The Court of Protection has ordered a conditional route to resolving a dispute over a deputy’s appointment of an associated investment manager, placing PW’s interests and potential claim at the centre of the decision.
What did the Court of Protection decide?
In Irwin Mitchell Trust Corporation v PW & Anor [2026] EWCOP 53 (T2), Her Honour Judge Hilder concluded that it was in PW’s best interests to grant retrospective ratification of Irwin Mitchell Trust Corporation’s instruction of IM Asset Management Ltd, but only if a sum equal to 60% of PW’s potential compensation claim, calculated using the receipts approach, is repaid into her estate.
The court did not determine the final value of the underlying claim. Instead, it set a condition intended to recognise the claim while allowing the existing deputyship relationship to continue if the condition is accepted.
“I give the greatest weight to the factors against ratification.”
— Her Honour Judge Hilder, summarising the balance of interests
What led to the dispute?
The judgment follows an earlier decision, [2024] EWCOP 16, which concluded that the appointment of IM Asset Management Ltd as PW’s investment manager breached the self-dealing rule. The subsequent proceedings considered whether that appointment could be ratified retrospectively and how the conflict of interest should be managed going forward.
Irwin Mitchell Trust Corporation sought retrospective ratification and, if successful, continuation of its role as PW’s property and affairs deputy. The Official Solicitor opposed retrospective ratification, with the Public Guardian taking the same position.
The court proceeded on agreed assumptions that the investment performance and fees during the relevant period were what could have been expected from a reasonable and experienced investment manager. Those assumptions did not remove the need to consider PW’s potential claim arising from the conflict.
- The earlier judgment found that the appointment of the associated investment manager breached the self-dealing rule.
- The court heard argument on the ratification issues.
- An agreed scheme for managing the continuing conflict for other affected individuals was authorised.
- Judgment on retrospective ratification was handed down.
Why was ratification conditional?
The court weighed the benefit of maintaining PW’s positive relationship with her existing deputy against the value of preserving her potential claim. The judge accepted that a change of deputy would cause some disruption and expense, but concluded that these consequences were not sufficiently significant to justify abandoning the claim altogether.
PW’s representatives considered that the claim should not simply be waived. The judge gave considerable weight to that position and found that the existence of a real, although not yet quantified, claim was more important than the amount PW might ultimately recover.
At the same time, the court recognised that maintaining the deputyship relationship and avoiding further dispute could benefit PW. Conditional ratification was chosen as a way to preserve both interests: the claim would be recognised through a payment, while the existing deputyship could continue if the condition were accepted.
The court emphasised that the decision was a best-interests determination under the Mental Capacity Act 2005, rather than an occasion to impose a punitive financial sanction or to determine the precise amount of any claim that might be litigated elsewhere.
What payment is required?
The parties disagreed about how PW’s potential claim should be quantified. Irwin Mitchell Trust Corporation advanced a “profits approach”, which would deduct certain operating costs and allow for skill and care. The Official Solicitor favoured a “receipts approach”, based on payments received from PW after VAT and third-party disbursements, without deductions for overheads and with very limited scope for an allowance for skill and care.
Judge Hilder preferred the receipts approach because it reflected the methodology advocated by PW’s own representatives. The court then applied a 40% reduction to that calculation, resulting in a condition requiring payment of 60% of the resulting amount into PW’s estate.
- Required repayment 60% Of the claim calculated on the receipts approach
- Decision deadline 21 days To confirm acceptance of the condition
- Payment deadline 28 days From formal hand-down, if accepted
The judgment does not fix a final cash figure. The parties must agree the sum using the specified methodology if Irwin Mitchell Trust Corporation accepts the condition.
What happens next?
Irwin Mitchell Trust Corporation must notify the court and the parties, no later than 21 days after hand-down, whether it accepts the condition. If it does, the parties must agree the sum and arrange payment into PW’s estate within 28 days of formal hand-down. Confirmation of payment must be provided to the court, the Official Solicitor and the Public Guardian. The deputyship appointment will then stand.
If the condition is not accepted, the appointment of Irwin Mitchell Trust Corporation as PW’s deputy must be discharged so that PW’s claims relating to the unratified breach can be pursued elsewhere. Her representatives must then apply for discharge and provide the declaration required for a proposed replacement professional deputy.
The parties are also expected to consider the implications for around 260 other cases in which similar conflict issues arise. A separate scheme, subject to further review, is intended to manage the continuing conflict in those cases until the sale-related conflict is expected to end in May 2027.
Frequently asked questions
What is retrospective ratification in this case?
It is the court’s approval of the earlier appointment of IM Asset Management Ltd, which would otherwise leave potential claims arising from the breach of the self-dealing rule.
Did the court decide the exact compensation amount?
No. The court specified the method and percentage for calculating the payment, but the parties must agree the resulting sum if the condition is accepted.
What happens if Irwin Mitchell Trust Corporation rejects the condition?
Its appointment as PW’s property and affairs deputy must be discharged, allowing the potential claims to be pursued elsewhere.
Does the judgment affect other deputyship cases?
Yes. The parties must consider the implications for around 260 other cases involving similar arrangements, alongside an agreed interim scheme for managing the continuing conflict.