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Financial abuse

13 June 2013

What is the issue?

  • As a result of economic recession, social change and advances in technology the risk of financial abuse is increasing. Solicitors are well placed to identify possible or actual financial abuse in the context of particular retainers.
  • You have a responsibility to be aware of financial abuse and to understand your role in both preventing it and taking action to protect clients who have been financially abused.
  • Financial abuse covers a wide variety of activities from mishandling finances to fraud, but may broadly be described as a violation of an individual's rights relating to their financial affairs or assets.
  • Anyone can be a victim of financial abuse, but particular groups may be especially at risk. Age and specific disabilities may have an impact on the individual's capacity to make decisions which places them at increased risk of abuse.
  • People with learning disabilities or other conditions that have led to cognitive impairment, and in some instances, people who have poor mental health may also be particularly at risk.
  • This practice note is aimed to assist you in identifying and acting upon suspected or actual financial abuse in the course of your practice.
  • The SRA has published a Handbook, which sets out all the SRA's regulatory requirements. It outlines the ethical standards that the SRA expects of law firms and practitioners and the outcomes that the SRA expects them to achieve for their clients.
  • An overview of outcomes-focused regulation (OFR) can be found on the Law Society's website. This provides information on what the SRA Handbook contains, including a summary of the chapters in the Code of Conduct and a summary of the reporting requirements included throughout the Handbook.

Legal status

This practice note is the Law Society's view of good practice in this area. It is not legal advice.

Practice notes are issued by the Law Society for the use and benefit of its members. They represent the Law Society's view of good practice in a particular area. They are not intended to be the only standard of good practice that solicitors can follow. You are not required to follow them, but doing so will make it easier to account to oversight bodies for your actions.

Practice notes are not legal advice, nor do they necessarily provide a defence to complaints of misconduct or of inadequate professional service. While care has been taken to ensure that they are accurate, up to date and useful, the Law Society will not accept any legal liability in relation to them.

For queries or comments on this practice note contact the Law Society's Practice Advice Service.

Professional conduct

The following sections of the SRA Code are relevant to this issue:

  • Chapter 1 on Client Care
  • Chapter 4 on Confidentiality and disclosure
  • Chapter 11 on Relations with third parties

SRA Principles

There are ten mandatory principles which apply to all those the SRA regulates and to all aspects of practice. The principles can be found in the SRA Handbook.

The principles apply to solicitors or managers of authorised bodies who are practising from an office outside the UK. They also apply if you are a lawyer-controlled body practising from an office outside the UK.

Terminology

Must  

A specific requirement in legislation or of a principle, rule, outcome or other mandatory provision in the SRA Handbook. You must comply, unless there are specific exemptions or defences provided for in relevant legislation or the SRA Handbook.

Should  

- Outside of a regulatory context, good practice for most situations in the Law Society's view.

- In the case of the SRA Handbook, an indicative behaviour or other non-mandatory provision (such as may be set out in notes or guidance).

These may not be the only means of complying with legislative or regulatory requirements and there may be situations where the suggested route is not the best possible route to meet the needs of your client. However, if you do not follow the suggested route, you should be able to justify to oversight bodies why the alternative approach you have taken is appropriate, either for your practice, or in the particular retainer.

May  

A non-exhaustive list of options for meeting your obligations or running your practice. Which option you choose is determined by the profile of the individual practice, client or retainer. You may be required to justify why this was an appropriate option to oversight bodies.

The Law Society also provides a full glossary of other terms used throughout this practice note

1 Introduction

1.1 Who should read this practice note?

All solicitors who advise clients that are or may be at risk of financial abuse, in particular those conducting private client work involving financial planning, execution of wills or LPAs.

1.2 What is the issue?

As a result of economic recession, social change and advances in technology the risk of financial abuse is increasing. Solicitors are well placed to identify possible or actual financial abuse in the context of particular retainers.

You have a responsibility to be aware of financial abuse and to understand your role in both preventing it and taking action to protect clients who have been financially abused.

Financial abuse covers a wide variety of activities from mishandling finances to fraud, but may broadly be described as a violation of an individual's rights relating to their financial affairs or assets.

