Deputyships

Under the Mental Capacity Act 2005, where someone lacks the capacity to make a decision in relation to their property and affairs or health and welfare, a deputy can be appointed by the court to make decisions on their behalf.

The Deputy is accountable to the court and must act in accordance with the 5 core principles of the Mental Capacity Act and ensure that all actions taken are in the ‘best interests’ of the protected person.

The Mental Capacity Act states that;

A person must be assumed to have capacity unless it is established that he lacks capacity.
A person is not to be treated as unable to make the decision unless all practicable steps to help him do so have been taken without success.
A person is not be treated as unable to make a decision merely because he makes an unwise decision.
Before the act is done, or the decision made, regard must be had as to whether the purpose for which it is needed can be effectively achieved in a way that is less restrictive to the person’s rights and freedoms.

Any person over 18 can apply to be a Deputy. A prospective deputy will need to make a declaration
of the appropriateness of their appointment and declare any criminal convictions or any history of
bankruptcy.

Lay Deputy

In most cases, a relative or close friend will be the most appropriate person to be appointed as deputy. They already have a close involvement with the person and can actively act in the ‘best interests’ without incurring unnecessary expense. The deputy may get assistance from solicitors, financial advisers and accountants as needed and deal with the majority of the administration themselves. They will still be accountable to the court for how they spend the money and will have to prepare annual accounts detailing expenditures.

Professional Deputy

Where the settlement is larger or there is no one available to help administer the fund it is usually the best solution to instruct a solicitor to act as a Professional Deputy. A Professional Deputy will act with guidance from family members to ensure that the fund is administered in the ‘best interests’ of the protected person whilst having the expertise to deal with more complex areas of the administration including tax, benefits and investment.

It is recommended that a Professional Deputy be appointed where the estate is large and complex. In Personal Injury and Clinical Negligence cases where large damages awards have been recovered the court has indicated it would be requiring that a Professional Deputy be appointed.

Such cases have great complexity and make it difficult for a family member to act impartially when the decisions are so closely linked to them. A Professional Deputy can act independently. The lifetime costs of a Professional Deputy are recoverable within the larger claims.

An application is made to the Court of Protection to appoint a Deputy. The matter is then referred to a Court of Protection Judge who considers the case and makes a decision.

If the judge considers the appointment to be is in the best interests of the person who has lost capacity he will issue an order granting authority to the deputy and set out the terms of the authority given.

The order will give a general authority to manage the affairs of the protected person for a specified duration. Most orders would be issued until further order meaning that they stand indefinitely unless another court order is made in their place.

Any decisions falling outside the authority given in the court order will need a further application to the court. The court order will usually allow for the expected day-to-day running of the matter but any unexpected or large purchases will need court approval requiring a further application to the court.

Large gifts, purchases of property and statutory wills will all require further applications to the court for approval and with each application requiring several months to process, planning  ahead is crucial.

The Deputy undertakes to act in the best interests of the ‘protected person and each decision made should reflect this position. Once the order is in place the deputy is responsible for all financial affairs.

Deputy Account – Once the court order has been received the deputy will need to set up specially designated accounts to manage the award and keep it separate from their own accounts.

Security Bond – The court requires the deputy to pay in an annual insurance sum as security to protect the ‘protected person’ from financial loss. This figure is set in relation to the size of the sum the fund.

Inform organisations – The deputy will need to circulate a copy of the order to all financial institutions that deal with the protected person. E.g. Banks, DWP, residential home, local authority.

Annual reporting – On the anniversary of the order, every year, the court require an account of the annual spending to be submitted to the court in the form of a report. This report requires details of all bank accounts and demands an illustration of where any funds have been spent. It is good practice to keep receipts for any of the spending throughout the year to evidence expenditure in case of further enquiry by the court

Once appointed all deputies are supervised by the Office of the Public Guardian. The OPG may require contact with a caseworker, reviews of the annual report or visits from a court visitor. Annual reports are audited by the Office of the Public Guardian.

The Office of the Public Guardian has a duty to investigate any complaints regarding how the deputyship is being used.

The order terminates when the person who has lost capacity dies or regains capacity. The Deputy may apply to resign or retire from the role or they can be removed for wrongdoing.