Posted by Sara Isenberg, Senior Associate
Who’s fooling who? Why you need to be sure whoever signs your terms and conditions is authorised to do so.
You have a new, self-funding resident, lacking in capacity to enter into any residential or service contract – who do you ask to enter into the contract on their behalf? Who is actually legally able to sign on their behalf? Please read on to see what you need to clarify to reduce your risk of a dispute over who is liable to meet a self-funding service users fees.
You do not want to find yourself in a dispute over unpaid fees. One of the ways you can avoid this scenario is by having a clear and accurate understanding as to who should be completing all your relevant documentation. Furthermore, you should also be aware as to what necessary relevant evidence you may need to obtain to support your understanding.
Who has legal authority to enter into a service user contract on behalf of a person lacking the requisite mental capacity to do so themselves?
Ordinarily, the only persons able to enter into such a contract on behalf of an incapacitated resident would be an Attorney or a Deputy of the Court of Protection or someone expressly authorised by the Court to enter into such a agreement.
If you are dealing with an Attorney you should ask to see a copy of either the registered Enduring Power of Attorney or a registered Property and Financial Lasting Power of Attorney (introduced in October 2007) and for completeness you might be prudent to keep a copy on your files. There may be exceptions where an Attorney is unable to sign on behalf of the service user (there may be restrictions contained within the document) or where you may require the signatures of several Attorneys (if they have been appointed jointly). So, you need to be careful to ensure an Attorney does have the requisite authority to sign, though most will.
Alternatively, where the service user did not appoint an Attorney prior to losing capacity, you may find you are dealing with a Deputy appointed by the Court of Protection. Most orders will include a general provision enabling the Deputy to, say, validly enter into a residential care agreement on behalf of the protected person. However, again, there may be some restriction in the Order preventing this so its wise to double check.
But what about a person’s Next of Kin?
Do not be misled into thinking that a ‘next of kin’ is afforded any particular legal status or particularly any legal authority to enter into contracts on behalf of an incapacitated adult. They are not. Therefore be prepared to disappoint relatives or even friends who assert that they can sign something on behalf of the new resident because they are their ‘next of kin’. Unfortunately, that does not mean you should accept their signature as being in the place of the future resident or service user.
When a service user cannot enter into a contract themselves be sure you have a signature from an authorised person in their place.
The risk of having someone legally unauthorised to access the service user’s funds, but who signed your agreement, is that you suddenly find the fees are not being paid and the signatory refuses to use their own funds to clear a liability. Clearly this is a situation you want to avoid.
It is therefore critical that you are suitably satisfied that that whomever enters into a contract on behalf of an incapacitated service user has the legal authority to do so. To that end, you should commonly only be dealing with Attorneys or Deputies. However, it is not always easily apparent as to who does or does not have the requisite authority to enter into an agreement and if you are even a little uncertain it would be prudent to seek advice.
Finally, where you are in any doubt that a potential new resident has themselves the capacity to enter into a contract you must tread very carefully, as you may find yourself with voidable contract and an unpleasant dispute. Again, when in doubt, seek advice.
The risk of having someone legally unauthorised to sign your agreement, on behalf of an incapacitated adult, is an undesirable situation. For advice on any legal issues concerning the legal authority of those signing on behalf of service users, contact Sara Isenberg in the Health and Social Care Team at Royds Withy King on 020 7583 2222 or firstname.lastname@example.org.
Alternatively, contact Hazel Phillips, also in the Health and Social Care Team, at email@example.com who can review your service user contracts and ensure they are enforceable and compliant with consumer legislation/CMA Guidance.
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