Part 2: Determination of Capacity in Practice

When to raise the issue

The issue of a party’s capacity, if raised,  should  be dealt with as soon  as  possible.  The  Court  of  Appeal so held in the case of Masterman-Lister v Brutton 5 (and in the context of care proceedings in Re D (Children)6). In the former, there was no Court of Protection (‘CoP’) involvement and the issue was whether or not the claimant was entitled to reopen litigation that had been settled on the basis that he had capacity and, therefore, had not had the approval of the court. Sometimes a deputy will have been appointed and the CoP will already have adjudicated upon the issue of the claimant’s capacity pursuant to its powers under s15 of the MCA 2005 (to make declarations as to a person’s lack of capacity). A typical CoP order appointing a deputy in relation to a patient’s property and affairs will recite that the court has been satisfied that the patient is unable to make various decisions for him/herself in relation to matters concerning property and affairs because of an impairment of or disturbance in the functioning of the mind or brain.

Such a dispute came before Kenneth Parker J. in Loughlin v Singh.7 There, the issue of capacity was dealt with at trial and, after hearing extensive evidence, the judge decided that the claimant lacked capacity both to conduct litigation and manage his property and affairs. It is of note that little, if any, attention was paid to the fact that the CoP had already determined that issue and, although the court plainly had before it documents from the CoP, it is not clear from the judgment whether or not the parties had sought permission from the CoP, pursuant to Court of Protection Rules 2007 rule 91, to use information relating to the CoP proceedings in the Queen’s Bench proceedings.

Part of the reason why the QB Judge paid scant heed to the CoP declaration of incapacity is contained in the annex to the judgment: the judge was critical of the conduct of the claimant’s solicitors and of one of the claimant’s experts in the case. The expert had changed his view about capacity without proper explanation or grounds and the claimant’s solicitors had presented the CoP with that evidence of incapacity without alerting the CoP to the fact that that was not the original view of that expert or to the fact that other experts held opposing views. At the end of the annex to his judgment Parker J said:

All I need add is that the lamentable failures that occurred here, and the invidious position in which the judge in the Court of Protection was unwittingly placed, must never be repeated. The issue of capacity is of very great importance, and all involved must ensure that the Court of Protection has all the material which, on proper reflection, is necessary for a just and accurate decision.”

The absence of mention of the decision of the CoP highlights the question of the status of such a decision. Section 15 of the MCA 2005 gives the CoP specific power to make declarations as to a person’s capacity but it must be recalled that such declarations are always decision-specific and time-specific. As regards the latter, in respect of many patients the lapse of time will not make matters better, but there are some patients whose capacity to make particular decisions will vary in time.

Some decisions by courts as to status are binding in rem; in other words, on the whole world whether parties to the action or not. For example, decisions as to the status of a person’s marriage are thus binding. In one sense, a decision as to a person’s mental capacity is a decision as to that person’s status but that decision is, as discussed above, fact and time-specific. In Hill v Clifford,8 the Court of Appeal held in relation to inquisitions under the then Lunacy Acts, that the result of such an inquisition could be read in a subsequent suit between third parties as evidence of the ‘lunacy’, but not conclusively, such that it might be traversed (see the judgment of Cozens-Hardy MR at 244).

It is likely that the same approach would be followed today, even though the MCA 2005 gives the CoP particular power to make declarations as to capacity. That is because circumstances might have changed. In the Loughlin case, if this issue had arisen, the defendant would no doubt have said that there was material that was not put before the Court of Protection which ought to have been and which would have made a highly material difference to its deliberations.

A decision of the CoP to appoint a deputy, after having considered appropriate evidence, should not, however, be dismissed lightly. The correct approach in subsequent proceedings between the patient/claimant and a defendant would be for the civil court to ask itself the question whether or not there was material which undermined the CoP’s decision to a significant degree. Was there something which was wrongly withheld from the CoP? Have circumstances changed? The subsequent civil court should not simply embark on its own investigation, feeling free to come to a different conclusion. That would undermine the status of the CoP, lead to potentially different conclusions by courts of competent jurisdiction and possibly bring the operation of the courts into disrepute.

Can a defendant in a personal injury action intervene in capacity decisions in the Court of Protection?

In the first instalment of this article, reference was made to the case of Re SK.9 There, the defendant in the Queen’s Bench proceedings sought to be joined in the CoP proceedings to be heard on the issue of what decision should be taken concerning the patient’s rehabilitation. The defendant was concerned that if the CoP came to a decision that it was in the best interests of the claimant to have intensive rehabilitation, then, without the opportunity of being heard, the defendant would be “stuck” with that decision and that was unfair. What the defendant appeared to propose (see para 18) was a hearing where a single high court judge sitting in the CoP should decide the issue “Where should (the claimant/ patient) be accommodated and cared for, and with what level of rehabilitation?” and that the decision in relation to that would be binding both in the CoP and in the Queen’s Bench proceedings. But the judge decided that the defendant had no right to be joined, for two reasons.

First, the defendant did not have a sufficient interest in order to be joined as a party – see rule 75 of the Court of Protection Rules – because the defendant’s interests were in preserving its own financial position and thus were not aligned with the best interests of the patient (see para 41). Second, it would not, in any event, be desirable to join the defendant within the meaning of rule 73. There were a number of reasons for that: the decision in the CoP and the Queen’s Bench Division were different decisions, the decision in the Queen’s Bench Division is a “snapshot”, whereas the decision in the CoP is for that particular time only and capable of variation. The judge also questioned whether, if there were multiple defendants, all defendants should be entitled to be joined and whether such would be an intolerable burden on the CoP.

A distinction can be drawn between the SK case and any case where the claimant’s capacity is in issue. The decision that the CoP has to make is the same as the civil court would have to make but with one difference, namely that the latter would be making a decision on a once-and-for-all basis (at least at trial) and the former, of course, would not be a once-and-for-all decision, although in practice it might be.

The role of lasting powers of attorney in PI claims Whilst a person may lack the capacity to manage their own property and affairs, they may still have the capacity to decide to make (and indeed revoke) a lasting power of attorney. If so, then the claimant can choose who should look after his/her property and affairs, specifically a personal injury award.

The claimant may choose to appoint a family member alone or a family member together with a professional. If the former, solicitors would have to advise of the risks associated with that choice and the reasons why the CoP does not, ordinarily, appoint a family member as sole deputy in relation to the administering of large personal injury awards (conflicts of interest etc.). There would be no need for a hearing to approve that course of action and no need to persuade the court that the disadvantages of having the award in a personal injury trust, such as want of supervision, outweigh the advantages of that course, e.g. reduced costs. The principle of autonomy would apply, namely that if the claimant is able to make a decision, then the claimant has the right so to do (whether the decision is wise or not). Come what may, the Practice Direction to CPR 21 makes clear that where there is a lasting power of attorney the damages award does not come under the jurisdiction of the Court of Protection.