In an article of 28 April 2013, the Daily Mail continues its campaign against the perceived inefficiencies and failings of the Court of Protection. In this article, they focus on the interest rate paid on significant cash deposits held on behalf of individuals subject to the Court’s jurisdiction.
From the many readers’ comments posted in response, this is clearly an emotive subject, particularly because of the Daily Mail’s preferred description of it as a “secret” Court. Is it reasonable to criticise the Court in this way?
The Court of Protection exists to protect individuals who lose the capacity to manage their own affairs as a result of an impairment or disturbance in the functioning of the mind or brain. The Court’s origins can be traced right back to the 14th century and it is not simply a creation of the last Labour government as the Mail would have you believe. It first became known as the Court of Protection in 1947. The last government did enact wide ranging reforms to the Court with the introduction of the Mental Capacity Act 2005 (“MCA”). A key reform was the extension of the Court’s powers to deal with welfare issues in addition to its historical role in looking after property and affairs. This is not the forum to debate the impact of these reforms, but the need for them had been apparent for many years.
The Court only becomes involved where evidence confirms an individual lacks capacity to make a particular decision, for example to manage property and affairs. If that is the case, then the Court can appoint someone known as a Deputy to carry out that role. It is then the Deputy’s responsibility to make decisions on behalf of that person (if they cannot do so themself) subject to the terms of the Court order appointing them and the MCA. Any decision made must be in the best interests of the individual concerned.
It is true that funds held with the Court Funds Office (a separate body entirely within the Court system) do only pay 0.5% interest on deposits. This is in line with the current base rate set by the Bank of England and the Court of Protection does not set the rate. Better rates of interest are available outside the Court system. Is this the fault of the Court of Protection?
If a Deputy has been appointed, then they would usually be granted wide-ranging powers of investment on behalf of the person who lacks capacity. They are not therefore required to leave the funds in Court, but can take positive steps to administer the funds more effectively, including appointing an investment professional to advise them. The key point is that the Deputy is the person who must take this action. It is not the Court’s role to actively manage the funds or to act as investment manager.
There is a sound argument that leaving funds in an account earning only 0.5% when better alternatives are available would not satisfy the best interests test. If so, then why are Deputies not taking appropriate steps to invest the funds appropriately?
Perhaps the article really highlights the lack of understanding by many Deputies over what their role is and what powers they may have. It also emphasises the need to seek specialist legal advice to help demystify the process as withdrawing the funds from Court and investing them appropriately need not be a difficult process.
Finally, it is also worth commenting on the popular use of “secret” to describe the Court. Proceedings and hearings do generally take place in private although there is provision to allow the media to report in certain circumstances. This seems eminently sensible. If it concerned your loved one, would you want details of their financial or other personal affairs routinely reported in the press? Their affairs were private before they lost capacity so why should they now become public?