The Court of Protection’s approach to attorneys and support payments
The subject of support payments has been very topical of late and we have seen a number of cases come through to the Court of Protection. This case is a little different because it involves attorneys.
Comment
There is extremely helpful guidance here from Senior Judge Lush, firstly on the question of mileage, secondly on the point of whether attorneys should be paid for the administration work they do in the absence of any agreement with the Donor (answer, no) and thirdly, clarification on gratuitous care. It is useful it is made clear that gratuitous care payments can be made to attorneys. In common with a lay Deputyship situation, these payments always ought to be approved by the Court of Protection.
Case Details
The subject of support payments has been very topical of late and we have seen a number of cases come through to the Court of Protection. This case is a little different because it involves attorneys.
The case involved Bill and Betty, who both suffered from dementia. Bill died three days before the hearing. They had three children, Theresa, Susan (who suffers from bipolar disorder and fibromyalgia), and Stephen. The couple had originally appointed all three children as their attorneys under an EPA but in September 2007 they signed another EPA revoking the earlier EPA and appointing Theresa and Stephen jointly. At the time Susan was having health problems and did not want to be an attorney anyway. Bill and Betty had a bungalow worth £275,000 and life savings of £50,000. Their joint income was just over £29,000 with just over £21,000 of outgoings. This included £150 paid to each of their children each month.
The annual allowance for Inheritance Tax purposes, £3,000, had also been transferred into a “contingency care fund” each year with the purpose of topping up care fees if either parent went into residential or nursing care.
Relations with Susan were difficult; “the attorneys have consistently had difficulties in dealing with their sister, Susan. In 2009, when it was no longer safe for their mother to drive, they agreed to let Susan have their mother’s car. In 2014 she asked them to buy her a new car from their parents’ funds. The attorneys refused and Susan retaliated by reporting them to the OPG for siphoning away their parents’ money into the two savings accounts”.
The Public Guardian investigated and the attorneys transferred all of the payments into the contingency care fund back into their parents’ accounts.
The OPG requested the attorneys seek retrospective approval for the £150 paid to each attorney each month. They also wanted the arrangement to be continued. The attorneys said “without some form of financial support the level of care we provide to maintain our parents in their own home would be unsustainable. This is the most economical way of supporting our parents. If we had to rely on outside agencies to do the tasks we do out of love for our parents the cost to their estate would be far greater.”
The attorneys were not in agreement with the OPG’s stance:
“We are extremely disappointed to be making this application for retrospective permission for the £150 for each of us (Bill and Betty’s three children) for travel and expenses from their joint estate. Equally we are angry that the money we have saved from their estate for third party ‘top up’ fees has been paid back into their estate. In our view the OPG have forced us to act against the best interests of our parents. We now have no flexibility in choosing future care homes.
Our parents wish to remain together in their own home for as long as possible, and all our decisions and actions have been to that end. The £450 we have taken for care and expenses is a fraction of the cost had we involved outside agencies.
You will appreciate that in 2009 we had to plan for the future. Both our parents had been diagnosed with Alzheimer’s in 2008 and we had to make decisions quickly. We had no idea what the future might hold or what care decisions might have to be made, only that we needed money for them.
We understand that our file has been passed to the judiciary. You will note that none of the above arrangements have been ‘hidden’, and we have tried to keep comprehensive records of all transactions and receipts in a perfectly open manner, and retaining all bank statements and receipts.
Despite engaging care agencies in 2013 to oversee medication and meals, this has not reduced our own weekly tasks. Indeed, now that our parents are under greater observation, our ’emergency’ calls have increased. The carers have informed us of various problems which necessitate extra journeys in order to solve them.
We registered the EPA in October 2009 and in October 2010 we arranged for ourselves and my sister Susan to receive £150 per calendar month to offset travel and care expenses from the joint account of my mother and father. Prior to the above date and for the previous eight years, the three of us had undertaken all tasks relating to our parents’ care without recompense from their funds. However with the degeneration of their condition, care became more intensive, petrol prices increased considerably and, as my parents lost the capacity to drive, this was not economically sustainable.”
The attorneys also discussed travel expenses. They charged travel expenses for visits for care, gardening, house cleaning and taking meals. They also pointed out that they took their parents to medical appointments, visit relatives in various places, taking their parents to their houses and bringing them back, admin etc. They pointed out that they both incurred car damage on trips related to their parents. There was also significant mileage when the parents were having a wet room installed. The attorneys pointed out that Stephen lived further away and so was at a financial disadvantage.
The attorneys also set out all of the other things they did for their parents, such as dealing with care agencies and utility companies, the DWP and insurance companies as well as dealing with tradesmen, DIY, washing, gardening, local shopping as well as general postage and printing.
