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Family Law

The leading authority on all aspects of family law

11 FEB 2014

INCAPACITOUS MOTHER: Re X, Y and Z [2014] EWHC 87 (COP)

(Court of Protection, Baker J, 24 January 2014)

The full judgment is available below.

In conjoined care and Court of Protection proceedings the mother of three children, aged 15, 13 and 12 lacked capacity. The mother and father's relationship broke down due to violence and the father was sentenced to 42 months' imprisonment for offences against the mother. The mother suffered severe injuries following a road traffic accident including a spinal fracture, complete paraplegia and a significant head injury which altered her personality and caused challenging behaviour.

The maternal grandmother initially cared for the children but following her death a team of nannies was employed. The mother received damages of £4.25m with periodical payments of £175,000 pa and then £215,000 pa after she reached 60. Included in the settlement was funding for the employment of nannies but nothing was ring fenced for that purpose.

When the mother's behaviour reached a stage where it was considered the children were suffering emotional harm, social services applied for care orders. The mother was represented by the Official Solicitor. The threshold was agreed on the basis of the mother's injury and the consequent psychological harm to the children. A care plan was formulated for the children to live with a foster carer, under a care order, and to have contact with the mother. The foster carer, however, was unwilling to take on responsibility for the children without further payment from the mother over and above the fostering allowance. The local authority and guardian supported this request on the basis that she would be leaving employment.

The local authority applied to the Court of Protection for a declaration that ongoing employment of the foster carer as the children's nanny was appropriate expenditure from the mother's funds.

Baker J concluded that the mother lacked capacity in relation to decision making concerning the foster carer and any form of financial payment to her and that it was in her best interests to make payments to the foster carer. He found that where a parent lost mental capacity when she was still responsible for her children, those responsibilities constituted part of her interests. The mother's deputy would retain power to terminate or reduce payments to the foster carer in the event that her own needs or financial position changed.

Final care orders were granted and the mother's deputy was authorised to make payments to the foster carer.

A judicially approved version of the judgment with a comprehensive headnote will appear in a forthcoming issue of Family Law Reports.

__________________________________________________________________

Neutral Citation Number: [2014] EWHC 87_2 (COP)

Case No: COP11584474

 

IN THE HIGH COURT OF JUSTICE

FAMILY DIVISION AND IN THE

COURT OF PROTECTION

 

Royal Courts of Justice

Strand, London, WC2A 2LL

 

Date: 24/01/2014

 

Before :

 

THE HONOURABLE MR JUSTICE BAKER

- - - - - - - - - - - - - - - - - - - - -

 

IN THE MATTER OF THE CHILDREN ACT 1989

AND IN THE MATTER OF X,Y and Z (Minors)

 

Between :

 

 

A Local Authority

Applicant

 

- and -

 

 

(1) P (by her litigation friend, the Official Solicitor

(2) F

(3-5) X, Y and Z (by their Children's Guardian)

(6) S

 

 

 

Respondents

 

And Between

 

 

A Local Authority

Applicant

 

- and -

 

 

SA

Respondent

- - - - - - - - - - - - - - - - - - - - -

- - - - - - - - - - - - - - - - - - - - -

 

Margaret Pine-Coffin (instructed by Local Authority Legal Unit) for the Local Authority

Peter Horrocks (instructed by the Official Solicitor) for P

Camilla Whitehouse (instructed by John Sellars) for F

John Ker-Reid (instructed by Dutton Gregory) for X,Y and Z by their children's guardian

Sarah Phillimore (instructed by Withy King) for S

Barbara Rich (instructed by Charles Russell LLP) for SA (P's deputy)

 

Hearing dates: 20th and 29th November 2013

- - - - - - - - - - - - - - - - - - - - -

 

Judgment

 

THE HONOURABLE MR JUSTICE BAKER

This judgment was delivered in private.   The judge has given leave for this version of the judgment to be published on condition that (irrespective of what is contained in the judgment) in any published version of the judgment the anonymity of the children and members of their family must be strictly preserved.   All persons, including representatives of the media, must ensure that this condition is strictly complied with.   Failure to do so will be a contempt of court.

