Incapacity, Periods of Lucidity and ability to enter into binding agreements

The case of Bashir and Bashir [2019] EWHC 1810 (Ch) examined the question of whether P, having regained capacity during a period when he was subject to a Deputyship order, was able to enter into a valid settlement agreement.

P received a substantial compensation payment from the Criminal Injuries Compensation Authority following an attack.  His sister (“S”) was at the time, appointed as his Property and Affairs Deputy and had appropriated in excess of £1.5m from P in breach of trust and her fiduciary duties.

A professional Deputy was subsequently appointed for P and proceedings for restitution were issued by the professional Deputy, against S.  As part of those proceedings, a charging order was secured against S’s property.  S’s solicitor made a without prejudice offer to the Professional Deputy to settle the claim against S.  It appears that the proposed settlement was at an undervalue.

P purported to accept that offer, against advice from the Professional Deputy, by writing a letter to S’s solicitor accepting the offer “without further delay”.  A Court of Protection Visitor subsequently reported that P had significant assistance in writing that letter (P was unable to read the letter when asked to do so).

One of the main matters to be determined by the Court was that even if P had regained capacity by the date of the alleged agreement to settle the claim against S; whether he could in fact enter into a binding agreement, whilst he remained under the jurisdiction of the Court of Protection.

The Judge stated that even if P had regained capacity during the relevant period, he could not, as a matter of law, enter into a binding agreement with the Defendant in the claim, even during a lucid interval.   That is because the making a Property and Affairs Deputyship order has the effect of passing property out of P’s control.  Any subsequent disposition of that property by P, was inconsistent with the transfer of that control and therefore void.