Court Allows Appointment of Office-Holder as Deputy Under Mental Capacity Act 2005 With Emphasis on Insurance Coverages and Risk Assessment

Citation: [2018] EWCOP 21
Judgment on

Introduction

The case summarised [2018] EWCOP 21 revisits the intricacies of appointing a deputy under the Mental Capacity Act 2005. The focus is on the scope for appointing an office-holder as a deputy, rather than an individual, and the implications of such an appointment. Fundamental considerations include the interpretation of the Act, suitability and risk assessment related to the role of a deputy, as well as insurance matters relevant to the position.

Key Facts

SH, a 71-year-old individual, is recognised as lacking the capacity to manage her own property and affairs due to a persistent delusional disorder. A company, Focus Independent Adult Social Work C.I.C. (hereafter “Focus”), through the then holder of the office of Head of Business Development & Client Finance, applied to be appointed as SH’s property and affairs deputy. The critical facts involve the examination of the legality of appointing an office or position rather than an individual, the effect of potential changes in the person holding the office, the capabilities and insurance coverages of Focus, and the prospective risks to the incapacity person’s assets.

The analysis primarily revolved around interpreting the Mental Capacity Act 2005, specifically section 19, concerning the appointment of a deputy. The court considered how section 19 aligns with section 12 of the Interpretation Act 1978, which deals with the continuity of powers and duties when associated with a holder of an office.

Additionally, principles from the Companies Act 2006 were brought to attention to determine the legal powers of Focus to act within its declared objectives and whether such a role as a deputy would fall under those objectives. This is linked to s31(1) of the Companies Act, which posits that a company’s objects are unrestricted unless explicitly limited by its articles.

Insurance coverage and professional indemnity were scrutinized under the lens of protecting the assets of the person under deputyship. The principle that the court exercises risk assessment when determining the suitability of a company to act as a deputy and deciding on the level of security bond, as referenced in Re H [2010] 1 WLR 1103, was discussed with conclusions drawn about the insufficiency of Focus’s existing policy.

Outcomes

The court concluded that the Mental Capacity Act 2005 s19(2), read in conjunction with the Interpretation Act 1978, allows for the appointment of the holder of a specified office, with the post being held by successive individuals over time. This brings transparency and continued oversight as changes in office-holders are reported to the Public Guardian.

Regarding the company’s ability to conduct deputyship functions, the court was satisfied by self-reporting through a declaration of truth without needing to delve into complex company law issues. The provided professional indemnity insurance by Focus was deemed inadequate considering the exclusions mentioned. Consequently, the court required a security bond equivalent to that of a non-professional lay deputy, set at £10,000 for SH’s case.

The court made a cost-neutral decision where the parties were to bear their own costs with the agreement that SH’s estate would incur no further costs beyond those fixed at the public authority rate. Additionally, Focus was instructed to compile a list of all deputyships it was managing, to facilitate further court review concerning the adequacy of security and clarity of appointed office-holders.

Conclusion

In [2018] EWCOP 21, the court adeptly navigates through the legal landscape framing the appointment of deputies under the Mental Capacity Act 2005. It affirms that an office-holder can indeed be appointed as a deputy, sustaining the role even when there is a change in the person occupying the office. Moreover, the court emphasizes the importance of insurance and bond coverage assessing the management of the protected party’s affairs, which contributes significantly to the suitability of an organization for the deputyship role. The case sets a benchmark for future proceedings in the appointment of deputies, addressing the necessity of clear succession in office and the protectiveness of insurance terms for vulnerable individuals’ estates.