The OPG has published a practice note clarifying its approach to the use of client accounts to manage deputyship funds, and how the deputy acts under the MCA 2005, the Solicitors Regulation Authority Accounts Rules 2011 (‘SARs’) and the MCA Code of Practice.
The note clarifies that the OPG has no objection in principle to use of general client accounts as a temporary or holding position prior to deputies setting up segregated client accounts or separate bank accounts as expected, to manage ongoing transactions. Solicitor deputies are reminded that there are factors other than the SARs that they may wish to consider.
The first is that in addition to SRA requirements, the OPG will need to be satisfied that deputies have proper safeguards in place to protect deputyship funds. Deputies act under the authority of the court on behalf of vulnerable people, and extra care may need to be taken around who can authorise payments from deputyship funds. The OPG advises that setting up a separate bank account for a deputyship with named signatories may be simpler in practice. The second is that a deputy has a general duty to act in the incapacitated person’s best interests, which can include managing their funds to gain the best return. There will be cases where large balances in a client account will not represent the best investment strategy for a client. In these cases OPG will question the appropriateness of keeping significant excess funds in this way.
The OPG reminds professional deputies of their standards, and in particular Standard 1a (9), which states:
“Open a deputyship account in the client’s name with the deputy named as such on the account. Ensure that all funds held for the client are held in accounts and/or investments in their name and kept separate from the funds of the deputy or other parties.”
The note also reminds solicitor deputies that their management of funds should be organised with the best interests of their client in mind.