Various Applications in respect of ‘Direct Payments’, Re

THE ISSUES FOR DETERMINATION

In Lumb v. NHS Humber & North Yorkshire ICB [2024] EWCOP 57 (T2) it was determined that:

There are now seven applications to be determined which together seek to achieve clarification of whether the Court of Protection can appoint deputies with authority to manage Direct Payments payable under a range of schemes; and, if so, the terms of the authority required.

These seven applications have been made by professional deputies who :

The Public Guardian, who has statutory obligations to supervise deputies, has been joined as respondent to each of these seven applications. The Official Solicitor has accepted the Court’s request to act as amicus curiae within these proceedings, and was so appointed by order made on 25^th January 2026.

In the parlance of the Mental Capacity Act 2005, the person who benefits from Direct Payments is ‘P’. For simplicity, in this judgment I shall adopt an equivalent approach, referring to the public body which ‘foots the bill’ of Direct Payments as ‘F’, and the person who receives/manages the Direct Payments as ‘R’.

THE SEVEN APPLICATIONS

AH 13330937

SF 13080340

MCL 13645655

HI 12321420

EL 12788364

TF 11421745

RF 13604385

All of these matters (and one other, which has subsequently been withdrawn) were first considered together on 21^st October 2025, when an order was made which:

At a hearing on 25^th January 2026, directions were given for:

By order made on the papers on 24^th February 2026:

In the matter of RF, the responses which came back from F (Footnote: ¹) were thought by the deputies to be inadequate, so an application was made for a s49 report to be directed. By order made on 10^th April 2026 (‘The Refusal Order’) I refused that application, noting that F’s response to date included the following explanation:

“In cases where an adult or their representative is unable to manage P’s Direct Payments, The London Borough of Redbridge will commission a package of care based on the care and support needs identified during the assessment.

….

The Local Authority does not have control over whom a domiciliary care agency employs. While the Local Authority can request that the agency considers taking on the existing personal assistants, it cannot instructor (sic) require the agency to do so.

….

As this is currently a hypothetical scenario, the Local Authority is unable to provide a full response at this stage. Decisions regarding whether an agency would be commissioned, or whether alternative forms of support would be commissioned, depend on the individual’s assessed care and support needs and on whether there is a suitable person available to manage Direct Payment (DP) arrangements on her behalf. Until a formal request is made, the LA is unable to comment further on this matter.”

An application was made for reconsideration of The Refusal Order. On 1^st June 2026, upon reconsideration, I affirmed that order noting that:

So, in summary, these seven applications come from four deputyship-providing solicitors’ firms and involve Direct Payments payable through four separate schemes. In marked distinction to the Lumb case and SBB:

THE FOUR SCHEMES

The applications in respect of TF and EL involve The National Health Service (Direct Payments) Regulations 2013 – the same scheme as was considered in Lumb. I have been provided with a copy of these regulations [A273] and their Explanatory Memorandum [A299]. For brevity I will refer to this scheme as ‘the NHS Regulations.’

The applications in respect of AH, SF, HI and RF all involve The Care and Support (Direct Payments) Regulations 2014. I have been provided with a copy of these regulations [A300] and their Explanatory Memorandum [A313]. For brevity I will refer to this scheme as ‘the Care Act Regulations.’

The applications in respect of MCL and AH involve The Special Educational Needs (Personal Budgets) Regulations 2014. I have been provided with a copy of these regulations [A314] and their Explanatory Memorandum [A322]. For brevity I will refer to this scheme as ‘the SEN Regulations.’

The application in respect of EL involves The Community Care, Services for Carers and Children’s Services (Direct Payments) (England) Regulations 2009. I have been provided with a copy of these regulations [A324] and their Explanatory Memorandum [A339]. For brevity I will refer to this scheme as ‘the Children Act Regulations.’

THE FUNDAMENTAL DISPUTE

The fundamental dispute in these proceedings is whether each or any of the four schemes of regulations requires the person receiving and managing Direct Payments (‘R’) to make decisions of a ‘welfare’ nature. This is fundamental to the applicant deputies because, if authority to make decisions of a ‘welfare’ nature is required, none of them presently has it. Consequential questions therefore arise as to whether they should be given it, retrospectively and prospectively; and, if so, in what terms.

In the Lumb case, I came to the conclusion that the NHS Regulations do include exactly that requirement.

The applicant deputies accept that these proceedings are not an appeal against the Lumb determination. They were also clear, when I offered them the opportunity at the outset of the hearing, that they sought neither an adjournment nor allocation of current issues to a Tier 3 judge. They contend that the Lumb determination “is not binding”, and they seek to persuade me now to come to a different conclusion. If successful in that, they are not concerned about inconsistent decisions because they consider that it would be clear that the later decision was to be preferred.

The Public Guardian and the Official Solicitor each also confirmed their position that I should proceed to determine the current applications.

So, I turn first to consider each of the four schemes individually, to identify what provisions (if any) suggest that welfare-type decisions are required by R.

The NHS Regulations [A273]:

The Care Act Regulations [A300]:

The SEN Regulations [A314]

The Explanatory Memorandum [A323] includes the following provision:

“7.2

The policy intention underpinning the introduction of the offer of a personal budget from September 2014 is to give parents and young people with an EHC plan direct choice and control over the services they receive and allowing them to tailor provision to meet their own unique needs.”

The SEND Code of Practice [excerpts at A921 – 989] contains virtually nothing about management of Direct Payments but I note from the section headed “Writing the EHC plan” [A942] the following stipulations at section 9.61:

The Children Act Regulations [A324]:

The applicant deputies wish to be able to manage Direct Payments, but only within the framework of deputyship authority. Their reasons of this are as follows [ps para 25 – 26]:

That position reflects Mr. Lumb’s. However unlike Mr. Lumb, the applicant deputies contend that property and affairs deputyship in standard terms is sufficient to enable them to manage Direct Payments. Their ‘headline’ reason for this is that their experience of the current applications demonstrates that “the role of the DP holder is to administer a public body’s care plan, which P does not have a power to alter whether or not they have capacity. It is an operational task that is linked to seeking out statutory funding for P (a financial decision) and arranging care for P on a private basis. It is ancillary to property and affairs authority, not welfare authority.” [ps para 76]

In support of their position, the applicant deputies have provided a ‘statutory frameworks table’, with a column for each of the four schemes and a row for each of 15 questions/approaches. The issues to be addressed in the rows appear to have been chosen by the person(s) who drew up the table without further explanation but I note:

Describing their ‘headline’ argument (ie how the applicant deputies have actually been managing the Direct Payments in issue), the applicant deputies explain [ps para 42] that they:

In short, the applicant deputies contend that the role of R is “operational”, consisting of “implementing the decisions taken by the statutory body to meet a person’s needs in the discharge of their duties to that person” [ps para 45].

Nonetheless, the applicant deputies :

In support of their ‘operational’ approach, the applicant deputies identify the following features as common to all of the Direct Payment schemes under consideration [ps para 43]:

I note that this list of common features does not include any mention of the ‘choice’ agenda set out in the Explanatory Memoranda. Nonetheless, the applicant deputies do, seemingly with positive/supportive intent, identify a feature which appears to me to stem from that agenda:

“The distinction between DPs and directly-commissioned packages is typically that a DP holder may be willing to make practical arrangements for meeting those needs in a manner which would not ordinarily be commissioned by a public body, which are very rarely willing to directly employ care staff to be allocated specifically to P…….. The key benefit of a DP as a means of commissioning care is to allow a focus on P as an individual, and for the steady employment of named carers for P….” [ps para 47]

The applicant deputies also address each of the four schemes separately.

In respect of the NHS Regulations, the applicant deputies contend [ps para 48] that:

In respect of the Care Act Regulations the applicant deputies:

Their interpretation of section 32 of the Care Act [ps paragraphs 64 - 65] accords with the one set out above. The applicant deputies emphasise that, while a health and welfare decision-maker may “bar” another from requesting a DP, such decision-maker “has no ongoing role in managing a DP, as it is the local authority that determines how public funds are to be spent…” They

In respect of the SEN regulations the applicant deputies “do not consider that either in law or practice, there are any meaningful ‘welfare’ decisions to be taken on behalf of P in administering SEN Direct Payments. The plan is written and specifies the provision to be made – the DP holder must ‘secure the services’ set out in the plan.” [ps para 73] “The role of the DP holder is to deliver the EHC Plan in the manner specified by the local authority, and not to take welfare decisions on behalf of P as to how P’s needs are to be met.” [ps para 69].

