Do you worry that you are not managing the financial and property affairs of your loved one well enough. Every attorney has doubts about this. Reeta explains in this blog why Senior Judge Lush decided it was not in the Patient’s best interests to sack his three attorneys (“revoke” the financial and property LPA) and instead appoint a Local Authority/Court of Protection’s panel solicitor to the replacement deputy.

This case demonstrates the need for care homes and attorneys (or equivalent deputy ) to work more amicably together and consider avoiding delay/cost of going to court to litigate.

This case is concerned DT, the individual residing in a care home and the two parties in the court case were three attorneys vs the Public Guardian from OPG.

The case concerns unpaid care home arrears initially around £20,000 and by the time of the hearing a year later, around £70,000.  The LA placed a charge on the resident’s home. The LA asked OPG to apply to the Court to sack the attorneys. With delay of one year, assets were limited.  The LA refused to accept being the replacement deputy and Senior Judge Lush refused to replace the deputy because assets were too limited to pay for the cost of a Panel deputy solicitor – leaving the LA and nursing home back at square one, to negotiate settlement of unpaid fees directly with the attorneys instead.

On 19 February 2015, there was a hearing at the Court of Protection. The Office of the Public Guardian had applied to cancel an Enduring Power of Attorney (‘the EPA’).

Senior Judge Lush in his Judgment stated:

“It is unusual for me to dismiss an application by the Public Guardian, but on this occasion I am not satisfied that the order he is seeking:

-is proportionate;

-is less restrictive in terms of DT’s rights and freedom of action;

-respects DT’s rights, will and preferences;

-warrants public interference in his private and family life; or

-is in his best interests.”

The facts

DT, the donor has dementia, which is caused by a combination of (a) vascular disease; (b) an acquired brain injury in 2006 and (c) chronic alcoholism.

On 23 July 2007 he executed the EPA, in which he appointed his sons jointly and severally to be his attorneys, with general authority to act on his behalf in relation to all his property and affairs.

The EPA was registered by the Office of the Public Guardian (‘OPG’) on 26 September 2011.

The application

Around three years later, Suffolk County Council had contacted the OPG expressing its concern about arrears of care home fees, which at that time amounted to £19,624. The Public Guardian then submitted an application to the court, seeking the following court orders:

-a declaration as to DT’s lack of mental capacity to make decisions in relation to a matter or matters concerning his financial affairs

-if the attorneys do not provide satisfactory full detailed accounts with supported documentation to the Public Guardian for their dealings with the management of DT’s property and financial affairs over the last three years

-the EPA be revoked and the registration of the EPA made by DT be cancelled.

The Court of Protection Visitors’ reports

Court of Protection Visitors were sent to DT to provide reports to the Court:

General Visitors, who need not have a medical qualification: section 61(3).

Special Visitors, who are registered medical practitioners and have a special knowledge of, and experience in, cases of impairment of or disturbance in the functioning of the mind or brain: Mental Capacity Act 2005, section 61(2)

Conclusion of special visitor clinician:

“…In spite of the diagnosis of dementia, he still has the ability to indicate who should have the power of attorney. He has asserted strongly his view that his sons should continue to have the power of attorney and manage his personal and financial affairs.”

Response to questions raised in the commissioning document

DT has the capacity to revoke or suspend the EPA.

DT has the capacity to make a new LPA.

DT has capacity to direct the attorney to make decisions on his behalf regarding the management of his affairs and has entrusted the attorneys to make all decisions on his behalf and has implicit trust in his sons.

DT does not have the capacity to manage his own affairs.

Though DT has the capacity to instruct his attorneys to provide an account I do not think he will instruct them as he does not find the need for it, having implicit faith in their ability.

DT has capacity to choose or say who he would like to manage his affairs, should he not be happy with the existing attorney.

DT does not have any awareness of his financial situation.

DT is being well cared for.

