Personal injury trusts news

 

Oakland's Junior School win prizes for road safety project

Children from Oaklands Junior School in Crowthorne worked hard and had fun learning about road safety during this year’s Road Safety Week campaign (November 20-26, 2017).

Their challenge was to think about how to make the roads around their school safer, and to create a poster promoting road safety. 

The national awareness week is the flagship event of Brake, the road safety charity, and has been running for 20 years. The theme, Speed Down Save Lives, was chosen because speeding remains a huge problem in the UK; the risk of injury increases massively with impact speed, and speeding is a factor in nearly a quarter of fatal road crashes in the UK. 

Local Brain Injury Group member firm Boyes Turner supported the school’s activity and got involved in judging the poster entries and awarding prizes.

“We work with families badly affected by avoidable accidents all the time, and campaigns like this are a great way to get the message out there that we can all do a bit more to make our streets safer and reduce accidents,” said Claire Roantree, Partner at Boyes Turner. “The creativity of the children never fails to impress, and demonstrates that they’ve had fun learning about a very serious message.”

The winning entries each received WHSmith vouchers, and all children taking part received a fluorescent pencil.

“Road Safety Week is about raising awareness that will keep everyone alert and safe on the roads. If we can make the message fun, we can make it last”, said Sally Alexander, teacher at Oaklands.

The Brain Injury Group is a national network of specialist brain injury lawyers and support services. If you have been affected by brain injury visit braininjurygroup.co.uk for help and signposting to services.

Q&A with the Court of Protection team

Over the following weeks we will be sharing a series of question and answer articles about our day-to-day lives in a Court of Protection team. This week, I interviewed Ruth Meyer who is a partner and head of the Court of Protection team.

Ruth Meyer

Ruth qualified in 1990 and is a partner at Boyes Turner, heading up the Court of Protection group. Ruth has considerable experience in Trustee and Deputyship work and particularly in acting for clients who have suffered profound injury resulting from the negligence of others.

Her memberships include the Law Society’s Probate Section, the Society of Trust and Estate Practitioners and Solicitors for the Elderly. She is also a panel member of Mencap.

In 2013 Ruth was ranked as a leading UK Court of Protection Solicitor in the Chambers Guide to the UK Legal Profession and is described as caring ‘passionately about her clients’ welfare’ in the Legal 500.

  • How much variety is there in your work?

    The work within the Court of Protection team is highly varied. My day changes from day to day. Each family is unique and we offer a very bespoke service to meet the needs of clients. I manage deputyships for people who do not have sufficient capacity to manage their finances as well as private trusts for clients who do have capacity to manage their finances but remain vulnerable. We also deal with the purchase and adaptation of properties, the employment of carers and case managers as well as therapists. We purchase equipment and ensure vat exemption forms are completed as well as dealing with annual accounts, tax returns, benefits and the investment of funds though financial advisers. In between all this many one off issues appear and in the past we have had to deal with properties that have flooded, emergency vet fees for a much loved family pet and arson attacks. The list can go on but it certainly adds to an eventful day! However, behind all this I know we have clients who are worried and need to know that they have professional help in sorting out some very significant issues.
     
  • What do you see as the major issues/ trends in Court of Protection today? 

    I think it has become harder over the years to open up a deputyship or trust bank account. It must be very difficult for non–solicitor deputies. I have built up a good working relationship with two local banks who offer an excellent service and who will immediately sort out matters in the unlikely event of something going wrong. This is so important as it can be really stressful if you cannot access money and funds are required urgently for care or for rent.In addition I have noticed a more paper based approach as there are many forms to complete in order to obtain a deputyship. Years ago the Public Guardianship Office (as it was known then) would assign a case manager to every single file and a deputy could speak directly with the case manager to obtain some additional support on a matter that may not be straightforward.In addition, previously a visitor from the court used to visit the client each year and I would always coincide my annual visit at the same time so that we could discuss any issues together and how they could be solved. Unfortunately such visits are now randomly assigned and may only be once every three years, although on occasions I have contacted the OPG to request a visit for a vulnerable client that urgently requires it and this has been arranged.
     
  • What are the toughest problems and decisions you handle? 
     

