Various Incapacitated Persons, Re (Appointment of Trust Corporations As Deputies) [2018] EWCOP 3

IMPORTANT This judgment is covered by the terms of orders made pursuant to the Practice Direction – Transparency Pilot. It may be published on condition that the anonymity of the incapacitated persons and members of their family must be strictly preserved. Failure to comply with that condition may warrant punishment as a contempt of court.Date IN THE COURT OF PROTECTION Date: 25 th January 2018MENTAL CAPACITY ACT 2005[2018] EWCOP 3In the matter of: Various Incapacitated Persons
Before
Her Honour Judge HilderVARIOUS INCAPACITATED PERSONSTHE APPOINTMENT OF TRUST CORPORATIONS AS DEPUTIESDavid Rees QC and Alexander Drapkin instructed by and for the Trust CorporationsClaire van Overdijk instructed by and for the Public GuardianHearing date: 22 nd September 2017The proceedings were heard in public subject to orders made on various dates pursuant to the Practice Direction – Transparency Pilot.This judgment is being handed down and delivered to the parties by e-mail on 25 th January 2018. It consists of 27 pages plus 2 schedules and has been signed and dated by the judge. The numbers in bold typeface and square brackets refer to pages in the hearing bundle.JUDGMENTThe scope of proceedings
[1]This judgment concerns applications in respect of 36 different persons, listed in schedule 1 attached. Each application seeks the appointment as property and affairs deputy of a trust corporation. The applications have been made by eleven different trust corporations, as identified in schedule 1. The Court’s concern has been to identify what information is required for the Court to be satisfied that a trust corporation is a fit and proper legal person to hold such appointment.[2]The eleven trust corporations are jointly represented by a single legal team. The Public Guardian is not a party to proceedings but has been asked (and has consented) to attend by representation to assist the Court. The trust corporations and the Public Guardian have all confirmed that they will bear their own costs, and they do not seek to recover costs from any protected person. The Court wishes to record its appreciation for that approach.[3]Aspects of the Court’s enquiries relate to matters of commercial confidentiality. Therefore each trust corporation has prepared its own statement for its applications; Counsel for the trust corporations and for the Public Guardian have seen all statements; but each trust corporation has seen only its own. The hearing was conducted as far as possible in general terms with personnel from all eleven trust corporations present. Where specific questions arose in relation to a particular trust corporation, the hearing was conducted – with the agreement of all - in the absence of personnel from any other trust corporation.

Matters considered

[4]In advance of the oral hearing, I considered all of the documents filed within each separate application and a bundle of three lever arch files including:a. A position statement by Mr Rees QC and Mr Drapkin on behalf of all eleven trust corporations, dated 15th September 2017 [tab 1];b. A general position statement by Ms. Van Overdijk on behalf of the Public Guardian also dated 15th September 2017 [tab 2];c. 35 specific position statements The application for which there is no specific statement is that relating to JDA, case number 13042200. relating to the individual protected persons, prepared variously by Michael Slatcher, Dean Keary, Kayleigh Thorpe, Charlotte Stokes, or Amy Murdoch of the Office of the Public Guardian and dated 29th, 30th or 31st August 2017, 4th, 5th , 8th or 11th September 2017 [tab 3];d. A witness statement on behalf of each of the eleven trust corporations [tabs 4 – 14 ] and a supplementary statement in respect of one of them [tab 17];e. A witness statement by Kayleigh Smith exhibiting a document from Aviva, a bond provider [tab 15];f. A witness statement by Paul Philand on behalf of Howden Group (UK) Ltd, a bond provider [tab 16].[5]Since the hearing, I have additionally considered:a. A document entitled “Questions for the SRA” prepared by the Public Guardian;b. A letter from the SRA dated 30th October 2017; andc. Further Submissions on behalf of the Trust Corporations, dated 22nd November 2017.

The law

[6]The Court’s powers in respect of the appointment of deputies are set out in section 16 of the Mental Capacity Act 2005:(1) This section applies if a person (‘P’) lacks capacity in relation to a matter or matters concerning – (a) P’s personal welfare, or (b) P’s property and affairs.(2) The Court may – (a) By making an order, make the decision or decisions on P’s behalf in relation to the matter or matters, or (b) Appoint a person (a ‘deputy’) to make decisions on P’s behalf in relation to the matter or matters.(3) The powers of the court under this section are subject to the provisions of this Act and, in particular, to sections 1 (the principles) and 4 (best interests.(4) ….(5) The court may make such further orders or give such directions, and confer on a deputy such powers or impose on him such duties, as it thinks necessary or expedient for giving effect to, or otherwise in connection with, an order or appointment made by it under subsection (2). …..[7]In respect of the appointment of deputies, section 19(1) of the Act provides that: (1) A deputy appointed by the court must be – (a) An individual who has reached 18, or (b) As respects powers in relation to property and affairs, an individual who has reached 18 or a trust corporation.[8]“Trust Corporation” is a technical expression. Its definition must be traced through a number of different statutes and secondary legislation, which Mr Rees and Mr Drapkin have helpfully set out:8.1 Section 64(1) of the Mental Capacity Act 2005 provides that “‘trust corporation’ has the meaning given in section 68(1) of the Trustee Act 1925”;8.2 Section 68(1)(18) of the Trustee Act 1925 provides that “’Trust corporation means the Public Trustee or a corporation either appointed by the court in any particular case to be a trustee, or entitled by rules made under subsection (3) of section four of the Public Trustee Act 1906 to act as custodian trustee.” This definition is expanded by section 3 of the Law of Property (Amendment) Act 1926. Mr Rees and Mr Drapkin submit that the expansion of the definition is not relevant to the particular applications currently before the Court but could be of relevance in other applications.8.3 The relevant rules are the Public Trustee Rules 1912 (as amended).8.4 Rule 30(1) in its current form provides that “The following corporations shall be entitled to act as custodian trustees: - (b) any corporation which:-(i) is constituted under the law of the United Kingdom or of any part thereof, or under the law of any other member State of the European Economic Community or of any part thereof;(ii) is empowered by its constitution to undertake trust business (which for the purpose of this rule means the business of acting as trustee under wills and settlements and as executor and administrator) in England and Wales;(iii) has one or more places of business in the United Kingdom; and(iv) is- a company incorporated by special Act of Parliament or Royal Charter, or a company registered (with or without limited liability) in the United Kingdom under the Companies Act 1948 or under the Companies Act (Northern Ireland) 1960 or in another Member State of the European Economic Community and having a capital (in stock or shares) for the time being issued of not less than £250 000 (or its equivalent in the currency of the State where the company is registered), of which not less than £100000 ( or its equivalent) has been paid up in cash, or a company which is registered without limited liability in the United Kingdom under the Companies Act 1948 or the Companies Act (Northern Ireland) 1960 or in another member State of the European Economic Community and of which one of the members is as company within any of the classes defined in this sub-paragraph.”8.5 The Rules are treated as also including companies registered under the Companies Act 1985 and the Companies Act 2006. See Companies Consolidation (Consequential Provisions) Act 1985 section 31(6) – repealed with effect from 12th May 2011 - Companies Act 2006 section 1297(5) and Lewin on Trusts 19th Ed para 19-061 fn 141.[9]The appointment of a deputy is, as spelled out in section 16(3) of the Mental Capacity Act 2005, a ‘best interests’ decision, and therefore to be made by reference to the facts of a particular case. In each of the applications before the Court, as with any other application for appointment of a deputy, the Court must be satisfied that the person or body whose appointment as deputy is under consideration is capable of discharging the responsibility properly. As it is put at paragraph 8.32 of the Code:
“The court will decide whether the proposed deputy is reliable and trustworthy and has an appropriate level of skill and competence to carry out the necessary tasks.”

