Deputies conducting litigation – obtain prior authority warns Court of Protection

Her Honour Judge Hilder has warned that Property and Financial Affairs deputies should seek advance authorisation before conducting litigation on behalf of a protected party in the linked cases of ACC, JDJ and HPP (ACC & Ors (2020 EWCOP 9).

In each of the three linked cases, the deputies had embarked on litigation on behalf of the protected party.

The three cases were listed to be heard at a single hearing, to allow the court to consider wider issues of (1) the potential for a conflict of interest to arise in situations where Property and Financial Affairs deputies instruct a firm of solicitors with which they are associated; and (2) costs.

The Official Solicitor was appointed to act as “litigation friend” for ACC, JDJ and HPP. The Public Guardian was also joined to the proceedings by reason of their duty to supervise deputies.

The position of the deputies

The deputies argued that:

1. one of the benefits of appointing a solicitor or solicitor-owned trust corporation as a deputy is that it provides the protected party with “ready access to the expertise, not just of the deputy, but of his or her firm or associated practice”;
2. a deputy’s standard authority should be understood as including not only “unexceptional non-contentious legal tasks” but also of obtaining legal advice in relation to contentious matters falling short of engaging in litigation;
3. where circumstances demanded urgent action, a deputy should be able to issue court proceedings and seek interim relief without prior authorisation from the Court of Protection, and the Court of Protection should look upon a retrospective application for authority for such actions sympathetically;
4. it would be “too restrictive” to require that every use of a deputy’s own firm outside a narrow definition of “management” required prior authorisation and that such an approach would be likely to result in disproportionate costs to P; and
5. while recognising that there was a potential for a conflict of interests to arise where a deputy instructed a firm with which they are associated to conduct litigation, any concerns about such a conflict could be addressed by requiring the deputy to obtain details from other firms of applicable rates, either on a case by case basis or by way of annual review, and/or by requiring the deputy to take advice on the merits of proposed course.

The position of the Official Solicitor

The Official Solicitor accepted that decisions to obtain legal advice on behalf of a protected party, and from whom, are ‘best interests’ decisions.

It further accepted that obtaining such advice will sometimes be within a deputy’s general authority and, in those circumstances, choosing to instruct the deputy’s own firm is a ‘best interests’ decision to be taken by the deputy. However, the Official Solicitor also contended that in some cases it would be most appropriate to obtain specific authority from the court to obtain legal advice from a different firm.

The Official Solicitor’s overriding view was that the standard terms of a Property and Financial Affairs Deputyship order did not encompass authority to litigate, which is both “risky and expensive” and concluded that any right to take costs for such actions from the funds of the protected party should be limited to occasions when the Court of Protection has specifically considered the merits of the proposed litigation and granted such authority.

The Official Solicitor did, however, accept that that the standard terms of a Property and Financial Affairs Deputyship order do allow a deputy to obtain “modest levels of advice and incur costs…falling short of conducting litigation,” and suggested a certain financial limit, pf perhaps £2,000.

The Public Guardian

The Public Guardian did not take a position on the facts but considered that its supervision process would be greatly assisted if deputyship orders specified the extent of the deputy’s powers “as [clearly] as possible” and invited the Court to give guidance on the issues raised.

Judgement

Some interesting arguments were raised by all parties and Senior Judge Hilder considered these in considerable detail. She identified nine questions arising from the applications:

1. What authorisation is required to conduct litigation on behalf of P?
2. What about further proceedings in the Court of Protection?
3. To what extent does “general authority” encompass authority to take legal advice on behalf of P?
4. Where is the line drawn between seeking advice and conducting litigation?
5. What about urgent matters?
6. How should conflicts of interest be addressed?
7. What about cases where the deputy is not the instructing party?
8. What about acting as litigation friend?
9. What if P has capacity to give instructions for the work in question?

Conclusion

Senior Judge Hilder held that the standard Property and Financial Affairs Deputyship order does not permit a deputy to engage in contentious litigation on the protected party’s behalf and that such authority must be specifically granted.

She added that, in considering such an application, the court may well set limits to such authority, perhaps with a cap on the costs.

However, Senior Judge Hilder agreed that, in the three specific cases before her, the deputies’ decisions to litigate were justified and so authority should be retrospectively granted.

However, she warned Property and Financial Affairs Deputies not to take this ruling to mean that retrospective authorisation will be granted on other occasions.

She said: “Nothing in this decision should encourage property and affairs deputies to consider that there will on other occasions be a similarly positive determination of applications effectively to authorise litigation after the event. Conducting litigation on behalf of P is a significant step, likely to incur significant costs. Appropriate authorisation should be secured in advance.”

Takeaway note

The message to Property and Financial Affairs Deputies is that authority should be sought from the Court of Protection before embarking on litigation.