In respect of the Children Act Regulations the applicant deputies submit that “using a DP to secure a specified service does not involve welfare-decision-making authority, as P does not determine the ‘services they are obliged to receive’.” [ps para 75]

The overall position of the Public Guardian is that “some form of welfare power” is required for management of Direct Payments by court-appointed deputies, “save possibly in relation to certain SEN nominees” [ps para 60] :

Contrary to the assertions of the applicant deputies, the Public Guardian considers that “often the care plans are not particularly prescriptive. They are unlikely to specify a particular provider to use. They are unlikely to specify the exact hours of the day when care is to be provided.” (In oral submissions, Mr. Drapkin referred me to actual care plans in the current application, to demonstrate this point.) It follows that “all of that lies to be decided by those with the practical control of the care package. In a direct payment case that must be those in control of the direct payments.” [ps para 51]

The Public Guardian draws a useful distinction [ps para 52] between

More broadly, the Public Guardian is concerned that the “operational” approach to Direct payments does P a disservice:

“Direct payments appear to have the ability to confer flexibility in care organisation. They should be held by someone who is at least able to exercise such powers as they have, even if, as the deputies submit, they are tightly constrained by the funding bodies.” [ps para 53]

The Official Solicitor’s submissions as Amicus Curiae are that:

In respect of the fundamental issue in these proceedings, the Official Solicitor’s advice to the Court [ps para 61 – 63] is not simple but it is clear, and so I set it out in full:

“37.

A decision whether to request direct payments necessarily involves a welfare decision. The care plan is not prescriptive. Further, a decision needs to be made that it is in P’s best interest that P’s care is delivered by directly employed carers who are chosen by the deputy (in consultation with family and others concerned in P’s welfare), or if directly commissioned services are in P’s best interests. That is fundamentally a welfare decision. It may be a decision as to the nuts and bolts as to how to implement overarching decisions as to what care P needs, but that does not fundamentally change the nature of the decision as a welfare decision.

….

61.

The authority required to request direct payments and deal with them in accordance with the relevant regulations is (save possibly in relation to SEN nominees) mixed authority ie it involves aspects both of property & affairs and health & welfare. It is necessary not only for the deputy to receive the payments, but also to expend those payments in the implementation of the care plan, which involves making decisions as to how that care plan will be implemented. These are not high level welfare decisions. They are also decisions which will be made in consultation with others concerned in P’s welfare, but they are still decisions which are decisions about personal welfare, rather than mechanical decisions about implementation of a detailed plan set out by the public authority. Such plans are not, in general, so prescriptive.

62.

For the reasons set out in paragraphs 28 -31 and 38 above, the authority required in relation to each type of Direct Payment is not exclusively property and affairs authority: such authority necessarily involves taking decisions regarding P’s welfare. Even a decision to maintain the status quo is a decision involving welfare considerations.

63.

Given that dealing with the Direct Payments to employ carers, particularly where a package is funded by a combination of public and private funding, purely welfare authority is not sufficient. A welfare authority does not confer authority to deal with P’s money, or with P’s “affairs”. Powers to deal with P’s property and affairs in the absence of formal authority are extremely limited. Section 8 MCA 2005 allows reimbursement from money “in P’s possession”. Section 8(3) makes clear that it is possible to “spend money for P’s benefit” but that would not mean that the act done was done “as deputy”. An act is done “as deputy” if the statutory indemnity can be employed. Further, section 8 does not allow recovery of that expenditure from funds which do not belong to P, as would be the case where direct payments would be used to meet the costs of care.”

For each of the Direct Payment schemes under consideration there is a route to managing those payments (‘being R’) which does not require any court-given authority. That tells us that deputyship is not necessary for P to receive Direct Payments but it does not answer the fundamental dispute in these proceedings. The applicant deputies do not wish simply to manage Direct Payments – they wish to do so with the advantages of deputyship authority, namely indemnity for their actions and ability to charge P for their efforts. So the question remains: what authority is required from the Court of Protection for managing Direct Payments within deputyship?

The information before the Court in these proceedings is that, in reality, for each of the seven Ps, the only way for them to receive Direct Payments is if they can be managed within deputyship – because no one is available and/or willing to do it any other way. Before this situation is accepted in the determination of each application, the availability of an alternative R may need to be interrogated further. (There was an alternative option identified in Lumb.) However, for the purposes of this judgment, I assume this information to be correct.

The corollary of this ‘reality’ is that, unless appropriate deputyship authority can be identified and conferred, going forwards each P will only be able to receive directly-commissioned care and support, which is unlikely to replicate their current, tailored provision. I agree with the analysis of the Official Solicitor that this corollary means that P would be disadvantaged as compared to a capacitous peer. It is therefore important to find a way by which Direct Payments can be managed within deputyship. In my judgment that way must be workable across all the material circumstances in which P may find themselves eligible for Direct Payments to meet their needs – like SBB, with no significant assets; or like the seven Ps in the current applications, with the bittersweet advantages of a damages award.

Only the Court of Protection can confer deputyship authority. Whatever the provisions in the various Direct Payment schemes, they do not alter that basic situation in law.

Although its name is ancient, the jurisdiction of the modern Court of Protection is yet quite young. Nonetheless, for almost twenty years now there has been a settled approach of deputyship being considered in two distinct streams. As set out at paragraph 73 of Lumb:

“(a)

in accordance with the specific categories of s 16(1) of the [Mental Capacity] Act, the Court of Protection invariably confers property and affairs deputyship authorities separately to welfare deputyship authorities…

Management of Direct Payments raises the question of whether this is necessary or appropriate.

Adopting Ms. Bedworth’s terminology, deputyship authority is “bottom up” ie there just is no deputyship authority unless and until the Court has conferred it. That applies to both ‘streams’ of deputyship. The realities of life and specific Mental Capacity Act provisions have meant that the authorities which are granted as ‘standard’ across the two streams are different: property and affairs deputyships standardly include a ‘general authority’, welfare deputyships do not.

As set out at paragraph 47 of Re ACC [2020] EWCOP 9:

“The purpose of the ‘general’ authority is to enable a property and affairs deputy to do on behalf of P those myriad tasks too numerous to identify individually which are commonly required to manage an individual’s financial affairs efficiently. The essence of its scope is the ‘ordinariness’ of the task contemplated.”

As set out at paragraph 53.7(c) of Re ACC [2020] EWCOP 9:

“… the authority of a property and affairs deputy does not encompass determination of P’s care needs but it does encompass the application of P’s funds to meet the costs of care arrangements. If those arrangements involve direct employment of carers, preparation of employment contracts will be encompassed within the ‘general’ authority to manage P’s funds.”

The applicant deputies want management of Direct Payments to fall within the ‘general authority’ of property and affairs deputyship. Hence, they describe what they actually do in respect of the Direct Payments being received in the present seven cases as purely ‘operational’, within the description set out at paragraph 53.7(c) of Re ACC. They point out that taking this approach would avoid any issues of retrospective authorisation in the cases presently under consideration (and, I am told, many others), and would keep to a minimum the need for future applications.

It is not clear to me that all the applicant deputies are in fact acting merely ‘operationally.’ For EL, there have been costs incurred in a dispute about managing the care package as a whole. For TF, there have been costs incurred in respect of adequacy of Direct Payments. For RF, the Deputies have become involved in welfare-type issues at least to the extent that, as previously recorded within these proceedings, they consider the current support plan does not meet her needs. In all of the cases, they advance the view that running a care package via Direct Payments is better than the alternative for the welfare of their P.

In Lumb, I determined that management of Direct Payments under the NHS Regulations involved welfare-type decision-making and so was outside standard authorisations of a property and affairs deputy. I did not otherwise consider the scope of ‘general’ authority. The current proceedings lead me to consider whether, even if I were to accept that the applicant deputies’ have been acting purely ‘operationally’, management of Direct Payments could ever fall within the meaning of ‘general’ authority.