Background factors

[10]Over the first ten years that the Mental Capacity Act 2005 has been in effect there have been significant developments in the legal and commercial landscape which are reflected in the range of applications for appointment as property and affairs deputy which the Court receives. Whereas the Code of Practice to the Mental Capacity Act 2005 at paragraph 8.40 explains trust corporations in parentheses as “(often parts of banks or other financial institutions)” in fact none of the eleven trust corporations in these proceedings is part of a bank or financial institution. They are all associated with solicitors’ legal practices In the words of Counsel for the trust corporations, “different firms adopt different ownership structures. Nonetheless in broad terms it is reasonable to say that all are owned by solicitors’ practices.” There is no application within these proceedings from any other type of trust corporation, although the Public Guardian has referred to appointments of two charities and a bank. . It is to be expected that use of the trust corporation structure will continue to develop further. As the Public Guardian notes [tab 2, paragraph 4], “newly established businesses within the legal sector are now combining TCs with consumer brands…”[11]The Law Society has published a Practice Note, dated 20th June 2016, which “summarises what a trust corporation is, the requirements for its creation and a number of other matters.” The last paragraph of section 2 states:
“Such a corporation can be a wholly owned subsidiary of another company, or its shares may be held by an LLP. It may be part of a group structure but it is a separate legal entity (emphasis added)and may hold assets in England, Wales and overseas.”
The importance of the separate legal identity of the trust corporation is underlined by further reference at paragraph 3 of the Note:
“Trust corporations are separate legal entities to their parent partnership or LLP, and so carry a separate risk.”
[12]Paragraph 2.1 of the Practice Note outlines “Differences between bank and solicitor-owned trust corporations:• A law firm’s trust corporation is usually created as a wholly owned subsidiary of the partnership, LLP or alternative business structure (ABS). Bank trust corporations are usually part of the banking trading group,• Most law firm-owned trust corporations are shell companies that do not trade. However some have the ability to trade in their memorandum and articles of association. Bank-owned trust corporations are generally trading.• Directors of law firm-owned trust corporations are almost invariably the private client salaried and equity partners if the firm is a partnership, or the directors in the case of an LLP, and are the authorised persons who act on behalf of the corporation. They must be UK solicitors or registered foreign lawyers. By contrast, the directors of bank owned trust corporations tend to be employees (and directors) of this entity alone, with separate authorised persons being senior managers employed by the bank.• A law firm’s trust corporation does not usually have any direct employees. Bank-owned trust corporations generally do have employees.• When a law firm’s trust corporation is appointed to act, it engages its parent firm to carry out the legal work on the firm’s standard retainer. This may be under terms of business created specifically for the law firm’s trust corporation. This method is adopted to ensure that the trust corporation subsidiary can be treated as non-trading. The trust corporation contracts the law firm to carry out the work. Bank-owned trust corporations have terms of business that indicate the charges the trust corporation will make themselves for running the trust. This is the opposite of a solicitor subsidiary trust corporation, which is charged by its parent for the work the firm does.”[13]The Note offers some explanations as to why a law firm might chose to create a trust corporation: Para 3:
“A trust corporation is designed to increase flexibility and improve services for clients. By creating a trust corporation, you can streamline the administration of estates and trusts to provide greater flexibility in the day-to-day administration of the files that it handles. Para 3.2: “From the client’s perspective, the benefits of appointing a trust corporation include: • Continuity – new trustees are never needed as a trust corporation never dies, goes on holiday, gets ill or retires. This can create substantial savings in professional fees: each time an individual trustee retires and a new trustee appointed, a deed needs to be created and the assets of the trust have to be transferred, whereas with a trust corporation the appointment and retirement of directors will not affect the assets within particular trusts. • Availability – individual trustees aren’t always available due to holidays and other commitments, but a trust corporation will always be available. • Professionalism – trust corporation signatories will be senior members of the private client department of the firm who deal with trusts and estates every day.”
[14]These identified benefits are all procedural or financial. Whilst such are important, they are not the only considerations. Each case will be different but deputyship generally also requires an appropriate person-to-person interaction with the protected person and often their family. Considered from that perspective, it can be seen that the benefit of continuity accrues also to the law firm – a client is retained for the long term, even if the individuals familiar with the case change firms.

Court of Protection procedures

[15]The modern Court of Protection has no day to day supervisory function. The Court appoints a deputy but supervision of the deputy after appointment is the responsibility of the Public Guardian, whose Office operates as an Executive Agency of the Ministry of Justice, entirely separate from the Court.[16]Whenever an application is made to the Court, a balance needs to be struck between the requirement to provide information necessary for the Court to determine the application, and the burden of providing such information (the cost of which in property and affairs cases will generally fall on the incapacitated person.) COP4 Declaration[17]The standard vehicle for providing to the Court the information necessary to reach a view as to suitability for appointment is the COP4 declaration. As it is put at paragraph 8.37 of the Code:
“Anybody considered for appointment as a property and affairs deputy will need to sign a declaration giving details of their circumstances and ability to manage financial affairs. The declaration will include details of the tasks and duties the deputy must carry out. The deputy must assure the court that they have the skills, knowledge and commitment to carry them out.”
[18]Section 2 of the COP4 declaration form asks six questions in respect of a potential deputy’s personal circumstances. Section 3 asks nine questions about their financial circumstances. Section 4 sets out a series of undertakings which a potential deputy is required to give.[19]It is to be noted that the COP4 declaration is a ‘self-reporting’ requirement, and carries the element of trust implicit in all such systems. The Court relies on the probity of the person completing the form There is a declaration of truth at the end of the form. If it later transpires that the deponent has provided false information, the remedy is after the event, and may ultimately include committal in accordance with section 5 of Part 21 of the Court of Protection Rules 2017. If a solicitor fails to comply with an undertaking, such failure is also likely to be seen as professional misconduct and could result in the solicitor, or partners/members in the firm, appearing before the Solicitors’ Disciplinary Tribunal. . Where the applicant is a professional (such as a solicitor), the Court generally does not require the filing of detailed evidence of compliance with professional standards; it relies on the self-declaration of professional status as implying such compliance.[20]Many of the questions in the COP4 declaration do not sensibly apply to a trust corporation; and equivalent questions which would apply to a trust corporation are not presently included. Security bond[21]In order to safeguard the interests of those for whom a deputy is appointed, the Court usually requires a deputy on taking up appointment to provide “security” through a form of insurance bond. Periodically the Ministry of Justice contracts with a bond provider to supply such bonds. The Public Guardian is responsible for the management of the contract for the provision of bonds. With effect from 1st October 2016, following a tender process, Howden Group (UK) Limited became the Ministry of Justice’s approved bond supplier. (Neither the Court nor the Public Guardian mandates the use of the approved supplier but neither can they provide to prospective deputies the details of any other supplier.)[22]The Court assesses the level of the security requirement based on a number of factors, including the size and nature of the estate and the availability of professional indemnity insurance. Ultimately, in those cases where a deputy breaches his powers and obligations, a sum not exceeding the amount of the endorsement and representing the loss to the protected person may be claimed by enforcing the bond.