The Honourable Mr. Justice Baker :

 

Introduction

[1] On 20th and 29th November 2013, sitting as a judge in the Family Division and in the Court of Protection, I made final orders by consent in two conjoined proceedings (1) under Part IV of the Children Act 1989 care orders in respect of three children and (2) under the Mental Capacity Act 2005 authorising the payment of sums to facilitate the care of the children from funds held in trust for their mother (hereafter referred to as "P") who is a person lacking capacity within the meaning of the 2005 Act. This judgment sets out the reasons for making those orders

Background

[2] P was born in 1977 and is now aged 36. In 1998 she married a man, hereafter referred to as F, and in the course of the marriage gave birth to three children hereafter referred to as X, now aged 15, Y, now aged 13 and Z, now aged 12. The marriage was characterised by repeated acts of serious physical violence perpetrated by F upon P, resulting in divorce proceedings and a series of applications for injunctions and ultimately criminal proceedings as a result of which F was convicted and sentenced in July 2003 to a total of 42 months imprisonment.

[3] By that stage, however, the life of P and her family had been drastically affected by a catastrophic road accident when P was one of three passengers in a motor car being driven by her sister. The other three occupants of the car were killed. P survived but sustained very serious injuries, including a spinal fracture resulting in complete paraplegia, a range of other fractures and internal injuries, and a significant and severe head injury which has affected her personality leading to very challenging behaviour over the years since the accident.

[4] At the date of the accident, the children were aged 4, 2 and 9 months. They had spent a short period in voluntary foster care after an incident in which P had been hospitalised because of an assault by F. For several years after the accident, the principal responsibility for caring for the children was undertaken by their maternal grandmother, with some assistance from outside carers. Following the grandmother's sad death in 2008, the children have been looked after by a team of nannies employed by the mother. In particular, one nanny, hereafter referred to as S, has lived in the home with the mother and the children during the week, with two other nannies taking over at weekends. At present, S is employed by the mother working from 7.30 pm on Sunday to 7.30 pm on Friday and living in the family home. She receives a salary of £41,498, and in addition is provided with accommodation and food when she is living in. The children have become closely attached to S and all parties accept that she has done an excellent job in looking after them. F has not been involved in caring for the children. There have been ongoing proceedings concerning the children's contact with their father. At present, the children see F on a supervised basis during school holidays and also speak to him occasionally over the telephone.

[5] On 31st March 2009, an order was made in the Court of Protection appointing a deputy to make decisions on behalf of P in relation both to her property and affairs and to her personal welfare.

[6] A claim for damages was made on behalf of P for the injuries sustained in the road accident. As demonstrated by documents from those personal injuries proceedings produced to this court, that claim was eventually settled in April 2012 and the terms approved and embodied in an order by Tugendhat J Under the settlement, the insurers paid a lump sum totalling £4.25 million, together with periodical payments for care to age 60 in the sum of £175,000 per annum and thereafter in the sum of £215,000, such sums to be increased in line with inflation. The lump sum included compensation for costs already incurred which had, as I understand it, been met by interim payments. The current value of the lump sum remaining is now slightly less than £2 million. The lump sum awarded included compensation for the cost of employing nannies to look after the children prior to the settlement in a sum of approximately £508,000 and future payments for employment of nannies capitalised at approximately £400,000. The terms of the settlement did not provide that this sum should be "ring fenced" for the exclusive use of meeting child care expenses.

[7] Since the date of the court order approving the settlement, the costs of employing the nannies have been very close to the estimated figure. P's own care costs, however, have been significantly greater than anticipated, leading to a shortfall in the periodical payments which in turn has obliged the deputy to make further drawings on the capital lump sum. At present, the expenditure incurred on P's behalf is running significantly in excess of her periodical payments. A schedule produced on behalf of the deputy shows that her annual expenditure is in the region of £476,000. A proportion of these payments relate to the care of the children. It has been calculated that, were P no longer to be responsible for caring for the children, the net potential savings to her would amount to some £93,000. This figure includes a saving of approximately £75,000 in respect of salaries paid to the nannies and the tax liabilities thereon. Even if relieved of all these payments, however, it is submitted that P's capital sum would be exhausted within approximately 10 years. There is no medical evidence to suggest that P's life expectancy has been significantly affected as a result of the accident.

[8] Over the years since the accident, the mother's challenging behaviour has increasingly impinged upon the children. Social services have become involved and endeavoured to provide professional assistance to support S and the other carers in looking after the children. The local authority has endeavoured to manage the difficulties caused by P's behaviour and its impact upon the children by providing support for the children and nannies. Periods of respite care for P were also arranged, funded by her estate. As P's difficult behaviour has become more challenging, more frequent and longer lasting, the risk to the children has increased. The children have become increasingly wary of their mother because of her inconsistent responses to them. The atmosphere in the house has become on occasions, in the words of the local authority, oppressive and tense. The children themselves have begun to exhibit behaviour regarded as attributable to emotional harm resulting from their mother's condition. Increasingly they have comfort from their nanny, S.

