Mediation in the Court of Protection

The Contested Wills, Trusts and Estates team discusses the option for parties to attempt mediation in contested Court of Protection matters.

Despite mediation pilot schemes, the Office of the Public Guardian and the court’s general encouragement for parties to use alternative dispute resolution, and rule 1.3(3)(h) of the Court of Protection Rules 2017, only around 5% of Court of Protection disputes (health and welfare and property and affairs) involve mediation. This is a lower percentage than other litigious matters such as contested probate, family law and wider, more general litigation such as contract or monetary disputes.

As with any mediation, there must be a chance of settlement and it is easy to see why there is such a low figure. If there is a dispute between family members concerning the protected party’s (“P’s”) care placement, for instance, a compromise might be less likely given the limited middle ground: either P remains at home with a package of care or moves into a care home.

A party to proceedings that may have financially abused P might also derail mediation in trying to justify their actions, making it more appropriate for the court to determine a particular case. There is also often an urgency to Court of Protection proceedings, with some issues determined in a short space of time at one hearing; mediation merely an afterthought if considered at all.

Like any other decision, the decision to mediate also needs to be in P’s best interests under section 4 Mental Capacity Act 2005 and a litigation friend appointed to represent P in proceedings might take the view that it is not, given the costs involved when compared to the value of the estate. For example, it might not be commercial for mediation to be attempted between the disputing parties.

The general rule in Court of Protection proceedings relating to P’s property and financial affairs (discussed in more detail below) is that those costs are borne by P i.e., out of their assets. Therefore, mediation might not be in their commercial best interests, and it might simply be more cost-effective for the matter to be determined at court.

The purpose of mediating a dispute in the Court of Protection is to explore whether the parties can agree what is in P’s best interests. This is different from the usual best interests meeting whereby there is no independent mediator appointed. It can also be a forum more suitable for P, considering that all steps should be taken to ensure P’s participation.

Mediation provides an opportunity for the parties to have their say, often placating the urge for a person to ‘have their day in court’. It can also instil the realisation of the implications and costs of disputed proceedings and/or an improved relationship of trust and confidence between, say, two siblings who previously disagreed on the best person suited to manage P’s property and affairs.

If agreement can be reached, and a settlement agreement sent to the court for approval, this can negate contested proceedings and the hearings, time and costs associated with those (should the court agree to the terms of any settlement).

A good example might be in the case of a statutory will dispute or gift application. Siblings concerned by a will purportedly drafted by P when their testamentary capacity may have been in doubt might well resolve their differences when the gravity and costs of the contested proceedings are realised at mediation. Similarly, the amount of a proposed gift to a loved one by P’s attorney or deputy for property and affairs might be agreed at mediation where it would otherwise not have been agreed right up to trial, at significant and unnecessary expense to P.

Of course, with both above examples, the Court of Protection will have to sanction the Statutory Will or gift to be paid from P’s funds. However, reaching an agreement in principle with the opponent(s) in proceedings, subject to the court’s approval, will likely save the significant costs that would be incurred if the matter remained contested.

An ever-ageing population coupled with a troublesome financial period means that Court of Protection disputes are becoming more and more common leaving more scope for mediation and to free up the limited Court of Protection resources.

I consider there is also likely to be shift in the general rule in Court of Protection proceedings in property and financial affairs that those costs are borne by P i.e., out of their assets. The Court of Protection does have discretion to make an alternative order on costs which it has demonstrated it is willing to do and will have regard to the following when considering whether to depart from the usual rule:

1. the conduct of the parties;
2. whether a party has succeeded (whether in whole or part); and
3. the role of any public body involved in the proceedings (such as a local authority or the Office of the Public Guardian)

You can read my previous article which looks at the rules on costs in the Court of Protection in more detail.

While the Court will often exercise this discretion, I have often thought it unfair to P that they should have to bear the costs of a dispute arisen entirely outside their control between family members disguised as a dispute concerning P’s best interests.

In turn, I think that disputes concerning P’s property and financial affairs often go the distance because of the disputed parties’ perceived ‘insurance’ that their costs will not be paid by them personally, because of the usual rule.

Should there be a shift towards the usual rule existing in other areas of litigation, such as contested probate, where usually the ‘losing’ party pays the ‘winning’ party’s costs (or a significant proportion of them), those party to a Court of Protection dispute might be more inclined to resolve their differences at an earlier stage, such as mediation, given their own personal exposure to a costs order being made against them. Even if there were a more subtle shift just that the parties meet their own costs (and not necessarily those of the successful party), the personal costs to those parties to proceedings would likely be considered more carefully.

It will be interesting to see the role that mediation has to play moving forward in Court of Protection property and financial affairs disputes, and I anticipate it will be used more successfully in the future. Personally, I think it should be utilised more, regardless as to what the future holds.