Age-old problems

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The ethics surrounding capacity, autonomy, legacy, values and digital assets were front of mind at the annual conference of the Law Society’s Private Client Section

Doctors and private client solicitors must both weigh issues of capacity, autonomy, safety and control in their work with patients or clients respectively. Each have their own tests to help them balance considerations that are in conflict. The legal and medical professions can, and do, wrongly defer to the other’s judgement when making decisions.

A discussion on these issues opened the Law Society Private Client Section’s annual conference. The section’s former chair Gary Rycroft, a partner at Joseph A Jones & Co Solicitors, was in conversation with geriatrician Dr Lucy Pollock, author of The Book About Getting Older.

Dr Lucy Pollock

Dr Lucy Pollock, geriatrician

‘It strikes me immediately how significantly our worlds overlap,’ Pollock began. Rycroft noted a common issue they had with some clients/patients. Rycroft related the experience he had of acting for clients on different matters over decades. Pollock shared this experience where patients had a long-term condition. Where patients were known for a shorter time, she added, the relationship of a doctor could be of ‘great intensity’, when what was needed was ‘bold, courageous and important decisions’.

As a result ‘the issue of capacity sits on my shoulders every day’, Pollock said. If there is a suspicion that the patient has a problem with cognition, where capacity is ‘wobbly’, a dilemma arises – what conversations should be had with family members? ‘You have to know the Mental Capacity Act inside out,’ she added.

Misreading capacity is a risk. ‘The patient having a very strong opinion,’ she noted, can be mistaken for capacity. ‘It’s very important that everyone in the team knows the difference between having an opinion and having capacity.’

As Rycroft noted: ‘Often, someone who is articulate on the surface, someone who has a strong opinion, can actually bamboozle everybody.’

What risks should people be allowed to take in a context where there are questions about their capacity? This is a question that engages principles in law and medicine. Pollock gives the example of an infirm patient who says: ‘I am going home. I don’t care if I fall over and am not found for two days.’ Perhaps such a patient’s ‘autonomy’ should be respected, because they have acknowledged the risks they face.

That can be contrasted with another infirm patient who says: ‘I’m going home, I’ll never fall over again.’

Considerations around autonomy now take place in the context of a culture that tends to show ‘a deference to safety’ which ‘is getting bigger and bigger’, Pollock added.

For a solicitor’s clients, Rycroft continued, capacity might be tested against whether a client can ‘show their understanding of the risks in a decision’.

Lasting powers of attorney

It is 15 years since the Mental Capacity Act introduced lasting powers of attorney (LPAs). The intention of LPAs being granted was to simplify decision-making over people who lack capacity, by clarifying the position and powers of an appointed ‘attorney’. What is the verdict 15 years on?

‘On balance, it has not been helpful,’ is Pollock’s assessment. Some of that lack of utility can be attributed to a wrong impression, she added. ‘People think that without an LPA family can’t have a role,’ she explained.

A further complication may be that an LPA has been appointed by a patient/client who never related their wishes to their attorney – whether that be on finances or care and treatment options. It is also, Pollock said, difficult to obtain an LPA, which she now holds for her own mother. Their application took repeated submissions due to errors and omissions. ‘I should have engaged a solicitor,’ she confessed.

Generational conflict

For some private client solicitors who attended the conference, their firm has acted for the same family for several generations. For wealthy clients, that had commonly involved establishing and maintaining trusts – protecting wealth and maintaining specific assets in closely prescribed ways.

But what clients and families want here is changing, and generational differences of opinion are now being publicly debated. Younger generations profess themselves unhappy with the source of some wealth and may have different priorities.

Some are more sanguine about paying tax and uncomfortable about offshore vehicles designed to minimise the tax a family pays. Proposals for a ‘wealth tax’ to pay for the cost of dealing with the pandemic numbered many relatively wealthy people among their supporters.

