What is the position where there is a reverse indemnity in a damages claim?
Where authority to manage DPs includes welfare authority, can a Trust Corporation (TC), be authorised?
If a TC cannot be authorised to manage DPs and there is a mixed funded package of care, can an individual Director of the TC be authorised to manage DPs where the TC is the property and affairs deputy?
Is a deputy who is authorised to manage DPs, treated as an agent of P pursuant to s19(6) MCA, or, do they act as principal, where DPs are managed under either the NHS or SEN Regulations?
Where a case manager (CM) receives DPs as the authorised person instead of the deputy, is a deputy authorised under their general authority to pay the costs of the CM to act as the authorised person?
Should a deputy first ask the statutory authority to fund their costs of managing DPs before applying to the Court for authority?
Where a deputy has been managing DPs without authority, do they need to apply to the Court for retrospective authority for any remuneration they have received from P’s funds?
What is the long-stop date where retrospective authority is concerned?
Where there is a mix of public and private funding for care, how do you calculate what costs arise from the management of DPs and for which authority is required?

As part of the applications for authority, the applicant deputies argued to the court that:

1. The nature of the authority required to manage direct payments under each of the legislative regimes was property and affairs, rather than welfare; and

2. The authority to manage direct payments was within the ‘general’ authority of property and affairs deputies (such that additional applications for authorisation should not be required).

WHAT DOES THE 2026 DIRECT PAYMENT JUDGMENT CONFIRM?

Her Honour Judge Hilder confirmed her position from Lumb 2024 on 4 key issues, and extended them to the other three legislative regimes

Managing DPs involves a mix of financial and welfare decision-making,
The general authority of a property and affairs deputy does not include authority to manage DPs,
The Court can provide authority to manage DPs notwithstanding it requires a mix of financial and welfare decision-making, and
A trust corporation cannot be authorised to make welfare decisions.

In addition, the 2026 Direct Payment judgment confirms:

It is only possible to provide welfare authority once P has reached aged 16 years. Authority to manage DPs cannot therefore be granted where P is under age 16 years;
Administration of carers’ employment contracts by a property and affairs deputy is within their general authority;
Negotiating the sufficiency of DPs with the statutory authority is not within the general authority of the deputy, but may be granted to a deputy who makes an application for this authority;
The presence of a reverse indemnity in a settlement order (and an obligation on P to seek out direct payments to fulfil the terms of that order) does not extend the scope of the deputy authority. Additional COP authority beyond a deputy’s general authority to manage DPs would therefore be required for a Deputy to manage any obligations to claim DPs required by a reverse indemnity;
Given practical difficulties arising, it would not be appropriate for an individual director of a TC to be authorised to manage DPs, where the TC is property and affairs deputy and the package of care is a mix of public and private funding.
Where a CM is appointed by the statutory authority to manage DPs, a deputy has authority to pay the fees of the CM under the general authority;
A deputy is not to be considered as the ‘last resort’ where the management of DPs are concerned, and may be appointed even if there are others who could potentially manage the DP
A deputy should seek funding from the statutory authority for the costs of managing DPs before they apply to the Court, but they do not need to wait for a response where that is delayed,
Where a deputy has been managing DPs without authority and has been paid for so doing from P’s funds, retrospective authority is required.
Where a former deputy has managed DPs without authority and has charged P for so doing, the current deputy does not need to seek ratification from the Court for those costs but should consider whether an application to recover those costs from the former deputy is appropriate.
The long-stop date for retrospective authority will usually be 11 October 2024 (Lumb), unless there are case-specific factors otherwise
The ‘but for’ test applies when determining what costs arise from managing DPs where there is a mixed funded package of care.

Her Honour Judge Hilder also very helpfully sets out:

Draft wording for an order providing authority to manage DPs (schedule 1)
Evidence required on an application for authority to manage DPs (schedule 2)
Guidance as to when it would be in P’s best interests for a deputy to be authorised to manage DPs.
Evidence required for retrospective authority for any costs paid to date by P.

In addition to restating the position from Lumb 2024 concerning welfare authority and implications arising from that, this judgment has provided some very helpful practical clarification for deputies in relation to the management of DPs including:

What authority is required and who can apply,
When to apply,
What evidence the court requires,
When retrospective authority is required and how to calculate the costs arising.

This should hopefully provide deputies with the information they need to decide:

Whether they can be appointed to manage DPs for P,
What issues arise on a best interests decision,
What evidence is required for both a retrospective and prospective Court application,
What deputy costs are caught, and for which separate DP authority is required.

Confirming a long-stop date of October 2024 and the application of a ‘but for’ test will undoubtedly also limit the work required for retrospective applications which is very much appreciated.

We would like to thank:

· Her Honour Judge Hilder for providing the clarification sought.

· Tor Butler-Cole KC and Arianna Kelly both of 39 Essex Chambers for their skill and expertise in this matter.

· The applicant Deputies’ firms, Apricity Law, Anthony Gold, Boyes Turner and EMG Solicitors, for the pro bono hours donated throughout these cases in relation to the issues impacting Deputies managing DPs generally, to assist with securing this much needed clarification from the Court.

· PDF members for responding to requests for information so promptly and to the PDF for its financial contribution towards Counsel’s costs of the final hearing.

· BABICM and its members for very helpfully responding to requests for information.

A webinar ‘Unpacking Lumb’ will take place on 24th September – register here.

Stacey Bryant

James Pantling-Skeet

Emma Tante

Samantha Hind

Sue Bowler

11 September 2026