A simple fix is to use the COLLATE clause in conjunction with the DISTINCT Clause.
e.g.
a) CASE INSENSITIVE DISTINCT CLAUSE
SELECT DISTINCT (Item) COLLATE sql_latin1_general_cp1_cs_as
FROM (
SELECT 'a' item
UNION ALL SELECT 'A'
)items
b) CASE SENSITIVE DISTINCT CLAUSE
SELECT DISTINCT (Item) COLLATE sql_latin1_general_cp1_ci_ai
) items