By Holly Mieville-Hawkins, Senior Associate and Head of Mental Capacity at Michelmores LLP
When an attorney or deputy acts in a way that is in breach of their duties, it can cause significant losses to the estates of those that they represent. That is why it is important to know the warning signs that all may not be well, the standards that they should be held to, and how to remove them.
Throughout this article, 'P' refers to the person that lacks capacity to manage their finances.
The potential red flags for an attorney/deputy relationship that may need some attention can include:
• Lack of involvement of P;
• Decision making that is contrary to P’s expressed wishes and feelings;
• Inappropriate attitude to risk;
• Making decisions that are outside of attorney/deputy authority, including gifting;
• P’s needs not fully met (think care, clothing, food, transport, housing);
• Sudden appearance of previously uninvolved relatives;
• Sudden changes or proposed changes to P’s Will or attorney/deputy; and
• Relationship breakdown between P and deputy/attorney.
The Law Society has published an excellent guide on best practice when there are concerns of financial abuse. Retrospective applications for ratification of acts that have exceeded deputy or attorney authority can be made, but there can be no guarantee of success.
The first step if there are concerns of wrongdoing will be to discuss concerns with the potential wrongdoer and advise that they seek guidance from the Office of the Public Guardian or a professional. Ideally, they will either change their behaviour or agree to step down. However, if this is not the case, then an application to the Court of Protection may be required. In an ideal world, any application for the removal of an attorney or deputy would be done with the attorney or deputy's consent, as this will reduce costs and delays for all involved. However, this cannot always be achieved and often such applications will be contentious.
Grounds for removal
Enduring Power of Attorney
The Court of Protection can only remove an attorney under a registered enduring power of attorney (EPA) on the following grounds ((paragraph 16(4) of schedule 4 to the Mental Capacity Act 2005 (MCA 2005)):
• Fraud or undue pressure was put on the donor to create the EPA
• Having regard to all the circumstances, and in particular the attorney's relationship to or connection with the donor, the attorney is unsuitable to be the donor's attorney
There are some clear examples where an attorney is simply wholly unsuitable, including Public Guardian v MF  EWCOP 68, where the attorney failed to pay his mother's care home fees, didn’t provide funds for toiletries, and claimed over £117,000 in 'out of pocket' expenses. Additionally, an attorney or attorneys can be removed where disagreements between warring sibling attorneys mean that the proper administration of P's affairs cannot take place, as the hostility from one attorney to another effectively impedes any proper communication taking place (Re F  3 All ER 277).
Lasting Power of Attorney
The grounds for removing an attorney under a registered LPA are slightly different. The Court of Protection can also make an order for revocation of an LPA in relation to one or all attorneys, on the following grounds (section 22(4)(b) of the MCA 2005):
• Fraud or undue pressure was applied to the donor to create the LPA
• The attorney has behaved, is behaving, or is proposing to behave in a way that contravenes their authority or is not in the donor's best interests
These are in addition to the right of the Court to declare that the LPA was invalidly created or has been revoked and should thus be removed from the register.
When considering whether to remove an attorney, the Court takes the fact that the donor appointed that person to be their attorney as an important written expression of the donor's wishes and feelings regarding who should manage their funds (Re RG  EWCOP 2).
Similarly, when a donor has changed their mind about who should be attorney, but lacks capacity to revoke the LPA, then the Court should take those views into account (SAD v SED  EWCOP 3).
Further, where the Court has concerns about an attorney, but is of the view that those concerns can be mitigated by closer supervision, it can revoke the LPA and appoint the attorney as a deputy (Re AMH  EWCOP 70).
When considering whether an attorney has behaved in a way that is contrary to the best interests of P, the court can consider the attorney's behaviour in the wider world, not just in their role as attorney (Re J (unreported), 6 December 2010, CoP).
Similarly to attorneys acting under an EPA, where attorneys are unable to work together to the extent that they are unable to operate the LPA for the purpose that it was intended, they may not be acting in the donor's best interests, which is a ground for the court to revoke the LPA (Re EL (revoking a lasting power of attorney)  EWCOP 30).
The Court can also make a proactive removal of an attorney when they are proposing to act in a way that contravenes their authority or is inconsistent with the donor's best interests (Re KC  EWCOP 62).
The CoP has authority to remove a deputy under section 16(8) of the MCA 2005, and the wording and grounds mirror that of removal under an LPA. In addition, a deputy can be removed if they act inconsistently with the wording of the Order. Therefore, careful attention must be given to the wording and also the reporting requirements of a deputy.
Whilst each case is different, the approach the Court takes is likely to have the following starting point (Re B (unreported, 15 August 2011):
• An application for the removal of a deputy may be made by any interested person, including P;
• The burden of proof is on the person seeking a change in the status quo, on the usual civil standard;
• A reason for the change of status quo must usually be given;
• If there is no assertion that the existing deputy is unsuitable, or the applicant fails to prove that the existing deputy is unsuitable, strong evidence is needed that it is in P's best interests to discharge the existing deputy and appoint a new one, in accordance with s.4 MCA 2005.
In the recent case of Kambli v The Public Guardian  EWCOP 53 (27 August 2021), the Court confirmed:
"When a deputyship encounters difficulties, the response of the Court should not be to change the appointment as default response. Changing deputy inevitably incurs costs which could otherwise be avoided and risks being perceived as 'rewarding' negative behaviour, which in turn undermines the prospects of future stability. Rather the Court should probe the actual circumstances, with a view to salvaging working relationships if possible."
As with attorneyship, P's wishes and feelings will be a key consideration (Essex CC v CVF  EWCOP 65).
Any application for the removal of an attorney or deputy should be made using the standard CoP forms COP1, COP1A, COP1F, COP3 and COP24, setting out the grounds for removal, with evidence in the form of bank statements and clearly documented examples of concerns, as far as possible. The usual application fee of £371 applies.
The attorney or deputy to be removed should be listed as a respondent. The case will be appointed to the usual pathway in accordance with Practice Direction 3B. The Official Solicitor may well be appointed to represent P independently.
• The CoP is unable to make orders requiring that any defaulting deputy or attorney is imprisoned or fined, or must give back misappropriated funds to P
• The new deputy or attorney has a duty to investigate the removed attorney or deputy's financial wrong doing, and/or any court findings, and consider if further legal action is required
• For a deputyship, the security bond will be called in (London Borough of Enfield v Matrix Deputies Ltd  EWCOP 22)
• The new attorney or deputy must consider if a statutory Will is needed
• Claim on attorney or deputy's professional indemnity insurance if appropriate
This article is featured in the winter 2022 edition of the quarterly news digest, Entitlement. Click the image below to download your free copy of Entitlement for more informative articles.