Procedural history of the applications

[23]In each of the applications presently before the Court, an order has been made that includes a recital in the following terms (or substantially in those terms):
“It appears to the Court that, to be satisfied that a trust corporation is a fit and proper legal person to be appointed as a property and affairs deputy and to set the level of security bond if it makes the appointment sought, the Court needs to address the following issues: a. That the trust corporation can lawfully act as such; b. Whether its internal management, supervision and controls are appropriate (particularly in respect of its identification and formal appointment of authorised persons to act on behalf of the trust corporation, its day to day decision making process, the way in which it holds a protected person’s assets and funds, the ways in which it pays out such assets and funds, and its quality of performance controls); c. The total amount of protected persons’ assets and funds which it currently holds and will be holding from time to time; and in whose name(s) and in what account(s) such assets and funds are held; d. What external regulation (apart from supervision of the Public Guardian) the trust corporation is and will be subject to; e. The level of insurance cover which the trust corporation has and will maintain in respect of loss to the assets and funds of protected persons’ funds which it holds, through dishonesty, breach of duty, negligence or any other cause; f. If the Court appoints a trust corporation as a deputy, what steps will be taken by the Public Guardian throughout the duration of the appointment to check that, having regard to issues (a) to (e) above, the trust corporation continues to warrant fit and proper appointment as property and affairs deputy for the protected person; and that the level of security bond set by the Court remains appropriate.”
[24]In each matter, a direction was made for an authorised officer of the trust corporation to file a statement addressing matters set out in (a) – (e); and for the Public Guardian (or a person nominated by him) to file a statement addressing (f), together with information as to “b. whether the trust corporation has been registered with/assessed by…the bond provider; c. Whether the aggregate value of the estates for which the trust corporation acts (if any) falls within the upper limit set by its professional indemnity insurers; d. Any other matter which the Public Guardian considers should be brought to the attention of the Court concerning the suitability of the trust corporation to act as deputy; e. If so advised, the level of the bond he invites the Court to set.”

Evidence relevant to all the applications generally

[25]The Public Guardian’s responsibilities for supporting and supervising deputies have led to the development by his Office of a series of written “standards” which set out what is expected of a deputy and provide a checklist of actions and behaviours every deputy is expected to follow. The standards applicable to professional and public authority deputies are set out in a document numbered SD5 and entitled “Deputy standards Professional deputies.”[26]In respect of trust corporations, the Public Guardian’s general approach is set out in his position statement [tab 2]:
“26. …. A TC will be treated the same as any other professional deputy and will be required to meet any standards set by PG. 27. Once a deputy is appointed, the PG will contact the new deputy. The PG operates two supervision levels: general and minimal. New deputies get a “general” level of supervision for the first year. After the first year, a property and affairs deputy managing an estate of less than £12 000 will move to a minimum level of supervision. The different levels have different supervision costs and different reporting requirements with deputies on a general level of supervision required to provide a more detailed report than those on a minimum level of supervision. 28. The professional deputy team will contact new deputies who have not had any deputyship cases before to conduct a settling in call to discuss the case including the setting up of deputyship accounts. 29. The professional team review annual reports for all cases, this details income and expenditure and also decisions made on behalf of the client. Along with the annual report all professional deputies must submit an OPG105 detailing the costs taken and estimated costs for the next reporting year. Where costs taken exceed fixed costs, and where the court order allows, the professional team requests copies of the Senior Courts Costs Office cost certificates and reconcile these against the costs charged. 30. The professional team review the bonds and professional indemnity insurance upon review of the annual reports to ensure the client’s assets are protected. The professional team monitor the compliance with PG’s requests for information including annual reports and costs certificates taking action as necessary including discharge. 31. The professional team also review COP visitors’ reports following client and assurance visits. They will address any issues or concerns with the deputy and monitor their compliance with requests, and monitor the deputy’s adherence to the professional deputy standards, practice directions and practice notes.”
[27]The Public Guardian’s position statement gives (at paragraph 23) an unequivocal statement of his position in respect of trust corporation deputies: he “wishes to note that there are clear benefits to the appointment of a TC, most notably that of continuity, ie there are no personal appointments and therefore, no costly applications where a deputy retires.”[28]There is no suggestion in any of the statements or submissions made by the Public Guardian that his Office either does or could conduct any checks as to the suitability of a trust corporation prior to appointment as a deputy.[29]There has also been filed at Court information from two bond providers. 29.1 Exhibited to a COP24 statement by Kayleigh Smith [tab 15] is a single page document said to have been provided by Aviva, who underwrite deputy bonds provided through Deputy Bond Services. The document is not signed and bears no other mark of authentication by Aviva but sets out that “Our assessment on the Trust Corporation is two-fold: 1. Can the Trust legally be appointed as a Deputy in accordance with the Mental Capacity Act 2. Are there appropriate provisions in place for the prospect of recoveries should a claim be paid Therefore we check the following: 1. What is the legal status of the Trust Corporation: [After reference to the Public Trustee Rules]…Therefore I check to see whether the company is “a. registered in the UK and therefore has one or more places of business within the UK; b. is empowered by its constitution to undertake trust business; c. has the appropriate paid up share capital.” If these criteria are met, then I am satisfied that they are legally able to be appointed as Deputy, so from the OPG/Court’s perspective they are acceptable. If they failed to meet this criteria I would question the validity of their appointment….. 2. Is the Trust Corporation linked to the firm: This is a risk assessment for us to consider the acceptance of a bond for a validly appointed Trust Corporation. To help understand we ask the following questions:

Therefore we check the following:

