Tackling challenges for attorneys and deputies

Costs can be a particular issue for professional attorneys and deputies, so following best-practice guidance is a must, advises Margaret Windram

The Law Society practice note on lasting powers of attorney (LPAs), published on 7 June 2016, provides guidance for members on good practice in this area. It covers the creation of LPAs for property and financial affairs (financial decisions) and for health and welfare (health and care decisions), including the capacity requirements, and is a must-read for all practising in this area.

The guidance sets out the various matters that need to be taken into account when deciding who to choose as the attorney and also reminds us of the need to carefully advise the client creating the LPA about the risk of abuse. It suggests there may be situations where a deputy (once capacity is lost) could be more appropriate and protective than an LPA - for example, where the assets are more substantial or complex than family members are accustomed to handling and there is no suitable professional to appoint as attorney, or where litigation may lead to a substantial award of damages for personal injury.

Costs issues

If a professional attorney or deputy is to be appointed, costs can be a particular issue. Where it is proposed that you (or a colleague) are appointed

as solicitor attorney under an
LPA, you should discuss with
the donor your current terms and conditions of business, including charging rates and
the frequency of billing. These should be approved at the time of granting the power. You must ensure the donor is aware that costs will increase in future years, giving enough information that they can make a properly informed choice.

There are benefits to appointing a lay attorney, such as a family member, because of the costs issues. However, if the donor still chooses a solicitor attorney, the LPA forms include
a section where the donor can confirm that they have agreed
to their attorney being paid
fees and set out the agreed arrangements. A good file
note of the discussion should also be kept.

The Office of the Public Guardian (OPG), together with the Senior Court Costs Office (SCCO), issued guidance on
19 July 2016 on professional deputy costs.

Client's best interests

The deputy must always act in the best interests of the client, as is the case with every decision or step taken.

The OPG will ask professional deputies to submit a breakdown of the costs involved in their care and an estimate for the following year on an OPG 105 form, which will be requested alongside the deputy report (OPG 102). On receipt of the estimate, the OPG case manager will review the estimated costs and contact the deputy to discuss any concerns or clarify any issues.

A professional deputy is entitled to general management costs which are reasonable and proportionate to the total value of the client's estate and the amount of work done. Any
work must be done by the appropriate level of fee earner. Guidance is given about this, including that routine activities, such as paying bills and checking bank statements, should be carried out by an administrative assistant or grade D fee earner
at best, with only three-minute units allowed for paying bills and short letters. The SCCO's usual practice is to allow one home visit in each 12-month period in cases which are
stable, with the cost of only
one fee earner allowed for
the visit except in the most exceptional cases.

If deputies are being paid for their duties, they are expected to demonstrate a higher degree of care or skill when carrying them out and must always consider whether it is in the client's best interests to continue in the role if the costs are significantly reducing the client's estate. They must also consider whether, once the client's affairs are sufficiently well organised and if unlikely to undergo a significant change, it may be more appropriate for a lay person to be appointed instead to reduce costs.

While there is a general duty of confidentiality, the OPG encourages deputies to be open about charges with the client's family (subject to considering whether disclosure is in the client's best interests).

When submitting the bill for assessment, the professional deputy should enclose a copy of the fee estimate. If costs are 20 per cent or more above the estimate, reasons should be given. During the year, if changes in the client's circumstances mean costs will increase to 20 per cent or more above the estimate, the deputy should alert the OPG, explaining the reasons.The OPG may alert the SCCO to any concerns that it has about costs, but it will be for the SCCO to assess costs and the OPG will not seek to overturn any cost certificates issued.

While there are hurdles aplenty to overcome, at least practitioners can know that if they follow this guidance, they should have a good defence to any criticism.

Margaret Windram is an associate at Irwin Mitchell @irwinmitchell www.irwinmitchell.com