Calling an attorney to account: what are my responsibilities?

The partners of my firm are the appointed executors in an estate. The deceased was resident in a care home for 18 months before he died. He had capacity but could not cope with his affairs. While in the care home his property and other assets were sold realising about £400,000.

His son has acted under an EPA granted in September 2007 in controlling his finances since the deceased entered the home. The son is a residual beneficiary of the estate together with his sister who lives abroad.

After the sale of the property the son began to transfer substantial sums from the accounts without any obvious explanation for what purpose those monies were used.

The attorney's sister in anticipation of receiving a benefit under the deceased's will is now asking what has happened to the assets and what can be done. She has learnt that her brother has been somewhat extravagant. He has explained his new wealth by claiming that he received a promotion at work.

As the executor your duty is to optimise the value of the estate for the benefit of the beneficiaries and may include action to recover assets transferred during the testator's lifetime. However, such investigations and action for recovery can prove costly for the estate. It is therefore important to pursue the matter as cost-effectively as possible.

To avoid criticism of your actions first canvass the opinion of the daughter. While the decision to act is ultimately yours, it would serve no purpose to do so if the proposed action was contrary to her wishes. If she wants you to pursue the matter then you should ensure that you receive an indemnity from her for any costs incurred. The daughter's indemnity alone will suffice in this case. If there were several beneficiaries and unanimity did not prevail then a Beddoes application may be appropriate.

First try to establish so far as you are able what monies have been transferred to the attorney. Notwithstanding the daughter's enthusiasm for you to pursue matters, one must first assess the cost/benefit of doing so. For example, if it is likely that money has simply been spent does the attorney have alternative assets that might satisfy any ultimate liability? If satisfied, then write to the attorney and request an account of his dealings with his father's finances and assets from the date the EPA was granted.

Try to avoid appearing confrontational and partisan. Confrontation will increase costs and provoke a reluctance to provide the requested information.

Your first approach can be couched as a general enquiry, perhaps offering the attorney an appointment to meet and discuss what has happened. The attorney should provide a clear explanation of where the money has gone. What further action is then required is dependent on the attorney's response, but let's assume that you receive a wholly unsatisfactory explanation of his dealings or indeed no reply at all.

Application for an account

Your application to the court for an account of monies received by the attorney is made in the Chancery Division under CPR part 8. The application must be supported by evidence, usually in the form of a witness statement from the executor.

The details of the claim should include inter alia: an account of monies received by the attorney and how that money was applied; an inquiry of what monies if any remain in the control of the attorney; and an order for payment by the attorney of any monies found to be due. The court will then list the matter for a disposal hearing.

If the attorney still fails to comply and the hearing is required then a draft order should be made available. The order should provide for a reasonable period (say 28 days) for the attorney to account and a further period (say a further 14 days) for repayment.

Failure to comply is a contempt of court and carries penal sanctions. The order must therefore be personally served on the attorney and an affidavit of personal service must be filed at the court. The threat of imprisonment is usually sufficient to ensure the compliance of the most errant attorney '“ but not always. At this point the executor's choices are limited. One may feel obliged to try to force compliance by issuing an application for committal on form N244 supported by evidence in the form of an affidavit.

Civil contempt must be proved beyond reasonable doubt (CPR schedule 1, RSC order 52, practice direction 1.4). One must prove that the failure to comply with the order is a deliberate or wilful breach (see White Book 2011 SC 52.1.12).

The burden is one that most civil practitioners are unfamiliar with. Save for the most exceptional circumstances, the judge is unlikely to order committal, preferring to grant the attorney a further opportunity to comply. Furthermore, even if such an application was successful committal does not recover the liability.

Alternative remedy

In order to avoid the inevitable frustration of the above the practical alternative is to substitute one's application for committal with an application for the recovery of a fixed sum. This may require a further application, but the court has previously been receptive to such an approach.

The calculation of the fixed sum to be recovered need not be exact but should be seen to be reasonable. Based upon any information available to the executor a rough calculation would be accepted and an order for repayment made. If the attorney feels the calculation is unreasonable he can apply for the order to be set aside, but that would not be successful simply as matter of routine without evidence of compliance on his part.

Once that order has been made then the normal gamut of enforcement procedures are available to the executor including but not limited to a charging order, freezing order or bankruptcy.