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Property Law - Mental Capacity Act 2005 – New Rules; Same Problems

By : Alison Meacher

Considerable publicity and column inches have recently been dedicated to the effect of s.22(3)(c) of the Disability Discrimination Act 1995 (“DDA”) in possession proceedings, on both discretionary and mandatory grounds. This has led parties, their representatives and Judges also to question whether the person who is said to be disabled lacks ‘capacity’; despite the fact that these are two quite distinct issues. It is also useful to revisit the issue of capacity in light of the fact that the Mental Capacity Act 2005 (“the Act”) came into force this year, and the consequential amendments to the CPR that have been in place since 1 October 2007.

Some of the changes to the CPR introduced by the Act are purely cosmetic and impose little additional burden on practitioners. For example, a person said to lack capacity is now to be identified as a ‘protected party’ rather than a ‘patient’ and the term ‘receiver’ has been replaced with ‘deputy’. However, practitioners do need to familiarise themselves with the new Act and in particular the new test for capacity. Significantly, CPR rule 21.1 provides that “to lack capacity” means to lack the capacity to conduct the proceedings, rather than to lack capacity to manage and administer property and affairs. This test is arguably much wider than its predecessor. 

When considering capacity, s.2(1) and 2(2) of the Act set down the fundamental test. A person is said to lack capacity if at the material time he is unable to make a decision for himself because of either a temporary or permanent impairment of, or disturbance in the functioning of the mind or brain. Some useful guidance in applying this test is found in section 3 of the Act, which expressly provides that a person lacks capacity if they are unable to:
(a) understand information relevant to the decision (even if the information is presented in a culturally appropriate way, i.e. using simple language and visual aids);
(b) retain information (albeit he will not regarded as unable to make a decision if he can retain information for a short period of time only);
(c) weigh information in order to make a decision; and
(d) communicate his decision by talking, using sign language or any other means. 
In addition, the person must be unable to understand the reasonably foreseeable consequences of their decision, including the failure to make a decision (s.3(4)). Accordingly, a person is not to be treated as lacking capacity simply because he makes unwise decisions.  It is of note that the Act does not impose a requirement that the person is able to believe the information provided to him relating to the decision. The starting point in all cases is the presumption that an adult (i.e. a person aged 18 or over) has capacity. This remains the case whether or not that party is disabled or has been found to be disabled within the definition of the DDA. It may be necessary therefore, to remind the court that the burden of proving lack of capacity falls on the person who alleges that he lacks capacity, and will usually, but not always, involve the filing of medical evidence, such as the report of an expert psychiatrist. Moreover, it may be necessary to draw the court’s attention to the test under the new Act and the amendments to the CPR. 
Realistically however, if there is any reason to doubt a party to proceedings has capacity the court will often feel bound to adjourn the proceedings until such time as the issue of capacity has been determined and the appointment of a litigation friend (if appropriate). Unfortunately, nothing in the Act or the new rules diminishes the danger that an unscrupulous defendant may seek to raise issues of capacity to engineer an otherwise unnecessary delay in the determination of proceedings brought against him. Hopefully, in light of the new test and rules, the courts can now be persuaded to take a more robust approach to defendants who raise the question of capacity, than has hitherto been the case.