With the benefit of extensive argument, it seems to me difficult to say that management of Direct Payments within a regulatory scheme is an ‘ordinary’ part of managing property and affairs. Even viewed as a purely administrative function, ‘operational’ management of Direct Payments is a specific, distinct responsibility, easily identifiable, and involving complexities which are not of a ‘day to day’ type – such as deployment of funds within specific constraints, engagement with the paying public authority to satisfy that authority that the constraints are observed, and the repayment obligations. These (and other) aspects of managing Direct Payments are not ‘ordinary’ features of managing an estate, large or small. I note that the Official Solicitor takes the same view [ps paragraph 36].

In the same way as Cobb J (as he then was) in Re A (Capacity: Social media and Internet Use: Best Interests) [2019] EWCOP 2 considered that decisions about engagement with the internet and social media were distinct from decisions about other forms of contact and care, in my judgment it is clear that managing Direct Payments within the requirements of a regulatory scheme is ‘operationally’ distinct from ‘day to day’ general management of a person’s property and affairs. It is not simply a matter of day-to-day ‘myriad tasks’. There are particular and unique characteristics of managing Direct Payments which risk being ‘lost’ or overlooked if such management is just swept up as a generality, to the detriment of P. So, I find the argument of incorporation into ‘general authority’ uncompelling, even without yet having reached a conclusion as to the fundamental dispute in these proceedings.

Further and relatedly, I agree with the Public Guardian that, whether or not the applicant deputies have indeed been acting purely ‘operationally’, such description does not answer the fundamental dispute in these proceedings, which is what the role of R properly requires. If Direct Payments are to be managed via deputyship, the authority conferred by the Court of Protection must be sufficient to enable the Deputy to discharge the role fully as conceived by the relevant regulations, not how the applicant deputies say they have interpreted it to date.

So, I turn to consider the specific Direct Payment schemes.

In respect of the NHS Regulations, the conclusion I came to in Lumb (paragraphs 68 & 69) was that management of Direct Payments included more than delegated financial administration, reflective of the ‘choice’ agenda.

In so far as the applicant deputies contend [ps paragraph 48(b)] that the Lumb judgment was wrong (at paragraph 70) to refer to the Guidance document, relying on R(CXF) v. Central Bedfordshire Council NHS North Norfolk Clinical Commissioning Group [2018] EWCA Civ 2852 [A447]:

I am not persuaded by the arguments of the applicant deputies that I should now depart from the conclusions reached in Lumb.

Each of the other schemes currently under consideration are much less prescriptive than the NHS regulations as to what is required of R. I have found no specific requirements in the Care Act Regulations or the Children Act Regulations which impose equivalent welfare-type requirements on R. In respect of the SEN Regulations, section 80(6) of the Act leans one way, but regulation 5(2)(b) perhaps leans the other. However, it is clear that all these regulatory schemes are underpinned by intention to give effect to the same ‘choice’ agenda:

Having looked at the care plans for each of the seven Ps in the current proceedings, I cannot agree with the applicant deputies that they are ‘prescriptive’ to the point of rendering R’s role simply a question of applying funds as directed. There is a great deal of leeway remaining as to how the specified extent of support is made manifest. The applicant deputies themselves acknowledge that this is the key advantage to Direct Payments. As the Official Solicitor notes, perhaps the decisions involved are not ‘high level’ and are being made in collaboration with others. Nonetheless, Rs are still making welfare-type decisions when, in accepting the role at all, they indicate their judgment that Direct Payments are an appropriate way of meeting P’s needs for care and support; and thereafter, when they actually deploy the Direct Payments.

I am concerned, with the Public Guardian, that a purely ‘operational’ interpretation of the role of R fails to recognise the underlying purpose of Direct Payments, renders the ‘choice’ agenda illusory, and thereby does P a disservice.

So I conclude that, in all of the Direct Payment schemes currently under consideration, some authority beyond what is incorporated in the ‘general’ authority of a property and affairs deputy, and beyond simply ‘operational’ management of money, is required if Direct Payments are to be managed within deputyship.

I now turn to consider the specific questions which were agreed between the parties to require determination within these proceedings (modestly adapted in accordance with the conclusions reached as the journey through the questions progresses.)

THE SPECIFIC QUESTIONS

The parties agree that it is possible as a matter of law for the Court of Protection to give a deputy authorisation as deputy to manage direct payments in respect of a P who is aged 16 or over.

In Lumb (at paragraph 95) I specifically determined:

SBB being over 16, age was not a relevant consideration in the Lumb litigation but it is relevant to the generality of Q1 because of the different scope of the Court of Protection’s jurisdiction in respect of property and affairs and in respect of welfare:

The applicant deputies’ approach – that managing Direct Payments is within the ‘general’ authority of property and affairs deputyship – allows them to answer Q1 positively in respect of all Ps. They further point out [ps para 10 - 14] that having such authorisation from the Court of Protection is not itself sufficient for Direct Payments actually to be received and managed by the deputy, so there are ‘multiple protections’ in place in their approach:

The approach of the Public Guardian and the Official Solicitor – that welfare-type decision making authority is required – leads them to conclude that Direct Payments can only be managed within deputyship in respect of a P who is over 16.

The Official Solicitor further considers it “doubtful” that Direct Payments under the Children Act regulations come within “… affairs” of a P who is under 16, since they are paid to the parents (not the child) and the associated obligations fall on the parent (rather than the child).

Nothing in the current proceedings leads me now to a different conclusion from that reached in Lumb as to the principle of whether the Court of Protection could appoint a deputy with specific authority to manage Direct Payments. I remain satisfied that there is nothing in the categorisation of powers within the Act which prevents a deputyship appointment which draws on powers from both categories. However, the limitations of each category must continue to apply – the scope of one (property and affairs) cannot somehow be ‘read across’ to the other (welfare) just because a single deputyship appointment combines authorisations from each category. It is the substance of the authorisation that matters, and welfare-type decisions for under 16s are not the province of the Court of Protection.

Having concluded that acting as R involves some welfare-type decision-making, it follows that authorisation to manage Direct Payments under these schemes within deputyship must incorporate sufficient authority for that welfare-type decision-making; and therefore it is only possible where P has reached the age of 16.

Although this conclusion is not now critical to any of the seven applications currently before me, I acknowledge that there are likely to other cases (such as where P sustained brain injury in the birth process) where this has a practical impact. To ensure that a P under the age of 16 is not excluded from the ‘choice’ agenda, it may be necessary for public bodies, families and case managers to look again at the alternative approach which was available in Lumb.

So, the answer to QI is ‘yes, as long as the beneficiary of the Direct Payments (P) is over 16.’

The NHS Regulations and the Care Act Regulations both include a specific condition that P must have capacity to request a Personal Health Budget/Direct Payments, and an alternative route to requesting Direct Payments if P lacks such capacity. The parties agree that, in those schemes, it is not open to a deputy to “stand in the shoes of P” to request Direct Payments – the alternative route must be used. This is in accordance with my conclusion in Lumb (paragraph 85). I concur now.

The SEN Regulations and the Children Act Regulations do not have an equivalent approach. Where P is over 16, the parties agree that an appropriately authorised deputy could “stand in the shoes of P” to request Direct Payments. I concur.

I have already set out above my conclusion that matters relating to management of Direct Payments do not fall within ‘general’ authority of property and affairs deputyship. Q3 seeks to break down various aspects of management of Direct Payments.

The applicant deputies acknowledge [ps paragraph 27] that in all the seven cases of these proceedings, the deputy utilises professional services of case managers “to minimise the deputy’s own costs in managing the DP.” Their argument seems to be that, using case managers in this way, some aspects of managing Direct Payments are “closely aligned with two tasks” which the Court has already determined to be within the general authority of a property and affairs deputy [ps paragraph 28]. They are referring here to my decision in Re ACC [2020] EWCOP9, and they identify those “two tasks” as follows:

I do not recognise the “two tasks” as described as being the subject of any determination in Re ACC. Neither does the Official Solicitor [ps paragraphs 32- 35]. Negotiating the sufficiency of public funding to meet care needs and participating in reviews of such funding were simply not considered in that judgment; and employment of care staff was considered only to the extent of preparation of employment contracts. As the applicant deputies accept [ps para 33], the issue of making arrangements for the use of public funds was not considered either.

