Appointment of Receiver

Applications to the Court of Protection for the appointment of a Receiver

by Trevor Lyttleton*

Published in The Solicitors’ Journal - 5th March 2004 issue

*Trevor Lyttleton MA LLM (Cantab) is a Solicitor based in Marble Arch London W1, formerly with Freshfields and now a sole practitioner, with substantial experience in advising elderly Clients primarily in Central and Greater London .A member of the Court of Protection Receivership Panel , Trevor Lyttleton specializes in Court of Protection, Receivership and Enduring Power of Attorney and mental health matters, with particular expertise in senile dementia issues relating to the elderly.

Trevor Lyttleton’s legal expertise is supplemented by some 40 years direct personal responsibility, as Founder and Chairman of the National Charity, Contact the Elderly, for providing a vital lifeline of care and support to many thousands of elderly people through a team of some 4000 volunteers, throughout the UK (see website: www.contact-the-elderly.org). This experience has given him a unique insight into the mental problems and special needs of frail and incapacitated elderly people.

Section 94(2) of the Mental Health Act 1983 defines a ‘patient’ as a person who, on the medical evidence is incapable, by reason of mental disorder of managing and administering his property and affairs. The Court of Protection has unfettered discretion to appoint a receiver of a patient, and will normally do so where he or she has more than £16,000 in cash after payment of debts, property to be sold or purchased, or sufficient income for the Court to consider a receiver appointment to be necessary.

Formal applications for Receivership appointments are made to The Public Guardianship Office and relevant documents are obtainable from its website: http://www.guardianship.gov.uk/Protection.html#forms . Detailed information concerning the prospective receiver and affairs and property of the patient are required to enable the PGO to make an assessment of needs, and decide to what extent the receiver will require special supervision or support.

Neither the Mental Health Act 1983 nor the Court of Protection Rules specifies who should apply to the Court for a receivership appointment. The applicant normally seeks his own appointment, but may request the appointment of someone else

In order of preference the Court of Protection, will consider appointing as receiver:

· a spouse or close relation who has taken a personal interest in the alleged patient’s affairs

· a close friend

· an officer of a local authority or

· a professional adviser.

In certain cases the Court may appoint a solicitor, who may apply to be remunerated for his services under Rule 43 of the Court of Protection Rules 2001 and should specify his proposed remuneration in Form CP5 (see below)

Joint receivership appointments are normally discouraged, as they tend in practice to be more costly and less likely to lead to simple and effective management of the patient’s affairs.

If a suitable receiver cannot be found, the Court of Protection will consider whether to appoint a member of its professional Receivership Panel. If this is not considered to be in the client’s best interests, the Court will appoint the Chief Executive of the PGO to act as Receiver of Last Resort. In that event, day-to-day responsibility for managing the patient’s financial affairs will be delegated to a PGO caseworker.

Before making a receiver appointment, the Court will take account of a variety of factors, established by case law, including:

· whether the estate is substantial or complex

· the patient’s views and preferences

· the receiver’s location

· the degree of love, devotion and affection between receiver and patient

· The care provision required for the patient

· Remuneration required by the receiver

Application Procedure

A formal application form no longer needs to be completed. A first application for the appointment of a receiver merely has to state the name and address of the applicant and proposed receiver and their relationship (if any) to the patient in such manner as the court shall direct:(Rule 7(1) of the Court of Protection Rules 2001). This information is provided in the Receiver’s Declaration (see below),

The application is submitted to The Public Guardianship Office, Archway Tower, 2 Junction Road, London N19 5SZ (DX 141150 Archway 2) by completing and returning the following documents.

1. The Receiver’s Declaration

2. A Medical Certificate (Form CP3).

3. The Statement of Client’s Assets & Income (Form CP5).

4. Copies of Notification Letters

5. A copy of the alleged patient’s will if any

6. Cheque for the Commencement Fee payable to ‘Public

Guardianship Office’ of £70.00 (as of August 2003)

7. Covering letter*

The Applicant may wish to refer in the covering letter to issues relating to the patient’s affairs, which he considers should be included in the First General Order, or to submit a Draft of the proposed Order for the Court’s consideration.

Documents 1 to 4 above are supplied with the PGO Application pack with the booklets “Making an Application” and “Duties of a Receiver”

1. The Receiver’s Declaration

Whether or not he or another party makes the application, the prospective receiver must complete and sign the Receiver’s Declaration, requiring him to provide the following information:

(a) his personal and contact details and relationship to the patient;

(b) his personal circumstances, current occupation and suitability: whether he has been bankrupt or insolvent, disqualified from acting as a company director, convicted of any criminal offence, or is aware of any conflicts of interest; whether he has held any previous receivership appointment or knows of any reason why he may be unable to carry out his duties as receiver

(c) he must demonstrate that he fully understands his duties and responsibilities if appointed receiver, by completing a series of undertakings that he will carry out seventeen specified obligations as receiver and has the ‘skills, time and knowledge to complete them’;

(d) he must explain why he wishes to be appointed receiver, showing he has considered the matter carefully and has the appropriate skills and, where appropriate, professional qualifications to act as receiver;

(e) he must declare that he or she has given accurate information, read the accompanying PGO booklet ‘Making an Application’, and consents to such additional enquiries as may be required including credit agency checks.

