PVJ v CICA
Summary
This was P's appeal against part of the order of Senior Judge Lush [2015] EWCOP 22 (see our earlier report here). In this case P was the victim of crime as a baby that left him seriously brain damaged. No one was prosecuted but the possible perpetrators were members of P's family (mother, brother and mother's partner).
P's mother and subsequently a local authority deputy on his behalf made an application for compensation under the criminal injuries compensation scheme. After something of a struggle the CICA made an award of approximately £3million.
The CICA, pursuant to the scheme, required that the award be held on trust that excluded as beneficiaries the possible perpetrators. The CICA took the view that such a trust had to be made by the Court of Protection as P would be the settlor of the trust and P's deputy did not have power to make a settlement because section 20 (3) MCA prevents a deputy being given power to settle P's property.
Senior Judge Lush had agreed with the CICA but Charles J allowed P's appeal (see paragraphs 63-67 and 81) on the basis that P did not become entitled to any property as the scheme required the award to go directly to trustees in such cases. Charles J remarked on his surprise that CICA had argued the contrary as its practice in relation to capacitous applicants in such circumstances was to set up trusts without the applicant being named as the settlor.
Thus, in such cases the Court of Protection is not required to approve the trust and indeed Charles J endorsed the Senior Judge's view that the Court of Protection does not have to approve the settlement of the application (see paragraphs 72-73 and 82) (although this was not the subject of the appeal).
The second of the two judgments resulted from Charles J's invitation to the parties to negotiate about various provisions in the proposed trust. In particular he was concerned that CICA appeared to have taken a somewhat inflexible approach to the total exclusion of the mother from benefit in circumstances where P had lived with and been cared for by his mother from an early age (after a brief period in care). He also invited the parties to agree standard terms for the appointment of a deputy where a CICA application is envisaged and to consider whether a Peters undertaking was required in the trust instrument (an undertaking not to apply for certain benefits) as the trustees would not have the power so to do.
Happily agreement was reached and the appointment and terms of the trust are annexed to the second judgment. The former made it clear that the deputy would have power to bring, negotiate and accept the award and any trust deed. The latter excluded P's mother from potentially benefiting only from a distribution if P pre deceased her. It also (in the light of the judge's comments in the first judgment at 101-103) did not contain a Peters undertaking.
Comment
The judgment does not make comfortable reading for the CICA as it contains some criticism of what the judge considered a somewhat inflexible approach. The approval of standard documents should make these cases easier and quicker to deal with in the future and the fact that the Court of Protection does not have to be involved will save expense.
