Joint Committee on the Draft Mental Incapacity Bill Minutes of Evidence


Examination of Witness (Questions 500-511)

MR DENZIL LUSH

14 OCTOBER 2003

  Q500  Baroness Fookes: How would you deal with that particular problem if you want things spelt out more than they are?

  Mr Lush: We have exactly the same dilemma with the best interests case. By no means is that fully defined in those four criteria. It is a question of parliamentary draftsmanship.

  Q501  Mr Burstow: Talking of parliamentary drafting and relevant wording, I wanted to come back to this concept of general incapacity that you were describing just now and I wondered if you might be able to help us with any thoughts as to a formulation that could be incorporated into the draft Bill to enable us to capture that idea?

  Mr Lush: The Court of Protection's jurisdiction is invoked when a person is incapable by reason of mental disorder of managing and administering their property and affairs. The mental disorder bit actually appears in the Mental Health Act, but nobody in a reported decision has ever come up with what incapacity to manage your property and affairs actually means. There was one judge, Judge Wilberforce, who said back in 1963 that it depended largely on the property and estate that you had to manage and administer. He was referring to an ambassador's widow who lived in the Holden Hills in Devon, in a beautiful Queen Anne mansion that would probably be worth £5 or £6 million nowadays and she had a stroke and she really could not communicate. What I think he was saying there is that where you have somebody with a property of that significance to manage and administer it is probably more problematic to do so than if somebody has just a £30,000 account in the Halifax Building Society which would be easier to manage. Then there are other considerations that were brought in by another judge that really meant taking advice, maybe a problem over financial management and weighing the advice in the balance and arriving at a decision in that way. There was a case called Masterman-Lister v Brutton & Co that was widely reported last year and went to the Court of Appeal. I do not think it has helped in any way because they were relying on the Law Commission's definition of specific function and capacity, which is what appears in this Bill, and trying to apply it to general capacity, which is "general ability to manage one's property and affairs". I do not think the common law has got it right. I do not know if it would be possible to come up with some sort of proper formula as to the capacity to manage one's affairs, but I would not like to shoot one off the top of my head right now.

  Q502  Mr Burstow: Could you possibly come back to the Committee with some further thoughts on that?

  Mr Lush: Yes. What in fact happened in Masterman-Lister is that I fed the judge some materials on that and there was a particularly useful decision based on an Australian case that was based itself on American rulings before it which was that it was quite a satisfactory definition of it.

  Q503  Lord Pearson of Rannoch: Surely it is almost impossible to draw the line on this one between those who do have capacity and those who do not because we can all think of families who have in one way or another wasted colossal fortunes, one generation taking decisions which technically look as though they lack mental capacity, but one surely cannot do anything about that. Likewise, your example of the old lady who gave an awful lot of money to her window cleaner, if she is otherwise sane, surely it is a very difficult one to define in law, is it not?

  Mr Lush: Yes.

  Q504  Lord Pearson of Rannoch: A fool and his money can be easily parted!

  Mr Lush: There are two extremes. There is capacity at one end of the spectrum where understanding is everything and there is undue influence at the other end of the spectrum where a particular relationship is involved and there is a great grey area in between. I think essentially what I was trying to say in my submission is a lot of this is to do with burdens of proof and a lot of the burdens of proof really relate to unscrambling transactions that have gone wrong. I think, for example, the burdens of proof are not the same for different transactions. I was spectacularly reversed in a case called Re W a few years ago where I ruled that a person was incapable of creating an enduring power of attorney. I had some evidence from an eminent psychologist which said no way was she capable of creating an enduring power of attorney on 6 June, so I refused to register it and her attorney appealed and she was successful in her appeal. What the judge said was, "I did not need to be satisfied that she understood that she actually had the capacity to make it. All that I needed to be satisfied about was that she did not lack the incapacity to make it". That was a totally different emphasis on this and these are objections to the registration of enduring powers of attorney on the grounds that they are not valid. I think probably up until then we were objecting on a regular basis, but since then I think there are only two or three cases where an objection has been upheld on that basis. A lot of this burden of proof area is desperately complicated, but I think by looking into it and perhaps making sure that when things go wrong they can be unscrambled relatively easily, burdens of proof have a lot to play.

The Committee suspended for a division.

