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Increase in limit for a protected beneficiary to £100,000

In the latest CPR Rule changes on 6th April 2023 the limit has been increased from £50,000 to £100,000

The number of claimants that can apply to the Court of Protection for the appointment of a deputy will decrease from the 6th April 2023 with the introduction of the increase in the limit from £50,000 to £100,000.00 for damages paid into court.

Why did the change come about?

The Civil Procedure Rules Committee issued a consultation CPR Part 21 (Children and Protected Parties) which closed on 24th November 2022.  The CPRC considered the responses at the meeting on 2nd December 2022 which attracted comment as part of the consultation, with one respondent body raising a concern that the increase to £100,000 would mean that fewer claimants can apply to the Court of Protection for appointment of a Deputy.

The reason for change can be covered in the minutes as provided by Master Cook.

Master Cook explained the practical rationale which suggested the concern was misplaced. It was explained that the purpose of this provision was to enable the court to avoid the expense of appointing a Deputy or applying to the Court of Protection where the damages awarded were modest. This sum has been fixed at £50,000 for a considerable period of time. Management by the court (Court Funds Office) is a light touch inexpensive alternative to the Court of Protection route. The increase to £100,000 gives more scope to reduce costs for protected beneficiaries and was seen as leading to fewer applications to the Court of Protection, not more.

The wording at rule 21.11

(12) In rule 21.11—

(a)in paragraph (3), for “in accordance with” substitute “under”; and

(b)after paragraph (3) insert—

(4) Where a child lacks capacity to manage and control any money recovered by or on behalf of the child, and is likely to remain so on reaching full age, the fund will be administered as a protected beneficiary’s fund.

(5) Where a child or protected beneficiary is in receipt of publicly funded legal services the fund shall be subject to a first charge under section 25 of the Legal Aid, Sentencing and Punishment of Offenders Act 2012(9) (statutory charge) and an order for the investment of money on the child’s or protected beneficiary’s behalf must contain a direction to that effect.

(6) The representative or litigation friend of the child or protected beneficiary must apply to the court for directions for management of the fund or payment into court (using Form CFO 320 or CFO 320PB to be completed by the judge), stating the nature and terms of any proposed investment vehicle, with appropriate supporting evidence.

(7) The judge hearing the application may adjourn it and give directions for further information to be provided and, unless the judge directs otherwise, the money recovered will be paid into the court special account pending determination of the application for investment.

(8) Where money is recovered for the benefit of a child who is not a protected beneficiary—

(a)if the court considers it appropriate, it may order that the money be paid directly to the litigation friend to be placed in a bank, building society or similar account for the child’s use;

(b)if the money remains invested in court, it must be paid out to the child when the child reaches the age of 18;

(c)any investments held in court other than money must either be sold and the proceeds paid to the child, or transferred to the child, when the child reaches the age of 18.

(9) Where money is recovered for the benefit of a protected beneficiary—

(a)if the amount is £100,000 or more, subject to (b) below, the court shall direct the litigation friend to apply to the Court of Protection for the appointment of a deputy, after which the fund shall be dealt with as directed by the Court of Protection;

(b)the procedure in sub-paragraph (a) will not apply where a person with authority to administer the protected beneficiary’s financial affairs has been appointed as attorney under a registered enduring power of attorney, or as donee of a registered lasting power of attorney, or as the deputy appointed by the Court of Protection;

(c)any payment out of money must be in accordance with any decision or order of the Court of Protection;

(d)if an application to the Court of Protection is required, that application must be made;

(e)if the Court of Protection so decides, on its own initiative or at the request of the judge hearing the application for investment, an amount exceeding £100,000 may be retained in court and invested in the same way as the fund of a child.

(10) A request for payment of money from a fund held for the benefit of a child or protected party, or to vary an investment strategy, may be made in writing with appropriate supporting evidence (but without making a formal application) to a Master or District Judge and may be determined without a hearing unless the court directs otherwise..

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