Deputyship applicationsProperty and affairs applicationDeputyship applications:deputy needed, whenDeputyship applications:capacity, andDeputyship applicationsDeputies:need forApplications:property and affairs casesProperty and affairs applicationDeputyship applications:deputy needed, whenDeputyship applications:capacity, andDeputyship applicationsDeputies:need forApplications:property and affairs casesProperty and affairs applicationDeputyship applications:deputy needed, whenDeputyship applications:capacity, andDeputyship applicationsDeputies:need forApplications:property and affairs cases(reproduced in full in appendix A)Property and affairs applicationDeputyship applications:deputy needed, whenDeputyship applications:capacity, andDeputyship applicationsDeputies:need forApplications:property and affairs cases(reproduced in full in appendix A)Property and affairs applicationDeputyship applications:choice of deputyDeputyship applicationsApplications:property and affairs casesProperty and affairs applicationDeputyship applications:choice of deputyDeputyship applicationsApplications:property and affairs casesProperty and affairs applicationDeputyship applications:merits of proposed deputiesDeputyship applications:choice of deputyDeputyship applicationsApplications:property and affairs casesProperty and affairs applicationDeputyship applications:merits of proposed deputiesDeputyship applications:choice of deputyDeputyship applicationsApplications:property and affairs casesProperty and affairs applicationDeputyship applications:merits of proposed deputiesDeputyship applications:choice of deputyDeputyship applicationsApplications:property and affairs casesSkype:evidence byProperty and affairs applicationDeputyship applications:merits of proposed deputiesDeputyship applications:choice of deputyDeputyship applicationsApplications:property and affairs casesProperty and affairs applicationDeputyship applications:choice of deputyDeputyship applicationsApplications:property and affairs casesProperty and affairs applicationDeputyship applications:choice of deputyDeputyship applicationsApplications:property and affairs casesProperty and affairs applicationDeputyship applications:choice of deputyDeputyship applicationsApplications:property and affairs casesProperty and affairs applicationDeputyship applications:professional deputiesDeputyship applications:choice of deputyDeputyship applicationsApplications:property and affairs casesProperty and affairs applicationDeputyship applications:choice of deputyDeputyship applicationsApplications:property and affairs casesProperty and affairs applicationDeputyship applications:security bondDeputyship applicationsApplications:property and affairs casesProperty and affairs applicationDeputyship applications:security bondDeputyship applicationsApplications:property and affairs casesProperty and affairs applicationDeputyship applications:supervisionDeputyship applicationsApplications:property and affairs casesProperty and affairs applicationDeputyship applications:restrictionsDeputyship applicationsApplications:property and affairs casesProperty and affairs applicationDeputyship applications:restrictionsDeputyship applicationsApplications:property and affairs casesProperty and affairs applicationDeputyship applications:powers of deputyDeputyship applications:duties of deputyDeputyship applicationsApplications:property and affairs casesProperty and affairs applicationDeputyship applications:powers of deputyDeputyship applications:duties of deputyDeputyship applicationsApplications:property and affairs cases(reproduced in full in appendix A)Property and affairs applicationDeputyship applications:powers of deputyDeputyship applications:duties of deputyDeputyship applicationsApplications:property and affairs casesCodes of Practice:Mental Capacity Act 2005 Code of Practice (2007)Property and affairs applicationDeputyship applications:powers of deputyDeputyship applications:duties of deputyDeputyship applicationsApplications:property and affairs casesProperty and affairs applicationDeputyship applications:investmentDeputyship applicationsApplications:property and affairs cases(reproduced in full in appendix A):s1(5)Property and affairs applicationDeputyship applications:investmentDeputyship applicationsApplications:property and affairs casesProperty and affairs applicationDeputyship applications:investmentDeputyship applicationsApplications:property and affairs casesProperty and affairs applicationDeputyship applications:investmentDeputyship applicationsApplications:property and affairs casesProperty and affairs applicationDeputyship applications:gratuitous careDeputyship applications:family care paymentsDeputyship applicationsApplications:property and affairs casesProperty and affairs applicationDeputyship applications:gratuitous careDeputyship applications:family care paymentsDeputyship applicationsApplications:property and affairs casesProperty and affairs applicationDeputyship applications:gratuitous careDeputyship applications:family care paymentsDeputyship applicationsApplications:property and affairs casesProperty and affairs applicationDeputyship applications:gratuitous careDeputyship applications:family care paymentsDeputyship applicationsApplications:property and affairs casesProperty and affairs applicationDeputyship applications:gratuitous careDeputyship applications:family care paymentsDeputyship applicationsApplications:property and affairs casesProperty and affairs applicationDeputyship applications:gratuitous careDeputyship applications:family care paymentsDeputyship applicationsApplications:property and affairs cases
When is a deputy needed?
