It’s vital to check “under the hood” when requesting the appointment of a Trust Corporation as deputy.

Overview:

In a recent case, Matrix Deputies Limited admitted breaching their fiduciary duty by accepting commissions on sales of residential properties belonging to vulnerable clients. They also accepted “failures in administration”.

The allegations against Matrix Deputies Limited were serious and were not contested. Investigations by PwC accountants on behalf of the London Borough of Enfield found:

  1. Excessive fee charging;
  2. Inappropriate/inadequate arrangements for holding/recording client funds and transactions;
  3. Conflicts of interest arising from inappropriate relationships with other bodies; and
  4. Failure to provide information requested and to comply with Court Orders for disclosure of information

When considering to the Court of Protection for the appointment of a Trust Corporation as deputy, the applicant should check that:

  1. The directors of the Trust Corporation have sufficient legal knowledge and experience; and
  2. Administrative structures exist so the Trust Corporation can meet the Office of the Public Guardian Professional Deputy standards.

An application for an Office of the Public Guardian approved panel deputy is a better option than applying for the appointment of a Trust Corporation which fails to meet the minimum standards.

Comment:

  1. Fee charging:

If directors of a Trust Corporation are legal professionals, they are regulated by the Solicitors Regulation Authority. Their client care letter provides an estimate of their likely costs and must be regularly updated. Complaints about fees can be made to the Solicitors Regulation Authority and may be upheld.

Usually, a deputyship order will include a clause authorising costs to be paid on a fixed fee basis, or to be assessed by the Senior Courts Costs Office.

If costs are assessed, the deputy is authorised to charge for 75% of the work they have completed on behalf of the client on a quarterly basis. At the end of the year, an annual bill is assessed by the Senior Courts Costs Office and a balancing payment may be charged by the deputy. All costs must be reasonable and proportionate.

The Senior Courts Costs Office recommend that the day-to-day administration of a vulnerable person’s affairs should be carried out by a junior member of staff. Senior directors of a Trust Corporation should only carry out specialist or essential work.

An appropriate level of legal knowledge is required to interpret the deputyship order and to recognise the need for legal advice. If a deputy does not follow the terms of the deputyship order, there is a risk of overcharging. It is therefore important to identify the directors of the Trust Corporation and investigate whether they have:

a. Legal training;

b. A listing in Legal 500 and Chambers legal directories as a Court of Protection practitioner;

c. A Law Society website listing as a specialist in Court of Protection law;

d. Membership of organisations such as Solicitors for the Elderly, STEP or the Court of Protection Practitioners Association;

e. Written well-respected books, leaflets, webinars or articles about Court of Protection law;

f. Acted as a panel deputy for the Office of the Public Guardian.

The absence of most or all of these factors may indicate a lack of legal knowledge and experience and should prompt a more extensive examination of the Trust Corporation’s internal structures and whether these are fit for purpose

An online search, search at Companies House or of Solicitors Regulation Authority proceedings may also reveal facts about the Trust Corporation or individual directors which need further explanation.

2. Arrangements for holding clients funds, record keeping and carrying out financial transactions:

Solicitors are required to follow strict Solicitors Accounts Rules.

These strict rules can provide a foundation for establishing structures to meet the requirements of the Professional Deputy standards published by the Office of the Public Guardian, including:

a. Identifying a client’s assets;

b. Registering the assets in the client’s name;

c. Establishing a deputyship current account;

d. Checking payments in and out of the deputyship current account;

e. Authorising large payments appropriately;

f. Recording and protecting large payments, such as the purchase of a house; and

g. Storing cheque books and private information securely.

Structures should be regularly audited and failures in administration should be addressed quickly and effectively.

3. Conflicts of interest:

During the course of a deputyship, a Trust Corporation will work with financial advisors, case managers, architects, estate agents, builders, other lawyers, forensic accountants, mediators, capacity assessors, care agencies, therapists, barristers and many other professionals. Developing positive working relationships is an essential element of the deputy’s role.

The Trust Corporation may also develop expertise internally. Legal directors often apply their specialist legal knowledge of health and care, private client, property and other matters when dealing with the affairs of vulnerable people.

Policies should be developed within a Trust Corporation governing relationships with other bodies to include:

a. A fair bidding or introduction procedure for the commissioning of services;

b. Prohibition on the receipt of commission from third parties;

c. Details of whether and in what circumstances it would be appropriate to commission services from friends or family members of the vulnerable person;

d. Details of whether and in what circumstances it would be appropriate to commission services from which the Trust Corporation, its directors, family or friends could benefit, either directly or indirectly; and

e. A process for commissioning appropriate, high quality and good value services.

These policies should be informed by the requirements of professional regulatory bodies such as the Solicitors Regulation Authority, guidance issued by the Office of the Public Guardian, the legal requirements of the Mental Capacity Act 2005 and other relevant legislation as well as the practical experience of the deputy.

4. Disclosure of information

Information should be readily available in a format which can be communicated to the Office of the Public Guardian, other investigatory bodies or their agents.

Formal structures should be in place for:

a. Reporting to the Office of the Public Guardian;

b. Preparing tax returns;

c. Regular financial and administrative auditing, as per Law Society and Lexcel standards.

http://www.bailii.org/ew/cases/EWCOP/2017/14.html