[9] Recognising that none of this was P's fault, the local authority reluctantly concluded that it was necessary to move the children away from their mother. As a result, on 5th February 2013, the authority applied for care orders in respect of all three children. Those proceedings were swiftly transferred to the High Court and listed before me. The Official Solicitor accepted instructions to represent P in the care proceedings. The father F was also joined as a party, as was S. The children have been represented by a guardian. Within those proceedings, all parties agree that the threshold criteria for making public law orders under s.31 of the Children Act 1989 are satisfied in that (1) due to the mother's acquired brain injury resulting from the road traffic accident in June 2002, she is unable to meet the children's needs or provide them with an adequate and consistent level of care, and (2) as a result the children had shown disturbances and behaviours consistent with have suffered psychological harm.

[10] Unfortunately, there are no members of the extended family who are in a position to look after the children. In the circumstances, all the professionals are agreed that the best outcome for the children is that they should move to live in another house within the local area where they can be cared for by S whilst continuing to have contact with their mother. The focus of the proceedings has therefore been directed at achieving this outcome.

[11] The local authority has considered a number of options, specifically (1) a residence order (2) a special guardianship order or (3) a care order with the children placed with S as foster carer. It is the local authority's view, with which the other parties of the care proceedings agree, that the third option is the best outcome. It would provide the children with a degree of security in the event that the arrangements with S broke down. The children would have the benefit of the leaving care provisions under s.23A- 23E of the Children Act 1989 and the Care Leavers (England) Regulations 2010. S would be entitled to a fostering allowance of at least £248 per week per child. This sum would be increased in the event that it was identified that the children had any additional specific care needs and will rise over time as the children become older. The sums paid to S as a foster carer would be greater than any sums paid by the local authority were she to look after the children under a residence order or a special guardianship order. Any allowances paid by the local authority under such orders are both means tested and reviewable from time to time.

[12] The degree of financial security for the children is therefore greatest under a care order. The local authority has also agreed to support S to obtain rented accommodation through a housing association and if necessary to fund a rental property for a short term period until such time as a long term property can be obtained, Furthermore, under a care order the children would have support for themselves as "looked-after children", including the support of a social worker. S would also have the support of her own social worker specialising in the support of foster carers.

[13] In deciding what order to make at the conclusion of care proceedings, the court applies s.1 of the 1989 Act. The child's welfare is the paramount consideration, and the court takes into account, insofar as relevant, the factors identified in the checklist in s.1(3). Under s.1 (5), the court should not make any order unless it considers that doing so would be better for the child than making no order at all. If it concludes that an order is required, it is an important principle that it should be the least interventionist order consistent with the welfare of the children. An order placing a child in the care of a local authority is an interference with the family members' rights to respect for family life under Article 8 of ECHR and must be proportionate to the aim of protecting the child.

[14] In this case, however, I am satisfied that the local authority's arguments in favour of the care order, supported as they are by all other parties to the care proceedings, are both cogent and persuasive. The making of a care order, on the basis of the care plan proposed by the local authority, is the best outcome, applying the s.1 criteria, and is a necessary and proportionate interference with article 8 rights. S is manifestly the best person to care for the children, and their placement with her will minimise the risk of future harm

[15] The issues in this case, however, arise from the requirements that S is placing on her engagement as full-time carer for the children. She states that she is unwilling to take on this responsibility unless she receives a further payment from P over and above the fostering allowance which will be paid by the local authority under the care order. It is uncontroversial that the children's needs will be best met if they stay in her care, rather than a move to another foster placement with a stranger. However, if she is to remain their carer, she submits that she will need to continue to be receive further funds in order to meet her own financial commitments without going into debt and to avoid being left in a very difficult position when the children reach adulthood, having given up her employment and thus unable to make provision for her retirement.

[16] It is submitted by Miss Phillimore on behalf of S that these additional payments should be met from P's funds. It is pointed out that, had there been no care proceedings and no suggestion that the children move from their mother's care, they would have continued to require considerable financial support from the mother's estate to be maintained at her home for at least the next six years. When the children move from P's home, her estate will be able to make considerable savings, even if continues to make payments to S. The extra sum sought by S, in addition to the fostering allowance, is a net sum of £20,000 per annum which would incur a total annual expenditure to the estate of approximately £27,500. It was submitted on S's behalf that the best way in which this sum could be paid would be by P through her deputy continuing to employ S under a contract of employment.