It is in the context of such debates that barrister Michael Sherry of Temple Tax Chambers tackled developments in capital taxes. ‘The problem with the family trust is that it doesn’t get people talking, and it particularly doesn’t get people talking across the generations,’ Sherry observed. ‘A younger generation needs to get used to their responsibilities and to see them in action. More clients, he noted, are using ‘family constitutions’ to guide their affairs and decision making for the family.

A family constitution can strengthen families by prompting conversations about values and the purpose of the family’s wealth, and reduce the likelihood of future conflict.

Digital assets

New Square Chambers barrister Leigh Sagar considered the management of digital assets. He excluded discussion of assets ‘with little value’, such as the social media or email accounts of the deceased.

Assets that have significant value include: ‘tokens’, he noted, of which cryptocurrencies such as bitcoin are the best known; smart contracts (‘little computer programs that run in systems’); and non-fungible tokens, which have shot to prominence because of their use for digital artwork.

The courts, Sagar noted, have recognised cryptoassets as property in a series of judgments: AA v Persons Unknown [2019] EWHC 3556 (Comm), [2020] 4 WLR 35; Ruscoe v Cryptopia Ltd [2020] NZHC 728 [2021] WTLR 965; and Tulip Trading Ltd v Van Der Laan [2022] EWHC 667 (Ch).

‘[These are] normal assets,’ Sagar said, ‘once you get over the fact that it’s not something you can see and touch.’ But, he cautioned: ‘There is a danger some lawyers will search the internet for 15 minutes before meeting a client, and persuade the client, “I know something about it”. That’s really dangerous. You need to learn and understand the nature of these assets; be aware of the processes involved; and be able to ask questions of an expert.’

Search for meaning

The meaning of words matters when a legacy is disputed. The courts continue to pick over the definition of language used in wills

‘Children’ and adopted children

In the absence of express direction in the will, references to ‘children’ include adopted, legitimate and illegitimate children so long as the instrument was made after the relevant legislation came into force. This is usually what clients want.

But what about exclusions? In Hand v George [2017] EWHC 533 (Ch), Rose J held that in her opinion the adopted children would succeed in a claim under the European Convention of Human Rights that exclusion was discriminatory and breached respect for private and family life.

However in PQ v RS [2019] EWHC 1643 (Ch), Master Marsh accepted counsel’s point that there was still doubt as to whether Hand was correctly decided. He therefore consented to a Variation of Trusts application to amend the terms of a trust to expressly admit legitimate children.

My ‘nephews’ and ‘nieces’

In Re Daoust [1944] 1 All ER 443, Vaisey J said there was ‘no doubt at all that the strict and proper meaning of the word “nephew” is “son of a brother or sister”; and, similarly, “niece” means, in the strict sense, “daughter of a brother or sister”’. But it was susceptible to extension to include the children of a brother- or sister-in-law, but this would take compelling circumstances to apply.

What might compelling circumstances look like? This arose in Wales v Dixon [2020] EWHC 1979 (Ch), an unfortunate case where the will-drafter misunderstood the client’s wishes. Master Teverson was fiercely critical of the steps taken in relation to the instructions for the will. Looking at the surrounding circumstances, including the existence of mirror wills, Teverson decided it was clear that the deceased, by referring to ‘such all of my nephew’s and niece’s children’ was intending to include nephews and nieces of his wife as well as his own and the will should be interpreted in that way.

‘Spouse’ and same-sex spouses and civil partners

In Goodrich and others v AB [2022] EWHC 81 (Ch), Chief Master Schuman had to consider whether a reference to ‘spouses’ in a deed of settlement dated 11 April 1990 creating an Employee Benefit Trust (EBT) should be construed to include civil partners and same-sex spouses.

What are the implications of his judgment? First, to all intents and purposes the exclusion of same-sex spouses contained in schedule 4 for private instruments pre-dating the Marriage (Same Sex Couples) Act 2013 will no longer apply.

Second, in relation to civil partners we have the statement that the legislation is discriminatory but that it cannot be read in such a way as to remove the discrimination.

Third, references to ‘spouse’ in private instruments will not necessarily be interpreted as including civil partners.

Source: conference presentation by Professor Lesley King