Digging for gold

Private client practitioners are all aware of the age-old test for making a will laid down in Banks v Goodfellow [1870] LR 5QB 549. The test sets out that a person making a will must:?
 

• understand the nature of the act and its effects;
   

• the extent of the property of which he is disposing; and
   

• be able to comprehend and appreciate the claims to which he ought to give effect.?
   

This was expanded upon by Templeman J (as he then was) in Kenwood v Adams [1975] CLY 359 November whose judgment has become known as ‘the golden rule’: “In the case of an aged testator or a testator who has suffered a serious illness, there is one golden rule which should always be observed, however straightforward matters may appear, and however difficult or tactless it may be to suggest that precautions be taken; the making of a will by such a testator ought to be witnessed or approved by a medical practitioner who satisfies himself of the capacity and understanding of the testator and records and preserves the examination and findings.”
 

Following this case, it has therefore been accepted that the best practice approach when a solicitor is instructed to prepare a will for an elderly testator, where there is any doubt over their mental capacity, is to arrange for them to be examined by a medical practitioner and a report made. However, this is not always possible or practical.

Target practice

As professionals, all we can do is to advise our clients of the consequences of not obtaining such evidence, particularly where there is likely to be an aggrieved beneficiary. We cannot force them to undertake the required assessment. Templeman J said, very aptly, in Re Simpson [1977] 131 SOLJO 224, that “if proper precautions are not taken then injustice may result or be imagined, and great expense and misery may be unnecessarily caused”.
 

Although best practice, there have been subsequent cases where a will can be held invalid on capacity grounds even after following the golden rule. In Sharp v Adam [2006] EWCA Civ 449, the Court of Appeal stated “the golden rule is a rule of solicitors’ good practice, not a rule of law giving conclusive status to the evidence obtained in compliance with the rule”.
 

However, we all know that in the real world it is very difficult, and in some cases impossible, to obtain a report or even an opinion from a medical practitioner. In an increasingly litigious world, many medical practitioners seem reluctant to complete such reports, leaving the solicitor in a difficult position.
 

The introduction of the Mental Capacity Act 2005 has not assisted either. Although the general consensus is that a solicitor or doctor considering whether a person has testamentary capacity should have regard to the MCA, case law has confirmed that the Act restates the common law principles laid down in Banks. Indeed, the code of practice under the MCA states that “the Act’s new definition of capacity is in line with the existing common law tests, and the Act does not replace them”.
 

Furthermore, in Perrins v Holland and others [2010] EWCA Civ 840, the Chancellor of the Court of Appeal confirmed that “the requirement for testamentary capacity is not statutory” and further demonstrated how the test had developed through case law.

Evolutionary principles

With the advent of modern science, the issue of mental capacity is more understood than it was in the days of Banks. Case law has developed and, ?more recently, two cases in particular ?are of note.
 

The first is Key v Key [2010] EWHC 408 Ch, where the effect of bereavement on capacity was considered. The case involved a “slight development of the Banks v Goodfellows test, taking into account decision-making powers rather than just comprehension, [the judge] considered that it is necessitated by ?the greater understanding of the ?mind now available from modern psychiatric medicine”.
 

Thc case involved George Key, who died on 20 July 2008, two months before his 91st birthday. His wife, known to the family as Sybil, had died almost two years earlier. They had been married for 65 years. One week after Sybil’s death, a solicitor, Mr Cadge, came to see Mr Key to make a new will, which was signed two days later. The terms of the will differed significantly from his previous will in that it provided for the majority of the estate to pass to his two daughters. The previous will, made in 2001, had provided for the estate to be held on life-interest trusts for his wife and the residuary estate to pass equally between his two sons. The two sons challenged the will on the basis of want of testamentary capacity and want of knowledge and approval.
 

Mr Justice Briggs was particularly critical of Mr Cadge, the solicitor, stating: “Mr Cadge’s failure to comply with what has come to be well known in the profession as the golden rule has greatly increased difficulties to which this dispute has given rise and aggravated the depth of mistrust into which client’s children have subsequently fallen.”
 

Contrast this with the case of Thorpe v Fellowes Solicitors LLP [2011] EWHC 61 QB. The decision received considerable press coverage due to the comments made by Mrs Justice Sharp: “I should add, since at least part of the claimant’s case seems to have suggested, at least implicitly, that this was the case, that there is plainly no duty upon solicitors in general to obtain medical evidence on every occasion upon which they are instructed by an elderly client just in case they lack capacity. Such a requirement would be insulting and unnecessary.”
 

Thorpe v Fellowes involved the sale of Mrs Hill’s property. Mrs Hill suffered from dementia. She sold her property at an undervalue and requested that the sale proceeds be paid to her daughter’s bank account. Mrs Hill’s son brought an action for professional negligence against the firm of solicitors that acted in the sale because, among other things, the firm had failed to appreciate that Mrs Hill was a vulnerable person and had failed to make enquiries as to her capacity to understand the sale, which represented a disposal of her only asset.

Mrs Justice Sharp said that “a solicitor is generally only required to make enquiries as to a person’s capacity to contract if there are circumstances such as to raise doubt as to this in the mind of the reasonably competent practitioner”.

Practical application

So what practice points can be made in all of this? While solicitors are clearly ?not medically qualified, we are required to have knowledge of, and recognise ?the signs of, mental incapacity. In much of this, I suspect, common sense will need to prevail. It further highlights ?the need to know your client and their own circumstances.

When acting for an elderly client who has suffered bereavement or is dealing with significant stress, it would be prudent to take time to address the issue of capacity. I do not think we can afford the criticism laid down at the door of Mr Cadge, and so common sense has to be: follow the golden rule. At the very least, to avoid a claim being made, it is sensible to:

• see your client alone so there can ?be no argument as to undue influence and coercion;

• 
  ?make detailed attendance notesof your meeting; and

• 
  ?if the client is making a will which may become even slightly contentious, it is advisable to obtain medical evidence of capacity and, as a bare minimum, advise your clients of the pitfalls of not doing so.
   

One final note: in an age of increasing life expectancy, the effect of the golden rule does not only apply to private client practitioners but also to colleagues in other disciplines such as conveyancing, and this is something to which we all should give some thought.

Suzanne Evans is a solicitor working at Access Legal from Shoosmiths

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