[17] S's perfectly understandable insistence on receiving further sums to care for the children was fully supported by the local authority and by the children's guardian. Two objections were raised, however, by P's deputy. First, it was argued that such payments might not be in P's best interests, having regard to the fact that there is currently a shortfall between P's income and expenditure on her own needs. Secondly, it was contended that there were insuperable legal difficulties militating against P continuing to employ S under a contract of employment. In advancing these objections, the deputy was not acting adversarially, but merely raising issues in her capacity a professional office-holder with duties under the 2005 Act so that the court could make the decision concerning the use of P's funds, as required, in P's best interests.

[18] In order to resolve this dispute, at my suggestion the local authority filed an application in the Court of Protection seeking a declaration that the continued employment of S as the children's nanny was appropriate expenditure from the funds held on the P's behalf and administered by her deputy. Thereafter, that application was transferred to me and listed alongside the care proceedings.

[19] At a hearing on 25th July, I gave directions in the Court of Protection for the determination of the following questions (1) whether P lacked capacity and, if so (2) whether it was in P's best interests for the deputy to continue to employ S under a contract of employment in the circumstances as proposed in the concurrent care proceedings, and if so at what level of remuneration, or (3) if not, whether it was in P's best interests for the deputy to make a non-contractual contribution to the arrangements proposed by the local authority for the children to be cared for by S.

Capacity

[20] At the hearing in July, I also directed the local authority to file an assessment as to P's capacity to make a decision concerning the future employment of S. Pursuant to this direction, P was assessed on 4th September by Dr Emma Cotterill, clinical psychologist. In her assessment dated 5th September, Dr Cotterill recorded that both the diagnostic and functional tests for lack of capacity under s.2 and 3 of the Mental Capacity Act 2005 were satisfied. P has an impairment of, and/or disturbance in the functioning of, her mind and/or brain by reason the traumatic brain injury sustained in the road accident in 2002. Dr Cotterill's examination revealed that she was unable to understand, retain, use or weigh information concerning the future employment of S. At the time of Dr Cotterill's examination, P was suffering from a urinary tract infection which had a significant negative affect on her mental health. Dr Cotterill therefore thought there was a prospect that, when not suffering from such an infection, she may (with support) be able to demonstrate capacity in this area momentarily. Overall, however, Dr Cotterill concluded that P is unlikely ever to be able to make a fully informed decision regarding whether it is in her best interests to pay the nanny.

[21] In the light of this assessment, the parties to the Court of Protection proceedings, namely the local authority and the deputy, agreed at the hearing on 11th September agreed that P lacked the capacity in relation to the decision whether to continue to employ S or whether to make any other form of financial contribution to her if she continues to care for the children. I agree.

Best interests - statutory provisions

[22] Under s.1 (5) of the Mental Capacity Act 2005, "an act done, or decision made, under this Act for or on behalf of a person who lacks capacity must be done or made in his best interests." S.4 makes a number of provisions concerning "best interests". Under s.4(2), "The person making the determination must consider all the relevant circumstances..."

[23] Under s.4(6), that person

" must consider, so far as is reasonably ascertainable

(a) the person's passed wishes and feelings (and, in particular any relevant written statement made by him when he had capacity),

(b) the beliefs and values that would be likely to influence his decision if he had capacity, and

(c) the other factors that he would be likely to consider if he were able to do so."

S. 4(7) requires the decision maker to take into account, if it is practicable and appropriate to consult them, the views of a number of other named persons, including any deputy appointed by the court.

[24] S.16 sets out general powers to make decisions and appoint deputies for he person lacking capacity. Under s.16(2), the court

" may

(a) by making an order make the decision or decisions on P's behalf in relation to the matter or matters,

(b) appoint a person ("a deputy") to make decisions on P's behalf in relation to the matter or matters."

S. 16(3) stipulates the powers of the court under the section are subject to the provisions of the Act and, in particular, section 1 (the principles) and 4 (best interests). Under section 16(5),

"The court may make such further orders or give such directions, and confer on a deputy such powers or impose on him such duties as he thinks necessary or expedient for giving affect to, or otherwise in connection with, an order or appointment made by it under s.16(2)."

[25] S.18 particularises the powers available with regard to P's property and affairs. Those powers include the control and management of P's property; the sale, exchange, charging gift or other disposition of P's property; the carrying out of any contract entered into by P; the discharge of any of P's obligations, whether legally enforceable or not; and the settlement of any of P's property, whether for P's benefit or for the benefit of others.

