Is a solicitor under a duty to warn their client of risks falling outside their retainer?
Last month it was reported by the BBC that a consultant psychiatrist, Zholia Alemi, had been found guilty of four fraud and theft charges (and subsequently jailed for five years) having “redrafted [an elderly patient’s] will and fraudulently applied for power of attorney” in an effort to benefit from her estate. Alemi is said to have met the patient at a dementia clinic.
More recently, there has been press coverage concerning a solicitor “sentenced for stealing almost £110,000 from elderly clients”. The solicitor is said to have stolen money from the estate of a deceased man and committed fraud by abuse of position by misappropriating funds from two other elderly clients. In each case, the solicitor had been granted power of attorney by the individual involved.
In August 2017, retired Court of Protection judge Denzil Lush made headlines when he expressed concern about the opportunities for abuse associated with making a Lasting Power of Attorney. Figures published by the Office of the Public Guardian (“OPG”) earlier this year appear to reinforce such concerns revealing a significant increase in the number of investigations into people with Lasting Power of Attorney (from 1,199 in 2016/17 to 1,729 in 2017/18).
A lasting power of attorney is legal document designed to protect the maker (“the donor”) enabling them to appoint a trusted third party (or parties) (“the attorney”) to act on their behalf in the event that they lose the capacity to make decisions for themselves. There are two types of lasting power of attorney – one covers health and welfare and the other property and financial affairs. A lasting power of attorney must be filed with the OPG while the maker still has full mental capacity.
Abuse of a power of attorney is more often than not revealed either on death of the vulnerable individual or at a point where a third party has sought to intervene by seeking the assistance of the OPG or the Court of Protection having becoming suspicious as to the actions of the attorney. In the case of the latter, if the evidential position is sufficient to support the concerns the likely outcome is that the power of attorney be revoked and a Deputy be appointed by the Court of Protection who then becomes responsible for the vulnerable individuals affairs (be it health and welfare or property and affairs or both).
In either case, once the abuse has been stopped urgent consideration will need to be given to the possibility of legal action been taken against the perpetrator. It may be necessary to report the attorney to the police for fraud or theft and/or pursue civil proceedings in an effort to recover and/or preserve the assets of the donor. Possible applicable civil action might be a claim for undue influence or a breach of trust and/or fiduciary duty claim and would extend to making an application for an injunction in order to prevent the perpetrator from disposing of, or dealing, with assets. A Deputy would require authority from the Court of Protection to litigate on the donor’s behalf (it is often the case that the order appointing the Deputy will give them authority to investigate suspected financial abuse and if appropriate and in the best interests of the vulnerable person take action). Proceedings to recover misappropriated assets or for damages will be pursued in the Chancery division and the Court of Protection will have no jurisdiction in relation to these matters.
Whether it is a Deputy or Executor that is tasked with investigating the financial abuse, the question of proportionality will be a central consideration in determining how far to pursue matters. It would not be in the best interests of the vulnerable individual, nor the beneficiaries of an estate, to aggressively pursue civil proceedings if the value of the potential claim does not justify the associated legal costs or the prospects of recovery are low (the assets have already been dissipated and the attorney does not have assets of their own against which to enforce an order). An application should be made to the Court of Protection or the Chancery courts (as applicable) if there is any doubt as to how best to proceed.
It should be noted that whilst the apparent increase in abuse of an LPA is of course of very real concern this may (at least in part) be down to our aging population (and associated increase in the number of LPAs). Moreover, there are safeguards in place to protect an LPA donor namely: (1) the requirement for a “certificate provider” who is an independent person tasked with confirming that the donor understands the power and importance of the LPA and is not under any pressure to make it; and (2) that the donor is able to list in the LPA application a number of people to be notified upon the registration of the LPA with the Court of Protection (it cannot be used until this has been done).
However, in the event that the worst should happen independent legal advice should be sought at the earliest possible opportunity to increase prospects of success in preserving and/or recovering the donor’s assets.
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