Local councils owe a continued duty of care to vulnerable people even if they have been awarded a personal injury settlement, a court has ruled.

The High Court threw out an appeal by Wokingham Borough Council after the local authority argued it should take into account the woman’s damages when carrying out an assessment of her finances.

The decision should help to clarify the law around care payments and end councils’ protests at so-called ‘double recovery’, where a person receives money for the same injury twice.

The woman had received a personal injury award in 1998 of almost £1.3m for medical negligence dating back to 1975.

Her solicitor complained to the Local Government and Social Care Ombudsman that the council had failed to assess the woman’s finances properly by failing to disregard the personal injury award.

The ombudsman upheld that complaint last February, saying the council was at fault and ordering the backdates payments for her care for her eligible needs. Those payments can now be enforced after the Honourable Mr Justice Fraser, sitting in the administrative court, ruled the application for judicial review was both out of time and ‘totally without merit’.

Local government ombudsman Michael King said: ‘The judge has ruled and confirmed out interpretation of the law was within the range of reasonable responses. Councils can be clear about the way we will look at any similar cases that come to my office.

‘I now urge Wokingham Council to consider the report as a matter of urgency and pay the woman the money she is entitled to, and which she has been waiting for since last year while the court case was being settled.’

The Care Act 2014 and the associated ‘charging regulations’ make it clear that while councils can expect people with capital over £23,250 to pay for their own care, some forms of capital must be disregarded. These include capital derived from an award of damages for personal injury which is administered by a court, or the value of the person’s main or only home where the person is receiving care is not in a care home.

Virginia Cooper, a partner at national firm Bevan Brittan, which advised the ombudsman, added: ‘All authorities involved in outstanding litigation over care costs will now need to take full account of these latest judgments – and that personal injury settlements must be disregarded in future financial assessments in accordance with the charging regulations.’