“a. registered in the UK and therefore has one or more places of business within the UK; b. is empowered by its constitution to undertake trust business; c. has the appropriate paid up share capital.” 1. Confirmation the Trust Corporation is related to the firm 2. Confirmation of the Directors and authorised signatories of the Trust Corporation 3. The Trust Corporation is covered separately and named on the PI insurance cover These questions enable us to clearly establish and document the legal relationship with the firm of solicitors and the Trust Corporation. We provide a bond facility for the firm with the facility limit based (in part) on the amount of the P.I. cover purchased. By ensuring that there is this legal relationship and that the P.I. covers the Trust Corporations this ensures that the bond issued for the Trust Corporation attaches to the firm and the P.I. in the same way that an individual solicitor being personally appointed would have. We would not wish to be in a weakened recovery position when providing a bond for a Trust Corporation than we would for an individual.” 29.2 In a witness statement by Paul Philand, Global Head of Surety for RKH Specialty, dated 18th September 2017 [tab 16] the approach of Howden Group (UK) Limited is set out as follows: “4. We have always taken the view that the Court decides on whoever is suitable to act as deputy having considered the facts before them and once that decision is made we must arrange a bond for that entity or individual. However where we might have reservations we would share these with the Court/Office of the Public Guardian. We have never seen the need to share any such reservations on any SRA regulated trust corporation. 5. … were we … to “grade” the level of risk associated with the different types of deputy that the Court appoints, then these directly or indirectly SRA regulated trust corporations would be amongst the lowest risk by comparison to the types of deputy, in our view. 6. I have been asked what checks, if any, Howden do before providing a bond. As we are committed to providing bonds whenever the Court appoints a deputy we do not do any before the bond is provided. However, an informal arrangement exists whereby we then do some rudimentary record checking. For SRA regulated trust corporations we check that the trust corporation appears on the SRA list and that (at least the majority of) the directors are solicitors and listed. 7. We do not ask for copies of the solicitors’ insurance certificate, relying on the fact that the SRA will have ensured that the solicitors are insured. For non-solicitor trust corporations we do ask whether they have professional indemnity insurance in place covering their work as deputies. We also do some further rudimentary checks for non-solicitor trust corporations. 8…..we are fully aware of the strict regulations and requirements the SRA impose on law firms and the onerous (to underwriters) nature of those rules. As such we feel if a solicitor’s deputy work is under the SRA “control”, we are content. 9. We have never raised any reservations with the Court on any directly or indirectly SRA-regulated trust corporations.”
[30]When Deputy Bond Services was the MOJ contracted supplier of bonds, it provided to the court confirmation of trust corporations in respect of which it had conducted its checks with no concern arising. The Court informally referred to this list of “checked” trust corporations as an indication of appropriateness for appointment. With the different approach of the current approved supplier, no similar reference is now available to the Court.

Conclusions:

[31]There is presently no system in place as between the Court, the Office of the Public Guardian and the Ministry of Justice’s approved bond supplier on which the Court can rely as to the suitability of a trust corporation for appointment as deputy prior to making such appointment. A trust corporation can apply to be on the PG’s panel of deputies, but there is no ‘panel’ of trust corporations which have demonstrated compliance with legal requirements to act. Information necessary to satisfy the Court as to suitability must therefore be ’built into’ the application process itself. Information which the Court has identified as necessary Whether a trust corporation can lawfully act as such:

Information which the Court has identified as necessary

[32]The Court needs to be satisfied that the applicant trust corporation meets the four conditions of Rule 30 of the Public Trustee Rules 1912 as set out above.[33]The Public Guardian’s position is that “the PG’s Professional Deputyship Team are not legal experts on the constitution of TCs and it is submitted that the PG would be in danger of overstepping his statutory remit in carrying out such assessments, especially if a wrong conclusion is reached with potential claims for loss of work.” [tab 2 paragraph 10][34]In each of the applications currently before the Court the trust corporation has been required to submit a copy of its Articles of Association. It is said on behalf of the eleven trust corporations that to do so each and every time they make an application for appointment would be unduly burdensome and costly. In any event, it is neither appropriate nor feasible for the Court of Protection to decide matters of constitution of a trust corporation.[35]How then is the Court to be satisfied that a trust corporation can lawfully act as such? In my judgment, the only feasible and proportionate way for the Court to satisfy itself of this basic requirement is to require self-reporting, with a declaration of truth, in the same way that other kinds of deputy are required to self-report their own appropriateness to act as deputy.[36]A trust corporation applying to be appointed as property and affairs deputy should firstly make a declaration, with a declaration of truth, that it can lawfully act as such; and secondly, give an undertaking to notify the Public Guardian forthwith if that state of affairs changes at any time throughout the duration of the appointment.[37]In the event that anything in the application papers leads the Court to require further confirmation of a trust corporation’s compliance with legal requirements to act as such, the appropriate approach of the Court would be to direct a report on that issue from the Public Guardian, pursuant to section 49 of the Mental Capacity Act 2005.

Whether the internal management supervision and controls of the trust corporation are appropriate:

[38]The trust corporations submit that “provided that they are able to manage and administer P’s funds properly, and in accordance with their statutory and fiduciary obligations, trust corporations should be free to adopt their own internal management procedures (just as individual professional deputies and public authorities are). It is not for the court to seek to impose a standard set of practices on trust corporations….. Parliament simply provided that any trust corporation could be appointed as a property and affairs deputy if the court considered it to be in P’s best interests to do so.”[39]It is of course not the role of the Court to impose a set of internal practices. It is both undesirable and unfeasible for the Court to attempt to assess the working systems of a trust corporation but how is the Court to know if a trust corporation “is able to manage and administer P’s funds properly and in accordance with their statutory and fiduciary obligations”?[40]Once a trust corporation is established, and has been through a cycle of assurance visits, the Public Guardian could potentially be asked to provide information to the Court but this would be an onerous, expensive and time-consuming approach on a case by case basis. Moreover, the Public Guardian’s assurance visits cannot offer the Court any information in respect of a newly created trust corporation which has as yet no track record of handling deputyships.[41]In my judgment, the appropriate and proportionate response, in line with the existing COP4 procedure, is for the Court to require an undertaking from an appropriate officer of a trust corporation applicant to comply with the Public Guardian’s published standards for professional deputies. (Standard 3 sets out an expectation to “Maintain effective internal office processes and organisation”. Standard 4 requires possession of “the skills and knowledge to carry out the duties of a deputy.”)[42]No arguments against this approach were raised on behalf of the trust corporations.[43]The Public Guardian accepts the suitability of this approach for trust corporations of the type involved in these proceedings (ie linked to legal practices) but raises concerns about other types of trust corporation – specifically, charities and banks.[44]Mr Rees considered it essential that trust corporations not associated with solicitors firms should not be subjected to a lower standard, and I agree with him. The Public Guardian’s standards do not prescribe processes; they set out end-result competencies. The purpose of them is to secure the interests of the person whose funds are being managed. In my view an undertaking to comply with the Public Guardian’s standards for professional deputies may properly be expected of any type of trust corporation applicant. If trust corporations other than of the type in these proceedings (ie linked to legal practices) considered themselves in difficulty in giving such an undertaking, it would be appropriate for the Court to ask for further explanation, and a decision as to appropriateness for appointment taken on a case by case basis in the light of any responses.

