Andrew Welch 09 October 2020

External solicitors and Court of Protection finance deputyships – to instruct or not to instruct?

While local authorities appointed as Court of Protection finance deputies are able to instruct external solicitors to act on their behalf, the Association of Public Authority Deputies (APAD) has raised some concerns with contracting out in this area. Here are the arguments for and against instructing external solicitors, explaining why it is a good option in appropriate circumstances.

Balancing the needs of all service users

Firstly it should be noted that a local authority should be a deputy of last resort. Although some funds can be recovered, appointing a local authority as deputy will necessarily incur a cost on the public purse, with a consequent reduction on what is available for other local authority service users.

Private solicitors do not receive public funds for these purposes so they cannot operate deputyships for free and must take a reasonable amount from the service user’s capital. External solicitors cannot take on every case and need to set limits on capital in cases, below which they cannot act - typically £100,000.

This will mean that the majority of a local authority department’s caseload cannot be referred externally. However larger cases tend to be more time intensive and their referral out will free up local authority staff to concentrate on appointeeships and more modest level deputyships.

The effect should be a significant reduction in workload and backlogs for internal staff, relieving pressure and enabling them to more efficiently attend to other needs in their community; in turn achieving greater staff morale and staff retention.

Referring out a modest number of larger cases would therefore potentially increase productivity and capacity for internal teams - an important consideration when budgets are under pressure and additional internal recruitment is difficult to fund.

While demographics suggest the demand from service users for appointeeships and deputyships will keep rising, it is likely that budgets will not.

Services users with external solicitors deputies will likely pay more than if services were provided at a lower rate by local authority deputies, but the principle is no different than those funding their own care home fees when they have the means to do so. Local authorities cannot, within current budgets, take over care home fee funding for all, regardless of assets - the same principle can be applied to deputyships.

Referring out appropriate deputyships has no negative impacts on a local authority’s equality and diversity obligations. Indeed, relieving pressure and workload of staff could allow a local authority to target its internal resources to other, more appropriate cases. Recognising that most of this service user group will be vulnerable, there is still scope to use resources to advance an equality and diversity agenda which may be more difficult in a high-pressure, backlog ‘firefighting’ situation.

Fees and service

It is an understandable concern that solicitors will charge more than local authorities to service users and that those service users need a high level of protection. However both the level of fees charged and the quality of the work done by external deputies is subject to scrutiny by the Court of Protection (COP) and Office of the Public Guardian (OPG).

External solicitors also have highly experienced teams dealing with deputyships without the higher case load environments of local authorities - which we know has caused some concern with the OPG. So again, referring some cases out allows local authority teams to deliver a better service to remaining users within budget while also delivering a high quality service to the service users referred out.

Continuity of service is a question often posed and, in order to address this, firms provide deputyships through their own . This ensures continuity as the deputyship resides with the corporation, as opposed to an individual who could change law firms.

Risk and reputational issues

A local authority cannot be criticised for choosing to refer out because it should only be a provider of last resort, and it needs to make decisions about the allocation of public funds on that basis. Referral to an external solicitor means that the service user has a high level of protection from the OPG and COP.

In addition, are supervised by the Solicitors Regulation Authority.

In the circumstances, given this high level of regulatory oversight, there can be no substantive reputational damage or significant risk to the local authority in choosing such a solution.

It is sometimes said that beneficiaries of a deceased service user would object to referral to an external solicitor because of the higher charges. However, if such beneficiaries were closely connected with the service user it begs the question as to why they are not acting as deputy and suggests that the local authority is not actually deputy of last resort.

The local authority is not under a legal obligation to save estates and their beneficiaries’ money. If it was, then the logic would be to suggest that the local authority should pay all care home fees even of those with substantial assets, to save beneficiaries’ inheritances.

If beneficiaries were to demand that the local authority provide deputyship services themselves for services users with considerable assets, it is in effect a demand for scarce local authority resources to be diverted to preserve inheritances.

It should also be noted that before an external solicitor could act as a deputy, it would have to obtain the necessary order from the COP and if any family members or beneficiaries wished to object, they could do so at that point. Indeed that right continues and they could apply at any point to change the deputy. Those issues would be a matter for the court to resolve and could not be laid at the door of the local authority.

Practical matters

If cases with a local authority are backlogged because of scarce resources, this will impact on wider local authority finances. External solicitors appointed as deputies ensure all cases are progressed as quickly as possible and that service users’ financial obligations, especially those connected with care, are met promptly. This assists with local authority cash flow and avoids wasting resources on debt collection. In addition, a local authority cannot be accused of conflict of interest or treating itself as a preferential creditor as external solicitors act as ‘arm’s length’ organisations.

It is possible for external solicitors, if a local authority is struggling with waiting lists or backlog of allocations, to take on deputyships for a limited period to relieve pressure on local authority staff.

Modest numbers of referrals are unlikely to trigger formal tendering requirements. Our research shows public money is not being spent on these cases and the individual cases fall under the estimated value procurement threshold (£122,976). However from a reputational and risk point of view, local authorities will want to ensure they are referring to solicitors who meet all necessary requirements in terms of data protection, modern slavery, equality, etc.

Andrew Welch is managing partner at Stephensons Solicitors LLP

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