Long-TERM care payouts will need to be more carefully structured after a recent Court of Appeal decision, says one law firm.

The decision means that claimants will be denied social security benefits unless their payments are awarded via a formal trust set-up, Preston-based Meloy Whittle Robinson (MWR) has warned.

MWR partner Altaf Patel recently represented Charles Beattie, from Cumbria, who was left quadriplegic and severely brain-

damaged by a car accident at the age of 17.

His case was settled in 1992 for more than £1.5m, which was invested in a structured settlement fund to pay for the £6,000 per month, 24-hour support he requires.

But Beattie lost his income support, housing and council tax benefits when the Social Security Commissioner decided in 1999 that his monthly payments were income, which brought him far above the £8,000 a year maximum allowed.

Following the recent appeal by MWR, the Court of Appeal upheld the commissioner's decision that the money awarded to accident victims by insurers for their long-term care should be regarded as income.

Although disabled people affected by the decision will not be asked to pay back their income support, the Department of Social Security (DSS) could review its files and stop their benefits at any time.

Patel said that the many insurers who took a direct interest in the way payouts were structured should be aware of the case.

“In settling serious injury cases, insurers and legal advisers may now have to consider alternatives to the type of structured settlement in place in the Beattie case,” he said.