The Academies Financial Handbook is updated annually by the Department for Education and the Education and Skills Funding Agency; it contains a number of governance requirements for academy trusts.
The Act is underpinned by the fundamental concept that everything must be done in the P’s best interests and enshrines the five core principle under section 1 of the Act as follows:
“(2) A person must be assumed to have capacity unless it is established that he lacks capacity.
(3) A person is not to be treated as unable to make a decision unless all practicable steps to help him to do so have been taken without success.
(4) A person is not to be treated as unable to make a decision merely because he makes an unwise decision.
(5) 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.
(6) Before the act is done, or the decision is made, regard must be had to whether the purpose for which it is needed can be as effectively achieved in a way that is less restrictive of the person's rights and freedom of action.”
Specifically as regards financial and property affairs, under section 16(2) of the Act, where P lacks capacity in relation to a specific matter, the Court of Protection may make an order on their behalf, or appoint a deputy to make decisions in relation to the matter in question.
By way of reminder, Section 18 of the Act lists the matters to which the Courts powers under section 16 extend to, including, but not limited to, the control and management of property; the sale, gift or other disposition of property; the acquisition of property; the carrying on of business; dissolving a partnership; the settlement of property or the execution of a will; or the conduct of legal proceedings.
Appoint a Deputy
Where P lacks the capacity to manage their financial and property affairs, it has become commonplace for the Court of Protection to appoint a deputy to manage their affairs on an ongoing basis, to avoid the time and expense of having to apply to the Court to deal with numerous administrative issues.
Such an appointment will usually confer on a deputy the general authority to conduct P’s affairs to the extent to which that person is unable to conduct them themselves. This does not, however, cover every decision that might arise in P’s life.
Indeed, certain matters cannot be conducted by a deputy, including, as per Section 20 of the Act, the execution of a will or the settlement of property. Just because a decision is not expressly restricted under the Act does not mean that the deputy has been given authority to act in relation to that particular issue. Consequently, whenever a deputy acts they must always ensure that they have the relevant power to do so and are not exceeding the mandate that has been granted to them by the Court of Protection.
Conduct of Legal Proceedings
A prime example of this is the conduct of legal proceedings. It is common, for example, for a deputy to come across the need to consider pursuing a civil claim. Alternatively, they may find themselves being notified by P’s spouse that they intend to seek financial relief upon divorce. The deputy may well consider that because the proceedings relate to P’s financial and property affairs that they have authority to deal with such matters. This is not the case.
The ‘usual’ order made by the Court of Protection appointing a deputy does not provide authority to commence, continue or defend legal proceedings on behalf of P, even though such a step is not expressly restricted by Section 20 of the 2005 Act.
It can be all too easy for a deputy to venture into contentious matters and find themselves dealing with issues that they should not be, particularly where P is the defendant or respondent. In such circumstances, the Civil or Family Courts will need a ‘litigation friend’ to be appointed in order for the proceedings to move forward. A deputy is a prime candidate given their knowledge of P’s affairs and is often placed in a position where they might be pushed into acting as a litigation friend. Subsequently, the deputy might then file an appropriate certificate of suitability to act as a litigation friend or consent to an order of the Court appointing them and proceed to conduct the proceedings.
However, although this complies with the procedural requirement of the substantive Court in question, the reality is that unless their deputyship order expressly permits them to conduct the proceedings they will be acting in excess of their authority and in breach of the principles of the Act, even though their action may still be in P’s best interests.
By doing so, the deputy exposes themselves to personal liability for their actions. They risk not being able to recover any expenses incurred when acting in such regards, nor any losses incurred and/or being responsible for any adverse costs orders. This could be significant when you consider the cost of pursuing legal proceedings. Although the latter is a nominal risk in family proceedings, it is extremely pertinent in civil claims. Professional deputies may also not be able to recover their costs for acting in respect of such matters.
Yet, probably the most important issue is the fact that the deputy has breached one of the core principles of the Act, being that a person must be presumed to have capacity until it is shown that they lack capacity. By simply dealing with the Court proceedings in question, the deputy has assumed that the person does not have the requisite capacity to conduct the litigation on the basis they cannot conduct the management of their financial and property affairs. It must be remembered that capacity is time and decision-specific. Also, there are distinct legal tests for capacity to litigate and to manage property and affairs that must be observed.
Deputies must, therefore, be alert to the restrictions on their powers before engaging in legal proceedings. If it is considered to be in P’s best interest to engage in such matters, a deputy must first consider whether P lacks capacity to do so personally and, if necessary, commission an appropriate assessment of capacity. Subsequently, an application to the Court of Protection for authority to deal with such matters should be pursued. This is the only way to not only protect the deputy but to properly safeguard P’s interests.
For more information about the issues raised in this article please contact Douglas Houghton .
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