Anyone can be a victim of financial abuse, but particular groups may be especially at risk. Age and specific disabilities may have an impact on the individual's capacity to make decisions which places them at increased risk of abuse.

People with learning disabilities or other conditions that have led to cognitive impairment, and in some instances, people who have poor mental health may also be particularly at risk.

This practice note is aimed to assist you in identifying and acting upon suspected or actual financial abuse in the course of your practice.

The SRA has published a Handbook, which sets out all the SRA's regulatory requirements. It outlines the ethical standards that the SRA expects of law firms and practitioners and the outcomes that the SRA expects them to achieve for their clients.

An overview of outcomes-focused regulation (OFR) can be found on the Law Society's website. This provides information on what the SRA Handbook contains, including a summary of the chapters in the Code of Conduct and a summary of the reporting requirements included throughout the Handbook.

2 Financial Abuse

2.1 What is financial abuse?

There is no statutory definition of financial abuse. However, statutory guidance published by the Department of Health entitled 'No Secrets' defines financial abuse as follows:

'Financial or material abuse, including theft, fraud, exploitation, pressure in connection with wills, property or inheritance or financial transactions, or the misuse or misappropriation of property, possessions or benefits. (DH/Home Office, 2000)'

More information about 'No Secrets' can be found in 6.3.1 Codes of practice.

2.2 Forms of financial abuse

'No Secrets' is the English guidance to local authorities on safeguarding, and it identifies financial or material abuse as including a range of activities, which are listed below with examples of how they might manifest in practice.

In Wales, the applicable guidance is 'In Safe Hands', and for cross-border cases, it should be noted that the Scottish legislative regime is different.

  • Theft - either physically, or through transfer of funds from the vulnerable person
  • misappropriation or misuse of money or property - for example, improper use of money or assets when handling it for a vulnerable person under informal arrangements
  • exerting undue influence to give away assets or gifts - this can include placing inappropriate pressure on a vulnerable person to change their will, or make gifts they otherwise would not or signing over the family home to one relative when the older person is about to go into residential care
  • putting undue pressure on the older person to accept lower-cost/lower-quality services in order to preserve more financial resources to be passed to beneficiaries on death
  • carrying out unnecessary work and/or overcharging - for example, tradesmen advising repairs for non-existent problems to property, or offering a service such as will writing accompanied by pressure selling, work for which is overcharged, and/or charged in advance
  • misuse of older persons' assets by professionals - for example, by accountants or legal professionals with access to client funds
  • misuse of enduring/lasting powers of attorney - use other than as intended or further than as limited by the document
  • misuse of welfare benefits by appointees appointed to manage such benefits on behalf of a person lacking capacity to manage them
  • misuse of Direct Payments by paid carers or family members instead of using the money for the benefit of the recipient
  • salesmen encouraging certain people with learning disabilities who may lack capacity for their finances to enter into contracts or changing suppliers (for example for mobile phone services) when they do not understand their contractual responsibilities. This can also arise with older people, who may have limited capability to understand such contracts
  • apparent theft or loss of possessions, for example in contexts such as hospitals or care homes, or where people have carers at home. Assumptions that a person is fully protected once in these contexts should be avoided, as they can remain vulnerable to any of the above forms of abuse.

3 Identification of adults vulnerable to abuse and precautions to be taken

3.1 Groups at particular risk

Although anyone can be the victim of financial abuse, certain groups are particularly at risk.

3.1.1 Older people

In particular, older people are extremely vulnerable to financial abuse whether perpetrated by relatives, carers or strangers.

You should not assume that any person accompanying your client has their best interests at heart You should be alert to the nature of the instructions you receive and the manner or behaviour of someone who accompanies the client.

A study found the following factors predispose an older person to financial abuse. This is not an exhaustive list and some factors may apply to persons other than older people:

  • advanced age
  • stroke
  • dementia or other cognitive impairment
  • physical, mental or emotional distress
  • depression
  • recent loss of spouse or divorce
  • social isolation
  • middle or upper income bracket
  • taking multiple medications
  • frailty.

More information on the study, 'Strategy for Recognising, Preventing and Dealing with the Abuse of Older and Vulnerable People', Solicitors for the Elderly, January 2010 can be found at section 6.3.3.