External regulation other than by the Public Guardian

[45]Why should the Court consider external regulation relevant to suitability for appointment as a deputy? The Court’s concern is to protect the interests of the incapacitated person. The most likely risk to an incapacitated party from the actions of a property and affairs deputy is misappropriation/loss of that person’s assets. Any person or body appointed as deputy is subject to the Court’s power to terminate the appointment and to supervision by the Public Guardian, and the Court routinely appoints as deputy lay people who will be subject to no other regulation. If misappropriation/loss occurs, the prospects of recovering the misused funds are independent of regulation. Regulation is reactive – if a problem arises, a regulated person or body may be subject to sanctions but they are likely to come after the event. What assurance then does external regulation provide?[46]Where a lay, and therefore unregulated, deputy is appointed, the deputy is most commonly a family member or acquaintance of the protected person. Such a deputy is not usually authorised to charge for providing the functions of deputyship: he or she performs their duties for free, entitled only to claim reasonable expenses. In contrast, a trust corporation deputy is unlikely to have been previously involved with the protected person and generally anticipates authorisation for the charging of fees. Whereas a lay deputy is likely to be appointed only for a small number of protected persons, a trust corporation is likely to seek appointment for many protected persons, thereby aggregating a large risk.[47]Adherence to a regulatory framework provides a marker of standards; and the possibility (threat?) of sanctions for failure to meet prescribed standards will commonly operate proactively as an incentive to compliance. Regulation is not a guarantee of anything but it is, as Mr Rees describes, “a further check on what the deputy does….[because there is] someone else sitting on their shoulder.” The court must of course consider every case on its facts but where there is a requirement to comply with appropriate external regulation, the Court can derive assurance of the likelihood that a potential deputy will behave in an appropriate fashion to meet the best interests of P; and if he does not, that other agencies are likely to step in.[48]In respect of the applications currently before the Court, the relevant regulatory body is the Solicitors Regulatory Authority. Under chapter 12 of the SRA Code of Conduct a trust corporation owned by a solicitors practice may apply for SRA authorisation but is not required to be authorised as long as:a. It is not providing reserved legal activities to the public; andb. Any solicitor or Registered European Lawyers (RELS) involved in it are not ‘practising’ as defined under the SRA Framework Rules 2011 other than as in-house solicitors or RELs in accordance with rules 1.1(e) and 2.1(e) of the SRA Practice Framework Rules. Seven of the trust corporations involved in these proceedings are authorised by the SRA; four are not. One was formerly but is not presently.[49]In the context of optional SRA regulation of a trust corporation, Mr. Rees introduces (at paragraph 28 of his position statement) the term ‘separate’:
“a trust corporation owned by a solicitors practice does not require separate SRA authorisation if…”
The implication seems to be that, where the individuals involved in the trust corporation and the underlying law firm are themselves subject to SRA regulation, then ‘separate’ SRA regulation of the trust corporation offers no additional benefit or assurance to the Court. Given the separate legal identity of the trust corporation, that did not seem to me an obvious conclusion: a. In fact, the Directors of the trust corporations in these proceedings are not all solicitors; b. When a Director of a trust corporation is acting as such, does regulation in another role apply? What if the ownership of the trust corporation changes?[50]Mr Rees points to “SRA requirements for the supervision of employees and non-solicitors working in an SRA regulated institution” to the effect that, where a solicitors’ firm employs non-solicitors, they are indirectly SRA regulated because they must be supervised by a solicitor. If a non-solicitor employee acts in a way which is inappropriate for an SRA regulated body, the SRA can bar their employment (by the particular and any other SRA regulated body.) Section 44 of the Solicitors Act 1974 It seems to me however that this still does not provide a complete answer because one of the trust corporations does not require a solicitor who retires from the LLP to retire as Director of the trust corporation.[51]These considerations led to the identification in the hearing of three categories of trust corporation amongst the applicants:a. Category 1 – where the trust corporation is itself subject to regulation by the SRA;b. Category 2 – where the trust corporation is not itself regulated by the SRA but all of the individuals involved in the business of the trust corporation and the underlying firm are subject to SRA regulation, either directly or indirectly;c. Category 3 – where neither the trust corporation nor the entirety of the individuals involved are subject to SRA regulation.[52]The questions directed to the SRA after the hearing were intended to clarify to the Court the implications of regulation for each of these categories.[53]The first question related to Category 1 trust corporations. It was prefaced with a brief introduction:
“The parties understand that where a trust corporation is itself a recognised or licensed body, the SRA have both a supervisory responsibility over the body and various powers to take regulatory action against it to protect the public as may be necessary.”
The SRA was then asked to “briefly outline the responsibilities and powers of the SRA in this regard.”[55]The second question related to Category 2 trust corporations, and was set out as follows:
“It is the case that many trust corporations associated with solicitors’ firms are not recognised or licensed but do only have directors who are solicitors. The Court is trying to understand what effect that situation has on the SRA’s supervisory jurisdiction and powers: (1) Would the decisions of the solicitor directors as directors of the trust corporation be subject to the SRA Code of Conduct or to any specific parts of it? We understand that at least some of the Code of Conduct applies to solicitors in every capacity. (2) Assuming the Code of Conduct is relevant to these actions, how would the SRA respond to breaches of that Code of Conduct by the directors in that capacity, for example if serious irregularities in trust accounts held by the trust corporation were brought to the SRA’s attention? Specifically, could the individual solicitors be subject to regulatory action by the SRA in respect of improper decisions as directors of the trust corporation?”
[56]The third question put to the SRA was a generalised invitation to distinguish the regulatory regimes applicable to Category 1 and Category 2 trust corporations:
“Does the SRA have any general comment to make on the benefits to the public of a trust corporation being itself regulated or licenced or the risks of one not being?”
[57]The SRA response (in its letter dated 30th October 2017) uses different terminology to the questions, referring to “where a trust corporation is an authorised body.” Mr. Rees and Mr, Drapkin address this as follows:
“… trust corporations that are directly regulated by the SRA can themselves be either alternative business structures or have a structure that is regulated in the same way as a traditional legal practice would be. If the former then when regulated they are regulated as ‘licensed’ bodies and if the latter they are ‘recognised’ bodies. The SRA refers to both types of regulated body as ‘authorised’ bodies and therefore the word can be used to mean any trust corporation that is directly regulated by the SRA.”