7.36If a person loses their capacity to make some decisions about their finances and they have not planned for this eventuality by making an EPA (before 1 October 2007) or an LPA for property and affairs (from 1 October 2007 onwards) then it may be necessary for an application to be made to the court for the appointment of a property and affairs deputy. Without an attorney or deputy, the general rule is that no transactions concerning P’s property or finances can be validly undertaken.
7.37When deciding if an application for the appointment of a deputy is necessary, the nature of P’s assets and income should be considered. If the only income of the person concerned is state benefits then the appointment of a deputy may be disproportionate and costly, an application can be made by an individual (such as a family member) or an organisation (eg a council) to the Department for Work and Pensions (DWP) to be made their appointee to manage those benefits. This does not require an application to the court.
1See www.gov.uk/become-appointee-for-someone-claiming-benefits.7.38If, however, there are other assets or income that need to be managed, then it is likely that a deputy will need to be appointed. This would include situations such as P owning a property or savings and investments that needed to be sold or accessed, for example to pay for the costs of a care home or to meet P’s day-to-day expenses or regular payments.
7.39It is important to keep in mind that under the Mental Capacity Act (MCA) 2005 capacity is ‘decision-specific’, there are no absolutes in terms of a person’s decision-making capabilities (see paras 3.33–3.64). There is no contradiction between having a deputy and retaining the ability to make some decisions. For example, a deputy may need to make decisions about investing a large sum of money while P retains the capacity to manage their weekly income to buy groceries and personal items.
Choice of deputy
7.40The MCA 2005 does not set out any order for individuals to be considered for the role of deputy. The choice of who would be a suitable deputy will depend largely upon P’s family and circumstances.
7.41In
Re M; N v O and P2[2013] COPLR 91. Senior Judge Lush noted that pre-MCA 2005 authorities were still pertinent to the question of who to appoint as a deputy, and set out an ‘order of preference’ in which P’s family was to be preferred by the court over strangers such as professional advisers or statutory bodies. Senior Judge Lush observed that:
The court prefers to appoint a family member or close friend, if possible, as long as it is in P’s best interests to do so. This is because a relative or friend will already be familiar with P’s affairs, and wishes and methods of communication. Someone who already has a close personal knowledge of P is also likely to be better able to meet the obligation of a deputy to consult with P, and to permit and encourage him to participate, or to improve his ability to participate, as fully as possible in any act done for him and any decision affecting him. And, because professionals charge for their services, the appointment of a relative or friend is generally preferred for reasons of economy. There are, of course, cases in which the court would not countenance appointing a particular family member as deputy. For example, if there had been physical or financial abuse; if there is a conflict of interests; if the proposed deputy has an unsatisfactory track record in managing his own financial affairs; and if there is ongoing friction between various family members that is likely to interfere with the administration of P’s affairs. This list is not exhaustive.
3Para 39.7.42In this case, in applying the balance-sheet approach, the various factors the court considered in assessing the merits of the two proposed deputies were:
•ability to act;
•willingness to act;
•qualifications;
•place of residence;
•security;
•conduct before and during the proceedings;
•nature of relationship with M;
•M’s wishes and feelings;
•views of others;
•effect of hostility;
•conflicts of interest;
•remuneration; and
•the terms of M’s will.
7.43Senior Judge Lush found that the two factors of ‘magnetic importance’ in deciding who the court should appoint as deputy for P, where there were competing candidates for the role were ‘M’s past and present wishes and feelings and the unanimous views of others, who are particularly close to him, as to what would be in his best interests’.
4Para 78. He went on to comment that there were also cases in which the court would not appoint a family member, such as where P has recovered damages in personal injury litigation specifically to fund a professional deputy appointment.
