04 August 2015

Criminal investigation of attorney


Alice Tomlin
Associate | UK

The Court of Appeal (Criminal Division) has held that an attorney acting under a lasting power of attorney can be guilty of abuse of position under Section 4 of the Fraud Act 2006 where there is evidence of a 'general deficiency' in the attorney's management of the donor's financial affairs. This case is a reminder that in extreme circumstances the Office of the Public Guardian can refer matters for a criminal investigation.

In R v TJC The Defendant's father had three children, though one had died. The father became widowed and lived alone. In 2009, the father began to exhibit signs of dementia and a lasting power of attorney ('LPA') was drawn up appointing the Defendant as sole attorney with her brother as replacement.

In February 2010, the father was assessed to lack capacity to manage his financial affairs and the LPA was registered at the Office of the Public Guardian (the 'OPG').

In November 2010, the father moved in with the Defendant. The Defendant allowed her daughter and friends to live in her father's property rent free. Following a deterioration in his health in 2011, the father moved into a care home.

In 2012, the Defendant's brother caught sight of one of the father's bank statements and alerted the OPG to concerns about various payments made from his account. An investigation by the OPG revealed that significant sums had been transferred to the Defendant; a flexible bond had funds withdrawn from it; and substantial cash withdrawals had been made from other accounts. An officer of the OPG contacted North Wales Police and a criminal investigation began.

The Defendant admitted that she had not separated her own funds from those of her father. She also admitted that she had spent some of her father's money on things that were not in his best interests (contrary to what she is required to do as attorney). However, she denied taking advantage of him, saying that she used funds just to 'get by'.

Count 1 of the prosecution's particulars of offence were:

'TJC between 26 February 2010 and the first day of June 2012 committed fraud in that, dishonesty and intending thereby to make a gain for herself or another, or to cause loss to another or to expose another to risk of loss, abused her position of [sic] holder of a lasting power of attorney, in which she was expected to safeguard or not act against the financial interests of another, namely JW, by using monies belonging to the said JW for the benefit of herself and others, in breach of Section 4 of the Fraud Act 2006.'

At first instance, the Recorder indicated that the prosecution should identify the payments alleged to be fraudulent or dishonest. Counsel for the Defendant then applied for those particulars to be given. The issue for the prosecution was that much of the money had been 'frittered away on minor assets'. The only payments they could point to were payments: (i) for repairs to the Defendant's own vehicles; (ii) for a new kitchen in the Defendant's house; and (iii) crediting a sum to her Barclaycard account. The prosecution therefore added three further counts.

The Recorder concluded that it would be 'unfair and an abuse of process to try the Defendant on count 1 in the absence of further particulars'.

The prosecution appealed that ruling under Section 58 of the Criminal Justice Act 2003.

The Court of Appeal held that the Recorder was 'wrong in point of law'. It went on to say that:

'What the Recorder should have done was to require the prosecution to set out … the case being made in relation to the general deficiency …'

This would be done by evaluating, against the total sum (circa £75,000) that had been withdrawn from the father's account, the reasonable sums that would have been incurred in caring for the father. These sums could be calculated by reference to three periods: (i) the time during which the father was at his own house; (ii) the time during which he was at the Defendant's house; and (iii) the time during which he was at the nursing home.

The Court of Appeal directed that proceedings under count 1 resume in the Crown Court and be heard together with the other three counts.

Read the case here.

Alice Tomlin Associate | London

Category: Article