Our specialist Court of Protection Team is Celebrating its First Birthday!

Articles | Tue 24th Jan, 2017

The Court of Protection Team at 9 Gough Chambers contains market-leading barristers who are also recognised in Personal Injury, Clinical Negligence and Public / Family law.

We therefore provide a unique perspective to issues relating to the welfare and decision making for those who are incapable of doing so themselves: including those disabled and of reduced mental capacity arising out of injury and clinical negligence.

Highlights from 2016 have included:

Andrew Ritchie QC chairing the ‘Deputy Day’ hosted by Frenkel Topping with Edward Lamb speaking on best interests.

Edward Lamb speaking at the MBL conference chaired by Andrew Bagchi QC. Edward spoke on international perspectives of best interests [Ed’s talk is available here].

A selection of recent cases:

  • RE: M (on-going): Declarations sought on medical treatment relating to a vulnerable adolescent, Edward Lamb (instructed by the OS).
  • RE: JPG (on-going): Determination of whether a statutory will should be implemented in circumstances of alleged undue influence, Edward Lamb.
  • Re YW [2016] EWCOP 18: Dispute over an appointment of an interim deputy, Edward Lamb.
  • LBE v JM v BM v RD (on-going): Dispute between clinical commissioning groups arising from the differing locations of P’s previous care placements and a multi-party dispute as to best interests, Laura Bumpus.
  • LBH v EC v PH v VH (2016): Determination of best interests following a release from hospital (under section) for paranoid schizophrenia, Laura Bumpus.

This mail marks the first in a series of fortnightly ‘practice pointers’ that highlight recent developments in the Court of Protection. The first two in the series deal with cases straddling the civil jurisdiction and the Court of Protection: playing to Chambers’ existing strengths as a market leader in heavy-weight clinical negligence and personal injury.

TO TRUST OR DEPUTISE IN LARGE AWARDS OF DAMAGES

In cases involving significant damages, often in excess of £1m, Counsel are often asked to consider which is the most appropriate mechanism for the handling of an award for an incapacitious claimant.

In the Court of Protection (as opposed to the civil) jurisdiction where a person lacks capacity to manage property and affairs the Court of Protection will (usually) appoint a deputy. However trusts are often created for claimants in personal injury cases to protect an award from being treated as capital when assessing entitlement to means tested benefits. What then is the correct mechanism?
 
Following SM v HM [2012] COPLR 187 (a decision of HHJ Marshall) it was widely assumed by practitioners that the creation of a deputyship under the Mental Capacity Act 2005 (‘MCA 2005’) rather than a personal injury trust was the more appropriate mechanism to manage the award. The practice was sufficiently widespread for it to be considered by many as a presumption.
 
In SM v HM HHJ Marshall highlighted that each case is fact specific (always an unhelpful indication when seeking clarity!) but that on the facts of the case a trust should be established. She drew three main principles:

  • the administration of a trust was cheaper than a deputyship (no security bond premium or Public Guardian supervision fee);
  • HM’s mother was “a competent, forceful, well-educated and responsible person” (para. 169) and she could monitor the costs herself, there being no procedure for detailed assessment as required by a deputy; and
  • the proposed professional trustee agreed to limit their costs to the guideline rates allowed on detailed assessment.

SM v HM remained the leading authority on this point until Watt v. ABC [2016] EWCOP 2532 which Charles J decided late last year.
 
Charles J had approved a £1.5m award in the QBD. He held that P may regain capacity at some stage in the future. With support P was likely to be able to make decisions about income. If P were to recover capacity in relation to capital expenditure, he would be at risk of exploitation.
 
Charles J considered an irrevocable trust permitting autonomy of income but no access to capital. Charles J specifically rejected the notion that there was a presumption of deputyship over trusts. Each case has to be considered on its own merits and the starting point of a strong presumption in favour of deputyship may not be in P’s best interests; particularly in light of his findings arising from the risk of exploitation.

Six helpful practice points are recorded by Charles J (see paragraph 92):

  • “The management regime for a substantial award of damages should be considered as soon as is practicable.
  • This will involve a careful consideration of what the claimant (P) has and does not have the capacity to do and of his or her likely capacity and/or vulnerability in the future. This is relevant to both jurisdictional and best interests issues.
  • It will also involve the identification of all relevant competing factors and should not proceed on the basis that there is a strong presumption that the COP would appoint a deputy and would not make an order that a trust be created of the award. Rather, it would balance the factors that favour the use of the statutory scheme relating to deputies (that often found the appointment of a deputy in P’s best interests) against the relevant competing factors in that case.
  • It will also involve the identification of the terms and effects (including taxation) and the costs of those rival possibilities.
  • Care should be taken to ensure that applications that are not straightforward are not decided by case officers in the COP but are put before judges of the COP.
  • The possibility of listing case management hearings or the final hearing of QB proceedings before a judge who is also nominated as a COP judge should be considered. However, the potential for conflict between the respective roles of the judge in the two courts (e.g. one arising from a consideration of without prejudice communication in respect of the QB proceedings concerning its settlement that is not agreed or not approved by the COP judge) and the respective jurisdictions of the two courts need to be carefully considered.”

Of particular note is (6) above. If this sensible consideration is followed, much of the dispute that led to this case could necessarily be avoided.
 
The extent to which Watt advances anything particularly new is limited and some see the judgment as a rather semantic exercise. It does however remind us that each case requires individual consideration on its own merits. It is important therefore to bear the following broad principles in mind:

  • in difficult cases framing the trust in suitable terms so as to protect the best interests of P may be unachievable;
  • a deputyship order covers all decisions that can be made on behalf of P, which alone has its own attractiveness;
  • a decision must be made on how best to accommodate the views of the family as to income / capital;
  • whether there is a suitable family member who can be identified as being capable as acting as trustee;
  • whether the oversight provided by the Court of Protection is necessary or desirable; in particular in relation to the fees and costs of a professional deputy;
  • the likelihood of future disputes and the potential costs liability to be met by P.

The above list is not exhaustive but should provide a helpful starting point to the consideration of this issue.

Kindly written by Edward Lamb, Head of Court of Protection.

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