7.44Some individuals will be considered as unsuitable to act as deputy. In
Re BM;
JB v AG5[2014] EWCOP B20. and again in
Re PAW6[2015] EWCOP 57, [2015] WTLR 1785. Senior Judge Lush set out a list of those the court would not consider appointing, this list includes:
a)A proposed deputy who has physically, emotionally or financially abused P;
b)Where there is a need to investigate dealings with P’s assets prior to the matter being brought to the court’s attention, and the proposed deputy’s conduct is the subject of that investigation;
c)Where there is an actual conflict of interests, rather than simply a potential conflict;
7For comments on the court’s approach to managing conflict see Re JW [2015] EWCOP 82, [2016] COPLR 36. d)The proposed deputy has an unsatisfactory track record in managing his or her own financial affairs;
e)When there is ongoing friction between various family members, which is likely to interfere with the proper administration of P’s affairs; and
f)If there is a need to ensure that P is free from undue influence, particularly the influence exerted by the person who is seeking to be appointed as deputy.
8Re PAW [2015] EWCOP 57, [2015] WLTR 1785 at para 26. Other factors that may influence the decision about who should be appointed as deputy include locality, health, family and work commitments.
7.45In
DGP Law v DGHP and others,
9[2015] EWCOP 58. the traditional position was reversed with regard to appointing a deputy who lives outside the jurisdiction. In this case Senior Judge Lush appointed a deputy who lives in the USA. In his judgment Senior Judge Lush observed that ‘in the two decades since Justice Cunningham delivered his judgment there have been further technological advances in communications, such as online banking, digital reporting, mobile phone, email and Skype, and cheaper air travel as a result of a proliferation of budget airlines’.
7.46The court has also recently considered the situation where a deputy has limited command of English in the case of
Re FH10[2016] EWCOP 14, [2016] COPLR 287. and concluded that this is not an absolute bar being appointed deputy.
7.47These may be cases that need to be looked at on their facts as in each case features existed that mitigated the disadvantage suffered by the proposed deputy. In the first case the proposed deputy had access to up to date technology which facilitated administration of P’s affairs and in the second a close family member was available to translate for the proposed deputy. Once again we suggest that the court will look at all the circumstances of P and the proposed deputy when coming to a decision.
7.48It is possible for an application to be made for joint deputies to be appointed. This can help to share the burden but does require good communication to work efficiently. The updated application forms make it easier to make a joint application, providing spaces to specify up to four prospective deputies.
7.49Most deputies appointed are lay deputies, ie private individuals acting as deputy, usually for a family member. There are, however, professionals who specialise in this area of work and whose appointment is appropriate in some circumstances. Many local authorities continue to have a deputyship department but they will often only act as deputies of last resort where a suitable relative cannot be traced to undertake the role. A professional deputy is usually appointed where P has received substantial funds in compensation for a personal injury, or where P has complex or very high value personal finances or if the court concludes that is in P’s best interests for a neutral professional to undertake the role, usually where there is discord within a family. The Public Guardian also maintains a panel of deputies to whom cases can be referred to as a deputy of last resort (see also paras 20.44). Panel deputies are often appointed to act where there has been significant friction within the family about who should act as deputy for P. If the court believes that on-going family friction would impact upon the proper management of P’s finances a panel deputy will be invited to take on the role. For a discussion of the court’s approach to deciding amongst competing professionals see
Re RP Z.11[2016] EWCOP 1.7.50Finally, it should be noted that a trust corporation can be appointed to be a property and affairs deputy (but not a health and welfare deputy).
12MCA 2005 s19(1)(b).Security bond
7.51The court has discretion to require a deputy to provide security for the discharge of the functions conferred upon them.
13MCA 2005 s19(9); see also COPR r200. Generally, all deputies, whether lay or professional, are required to provide security by way of a bond, with the exception of local authority deputies. The level of the bond and the premium charged for it is determined by the court in reference to P’s assets and the amount of money to which the deputy has access.
14Re H (a minor and incapacitated person); Baker v H and the Official Solicitor [2009] COPLR Con Vol 606. The security bond is to protect P from financial loss caused by the deputy, whether deliberately or by negligence. There is a bond arrangement in place which deputies can use or they may wish to try to obtain their own cover. Once the bond is in place, the court will be notified and sealed copies of the order will be sent out to the deputy.
7.52Deputies and their legal advisers should note that they should apply to the court as circumstances change for the level of the security bond to be reviewed. During P’s lifetime the nature and extent of their assets will alter and therefore the appropriate level of bond should be reviewed at regular intervals.
Supervision
7.53When a new deputy is appointed the Office of the Public Guardian (OPG) will be notified by the court. The OPG will then provide a suitable programme of supervision to the deputy depending upon P’s circumstances. The OPG requires that every deputy submit an annual report detailing how P’s funds have been spent in the previous year and how any capital is invested. They check that the deputy obtains appropriate financial advice and acts upon it and they will schedule a visit by a court visitor to check that the deputy is coping with the new role. For more information on the role of the OPG, see chapter 20.