Whilst his needs are currently being met within the care home, the manager of the care home informed me that, because he soils his clothes, being doubly incontinent, there is a need to purchase new clothes quite often, and hence a supplementary sum of money should be made available each month to cater for this need. She suggested an additional sum of £50-£100 per month. In my opinion, his current placement at the care home is the best place for him.

DT has clearly expressed his opinion that he is happy with the attorneys’ management of his affairs.

There are no other issues I wish to bring to the attention of the Public Guardian.

DT is not capable of dealing with the complaint. I did not discuss the complaint with him, as I felt he could then misinterpret the complaint and became hostile towards his carers.

I did not confirm whether he had made any financial gifts from his estate as he clearly did not wish me to probe in his financial affairs and became increasingly hostile when I tried to ascertain his current financial state….”

The objections

The Office of the Public Guardian’s objections in a witness statement included:

“On 22nd October 2014, I spoke to the manager of the care home who told me that [DT’s sons and wife] visit DT very infrequently i.e. approximately once or twice a year and only one of his sons (unknown) telephones to see how he is in the interim.

[The manager] mentioned that she had initially raised concerns to Suffolk Safeguarding Unit on 30th March 2011 as DT’s wife had asked him to sign “pieces of paper”.

[The manager] stated that DT often complains that his wife is taking his money and using it to buy petrol. [The manager] said that in light of this, Social Services had asked the attorneys to provide an account of their financial dealings to DT on numerous occasions, so that he would be aware of how his money was being spent but to date this had not happened.

I received an email from Suffolk County Council on 24th October 2014 confirming that there is currently £68,997.40 outstanding in unpaid care home fees.

Whilst it is understandable that, as DT’s wife and children would consider all aspects of the family needs when making financial decisions, as DT’s attorneys it is their duty under the Mental Capacity Act 2005 to act in his best interests. The evidence shows that they are therefore conflicted in their interests and have failed in their duties as DT’s attorneys by not keeping accurate accounts, allowing his care home fees to accrue to £68,997.40, and failing to provide him with sufficient personal allowance. The Public Guardian, therefore, asks the court to revoke the EPA and invite Suffolk County Council to become deputy for DT.”

Finally, at the hearing, the Judgment of Senior Judge Lush

The Attorneys were trying to negotiate with Suffolk County Council on their father’s behalf to agree a reasonable monthly figure to pay the care home. The house in Lowestoft had been sold. They wished to negotiate a reasonable sum to pay off their father’s debt to Suffolk County Council, but the Council had refused to talk to them about the debt or enter into negotiations.

Ideally the attorneys would like to move their father back to another care home which is not 6 hours away. This is the main reason why they were unable to visit him as often as they would like.

DT’s assets and liabilities

DT owned assets jointly with his wife. His half share was worth £77,823.50.

The law relating to the revocation of an EPA

The criteria for the court to revoke an EPA are different from those for revoking a Lasting Power of Attorney (LPA). Subsections (3) and (4) of section 22 of the Mental Capacity Act 2005 provide that the court may revoke an LPA if (a) the donor lacks the capacity to revoke the LPA, and (b) the attorney has behaved or is behaving in a way that contravenes his authority or is not in the donor’s best interest, or proposes to behave in such a way.

In the case of an EPA, the court does not need to be satisfied that the donor lacks the capacity to revoke it himself. It merely needs to be satisfied that, having regard to all the circumstances, and in particular the attorney’s relationship to or connection with the donor, the attorney is unsuitable to be the donor’s attorney.

DT’s present wishes and feelings

Senior Judge Lush in his judgmentThere is nothing irrational, impracticable or irresponsible in DT’s wish that his sons should continue to act as his attorneys, and I am not satisfied that their conduct has had a sufficiently detrimental effect on DT or his finances to justify overriding his wishes.”

Financial provision for DT’s wife

At the beginning of his judgment, Judge Lush stated that this case was unusual, insofar as he rarely dismisses a safeguarding application made by the Public Guardian. It was also unusual because there was no evidence of dishonesty of the part of the attorneys and, although they had failed to produce satisfactory accounts, he stated that he would be very surprised if any of them had misappropriated their father’s funds. The principal criticism is that they have been applying DT’s funds towards the maintenance of their mother (his wife), who would otherwise be reliant on means-tested benefits.