[26] On behalf of the deputy, Miss Barbara Rich, reminds me that the previous legislation, contained in Part VII of the Mental Health Act 1983, specifically provided under s.95 that a judge

"may, with respect to the property and affairs of a patient, do or secure the doing of all such things as appear necessary or expedient...(b) for the maintenance or other benefit of members of the patient's family..."

Furthermore, under s.96, the court has the power to authorise

"the reimbursement out of the property of the patient, with or without interest, of money applied by any person...for the maintenance or other benefit of the patient or members of his family".

These specific provisions are not repeated under the 2005 Act. No party has suggested, however, that the general powers under s.16 and 18 of the 2005 Act do not extend to permitting the court to make orders for payment for the benefit of P's children, provided the court is satisfied that such payments are in P's best interests.

Best interests - case law

[27] In deciding whether a particular course of action is in P's best interests, I derive assistance from a number of observations set out in a series of judgments at first instance.

[28] Firstly, there is no hierarchy between the various factors which have to be born in mind. The weight to be attached to each factor will vary from case to case. In some cases, however, there may be a factor or factors which are of "magnetic importance" in determining the outcome: see observations of Munby J (as he then was) in Re M; ITW v Z and Various Charities [2009] EWHC 2525 (Fam), [2009] COPLR Com Vol 828, sub nom Re M (Statutory Will) [2011] 1 WLR 344 at paragraph 32.

[29] Secondly, I note the observation of Morgan J in Re G (TJ) [2010] EWHC 3005 (COP), (2010) COPLR Con Vol 403 at paragraph 35 that:

"...the words 'interests' in the phrase 'best interests' is not confined to matters of self interest or, putting it another way, a court could conclude in an appropriate case that it is in the interests P for P to act altruistically."

Morgan J reached this conclusion on the basis that the powers under section 18 of 2005 Act include the power to make gifts and settlements for the benefit of others. In that case, the judge concluded that an order for maintenance payments to an adult child of an incapacitated adult out of assets held for the benefit of that adult were in the best interests of the incapacitated adult.

[30] Thirdly, as set out above, under s.4(6) P's wishes and feelings, and the beliefs and values that will be likely to influence her decision if she had capacity, must be considered by the court, so far as reasonably ascertainable. Although part of the relevant considerations, they are not, however, determinative of the matters but, rather, factors to be considered as part of the overall best interests analysis. Whilst P's wishes and feelings will always be a significant factor to which the court must have regard, the weight to be allocated to those wishes and feelings will, as with any other factor, always be case-specific and fact-specific: see Munby J in Re M: ITW v Z (supra) at paragraph 35.

[31] Fourthly, in assessing the weight and importance to be attached to P's wishes and feelings, the court must have regard as required by section 4(2) to all the relevant circumstances. As Munby J observed in Re M, ITW v Z at paragraph 35:

"In this context the relevant circumstances will include, here I emphasise that they are by no means limited to, such matters as;

(a) the degree of P's incapacity, for the nearer to the borderline the more weight must be in principle be attached to P's wishes and feelings....

(b) the strength and consistency of the views being expressed by P;

(c) the possible impact on P of knowledge that her wishes and feelings are not being given effect to....

(d) the extent to which P's wishes and feelings are, or are not, rational, sensible, responsible and pragmatically capable of sensible implementation in the particular circumstances; and

(e) crucially, the extent to which P's wishes and feelings, if given effect to, can properly be accommodated within the court's overall assessment of what is in her best interests. "

[32] Fifthly, the "best interests" test under the 2005 Act is materially different from the test applied under the previous law, the so called "substituted judgements" test where under the court identified and adopted the decision that the incapacitated individual would have made if he had capacity. As Lewison J (as he then was) observed in Re P (Statutory Will) [2009] EWHC 163 (Ch) [2010] Ch 33 paragraph 38:

"the goal of the enquiry is not what P "might be expected" to have done; but what is in P's best interests. This is more akin to the "balance sheet" approach than to the "substituted judgment" approach...the same structured decision - making process applies to all decisions to be made on P's behalf, whether great or small..."