Reading on in the applicant deputies’ position statement, it becomes apparent that they make their argument in reliance on paragraphs 53 - 54 of Re ACC:

I disagree with the assertion of the applicant deputies [ps para 29] that ‘Requesting Direct Payments and negotiating the sufficiency of a directly commissioned care package is not of a meaningfully different character to the activities that were found to be appropriate in Re ACC.” I do not accept that such interpretation of Re ACC is reasonable:

In short, the applicant deputies are wrong to claim from Re ACC the authority which they do for the ‘two tasks’ set out in paragraph 90 above. Moreover, in my judgment such claim casts doubt on the description of their approach as ‘operational’ – ‘negotiating sufficiency’ cannot sensibly be described as an administrative task.

Happily, the applicant deputies’ reliance on paragraph 53.7(c) of Re ACC is not problematic. The administration of carer’s employment contracts can be regarded as within ‘general’ authority. The point in these proceedings however is that administration of employment contracts is only one aspect of ‘managing Direct Payments.’ As determined above, ‘managing Direct Payments’ involves wider questions.

So, the answer to Q3 is as follows:

The applicant deputies seek further clarification as to “what steps deputies can take to respond to a refusal of statutory funding and/or an inadequate or unlawfully reasoned offer of funding under a standard deputyship order, and whether the answer to that question differs depending on whether the requests for statutory funding also involves a request for [Direct Payments].”

I have not heard argument on these questions of ‘further clarification.’ In the context of litigation about Direct Payments, it is not clear to me what the applicant deputies mean when they refer to ‘statutory funding’. It would not be appropriate to extend these proceedings further to encompass a whole new issue at this stage. The judgment in Re ACC stands. In respect specifically of funding by Direct Payments, it follows from the determinations so far in these proceedings that the ‘standard deputyship order’ (ie the ‘general’ authority of a property and affairs deputy) does not encompasses authority to take any steps in respect of Direct Payments / refusal of Direct Payments / inadequate or unlawfully reasoned offer of Direct Payments. If in doubt as to the extent of their authority, a deputy should consider making an application to the Court for express authority. Otherwise, a deputy proceeds at risk as to costs (and potentially outside all the other benefits of deputyship appointment which lead the applicant deputies to decline to manage Direct Payments outside deputyship.)

This is a matter of dispute between the parties.

The position of the applicant deputies is that [ps paragraph 36]:

“it is unnecessary and undesirable for separate proceedings to be required in the Court of Protection [to] authorise a deputy to fulfil obligations placed on P in the King’s Bench Division, where:

(a)

P had a litigation friend appointed by the KBD Court who accepted the relevant obligations on P;

(b)

P’s litigation friend was fully advised on the terms of settlement by leading counsel, with counsel’s advice on settlement being disclosed to the court;

(c)

The consequential steps required by the deputy to seek out and receive DPs to ensure that P fulfilled those obligations were patent and set out in the terms of the order, along with the knowledge that the deputy would incur some costs in these tasks;

(d)

The proceedings specifically made provision for P’s future deputyship costs, in the knowledge that the deputy would be expected to pursue and manage statutory funding on behalf of P; and

(e)

The terms of the settlement were approved by a High Court Judge.”

This question is particularly relevant to the case of AH. However, I was informed during the hearing that in fact Direct Payments for AH were already being received at the time of the settlement order. So, it was not in reality a situation where the deputy was being obliged by the High Court to do anything that had not already been done.

As a basic principle, it is simply not possible for a judge of the King’s Bench Division of the High Court, sitting as such, to exercise powers conferred by the Mental Capacity Act on the Court of Protection. It is for this very reason that judges of the King’s Bench Division of the High Court can be and (as the President sees fit) are nominated to sit as Tier 3 judges of the Court of Protection. It is of course open to them to ‘wear two hats at once’ as they consider appropriate. That is not the situation which is the subject of Q4. In fact, as set out in Peters v. East Midland Strategic Health Authority [2009] EWCA Civ 145, the approach generally adopted was to require the deputy to make an application to the Court of Protection for a limit on their authority to be imposed. (I have in mind my decision in Re BJB [2024] EWCOP 59 (T2).)

So, I do not accept the applicant deputies’ suggestion that the scope of a deputy’s authority is somehow altered by the terms of High Court settlement approval order. I agree with the Public Guardian and the Official Solicitor that the existence of a reverse indemnity undertaking cannot make a difference to the scope of ‘general authority.’ There is merit in the Official Solicitor’s illustration [ps paragraph 40] of the absurdity this would produce – “the deputy would have no authority to request and manage direct payments the day before the order was approved, but would have such authority the day after the order was made. The scope of a deputy’s authority cannot change in that way. It is a recipe for uncertainty.” As the Public Guardian observes [ps paragraph 57] it “may not be what the parties to the consent order [for AH] either expected or hoped but it is not possible for them to change the scope and effect of a deputyship order.”

So, the answer to Q4 is ‘no, the position is no different because of a reverse indemnity in an order settling a damages claim on behalf of P.’

The parties all agree that no issue arises under section 20(3)(c) of the Mental Capacity Act 2005, and I concur.

In particular, the view of the Public Guardian and the Official Solicitor is summarised as follows:

At one stage in Lumb submissions raised the question of whether Direct Payments were held on a Quistclose trust. Ultimately that argument was not pursued. In any event, the Official Solicitor’s position statement [paragraphs 52 – 58, which are reproduced in Schedule 3 to this judgment] has helpfully considered the possibility, and dismissed it.

So, the answer to Q5 is “no, in respect of Direct Payments no issue arises under section 20(3)(c) of the Mental Capacity Act 2005.”

I have considered this question as “the fundamental dispute”in these proceedings – as above.

The conclusion I have come to is that the answer to Q6 is “authority to manage Direct Payments is to be understood as mixed, involving aspects of both property & affairs and health & welfare.”

All parties agree that the answer to this question must be ‘no.’ This was alluded to in Lumb. The statutory provision is determinative.

The applicant deputies consider that the scenario envisaged in this question “might be theoretically possible” [ps paragraph 79]. However, there is one of the seven current cases where the deputy is a Trust Corporation – SF. In that matter, the directors of the Trust Corporation deputy “do not wish to become unilateral health & welfare decision-makers for SF and consider this would create unnecessary costs and bureaucracy” [ps paragraph 78].

As the Official Solicitor points out [ps paragraph 66] there is no difficulty in principle with different persons holding different deputyship authorities in respect of the same P, or (pursuant to section 19(4) of the Mental Capacity Act 2005) there being joint and several authority in relation to some matters and joint authority in relation to others.

However, the Official Solicitor and the Public Guardian agree with the applicant deputies that significant practical difficulties would arise in the scenario contemplated in Q8. Where the costs of a care package were met in part by public funding (ie Direct Payments, under the control of the individual director and in respect of which that director owes duties) and in part by private funding (ie under the control of the Trust Corporation deputy), it would be unclear who should be the employer of any carer (which is said to be a particular advantage of having Direct Payments). It would be unclear who would make decisions, and decisions in the realm of private funding could have an impact on the public provision. I also agree that it is difficult to see how two different decision-makers, even if in legal terms within the same organisation, could be said to be in the best interests of P.

So, the answer to Q8 is ‘no.’

In light of the answer above, Q9 does not arise.

The Official Solicitor advises [ps paragraph 70] that it would be ‘insufficient’ simply to authorise a deputy ‘to manage Direct Payments’ because it is inherently unclear and fails to address both the requesting of such payments and the requirements in the role of R in respect of the care plan. Further [ps paragraph 73] the Official Solicitor considers that it ‘makes sense for a deputy who is to manage Direct Payments (in the sense of requesting and then implementing care plans and defraying costs of care) to have authority to negotiate on all aspects, short of litigation.” In particular she envisages this to include negotiations as to sufficiency, not just in the sense of whether the amount covers the hours but also as to whether the nature of the care is enough. ‘Any [such] decisions would be taken by a deputy in P’s best interests and in consultation with others and with the benefit of legal advice.’

Addressing Mr. Lumb’s concern that the role of R involved tasks outside the expertise of a solicitor, the Official Solicitor does not consider this to be a bar against being granted deputyship authority to manage Direct Payments [ps paragraph 76]. By analogy, it is not necessary for deputies to have investment expertise before authority to invest is conferred. Deputies are expected to take and will take professional advice as appropriate.