Restrictions
7.54It is not uncommon for a deputy order to contain restrictions to the deputy’s authority. When a new order is received, the deputy or their legal adviser should read it carefully and note any limits to their authority. Common restrictions include preventing the sale of a property without a further application to the court, or a limit to the amount of money that a deputy can spend in a year. If any of the restrictions are going to prove problematic, then so long as the application is made within 21 days of the order being served, a request can be made for a reconsideration under the provisions of COPR r89 (see further paras 18.3–18.6). Such a request can be made without incurring a further application fee.
7.55A deputy order cannot be exhaustive in setting out what a deputy is and is not authorised to do; the new deputy, or their legal adviser, should ensure that they are aware of the limits to the scope of the powers that they may exercise without further authorisation of the court.
Powers and duties of a deputy
7.56The order made by the court will set out the deputy’s powers and their limits; typical orders are to be found on the Court of Protection Handbook website.
15https://courtofprotectionhandbook.com/precedents/.7.57A deputy has what is known as a fiduciary duty towards P. This means that there is a relationship of utmost trust and confidence between the deputy and P. Where a fiduciary relationship exists, money and property must be managed in P’s best interests, without regard to any interest of the deputy. This means (among other things) that the deputy cannot profit personally by acting as P’s deputy and the funds and assets of P must be kept entirely separate from those of the deputy. In relation to property, the deputy cannot sanction a sale to him or herself, or a family member, particularly for less than full market value, without the additional approval of the court. It is also not appropriate for the deputy to receive any of P’s funds into an account in their own name. All of P’s assets and funds must remain be clearly in P’s name at all times. Most bank accounts and other assets should be named ‘A as deputy for Y’ so that it is immediately clear who the asset belongs to.
7.58A discussion of the full range of a deputy’s powers and duties falls outside the scope of this chapter, and indeed of this book. However, any person considering putting themselves forward as a deputy would be well advised to familiarise themselves with the Code of Practice to the Mental Capacity Act, the principles of the MCA 2005 and the COPR. There continues to be a steady flow of cases
16See Re GM [2013] COPLR 290; Re Buckley [2013] COPLR 3; Re AB [2014] WLTR 1303, [2014] EWCOP 12; The Public Guardian v AW and DH [2014] WLTR 1705, [2014] EWCOP 28 and The Public Guardian v DA, YS and ES [2015] WTLR 1647, [2015] EWCOP 41. which demonstrate that the court will not be lenient on deputies, or attorneys, who simply do not understand the true nature and scope of the role.
7.59We suggest the following by way of good practice upon the initial appointment of a deputy:
•The deputy should begin their task by circulating the deputy order to all of the financial institutions with whom P has a relationship. It is good practice to ask for an up-to-date statement or valuation and consider updating the court if it becomes clear once appointed that P had considerably more or fewer assets than were detailed in the COP1A. If P is living independently, the deputy should ensure as far as possible that their actions do not jeopardise P’s day-to-day activities. If P relies upon a particular current account to access a pension to buy groceries, the deputy should make it clear to the bank and the DWP at the time of notifying them of the deputy order that they do not want any changes to the present arrangement.
•Ensure that P is receiving all the income to which they are entitled (and none that they are not). This means that an early task for any new deputy is to review P’s benefits and make sure that claims are up-to-date. Benefits will need to remain under review by the deputy in the event of P’s circumstances changing.
•Check that insurance policies are updated and relevant to P’s circumstances. If the deputy has been appointed because of an accident sustained by P, it may be, for instance, that P has a critical illness policy which would pay out a sum to P.
•If P lives in their own home, the deputy should visit and check how well-maintained it is. If repairs or adaptations are needed, the deputy should seek quotes and take professional advice about the suitability of any changes. If there is a property that needs to be sold, the deputy should check that the deputy order allows sale without further court approval, and if so, then approach estate agents to get a range of valuations before choosing whom to market a property with. If not, the deputy should seek specific approval from the court.
•Consider P’s care arrangements and how they are funded. Explore options to maximise funding for example having an assessment for NHS Continuing Care or applying to the local authority for an assessment of P’s needs. If family members are being paid for caring for P from P’s funds the new deputy should follow the court’s guidance in Re HC which is discussed below at para 7.64.