    Some of the hardest problems relate to the finances for children who have been damaged at birth and have received a ‘substantial’ compensation award. To most people such awards do appear ‘substantial’ but the costs of therapies, adapting properties and appealing to a Special Educational Needs Tribunal can be high and expenses need to be carefully managed and budgeted for, as well as being in the child’s best interest. The difficulties arise when families want money to spend on matters that the award was not designed for such as an expensive family holiday or, contrary to this, the family do not want to spend any of the money mainly because they have got to a point in which they do not want carers or therapists in their home and wish to protect their privacy.Both issues can be difficult to manage and require diplomacy and tact. With holidays I usually explain to the family that we can pay for the additional costs of taking a disabled child on holiday as such expenses would cover the need for a larger room or specialist transport. These costs can be met from the award of compensation but if they have not been included then they will need to be paid from another ‘pot’ of money within the award so effectively we would be taking money  which has been reserved for something else.In respect to the privacy issue I have to be mindful that families do require privacy and maybe we could look at alternative solutions such as reserving a room in a local sports centre for physiotherapy or having carers who visit daily rather than live in. In respect to such matters it is better to build up the relationship with the family first and then gradually introduce carers and therapist’s so that a relationship of trust is established and the family can then see how beneficial the care and therapy is.

  • What attribute or experience do you look for in solicitors joining your team? 
     

    When looking for team members I value common sense and empathy above any other attribute. Most of our clients are vulnerable and their families may also require additional support and understanding. A solicitor needs to be able to ensure that clients feel comfortable so that they are able to ask as many questions as they want. Visiting a solicitor for the first time can be a worrying experience for clients who do not have much contact with solicitors. I usually find that as soon as clients have met me face to face they feel much more relaxed and this assists in giving advice on the way forward and building up a long term relationship.

  • Do you have any advice for anyone interested in qualifying into Court of Protection?
     

    For anyone interested in joining a Court of Protection team I would advise them to begin with the basics! They need to make sure that they have a thorough understanding of the Mental Capacity Act 2005 and the Code of Practice as this forms the basis of much of the work we do. I would then advise obtaining a working knowledge of how deputyship accounts are completed, the various forms to use as well as an understanding of income tax and who to approach for independent investment advice. Working in a Court of Protection team covers a variety of aspects and you need to have a little knowledge about a lot of things and know where and when to look things up!

  • What do you like most about working in the Court of Protection team?
     

    I really enjoy heading up the Court of Protection team. I started as an assistant solicitor with a background in Wills and Probate and eventually dealt with everything to do with Court of Protection work. This gave me a solid background and understanding of issues and now I act as deputy running a team of seven. Each team member is able to offer something different and we work together on matters so that we can offer the best possible service and advice. We use each other’s strengths to focus on applications, research matters and prepare detailed budgeting forecasts but behind all this are a team that cares passionately about the work they do and will always pull together to get the best for clients.

How much should family members be paid for the care they provide?

In Court of Protection cases and Personal Injury Trust cases payment can be made to family members for the care they provide to the person who suffered injury and this care is paid from the compensation award. This payment must be approved by the Court of Protection if payment is made to the deputy and by the trustees in respect to Personal Injury Trusts. 

It can be difficult to decide how much to pay for care as no amount really covers the additional work that family members provide but we have to have a starting point. I usually look at the care report in compensation cases as this may refer to a gratuitous amount recommended for family care and I then look at the final settlement and what was recovered.

Family members can be paid a sum free of tax and national insurance and approval to this is sought from HMRC in the form of a “Carer’s Certificate”. HMRC have issued guidelines on this in ESM 4016.

In the recent case of HC [2015] EWCOP29 (SJ Lush) payments for care were specifically discussed. In this case S J Lush allowed a commercial rate for care discounted by 20% because payment was not taxable, although usually in PI claims the deduction is 25%. He also provided for annual increases in line with the Annual Survey of Hours and Earnings (ASHE) 6145 which relates to carers and home carers.

The amount approved in this case was £1,500 per month for the deputy and £100 per month for his sister, although S J Lush noted that the payments were significantly less than any alternative care package that might be available.

This case provides useful guidance on payments to family members for care which is a selfless and all encompassing job that is often overlooked.

The Court of Protection: A History

Here at Boyes Turner, we have a rapidly expanding and developing Court of Protection team which is headed by the Court of Protection Partner and professional deputy, Ruth Meyer. The team is now made up of six members and is always busy with new and existing clients. We are not alone in this. Across the country there are Court of Protection teams working hard to meet an ever increasing demand. So where has this demand come from? And why is there such a need for these specialist Court of Protection teams?

The Masters in Lunacy

To answer these questions, we need to look at the history of the Court of Protection and the changes it has undergone in recent years. The Court of Protection as we now know it was created in 2007. It does however continue the much more established “…inherent jurisdiction of the Crown to manage the property and affairs of persons who lack capacity…” This jurisdiction can be traced back hundreds of years, although the first sign of a specialist court came with the appointment of two ‘Commissioners in Lunacy’ who were appointed in 1842 by the Commissioners in Lunacy Act.

