Deputyship, conflict and financial abuse

Elderly and vulnerable clients are at greater risk of financial abuse from family members and third parties who, for example, may befriend them specifically to extract money or other assets.

Where these clients require extra help but do not yet have in place an LPA, or no deputy has been appointed, potentially significant challenges can arise. Lockdown will, in some cases, have exacerbated the problem. It is well known that domestic violence increased dramatically after lockdown restrictions were imposed in March, and there’s no reason to doubt that elder abuse has also increased.

The restrictions meant that the elderly became almost completely reliant on their families, friends and neighbours for support. The opportunities for financial abuse were clear. Unfortunately, incidents of such abuse are not always resolved.

In a judgment handed down by the Court of Protection back in March, District Judge Geddes allowed an individual to be appointed as a professional deputy. It was an unusual case involving an elderly lady who appeared to have been the victim of earlier financial abuse (KKL Executor & Trustee Company Ltd v Harrison [2020] EWCOP 25).

P was 81 and suffered with advanced senile dementia. She lives in a residential care home, though when the deputyship application was made in May 2019 she was still in her own home. She is unmarried and has no family.

Under three successive wills, P had appointed a trust corporation (KKL) as executor and it was KKL who make the application to be appointed deputy for property and affairs.

The application was contested by a partner (LH) at Clarion Solicitors who also applied to be appointed deputy. She is a professional deputy who had been approached by P’s social worker under an approved scheme used by the local authority for referrals on behalf of vulnerable people for legal advice or deputyship.

Unfortunately, it was suspected P had earlier been the victim of financial abuse. She had a friend or neighbour (GY) who had been her informal carer and there seemed to have been an earlier conflict between her and KKL. Both accused each other of financially abusing P – there had been a number of “suspicious transactions” of more than £40,000 on her bank statements, suggestive of financial exploitation by a former carer.

However, who the perpetrator was (if indeed, there was one) had not been determined. A police investigation into earlier possible abuses has been closed. To compound matters, there were allegations on each side of an aggressive or combative approach being taken by the other.

The judge decided on balance that LH was best suited to be appointed P’s deputy as she was geographically nearer; had greater deputyship experience; and importantly, there was a potential conflict between P and KKL’s parent company. There were also regulatory concerns around KKL.

In fact, the judge commented that nothing raised by or on behalf of KKL suggested LH would be “anything other than a perfectly suitable deputy” for P.

District Judge Geddes’ comments around potential conflict are well worth noting. He said that “the magnetic features have to be the need to investigate whether KKL’s conduct of [P’s] affairs to date has been in breach of the Fundraisers Code and the clear potential for a future conflict as a result of JNF UK [KKL’s parent company]” being P’s sole beneficiary.

Practitioners would be wise to be extra vigilant for indications of financial abuse when acting for elderly clients in the current climate.

Written by Nicola Laver, a non-practicing solicitor and a qualified journalist. She is also editor of Solicitors Journal.


Posted on 04.09.20