No presumption of deputy appointment - Court of Protection sets guidelines to be applied in damages claims

22 Nov 2016

Louise Ursula Watt and ABC (by his litigation friend DEF) and the Official Solicitor [2016] EWHC 2532 (COP)

This judgment by the Court of Protection (COP) is of interest to defendants confronted by rising Deputy costs. It dealt with an application to consider if the best interests of the claimant, in receipt of substantial damages, were best met by the damages being administered by a Property and Affairs Deputyship or being held in Trust. The judge rejected any strong presumption in favour of Deputyship. Details of the case and implications for catastrophic injury claims handling are given below.

The judgment was released under the Court of Protections transparency pilot.

The facts

The claimant, ABC, was awarded damages for personal injuries in the sum of £1.5m. He lacked capacity. As a consequence an application was made to the Court of Protection by Louise Watt. It  concerned the issue of whether the damages should be paid to and administered by a property and affairs deputy or held in trust.

In the damages proceedings there had been issues over the claimant’s capacity which had been resolved on the basis that the claimant lacked litigation capacity. However a dispute continued over capacity or  the extent of his capacity to manage his financial affairs with support. The damages case settled before these matters were resolved but they remained live ones in relation to the jurisdiction of the Court of Protection and how the damages were to be administered.

The application

The judge hearing the application recorded that the purpose of the application was to enable the court to carry out a properly informed analysis of ABC’s best interests that took into account the risks to him and consider the views of the litigation friend and the deputy as to the approach to be taken. The claimant had a strong desire to have some control and autonomy over some part of his damages.

The judge stated that the case raised points of some general importance namely:

  • The evidence and arguments that need to be considered in a personal injuries action as to how an award should be administered and, as a consequence, how provision should be made for the costs of administration in the sums awarded.

  • Whether the view was correct that the decision in SM v HM [2012] COPLR 187 set out a strong presumption as to the appointment of a Deputy in such cases.

It was noted that that in the damages proceedings the issue of whether a trust or deputyship was appropriate was raised and that there was a significant difference between the costs. The damages for the capitalised costs of a deputy were placed at £462, 618 and of a professional trustee and case manager £181,559[1].

The decision

A deputy was already in place at the time of the application. The judge decided that a deputy should continue to be appointed but reached that decision only because of the earlier decision to appoint one and that to change now would present a risk to the claimant. The judge made clear his decision was based on the existence of the deputy not that it was necessarily the right approach for this claimant; he was not convinced that the approach taken by those advising the litigation friend and deputy was correct.

In particular, he rejected the view that there was any strong presumption in favour of the appointment of a deputy. Such a presumption would run “counter to the underlying rationale and purpose of the Mental Capacity Act and  in particular of its decision and fact sensitive approach to the application of its best interests test in all the circumstances of the case.”

The frequency with which Deputies are appointed did not create a presumption, starting point or bias that needs to be displaced. In so far as there had been reliance on the case of SM v HM as creating that presumption, the judge’s view was that if “SM” had in fact done that it was wrong. However, he doubted that the decision had done so. He referred to a passage of the judgment in “SM” which made clear there was no such presumption:

it cannot be overemphasised that any actual decision [as to whether to appoint a deputy] is completely fact sensitive…the ultimate test is what is in the P’s (protected party) best interests.

….deputyship is properly treated as the normal arrangement and as the benchmark against which to compare any other proposed method…and it is therefore the starting point. The point is that it is only the starting point. Deputyship is a means to an end, not an end in itself. The end is doing what is in the protected party’s best interests not promoting the use of the statutory scheme….The key is that the test is a relative one, namely, in all the particular circumstances, are P’s best interests better served by taking that particular course.”

In considering the choices it was vital to consider what the relevant claimant has the capacity to decide with support. In closing  his judgment, reflecting the general importance of some issues, the Judge set out a number of points which he said  should be considered in analogous cases:

  • 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.

Relevance to Catastrophic Injury claims

  1. The strong presumption in favour of a deputy can often be seen at work in cases – at least there does not seem to be consideration of other ways of managing a claimant’s award other than that approach.
     
  2. In this case, but for the existing deputy, a trust arrangement may have been in the best interests of the claimant and based on the alternative costings, a much cheaper outcome for the defendant in the damages claim.
     
  3. The question of the right approach taking into account the circumstances of the particular claimant should be borne in mind in cases where the capacity of the claimant to manage an award is in issue and/or the claimant may have capacity to manage some decisions alone or with support, and not others.
     
  4. Questions should be raised as to whether alternatives to a deputy have been considered. Aside from defendants’ CoP/Deputy experts considering the costs claimed (and often late in the day) an instruction in the early stages of a case to consider the alternative approaches, in the light of the claimant’s circumstances and best interests, should be considered.
     
  5. In particular note should be taken of paragraph 65 of the judgment wherein the judge said:
    “In my view, both in QB proceedings and the COP the parties should provide a reasoned or particularised comparison between the rival options an so they need to be identified with appropriate particularity.”
     
  6. In this case the costs of a trust arrangement were 40% of the claimed costs of a Deputy. The judge made the point that this may not always be the case, however, defendants should seek evidence on whether a trust is more appropriate post settlement and the comparable costs of one being in place.
     
  7. Note should be taken of the judge’s view that these issues may not be appropriate for consideration by a Case Office as opposed to a judge of the CoP.
 


Kerris, Emma and Jenny are members of the Capacity and Court of Protection Subject Matter Expert Group within BLM's Catastrophic Injury Group 

 
 

Kerris Dale

Consultant

 
 

Jenny Moates

Consultant

 
 

Emma Eccles

Associate

 

[1] There is no information on whether the cased manager cost was separate from or included in damages for case management generally.

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Disclaimer: This document does not present a complete or comprehensive statement of the law, nor does it constitute legal advice. It is intended only to highlight issues that may be of interest to customers of BLM. Specialist legal advice should always be sought in any particular case.

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Kerris Dale

Kerris Dale

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Cardiff


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