Prosecution of attorneys for financial abuse

Criminal prosecutions of attorneys for financially abusing the donor of a Lasting Power of Attorney can be difficult to bring.  This criminal appeal might make such prosecutions easier.

The defendant in this case was the incapacitated person’s daughter.  Readers might be interested to know that Senior Judge Lush keeps a list of the identities of the abusers in the cases that come before the Court of Protection.  Perhaps unsurprisingly, but certainly depressingly, the majority of abusers are family members.  Statistically sons are more likely to be financially abusive than daughters although there are a number of cases where both perpetrate financial abuse.

The incapacitated person had two living children.  He was a widower living alone in a property in North Wales.  He had a pension of over £2,000 per month, savings and an investment bond.  When he started to show symptoms of dementia he appointed his daughter as sole attorney with his son as replacement. The Power was registered in February 2010 and the defendant acted under the LPA until her father died in October 2013.

For the first few months following registration, the donor lived in his own home.  Everything was paid by standing order from his bank account.  However, the daughter then moved the donor into her home and her daughter and her friends lived in his house rent free.  He entered care about a year later.

The son saw one of the bank statements and became concerned.  He contacted the OPG who then investigated.  They found that significant sums had been withdrawn from the bank accounts and bonds and transferred into the daughter’s own account. The OPG contacted North Wales Police.

The daughter admitted that she had spent some of her father’s money on things that were not in his best interests and on herself and other people. In respect of sums that had been shown to have been expended on repairs to two vehicles, she said that was in her father’s interests because the vehicles were used to take him out. In respect of money that had been spent on a kitchen in her home, she said that that was for his benefit because her intention was to have him return to live with her after he went into the care home in November 2011.

During the trial the prosecution case was summarised for the jury as follows, “the prosecution say that once you have considered all of the evidence in this case, including the large amount of money withdrawn by the defendant from her father’s accounts, the regular standing orders and the bank transfers she was making from her father’s accounts to her own, her failure to keep any record of the expenditure of her father’s money, the car bills and credit card purchases clearly for her own benefit and paid for with her father’s money and the £6,000 spent on a new kitchen for her own property you will be satisfied of her guilt.”

The legal issue raised by the defence was that the prosecution had not identified which part of the money the daughter had spent had been fraudulently and dishonestly used.  The prosecution responded saying that although it was accepted that some of the money was spent on her father, “she had been spending the sums to such a degree and in such high quantities in certain given months that she could not possibly have been acting honestly. She must have known that what she was doing was dishonest. The prosecution said there were no tangible assets which could be pointed to (such as holidays or expensive assets which had been acquired); that the father’s money had been frittered away on minor assets. Furthermore the sums which had been taken from the father’s account had been either amounts taken out in cash (through an ATM or by cheques made out to cash) or had been transferred directly into the defendant’s account. Thus, for example, although the prosecution could point to a sum of £1,200 spent on a “makeover”,
the cheque for that sum had been drawn on the defendant’s bank account. It was, therefore, not possible to say that specific sum came from her father’s funds“.

The Recorder who heard the initial case stayed the case and discharged the jury because the prosecution could not identify and specify the unlawful transactions. The prosecution appealed.

On appeal, the Court of Appeal said that it was clear that the course of the argument being made by the prosecution was that there was a general deficiency of funds that they contended had been misappropriated.

The prosecution contended that that general deficiency could be arrived at by allowing, against the total sum of £75,000 that had been withdrawn from the father’s accounts (either in cash or by transfer to the defendant’s bank account), the reasonable sums that would have been incurred in caring for the father. The reasonable sums that would have been incurred in caring for the father would be calculated by reference to the three periods to which we have referred, namely, the time during which he was at his own house, the time during which he was at the defendant’s house and the time during which he was at the nursing home. Taking the last by way of example, it appears that in the period between November 2011 and June 2012 approximately £14,000 had been withdrawn in cash during a period where the costs of the nursing home were entirely covered by direct payments from the father’s account to the nursing home. The general deficiency for that period would be calculated by allowing a reasonable sum for the incidental expenditures that would have been incurred for the benefit of the father as against the substantially greater sum that had been taken in cash. A similar process could be taken for the other two periods.

The Court of Appeal concluded that the prosecution must continue in the Crown Court.  The Court of Appeal was not complimentary about the way proceedings had been dealt with by the defence saying, “it is a regrettable feature of this case, as we observed at paragraph 5, that despite the pre-trial hearings, counsel then representing the defendant had not raised any issue as to the adequacy of the way in which the prosecution had put its case. This was a failure that should not have occurred and resulted in three days of court time being wasted before the Recorder. This type of waste of resources must not be repeated. Those attending pre-trial hearings must give the proper attention to cases. If they do not, then it is open to the trial judge to proceed with the trial without entertaining applications of this type on the basis that they should have been made earlier; it will not matter that the advocate at the pre-trial hearing was different; it was the duty of that advocate only to appear at the pre-trial hearing on the basis that the advocate was fully familiar with the case and had the requisite competence to do so“.

Comment

In cases where financial abuse has taken place, it can be extremely difficult to pin down exactly which money was used dishonestly as, as we saw in this case, many of the transfers are direct into the abuser’s bank account.  Readers will recall cases where payments have been made directly out of the donor’s bank account, for example to utility companies the donor did not use or dating sites which the donor was not a member of, but the pattern is typically more akin to this case.  It can be frustrating for all concerned when it appears obvious that a huge amount of money has been withdrawn but not spent on the donor.  There are important lessons here for the prosecution in framing the cases but hopefully this will make the police and prosecutors more inclined to bring financial abusers to justice.  This sort of behaviour is theft every bit as much as if the abuser had been a stranger who walked up to an elderly person in the street and demanded that they hand their money over, and the results can be equally devastating.

July 2015

TJC, R v [2015] EWCA Crim 1276