[33] It has been suggested, however, that, in the light of the importance attached to the wishes and feelings of P by s.4(6) of the 2005 Act, the concept of 'substituted judgment' continues to have some relevance. In Re G (TJ), supra Morgan J traces the evolution of the best interests test through the judgments of the Court of Appeal and House of Lords in Airedale NHS Trust v Bland [1993] AC789 (in particular the judgment in the Court of Appeal of Hoffmann LJ) and the report of the Law Commission 231 which proceeded the passing of the 2005 Act. At paragraph 55 of his judgement, Morgan J observed:

"The best interests test involves identifying a number of relevant factors. The actual wishes of P can be a relevant factor: s4(6) (a) says so. The beliefs and values which would be likely to influence P's decision, if he had capacity to make the relevant decision, are a relevant factor: s.4(6) (b) says so. The other factors that P would be likely to consider if he had the capacity to consider them, are a relevant factor: s4(6)(c) says so. Accordingly, the balance sheet of factors which P would draw up, if he had capacity to make the decision, is a relevant factor for the court's decision. Further, in most cases, the court will be able to determine what decision it is likely that P would have made, if he had capacity. In such a case, in my judgment, P's balance sheet of factors and P's likely decision can be taken into account by the court. This involves an element of substituted judgment being taken into account, together with anything else which is relevant. However, it is absolutely clear that the ultimate test for the court is the test of best interests and not the test of substituted judgment. Nonetheless, the substituted judgment can be relevant and is not excluded from consideration. As Hoffman LJ in the Bland case, the substituted judgment can be subsumed within the context of best interest. That appeared to be the view of the Law Commission also."

Best interests - submissions

[34] On behalf of the local authority, Miss Pine-Coffin places particular emphasis upon the wishes and feelings of P, namely that her priority is the children and her desire that, if they can not continue to live at home, they should continue to be looked after by S. She relies on the observation by the Official Solicitor, in a position statement filed in the care proceedings, that P "wants to avoid at all costs the possibility of the children being placed in alternative foster care".

[35] Secondly, Miss Pine-Coffin submits that P's mental and emotional health might deteriorate if she became concerned about the children's well being. Therefore, any payment to facilitate the continued care given by S would be not merely "altruistic" but also in her own self interests as it would promote her own mental and emotional well being.

[36] Thirdly, Miss Pine-Coffin submits that the current depletion of P's fund is unsustainable. Therefore, whatever happens about the children, measures will have to be taken to reduce expenditure on P's day-to-day care. The proposal that S should continue to be employed by the deputy on behalf of P at a gross salary in the region of £27,500 for the next six years would deplete the capital fund by a total of approximately £165,000. Miss Pine-Coffin submits this will have only a marginal effect upon the capacity of the fund to meet P's needs. It will advance the date on which the fund is depleted by, at most, 9 months. Miss Pine-Coffin further points out that, if the current position had continued so that the children have remained at home with the present care arrangements, the impact upon the capital fund would have been far greater, since the annual sums currently paid in respect of the care of the children by the estate exceed £93,000.

[37] In reply, Miss Rich accepts that P has expressed a preference for the children to continue to be looked after by S while rather than other foster carers. Miss Rich submits, however, that there is no evidence that P has expressed this preference in circumstances where it has been explained to her that, were she to make a financial contribution to this arrangement, it would exacerbate her income shortfall. The deputy contends that P's express preference for the children to be looked after S should be seen in the context of her inability to weigh up her own care needs against the needs of her children.

[38] Miss Rich submits that there is no evidence to support the contention made on behalf of the local authority that a change in the children's carer may impinge upon P's own mental health. Miss Rich submits that this amounts to no more than speculation.

[39] Miss Rich submits that the primary purpose of the damages award to P is to provide for all of her needs for the rest of her life. Whilst the schedule of loss prepared on her behalf in the personal injury proceedings set out the various claims relating to specific costs which were anticipated to be incurred during her life time, including nanny costs and other costs in respect of the children, the final settlement reached was for a global sum, which did not specify any part of the award to be used for any particular purpose. The current annual expenditure on P exceeds her annual periodical payments very considerably. The deputy calculates that, best based on current levels of spending, P's capital sum will run out in approximately 2022. A substantial proportion of the annual expenditure - approximately £93,000 net - is incurred in respect of the children, including costs of employing nannies. Even if this figure is removed, however, the current level of expenditure on P would exceed her periodical payments by some £200,000 a year so the capital fund would be exhausted at some point later in that decade. The deputy accepts that "therefore a significant reduction in the level of spending is necessary in order to ensure that P's needs are met for the duration of her life expectancy, regardless of any decision which is made in relation to the children."

[40] As stated above, the deputy does not put these arguments forward from an adversarial position, but rather to assist the court in assessing where P's best interests lie.

Contractual or  non-contractual payments?

[41] If the court concludes that in principle it is in P's best interests for further sums to be paid to S, the question arises whether such payments should be made under a contract or ex gratia.