You may also need to consider a client's background in order to assess their capability. For example, some older women may not have had an involvement in the family finances, so a partner's death can have a greater impact on their capability than is immediately evident.

3.1.2 Other vulnerable adults  

While older people may be particularly vulnerable other groups may also be vulnerable to financial abuse, including individuals with learning disabilities, poor mental health and acquired brain injury (eg stroke).

People with sensory impairments may also be at particular risk of abuse, especially where they are relying on others for information and assistance managing their affairs.

Government guidance and case law commonly cite the Law Commission Report Who decides?: making decisions on behalf of mentally incapacitated adults(1997) when defining 'vulnerable adults'.

Under this definition, a vulnerable adult is a person over 18 years of age who:

'is or may be in need of community care services by reason of mental or other disability, age or illness and who is or may be unable to take care himself or herself, or unable to protect himself or herself against significant harm or serious exploitation.'

More information can be found at 6.5.1 Law Commission Report.

The Law Society acknowledges the view of many stakeholders that use of the word 'vulnerable' can be perceived as negative and can undermine the fact that the fault of any abuse lies solely with the perpetrator.

'Vulnerable adults' has been used in this document only for clarity as the existing legal term used in applicable guidance, and is only intended to refer to people at greater risk of financial abuse.

Capacity can fluctuate over time alongside other circumstances such mental health problems, and you should therefore assess capacity at the point a decision is being made by the client.

People with fluctuating mental health conditions may be aware that their capacity to instruct and to manage their financial affairs can vary, and may want advice to help them plan for times when they lack capacity. See section 3.3.2 on 'Capacity to instruct a solicitor' for further details.

3.2 What to be alert for - known indicators for abusive activity

Financial abuse indicators can include the following scenarios and even though these indicators have been set out for elderly persons, they can also be found in financial abuse of other client groups such as people with learning disability etc:

  • signatures on cheques, or other documents that do not resemble the vulnerable person's signature or are signed when the person is unable to write
  • any sudden changes in bank accounts, including unexplained withdrawals of large sums of money by a person accompanying the vulnerable person
  • the sudden inclusion of additional names on an vulnerable person's bank accounts or benefits payments - often these individuals are unrelated to the older person
  • abrupt changes to or creation of wills that leave most or all of the assets to a new friend or only one relative
  • the sudden appearance of previously uninvolved relatives claiming their rights to a vulnerable person's affairs and possessions
  • unexplained sudden transfers of assets to a family member or someone outside the family
  • numerous small sums of cash being 'given' to, or money regularly disappearing after visits from a relative or neighbour
  • numerous unpaid bills when someone else is supposed to be paying bills for the vulnerable person
  • unusual concern by someone that an excessive amount of money is being expended on the care of the vulnerable person
  • lack of amenities such as TV, personal grooming items, appropriate clothing items, that the vulnerable person should be able to afford
  • the unexplained disappearance of funds or valuables such as jewellery
  • deliberate isolation of a vulnerable person from their friends and family, resulting in the carer alone having total control.

From A Strategy for Recognising, Preventing and Dealing with the Abuse of Older and Vulnerable People', Solicitors for the Elderly, January 2010. See further information at 6.3.3 Third party guidance.

While solicitors may be more likely to notice some indicators than others, depending on the nature of their practice (for example, with regard to will making, gifts or transfer of assets), they may also become aware of others during the course of their work for a client.

Mental health awareness training and disability equality training can assist in identifying potential abuse. You may wish to dedicate some of your CPD hours to such courses to develop this awareness.

3.3 Identification and the assessment of capacity

Clients who may exhibit particular vulnerability to financial abuse may also lack capacity to provide instructions for a transaction.

Clients who lack capacity may be at greater risk of abuse; for example, they may not understand the risks and consequences of making a substantial gift of their assets or of transferring their family home into the names of relatives.

Solicitors are service providers under equality legislation and you should use plain English when speaking or writing to the client about measures that would protect them from abuse.

If your client does lack capacity, then your role and obligations are different to when the client has capacity. The assessment of mental capacity is governed by the Mental Capacity Act 2005 (MCA 2005).

