The Court of Protection got it spot on in Re JDS, says Eddie Fardell

I often hear it said that being a lawyer is a great job were it not for the clients. And, like most of my colleagues, I enjoy a good moan now and then about the trials and tribulations of everyday working life.

But I can genuinely say I feel privileged to do what I do; act as a professional deputy primarily in accident cases. Yes, I have some incredibly difficult clients but they usually have good reason to be so. And some of their families are, quite frankly, almost unbelievable at times.

Maintaining perspective

But I do feel lucky to specialise in this area. I have met some truly wonderful people over the last twenty years or so who have overcome real tragedies in their lives with such courage and fortitude that leaves me in awe. It is no exaggeration to say that every single week of my working life something happens in one of my cases which makes me feel very humble.

It’s a wonderful job for helping keep things in perspective. If I’m feeling sorry for myself I only have to give a moment’s thought to what some of my clients have to deal with. The self-pity swiftly turns to sheepishness.

There are, of course, always the exceptions. I have acted in cases where the damages award has been looked upon as the family nest egg; the cash cow which has now become available to all and sundry. It can be a constant battle to stop the much-needed funds being frittered away on all kinds of unnecessary luxuries. Or those families who want to spend as little as possible. Sometimes this is because there is a real and constant fear that the money is going to run out, but often the motive is more self-serving; a deliberate attempt to preserve the pot available for inheritance.

Let me make it clear that this is not the norm. As I say, I am privileged to act for some wonderful, totally selfless people and their families. But there are those who have an eye on what’s in it for them. I have had a few cases where, post settlement, the emphasis has clearly not been on making the victim’s life as fulfilling as possible, but rather on inheritance tax mitigation.

I have always given such ideas pretty short shrift and, to be fair, the idea is usually quickly dropped when I explain that tax planning for young victims is, so far as I’m concerned, off the radar. But there have been cases in the past where the family persist; where they see potential tax savings as a major priority.

Reinforced beliefs

I was therefore delighted when Senior Judge Lush published his decision in the case of Re JDS earlier this year. This was an application on behalf of the parents of a twenty-year-old man who suffered from cerebral palsy as a result of birth mismanagement. An earlier application to make gifts from his estate to save inheritance tax had been refused. An amended, and less ambitious scheme, was put forward. The application was not supported by the official solicitor and Senior Judge Lush agreed. It was not seen how such a scheme could be in this young man’s best interest.

The decision is well worth a read. The senior judge sets out the arguments of counsel for the applicants and for the official solicitor in full. He then adopted a ‘balance sheet’ approach - more usually used in health and welfare cases – to set out the advantages and disadvantages of the scheme being allowed. In my view, this worked very well in this particular case and it was quite clear that advantages were heavily outweighed.

I do hope the decision in this case relegates possible tax saving schemes in cases such as this to where I think they should be – right at the bottom of the pile. I fully accept that tax planning is of relevance in this area. But for a twenty year old with uncertain life expectancy? A non-starter in my view.

I hope this case will make practitioners think very carefully in the future when they are asked to advise on such schemes. I will certainly feel even more confident in pouring cold water on them when they are raised with me.

In JDS the applicants, the young man’s parents, were awarded their costs from their son’s estate. Future applicants in similar circumstances may not be so lucky...

Eddie Fardell is a partner and head of the Court of Protection team at Thomson Snell & Passmore