When we talk about the Court of Protection, it’s usually in the context of applying for deputyship or seeking approval for decisions made by attorneys and deputies. But what happens if, while acting in one of these roles, you make a decision without realising that Court approval was required?
A retrospective application is made to the Court of Protection to obtain approval for actions already taken without prior authority. As you can imagine, these applications are not always looked upon favourably. Authority should be sought in advance wherever possible. They can also be stressful, as the Court may deny the application, meaning the decision must effectively be undone. The deputy or attorney could be held personally liable for any financial loss or harm caused to the estate of the person whose affairs they are managing. If the Court considers the decision serious enough, it may instruct the Office of the Public Guardian to investigate the conduct of the deputy or attorney, which could result in removal from the role.
What is the Court of Protection?
The Court of Protection is a specialist court that makes decisions for people who lack the mental capacity to manage their own affairs. It broadly deals with two areas: property and financial affairs, and health and welfare. The Court’s role is to ensure that all decisions made on behalf of someone else are in their best interests. It can appoint deputies, rule on disputes, and authorise decisions that fall outside the scope of a deputyship or lasting power of attorney. Read our article here to learn more about the Court of Protection.
When are retrospective applications made to the Court of Protection?
Retrospective applications are often made in situations where urgent decisions were required in the best interests of the person, and there simply wasn’t time to apply to the Court beforehand. More commonly, they arise from misunderstandings about the scope of the deputyship order or the attorney’s authority. Another frequent reason is the presence of a conflict of interest, particularly where the deputy or attorney stands to benefit from a decision affecting the person’s assets.
When is the Court of Protection unlikely to approve retrospective application?
There are certain types of decisions where retrospective approval is rarely granted. These include entering into litigation on behalf of the person, creating a statutory Will, or making significant financial transactions, especially those involving the deputy or attorney personally.
For example, we recently acted in a matter where we successfully obtained retrospective approval for the sale of a person’s property to an attorney. This was highly unusual and not something we would ever recommend doing without prior authority from the Court.
A recent case highlights the risks of acting without approval. A law firm’s trust corporation, acting as deputy, appointed its own asset management company to manage the person’s funds. The Court found this to be a clear conflict of interest, even though safeguards were in place. This demonstrates that prior authority should always be sought where there is any crossover or potential conflict; even if you believe the conflict has been managed appropriately.
Timing and responsibility
Retrospective applications are most understandable when a decision must be made urgently to prevent harm. However, if you later realise that a decision you made required Court approval, it’s important to act quickly. If it’s discovered later that you knew authority was needed but failed to apply, the Court is less likely to be sympathetic and you may be held personally liable for any resulting costs.
Risks to consider when making a retrospective application
If the Court of Protection denies a retrospective application, the action taken without authority will not be ratified. This means it may be deemed invalid or unlawful. The deputy or attorney may be personally liable for any financial loss or harm caused to the person’s estate. In some cases, the Office of the Public Guardian may investigate the conduct, which could lead to removal from the role or restrictions on future decision-making. Additionally, any costs incurred in relation to the unauthorised act may not be reimbursed. This highlights the importance of seeking prior approval wherever possible and ensuring all decisions are made transparently and, in the person’s best interests.
Best practice for Attorneys and Deputies
Retrospective applications should never be relied upon as a routine solution. Deputies and attorneys must act within the scope of their authority and in the best interests of the person they represent. If you’re unsure whether a decision requires Court approval, it’s always best to check first.
Documenting decisions thoroughly, especially those made urgently and seeking legal advice where needed will help safeguard you in your role. If a decision must be made without prior approval, keep clear records explaining why it was necessary. This will be essential if the Court later reviews the matter.
If you’ve made a decision or are considering one on behalf of someone else and you’re unsure whether Court approval is needed, please don’t hesitate to contact us. We’re here to help.