Paragraph 3(2) of Schedule 4 to the Mental Capacity Act 2005, which applies to EPAs, though not to Lasting Powers of Attorney, provides that:

“Subject to any conditions or restrictions contained in the instrument, and attorney under an enduring power, whether general or limited, may (without obtaining any consent) act under the power so as to benefit himself of other persons than the donor to the following extent but no further –

-he may so act in relation to himself or in relation to any other person if the donor might be expected to provide for his or that person’s needs respectively, and

-he may do whatever the donor might be expected to do to meet those needs.”

Senior Judge Lush in his judgment decided that attorneys were, therefore, acting within the scope of their authority when they decided to make reasonable financial provision for their mother from their father’s funds. However, they seem to have made more generous provision for her than DT would have done to meet her needs, and the Judge did not understand why she received the entire rental income from their former matrimonial home, rather than simply her own half share.

The costs of a panel deputy as Per the Judgment of Judge Lush

Section 19(3) of the Mental Capacity Act 2005 states that “a person may not be appointed as a deputy without his consent,” and Judge Lush was disappointed that, having agreed to act as deputy, Suffolk County Council, subsequently withdrew its consent. This had an enormous impact on the costs involved.

Public authority deputies are allowed remuneration in accordance with Practice Direction 19B, “Fixed Costs in the Court of Protection.” The rates of remuneration have remained static for the last four years, since 1 February 2011. Understandably, this is a bone of contention for cash-strapped local authorities, and partly accounts for an increasing and alarming trend in which councils are refusing to take on deputyship work.

If Suffolk County Council were appointed as DT’s deputy, it would be entitled to an annual management fee of £700 for the first year and £585 for the second and subsequent years.

At the hearing IT asked about the likely costs of a panel deputy, and I suggested that they would be in the region of £200 an hour. Any meaningful calculation is, of course, more complicated than that.

The cost of employing a panel deputy depends on a number of factors, including:

the geographical location of the panel deputy’s practice;

the various grades of fee earners involved in the matter;

the nature, extent and complexity of property and affairs that need to be managed and administered;

whether the costs relate to the first year of the deputyship or to the second and subsequent years;

whether P is living in his own home or in an institutional environment;

whether P’s family are at loggerheads with one another; and

whether there has been financial abuse, and it is necessary to make further investigations or to bring proceedings against the abuser in order to restore P’s estate to its rightful level.

As regards the nature, extent and complexity of the affairs that need to be managed and administered, DT’s former matrimonial home will be sold shortly. His share of the gross proceeds of sale will be £70,000. His share of the net proceeds of sale may be a couple of thousand pounds less than that and will be extinguished by the payment of his debt of £69,000 to Suffolk County Council. His remaining capital assets – a half share of a Scottish Widows ISA and a half share of the balance on a Halifax account – amounted to just under £8,000. His income was roughly £17,000 a year.

It is likely, therefore, that in this case, a panel deputy’s costs would be roughly £6,100 during the first year of appointment, and approximately two thirds of that sum in the second and subsequent years. By comparison, DT’s attorneys were charging nothing. They didn’t even claim travelling expenses when they visit because they visited him as his sons, rather than as his attorneys.

Judge Lush decided consider that, in this case, the employment of a panel deputy to manage DT’s property and financial affairs, even if it were necessary (which it is not), would be a disproportionate drain on DT’s limited resources.

Considering all the relevant circumstances and, in particular, the extent to which DT retained capacity and his clear expression of his present wishes and feelings on the matter, the Judge dismissed the Public Guardian’s application to revoke the EPA.

Thoughts? Examples? Please share in the comments

About the author:

Reeta Ram is Family Representative and Director of Dementia Partners.  This case demonstrates the need for care homes and attorneys to review proportionality and work more amicably together instead of the cost of going to court to litigate on the question of replacing the attorney with a Local Authority/Panel deputy?