Both the applicant deputies and the Official Solicitor have offered suggested wording for authority to manage Direct Payments, for which I am grateful. They overlap quite closely but also have material differences. Having considered both proposals carefully, in my judgment the appropriate authority should be worded as follows:

“The deputy is authorised to consent to, receive and manage Direct Payments made for the benefit of [P] by any statutory body, in accordance with the requirements of relevant regulations. In order to give effect to this authority the Deputy is in particular authorised to:

i.

request a statutory body to carry out an assessment of [P]’s needs;

ii.

request a Personal Budget or a Personal Health Budget for P;

iii.

request Direct Payments as a means of a statutory body meeting its obligations to provide care and/or support for [P];

iv.

make representations to the statutory body making or proposing to make Direct Payments for the benefit of [P] as to

i.

whether [P]’s welfare would be best promoted by that statutory body making direct payments or not, and/or

ii.

whether the statutory body’s decision as to the level of direct payments or nature of the services included in any care plan is sufficient for [P];

v.

exercise any rights which are available to the recipient of Direct Payments within the relevant regulations to seek and/or participate in a review or re-consideration of the statutory body’s decision(s) or care plan;

vi.

to use or apply the Direct Payments, which may include by way of direct employment of carers, in the best interests of [P] and subject to compliance with any conditions applicable as specified by the relevant statutory body and/or the relevant regulations.

(For the avoidance of doubt, nothing in this order authorises the deputy to appeal, or instigate proceedings for judicial review of, any decision made by the statutory body in respect of Direct Payments without further order of the Court.)”

For convenience, I have set out this wording in Schedule 1 to this judgment.

Whenever a deputyship appointment is made, the order sets out a self-description after the name of P: it says “ORDER APPOINTING A DEPUTY FOR PROPERTY AND AFFAIRS” or “ORDER APPOINTING A DEPUTY FOR PERSONAL WELFARE”. Where authority to manage Direct Payments is included, neither of those descriptions would be fully correct. The words “AND MANAGEMENT OF DIRECT PAYMENTS” will need to be added. The wording as above could then simply be added to that section of the deputyship appointment order which is headed ‘Authority of Deputy’.

Alternatively, the Direct Payments authority may be sought only sometime after a deputy’s appointment. In those circumstances a free-standing order could be made, headed (as usual with subsequent orders) simply “ORDER”. It would recite:

For the avoidance of doubt, and noting that the authorities of a welfare deputy do not usually include matters such as operation of a bank account, that type of practical step is implicit in the wording of part (vi) of the authorisation relating to Direct Payments – Direct Payments could not be used or applied “as specified by the relevant statutory body and/or the relevant regulations” otherwise.

This question arises in respect of:

Effectively, these regulations conflict with s19(6) of the Mental Capacity Act 2005, which provides that a deputy is to be “treated as P’s agent” in respect of actions within deputyship. This provision in the Act is generally understood to mean that, as long as the deputy makes clear that they are acting as deputy, the deputy incurs no personal liability when entering into obligations on behalf of P.

The applicant deputies consider [ps paragraph 83] that these particular regulations are probably for “the primary purpose of clarifying that the DP holder cannot enter into an employment contract on behalf of the statutory body”. They agree with that purpose. However they further consider that a deputy could be a principal on the contract whilst still being P’s agent in accordance with the statutory designation of the Mental Capacity Act. Otherwise, they are worried about potential for personal liability and would therefore not be willing to manage Direct Payments.

The Official Solicitor notes [ps paragraph 77] that the relevant regulations only require R to act “as a principal”, noting that the requirement is not to act as the only principal ie “the regulations do not preclude P from being bound by the contract, and liable to be sued on it.” Further, the Official Solicitor points out that there are circumstances where an agent acting within his authority still incurs personal liability [ps paragraph 81, noting in particular Bowstead & Reynolds on Agency at 7 – 058 to 7 – 063] For example, if an agent commits a tort on instructions, the agent is not freed of personal liability but instead has a right of indemnity for any liability which he incurs for acts done within the scope of his authority: Lifestyle Equities CV v. Ahmed [2025] AC 1 at 91. The practical concern for deputies is the availability of the indemnity – which is addressed if they act within the scope of their court-conferred authority.

The Public Guardian looks more widely at the particular schemes [ps paragraphs 66 & 67], noting in particular regulation 17(9) of the NHS Regulations and regulation 14(7) of the SEN Regulations, which each provide for any right or liability of R to a third party in relation to a service secured by Direct Payments generally transfers to F when Direct Payments stop. One of the triggers for Direct Payments stopping is that R has withdrawn their consent. The Public Guardian suggests that this provides reassurance to deputies about potential for personal liability.

The Public Guardian further suggests [ps paragraph 69] two possible ways of reading the conflicting materials together:

I am grateful to Ms. Bedworth and Mr. Drapkin for their detailed considerations of the agency considerations. It seems to me that there is actually little dispute here, and the concerns of the applicant deputies can be allayed.

So, the answer to Q11 is ‘yes, where a deputy is acting within court-conferred authority to make the decisions which are required in management of Direct Payments, the indemnity for their actions which comes from s19(6) of the Mental Capacity Act 2005 will apply.’ Such deputy may enter into a contract for employment of a carer on P’s behalf but as principal to the contract, so meeting the requirements of the regulations whilst also being entitled to an indemnity from P’s estate.

I recognise the implications of this issue for the applicant deputies, and any others who have been managing Direct Payments without the authorisation now formulated in response to Q10 above, seeking retrospective authorisation.

In Lumb [paragraph 80, footnote 2] I noted that a capacitous person receiving Direct Payments would not ordinarily incur fees for their management and so, as a starting point, it was difficult to see why P should bear such costs. That observation still holds good. It is reflected in the fact that the damages awards of some of the Ps in the current applications specifically included such costs as a head of loss. However, it is not likely on its own to be determinative of whether or not it is in P’s best interests either to appoint a deputy or to confer on that deputy authority to manage Direct Payments.

There is no substantive dispute here. Once a deputy is appointed, in respect of performing the functions of deputyship as set out in the appointment order, the statutory provisions and the usual Rules will apply.

The answer to both parts of Q12 is ‘yes.’

This question addresses an alternative scenario to that which is currently occurring in each of the seven applications currently under consideration:

There is potential for confusion in the question’s use of the word ‘appoint’: is it referring either

In respect of Scheme Appointment, no provisions exist for nomination on behalf of the incapacitous person under the Care Act Regulations. The Official Solicitor’s analysis [ps paragraph 90] is that “… only ‘a “representative”, being a person with welfare authority, has the right to appoint a nominee. Under the SEN Regulations and the Children Act Regulations, the deputy does not have power to appoint a nominee for the same reason.” I have added the emphasis here but I agree with the statement, in line with my conclusions above. It follows that a property and affairs deputy appointed in standard terms could not exercise a power within the regulations to appoint a case manager as R, as the deputy’s nominee or otherwise.

The position of the applicant deputies as set out in their written submissions [ps paragraphs 85 & 86] differs. They consider that “the ‘appointment’ of a case manager acting as the recipient of the direct payment is a power held by the statutory body, and they would not have the power to ‘appoint’ a case manager in this role.” They envisaged that, in three of the four schemes, a person (including a deputy) appointed by a public body could nominate another person to manage a direct payment on their behalf, subject to the public body’s agreement in accordance with the statutory schemes. They analyse the schemes as follows:

I acknowledge that this position was formulated on the basis of the applicant deputies’ position as to the fundamental dispute in these proceedings. That position not having found favour, their assertion that a property and affairs deputy appointed in standard terms can effect a nomination to bring about Scheme Appointment of a case manager also fails. Such deputy cannot be a “successful requester”. However, a deputy with the requisite authority and role under the NHS Regulations or the SEN Regulations could in principle make such a nomination.

In respect of Case Manager Appointment however, the position is different. If a deputy with standard authorities were to appoint a case manager for P, the case manager could then take whatever steps were open to them independently of the deputy to become appointed by F as R, on the basis that the deputy would pay them from P’s funds for the time and effort of discharging that role. This appears to be the way the Public Guardian interpreted Q13 [ps paragraph 71].

