A recent case in the Court of Protection[i] has given property and financial affairs Deputies clarity about the extent of their authority to make decisions on someone else’s behalf. Kelly Knight from Hyphen Law explains what this means.

If a person lacks the mental capacity to make their own financial decisions, the Deputy has the ‘general authority’ granted by the Court to ‘step into their shoes’ and make those important decisions for them.

However, there are certain situations when the Deputy is not permitted to make decisions without first seeking authority from the Court of Protection. Failing to get that permission could mean the Deputy is held personally liable for any costs incurred as a result.

What is ‘general authority’?

The Senior Judge of the Court of Protection, Her Honour Judge Hilder has made it clear in the recent case (known as ‘ACC’) that there is a defined limit on what property and financial Deputies can and cannot do without requiring further authority from the Court.

General authority means you can undertake routine tasks, such as paying household bills, and can instruct others to assist you, such as a property lawyer if you are authorised to buy or sell a house.

However, what it does not cover is more contentious issues, such as issuing legal proceedings on behalf of the protected party or even appealing the outcome of decisions made by public bodies.

What decisions can a property and financial affairs deputy make?

If you are a Deputy looking after your child’s financial affairs, you can make financial and property-related decisions for them. However, you always have to take into account their wishes when making those decisions, if they are able to express them, and ensure that any decision is in their best interests.

When a young adult reaches the age of 18, they are legally responsible for making their own decisions, as long as they have the capacity to do so. This is the case even if a Deputy has been appointed.

When a Deputy does need to make decisions, the purpose of the ‘general authority’ given by the order which has appointed them is to enable them to deal with the full range of tasks required to manage someone’s affairs. It is also accepted that a Deputy may have to incur the cost of seeking expert advice on some issues such as:

• Completing annual tax returns
• Employing carers and dealing with contracts of employment
• Entering into tenancy agreements and negotiating terms
• Buying and selling property
• Purchasing vehicles and specialist items of equipment
• Commissioning and paying for therapies

For some Deputies, the general authority included in their order may be sufficient to cover all of the decisions and steps they need to take during their role.

Are there any decisions a property and financial affairs Deputy cannot make?

There are limited steps a property and financial affairs Deputy can take to deal with contentious issues, such as starting legal proceedings.

Judge Hilder has said that Deputies can seek advice and write a ‘Letter Before Action’ (LBA). This is a formal letter setting out the basis on which a claim may be made.

Once the Deputy has received a response to their LBA, they will need to seek further authority from the Court of Protection before they can take any additional steps or issue legal proceedings.

Property and financial affairs Deputies must also get further authority from the Court of Protection for a wide range of other contentious issues, including:

• Evicting tenants who have not paid rent
• Starting divorce proceedings
• Getting information on health and welfare matters in the Court of Protection
• Challenging decisions made about NHS Continuing Healthcare funding (NHS CHC)
• Appealing decisions made by Local Education Authorities regarding Education, Health and Care Plans (EHC)
• Appealing decisions made by Local Authorities about the care provided under the Care Act 2014

It is vital that Deputies do not act beyond their remit when it comes to legal challenges, claims or appeals or there is a risk they will be held personally liable for any costs incurred by either or both sides, and these costs could be substantial.

Is the Court of Protection likely to grant authority?

No, not necessarily. The Court will, at the very least need to receive the following information:

• An update regarding the value of the protected party’s estate
• An estimate of the costs likely to be incurred (e.g. solicitor and/or barrister fees, court fees, expert witness costs, etc.)
• The likely merits of success
• An explanation of why the Deputy is the most appropriate person to bring the claim

When the Court considers an application for authority to conduct proceedings, it will consider whether there should be limits to such authority.

If there are concerns about merits or costs, the authority may be granted only up to a specified stage of proceedings (when another merits assessment may be required), or with a limit on the costs which may be incurred without further application.

The Deputy is allowed to incur the cost of seeking legal advice when thinking about taking such action.

What happens if the matter is urgent?

Legal disputes often need a quick response. Understandably, many Deputies will be concerned by any delays caused by having to seek the Court of Protection’s authority before dealing with contentious legal issues.

One option is for the Deputy to incur the cost of bringing a claim upfront, before seeking retrospective authority from the Court of Protection to approve the expenses.

The Court would need to be satisfied the urgent action was required, the costs incurred were reasonable and that ultimately, the Deputy was acting in the best interests of the protected party.

Of course, there is always a risk that if the Court refuses to grant retrospective authority, the Deputy will be held personally liable for the costs incurred (such as any solicitors’ fees, court fees, etc.)

Do the rules change if I’m the parent and the Deputy?

If you are the parent of the child as well as the Deputy, it may be possible for you to address specific issues in your capacity as someone with ‘parental responsibility’.

For example, someone with ‘parental responsibility’ has the authority to appeal the outcome of an Education, Health and Care Plan. This means a parent can appeal a Local Education Authority decision in their role as a parent, without the need to receive authority from the Court of Protection.

However, if the parent incurs the cost of instructing a solicitor to assist with the appeal, authority would be needed from the Court of Protection to use the protected party’s funds to cover the cost of the appeal.

What if I think I may need to take contentious action in the future?

If you think you may need to take contentious action in the future, you should seek legal advice about the merits of any claim or appeal and if necessary, request the authority from the Court of Protection to proceed with the required steps at an early stage. This could even be addressed at the time an application is made to the Court to appoint a Deputy, if the contentious issue is known about at the time.

How does this affect Professional Deputies?

The ACC case was mainly concerned about conflicts of interest that may arise when a professional Deputy instructs their own firm to conduct litigation or deal with other legal issues on behalf of a protected party.

In those situations, the professional Deputy must get cost quotes from other law firms for comparison and must be able to justify any decision to instruct their own firm as being in the best interests of the protected party.

Professional Deputies will also need to seek authority from the Court of Protection to address any contentious issues that arise.

About Kelly Knight

Kelly Knight is an Associate Legal Director at Hyphen Law. She specialises in Court of Protection work and the creation and administration of Personal Injury Trusts. She has been recognised in both the Legal 500 guide 2021 and the Chambers and Partners 2021 legal directory.

[i] ACC & Others [2020] EWCOP 9

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