Watt v ABC [2016] EWHC 2532 (COP)

Analysis

ABC was awarded £1.5m in settlement of personal injury proceedings in the QBD. ABC executed a revocable personal injury settlement in January 2015 to receive interim payments of damages and to preserve his entitlement to state funded care. In June 2015 the applicant was appointed by the Court of Protection to be ABC’s deputy, on the basis that he lacked capacity to manage his property and affairs. There were difficulties and issues relating to the extent of ABC’s capacity which had arisen in the context of the QBD proceedings, but had not been resolved. The deputy made an application for directions as to whether the award should be paid to and administered by her as property and affairs deputy, or should be held on bare trust.

Held:

1. 1) ABC did not have capacity to make a number of decisions relating to his property and affairs without support, and there were real risks that ABC could lose significant parts of his capital. Moreover, he would always be vulnerable to influence from others which might cause him to waste the award. However he had capacity to make decisions concerning his income.
2. 2) A trust would give recognise his capacity to make decisions concerning his income and would preserve his autonomy. It would restrict what he could do with capital, but would provide flexibility through the exercise of powers. This would reduce the risk of fall out with professionals.
3. 3) An irrevocable trust had not been taken into account or given any weight in the QBD, but it was too late to impose this type of trust as the discharge of the deputy and creation of the trust would undo progress made and exacerbate breakdown risks.
4. 4) Where the ability of P to make relevant decisions arose, the statutory scheme provided advantages over a trust because (i) the restriction placed on the power of the deputy by s20(1) of the 2005 Act promoted autonomy and flexibility and provided a statutory decision-making structure for the performance of the duty and ability of the deputy (a) to let P make the decisions he could and (b) to make decisions for P when he lacked the capacity to do so, and (ii) it gave protection to the deputy and third parties in respect of dealings with P’s property. In contrast, the authority of trustees was granted and governed by the trust deed and trust law.
5. 5) SM v HM did not constitute authority for the proposition that there was a strong presumption in favour of the appointment of a deputy. That ran counter to the underlying rationale and purpose of the 2005 Act, and, in particular, of its decision and fact sensitive approach to the application of the best interests test in all the circumstances of the given case.
6. 6) The award should be held and managed by the deputy

JUDGMENT CHARLES J: Introduction [1] This is a public document. The hearing was held in public pursuant to the transparency pilot and so a pilot order restricting reporting has been made. [2] As a result of a settlement of proceedings in the Queen’s Bench Division (the QB Proceedings), which I approved, ABC was awarded substantial …

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