The applicant deputies point out [ps paragraph 87] that, for Ps with substantial care needs, deputies with standard term authorities often purchase private services to complement provision from public bodies, and they consider that paying case managers to manage Direct Payments would be a decision in the same vein. Their faith in such a way forward is however somewhat lukewarm. They inform the Court [ps paragraph 88] that:

“… there have been limited numbers of case managers who have actually been willing to manage DPs. Many case managers have offered payroll or complementary services to those in receipt of DPs, but have not been willing to apply for and receive DPs in their own right. Several of the deputies in these applications have explored this option as an alternative to their managing the DPs, but to date, no viable plan which would wholly transfer this responsibility to a case manager has been identified in any of the test cases.”

The Public Guardian notes the endorsement in Lumb of case managers acting as R, and considers that in many cases the scenario of Q13 “may be the obvious solution if a suitable case manager can be found.”

The Official Solicitor also identifies [ps paragraph 91] that it would be possible for a case manager to be appointed as R by F or by P’s parents (for example by regulation 5(4) of the NHS Regulations, or section 32(4) of the Care Act); that as such the case manager will be developing care plans; and that it would be within standard authorisations of a property and affairs deputy to use P’s funds to remunerate the case manager for that work.

So, the answer to Q13 is best phrased in two parts:

The parties have agreed a list of matters in response to (a). With some rearrangement of the order of matters on the list, I agree that the following matters will need to be addressed in evidence filed in support of an application for authority to manage Direct Payments:

By way of clarification of (7), the requirement is intended to give the decision-maker a picture of deputyship costs over a period sufficient to ‘iron out’ any individual year of exceptional costs. The previous three years is, in my judgment, a proportionate maximum for that purpose. Clearly the deputy will not be able to provide information for any period longer than their appointment, so the 3 year maximum may not be achievable in all cases. The 3 year period is consciously longer than the period for which an application for retrospective authority is required (see the answer to Q19 below) because the purpose of the exercise is different.

For convenience I have set out this list, which is the answer to Q14(a), in Schedule 2 to this order. Of course, the Court will still be able to ask for additional information if it is considered that there is anything case specific which requires it.

The parties have also agreed, in response to (b), that “attempts ought to be made to identify another Direct Payment recipient”. I am not persuaded that this wording correctly captures the appropriate approach.

The Official Solicitor identifies [ps paragraph 92] that a deputy contemplating an application for authority to manage Direct Payments “should first take steps to identify whether there is anyone else who is able or willing to act as representative (under the NHS Regulations) or authorised person (under the Care Act) and whether such person would want to nominate the deputy to receive the payments.” I agree. “Similarly, if the parents of a young person were to request SEN or Children Act Direct Payments, they should be asked if they want the deputy to act as nominee.” I agree with that too. This will affect the scope of the authority which the deputy needs to seek. However, this is not the same as requiring attempts “to identify another Direct Payment recipient.”

In particular, I would like to avoid any suggestion that a deputy should be given authority to manage Direct Payments only as a ‘last resort.’ I consider the question more broadly - attempts should be made to identify who else is willing and suitable to act as R, with a view to working out whether or not an application is appropriate at all. It may be that such attempts resolve the situation and the deputy does not need to make any application, for example where a child’s parent is willing to request and manage Direct Payments under the SEN Regulations. However, it may be that such enquiries produce more than one possible R, with disagreement as to which would be most appropriate. In those circumstances, from the range of options a best interest decision should be taken as to whose discharge of the functions of R would best meet P’s interests, without hierarchy other than that which follows from the regulations themselves. I suggest that factors relevant to that consideration will include (but not be limited to):

As to the matter of whether attempts should be taken to obtain funding from the statutory body for the deputy to manage Direct Payments before the deputy makes an application for authority to do that:

So, in my judgment the answer to Q14(b) is best phrased in two parts: before making an application for authority to manage Direct Payments, a deputy should take steps:

The parties have agreed, in response to Q14(c) that it is not necessary to give notice of the application to the funding public body or the defendant in any damages claim. I understand the question to be referring to formal notification as required by Rule 9.10 of the Court of Protection Rules 2017, as distinct from the informal awareness of a possible application which is implicit in the requirement (just set out in response to the immediately preceding question) to seek funding information from F.

The purpose of the notification requirements under the Rules is to ensure that persons with a proper interest in the application have an opportunity to raise objections. An application for deputyship authority to manage Direct Payments may impact on the range of persons to whom the public body can make Direct Payments but it cannot alter the underlying duties of F under relevant legislation, or the underlying issues in a damages claim. For that reason, I concur with the parties’ agreed position.

The answer to Q14(c) is that it is not necessary to give the funding body formal notification of the application for deputyship authority to manage Direct Payments.

As to who should be notified, Practice Direction 9B paragraph 4 specifies that an applicant must seek to notify “at least three persons who are likely to have an interest in being notified”; and paragraph 5 specifies that “[m]embers of P’s close family are, by virtue of their relationship to P, likely to have an interest in being notified” of an application.

The Official Solicitor has considered [ps paragraph 98] whether ‘mere’ notification, as opposed to being named as a respondent and therefore served with a copy of the application papers, is appropriate for some persons who are potentially alternative Rs – health and welfare deputies or attorneys, and adult members of P’s family currently involved in P’s care. She concluded that for those persons notification “will not necessarily be sufficient”. In my view it is not necessary to be any more prescriptive than that at present. In accordance with the approach set out in response to Q14(b), steps will have been taken to identify other potential Rs before the application is made. Whether notification of such persons is then ‘sufficient’ or full service is required will depend on the full circumstances of the case, including the point at which the application is made. As long as notification clearly explains that authority to manage Direct Payments is being sought, in my view notification may well be ‘sufficient.’ It will then be open to the notified person to respond in such a way as would result in full service, if they so choose.

So, the answer to Q14(d) is that notification should be provided in accordance with Rule 9.10 of the Court of Protection Rules 2017 and Practice Direction 9B. Consideration should be given to whether persons clearly in a position to be alternative Rs should be formally served with the application for deputyship authority to manage Direct Payments, rather than ‘merely’ notified of it.

The parties have agreed a list of factors which are relevant to whether management of Direct Payments via deputyship is in P’s best interests, as follows:

I agree with all of these factors except that (d) merits further clarification. Whether or not someone else is willing – and suitable - to manage Direct Payments is indeed relevant to whether or not a deputy should be authorised to discharge that function but, as above, in my view it is not appropriate to view management of Direct Payments through deputyship only as a ‘last resort’. There may well be cases where a family member of P would be willing to manage Direct Payments but still considers, as envisaged by (f), that it would be better for P if a deputy took on that role.

The proportionality of the deputy’s costs – (e) in the agreed list above – also merits further consideration. Of the current applications it is notable that the matter of TF involves deputyship costs for managing Direct Payments even though the care package is heavily weighted towards public funding. The applicant deputies explain [ps paragraph 94] the strong preference of TF’s family for the model of care which Direct Payments make possible – a consistent group of employed carers, rather than a probable inconsistency of agency carers. I accept that this approach may be appropriate. P’s wellbeing cannot be measured exclusively in monetary terms. However I am not persuaded by the suggestion of the applicant deputies [ps paragraph 96] that a ‘financial threshold’ of costs incurred in managing Direct Payments could be set, below which the costs of an application for authority would be disproportionate. Such thresholds always age poorly as costs rise over time.

It is to be hoped that the agreed list of relevant factors is helpful to would-be applicants but it must be emphasised that this list is merely a generalised starting point. As always, in any particular case there may be other factors which are specifically relevant. The list should not be viewed as exhaustive.

Given the conclusions above, the applicant deputies accept [ps paragraph 99(a)] that an application for retrospective authority is appropriate. As I have said before, such application is in substance an application for relief from liability. The Official Solicitor and the Public Guardian agree that such application is necessary. However, in my view a proportionate approach can and should be taken, and the following questions explore this further.