[42] On this latter question, I subsequently gave permission to the deputy to obtain the expert opinion of a lawyer specialising in employment law. I am very grateful to Mr Jeremy Burns of counsel for providing an expert report on this issue, and for answering supplementary questions posed by counsel in writing.

[43] In summary, Mr. Burns' advice was as follows:

(1) There is no doubt that the existing contract with S is an employment contract and, unless it is to be varied by mutual agreement in writing, so as to be meet the new circumstances, it will have to be terminated. Proper care should be taken to avoid any such termination being an unfair or wrongful dismissal.

(2) Foster carers engaged by local authorities are office-holders whose rights and duties are regulated by statute and not by contract: W v Essex CC [1998] EWCA Civ 614, [1998] 2 WLR 534. a foster worker Is not, vis a vis the local authority a worker, a home worker a defined in section 13 of the Employment Relations Act 1999 or an employee in section 230(3) Employment Rights Act 1996: Bullock v Norfolk CC [2011] UKEAT/0230/10/RN. Such relationships are not contractual because (a) they are not freely negotiable and (b) it is against public policy that an office holder should be subject to the control of an "employer" in a private contract - instead the office holder should be free to perform the office as required by the duties of his office.

(3) If payments made by a local authority to induce a person to take up a statutory duty such as foster-caring are precluded from having contractual force because of the existence of the statutory scheme, then the same must apply to payments made for the same purpose by a third party. The objections to an office-holder being made subject to control through a contract apply with equal if not greater force when the contract is with a private individual. Although P is not subject to the statutory obligations and prescribed forms of fostering agreement which would apply between the local authority and S, nevertheless the existence of those restrictions would exclude S's and P's ability to enter into any freely-negotiated agreement between themselves about the fostering.

(4) Viewing the matter on basic contractual principles, contracts procured by threats or pressure are voidable for duress. To say to P "your children are being taken into care (through an involuntary statutory process beyond your control, but they won't end up with the best person unless you pay" is a form of duress which would result in any contract being voidable as against S, who would have entered into it on notice of the situation.

(5) For these reasons, the proposed agreement between P and S would not give rise to an enforceable contract. Attempting to create an enforceable contract between P and S for payments to the latter in relation to her fostering duties is, in Mr Burns' opinion, a recipe for future problems on a number of fronts. First, there will be an unresolved issue as to whether the contract is enforceable at all. Secondly there will be scope for arguments about the proper employment law classification, and the potential for unmanageable employment liabilities to arise.

(6) If any payments are justified or to be made by P, the best way to avoid or reduce employment legal problems would be to ensure that the payments are not made contractually at all, but as a matter of an ex gratia discretionary allowance, which the deputy could be authorised by court order to make from time to time as she sees fit to S for the benefit of the children.

(7) It is advisable for a form of acknowledgment was to be produced between P and S to provide for or record the basis of any payments. Such document should record that (a) the payments are to be made on a discretionary and ex gratia basis (b) they will not be enforceable by S contractually (c) they can be stopped at any time without notice (d) they are to be paid to her for the benefit of the children only (e) the arrangement is not intended to give rise to employment law or any other obligations or liabilities on P's part (f) S will be responsible for discharging any tax or national insurance liabilities arise on the payments, and (g) in entering into the arrangement and before signing the acknowledgment, S was represented and advised by Counsel in that regard.

[44] This advice was accepted by both the deputy and the local authority. I also accept that it is an accurate statement of the law, and indicates the right course to be adopted, provided the court concludes that payments are in P's best interests.

Conclusion

[45] I conclude without hesitation that the proposed payments to S from P's estate are in P's best interests. I accept that the court has power under the 2005 Act to approve payments for the maintenance or other benefit of members of P's family, notwithstanding the absence of an express provision to that effect in the Act, provided such payments are in P's best interests. Such payments might be called altruistic, but are more characterised as falling within the broad meaning of the concept of "best interests" under the Act. Where a parent loses mental capacity at a time when she is still responsible for her children, those responsibilities are part of her "interests" which have to be addressed by those making decisions on her behalf, and payments to meet the reasonable needs of those children are manifestly capable of being described as in her "best interests". As set out above, the powers available to the court and the deputy under s.18 when acting in her best interests include the power to discharge any of P's obligations, "whether legally enforceable or not" and the settlement of any of P's property, whether for P's benefit or for the benefit of others. Whether or not such payments are in her best interests depends on all the circumstances, applying the criteria in the Act.

