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Baker v H [2009] EWCOP B31

(Redirected from Baker v H (2009) EWHC B31 (Fam))
Deputy security bonds (1) The judgment sets out a structured general approach to considering the setting of security and its interplay with the terms of appointment of a deputy; (2) On the facts, the level of security was reduced from £750k to £175k.

Extract from judgment

Summary of general guidance

106. In final summary, then, I set out below what is, in my judgment, a properly structured general approach to considering the setting of security and its interplay with the terms of appointment of a deputy. It largely follows the order of the factors which I have set out above. I do so with grateful acknowledgement to the argument of Mr Rees as amicus curiae, on whose submissions it is based. It can be taken as a useful executive summary guide, whilst bearing in mind that it is only a [words missing from transcript]

(1) If the Court has real doubts about whether a deputy can be trusted with P’s assets, then it must consider not appointing him as a deputy. Alternatively (if this will largely allay such doubts) the court can and should consider imposing limits on the funds under the deputy’s control and, in particular, should consider whether the general words of the order appointing the deputy should be narrowed to prevent his having any authority to deal with any property occupied by P as his home, (or any interest of P therein) without further order of the court.

(2) The court should then consider the amount of funds that are to be placed in the deputy’s hands or under his control, and envisage the costs and/or loss to P if there were to be a total default by the deputy.

(3) The court should then consider whether the deputy carries professional indemnity insurance which would be effective to replace P’s assets in his hands in the event of such a total default. This will include reviewing such matters as the level of aggregation of assets in the hands of a single deputy relative to his insurance.

(4) In the absence of adequate insurance cover then the starting point will be the value of the assets in or passing through the deputy’s hands. This consideration may lead back to a review of the terms of the deputyship order with a view to limiting the value of the vulnerable assets.

(5) Where the deputy apparently has adequate and effective professional indemnity insurance, then the court

(i) should require him to deposit a copy of this with the OPG and inform the OPG/the court immediately if its level is reduced, and
(ii) should aim to set a level of security which will provide adequate resources to meet P’s immediate expenditure needs for a period related to the time it may take to settle the insurance claim (perhaps up to 2-3 years), the costs of making such a claim, and an allowance in case immediate debts of P may have been left unpaid, applying a suitable margin for error.

[(6)] Having formed the above provisional view as to the appropriate level of security, the court should finally consider the level of premium and whether this would cause P undue financial hardship, or would otherwise in all the circumstances (including the apparent status of the deputy) appear to be an unjustifiable or wasteful use of P’s resources, when balanced against the benefit of having that security. Special circumstances (eg husband/wife deputyships, or lay deputies of obvious stature, or situations in which the real risk would appear to be merely negligence rather than total default) may mitigate this, but must provide some real justification for taking the view that such a level of security is not reasonably necessary. The court will then decide whether it is in P’s best interests to maintain the level of security originally assessed, or to reduce it to any extent.

Summary from Court of Protection 2009 Report

This was an application by a professional deputy for the court to reconsider the level of security it required from him (£750,000). Judge Marshall, in reducing security to £175,000 held that the court should take into account the following factors when setting security:

  • The value and vulnerability of the assets which are under the control of the deputy.
  • How long it might be before a default or loss is discovered.
  • The availability and extent of any other remedy or resource available to P in the event of a default or loss.
  • P’s immediate needs in the event of a default or loss.
  • The cost to P of ordering security, and the possibilities and cost of increasing his protection in any other way.
  • The gravity of the consequences of loss or default for P, in his circumstances.
  • The status, experience and record of the particular deputy.

External links

CASES DATABASE

Full judgment: BAILII

Subject(s):

Date: 15/10/09🔍

Court: Court of Protection🔍

Judge(s):

Parties:

Citation number(s):

What links here:

Published: 9/11/09 21:47

Cached: 2024-12-23 01:05:21

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