Investment
7.60A deputy should take care to review P’s finances and investments, preferably with the assistance of a suitably qualified Independent Financial Adviser (IFA). This is true not simply of new deputies but equally applies to long-standing appointments. P’s needs and circumstances will alter over time and the deputy should be alive to these changes.
7.61In
Re Buckley17[2013] COPLR 39. Senior Judge Lush took the opportunity to look at the investment responsibilities of an attorney, noting that:
20. There are two common misconceptions when it comes to investments. The first is that attorneys acting under an LPA can do whatever they like with the donors’ funds. And the second is that attorneys can do whatever the donors could – or would – have done personally, if they had the capacity to manage their property and financial affairs.
21. Managing your own money is one thing. Managing someone else’s money is an entirely different matter.
22. People who have the capacity to manage their own financial affairs are generally not accountable to anyone and don’t need to keep accounts or records of their income and expenditure. They can do whatever they like with their money, and this includes doing nothing at all. They can stash their cash under the mattress, if they wish and, of course, they are entitled to make unwise decisions.
23. None of these options are open to an attorney acting for an incapacitated donor, partly because of their fiduciary obligations and partly because an attorney is required to act in the donor’s best interests. Section 1(5) of the Mental Capacity Act 2005 (the 2005 Act) states that, ‘an act done, or decision made, under this Act for or on behalf of a person who lacks capacity must be done, or made, in his best interests.
…
25. Attorneys hold a fiduciary position, which imposes a number of duties on them. Like trustees and other fiduciaries, they must exercise such care and skill as is reasonable in the circumstances when investing the donor’s assets and this duty of care is even greater where attorneys hold themselves out as having specialist knowledge or experience.
26. Although it does not expressly apply to attorneys, s4 of the Trustee Act 2000 requires trustees to have regard to what are known as the ‘standard investment criteria’ when exercising any power of investment.’ [Senior Judge Lush then set out how these investment criteria apply]
7.62This guidance was given in the context of a case concerning an LPA, but both the comments should be read as being equally applicable to a property and affairs deputy.
7.63The investments made by the deputy (or attorney) on behalf of P must be in P’s best interests, and in line with any other restrictions set out in the deputy order.
Family care payments: ‘gratuitous care’
7.64In the case of
Re HC18[2015] EWCOP 29. the court considered the issue of family members being paid for care from P’s funds. This is usually known as ‘gratuitous care’, as it refers to a situation where the person being paid (often one of P’s parents) provides care out of love and affection for P but in doing so they save P considerable money on the provision of commercial care arrangements and also make a sacrifice of their own career and earning potential. In these circumstances gratuitous care payments can be made to the carer to recognise their contribution, so long as court authority is obtained.
7.65A deputy order does not automatically allow a lay deputy to make payments to themselves or a close relative for providing care to P. A lay deputy wishing to make gratuitous care payments should follow the steps set out in Re HC for ascertaining the appropriate level of payment:
1)What is the commercial value of the care that the family member provides?
2)The ceiling for payment is the value of commercial care reduced by 20 per cent to reflect the savings of tax and National Insurance;
3)Is the proposed payment affordable for P?
The case also sets out a mechanism for increasing the payment each year on the anniversary of the order.
7.66The method for deciding the commercial value of the care provided will differ depending upon the circumstances of each particular case. Some applicants may need to commission a report from a care expert to assist with this point. The issue of affordability will also be highly variable from case to case and to be able to make decision about what is in P’s best interests the court will require up to date information about all P’s capital, income and expenditure as well as the proposed gratuitous care payment and the impact this will have as well as medical information about P’s life expectancy.
7.67The case of
Re HNL19[2015] EWCOP 77. saw the court examine the situation of families where care payments commenced under pre-MCA arrangements and were continued by the lay deputy. In this case the court had sufficient information to give retrospective approval to payments that had been made and to authorise the continuation of payments in future. It is not uncommon for lay deputies to have begun making gratuitous care payments without being aware that court authorisation was required. It is clear now that the court will look to regularise these situations when they come before it.
7.68A deputy making gratuitous care payments would also be wise to notify HMRC of the arrangement to ensure that the payments will not be subject to income tax. The recipient of the payments should be made aware that unlike paid employment they will be responsible for their own National Insurance payments and they may wish to take independent financial advice about the likely impact on their state pension entitlement.
7.69The Office of the Public Guardian has now produced a Practice Note on gratuitous care, taking into account decisions such as those set out above.
20www.gov.uk/government/uploads/system/uploads/attachment_data/file/524111/PGnote_2016_05_family_care_payments.pdf.