  Q505  Mrs Browning: How serious is the problem of financial abuse with enduring powers of attorney in your view? You mentioned surveys in your submission, surveys of abuse, and I just wondered how accurate they are and why then you say that you are not sure you agree with those who claim that the existing criminal law is not adequate to deal with financial abuse of people who lack capacity. If I may, Chairman, just add a tail end of my own because it relates to a particular constituency case I have been dealing with, the Court of Protection actually have managed to restore money, but were unable to refer it for criminal prosecution because the person concerned was 98 and clearly could not be called as a witness. I just wonder how difficult it is to bring criminal prosecutions when the key witness lacks capacity.

  Mr Lush: I think you have just answered the question you were going to ask, that particular part. I have gone down on record in the Solicitors' Journal on 11 September 1998 as saying that I think that financial abuse occurs in about ten to 15% of cases involving enduring powers of attorney. In fact the figure is one in eight, but I put it at ten to 15 because that sort of sounded slightly vaguer. That was 1998 and I still adhere to that estimate, though I admit it is entirely a hunch and just an instinctive assessment. There is nobody who can possibly say that you have got, say, 39,421 people being abused at this very moment; nobody could possibly collect that data. Another problem is how do you actually define "abuse". If you were talking in terms of purely criminal behaviour, then I think probably the abuse level would be at 2 or 3%. If you are talking about unethical conduct of any kind, it is going to be much higher and that is the sort of figure I am talking about, the 12.5% being the one in eight. The largest abuse case that we have come across of an enduring power of attorney involved an elderly lady from Torquay who one lunchtime was invited to have a glass of sherry with the proprietor of the residential care home in which she lived and after two or three sherries gave an enduring power of attorney in her favour and a will and he then proceeded to raid her bank account and transfer it to a Swiss bank account in his own name. It was £1.9 million. We did in fact have a bit of a result and we managed to recover £1.3 million, but £600,000 he had spent. What is actually much more interesting is the abuse that occurs at the lower level, that threshold of where do you draw the line between acceptable and unacceptable behaviour. I had an application for the objection of an enduring power of attorney a few years ago where the objector was claiming that her brother, who was the attorney, was charging 31 pence a mile every time he went to see the mother. Now, the mother lived in Banbury and he lived in Evesham and the round trip was 90 miles, 45 miles each way, so that was £27.30 each time he visited his mother and he visited her three times a week, so that was £82. Now, as an attorney, there was absolutely no need for him to visit her that frequently and claim reimbursement for all business expenses. If he is visiting her as a loving son, you would not expect him to charge that sort of rate of remuneration, so it is those lower levels of abuse which are in fact far more interesting than the patently criminal ones. As far as surveys are concerned, I think you, Mr Burstow, mentioned or somebody mentioned No Secrets and that was in the year 2000 that that was published. There was a survey conducted by the charity, Action on Elderly Abuse, and it was published in the press quite widely in July 2002 and, according to that, one in three elderly people suffer from psychological abuse, one in five are physically abused, the same number are conned out of their savings and more than 10% are neglected and 2.4% are abused sexually.

The Committee suspended for a division.

  Q506  Mrs Browning: Is your proposal to extend the offences of ill-treatment and neglect in this Bill likely to be adequate to cover the scenarios you have described to us? Also what sort of extensive monitoring system would you feel was appropriate to try and address some of these problems?

  Mr Lush: I think the recommendations I was coming up with primarily were sort of just tweaking changes of emphasis in the private law/civil law side of things really to put right disasters and to restore people's positions they were in before they made a problem transaction or whatever. On the criminal side, I think it was you who said earlier on that a lot of the problem is that the star witness is the elderly person who has been abused and the police are reluctant to prosecute. Half of the abuses which occur involve family members and again we have this additional complication where it comes down to best interests and whether it is in the best interests of the old person for a family member to be charged, convicted and possibly given a custodial sentence. We did have one two or three years ago where a daughter and son-in-law were both attorneys under an enduring power of attorney and behaved appallingly. The son-in-law was given a custodial sentence, but charges were dropped against the daughter and I think that was the first time that I was aware that a family member had actually been given a custodial sentence for an abuse.

  Q507  Baroness Barker: This is a question which you may not be in a position to answer now, and that is fine if you wish to write to us subsequently, but the question I would like to ask is given your experiences, with the practices of financial institutions (a) to what extent are they consistent or not, and (b) to what extent do they help to foster or to prevent situations in which financial abuse can happen? As a supplementary to that, given the huge changes that are taking place in the technology of finance at the moment, does that give additional cause for concern?