3.3.1 Principles  

The MCA 2005 sets out a number of principles for its application, the first three of which act as a starting point for assessing capacity:

  • A person must be assumed to have capacity unless it is established that he lacks capacity - Section 1(2)
  • A person is not to be treated as unable to make a decision unless all practicable steps to help him to do so have been taken without success - Section 1(3)
  • A person is not to be treated as unable to make a decision merely because he makes an unwise decision - Section 1(4)

The MCA 2005 Code of Practice provides a comprehensive explanation of how these principles are applied.

3.3.2 Capacity to instruct the solicitor  

If you are in any doubt as to whether a client has capacity to provide instructions, you must perform a capacity assessment before any instructions are acted upon.

The assessment should be conducted with the client alone without other family members being present. It should not be assumed that anyone accompanying the client has their best interests at heart.

However, it may be useful to observe how any relative or friend who has accompanied the client behaves towards the client and vice versa to identify whether there is the possibility of undue influence or pressure.

Section 2(1) of the MCA sets out a two stage test for establishing a lack of capacity, explained in the Code of Practice as determining whether:

  • they have an impairment or disturbance (for example, a disability, condition or trauma) that affects the way their mind or brain works, and
  • the impairment or disturbance means that they are unable to make a specific decision at the time it needs to be made.

Further information can be found in section 6.3.1 Codes of practice.

An impairment or disturbance can be temporary, and the relevant time for establishing whether one exists is the time the decision needs to be made.

For a person to lack capacity to make a specific decision, it must be established on the balance of probabilities that they are unable:

  • to understand the information relevant to the decision, or,;
  • to retain the information, or,;
  • to use or weigh up the information as part of the process of making the decision, or
  • to communicate the decision (whether by talking, sign language, or any other means).

Most importantly, section 3(4) states that the information relevant to a decision includes information about the reasonably foreseeable consequences of deciding one way or the other or failing to make a decision.

This provision is useful for assessing people with borderline or fluctuating capacity. If the person fails any one of the elements listed above, then they are treated as lacking capacity for that decision.

3.3.3 MCA 2005 and undue influence or misuse of power  

Under MCA 2005, there remain a number of decisions where case law determines whether or not the person has the capacity to decide a matter.

This includes capacity to make a will (Banks v Goodfellow (1870) LR 5 QB 549) and capacity to instruct a solicitor to take legal proceedings ( Masterman-Lister v Brutton & Co [2002] EWCA Civ 1889).

There are a minority of cases where a person may appear to have capacity under the MCA 2005 test but actually lacks capacity when they come under pressure from powerful relatives or friends. This can happen for example, to someone in the early stages of dementia or with a mild learning disability.

In DL v A Local Authority & Ors [2012] EWCA Civ 253 the Court of Appeal used its inherent jurisdiction to protect such vulnerable adults.

Since then, the inherent jurisdiction has been used infrequently to protect this group of people.

Further steps in assessing capacity  

In addition to the principles set out at the start of this section, the following list provides a summary of the relevant issues and actions you should bear in mind when assessing capacity.

The threshold test for establishing lack of capacity will vary depending on the seriousness of the decision being made, which for example may be of a different level when making a will, gift or lasting power of attorney.

Similarly, the formality of the assessment should relate to the seriousness of the decision. The assessment of capacity form (COP3) requires the form to be completed by a 'practitioner', which could be a psychologist, psychiatrist, or other registered medical practitioner. In some circumstances it can be signed by a registered therapist such as a speech therapist or occupational therapist.

When choosing a health professional to conduct a capacity assessment of your client, you should make sure he or she has a good understanding of the Mental Capacity Act

While there is an assumption of capacity under the MCA principles, you must be satisfied that the client has the requisite capacity to provide a given instruction.

You should not express a view on a client's capacity before conducting a formal assessment with them.

You should be careful to distinguish between the ability to express a choice (eg one beneficiary over another) and the capacity to understand the consequences and effects of a transaction involving the client's own interests. Under the MCA principles above, their choice does not have to be a wise one or one that you agree with.

If the client's capacity is in doubt, you should obtain a medical or other expert opinion (relevant to the matter affecting the client's capacity) when making the assessment of capacity in relation to specific decisions. This could be a specialist medical opinion, eg from a psychiatrist or geriatrician , a psychologist specialising in learning disability, or a neuro-psychiatrist or neuro-psychologist for a person with an acquired brain injury.

