LPA Safeguarding in practice – when things go wrong

 In Elderly/Vulnerable Client

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Safeguarding plays vital role in LPA adminIn our last article, John Smith lost capacity and his Lasting Power of Attorney had been invoked. John had appointed his niece to manage his financial affairs, and his solicitor as his professional safeguarder to ensure that any transactions are in John’s interest and above board.

Now, we discover that John’s niece, is under financial pressure because she has significant gambling debts – both John and his solicitor were unaware that she had any gambling problems. She has been using John’s money to service her debts.

Because John appointed a safeguarder, and all the transaction information is transparent within Switchfoot Teams, John’s solicitor has identified some unexpected and unexplained withdrawals and payments from John’s account. The safeguarder raised their concern with the Office of Public Guardian and is able to produce a comprehensive report of John’s finances as evidence.

It is clear that John’s niece can no longer be trusted to manage his finances, so an application is made to the Court of Protection to revoke the LPA and appoint a deputy. The court then appoints a professional deputy from the panel to manage John’s finances from that point.

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The Deputy’s Role

Often, when a court-appointed deputy takes over from an attorney under an LPA, they have to deal with poor paperwork, missing records and disorganised administration. John’s decision to use Switchfoot Teams, however, means that the deputy is in a much better position to get straight on with managing John’s affairs:

  • Detailed records help in attempting to recover the lost assets from the previous attorney.
  • The deputy can produce accounts, using Switchfoot Teams, to help complete the OPG deputy return.
  • When making best interest decisions on John’s behalf, section 4(7) of the Mental Capacity Act 2005 and Chapter 5 of the code of practice sets out requirements for the deputy to consult with others. The ability to invite others into Switchfoot Teams, and control the sharing of information and documents, makes it easy for the deputy to consult.


Applying the new SRA accounting rules

The newly-appointed deputy is aware that new SRA accounting rules have come into effect but is unsure how they affect him, as he is not bringing John’s accounts into the internal accounting of the firm, but is leaving them in situ, where they are performing well.

The purpose of the SRA change is to ensure that solicitors managing third party accounts check that their clients have got the funds and accounts they expect to have and reconcile those accounts consistently and regularly.

There are no changes to the frequency with which solicitors have to reconcile accounts. Rule 8.3 still applies in this case. The new rule 10.1(b) simply makes it clearer that third party accounts held outside the firm must now be reconciled with the same frequency.

At the moment it is not clear what needs to be reconciled to what or how you can actually achieve this without a fairly time consuming and laborious process.  Switchfoot Teams solves this problem with bank and financial feeds which reconcile on a daily basis if required. Automated reports can be produced monthly for the Compliance Officer for Finance and Administration (COFA) to sign, making compliance with the new SRA accounting rules on third party accounts easy, and CSV exports can be used to bridge to the other software used in the firm.

So, because John’s bank accounts and investments are third party accounts held directly with financial institutions rather than the solicitor’s own client account, Switchfoot Teams is the ideal way for the deputy to both keep a regular eye on accounts and transactions and to reconcile the accounts in accordance with – or exceeding the requirements of – the SRA rules.

Switchfoot Teams can help solicitors manage all these new requirements seamlessly and transparently. To find out more, visit www.switchfootteams.co.uk

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