Unfortunately, relations in the family had broken down and there had been two major disputes in front of the parents during the last year. An accountant had advised the attorneys to seek a direction from the Court that the siblings should not visit their parents at the same time until things were amicable again.
At the hearing, Senior Judge Lush explained the Court’s approach;
“I explained to them that what we are seeking to achieve is a neutral position whereby they are not financially at a disadvantage through acting as their parents’ attorneys, but they are not actually making a profit from their role.
I read to them paragraph 7.60 of the Mental Capacity Act Code of Practice, which says that:
“Attorneys must not take advantage of their position. Nor should they put themselves in a position where their personal interests conflict with their duties. They also must not allow other influences to affect the way in which they act as an attorney. Decisions should always benefit the donor, and not the attorney. Attorneys must not profit or get any personal benefit from their position, apart from receiving gifts where the Act allows it, whether or not it is at the donor’s expense.”
Senior Judge Lush made some important comments on mileage;
“I would prefer not to be cornered into approving any particular mileage rate. If the Public Guardian wishes to give guidance on such matters, that’s up to him. What I shall say is simply by way of general observation.
Theresa and Stephen based their calculations on a mileage rate of 45p, which was suggested to them by the AA. The AA, in turn, bases its mileage rates on those issued annually by HM Revenue and Customs (‘HMRC’). In the current financial year (2015/16) the mileage allowance payments paid by an employer to employees who use their own cars or vans for business journeys are 45 pence for every business mile for the first 10,000 miles and 25 pence for every business mile thereafter.
It will be noted that these rates apply to ‘every business mile’. In the context of the journeys made by an attorney acting under an EPA, the person paying the mileage allowance payment (the donor) is almost invariably a close relative who lacks mental capacity, rather than a multi-national corporation or other business employer.
In my judgment, the business mileage rates quoted by HMRC should be substantially discounted to reflect the fact that these are not ‘business’ rates but domestic rates. When dealing with the affairs of an elderly and incapacitated relative, attorneys are generally expected to act out of common decency and not to profit from their position”.
Taking the issue of the other expenses incurred by the attorneys next, Senior Judge Lush found that Bill and Betty did not provide expressly for their attorneys to be remunerated over and above receiving out of pocket expenses. Senior Judge Lush made it clear that he did not propose to allow any remuneration for the actual management of their parents’ property and affairs. He said, “from the evidence they have produced, there is nothing to suggest that there was an understanding that they would be rewarded on a quantum meruit (‘how much it is worth’) basis, and there is nothing exceptional about the paperwork they have completed and are continuing to deal with that warrants remuneration”.
Senior Judge Lush finally considered a payment to the attorneys for care and case management, referring to the recent case Re HLN [2015] EWCOP 77. His thoughts were as follows :
“I am prepared to allow Theresa and Stephen to be remunerated for the tasks they have performed as care support workers in making it achievable for their parents to remain in their own home for as long as possible and, in Bill’s case, until his death.
There is a commercial value for many of the tasks they perform, though I would be reluctant to place a specific value on their services in the absence of a professional valuation, such as the report produced in Re HLN. The expert in Re HLN quoted an hourly rate of £13.50, which the court would normally discount by at least 20% to reflect the fact that no income tax and national insurance contributions are payable in respect of the amounts paid.
Suffice it to say that I am satisfied in Theresa’s case that the care support she provides and the travelling expenses she incurs merit the payment of a sum of £150 a month from her parents’ funds. Stephen does slightly less than his sister Theresa in terms of care support, but has to travel a greater distance to perform these functions and, on balance, I am satisfied that he too should continue to pay himself a composite allowance of £150 a month in respect of travelling expenses and care support.
Accordingly, I retrospectively approve the payment of these allowances and I also approve the continued payment of an allowance of £150 a month to Theresa and Stephen until further order. I leave it to them to exercise their discretion to reimburse Susan for any reasonable out-of-pocket expenditure she incurs and to pay her a reasonable allowance for any care support services she provides to their mother”.
Senior Judge Lush agreed with the accountant ie; he did not consider that the two attorneys had profited from their duties in administering the affairs of their parents. He said;
“I am satisfied that the payments of £150 a month each to Theresa and Stephen were in their parents’ best interests and continue to be in their mother’s best interests, because:
(a) the services they provided were reasonably required to meet their parents’ care needs, as are the services they continue to provide for their mother;
(b) the payments are currently affordable and sustainable;
(c) they represent a considerable saving on the commercial cost of providing these services; and
(d) in the absence of any express provision made by the donors in their EPAs for the attorneys to be remunerated for acting as attorneys and to be rewarded for providing care support services, these payments strike a reasonable balance between ensuring that Theresa and Stephen are not financially disadvantaged by acting as their parents’ attorneys, but that they are not actually making a profit from their position”.
December 2015