Your client might have had contact with local authority social services who may have already completed a pro forma assessment of capacity for the relevant issue. This should be shared free of charge with you upon request (subject to your client's consent) and provides a good reference point in deciding whether or not it will be necessary to proceed to arrange a further professional opinion on your client's capacity.

Where social care or minor financial decisions are involved, such as a decision to move into residential care, or relating to contact with certain family members, a capacity assessment form can be completed by the local authority social worker.

For treatment decisions or major financial decisions, you may prefer to consult the treating psychiatrist, rehabilitation consultant or general practitioner. You should approach medical or social professionals who know the client well, especially if the client presents as if they have capacity, but appears unduly influenced or intimidated when in the presence of a particular relative.

The Law Society and British Medical Association book Assessment of Mental Capacity (3rd Edition) provides guidance on how lawyers and health and social care professionals can ensure this process is thorough and best ensures the protection of your client.

You should be aware of Data Protection Act obligations and the Solicitors' Code of Conduct when seeking medical or other opinions More information about the data protection act can be found 6.3.2.

What happens when someone lacks capacity  

If a person lacks capacity to make a decision, then the best interests principle applies.

Those close to the family should be consulted, and the views and wishes of the person lacking capacity should betaken into account before family or professionals can proceed to make a best interests decision on behalf of the person (see s5 of the MCA 2005).

You should continue to consult and involve a person who lacks capacity to instruct in decisions and further steps to be taken. Ensuring that a person has an independent advocate can assist in this regard.

Any substantial financial transaction will require Court of Protection involvement if the client lacks capacity (see sections below on Powers of Attorneys and deputyship).

However, if you determine on your own assessment that it appears the client lacks capacity to instruct you, then you should discuss the need to obtain a formal assessment of capacity from a relevant professional with your client.

4 Taking action to prevent abuse

If you suspect financial abuse, deciding on the appropriate action will not always be a straightforward decision. This is especially so when taking into account the rules of client confidentiality.

Iif your client does not have capacity to make the relevant decision or take the action that they want to take, then arguably your duty of care to protect that person in the public interest has to be weighed against the duty of confidentiality.

It is important to work and plan together with a client to prevent financial abuse, for example by taking precautionary measures to protect against financial abuse during periods when the client anticipates they may be unwell.

This could include:

  • making an LPA
  • making arrangements for two signatures to be required for withdrawal of sums above a certain amount.

These planning decisions need to be taken carefully, and balanced against the risk of the client being exposed to a greater risk of financial abuse (for example, by their attorney).

If you have a reasonable belief that an offence has been committed against your client and you have their consent to notify the police and other appropriate authorities you should do so.

Other methods of protecting your client from financial abuse are detailed in the sections below.

4.1 Powers of attorney

Lasting powers of attorney (which continue to be valid after the person loses capacity, unlike a power of attorney) enable an adult to appoint a third party to exercise decision-making powers on behalf of the donor.

It is important that clients understand the risks as well as the benefits of granting these powers, and you should be aware of the potential for their abuse and build in appropriate safeguards.

You should take special care if a client arrives with a new friend or long lost relative who they wish to nominate as their financial attorney, particularly when there is a complex portfolio of assets or large assets.

This person may be taking advantage of the client. In this situation you may decide to enquire into the nature of the relationship with the client. Such a decision will be within your professional judgement and may assist in ascertaining whether the relationship is genuine or not, and that the instructions are in the interests of the client.

You should note that a specific capacity test applies to making a lasting power of attorney.

The same principles apply to enduring powers of attorney executed before the implementation of the MCA, as these are still lawful.

For further information on lasting powers of attorney, including client's capacity to make them, and building in safeguards against abuse, solicitors should refer to the Law Society Lasting powers of attorney practice note.

4.2 Gifts

Clients should be made aware of the nature of any gift as an outright transfer, and should be made aware of the risks any substantial transfers may increase regarding their ability to support themselves independently.

Potential beneficiaries of the client's will, such as family members, may have encouraged the client to make a gift in order to avoid taxes or nursing home fees.

