Litigating on behalf of P: Guidance for Deputies on seeking permission and managing conflicts
Her Honour Judge Hilder has given judgment in ACC & Others  EWCOP 9, a test case which concerns the circumstances in which deputies must seek authority to litigate on behalf of P and other considerations such as managing conflicts where a professional deputy proposes to instruct its own firm in the litigation.
The specific facts of the three cases that were before the court are of far less interest than the extremely useful guidance that the Court gave, on the issues arising as follows:
What authorisation is required to litigate on behalf of P?
The “general” authority to manage property and affairs which is granted by the standard deputyship order encompasses those common or ordinary tasks which are required to administer P’s estate efficiently. It does not encompass authority to conduct litigation on behalf of P, which must be specifically granted [paragraph 51].
Where granted, the authority gives the deputy priority over others in the hierarchy of potential litigation friends for P and it enables the deputy to use P’s funds to meet the reasonable costs of the litigation and any adverse costs order.
What about further proceedings in the Court of Protection?
Specific authority to conduct litigation on behalf of P does not need to be sought where the contemplated litigation is in the Court of Protection in respect of a property and affairs issue or seeking directions in respect of a welfare issue [paragraph 52].
To what extent does “general authority” encompass authority to take legal advice on behalf of P?
Authority to make a decision / do an act in respect of P’s property and affairs encompasses such ordinary non-contentious legal tasks, including obtaining legal advice, as are ancillary to giving effect to that authority [paragraph 53]. In particular:
- authority to purchase or sell property includes conveyancing;
- authority to let property includes dealing with leases or tenancy agreements;
- authority to conduct P’s business includes dealing with employment contracts of that business;
- the preparation of an annual tax return includes obtaining advice as to completion of the return;
- discharging P’s financial responsibilities under a tenancy includes obtaining advice as to liabilities under the tenancy ;
- applying P’s funds so as to ensure that the costs of his care arrangements are met includes dealing with employment contracts of directly employed carers.
Where is the line drawn between seeking advice and conducting litigation?
Where a deputy has authority to make a decision / do an act in respect of P’s property and affairs, such authority encompasses steps in contemplation of contentious litigation in the realm of that authority up to receiving the Letter of Response but no further [paragraph 54.4]. In particular:
- authority to let property encompasses taking steps to form a view as to whether there are grounds to evict a tenant of such property [paragraph 53.13];
- “general” authority to manage P’s funds includes taking steps to form a view about whether a debt said to have been incurred by P is properly payable pursuant to section 7 of the Mental Capacity Act 2005 [paragraph 53.13];
- “general” authority to manage P’s funds includes steps up to but not including the delivery of a letter of appeal in respect of a decision that P is not eligible for continuing healthcare funding [paragraph 54.8(a)];
- where authority encompasses steps in contemplation of contentious litigation, that includes obtaining Counsel’s opinion [paragraph 54.5];
- “General” authority of a property and affairs deputyship order does not encompass seeking advice or other steps preliminary to litigation in respect of welfare issues; it does encompass making an application to the Court of Protection for further directions /specific authority in respect of welfare issues [paragraph 54.6];
- “general” authority of property and affairs deputyship does not encompass steps in contemplation of an appeal against the decision of an Education, Health and Care Plan [paragraph 54.8(b)].
What about urgent matters?
If circumstances arise where the protection of P’s interests requires action to be taken so urgently that prior authority to litigate cannot reasonably be obtained, a deputy proceeds at risk as to costs but may make a retrospective application for authority to recover costs from P’s funds. There is no presumption that such application will be granted – each application will be considered on its merits [paragraph 55].
In cases where an urgent injunction is required on P’s behalf and where the deputy will need to offer a cross-undertaking in damages, the application for retrospective authority should note the deputy’s exposure on the cross-undertaking and seek urgent consideration by the Court. It appears that such applications will be referred for consideration by the Urgent Business Judge (and it would be prudent to mark them as such).
How should conflicts of interest be addressed?
Where a deputy wishes to instruct his own firm to carry out legal tasks, special measures are required to address the conflict of interest:
- the deputy may seek prior authority [paragraph 56.7(a) – (e)];
- the deputy is required to seek – in a manner which is proportionate to the magnitude of the costs involved and the importance of the issue to P – three quotations from appropriate providers (including one from his own firm), and determine where to give instructions in the best interests of P [paragraph 56.7(f)(i)];
- the deputy must seek prior authority from the Court if the anticipated costs exceed £2 000 + VAT;
- the deputy must clearly set out any legal fees incurred in the account to the Public Guardian and append the notes of the decision-making process to the return. [paragraph56.7(f)(iv)]
What about cases where the deputy is not the instructing party?
It was being suggested by the applicant that the standard terms of a property and affairs deputyship would be sufficient to permit the deputy to use P’s funds to reimburse the third party’s expenditure (if in P’s best interests). The thrust of the argument being that the concerns about conflict would not be so acute because a third party (such as a family member) would have a degree of detachment over the question of whether or not to instruct the deputy’s firm.
The court disagreed with this proposal. Specific authority is required to use P’s funds to pay a third party’s legal costs, even if those costs relate to litigation for the benefit of P [paragraph 57]. The general authority of a property and affairs deputyship does not encompass such a use of P’s funds.
What about acting as litigation friend?
The court declined to rule on the question of whether or not a litigation friend may charge for acting as such, but noted (plainly discouraging such applications) that it will be extremely difficult to satisfy the Court of Protection, either prospectively or retrospectively, that granting authority to any person to charge P for acting as litigation friend (as opposed to incurring the cost of solicitors and counsel when acting as litigation friend) is in the best interests of P.
The Court further noted that the Official Solicitor is willing to act as litigation friend for P without charge in any of the existing classes of cases in which she acts where her usual criteria are met. [paragraph 58]
What if P has capacity to give instructions for the work in question?
If P has capacity to give instructions for particular work, he will also have capacity to agree the costs of that work. [paragraph 59]
In assessing whether or not P has capacity to give instructions, the relevant information that P will need to be able to understand in relation to the decision to give instructions for a specific piece of work includes:
- that the specific piece of work will need to be paid for from P’s own funds (where that is the case);
- that there is a range of options about whom to instruct; and
- the broad range of cost amongst the available options of whom to instruct.
Is litigation in P’s best interests?
This was not an issue that arose on the applications and can in many cases be quite a difficult question, particularly where the litigation proposed is against someone who is a family member of P. You can read my thoughts on how to approach the question of litigating in P’s best interests in this handout which I prepared for my talk on Financial Abuse at SGCL’s Elderly Client Conference last year, which can be downloaded here: Financial abuse SGCL.
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