Appointing a Receiver – A Brief Layman’s Guide

Introduction

The consequences of accidents or negligent medical treatment can be catastrophic to the person injured. They may, for example, suffer an injury which leaves them brain damaged. In these cases, it may be appropriate for a Receiver to be appointed to manage their financial affairs.

Whether a given individual is able to manage his own affairs is not always a straightforward question. Accordingly, we guard against pre-judging matters. Our starting point is to ask:

1. Has the person suffered some form of mental injury or trauma?
2. If so, then is it such as to render them incapable of managing his or her property and affairs?

It is important to distinguish between physical and cognitive impairment. Catastrophic injuries impair a person’s capacity for an independent existence and/or prevent them from undertaking independent activities of daily living. This does not necessarily include mental incapacity.

Clients who have suffered significant intellectual damage but remain mobile to some extent may be overlooked. Such a person’s injuries may not be adequately assessed in relation to the nature and extent of their injuries and/or the level of care and input they will require in the future. This can result their compensation claim being significantly undervalued. It is important to prevent this occurring as the cost of providing proper care for a person can be immense.

What is a ‘Receiver’?

A Receiver is someone who is appointed by the Court of Protection to manage a person’s financial affairs when they cannot do so themselves. The risk to a person unable to manage their own finances is that others will take advantage of them. Regrettably, this can happen all too often.

The Receiver can be a family member. The obligations can be considerable and so properly experienced solicitors can be appointed. We can advise on the appointment of  such Approved Solicitors.

How a Receiver Helps

The role of the Receiver is to control and protect the financial affairs of the patient so that they do not have to. All substantial transactions are approved by them and they have a duty to refuse approval for those transactions which are not in the patient’s best interests. It is important to take care when choosing the Receiver and the appointment must be approved by the Court of Protection with the Receiver regularly reporting to them. This helps to protect the interests of the person requiring their assistance.

It is important to note that the appointment of a Receiver inevitably leads to the loss of control by the person on what they want to spend their money on. In turn, this may lead to that person believing that there is a lack of flexibility and control in undertaking day-to-day living activities and making more permanent plans for their future needs. It is always important for the Receiver to listen to these views particularly in borderline cases (such as where their injury is a frontal lobe damage head injury where the person considers that he capable of rational decision making).

We believe that such people must be dealt with in a very sensitive and measured way and any perceived disadvantage in having a Receiver has to be addressed as early as possible and reviewed at appropriate intervals. The protection provided by the Court of Protection is flexible and is also subject to regular appropriate review. This assists us in protecting the patient’s interests.

Is the Appointment Permanent? 

The Receiver is appointed for only as long as he or she is needed. As solicitors, we must undertake the necessary and proper investigations at regular intervals in order to establish whether or not our client is only able to function within the framework of protective supervision of another person. An early detailed and careful assessment of potentially intellectually damaged clients is vital and that assessment must be carried out at the earliest available stage. Only then can a solicitor identify those clients whose disabilities mean that they are unable to manage their affairs.

This assessment should be reviewed regularly as a person’s condition can improve to such an extent that they can manage some or all of their affairs. Importantly, a person’s lack of capacity is not to be established merely by reference to his age or appearance or a condition or behaviour that might lead others to make unjustified assumptions about his capacity. Typically, if there is any uncertainty, we advise the person’s legal team meet them to form a preliminary opinion. Then, an expert medical opinion should be obtained covering the person’s condition and prognosis and, in particular, their mental capacity. Ordinarily, this expert will be a consultant neurologist, neurosurgeon or psychiatrist.

Relevant factors include:

(a) Adults are presumed to have capacity unless they can prove otherwise;
(b) Recognition that a person’s status can change over time (and so needs to be reviewed regularly);
(c) A person must be shown to be unable to understand the effects of a particular financial transaction (after having received proper advice on it);
(d) The person must be able to communicate, make and effect their decision regarding that transaction; and
(e) A person may need a Receiver but not a litigation friend (someone who assists them in understanding their compensation claim).

A professional Receiver will often be appointed during ongoing litigation. Once the main obligations have been dealt with, responsibility can be passed onto a suitable family member.

Prior to a person seeking legal advice, it is possible that a non-professional Receiver has been appointed who is unable to properly protect that person’s interests. In such cases we can also advise on whether an application should be made to the Court of Protection to replace the existing Receiver with someone more suitable.

Conclusion

Receivers and the Court of Protection provide an invaluable service in protecting those people who cannot manage their own financial affairs. Since their appointment takes away that person’s freedom of choice, however, it is vitally important to carefully investigate whether a Receiver is (or remains) necessary for that person. If it is, then it is equally important to ensure that a suitable person is appointed.

For further information, please contact:

Geoff Simpson-Scott (for enquires arising out of an accident)
E-mail: geoffrey.simpson-scott@colemans-ctts.co.uk
Direct dial: 0208 296 7951

Adapted from a forthcoming chapter on the Court of Protection published by the Association of Personal Injury Lawyers by  Terry Lee, Geoffrey Simpson-Scott & Katrina Waters