As well as advising the client of the risks to their future independence that such gifts might entail, it may not be an effective way to avoid tax.

Further, the local authority may treat this gift as a deliberate deprivation of assets for the purpose of avoiding paying residential or nursing home fees, which results in the local authority charging full fees to the client.

For further information on gifts of assets, solicitors should refer to the Law Society Making gifts of assets practice note.

4.3 Wills

When drafting wills, you should be particularly alert for potential abuse in the following instances:

  • where the person making the will is not being allowed individual access to the you
  • where instructions come from a third party
  • where instructions are coming from a third party who is to benefit from the will
  • where a third party is always present at an interview with the solicitor
  • where a third party is using their own solicitor to prepare a will for a vulnerable person who has previously had their own solicitor.

4.4 Estate administration

You should always be aware of the potential for abuse where an elderly person wishes to appoint an attorney for the purposes of taking out a grant of probate or letters of administration.

Notice should also be taken of substantial 'interference' or influence where a third party is becoming involved in the administration of an unconnected person's estate where they do not benefit or have no indirect benefit.

4.5 Mis-selling

Some groups at particular risk may lack capacity for their finances to enter into contracts, to change suppliers or to understand their contractual responsibilities.

If you suspect your client has been mis-sold a product or service, you may wish to consider approaching the relevant ombudsman. For example, for mis-selling of financial products, you or the client can contact the Financial Ombudsman. More information about the Financial Ombudsman can be found at 6.4.2 Financial ombudsman.

4.6 Language and cultural barriers

You should take great care to correctly identify the relationship between clients and any person accompanying them.

The exact nature of relationships can become confused when interpretation is necessary for communication with the client, or where the client is from a cultural background that identifies such relationships differently (for example, using familial language to describe someone not formally related to the client).

If you are concerned that the client's wishes are not being communicated accurately by someone that they have elected to translate for them, you should consider whether to engage an independent translator.

It is also important to ensure that contractual terms and consequences are clearly understood by clients from cultural backgrounds that may hold different understandings of contractual and propriety concepts.

5 Addressing suspected abuse - what steps to take

5.1 Confidentiality

This duty is covered in Chapter 4 of the SRA Code of Conduct. Outcome 1 requires that:

'The affairs of the clients are kept confidential by you and your firm unless disclosure is required by or permitted by law or the client consents'.

The SRA have published further guidance to help you meet this outcome. You can find this here

For advice on the Code of Conduct, solicitors should call the SRA professional ethics helpline on 0370 606 2577.

Solicitors may also find it useful to review the ICO guidance on disclosure under the Data Protection Act and the OPG Safeguarding Policy on sharing of information (section 6.4.1 below).

5.2 Office of the Public Guardian

The Office of the Public Guardian (OPG) has responsibility for investigating concerns about the actions of registered attorneys and deputies (or where the Court has authorised an action under a single order).

It has an investigations unit with a dedicated phone number which can be found at section 6.4.1 below. Its Safeguarding Vulnerable Adults policy outlines what they can do if investigating any of the above.

It could take any of the following actions:

  • apply to the Court for the suspension, discharge or replacement of a deputy
  • apply to the Court for an Order to be varied or for a deputy's security bond to be called in or varied
  • apply to the Court for a revocation of a power of attorney
  • inform the police, where a crime may have been committed
  • require a deputy to provide a final report where the person he or she was acting for has died or the deputy has been discharged.
  • monitor the situation through ongoing close supervision of the deputy in the case
  • inform external agencies. This will include notifying any professional body, where the perpetrator is a member, and the Independent Safeguarding Authority (from October 2009).

The OPG policy sets the following time limits for local authorities:

  • same-day referral to adult social care teams or relevant outside organisations
  • the next day for any decision to investigate, and
  • five working days toformulate a multi-agency plan for assessing the risk and addressing any immediate protection needs.

In practice, if the local authority have already placed the vulnerable adult into safeguarding, and are planning legal action against the suspected abuser, the OPG and the local authority will work together to decide which agency will take the lead for action.

If there are concerns about a person who is outside of the scope of an OPG investigation, the policy states that the informant should always be told:

  • when the OPG's action has completed, or
  • when the matter has been referred to another agency for investigation, and
  • if it has been referred, who it has been referred to.

