Scottish Sheriff Court Decisions

ISSUED BY SHERIFF J. BAIRD

AW 114/07

Application in respect of RL

On 2 July 2007, an application was presented under the Adults with Incapacity (Scotland) Act 2000, seeking the appointment of the applicant as guardian of the adult, with both welfare and financial powers. I granted the application at a hearing on 28 August. The guardian so appointed is the wife of the adult. He is only 56 years of age, but in November 2004, he was the victim of a serious assault in which he sustained traumatic head injuries and is now significantly cognitively impaired as a result. He is now bed bound and is incapable of looking after himself or managing his own affairs. He is an incapable adult within the meaning of the Act.

Since then, his wife, the guardian, has been managing heroically to look after him at home. He is immobile. He needs assistance with all tasks. She gave up her job to be his full time carer. She is supported by Social Work assistance. The family home is jointly in the name of herself and the adult. She wishes to care for him at home in familiar surroundings for as long as possible. A claim was made on his behalf to the Criminal Injuries Compensation Authority who made an award of £250,000 in respect of solatium and at the time of the hearing, were contemplating a further award of £250,000 in respect of patrimonial loss. He also owned one-half of the family home and on having to give up his employment, received a substantial lump sum and pension.

In short then, the adult has a substantial estate, and because of his young age and the need to make adequate and proper provision to ensure that he remains cared for in the future, the task of administering his estate is a substantial one. His wife is devoted to him and to the task of caring for him. She is manifestly a suitable person to have that responsibility, indeed is the most suitable person to have it, and is to be admired for her continuing efforts.

When I granted the order and appointed her as guardian, I ordered that caution be found in the sum of £600,000 and that it should be found within 12 weeks. Such an order is mandatory within the terms of section 58(6) of the Act, and although new powers to make the making of such orders discretionary have been passed by the previous Scottish Executive, they have not yet been brought into effect, but that in any event does not affect what I am about to address, because this is an estate of such size that I would have ordered caution to be found even if the section had given me discretion at the time of the order. It is simply too important a matter for the future of the adult not to have his assets covered by insurance.

When this Act was passed, it was the specific intention of Parliament to encourage lay members of the public to assume the role of guardian to an incapable adult. Providing for estates to be covered by insurance was thought to be the best way of protecting assets of one adult which were being administered by another. There is of course regular monitoring by the Office of the Public Guardian.

Unfortunately, there are only two insurance providers who have entered the market in Scotland; the Royal and Sun Alliance, ("RSA") and the Zurich Insurance ("Zurich") companies. The premiums charged are high and I am unaware of there ever having been a claim on any such policy. Indeed I am unaware of any significant, (if any at all), history of claims under previous common law or statutory legal arrangements for administering the affairs of others. Nonetheless, I recognise that it is a business, with risks to be assessed.

In this case, the solicitors acting for the guardian approached the RSA, but they said they would not be in a position to provide a bond unless the solicitors' firm undertook to control the monies along with the guardian. That is not the first time I have been told of a similar suggestion. What was proposed was the firm opening an account in their name and that of the guardian and somehow safeguarding the funds.

They refused, and quite rightly too. They have not been appointed guardian, nor any of their individual members. They have no power or authority to any such thing.

They then approached Zurich. Initially they seemed receptive, but when the documentation was sent to them, they said they could only provide a bond if a partner of the firm became a joint signatory on any relevant bank accounts, which partner would require to have joint control over any investments and provide joint instructions.

Once again, no partner of the firm was prepared to do that , and once again, quite rightly too. No partner has any authority or power to enter into any such arrangement.

In the event, the guardian appointed had to come back to court and ask that the requirement to find caution now be dispensed with as she was unable to find it. That is (currently) the only basis on which it can be dispensed with, and I was forced into the position of granting that motion, which of course means that an estate as substantial as the adult's here, and which needs to be carefully administered by someone on his behalf so as to provide expensive care for him for the rest of his life, is uninsured.

In a previous case where I was forced to make the same ruling, there was an estate of even greater extent.

To complete the picture, I have just learned of another case, where again I have approved the appointment of a guardian as suitable for the task, but who lives abroad, albeit able to visit regularly. The solicitors in that case have written to advise that the RSA do not offer guardianship binds for guardians who do not reside in the UK. Such an appointment, although unusual, is not unique.

I appreciate that insurance is a commercial business, with assessment of risk critical. I wonder however whether the insurers realise that the individuals whom they are unwilling to insure have already been appointed by order of this court which assessed them as suitable before appointment. There is no history of default known to me. It appears to me that the attitude being taken by the insurers is subverting the plain intention of Parliament to empower ordinary members of the public to take control of the affairs of others. Part of the plain intention of this legislation was to get away from the previous practice whereby only professionals, often unknown to the adults or their families, carried out this task.

And indeed, if all of the burden of administering the estates of others was once again to fall exclusively on the shoulders of professional firms, that will have substantial effects on the premiums they are charged by their own insurers. I have already been advised that that is so.

This is a matter which needs to be addressed. All I can do is add my own voice to the calls for steps to be taken to ensure proper protection for the assets of adults who are incapable of managing their own affairs.