Examination of Witness (Questions 500-511)|
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
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
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
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
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
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.