More information about persons outside the scope can be found in 5.2.1.

There may be situations where the person subject to abuse lacks capacity but the Public Guardian lacks jurisdiction to intervene as they do not have an appointed deputy or attorney.

In these circumstances you may want to consider or advise on an application to the court. The court has wide powers which may be exercised to protect someone who lacks capacity. This includes powers to appoint a deputy, make declarations of capacity, or prohibit named persons from contacting someone who lacks capacity.

The government is consulting on legislation in response to the Law Commission's report on the review of Adult Social Care law, which contained a number of proposals on safeguarding.

You should remain alert to any changes in this area of law.

5.2.1 Examples of persons outside the scope of the OPG

An unregistered EPA  

The OPG will normally make a referral to the Adult Social Care Department of the local authority of the area where the vulnerable person lives. If the donor of the EPA lacks capacity to make decisions, the OPG may advise that an application is made to the Court of Protection for revocation of the EPA and the appointment of a deputy. The court will sometimes order the Public Guardian to provide a report under Section 49 of the Mental Capacity Act in such cases.

A former receiver or deputy  

The OPG will normally advise the current deputy to deal with the matter. Where a deputy has been discharged, or has died, or the vulnerable adult has died, the OPG can call for a final report from the former deputy (or the personal representatives if the deputy has died). If the Public Guardian is not satisfied, he may apply to the Court of Protection for enforcement of the security bond. This only applies to deaths/discharges after 1 October 2007.

Any other person  

The OPG will make a referral to Adult Social Care and if the vulnerable adult has an appointed deputy then the OPG will want to be kept informed of the situation and could contribute to the action by monitoring the situation through supervision of the deputy and visits to the vulnerable adult from a Court of Protection Visitor.

Appointees  

The OPG will make a referral to the Department for Work and Pensions and to Adult Social Care.

5.3 Litigation

If litigation is contemplated, you should consult with family members to see if an appropriate individual is able to act as a litigation friend.

If there is no family or no one who does not present a potential conflict of interest with the client eg the relative is the suspected abuser, then you should contact the Official Solicitor. The Official Solicitor can be appointed as litigation friend, if proceedings need to be taken.

5.4 Deputyship

If the client has assets that need protecting and lacks capacity to manage their assets, an application should be made to the Court of Protection for a deputy to be appointed.

The Court will give wide ranging powers to the deputy to manage the client's bank accounts, sell property, and manage other assets.  

If there is a need for a court order appointing a deputy, then if no suitable individual can be found or no relative is willing to act as deputy, or you do not provide such a service, then one option would be to contact the local authority's adult care solicitor to ask whether the local authority Deputyship team is willing to act as deputy.

Failing this, an application can be made for a 'panel deputy' to be appointed.

A panel deputy is a member of an approved list of deputies (mostly solicitors) with specialist knowledge of the MCA 2005.

A list of panel deputies can be found on the justice.gov website, and the Court of Protection has access to a Panel of Deputies who may be called on where there is no-one else willing or able to take on the role of deputy.

You should consider whether it is appropriate for an application to be made for a statutory will.

5.5 Appointeeship

If a client is in receipt of a state pension and/or benefits, an application can be made to the Department of Works and Pensions for a suitable relative to be appointed as the appointee of the client's benefits if:

  • the client does not have capacity to manage them any longer, or
  • there are concerns that these are being mismanaged..

If there is no relative or no suitable relative, then the local authority may agree to be appointed as appointee of the benefits and pension.

If you have concerns that the benefits are being mismanaged, then you should consider reporting these concerns to the Department of Works and Pensions who will investigate whether or not the current appointee is a suitable person to continue to act as appointee.

You can contact the Pensions Service on 0845 6060265 for those over 60 if they suspect abuse and want to apply for appointeeship.

For those under 60 there are a number of potential remedies and the contact number is 0845 6088506.

The DWP benefit fraud hotline can be contacted on 0800 854 440. There is also a DLA and Attendance Allowance hotline which can be contacted on 08457 123456.

On contacting these hotlines, you will be informed of the appropriate office to send a fax with a letter and/or application to take over appointeeship or report concerns.