[58]From the SRA response, it is possible to extract the following propositions:a. SRA responsibilities: Section 1 of the Legal Services Act 2007 requires the SRA “to act in the public interest and protect users of legal services.”b. SRA powers: Where its regulatory authority is engaged, the SRA can• require prompt co-operation in relation to an investigation, including compliance with written notices to provide information, explanations and documents;• in the absence of such co-operation, rely on statutory powers under the Solicitors Act 1974 and the Legal Services Act 2007 to require information and/or documents;• where necessary to protect the public interest, intervene in and close down a regulated body at short notice.[59]In respect of Category 1 trust corporations: the SRA will “regulate the entity as well as the solicitors working in it” and so its powers include the ability to “impose conditions on … at any time to restrict or stop the firm from carrying out an area of work, limit the activities of a manager or employee to allow us to comply with … regulatory objectives (Rule 9 of the SRA Authorisation Rules 2011).”[60]In respect of Category 2 trust corporations, the SRA letter states that “Where a solicitor is involved in a non-authorised business they are not able to participate as a practising solicitor but are practising as a non-solicitor. Although we do not regulate the business we regulate the individual solicitor. As they are not practising as a solicitor but are outside of practice only certain parts of the [SRA Code of Conduct] will apply.” The regulatory position in such circumstances is as follows:• All decisions made by solicitor directors in a non-solicitor business must comply with Principles 1, 2 and 6 and comply with the Outcomes contained in chapter 11 (“Duties to third parties”) of the Code.• The SRA letter states unequivocally that “Serious irregularities in trust accounts would be a breach of SRA Principle 2 (Integrity) and SRA Principle 6 (behave in a way that maintains the trust the public places in you and the provision of legal service.)”• If the solicitors are practising elsewhere as a solicitor and also operate a non-solicitor business• the solicitor must comply with the Outcomes contained in chapter 12 (“Separate Businesses”) of the Code in relation to their non-solicitor business;• the Outcomes in chapter 10 (“You and your regulator”) will not apply but if a solicitor does not comply with an SRA investigation, the SRA will rely on its statutory powers to obtain information and/or documents;• the Disciplinary Rules “allow the SRA to impose the same sanctions as it would for a solicitor operating a trust corporation through an authorised body.”[61]The SRA response also addresses various other protective aspects of regulation:• Money held in a solicitor’s client account is protected by the Solicitors Act 1974. In the event of fraudulent activity, clients or third parties may have a right to make a claim on the compensation fund or against the firm’s compulsory professional indemnity insurance.• Clients have a right to complain to the SRA or the Legal Ombudsman if they are concerned about a solicitors’ conduct or the way in which a firm operates.[62]So, in terms of regulatory obligation, a comparison of category 1 and category 2 trust corporations seems to be as follows: Equivalencies:a. Whether a solicitor acts as such or as a director of the trust corporation, s/he is required to: i. uphold the rule of law and the proper administration of justice (Principle 1); ii. act with integrity (Principle 2); and iii. behave in a way that maintains the trust the public places in [them] and in the provision of legal services (Principle 6).b. In terms of sanction and enforcement of those obligations, the Disciplinary Procedure Rules apply. In particular, individual solicitors can be subject to regulatory action taken by the SRA in respect of financial irregularity. Differences: a. SRA powers include the ability to restrict or stop category 1 trust corporations from carrying out an area of work; in respect of category 2 trust corporations, any SRA intervention would be solely in respect of the underlying law firm or individual solicitor directors. b. The SRA cannot discipline non-solicitor employees or co-directors of category 2 trust corporations;c. In terms of seeking information, chapter 10 of the SRA Code (written notices to provide information, explanation and documents) will not apply to category 2 trust corporations.d. A category 2 trust corporation is not required to provide indemnity cover that complies with the minimum terms and conditions in the Professional Indemnity Insurance Rules 2013.e. Funds held by a category 2 trust corporation are not protected by the Solicitors Act 1974;f. Clients of a category 2 trust corporation do not automatically have a right to claim on the Solicitors Compensation Fund;g. Clients of a category 2 trust corporation cannot make a complaint either to the SRA or to the Legal Ombudsman about the trust corporation itself.[63]To what extent do these equivalencies and differences translate into material difference for the position of the protected person (which is the Court’s concern)? a. Direct/indirect intervention: The trust corporations submit that, if a category 2 trust corporation undertakes that they have no employees Mr Rees submits that the role of a company secretary should be distinguished. Such role may be fulfilled by an individual, and that individual might be employed. He submits that it would not be necessary for that individual to be authorised by the SRA given that the trust corporation will act by its directors, so “the risk to an incapacitated individual’s finances of a non-authorised trust corporation having a non-authorised company secretary is slight.” and no non-solicitor directors, then the SRA’s lack of direct authority over a category 2 trust corporation should not be a concern because “the composite protection of the SRA regulating the individual solicitor directors of the trust corporation and the SRA enjoying its full powers over the associated legal practice is sufficient for the Court to have confidence in the regulatory regime.” I agree, but it does depend on the undertaking being given. b.Limited application of Principles and Code: The trust corporations submit that the application of Principles 2 and 6, together with the SRA’s express confirmation that it would consider a serious irregularity in trust corporations’ accounts to be a breach of those principles, is sufficient to assure the Court that “the most significant danger to the incapacitated person is well covered by the regulatory position.” I agree. However, for that to be the case, it must be that all directors of the trust corporation are solicitors. c.Investigatory powers:The trust corporations submit that applicable SRA powers, coupled with the application of the Disciplinary Procedure Rules, are sufficient to police potential breaches of compliance obligations. Given that these obligations are essentially of reactive use, and there will be other avenues for pursuit of misappropriated funds in the security bond and in insurance cover, I agree. d. Indemnity insurance cover: Where the SRA requires the provision of indemnity cover, the Court can be confident that there will be an automatic check of continuous cover every year. The trust corporations submit that a category 2 trust corporation could give an undertaking to the court that it is covered by the indemnity insurance of its associated legal practice, on the same terms as that practice. In my judgment, there should also be given an undertaking to report to the Public Guardian any change in that position, and the maintenance of such insurance included as part of the Public Guardian checks in annual review. e. Funds protection under the Solicitors Act 1974: Mr Rees points out that the Solicitors Act does not provide direct protection for funds held by solicitors. Rather Solicitors Accounts Rules 2011 are made by the SRA pursuant to section 32 of the Act. Those Rules do not apply in full to funds held by solicitor deputies in any event:
“Rule 8.1 of the SAR 2011 provides that a solicitor deputy appointed by the Court of Protection must comply with the “appropriate statutory rules and regulations”, various of the SRA Principles and some discrete provisions of the SAR 2011. If the deputy does so it will be deemed compliant with the SAR 2011.”
The trust corporations accept that the “appropriate rules and regulations” include the Court of Protection Rules, the Mental Capacity Act 2005, the Code of Practice and the OPG Standards for Professional Deputies. They submit that in the case of both category 1 and 2 trust corporations, there should already be compliance with these requirements and with SRA Principles 1,2 and 6 and therefore “the remaining effect of the application of the SAR 2011 …would be small and…of only marginal benefit.” I agree. f.Solicitors Compensation Fund: The SRA provides a discretionary scheme which may make grants of up to £2million in circumstances where a defaulting practitioner, employee or manager has misappropriated funds and this has not been covered by their insurance. The trust corporations submit that, where the practical management of the incapacitated person’s estate is carried out by the legal practice associated with the category 2 trust corporation (as they suggest could be the subject of an undertaking), it is “likely (although perhaps not inevitable)” that any default will be “by some person acting in the course of the associated legal practice.” Noting Rule 3.1 of the Solicitors Compensation Fund Rules (which provides that the applicant does not have to be the defaulting practitioner’s client) the incapacitated person with a category 2 trust corporation as deputy would therefore have a right to apply to the Fund in an appropriate case. The acknowledgment that it is not “inevitable” that the proposed undertaking would cover all potential defaults gives reason for caution. However, taking a pragmatic view as to the requirements of most deputyships, I am satisfied that such undertaking is sufficient to assure the Court that there is very little material difference for the protected person as between category 1 and category 2 trust corporation deputyships in the context of recourse to the Solicitors Compensation Fund. The proposed undertaking however should be a requirement for category 2 trust corporations. g.Routes of complaint: Similarly, if there is assurance that all management is being conducted by the associated legal practice, and all directors of the trust corporation are solicitors, then there is likely to be no material difference to a protected person in the avenues of complaint available where the deputy is either category 1 or category 2.