  Mr Lush: The Irish Law Commission have come up with a paper fairly recently on the law and the elderly, looking at much the same sort of areas as you are looking at and one of the recommendations they are coming up with is that there should be a far greater responsibility on financial institutions to monitor accounts that involve old or vulnerable people, particularly perhaps joint accounts. I go along with that and I think there is an educational process and I think there is going to be a greater duty on them to do that. Something that is not in the public domain is that we had quite an interesting case last year which involved a woman who had two sons, one of whom was an attorney who took all of her savings, £74,000, and the other son then was appointed receiver and sued his brother to get the money back, but the brother was by then bankrupt, so what could he do? Well, this guy had a bright idea and he actually went to the Financial Services Ombudsman and the Financial Services Ombudsman held that the Alliance & Leicester had been under a duty to monitor strange movements from this account and in fact failed to do so and ordered the payment of £50,000 back to this woman's estate. So it is there, but it is not widely known and I do not think that case ever made it into the public domain, but I think there is a lot of scope for them to be educated and have special rules on protected accounts.

  Baroness Barker: I am sure that would not be a matter for the face of the Bill now, but possibly for regulation.

  Q508  Baroness Knight of Collingtree: This question deals with the point you made in your submission on autonomy and protection and the very first thing you said was that you thought the Bill was weak in terms of protection and this is a very major cause for concern. Now, throughout your submission you suggested that there was quite an easy way to get over this. You may not be able to answer it now, but I would be very grateful if you could give your own thoughts or suggestions as to how to get over this lack of protection. You also said that it can be remedied fairly simply with a little need for extra resources, so perhaps you could at least tell us what is "little" in that sense?

  Mr Lush: What I meant was just tinkering with these burdens of proof, making it much harder for abusers by making it easier for burdens to shift so that the burden of proof is then on somebody who has taken advantage of an unreasonable transaction. Once you get down to trying to recover money civilly from people who have abused, it is a very lengthy process and there are enormous obstacles, so you could somehow make that easier and that would be a relatively cheap solution.

  Q509  Baroness Knight of Collingtree: When you, in the same submission, said that that could be included in a code of practice, are you thinking along those lines?

  Mr Lush: Possibly.

  Q510  Baroness Knight of Collingtree: Because I could not quite balance up the two.

  Mr Lush: Possibly the burdens of proof then could be dealt with in a code of practice, yes. You see, what happens is that the burden of capacity then shifts. You have someone, an elderly woman, say, 85 years' old, she gives £5,000 under mysterious circumstances and she is presumed to be able to do that. The burden should then shift to the person who has received that gift to say, "Well, no, she really knew and understood what she was doing", and certainly with wills and so on and the monstrous switchings of burdens. Now, this Bill is going to cover wills and it is going to cover gifts and things like that as well as other transactions and the rules are really very complicated and they have not really been given enough attention. I think simply to say there is a presumption of capacity grossly overstates the problem and complexities of it.

  Baroness Knight of Collingtree: Perhaps in the interest of covering this very important point about protection we might ask Master Lush if he would consider this point very carefully and if he could give us any further information that would be very valuable.

  Q511  Mr Burstow: Can I just pick up on one thought which is in the submission, which is this issue of duty of care that should be on those who are substitute decision-makers and whether or not you feel that the legislation as currently drafted does implicitly place such a duty and whether there would be an advantage in making it explicit on the face of the Bill?

  Mr Lush: I am not sure that it does. If you actually read through that legislation, the only people who are required to act reasonably are those under a general authority. That is the only time the word "reasonably" arises. Theoretically you do not have that with deputies and LPAs. I am sure they would act reasonably. I am also worried that actually I can only remove people who are not acting in the best interests and that does not necessarily enable me to remove somebody who is incompetent because you have got this very narrow test of what "best interests" means. So you could have somebody who is appallingly incompetent in terms of providing financial needs and requirements but I am not sure I can get rid of them purely on the best interests test as laid out in the Bill.

  Chairman: Thank you, that is very helpful. Would you be kind enough to write to us particularly on advance decisions, which we have not reached, powers of inspection and the extra powers you have referred to. That would be very, very helpful. Thank you.





 
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