At this time, a person could come within the jurisdiction of the Lunacy Office if they were ‘a lunatic, so found by inquisition.’ Not entirely unlike the process today, an inquisition was requested in the form of a petition which was usually presented by a relative. This petition had to be supported by an affidavit of kindred and fortune and two medical affadivits. The case could then progress to a full inquisition, at which the alleged lunatic could request a jury of up to twenty-three men. The inquisition was usually held in the town or village in which the alleged lunatic lived, and as it was a public matter it was open to all to attend.

The case of William Frederick Windham is a good illustration of a case that would have been heard in the early days of the Lunacy Office. Windham inherited a considerable estate and income on his 21st birthday following the death of his father some years earlier. Just three weeks later he married a woman, described as having a notoriously profligate character, lavishing her with jewellery and promising her an income that comprised of nearly a third of his own annual income. Perhaps unsurprisingly, a petition was brought by 15 of his relatives applying for an inquiry as to his state of mind.

The inquiry was a showcase of contemporary legal talent and lasted for 34 days, the longest lunacy inquisition in legal history. Windham’s life was picked apart in the closest of detail, with the seventeen poached eggs he ate for breakfast and his obsession with trains called into question.

A jury found by a majority that Windham was of sound mind, although seven of the twenty-three did consider him to be mad. Windham was ordered to pay the costs of the trial, as the petition had been brought in good faith, which is a principle that still applies today.

Over the following century, there were developments in the power that the Masters in Lunacy had and the way in which they administered their work. By 1947, there was an Office of the Masters of Lunacy which was well established and constituted an office of the Supreme Court. It was in 1947 that the Office was renamed the Court of Protection.

Although the Court of Protection progressed significantly from the days of the Office of Lunacy, it remained limited in its power and ability to protect the vulnerable in society. A key reason for the inability of the Court of Protection to operate effectively was that there was a significant separation between the structures for welfare and financial matters. Financial matters were largely dealt with by civil servants on behalf of the Master in administrative arms of the Court of Protection. However, welfare decisions could only be made in the High Court. This was expensive and complicated and excluded all but the most exceptional of cases. The result of this was that the most vulnerable people in society were increasingly disconnected from the justice system, and this was a situation that could not continue.

The Significance of the Mental Capacity Act (2005)

In 2005, the Mental Capacity Act (MCA) was introduced as a way of protecting vulnerable people who are unable to make decisions on their own behalf. The five principles of the MCA 2005 are the foundation for all work carried out by Court of Protection teams, and they are:

  1. A person must be assumed to have capacity unless it is established that he lacks capacity.
  2. A person is not to be treated as unable to make a decision unless all practicable steps to help him to do so have been taken without success.
  3. A person is not to be treated as unable to make a decision merely because he makes an unwise decision.
  4. An act done, or decision made, under this Act for or on behalf of a person who lacks capacity must be done, or made, in his best interests.
  5. Before the act is done, or the decision is made, regard must be had to whether the purpose for which it is needed can be as effectively achieved in a way that is less restrictive of the person’s rights and freedom of action.

The MCA 2005 created the new Court of Protection and the Office of the Public Guardian, with the aim of creating “a unified jurisdiction, combining that of the old Court of Protection in relation to property and financial affairs with the personal welfare jurisdiction exercised by the High Court judges of the Family Division.”

The Court of Protection as created by the MCA 2005 is a specialist court of record with the same rights, privileges and authority as the High Court. It now has the power to make specific decisions, or appoint others (deputies) to make decisions, for people who do not have the capacity to make decisions for themselves. These decisions could be in relation to property, financial affairs, health and personal welfare.

The Court of Protection Today

After an initial period of transition, the Court of Protection is now well established and provides security to an increasing number of vulnerable people. The improved structure of the Court combined with an increased awareness and understanding of the importance of protecting vulnerable people in society has meant that there has been a significant increase in the work of the Court of Protection and of Court of Protection departments across the country. In 2012 alone there were 23, 538 applications to the court with 22,797 orders made. The orders made by the Court of Protection can be made on any number of issues, from investing an individual’s funds to deciding whether or not a statutory will can be made.

So from the Lunacy Office to the Court of Protection, the progress continues and the Court is able to effectively protect an increasing number of vulnerable people every day.

With thanks to Senior Judge Denzil Lush for his insightful and informative contributions which have been incorporated into this article.

Terrell, M. 2009. A Practitioner’s Guide to the Court of Protection. 3rd Edition. Chapter 2 – The New Court of Protection.