Conclusion

[64]I am satisfied that the Court can be satisfied that there is adequate external regulation of a trust corporation for it to be suitable for appointment as a deputy if an authorised person undertakes on behalf of the trust corporation EITHER that the trust corporation is itself authorised by the SRA; OR that:a. all the directors of the trust corporation are solicitors and it employs no one (save to the extent that it employs a company secretary); andb. the trust corporation will retain its associated legal practice to carry out all practical work in relation to the management of the incapacitated person’s property and affairs; andc. the trust corporation is covered by the professional indemnity insurance policy of its associated authorised legal practice on the same terms as that practice AND that the trust corporation will inform the Public Guardian immediately if any of these things change.[65]That leaves still to be considered Category 3 trust corporations, including those which are not linked to legal practice at all. The Public Guardian points out (at paragraph 17 of his position statement) that where a trust corporation is run by a charity, the Charity Commission is the relevant regulatory body. Where a trust corporation is linked to a bank, there will be financial regulatory authorities. Within these proceedings, the scope of regulation of any such bodies has not been considered. If the protective effect of regulation by bodies other than the SRA is broadly comparable, it is likely that the Court will be similarly satisfied as to the appropriateness of the appointment, although to establish such satisfaction there may need to be on the next occasion when such appointment is sought a direction to the Public Guardian to provide a report pursuant to section 49 of the Mental Capacity Act 2005.[66]The Public Guardian further points out the possibility that there may be trust corporations created in relation to whom there is no supervisory body at all, ie with no one “sitting on their shoulder.” The Court must consider every application on its merits but I agree with the Public Guardian’s submission that “the Court should treat non-regulated [trust corporations] with caution.” Where there is no external regulation, the Court is likely to require the provision of further information (such as is “built in” to the standard application process) before the application can be determined.[67]The Public Guardian suggests that (by analogy to the matters identified as relevant to setting the level of the security bond in the case of Re H, Baker v H & Another [2009] WTLR 1719) the Court should consider:a. the various list of qualities which case law has already identified as pertinent to suitability for appointment as deputy (including ability to discharge the functions of deputyship, degree of contact with P, relationship between the proposed deputy and P, where the proposed deputy is based, whether other demands on the proposed deputy will allow time for properly acting as deputy, age and health of proposed deputy, financial good character, previous experience of the role of deputy/attorney/executor/trustee, and other relevant skills);b. the risk to P;c. the size of the business;d. length of operation;e. whether the business involves any other public work (eg appointeeship);f. the number of directors (and information about them); andg. level of indemnity insurance.[68]Whilst this list should not be considered exhaustive, and additional factors may be relevant in any particular case, I agree that these factors are all likely to be relevant. The unregulated trust corporation applicant may be required to address them in the form of a COP24 statement by an authorised director; and the Court may direct the Public Guardian to prepare a s49 report to assist the Court. The total amount of protected persons’ assets and funds held; in whose name and in what accounts such assets and funds are held; AND the level of insurance cover which the trust corporation has.[69]In respect of how protected persons’ assets are held, Mr. Rees summarises that “broadly speaking investments are held in the name of the trust corporation as deputy for the relevant individual. There are differences in practice as to the holding of cash, with some use being made of the underlying law firm’s client account to hold some sums.” The Public Guardian has not made any submissions on this point, which I would regard as within the ordinary remit of his supervisory functions. In terms of how the Court considers these things, the considerations and conclusions above in respect of internal management supervision and controls, and external regulation, apply.[70]The concerns about the total amount of assets held and the level of insurance cover maintained were set out separately in the directions order but raise overlapping issues and were considered together at the hearing.[71]All of the trust corporations in these proceedings are covered by insurance policies maintained by the underlying solicitors’ practice; and all of the policies comply with the SRA Minimum Terms and Conditions of Professional Indemnity Insurance. In fact, all of the trust corporations in these proceedings maintain additional insurance cover in similar terms beyond the SRA minimum but to differing levels. Mr Rees summarised the SRA Minimum Terms and Conditions as requiring “a minimum of £3m cover for each claim for incorporated solicitors’ practices and alternative business structures and £2m for sole practitioners and traditional partnerships;” and set out the provision (at paragraph 2.5) for the insurer to aggregate claims arising from related matters.[72]The concern of the Court may be expressed by consideration of a hypothetical situation:a. a trust corporation deputy acts for 100 protected persons;b. inappropriate conduct by the deputy causes each protected person to suffer loss of £100 000;c. the insurers aggregate the claims and apply the policy cap to the aggregate claim, rather than the individual loss;d. the overall loss is £10 million but the funds available from insurance to compensate the loss are limited to £3 million.[73]The aggregate of deputyship funds held by the various trust corporations represented in these proceedings covers a very wide range, from zero (where a trust corporation is newly established and has yet to be appointed) to many millions of pounds.[74]How realistic is the Court’s concern about aggregation? It should be remembered that the same issue arises where the Court appoints a range of named individual solicitors within the same firm as deputies. Arguably, it is of less concern where the deputyship is held by the law firm’s associated trust corporation because of the (various) internal control structures adopted in respect of who is authorised to act on behalf of the trust corporation and in what transactions.[75]It is submitted on behalf of the trust corporations that paragraph 2.5 of the SRA Minimum Terms has not yet been subject to judicial consideration. Mr Rees referred to the authorities of AIG Europe Ltd v. OC320301 LLP & Others [2016] EWCA Civ 367 and Lloyds TSB General Insurance Holdings Ltd v. Lloyds Bank Group Insurance Co Ltd [2003] 4 All ER 43 (HL) as offering some reassurance that the kind of losses which the Court is concerned with could not be aggregated. He says that, where the assets of protected persons are misappropriated by a deputy, in reality it will most probably have been done by lots of separate acts, not an individual act; and where the deputy misappropriates funds belonging to person A and also to person B, it is at least arguable that those wrongful acts are not related.[76]Mr. Rees’ submissions may be optimistic (as is to be expected). At the very least, paragraph 2.5 of the SRA Minimum Standards leaves the risk of aggregation open. Nonetheless, it should be remembered that the provision of insurance is itself is a protective measure, and the aggregation risk should be considered in the context of the overall package of protective measures.[77]It may in theory be possible for the Court to address this by requiring insurance cover which expressly excludes any power to aggregate but there is no information before the Court as to whether such policies are in fact available. Moreover it seems likely that, even if they are available, the costs of such cover would be higher, and the extra burden of such costs would ultimately be borne by protected persons as clients of the insured. More practically, the aggregation risk can be reduced if the level of insurance cover is, rather than the minimum requirement, a figure more proportionate to the total assets held. In fact, this approach has already been adopted by all of the trust corporations in these proceedings.[78]The Court has heard no submissions as to the “adequacy” of insurance levels over and above the SRA required minimum. In my judgment it is feasible and practicable for the Court to check adequacy of insurance solely in the context of a single claim relative to the size of the estate in respect of which deputyship is being considered. It is not, however, feasible or practicable for the Court to assess adequacy of insurance cover in the context of total assets under the management of the proposed deputy and aggregation risk. Any view taken today would be out of date next week because of new appointments made and old appointments ending; and the additional burden of providing such information with every application would be disproportionate. The aggregation risk is more appropriately monitored as part of the Public Guardian’s ongoing supervision of deputies. If the Public Guardian, supervising all of the appointments held by a deputy at any given time, finds cause for concern as to adequacy of insurance levels overall, he should refer the matter to the Court which can take such further steps as may be appropriate in the circumstances, including adjusting the security requirement or ultimately terminating the appointment.[79]To facilitate this approach, what is required is that the trust corporation deputy deposits with the OPG upon appointment a copy of its professional indemnity cover (in line with the suggestion by HHJ Marshall QC in Baker v. HJ [2009] COPLR Con Vol 606 at paragraph 106) and undertakes to inform the Public Guardian immediately should its level of cover reduce.