[46] Plainly P's wishes and feelings are of great importance in determining whether in these circumstances it would be in her best interests for payments to be made. She has expressed the wish that her funds should be used in support of the children. It is said that, in expressing that view, she does not appreciate the fact that her own care needs are now costing more than her income. In my judgment, however, were she to have a full understanding of the shortfall, she would nevertheless support the payment of sums to S to safeguard the future of her children, preferring to make savings in the costs of meeting her own care needs. The new arrangement will significantly reduce the sums being paid towards the children out of her estate, and as a result the deputy and those responsible for managing her affairs will have greater flexibility in adjusting arrangements to enable her to make savings. I find that P's wishes and feelings are, in the words of Munby J Re M, ITW v Z at paragraph 35, "responsible and pragmatically capable of sensible implementation in the circumstances" and "can properly be accommodated within the court's overall assessment of what is in her best interests".

[47] Furthermore, by agreeing to an order of the sort proposed by Mr. Burns, the court is enabling the deputy (subject of course to any application to the Court of Protection) to retain the power to terminate or reduce the payments to S, should P's own care needs justify that course.

[48] The court having indicated that it was minded to find that payments were in P's best interests, the relevant parties (including S), after further negotiations, agreed the detailed provisions of an order in the Court of Protection proceedings which I have approved in the following terms:

"UPON the application of the local authority by form COP1 issued on 23 July 2013

AND UPON hearing counsel for the applicant and counsel for SA, the property and affairs deputy of P, and counsel for S, currently employed as a nanny for P's children

AND UPON reading further written submissions of the parties and the evidence of employment law of Jeremy Burns, barrister

AND UPON the Court being satisfied that P lacks capacity to make decisions about the employment of or the provision of ex gratia payments to S

AND UPON the Court being satisfied that it is in P's best interests for her children to continue to be cared for by S as foster carer in the event that a care order is made in favour of the applicant in case no ..., and for P to make non-contractual financial contributions to S whilst she continues to care for the children under this arrangement

IT IS ORDERED THAT

(1) SA as property and affairs deputy for P be authorised to make payments to S from P's funds at any time when S is engaged in caring for one or more of the children of P pursuant to any fostering arrangement made between the local authority and S following the making of any care order in favour of the local authority in relation to the children.

(2) In reviewing and considering the making of such payments pursuant to this authorisation, SA shall have regard to all relevant circumstances and to the statutory best interests provisions of the Mental Capacity Act 2005 and to the following specific considerations which have been agreed between the parties concerned:

a) SA will review P's financial position and the subsisting fostering arrangements and the financial circumstances of S and will consider making payments to S at least annually

b) SA will consider making annual payments to S at a level which will provide S with an anticipated minimum net sum of £20,000, subject to any change in S' personal financial circumstances

c) S will be responsible for dealing with the reporting, assessment and payment of any income tax or national insurance contributions payable on any payment which she receives from P

d) S will promptly provide SA with any information and supporting evidence about her financial circumstances on request from SA and on any other occasion of material change in such circumstances

e) In the event that S receives payment from any source other than the prospective fostering arrangement or the rental of her property, SA shall be entitled to take such income into account in reviewing any future payment to S, and to call for a refund of any past payment which, when taken together with all other sources of income for S, has provided her with a net income (disregarding fostering allowances and/or rental income from her property) materially in excess of £20,000 a year.

f) In the event that S is unable to act as foster carer for the children for any reason for any period longer than six weeks in any calendar year, SA may consider reducing the payment she would otherwise have made to S by a figure which represents a net 20,000/52 for each week in question, or calling for a refund on the same basis of any payment which has already been made for such a period.

g) On any occasion of review of payments to S when SA considers that it is no longer in P's best interests for any payments to be made, or to be made at a level comparable with that made in a preceding year, SA will give S reasonable notice of her decision.

h) With the consent of the local authority, SA will be entitled to information about S's conduct of the prospective fostering arrangement, and in particular will be entitled to attend and/or receive minutes of any LAC meeting held by the local authority.

(3) The costs of all parties of this application shall be subject to detailed assessment and paid from the funds of P pursuant to rule 156 of the Court of Protection Rules 2007, and for the avoidance of doubt such costs shall include the costs of work done by solicitors and/or counsel representing S in connection with this application."

[49] Having made this order, I proceeded to make a final care order, placing the three children in the care of the local authority on the basis of the care plan that they would be looked after by S acting as foster carer. A property has now been identified near to P's home, and S and the children are in the process of preparing to move there. The children will continue to have regular contact with their mother.

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