Re MB [2005] EWCA Civ 1293 – found at

https://www.lawtel.com/UK/FullText/AC0109786CA(CivDiv).pdf

Lush, D. 1998. ‘The Windham Inquisition’ – an article written for the Legal Executive Journal

Lush, D (as n.3 above)

Re MB [2005] EWCA Civ 1293 (as n.2 above)

Terrell, M. (as n.1 above)

Terrell, M. (as n.1 above)

 The Mental Capacity Act 2005

 Court of Protection Report 2009. Judiciary of England and Wales. Foreword by Senior Judge Denzil Lush

Figures taken from ‘An Introduction to the Court of Protection’, MBL Seminar presented by Claire van Overdijk. Original figures taken from –

https://www.gov.uk/government/uploads/system/uploads/attachment_data/file/217494/judicial-court-stats-2011.pdf

A day in the life...Ruth Meyer, Court of Protection Solicitor

No two days are the same! This one started at 8.31am with a three inch thick bundle of post and an inbox full of emails to get through.

By mid-morning I had met with one of the banks that manages thirty ruth-meterof our clients’ accounts to discuss their monthly charges. The amount that they want us to pay wasn’t unreasonable and I agreed that they could charge it as long as their system runs smoothly – and we get the financial information that we want, in the format that we ask for. This should, in theory, make it much quicker and therefore cheaper to manage client affairs, which in turn should enable us to help more clients, which means that banking costs will be reduced further. A real win-win situation all round.

My next meeting was with a Trustee regarding the adaptation work on a property bought for a five year old. The house cost just over £800,000 and the adaptations have initially come in at close to £1 million! Some of these are due to the family’s own needs but the majority are to help the child. Most of the meeting was spent on agreeing how the costs were to be divided as well as the best way to get the work paid for. As the case hasn’t been settled (liability has been admitted though) it may be some time before we get the balance of the compensation money which means that we are seeing if it is possible for the Trust and the family to obtain a joint mortgage to carry out the initial work.

The final meeting of the day was spent with the mum of one of the young adults that I act as Deputy for – who needed to get some paperwork witnessed. I have known the family for well over ten years and, unfortunately, her husband recently died at only 53 – after 20 years of marriage. We spent a good hour talking about how she was dealing with family life in general and the stresses and strains of now, in effect, being both mum and dad to her son. The mum was clearly finding this difficult, but I made sure that she knew that we would help out wherever and in whatever we could whilst of course making sure that the best possible carers were in place for her son. Just another part of the service we provide.

The rest of the afternoon was spent wading through a 30 page financial investment report. We currently have a large Trust in place which requires the removal of one of the financial advisors. The “beauty parade” that we are holding means reading through lengthy proposals from a short list of financial advisors before interviewing them. What it will come down to in the end – given that charges are usually pretty similar – is getting the match between the personality of financial advisor and the family spot on. Most of the Trusts that I deal with are set up when the child is quite young and are going to be in place for a long time. This makes a good match essential. The family need to be confident and, above all, like the person that they are going to be dealing with. Also, in many of the cases, the child is also able to build up a relationship with the financial advisor and therefore also needs to have confidence in being able to approach them and speak to them about their own investments.

At 6.36pm I turned off my PC and cycled home. Today has certainly been very varied, but I guess that’s what makes my job such an interesting one!

Managing a personal injury award - "professional" and "lay" deputies

A deputy is a person appointed by the Court of Protection to manage the financial affairs of someone who does not have sufficient capacity to do so themselves. A “deputyship” is often used in instances where a large personal injury settlement has been awarded to ensure appropriate, ongoing management of the money. 

A deputy could be “lay”, such as a family member or friend, or “professional”, such as a solicitor. The duties on a professional deputy are much more stringent as they have specialist knowledge and are, of course, charging for their services. One would expect standards to be high for professional deputies and we at Boyes Turner offer an excellent deputy service.

A recent report in The Times indicated the difficulties a professional deputy faced when the Office of the Public Guardian (OPG) was asked to investigate why no interest was earned on a large personal injury award of £3.32 million.

The lawyers concerned placed almost £2 million of this money in the firm’s zero interest bank account until it was finally moved to Barclays Wealth. In the intervening eight months the award had shrunk significantly. The client’s uncle claimed that his local bank manager had advised that he could have obtained a minimum of 3% giving the client £44,925 in interest payments. This is an incredibly important issue, bearing in mind how low interest rates are at present and the high cost of care and other expenses in large personal injury cases. The OPG, after investigation, concluded that there had been “no undue delay” in investing the money and did not expect that there had been a shortfall or discrepancies but it was concerned that “such a large amount of money [had been placed in] an account which pays no interest” and this really is the point. Even if the money had remained in the Court Funds Office it would have got 0.5% gross so to get less interest than that is detrimental to the client.

