Last week the Court of Protection handed down their down judgment in the case of SM –v- HM. The issue before the Court was in what circumstances was it open to the Court of Protection to authorise the settlement of any incapacitated person’s assets as an alternative to a Deputyship? Effectively, could a Court depart from their more commonplace regime of approving Deputyships to settle a Personal Injury Trust? The answer, in exceptional circumstance, is ‘yes’.
It is now a trite position that the best interests of the incapacitated person are paramount, and thus departing from the usual jurisdiction of the Court – approving a Deputyship – must be assessed on a case-by-case analysis. The judgment in SM makes clear that there will have to be exceptional circumstances for this be approved. In SM these circumstances were chiefly a per annum administrative cost saving of around £1,000 – £2,000, and also a “suitable and competent” lay-trustee in the child’s mother . The final issue which swayed the judge’s decision was that the professional trustee agreed to cap his rates to the Court’s rates.
In relation to the cost saving, the judge did not wholeheartedly accept that this was to be the situation in every case; however, the litigation settlement in this case was significantly compromised due to the real risk of losing at trial (leading to 30% recovery), and thus the judge accepted that, although it was not decisive, the cost were of “greater than usual importance”.
The judge concluded by saying that it was the coming together of all the factors that allowed her to authorise the settlement. So, what does this mean for personal injury and clinical negligence practitioners?
Well, of supreme importance, liaise with Court of Protection specialists at the earliest opportunity, and definitely by the time when you are coming close to liability settlement. No opportunity is too early to merely seek their counsel. Secondly, we are well placed to be discerning as to the capability and suitability of the lay-trustee/Deputy.. If you believe they are capable and amenable, then flag this up to your Court of Protection colleague. Thirdly, keep your options open and seek the advice of Court of Protection specialists to decide which is the most suitable taking into account the specifics of the case.
The judgment is a progressive one, and a victory for common sense. However, in her conclusion the judge is unambiguous in her caveat – “I would not…wish it to be thought that this individual case could be taken as a model”. I must also take this opportunity to congratulate and commend my colleagues in our Court of Protection department for first their diligence throughout, and also their probity in acting pro bono.