2. The Medical Certificate (CP3)

The Court’s jurisdiction is only exercisable where it is satisfied, after considering medical evidence, that the patient is incapable of managing his property and affairs. Submission of this evidence in the correct form is therefore of key importance in enabling the Court to take action, even when other papers are incomplete or cannot be submitted. The Court requires such evidence to be provided in the form of a medical certificate (Form CP3). Although the prescribed form is not mandatory it should be used in all cases as it contains important guidance to doctors and deals clearly with the information that the Court will require. Form CP3 obliges a medical practitioner to state his full name and qualifications, specify when the patient was last seen and to certify that the patient is incapable by reason of mental disorder of managing his property and affairs. The form then requires the doctor to specify (i) the nature of the mental disorder and (ii) give reasons for this opinion. As it is often overlooked, the latter requirement and the form’s explanatory notes should be drawn to the doctor’s attention. The doctor is also asked to indicate the patient’s physical condition, age and prospects of recovery to enable the Court to determine the patient’s needs and how capital should be invested or applied.

The medical assessment can be obtained from any registered medical practitioner and the patient’s GP, familiar his medical history, is often approached for this purpose. However, in my experience of receivership applications, GPs, especially in Central London, often find it hard to cope with their own bureaucracy, and are reluctant to take on such assessments. I therefore prefer to rely, with the GP’s approval, on an experienced psycho-geriatric consultant, whose fee is justified by superior expertise and the saving in time and cost of instructing him, and greater objectivity. This is especially valuable in cases of conflict between family members, who are less likely to subject a consultant to the kind of influence sometimes applied to a doctor who may also be their own GP of longstanding. A psycho-geriatric consultant’s assessment also provides a more authoritative benchmark, is less subject to legal challenge, and establishes a valuable contact with a reliable specialist, whom both GP or carers can call upon in the event of an emergency, or if the patient’s mental condition so requires.

The medical certificate is confidential and prepared for the Court rather than for the patient or the receiver. If the practitioner is unwilling to issue a certificate without the patient’s consent, which might not be forthcoming, the PGO may write to the practitioner directly requesting the certificate. Once completed the medical practitioner should return it to the solicitor lodging the application or directly to the PGO if there is no solicitor involved.

3. The Statement of Client’s Assets & Income (Form CP5).

The aim of this lengthy form is to enable the Court to obtain sufficient information to prepare the Draft Order without time-consuming correspondence with the applicant and consequent delay in processing the Application. The form should therefore provide accurate and detailed information, including:

· the Patient’s personal circumstances and background, including details of family and friends,

· whether a guardianship order or Power or Enduring Power of Attorney has been made;

· whether the patient holds a driving licence,

· whether the Patient has made a Will (in which case a copy must be filed with the Application, giving location details of the original Will, if not held by the applicant).

· Financial circumstances, assets, liabilities, and needs. Income and fees charged for the patient’s care and maintenance and other living costs, and Pension and Social Security details need to be provided, to establish whether there is likely to be a shortfall between income and expenditure.

The substantial preliminary work involved in furnishing relevant details may seem daunting to the uninitiated. These efforts, however, normally justify a more limited PGO involvement once the appointment has been made..

Procedure following filing of Application

The PGO will acknowledge receipt of the documents, state the time and date when the the Court will consider the Application, and may request further information. No personal attendance is normally required at these hearings, which usually take place within about 6 weeks of the filing of the application.

Notification of application to Patient

Following the filing of a first application to appoint a receiver, notice must be given to the Patient (Rule 24 of the Court of Protection Rules 2001). Such Notice must be given personally (Rule 24 (1) (E) and must, as per the prescribed Notification Letter, consist of notice:-

(a) that an Application has been made

(b) of the effect , if made of

(i) the appointment of a receiver, or

(ii) such other order, direction or certificate as may have been applied for;

(d) of any hearing fixed by the court and

(e) of such other information as the court may direct

A certificate of service has to be filed as soon as possible after service unless the court directs otherwise (COPRule 26 (1). The certificate must show where, when and how and by whom service was effected, and state whether the patient appeared, to the person giving it, to understand the notice. No order may be entered until at least 10 days after service of the notice.

Notification to next of kin and others

If there is a spouse of the patient living, his or her written consent should be submitted in support of any application for a receiver to be appointed. Unless the court directs otherwise, the applicant must give notice of his intention to make any such application to all relatives of the patient who have the same or a nearer degree of relationship to the patient than the applicant or proposed receiver, and to such other persons who appear to the court to be interested as the court may specify (COPRule 25 (1). The relatives’ details will have been listed in Form CP5. The Notification Letter (Document 4 above) is included in the Application Pack.

Due to space limitations, this article is confined to the basic application process. For further details and post-application issues, read Heywood and Massey Court of Protection Practice (Sweet & Maxwell): Objections to the application by patient or other parties: Paras.4-023 to 4-025, Contents of First General Order: Paras 4-026 to 4-027; Interim Applications for appointment of receiver ad interim where immediate provision has to be made re the patient’s property and affairs under COP Rule 42(1)(b): Paras. 4-028 to 4-034. For a fuller treatment of practical aspects, read Chapter on Application to Appoint a Receiver in Martin Terrell’s excellent Practitioner’s Guide to the Court of Protection (LexisNexis).

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*Trevor Lyttleton MA LLM (CANTAB) Solicitor

23 Bryanston Court, George Street London W1H 7HA

Tel 020-7402 4810 Fax 020-7262 4296

Email: trevor.lyttleton@btinternet.com