Employer insight: Mental capacity and your business

What challenges do an ageing demographic and the increasing prevalence of mental decline present for your business?

Bethan Byrne TEP: Mental capacity and vulnerability are two closely interlinked areas that have been increasingly high profile in recent years. A key message we have been delivering to our staff is that concerns around mental capacity (and vulnerability) are not limited by age of client or the type of instructions we receive. Our fee earners have always been alive to the fact that clients of advanced age may require additional support to provide instructions and in some cases this may require a formal assessment of mental capacity. However, there is now a greater understanding that it is incumbent on those advising all clients to understand and identify where a client may be vulnerable and require support, whether this is in court proceedings or at a practical level in how we provide advice or take instructions. Where relevant, this involves keeping the question of capacity in mind and under regular review. The challenging element can be supporting both our clients and our staff in understanding these issues. We have established a cross-departmental dedicated mental capacity group to support clients where mental capacity or vulnerability may be in issue.

Helledd Wyn TEP: Multiple complexities of blended families, tax planning and care fee planning and how they both interact are some challenges we face. Understanding that the law around mental capacity can affect anyone at any time and, in fact, crosses over many legal disciplines.

Victoria Mahon de Palacios TEP: In terms of our firm’s private client offering, the main challenge is ensuring that clients have the requisite mental capacity to instruct us to act for them. Questions over capacity would usually arise when we are preparing wills and/or lasting powers of attorney or when helping clients with gifting as part of their inheritance tax planning. Although our private client team would usually come across situations of mental decline more than other teams in our firm, it is becoming an increasing area of focus for teams in the wider firm, not least in our residential property team when taking instructions for property transfers.

What staff training needs has this presented?

Byrne: We run regular annual internal training on vulnerable persons and capacity for our staff and highlight both the relevant legal tests for capacity, as well as how to support and work with vulnerable clients. We also have a documented vulnerable persons policy and a vulnerable clients escalation process, with resources available to all staff via our intranet. As part of this training, we highlight these resources. This includes details regarding where our staff can find resources for their own mental wellbeing when dealing with some of these difficult issues. We also run regular training on working with high-risk clients, led by an external therapist who previously worked as a lawyer so really understands the industry.

Wyn: We conduct internal training on the England and Wales Mental Capacity Act 2005 and what to do if you have an incapacitated client.

Mahon de Palacios: Understanding how to assess mental capacity for different decisions and/or transactions has become essential. Our private client team has frequent training sessions from a variety of sources (for example, from psychiatrists, barristers, etc.) on issues surrounding mental capacity, such as the legal test to assess mental capacity, how to deal with clients where there are concerns and when medical input might be required, etc. Our team also provides sessions for other teams in the firm on matters of mental capacity to raise awareness in this area.

Have you needed to recruit for any new skills and knowledge?

Byrne: We have not needed to recruit for any new skills or knowledge but have sought to upskill our lawyers internally through training, knowledge sharing across teams and a dedicated internal team of fee earners with expertise in capacity and vulnerability issues who can address any queries or concerns fee earners across the business may have.

Wyn: We have not yet needed to recruit, but we are training current staff.

Mahon de Palacios: While we have not had to specifically recruit for skills to assist with the ageing demographic as we have lawyers within our private client team who specialise in the area of elderly clients and train and assist others in the team with such matters, we would of course have to recruit for such specialists should they no longer work with us. Without specialist knowledge in this area, it would be increasingly difficult to ensure that we are suitably protecting our clients’ interests.

What practical steps have you taken to help your clients and their families?

Byrne: As noted above, we have a dedicated mental capacity group who can support clients at any stage when capacity or vulnerability is an issue. We also have considerable contacts in the therapeutic community should additional support be beneficial.

Wyn: Explaining the need to be prepared rather than trying to deal with a crisis.

Mahon de Palacios: Vulnerability increases where there is mental decline and, sadly, we come across more and more cases where there has been financial abuse. To assist with helping people recognise the signs of financial abuse sooner rather than later, we have prepared leaflets in our office reception that list financial abuse indicators to raise clients’ and their families’ awareness in this area and help them spot tell-tale signs. We also share this leaflet with other professionals we work with in the private client industry (e.g., accountants, financial advisors, investment managers) to help them when they are dealing with their ageing client base. We also encourage meetings in person to help assess capacity and make the clients feel more at ease, offering to travel to their homes for this if it is difficult for them to attend our office.

What are the most challenging areas to manage?

Byrne: The most challenging area is dealing with individuals who are going through a distressing time while acting as their trusted advisors. It is imperative that we deal with matters sensitively and carefully, particularly where concerns around a client’s capacity may be in issue. We work with the client and the other relevant parties to progress matters, whether this involves a capacity assessment, a litigation friend or any other appropriate step. Such issues do not always involve only legal advice but proposing a practical, supportive and sensible way forward.

Wyn: The ‘it will never happen to me’ mentality.

Mahon de Palacios: Ensuring that clients have capacity to instruct us can be particularly challenging if instructions are to be taken remotely in this new age of online meetings. A number of elderly clients are not familiar with using such technology and can feel uncomfortable during online meetings, which can work against putting them at ease to help with any understanding that might be required. Further, with an ageing demographic and mental decline, the risk of undue pressure on individuals to enter into certain acts rises. With online meetings it can be impossible to know if someone else might be present in the background with the client and perhaps coercing them into certain acts. We would, therefore, always encourage face-to-face meetings for elderly clients or where there might otherwise be concerns about mental decline.