5.6 The role of the local authority

Under No Secrets, the lead agency responsible for arranging safeguarding procedures to take protective action for a vulnerable adult is the local authority adult care department.

The local authority can arrange an initial strategy meeting which is attended by relevant professionals, both statutory and voluntary, dealing with the vulnerable adult with a view to deciding immediate measures to prevent or stop the financial abuse.

Later, a case conference will be held to examine the effectiveness of the measures and decide further strategies.

It is important that the vulnerable adult's capacity to make relevant decisions, such as decisions to protect themselves against abuse, capacity to manage their finances and assets is assessed as soon as possible so that the outcome will determine the available legal options such as using the Court of Protection or not.

5.7 Abuse and neglect by legal professionals

If you suspect abuse or neglect by another legal professional, you should contact the SRA for guidance. For more information see 6.2.2.

5.8 Criminal offences

Where you suspect an appointee is not using their powers for the benefit of the vulnerable adult then you should notify the DWP.

If you suspect a criminal offence may be taking place, contact your local safeguarding team or the police. However, the police may ask that no action be taken while they investigate and gather evidence against the perpetrator before the perpetrator realises that the police are investigating.

The difficulty with this approach is that you may have a duty of care to apply for deputyship in the interim to protect the assets from being further dissipated by the perpetrator. If the perpetrator is a deputy or attorney, the OPG will want to launch an investigation.

Generally local authority solicitors will cooperate with the police. You should make clear that they must take interim steps to apply to the Court of Protection if there are sufficient assets to make it worthwhile appointing a deputyship. If not, they must notify DWP to stop paying the adult's benefits to the perpetrator as the appointee.

Local authorities may also be able to assist, by considering what protective action might be needed in cases of financial abuse; this action can include applying for interim deputyship orders or a single order.

6 Further information

6.1 Law Society

6.1.1 Law Society Practice Advice Service

The Law Society Practice Advice Service provides a dedicated support line for Law Society members and employees of law firms.

6.1.2 Law Society practice notes

6.1.3 Law Society publications

Assessment of Mental Capacity, 3rd Edition (2009)
Anti-Money Laundering Toolkit
Lexcel Financial Management and Business Planning Toolkit

6.2 Solicitors Regulation Authority

6.2.1 Professional Ethics Helpline

Contact the Solicitors Regulation Authority's Professional ethics helpline for advice on conduct issues.

6.2.2 Reporting another professional

The SRA provides guidance reporting misconduct.

6.3 Guidance

6.3.1 Codes of practice

Mental Capacity Act 2005 Code of Practice  

No Secrets - Department of Health and Home Office guidance on developing and implementing multi-agency policies and procedures to protect vulnerable adults from abuse (2010) (now on national archives website)

In Safe Hands - Welsh Government guidance on adult protection procedures

SCIE Report 50: Safeguarding adults at risk of harm - Social Care Institute for Excellence guidance on safeguarding which includes information on financial abuse against vulnerable adults (2011).

6.3.2 Data protection

6.3.3 Third party guidance

A Strategy for Recognising, Preventing and Dealing with the Abuse of Older and Vulnerable People (PDF) , Solicitors for the Elderly (January 2010)

6.4 Useful contacts

6.4.1 Office of the Public Guardian

Office of the Public Guardian Investigations Unit contact details, Policy Guidance, the Procedures and Practice Guidance and the Protocol for working with Local Authorities.

6.4.2 Other groups

6.5 Other resources

6.5.1 Law Commission report

Law Commission report: 'Who decides?: making decisions on behalf of mentally incapacitated adults ' (1997)

6.5.2 Practice note

Law Society practice note - Meeting the needs of vulnerable clients

6.6 Acknowledgements

The Law Society acknowledges the Mental Health and Disability Committee for its help in developing this practice note.

The Law Society would like to express its gratitude to the following organisations for their assistance in reviewing the practice note:

  • Action Against Elder Abuse
  • Age UK
  • ADASS
  • The Local Government Association
  • MIND
  • The Office of the Public Guardian
  • The Official Solicitor
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The Practice Advice Service provides a dedicated support line for Law Society members and employees of law firms. Call us on 020 7320 5675.

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