I need some guidance on whether ‘mixed’ compensation can be put into a personal injury trust (either wholly or in part).
I understand that PI trusts (and their helpful features re means tested benefits and financial assessments) are intended to hold compensation received directly from a personal injury.
However, I am dealing on a few clients who have compensation from ‘mixed’ claims, e.g. damage to reputation, loss of income, and PTSD. From what I have read, only the PTSD portion of the claim could accurately be classed as ‘personal injury compensation’ but the settlements are global figures, not broken down by type of claim.
My questions are:
Can compensation that has at least some element of personal injury ‘qualify’ the whole compensation for a PI trust?
If not, can a sensible proportion of it (derived from estimated value of the PI portion of the claim) be placed in a PI trust?
If not, is there some way a litigator can seek to structure settlements in a way which separates out the PI element of the compensation?
Grateful in advance for any ideas (or pointers in the right direction!)
If mixed funds are added to a PI trust the whole fund could be “tainted” for the purposes of means tested benefits. The funds of the trust should only derive from payments made in consequence of a personal injury to the injured person if the trust is to be treated as disregarded capital when assessing whether an individual is entitled to means-tested benefits (paragraph 12, Schedule 10 of the Income Support (General) Regulations 1987). There is a similar disregard in regulation 75(4) of the Universal Credit Regulations 2013. By way of example, damages for “injury to feelings” are not regarded as damages for personal injury (DR v Secretary of State for Work and Pensions [2024] UKUT 196 (AAC)). The Judicial Guidelines for the Assessment of General Damages in Personal Injury Cases [16th Edition] has no category for injury to feelings which are treated as distinct from psychiatric injury. It should be possible to separate out the pure PI element of the award so that this can be placed in a PI trust.
If the award has not already been agreed/ordered then it will be imperative to ensure that any agreement or order specifically sets out how much is allocated to each head of loss to avoid the risk of tainting the trust.