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Deputyship vs PI Trust: Round 2 ABC v Watt - Ruth Hughes, 5 Stone Buildings

18/07/17. Where P lacks capacity and has or is likely to have the benefit of a large personal injury award, the question will necessarily arise – how should P’s award be managed, through a deputyship award or through a personal injury trust. Unlike where the claimant in the personal injury case has capacity, there is no need to interpose a personal injury trust to maximise state benefits, as considered recently by Norris J in H v Craven [2016] EWHC 3146 (QB).

The first case in which this issue arose was SM v HM [2012] WTLR 281 in which HHJ Marshall QC considered the relative merits of a personal injury trust and deputyship. She concluded that deputyship was the starting position because it was a regime designed by parliament especially to manage the property of those who lacked capacity and also to protect them. The protection which deputyship provides is significant in particular:

  1. the costs charged by solicitors are strictly controlled by the Senior Court’s Costs Office;

  2. the Office of Public Guardian supervises deputies; and

  3. all deputies must take out a security bond which protects P in cases where the deputy causes loss to P.

However, it must be noted that professional deputies are unlikely to cause the security bond to be called upon, see Baker v H [2009] WTLR 1719.

Prior to the introduction of deputyship by the Mental Capacity Act 2005, personal injury trusts had been seen to be an effective and efficient method of bypassing the old Court of Protection and the limits on the powers of receivers, and in some quarters personal injury trusts remain popular, not least because there is a perception, although it is by no means clear a reality, that personal injury trusts are less expensive than deputyship.

In ABC v Watt [2017] 4 WLR 24 Charles J heard the compromise proceedings of ABC’s personal injury claim. He considered that a personal injury trust might be better suited to ABC’s situation than a deputyship and decided that this issue should be considered by him in his capacity as Vice-President of the Court of Protection. None of ABC’s deputy or ABC’s litigation friend or the Official Solicitor (acting as amicus) advocated a personal injury trust and ABC’s wishes pointed toward maintenance of the deputyship which was already in place and all of whom were concerned about the costs of the Court exercise.

Charles J was concerned that ABC might...

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