Fraud and the vulnerable – professional duties
It is a sad fact that the vulnerable are far more susceptible to fraud than the capable. One would assume therefore that professionals would owe a higher duty of care, when advising vulnerable people. This is especially so in relation to transactions.
However, this is not expressly set out in the 24th Edition of the Conveyancing Handbook for 2017. The Conveyancing Handbook, at Section 1.6.3, states that the Money Laundering Regulations 2007 (SI 2007/2157) apply to transactions. Those regulations require lawyers to take a risk-based approach to customer due diligence. However, being vulnerable is not listed as a risk factor. This may be due to problems in defining the vulnerable and concerns around discrimination.
Despite this, case law is full of examples of the vulnerable having been victims of not only fraud but also undue influence and professional negligence. This shows the vulnerable are clearly more at risk than the capable. As such they need additional assistance. Despite that, advice is often not as good as it should be. Some are not even aware of basic safeguards, such as only proceeding with a conveyance under a Lasting Power of Attorney, once they have received an office copy of that power from the Office of the Public Guardian (see Handbook at E2.11.6).
Part of their vulnerability stems from the fact than some are challenging people to deal with. The vulnerable are often isolated people with difficulties with communication and understanding financial issues. Many transactional lawyers operating on a fixed fee, find such clients taking up more time than others. They become a client to avoid, not a client to invest considerable extra time in.
Despite having worked for many years with vulnerable people, either directly or on behalf of the Official Solicitor, Local Authorities or the Court of Protection, it is my view that such clients do require additional time and support. The Law Society guidance to the profession – meeting the needs of vulnerable clients sets out many good practice points, however all of them require additional thought and time. There is no shortcut to effective communication. Unless this is factored into the work, some vulnerable people will continue to experience problems.
A further risk factor is that once a problem has occurred some vulnerable people can find it difficult to raise issues in a timely fashion. This reduces the chances of correcting mistakes and mitigating losses. They are then faced with making a claim to recover losses. Again, this process will be difficult for them. Whilst, for those who lack capacity the usual limitation rules do not apply, some will miss out on recovery, unless they find specialist advice.
Given the ever-growing population of elderly and vulnerable people, this real need should be seen not as an additional risk, but as an opportunity to add value. Equally those advising vulnerable persons should appreciate that they do require additional support and time.