A watershed court ruling on deprivation of liberty would cost £1.6bn a year if it was implemented in full, the Law Commission has estimated.
An impact assessment, published as part of the commission’s proposed overhaul of the deprivation of liberty safeguards (DoLS) system, said the actual costs of implementing the Cheshire West ruling far outstripped what was currently being spent by councils.
The ruling, in March 2014, broadened the scope of DoLS and has been blamed for a tenfold increase in applications from care providers seeking to deprive people of their liberty. These applications must then be assessed by the supervisory body, which in England is always a local authority but in Wales may also be a local health board.
The impact assessment said fully implementing the Cheshire West ruling would cost £1.6bn a year to councils, the NHS, regulators and people deprived of their liberty and their families in legal costs.
The figure, which covers England and Wales, also includes the cost of Court of Protection authorisation for deprivations of liberty in settings outside the DoLS system, such as supported housing.
It estimates £513.7m of the total cost would fall on councils and the NHS. As supervisory bodies the bulk of this is likely to fall on local authorities.
The figure far outstrips the £117.9m a year the commission estimated was currently being spent on the DoLS system, including implementing the ruling, of which £80.1m fell to councils and the NHS.
The difference between the £117.9m and £1.6bn figures is largely down to processing the large backlog of DoLS authorisation requests, the assessment said.
The Health and Social Care Information Centre said only 46% of applications had been dealt with by the relevant supervisory body between April and December in 2014.
Last month the Law Commission published a consultation seeking views on how to simplify the DoLS system, reduce the cost and extend it to community facilities such as supported housing.
The impact assessment said the commission’s preferred option for a new system, which includes automatic tribunal review of the deprivation of liberty at agreed regular intervals, would have an annual cost of £529.5m, of which £376.8m would fall on councils and the NHS.
Without the automatic tribunal system the total annual cost would be £209.7m a year, of which £165.8m would have to be met by councils and the NHS.
The consultation runs until 2 November but draft legislation is not due to be published until the end of 2016.
The number of DoLS applications has grown tenfold since 2012-13 to 110,800 in 2014-15.
Before the case it was assumed that if someone did not object to the care and treatment offered then the person would not be considered as being deprived of their liberty. But the Supreme Court in the Cheshire West case said anyone under “continuous supervision and control” and not allowed to leave was deprived of their liberty – regardless of whether or not they objectedt. This meant a far larger number of people were likely to be being deprived of their liberty and needed to be included in the DoLS system than previously thought.