Conclusions:

[80]In my judgment, the Court may be satisfied as to sufficiency of insurance cover if an authorised person gives undertakings on behalf of the trust corporation that it willa. maintain insurance cover which is compliant with SRA Minimum Terms and Conditions;b. lodge a copy of the insurance policy with the Public Guardian on appointment; andc. notify the Public Guardian immediately if there is any reduction in the terms or level of insurance cover AND the level of cover is adequate relative to the size of the estate in question. If the Court is concerned that the SRA minimum level may not be sufficient relative to the size of the estate, it should seek further information. Conclusions and Next Steps[81]The information and undertakings which I have identified as required for the Court to be satisfied that a trust corporation may appropriately be appointed are set out on a single page as Schedule 2 to this judgment.[82]It would be most convenient if these requirements were incorporated into an amended standard COP4 Declaration. Until that can be achieved, in my view the appropriate approach would be for a trust corporation seeking appointment as a property and affairs deputy to file with the application the current standard COP4 form with an additional page attached addressing those matters at schedule 2 of this judgment. The additional page should be endorsed with the name of the case and the name, position and signature of the authorised person giving the undertakings. Section 5 of the COP4 form should be completed so as to make clear that the additional attachment is part of the declaration, to which section 6 will then apply.[83]In respect of each of the applications in these proceedings, the trust corporation applicant is now required to file within 14 days an up to date COP4 declaration with the additional page attached as set out in paragraph 82 above. (For the avoidance of doubt, no COP9 application form is required.) The Court will further consider each application on the papers.[84]If, on considering the updated COP4 with the additional page, the Court is not satisfied that it is appropriate to make the appointment as sought, the particular application will be listed by the Court for further consideration at an oral hearing, reserved to me.

Post Script

[85]Whilst the issues raised in these proceedings have been under consideration, there have been other applications before the Court where an applicant trust corporation has been appointed as property and affairs deputy for a limited period (usually twelve-months) or its application has been stayed (“The Other Matters”). In some of The Other Matters, COP9 applications have been made for reconsideration of the time-limited aspect of the appointment or the stay.[86]In the light of this judgment, those trust corporation applicants in The Other Matters are invited to provide to the Court:a. a schedule of their time-limited appointments and stayed applications (In the schedule, each matter should be identified by name of the protected person and case number, and the date of expiry of any current order should be given); andb. in respect of each protected person on the schedule an up to date COP4 declaration with the additional information as set out in paragraph 82 above.[87]Upon receipt of the schedule and the declarations, the Court will consider each matter further of its own motion. (No COP9 application is required.) If, on considering the updated COP4 with the additional page, the Court is not satisfied that it is appropriate to vary the order in respect of time limited appointment or to lift the stay, the particular matter will be listed by the Court for further consideration at an oral hearing. 90. SCHEDULE 1 Irwin Mitchell Client name Court number SC 11598078 SPG 13020043 LAP 13014320 AO 13017928 ASA 13054472 RW 10101321 DMD 1304449T MIR 13011374 TGC 12985478 KIR 12943838 SF 13010745 NNR 12912309 JA 13012325 MHT 12988516 AL 12976106 AR 1302506T BR 12992008 PW 12934173 SB 12978372 CDN 96503580 MAB 13041836 MML 12998315 Slater and Gordon Client name Court number SAC 1300153T JMW Solicitors LLP Client name Court number OA 12997030 IS 12994873 Freeths Client name Court number CA 1044328T PKJ 13047855 JDA 13042200 PSG Client name Court number JZ 13040960 Stephensons Client name Court number CH 12896299 Russell-Cooke Client name Court number SJH 12988142 Chattertons Client name Court number LGC 13092237 Enable Law Client name Court number EM 12959800 AM 12959783 Thomson Snell and Passmore Client name Court number DS 12797943 Bromleys Trust Corporation Client name Court number SPG 13018183 Schedule 2: Information/undertakings to be provided by an authorised person on behalf of a trust corporation seeking to be appointed as property and affairs deputy

Schedule 2:

[1]The proposed deputy (the trust corporation) is a trust corporation within the meaning of section 64(1) of the Mental Capacity Act 2005 and can lawfully act as such; and the trust corporation will inform the Public Guardian immediately if that ceases to be the case.[2]The trust corporation will comply with the Public Guardian’s published standards for professional deputies.[3]EITHER(i) The trust corporation is authorised by the SRA; OR(ii) all the directors of the trust corporation are solicitors and it employs no one (save to the extent that it employs a company secretary); and(iii) the trust corporation will retain its associated legal practice to carry out all practical work in relation to the management of the incapacitated person’s property and affairs; and(iv) the trust corporation is covered by the professional indemnity insurance policy of its associated authorised legal practice on the same terms as that practice;[4]The trust corporation will notify the Public Guardian immediately if there is any change to any of the matters set out in paragraph 3 above.[5]The trust corporation undertakes that it (or where relevant its associated authorised legal practice) will maintain insurance cover that:(i) covers the work of the trust corporation and(ii) is compliant with SRA Minimum Terms and Conditions.[6]The trust corporation will lodge a copy of the insurance policy referred to in paragraph 5 above with the Public Guardian on appointment and will inform the Public Guardian immediately if there is any reduction in the terms or level of the insurance cover.

Cited in 5 later judgments