Irwin Mitchell v PW: Court of Protection orders conditional ratification of conflicted investment appointment

The Court of Protection has ruled that Irwin Mitchell Trust Corporation must repay 60% of a potential compensation claim into a protected person’s estate if it wishes to retain its appointment as her property and affairs deputy, following an earlier finding that its appointment of an associated investment manager breached the self-dealing rule.

In Irwin Mitchell Trust Corporation v PW & Anor [2026] EWCOP 53 (T2), Her Honour Judge Hilder held that retrospectively ratifying the appointment without compensation would require PW to abandon a claim of real, albeit unquantified, value. The court concluded that conditional ratification best balanced preserving her existing deputyship relationship against protecting her financial interests.

The decision follows an earlier judgement, [2024] EWCOP 16, which found that Irwin Mitchell Trust Corporation (IMTC) had breached the self-dealing rule by appointing IM Asset Management Ltd (IMAM), then part of the same group, to manage PW’s investments.

Best interests and the potential claim

The court considered whether the appointment could be ratified retrospectively under section 16 of the Mental Capacity Act 2005, applying the statutory best-interests test. The parties agreed to proceed on the basis that IMAM’s investment performance and fees were equivalent to those of a reasonable and experienced investment manager.

The principal dispute concerned the value of PW’s potential claim. The Official Solicitor, supported by the Public Guardian, argued that the claim should be calculated by reference to fees received, excluding VAT and third-party charges, with little scope for deductions for overheads or investment management work. On that approach, the recoverable amount could be approximately £37,647 for the relevant period.

IMTC argued that any claim should instead reflect its net profits after expenses and an allowance for skill and care. It estimated that the profit attributable to PW was between £9,000 and £9,500 before any further allowance.

Judge Hilder did not determine which method would ultimately govern a claim, observing that the question was for another court. However, she considered PW’s claim to have real value and treated its existence as a significant factor against unconditional ratification.

The judge gave considerable weight to the position of PW’s representatives, who opposed extinguishing the claim. Although PW and her husband valued their relationship with the existing deputy, the judge found that the disruption of appointing a replacement would not outweigh the importance of preserving PW’s potential rights.

Conditional ratification preferred

The court rejected IMTC’s primary submission that ratification should be granted without conditions. It also declined to give weight to arguments that refusing ratification could increase pressure on the Court of Protection and the Office of the Public Guardian. The judge emphasised that the decision had to be made in PW’s best interests, rather than to manage the court’s wider workload.

Instead, the court adopted a conditional approach intended to preserve both PW’s claim and the existing deputyship relationship. It required IMTC to repay an amount equivalent to 60% of the potential claim, calculated using the receipts approach, into PW’s estate within 28 days of formal hand-down.

IMTC must notify the court and the parties within 21 days whether it accepts that condition. If it does, the parties must agree the sum and confirm payment. The deputyship will then continue, and the proceedings will conclude without a further order.

If IMTC declines, its appointment must be discharged so that PW’s claims can be pursued separately. Her representatives would then have seven days to apply for its removal and propose a replacement professional deputy.

Wider implications for other deputyships

The judgement also addresses arrangements affecting approximately 260 other people for whom IMTC or Irwin Mitchell employees acted as property and affairs deputies and had appointed IMAM as investment manager.

The parties have agreed an interim scheme, including independent review of investment arrangements, to manage the continuing conflict until 30 May 2027, following the sale of IMAM. The court invited further discussions about the implications of the decision for those cases.

The question of prospective ratification in PW’s case remains unresolved and will depend on whether IMTC accepts the condition attached to retrospective ratification.