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The uncomfortable middle-ground of deputyship management – dangers for the unwary

Posted on 15th September 2020 in Probate & Wills

Posted by

Gráinne Staunton

Partner & Solicitor
The uncomfortable middle-ground of deputyship management – dangers for the unwary

The Mental Capacity Act 2005 originally envisaged two providers of deputyship services outside of the family members of those requiring assistance: solicitors and local authorities.  Mechanisms for both forms of service providers were included in the Act and its connected guidance.  The 15 years during which the Act 2005 has been in place, however, have seen a dramatic development in the landscape in which deputyships are granted and administered.  

Where the value of the estate is modest local authorities have commonly accepted the appointment of a deputy.  Budgetary pressures have forced local authorities to become increasingly cautious about accepting the responsibility of acting as deputy and carrying out all that the position entails. The need has therefore grown for other individuals and organisations to fill the gap where no family member is able, or willing, to accept the appointment but the assets do not justify the costs associated with the involvement of a solicitor. 

The service providers now populating the middle ground, between local authorities and solicitors, do commonly aim to provide a helpful service, driven by need, but are unregulated and, often, unqualified. The judgement released yesterday in Public Guardian v Riddle (no. 2)[1] has offered a timely reminder of the potential dangers of using these unregulated service providers, even though diversity in deputyship service providers is in principle a positive development’[2]

The case centres around a relatively experienced, but unqualified, individual who set up a business offering to accept deputyship appointments for those who needed assistance with their affairs.  The individual was appointed as deputy in roughly 40 cases in total.

The Public Guardian sought the individual’s removal as deputy due to the actions he had taken in relation to his clients’ affairs including:

  • charging fees for the work undertaken at an inappropriately high rate despite being notified that doing so was incorrect; and
  • using clients’ own funds, amounting to roughly £118,000, to pay his personal legal expenses relating to the Public Guardian’s investigations into his conduct.

Professionals can charge for the work they undertake in administering an individual’s affairs, when acting as their deputy, providing the Court has authorised them to do so.  The rules governing how charges will be calculated distinguish between the services offered by solicitors and those offered by public authority deputies and confirm that the Court can use the rules to allow professionals, other than solicitors or public authorities, to charge for their services as well.  The charging rates allowed for non-solicitors are lower than those available to solicitors due to, amongst other things, the additional regulatory burdens placed on solicitor deputies. 

Whilst the Court does retain discretion to allow higher charging rates to non-solicitors, those higher rates are not available to non-solicitors by default and requires the Court to exercise its judgment.  Other cases have confirmed that solicitor rates would not be available to non-solicitor individuals or to organisations unless there were exceptional circumstances. 

The protection offered to clients through the use of a solicitor was the driving factor behind the difference in charging rates.  In this case the judge specifically highlighted:

  • the professional code of ethics which binds solicitors and which does not apply to other professions or unqualified individuals,
  • the disciplinary procedures solicitors are subject to under their regulatory body should errors be made,
  • the ongoing cumulative and monitored training required from all solicitors,
  • the professional indemnity insurance required from all solicitors,
  • solicitors’ status as officers of the court.

The judge held that the deputy, in this case, had charged his clients at a rate which the deputy personally considered acceptable driven, at least in part, by the hope for the commercial success of his enterprise and irrespective of the information provided to him by the Public Guardian.  The judge also found that the actions of the deputy, in using client funds to pay his expenses amongst other things, clearly demonstrated that his level of expertise did not justify access to the higher rate of charge available to solicitors.

This case has highlighted the vulnerability of those individuals whose affairs could not be managed by willing friends or family and who fall outside the coverage offered by local authority and solicitor deputies.  Unregulated individuals, many of whom are well meaning, may not have the breadth and depth of knowledge or independent oversight which ensures public bodies and solicitors can be fully held to account, should mistakes be made.  

In the case of Public Guardian v Riddle (no. 2), the errors made by the unqualified professional deputy in question came to light due to the Office of the Public Guardian’s  supervision of deputies.  Once investigated, the clients’ funds were returned, and charging structure corrected.  To avoid disturbance to the clients, the Court of Protection chose to give the unqualified professional deputy a chance to correct the management of his client’s affairs, having returned their funds.  Close monitoring of the deputyships held by the individual will also be in place going forward.

One cannot help but wonder, though, how and when these expensive problems would have come to light had the Public Guardian not intervened and how safe many other estates may be when managed by unregulated businesses.  

[1] [2020] EWCOP 41

[2] Ibid., Judge Hilder paragraph 99

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