IS IT THE CASE THAT LASTING POWERS OF ATTORNEY (LPA'S) ARE THE RIGHT SOLUTION?

• LPA’s allow individuals to name others to help them in the management of their affairs if they should lose capacity or otherwise think they need assistance. LPA’S in their current form have been in existence since October 2007. They are arguably one of the most important tools for individuals as they get older.

• For an LPA to be valid it needs to be registered with the Office of the Public Guardian (OPG). Currently some 2.5 million LPA’s and their predecessor documents Enduring Powers which are still valid are registered.  650,000 new LPA’s are registered every year.

• There are two types of LPA.  The most common is for Property and Finance. This allows named Attorneys (you should name more than one in case an Attorney predeceases the maker of the LPA) to manage the makers affairs in respect of Property and Finance. The second type, less prevalent but arguably more important is for Health and Welfare. This LPA allows the makers Attorney’s to make decisions about a persons Health and Welfare with Doctors, Hospitals, Social Workers, Care Homes and others if you yourself are unable to do so.  With this LPA you need to have actually lost capacity to the extent that you cannot make decisions for yourself about Health and Welfare.

• LPA’s sound the perfect solution for people who are getting older.  A word of warning however from Denzil Lush, former senior judge in the Court of Protection and which is that you should never appoint Attorneys unless you absolutely trust them.  This warning is against a backdrop overseen by him which is that an estimated one in eight LPA’s go badly wrong. This is because Attorney’s mostly sons and daughters of parents making LPA’s abuse their position.  They do so by way of financial and other abuses against those they are supposed to be taking care of.

• It is the considered view of Denzil Lush, an acknowledged leading figure in his field that a better way of avoiding this type of problem is for people instead of making LPA’s to apply to the Court of Protection to have a Deputy appointed. This can be a person of the maker’s choice.  The difference is that if a Deputy or Deputies are appointed they are supervised by the OPG and have to buy an insurance policy to cover off against wrong doings and mistakes. Deputies have to keep records and justify their spending.

• Short of the recommendation above an alternative would be for the OPG to run training classes for Attorneys which explain their duties and what they can and cannot do when assisting people under an LPA. Their should also be a requirement for Attorneys to submit reports annually.  Presently this is not done. Bad abuses apart this is a main reason as to why Attorneys fall foul of the obligations and requirements that they are required to operate under.

• The above is an overview only.

For a free appointment and to find out answers to the questions that need answering  and to get the care you or a loved one need email Andrew Douglas or his  team on ajd@awdrys.co.uk or call on 0800 072 8636. Alternatively visit our website www.abdcare.co.uk. We have offices In Marlborough, Royal Wootton Basset, Devizes & Chippenham.

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NOT WHAT YOU INTENDED?

Much has been made recently in the media of agreements reached in a domestic and social setting and their legal effect, most notably in the form of the recent Sports Direct case. Mike Ashley’s fascinating and notorious business practices aside, the case is notable for its re-affirmation of the current position on such agreements. 

Contract Formation

In brief, the requisite elements for a valid contract to subsist are: 1. An Offer, 2. Acceptance, 3. Consideration (i.e. some value offered by the parties, commonly goods, services or money) and 4. An intention to create legal relations. There are of course other considerations beyond the scope here.

Social and Domestic Agreements

Historically, there is a wealth of case law to confirm that agreements reached in a social or domestic setting are subject to a rebuttable presumption that the parties do not intend their agreement to be legally binding, the classic example being an agreement reached at the pub with friends (bearing odd similarities to Mike Ashley’s recent case). As above, this presumption is rebuttable, effectively meaning that it can be defeated by the production of evidence that the parties did actually intend to be legally bound by their agreement.

Commercial Agreements 

In contrast with the position on social and domestic agreements, there is a presumption that parties to a commercial agreement do intend to be legally bound unless the contrary can be shown.

Sports Direct 

The brief facts of the Sports Direct case are that Mike Ashley was drinking with various members of his professional team including Jeffrey Blue, an investment banker involved with Sports Direct, at a London pub. During the evening Mr Ashley told Mr Blue that, should Sport’s Direct shares reach £8.00 a share, he would pay Mr Blue £15m. Mr Ashley, who knew Mr Blue affectionately as “Jeffers”, confirmed in his statement that he could not remember the events of that night and that all parties had drunk heavily. In any event, it was argued that there had been no intention for this be a serious and binding agreement.

Mr Blue’s legal team argued that this scenario did not fall within a social setting, despite the location and consumption of alcohol. In justifying this argument, there was some exposure of Mr Ashley’s unorthodox business practices, which have been seized upon by the media, no doubt being Mr Blue’s intention.

Despite the apparently commonplace circumstances of Mr Ashley holding business meetings in clubs, pubs and casinos as well as drinking and worse during such meetings, it was held that this agreement was made in a social setting and there was not an intention on Mr Ashley’s part for it to be binding. The agreement was therefore held not to be binding on Mr Ashley and Mr Blue was furthermore ordered to pay his own and Mr Ashley’s legal fees totalling almost £2.5m.

One of the morals of the story is of course to take legal advice in relation to any agreement you wish to have binding effect. Were Mr Blue’s agreement formalised in writing and agreed in a more sober setting, the case would no doubt have been different.

For more information contact our Commercial Team at any of our offices.

LITTLE WHITE LIES - THEY COST MORE THAN YOU THINK!

In almost every property transaction a seller (or landlord) is required to provide replies to standard pre-contractual enquiries. In residential transactions these will usually be in a Property Information Form and in commercial transactions they will be by way of CPSE’s.  It is important that these are answered correctly and updated if anything changes before sale as otherwise the buyer may have a claim for misrepresentation.

Misrepresentation is a false statement of fact made by one party to another party, which has the effect of inducing that party into the contract.

The recent case of Quilter v Hodson Developments Ltd [2016] is a warning to all those providing these replies to enquiries. In this case the developers, Hodson Developments Ltd sold an apartment in a development to Mrs Quilter for £240,000.  In their replies to enquiries Hodson had stated that they were not aware of any disputes in relation to the property. It later turned out that there had been disputes over the communal central heating and hot water system which serviced the development. In Court the Judge found that there had been misrepresentation and awarded Mrs Quilter damages of £15,000 – being the difference between the price paid for the apartment and the value having regard to the heating and water issues.

The case serves as a caution that omissions and failure to update a buyer or tenant on any issues raised, even after exchange of contract can result in serious and expensive consequences.

For more information contact our Commercial Dept.