Broadly, the Court will need to be informed of those matters which would be included in an application for prospective authority, historically framed. So, there should be set out in a COP24 statement:

The parties agree that:

I agree with this approach. It properly reflects the responsibilities of the current deputy and is sufficient to ensure that P’s interests are appropriately safeguarded. However I have not included in the summary above a further step which was also said to be agreed between the parties, namely that the consideration at (b) should include liaison with the previous deputy. In my view, any requirement for such liaison will be a case specific matter. There may be cases where the former deputy is simply no longer available for consultation. Even where that is not a problem, deputyship records are ordinarily copied to the new deputy in accordance with direction in the order discharging the old and appointing the new deputies. Those records will often be sufficient for the new deputy to form a view as to whether or not an application to recover remuneration is appropriate. Of course, if the records lead the current deputy to consider that such application would be appropriate, liaison with the former deputy (if possible) will be required. On the other hand, if the records lead the current deputy to consider that such application would not be appropriate, liaison with the former deputy would be unnecessary.

So, the answer to Q18 is that the current deputy does not need to seek ratification of management of Direct Payments by a former deputy but, in line with usual obligations to P, should consider whether an application to recover costs of such management is appropriate.

In their written submissions the parties agreed that, if there is to be a long-stop date, it should be the date of the 2024 decision in Lumb. In oral submissions, the applicant deputies modified their position such that the 2024 decision in Lumb should be the long-stop date for cases involving the NHS Regulations, but the date of this judgment should be the long-stop date for cases involving the other statutory schemes.

Direct Payments have existed in various forms since the 1990s. The commencement date of any specific set of regulations is not particularly helpful for present purposes if the concept predates them. Potentially, there may have been deputies managing Direct Payments outside specific authority for quite a long time, beyond common ‘limitation’ periods. The Lumb [2024] decision was the first occasion when the Court was called upon to consider, and deputies were put on notice of the Court’s view as to, the scope of deputyship authority required for management of Direct Payments. In my view, the proportionate approach is to regard the date of the Lumb judgment – 11^th October 2024 – as the long-stop date from which applications for retrospective authority are required in respect of cases involving Direct Payments from any of the various schemes.

So, the answer to Q19 is that, unless there are case-specific factors which become apparent in light of this judgment, retrospective approval need not be sought for steps taken and costs incurred by a deputy managing Direct Payments for any period prior to 11^th October 2024.

An SCCO-assessed bill is a judgment. The Official Solicitor has helpfully considered the procedural implications of any attempt to ‘go behind’ it [ps paragraphs 109 – 110].

There is an appeals procedure, with a time-limit of 21 days – CPR 52.12, Cook on Costs at 35.6. Potentially, permission to appeal out of time could be sought (on the argument that the judgment was made on a false basis, namely that the deputy was understood to be entitled to remuneration for management of Direct Payments when in fact that was outside their authority) but this is an additional hurdle and likely to involve satellite litigation, including as to deputyship authority to pursue such application. Given the policy underlying short time limits – namely finality of judicial decisions - it is not obvious that permission to appeal out of time would be granted. The relevant tests are set out in R (Hysaj) v. Secretary of State for the Home Department [2014] EWCA Civ 1633 and R(Fayad) v. Secretary of State for the Home Department [2018] EWCA Civ 54 at 22.

The applicant deputies point out [ps paragraph 99(i) and (j)] the current realities of timescales for SCCO determinations, and question the proportionality of any funds potentially recoverable.

Given all these complications, the Official Solicitor’s conclusion is that “it is likely to be a rare case in which it is in P’s best interests to re-open an assessment.” I accept that assessment. It should be borne in mind that P has had the benefit of the deputy’s work in managing the Direct Payments. In my judgment, it is not necessary, proportionate or appropriate to seek review of an already finalised SCCO assessment of costs.

So, the answer to Q20 is ‘no.’

The applicant deputies seek further clarification as to “whether bills which are currently awaiting assessment at the SCCO should be withdrawn”. They inform the Court (and I understand it to be correct) that such bills under £42 000 may have been filed from April 2025, and bills over £42 000 from autumn 2024.

Again, this is a matter on which I have not heard argument. However, I note that the ‘awaiting assessment’ period closely aligns with the period in respect of which application for retrospective authority is required. When the Court of Protection determines such application (which, it is to be hoped, would be a fairly contained time-frame), if retrospective authority is granted, it is likely to be expressed as ‘subject to’ or ‘at the level assessed by the SCCO’ - so assessment is likely still to be required. If retrospective authority is not granted, then assessment of the overall bill will still be required albeit with the complication of excluding whatever sum relates to the unauthorised management of Direct Payments. Therefore, it seems to me that there is nothing to be gained for the deputies, the Court of Protection or the SCCO by withdrawing now bills which have already been submitted for assessment. If circumstances arise whereby all need for assessment is extinguished, the bill can then be withdrawn.

The SCCO will be aware of this judgment and will no doubt plan its own work allocation accordingly, and indeed may choose to issue its own guidance. I anticipate that it would be of assistance to the SCCO if – rather than withdrawing an application for assessment in any matter likely to be affected by this judgment - the deputy notifies the SCCO of which outstanding bills include claims for which an application for retrospective authorisation by the Court of Protection is now required.

All parties agree that costs should be allocated on a ‘but for’ basis.

In all of the current applications, P’s care package is funded from a mixture of public and private sources. The arrangements relating to the privately-funded elements (including the employment of private carers) would not be funded by the public body whichever model of receiving public funding was adopted – the funding would fall to P’s private resources anyway, irrespective of Direct Payments. I accept the submissions of the applicant deputies [ps paragraph 103] that it would be very challenging to produce a rational figure for costs of managing Direct Payments on any basis other than the ‘but for’ approach.

The Public Guardian’s approach [ps paragraph 81] is that:

The Official Solicitor agrees [ps paragraphs 111 – 113] with the Public Guardian. In respect of the (c) part, she advises that

“Where initial costs would have been incurred in any event, then those should not be treated as costs of the direct payments. Later costs will depend on the specific circumstances, and may need to be apportioned depending on the proportion of the care costs attributable to public funding as compared with private funding. If though, these costs would have been incurred in any event (because P needs a privately funded care package, as opposed to a directly commissioned care package), those costs would not meet the ‘but for’ test.”

Applying this to the question actually posed, it seems to me that if P had a care team which was already employed on a private basis prior to receipt of Direct Payments, it cannot be said that the employment-related costs of the care team would not arise ‘but for’ Direct Payments. Trying to reduce the negatives in that sentence, it can be said that such costs arose and continue irrespective of Direct Payments.

So, the answer to Q21 is (a) ‘yes’, (b) does not arise, and (c) ‘no’.

The applicant deputies further seek clarification in respect of a different situation, namely where there was no privately employed care team before the Direct Payments - a care team “was appointed at the outset on a mixture of [Direct Payments] and private funding, but where they would not have been so appointed without the [Direct Payment] funding being available.” In this scenario, ‘but for’ the Direct Payments none of the costs of managing the care team would have been incurred.

It is important to remember here that the question of apportioning management costs between care funded privately and care funded by Direct Payments arises in the context of an application for retrospective authority to manage Direct Payments – paragraph 165(e) above. In my judgment it would be sufficient in such applications to explain this different scenario – that no care management costs would have been incurred ‘but for’ the availability of Direct Payments. The question of retrospective authorisation to charge fees for such management will then be determined with due consideration to all the other factors set out in paragraph 165 above, particularly (a) and (c).

The Public Guardian and the Official Solicitor agree that “full health & welfare supervision would not be appropriate. General supervision as applied to property and affairs deputies would be appropriate.”

The Public Guardian has filed evidence [in a statement by Katrina London, G33- 40] explaining the manner in which deputies are supervised by her office. In respect of supervision of welfare deputyships, I note that the Public Guardian’s team currently comprises seven Executive Case managers and eight General Case managers, and supervises approximately 2 825 cases. The Public Guardian is concerned that, if all the cases where it is thought that a property and affairs deputy is currently involved with Direct Payments (approximately 750) were suddenly required to be supervised by her welfare deputyship supervision team, it would require significant (approximately 25%) additional staffing – even without accounting for increased ‘first contact calls’ as the new system bedded in. I note those concerns.

Supervision is a statutory responsibility of the Office of the Public Guardian, not of the Court, so the type and level of supervision applied is primarily not a matter for determination in these proceedings. However, it is practical and sensible for the Court to have regard to how deputyship functions across the wider system of its use. Considering it is helpful to set out the Court’s ‘expectations’ in respect of supervising any deputy exercising authority to manage Direct Payments, I am willing to do so.

