When a child recovers a substantial compensation award, the court prefers to have a professional deputy in place at least for the first few years.
Often the parents are keen to act as deputies in order to save the costs of a professional deputy. However the role of deputy is an onerous one, especially if the parents are already caring for a severely disabled child. There is a requirement to keep detailed records and accounts and also to ensure that the money is invested so as to achieve the best possible return.
There is also a need for careful budgeting so as to ensure that the compensation award lasts for the duration of the child’s life.
In addition there is the potential for a conflict of interest to arise between the parents and the child. This is partly because they are living together and it is often difficult to disentangle the finances of the parents and those of the child. The deputy has a duty to keep the client’s finances completely separate from their own personal finances.
After the claim has settled, the parents are entitled to gratuitous care payments to compensate them for the care they provide. These calculations take into account the hours of care provided over and above the care that the child would have needed if not disabled, the percentage liability recovered in the claim and a deduction for notional tax and insurance. An obvious conflict of interest arises if the parent is left to work out the amount due to themselves.
Also after the case has settled, the deputy will agree a personal allowance to be paid to the parents to cover all additional expenses due to the disability which are not covered by DLA. Again a conflict of interest arises if the parent is left to calculate the amount due.
Other areas where a conflict of interest arises include agreeing how much the child should contribute towards family holidays and household bills.
There are also cases of financial abuse. In the Court of Protection case of Re S and S (2010), the parents of an adult daughter with cerebral palsy were appointed as her deputies and then squandered most of their daughter’s £2.6 million settlement on houses, cars, cosmetic surgery and holidays.
For all the above reasons, the court prefers to appoint a professional deputy for a brain injured child who has recovered a large compensation award.