Back in 2024, SJ Hilder delivered a landmark judgement relating to conflicts of interest in the Court of Protection. It focussed on whether a Deputy, or someone in a similar position of responsibility, face a conflict of interest when asking other areas of their firms, or firms connected to them to undertake work on behalf of their client.
The case focussed on the appointment of an investment manager for a person who lacked the ability to make their own financial decisions and had a professional deputy appointed, by the Court of Protection, to manage their finances, which included a large personal injury compensation award.
Why did the court find a conflict of interest?
The professional deputy appointed their own firm’s investment management team to oversee the investment of a significant portion of the person’s compensation award. The 2024 judgement found that the deputy’s duty was to act, solely, in the person’s best interest when selecting an investment manager. SJ Hilder found that there was a real conflict of interest present as the deputy had to balance the potential financial benefit to their firm against the need to act in the person’s best interests.
Further, the court decided that the ‘real sensible possibility of conflict’ was enough. It was not necessary to show that the person had suffered a loss due to the choice of investment manager. At the same time, internal procedures and checks could not remove the existence of the conflict.
The court returns to the issue in 2026
This month (October 2026), SJ Hilder has delivered a further judgement which deals with the question of what should happen when such conflicts of interest arise. In this case, and 260 other connected cases, the court had to balance the person’s potential claims against their deputy against the upheaval and cost involved in having to change deputy to pursue such claims.
Here, the person and the deputy had a strong and positive working relationship. The person, and their family, did not want the deputy to change and the court were mindful of this. On balance then, the court proposed a scheme whereby 60% the fees received by the investment manager would be refunded to the person.
What happens next?
The deputy now has 31 days to agree to this. If they do, then matters are concluded but if they don’t then a new deputy will be appointed and they will be able to consider the potential for a claim to be brought, no behalf of the person, for compensation.
If the above impacts you, a member of your family, of one of your clients, please reach out to our specialist team for assistance.