The Court’s own functions lead to the expectations that the supervisory regime applied to each deputyship is:

The welfare-type aspects of managing Direct Payments are circumscribed by the relevant regulations. It is not therefore to be expected that the panoply of “full Health and Welfare supervision” is required. Rather, it should be clear in the report submitted for supervisory purposes:

If those requirements are met, the Court simply expects that appropriate supervisory scrutiny is given to the deputy’s decision-making, through whatever administrative arrangements the Public Guardian sees fit.

The Public Guardian and the Official Solicitor consider that the supervisory requirement is not altered because of any requirement of the regulations that the deputy is acting ‘as principal’. I agree. P’s interests and vulnerabilities are no different whether the deputy acts as principal or otherwise. Neither should be the supervision. The Public Guardian’s supervisory role stems from the deputyship authority, not from the contractual arrangements.

So, the answer to Q23 is ‘no’.

The wording of this question is internally problematic. If the management is ‘without the authority of the Court of Protection’, the management is not being done as ‘deputy’. The supervisory position is that the Office of the Public Guardian only supervises deputyship functions.

If the question is intended to address a situation where, contrary to the expressed intentions of the applicant deputies, a person (‘X’) is both appointed as property and affairs deputy for P and also accepts in their personal capacity a role of managing Direct Payments, then the answer to the question is that the Office of the Public Guardian supervises X’s discharge of deputyship functions but not X’s management of the Direct Payments. I note that the applicant deputies have identified, as did Mr. Lumb, several factors which disincline them to adopt this approach. I further note that, should any appointed deputy be willing to take X’s approach and manage Direct Payments in their personal capacity outside deputyship, the Public Guardian has indicated [ps paragraph 84] her expectation that, in their deputyship capacity, X would provide “some basic information” about what was happening with Direct Payments.

On the other hand, if the question is intended to address the situation (as in the seven applications currently under consideration) where deputies have been managing Direct Payments without the authority which this judgment determines to be necessary, then the answer to the question lies in the requirement (as determined above) to seek retrospective authorisation. When considering such applications, it will be open to the Court to direct a report from the Office of the Public Guardian pursuant to section 49 of the Mental Capacity Act 2005 if felt necessary. (I do not expect that to be the norm.)

In this judgment I have considered four schemes by which public authorities may make Direct Payments to enable a person’s needs for care and support to be met, as opposed to commissioning such provision themselves. I have reconsidered conclusion previously reached in respect of the NHS Regulations, and I have also considered the Care Act Regulations, the SEN Regulations and the Children Act Regulations. I have concluded that management of Direct Payments in accordance with the requirements of each and all of these schemes requires some decision-making of a welfare-type.

On the way to reaching this conclusion, I have determined that management of Direct Payments cannot properly be regarded as a routine aspect of quotidian management of an estate. Rather, it is a complex set of specific, identifiable tasks and obligations to be regarded as sui generis and not within the meaning of ‘general’ authority in a standard- terms property and affairs deputyship appointment. The conclusion that management of Direct Payments involves some decision-making of a welfare-type puts this beyond doubt.

It is within the jurisdiction of the Court of Protection to appoint a deputy with authority to make decisions of a type which involve a mixture of both the property and affairs, and the health and welfare, streams of the Court’s jurisdiction. The separation of work streams in the Mental Capacity Act 2005 and in court processes is only a matter of workability and convenience. It does not reflect how people lead their lives, and it does not restrict the Court’s ability to respond to lived experience. The authority which is needed to manage Direct Payments within deputyship is set out, in the terms of a draft order, in Schedule 1 to this judgment.

In order to obtain appropriate deputyship authority, an application to the Court of Protection will be necessary. That application may be included in a first application for deputyship appointment, or it may be made subsequently by a deputy who is already appointed. The information which should be provided in support of the application is summarised in Schedule 2 to this order. As always, each application will be particular to its own facts. So the matters listed in Schedule 2 should not be regarded as exhaustive. If a particular case requires provision of additional information, that should be provided with the application and may otherwise be directed by the Court.

Twenty-four questions were posed within these proceedings about the practicalities around management of Direct Payments within deputyship. I have answered each of those questions.

I would like to record my thanks to the Official Solicitor and her team for the assistance they have provided to the Court as Amicus, my appreciation of the engagement in these proceedings of the Public Guardian and her team, and my gratitude to all counsel, instructing solicitors and applicant deputies for the constructive and timely way in which they have conducted matters.

I now invite the legal representatives to file an agreed draft order setting out any further directions sought for determination of the seven applications in light of this judgment.

A succinct descriptive account of P’s current situation, including:

A succinct descriptive account of P’s current care arrangements - how and by whom it is delivered.

The costs of P’s current care arrangements.

The size and nature of P’s estate, including:

Details of any Personal (Health) Budget under the relevant regulations, and of any Direct Payments.

Narrative explanation of:

In respect of deputyship costs (going back up to the last 3 years, but no further unless the deputy considers older information to be particularly relevant):

A copy of any formal advice received by the deputy in relation to the Personal (Health) Budget and the implementation of the care plan.

A narrative account of views expressed by other relevant persons (including family members, others involved in P’s care or treatment, any appointed attorney or other deputy etc.) regarding the pros and cons of meeting P’s needs by Direct Payments.

A narrative account of P’s own past and present wishes and feelings relating to the manner in which P’s care is delivered, in so far as they are ascertainable.

A narrative account of steps taken to consider options for management of Direct Payments by someone other the deputy.

The reasons why the deputy considers that

The response (if any) so far received from the relevant public body to being informed that the deputy is considering management of Direct Payments.

Official Solicitor’s submissions in respect of Quistclose trusts

“52.

This question arises out of submissions made in Lumb. In Lumb, as part of his argument that the NHS Direct payments were not part of P’s property, the deputy argued that the NHS Direct Payments were held on a Quistclose Trust. In summary, this was because the use to which the NHS Direct Payments could be put was strictly circumscribed. Under the regulations, the NHS Direct Payments may only be used to implement the care plan.

53.

Although the use of NHS Direct Payments (and indeed other Direct Payments) is circumscribed, it does not follow that the Direct Payments are held on a Quistclose Trust.

54.

The nature of a Quistclose Trust was explained by the House of Lords in Twinsectra v. Yardley [2002] 2 AC 164: see also Lewin on Trusts at 9-045 – 9-055; 9-060. A Quistclose trust arises where property is paid to a third party for a particular purpose. The recipient has a power (but not generally an obligation) to apply the funds for that purpose. If the funds are not so applied, or the purpose becomes impossible, then the payer can recover the money because they retain a beneficial interest in the funds. This is the only trust which arises. The property paid is held by the recipient on trust for the payer, pending the application of the funds in accordance with the authorised purpose, at which point the trust is discharged.

55.

It is an essential ingredient of the Quistclose Trust that there is an intention on the part of the payer to retain a beneficial interest in the funds: see Prickly Bay Waterside v. British American Insurance Co Ltd [2022] 1 WLR 2087.

56.

The NHS Regulations do not clearly show an intention on the part of the public body to retain a beneficial interest in the direct payments. Regulation 15 provides that the ICB may require payment of funds in certain circumstances. It does not state that repayment must be made, as would be the case in the event that the public authority’s proprietary in the payments continued. Moreover, the authority’s decision to request repayment can be reviewed.

57.

An intention to create a Quistclose Trust is not required for the statutory regulations to operate as intended. Moreover, the creation of the Quistclose Trust would create difficulties. It would also involve the recipient being a trustee for the payer i.e. the deputy owing fiduciary duties to the public authority. Such fiduciary duties would be in direct conflict with the duties to P. As the Public Guardian states, the obligations to use the direct payments in a particular way and make repayment in certain circumstances are sui generis statutory obligations: they do not involve a trust. The introduction of the trust analysis is an unnecessary complication and is not mandated by the statutory schemes.

58.

The funds must be used in accordance with the obligation sunder the relevant statutory scheme. The power to use the direct payments, although P will benefit from the use of the funds, is not a beneficial power vested in P (like a power to consent to sale) – where P lacks capacity P has no power to use the funds. Instead they are powers to spend money in a way which benefits P.