Compensation Protection Service

The Compensation Protection Service is a special unit within Wrigleys Solicitors LLP, which was founded by Wrigleys partner, David Coldrick, in 2000.

It has been specifically designed by Wrigleys to help injured people, who have received compensation, to get on with their lives whilst protecting their compensation awards.

A Compensation Protection Trust (Personal Injury Trust or Disabled Trust) is created when the injured person signs a specially drafted document called a trust deed. The deed states who must look after the compensation monies on the injured person's behalf and the uses to which the money may be put.

The Service is delivered by a team of specialist Trust Lawyers and Trust Administrators. They are trained to provide the range of services people need if they are in receipt of an award of compensation as a result of a personal injury, enabling them to protect the value of that award and prevent it adversely affecting the injured person's entitlement to State and Local Authority benefits.

If you would like us to secure a source of investment advice, then please let us know and we will do that for you if it has not already been arranged. We have considerable experience in securing high quality investment related advice for our Compensation Protection clients. David Coldrick recently wrote the standard textbook for solicitors on trustee investment “Coldrick on Modern Trustee Investment” (Ark 2006). 

You and your client should be aware that:

• Few financial advisers have significant experience of investing trust money.

• Even fewer have experience in investing monies for a Compensation Protection Trust (Personal Injury Trust or Disabled Trust).

• Trustee investment is governed by strict legal requirements, in particular the Trustee Act 2000.

• Care is required to ensure that trustees comply with their legal obligations. We can assist in that compliance process.

• The cost and quality of financial advice varies widely.

Confidence in the ability of professional advisers to prepare proper accounts and deal with tax issues is important to people who have received an award of compensation. Our Trust Administration Department can carry out any income tax, capital gains tax and accounts related functions your client might need assistance with. 

Those who receive larger awards for an injury are sometimes surprised at the extent of the Inland Revenue's increased interest in their own personal affairs, as well as the tax treatment of the money in the Trust. The Revenue are not just concerned with earned income, but also with investment income and capital gains. That is why an individual's tax affairs need to be dealt with in conjunction with the tax affairs of the Trust, though most Compensation Protection Trusts (Personal Injury Trusts or Disabled Trusts), if properly constituted, will have no adverse effect on the tax position of the individual. 

Bob is 56. He has been awarded £50,000 following an accident. Bob has not paid sufficient National Insurance contributions to qualify for the non-means tested benefit "Contribution Based Job Seekers Allowance." If Bob were able to seek work he would qualify for "Income Based Job Seekers Allowance" which is paid at the same rate as Income Support. In fact, Bob suffers from a disability as a result of his accident and has been judged unable to seek work.

Bob receives the single person's (age 25 and over) amount of Income Support which is £57.45. He also receives a disability premium of £24.50 for a single person.

He receives Housing Benefit of £57.45 per week to pay his rent and also has his Council Tax paid by Council Tax Benefit. Bob's Income Support also qualifies him for various health benefits such as free dental treatment, free eye tests etc.

If Bob were to have capital of over £6,000, his Income Support, Housing Benefit and Council Tax Benefit would all start to be affected. If he had capital over £16,000 he would not receive any of these benefits. The capital will be disregarded when assessing Bob's entitlement to benefits if it is placed in a Compensation Protection Trust (Personal Injury Trust or Disabled Trust).

FAILTURE TO DO SO COULD RESULT IN A LOSS OF INCOME OF £7,248.80 EACH YEAR IN ADDITION TO THE LOSS OF HIS COUNCIL TAX BENEFIT AND OTHER HEALTH BENEFITS E.G. FREE DENTAL TREATMENT, FREE EYE TESTS ETC.

The processes used are all designed to ensure that you and your client will always be fully informed of the direction of matters and in particular the charges for which your client's Compensation Protection Trust (Personal Injury Trust or Disabled Trust) will be liable.

If there are ever things which you or your client are not entirely happy with then you should feel free to tell us. Our objective is to ensure that you are entirely satisfied with what we provide. We are receptive to the need to make changes and are always seeking to make improvements. Wrigleys has a formal complaints procedure which is set out in the section entitlted "Our Terms."

If you or your client decide you would like to meet us then that is perfectly possible but there may be an extra cost for that. Most of our clients do not require it because they are happy with a postal, telephone and e-mail based service.