Prior to the Mental Capacity Act (MCA) 2005, which came into effect in 2007 deputies (then known as receivers) had to follow strict guidance and were strongly encouraged to use panel brokers. The problem was that it was a long drawn out process and there was very strict guidance as to how funds must be invested. In a changing financial climate this guidance was too rigid, became outdated and was not flexible to the client’s individual needs.

Since 2007 deputies are now free to invest how they wish and are under no obligation to use panel brokers. This has given them the freedom to choose an advisor and compare rates and different products to pick what they believe to be in the best interests of the client and tailor it to their needs.

Usually when a large personal injury case is dealt with a deputy will be appointed, prior to the case being settled. This is so that they can assist in the management of any interim payments. The deputyship Order will quite often include a clause that once the award has been settled the deputy must apply to the court for directions as to how the funds will be invested and produce a budget for the next three years. At that stage it is sensible to include a report by an independent financial adviser assisting in the recommendations as to the investment. A good deputy and a good independent financial adviser should be able to work well together to obtain the best rate they can get for their client and when the court looks through the application for directions they can approve what has been put forward.

The issue is what to do with the money prior to obtaining the court directions and this can cover a large sum of money over a significant period of time. The lawyer reported in The Times placed a very large sum in a non interest bearing account which was most likely because funds would be needed urgently and quickly to pay for what could be quite high care costs.

So, what lessons can be learnt from this?

  1. As soon as funds are received, ensure that money is immediately placed in an interest bearing account. You will need to try and find an account which pays at least 0.5% gross otherwise you would be receiving less than if you left the money in the court funds office.
  2. Make sure you have a good relationship with an independent financial adviser who can tailor their report for the needs of the client.
  3. Ensure you invest safely and wisely and review fees at regular dates.

Remember that one of the main principles of the MCA 2005 is “an act done, or decision made, under this Act for and on behalf of a person who lacks capacity must be done, or made, in the best interests”.

A Will or Trust could have saved the situation...

recent story on the BBC News, regarding a man who was jailed for sharing his father’s industrial compensation, brought home the stark reality of how easily the situation could have been avoided just through seeking wealth protection advice.

John Kennedy’s father died of asbestosis in 2001 and after his death he shared the compensation with family members in accordance with his father’s spoken wishes. No Will or specialised Industrial Disease Trust was left.

Before his father’s death, John’s mother was admitted to a care home and, as the family had limited savings, her care was funded by the Local Authority.

In 2005 £90,000 was paid in compensation for the industrial injury and, as there was no Will or Industrial Disease Trust, all of the funds should have passed to John’s mother under an intestacy. These rules state where your money should go if you do not leave a Will.

However John, with good intentions, decided to honour his father’s wishes and effectively took charge of the decision as he held a Power of Attorney for his mother. After a family meeting it was decided to share the money between various family members.

Unknowingly these actions led to devastating consequences and John was charged with benefit fraud, as the money should have passed to his mother to help pay for her nursing care. John was convicted and sentenced to nine months in prison suspended for two years. However, as he was unable to pay the money, which had been spent, he was jailed and served four months in prison. John’s criminal record has now affected his employment prospects and each month he has to pay a nominal sum from his benefits towards his outstanding debt.

Since then, due to his mother’s health, the family successfully applied for the nursing home fees to be met by the NHS as she qualified for continuing health care and if they had seen a solicitor about this in the first instance then John may never have been charged over the incident.

The final outcome for John could have been avoided by any of the following:

  • John’s father could have made a Will leaving his assets (even future assets) in the way that he would have wanted. That way he would not have been bound by the intestacy rules.
  • John’s father could have set up an Industrial Disease Trust before he died asking for funds in the future to be placed in Trust and be divided how his chosen Trustees saw fit. A private Letter of Wishes from John’s father to the Trustees would have guided them and the Trust could have been set up with a £10 loan which would then be repaid when the funds finally came through. This is more complicated than a Will but allows Trustees to distribute in the proportions they see fit at that time rather than set amounts under a Will.
  • The family should have taken advice about the continuing health care funding for John’s mother although health requirements usually have to be quite advanced for this to be granted.

It is understandable that families, where a member has been diagnosed with asbestosis, may not want to have to consider these issues at times of great family stress. However, speaking to a lawyer a little earlier would have avoided the difficult position that John found himself in, probably the last thing that his father would have wanted or anticipated.

The service was personal, professional and considered. I was treated so kindly and in the end I knew that not only had I found the right organisation but also the right person.

Boyes Turner client

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