Alison Huggins, one of the Solicitors at Howells, discussed how Solicitors have a key role to play in what should be a multi-agency approach to the prevention of financial abuse...
The Court of Protection’s decision in Re Harcourt in July of this year brought into the spotlight the issue of financial abuse and, in particular, the powers of the Office of the Public Guardian (OPG) and the Court of Protection to investigate an attorney’s actions in light of such concerns. However, this is a small part of a much wider problem.
Abuse of authority
The Mental Capacity Act 2005 (MCA) sets out the functions of the Public Guardian. These include dealing with complaints about the way in which an attorney is exercising their powers and directing a Court of Protection visitor to the donor or attorney.
Where there are circumstances suggesting an attorney may have behaved, or is proposing to behave, in a way that would contravene his/her authority, or would not be in the best interests of the donor, the OPG may require the attorney to provide information or relevant financial documents (MCA 2005 section 22(3)(b)).
Furthermore, in these circumstances, or where there has been fraud or undue pressure, the Court of Protection has the power to direct that a LPA is not registered, and if a donor lacks the capacity to do so, revoke it (MCA 2005 section 22 (4)).
HHJ Marshall QC, in her judgment in the unreported case of Re J (2010), gave comprehensive consideration of the circumstances in which the court may remove an attorney. She held as follows:
1. section 22 of the MCA does not depend on a general or abstract notion of ‘unsuitability’, but is narrower and more focused;
2. the section is not confined solely to actions taken in exercise of the power of attorney, but is concerned with actions that are broader than that. If there is sufficient evidence that the attorney is acting in opposition to P’s interests in a different context, there may well be sufficient reason for removal.
In the case of Mrs Harcourt, her care home owner identified the suspicious behaviour of the attorney.
The local authority’s vulnerable adults team alerted the OPG, which then opened an investigation.
The OPG asked a Court of Protection visitor to see Mrs Harcourt, and required explanations from the attorney, who was Mrs Harcourt’s daughter, for failing to pay fees and other suspicious activities.
The attorney would not accept that she had financially abused her mother, and was granted a series of adjournments. It was not until July 2012, a year after the initial concern was raised, that the Court of Protection revoked the LPA in favour of Mrs Harcourt’s daughter as a means of facilitating the appointment of a deputy.
Overcoming barriers
Senior Judge Lush had a number of difficult barriers to overcome before he was satisfied that he was in a position to revoke the LPA. First, he had to be satisfied that the donor had no capacity to make decisions to require her attorney to produce records and accounts, or to call for explanations of anything that appeared suspicious.
When making the difficult decision to refuse a further final adjournment, Lush had to balance the attorney’s right to a fair trial under the Human Rights Act 1998, with Mrs Harcourt’s rights under article 6 of the European Convention on Human Rights and Fundamental freedoms 1950 to have the outstanding issues resolved as soon as possible.
Making his findings in the absence of the attorney, who did not attend the hearing, the judge had to apply the best interests test set out in section 4 of the MCA.
This included consideration of the potential impact of Mrs Harcourt finding out that her daughter, who she had chosen to look after her financial affairs when she had capacity, may have been abusing her.
Senior Judge Lush stated: “In the absence of appropriate safeguards, the revocation by the court of a LPA, which a donor executed when they had capacity and in which they chose a family member to be their attorney, would be a violation of their article 8 rights. For this reason, the Mental Capacity Act has been drafted in a labyrinthine manner to ensure that any decision by the court to revoke a lasting power of attorney cannot be taken lightly.”
Harcourt demonstrates that applications to the Court of Protection in these types of cases are not straightforward and are not a strong deterrent to the persistent abuser. In particular, even where there appears to be evidence of financial abuse, revocation should not be assumed.
In a case in which my firm is acting, the court did not revoke a LPA, despite what appeared strong evidence of abuse, but instead ordered the attorney to produce annual accounts. Now that the attorney has breached this order, the client has to return to the Court of Protection. However, he is reluctant to do so, as the costs of the first application were deducted from his mother’s assets.
While the powers of the OPG and the Court of Protection are essential in compelling the disclosure of evidence and to remove offending deputies and attorneys, they only have a limited role to play in the fight against financial abuse, of which attorney abuse forms only a small part. The key to eradicating this type of abuse lies in developing effective methods of prevention and detection. This can only ever be a multi-agency task, but one in which private client practitioners have a vital role to play.
A report published in 2011 by the Social Care Institute for Excellence (SCIE) (‘Financial crime against vulnerable adults’) suggested that much abuse by attorneys is not referred to the OPG or the Court of Protection, despite this abuse being uncovered. The SCIE research team found the figures provided by the OPG on the number of safeguarding referrals made regarding the actions of deputies or registered attorneys to be surprisingly low, particularly given the impression gained from other agencies regarding the size of the problem.
One of the reasons suggested for this is the fact that abuse is often undertaken by unregistered attorneys, over which the Court of Protection has no jurisdiction.
The SCIE report examined, inter alia, the methods used to commit financial crimes and the impact on victims. It found that much crime is going undetected, with the effects of new technology and social change diversifying the threat. The report exposed a number of reoccurring missed opportunities to reduce harm.
It made a number of strategic recommendations with regard to raising awareness, particularly the need for toolkits for practitioners to cover preventative measures, including improving the quality of responses and the signposting to appropriate support and advice received by victims.
Key triggers
Recent research by the Brunel University Institute for Aging Studies (BIAS) (‘Detecting and preventing financial abuse of older adults,’ 2010) identifies that the types of financial abuse health and social care and banking professionals encountered in practice are well established. The research also identifies the key triggers used by experienced practitioners in these fields in order to identify concerns and take effective action.
In a current project (‘Developing decision training tools to enhance the ability of professionals to detect and prevent elder financial abuse’, 2012), BIAS is aiming to maximise the impact of earlier findings by developing two web-based decision tools: one for banking professionals; and one for health and social care professionals. The tools aim to harness the knowledge and experience of the experienced practitioners, as well as enabling ‘novices’ to make decisions that are more in keeping with those of experienced professionals.
To my mind, it is clear that implementing the recommendations of such research will have a significant impact on the fight against financial abuse, more so than the reported decisions of the Court of Protection.
However, neither of these studies, or the studies that have preceded them, have considered solicitors as relevant safeguarding professionals. I find this curious at best, particularly given that powers of attorney, wills and property transactions are routinely identified as vehicles of abuse, with solicitors often being the first to be consulted when suspicion of abuse arises.
In my experience, most private client solicitors are only too aware of the threat of financial abuse.
Furthermore, they are generally astute when it comes to preventing it.
As a matter of routine, these solicitors adopt safeguarding practices, such as pointing out the risks of appointing a single attorney, obtaining certificates of capacity where necessary, and – importantly - knowing when to refuse to act.
These good practices appear to be wholly unrecognised by the mainstream safeguarding agencies as a contributing factor in the prevention of financial abuse. Unfortunately, the academic researchers may have missed an opportunity to harness the knowledge and expertise of experienced private client lawyers.
In particular, further liaison may have led to the development of specific training tools that could be utilised to improve the decision-making processes of other members of the legal profession, many of which have regular contact with vulnerable clients. Financial abuse is not an issue about which any member of the legal profession can afford to be complacent.
This article was first published in Private Client Adviser – www.privateclientadviser.co.uk
by Tristan Lewis
