1. Mental Capacity Act 2005 Relevance for Housing Practitioners

2. What is capacity In order for a contract to be valid parties to the contract must have sufficient capacity to enter into the contract. At common law there is a presumption that the parties are of sound mind and have full contractual capacity. Where a person is suffering from an incapacity any contract entered into would be voidable at the person’s request. A contract will only be void if they, or their representative, can establish that their disability prevented them from understanding the transaction and that the other parties to the contract knew this. However, where a person’s affairs are being dealt with by the Court of Protection any contract disposing for his property would be void as it would interfere with the court’s jurisdiction. Where the contract is void it will not be binding on him but could be on the contracting party.

3. Why capacity is important Care providers and landlords make available their services on the basis of contracts. Given the nature of social housing and care providers’ clients the courts may find that you have, or should have had, an implied or express knowledge of mental capacity. Furthermore, the nature of the contractual arrangements it is likely that it would be providers initiating any legal action and prove their case It is therefore vital to understand the affect of capacity on these contracts and how the Mental Capacity Act will effect the current law and practice

4. The legal test for capacity The MCA sets out that there is a 2 stage test: a person lacks capacity in relation to a matter if at the material time he is unable to make a decision for himself in relation to the matter because of an impairment of, or a disturbance in the functioning of, the mind or brain. It does not matter whether the impairment or disturbance is permanent or temporary. confirms the test to establish decision making capacity is as set out by Butler Sloss LJ in Re: MB [1997]. That is a person is unable to make a decision for himself if he is unable: (a) to understand the information relevant to the decision, (b) to retain that information, (c) to use or weigh that information as part of the process of making the decision, or (d) to communicate his decision

5. When is it safe to contract? Following the test above a person would probably have capacity to consent to any contract including a tenancy provided they understood the essentials of ‘the deal’ e.g. for a tenancy: The basic concept of money – ie The concept of owning one’s own money; The concept of exchanging one’s own money, in return for something; The concept of promises and social rules (even if the person needs help to manage to abide by what’s been promised) - ie No damage to the property; No violence towards others living there. The presumption of capacity applies until the contrary is proven on balance of probabilities, witnesses may corroborate the process by which a contract was explained and made sense of if assent is with an X or completely orally, but all steps taken need to be carefully documented. A person who is still mentally capacitated, regarding taking on an obligation, can properly sign today, binding themselves to obligations when they are likely to deteriorate. The validity of those obligations under is not affected by any later incapacity.

6. When is it not safe A person who is clearly already mentally incapacitated should not be asked to contract directly with a support provider or a care agency, or sign a tenancy. Under the common law ‘Doctrine of Privity’ a person cannot acquire rights or be subjected to liabilities arising under a contract to which he is not a party. Contractors will need to know when a third party is seeking to enter into a contract on behalf of an incapacitated person if that third party has authority to act and whether any contract will be enforceable against the contracting party and/ or incapacitated adult.

7. Contracting for ‘necessities’ Section 3(2) of the Sales of Goods Act 1979 does allow that certain contracts for necessities can be enforced provided the goods have been delivered to the service user. Accommodation and shelter isn’t covered in the concept of ‘necessaries’ so relatives won’t be able to use this or the new statutory power under the MCA to promise to pay rent. S.7 and 8 of the MCA provides that an incapacitated person must pay a reasonable reimbursement for ‘necessaries’ and that it will be lawful for someone else to ‘pledge his credit’ to obtain these, To ensure they are acting lawfully providers and support workers will need to know: what is a ‘necessity’ to ensure they are acting legally What is meant by “money in P’s possession”

8. Providing Shelter and care to those with an incapacity

9. Can an incapacitated adult apply for help under the Housing Act? Any vulnerable person (including those with mental incapacity) and those reasonably expected to live with them have priority need status. The Housing Act 2002 allows that they or their co-habitees can make the application for housing. However, there is no duty under the Housing Acts owed to children or disabled persons who had neither the capacity to make an application themselves or to authorise an agent to make an application on their behalf. R v Tower Hamlets London Borough Council, Ex Parte Ferdous Begum (1993) The current Homelessness Code of Guidance for Local Authorities makes it very clear that Local Authority housing departments are obliged to ensure that those within mental health needs and incapacities are not at risk of homelessness and are adequately and appropriately housed. Providers will therefore need to consider a persons capacity to make the application and what their statutory duties are to individuals they assess as lacking the required capacity to make an application.

10. Can an incapacitated person be intentionally homeless? Housing Authorities must determine whether an applicant is homeless or threatened with homelessness intentionally. Generally, it is not for applicants to “prove their case”, but capacity is key to determining whether homelessness is as a result of a persons: own deliberate, conscious actions whether they were able to acquiesce to the actions of another which resulted in them losing accommodation. Housing providers will need to consider the above as well as what statutory obligations they owe to someone who lacked capacity to make themselves intentionally homeless, their positive statutory obligations, including under the Disability Discrimination Act, to incapacitated adults made homeless by another’s intentional actions

11. Does capacity affect the providers ability to discharge their statutory duty? Local Authorities have a duty under the Housing Act to provide advice and assistance to those threatened with homelessness and secure an offer of appropriate accommodation to those in priority need. They are able to discharge this duty if, after they have made a reasonable offer, the capacitated person rejects the provision. Where there is an assessed need for community care services these can not be lawfully withdrawn unless, after reassessment, there is a change in the level of need or eligibility threshold resulting in no further duty to the individual. In addition providers can discharge a duty if another organisation or person is able to meet that need or a capacitated adult refuses a reasonable offer of assistance. A person’s capacity will have to be determined when a housing or care provider is seeking to withdraw a service and discharge their duty as a result of the unreasonable behaviour on behalf of the service user. Any decision to discharge a statutory duty is subject to legal challenge Providers will therefore need to know what steps to take to ensure a decision to discharge their statutory duties is lawful.

12. How does capacity determine who is responsible for providing care? Capacity is key to the determination of “Ordinary Residence” a legal term used to decide which authority is responsible for providing services under the National Assistance Act 1948 and the Chronically Sick and Disabled Persons Act 1970. It does not apply to other legislation although there are similar concepts in the Housing Act and the provision of social services under the Children’ Act. A person’s ordinary residence is a matter of fact and law. It determined solely by the person’s intentions to settle voluntarily for the purposes of daily living. Very little capacity is required because the context is a person’s civil liberties to live where it suits them, and which authority pays, not adult protection. Providers will need to have a full understanding of capacity and the relevant case law in this area to ensure assessments focus on the correct factors and identify the correct authority quickly.

13. Can an incapacitated person have a tenancy? Whilst the Housing Corporation require a properly exercised tenancy to be in the form of an Assured or Assured Shorthold Tenancy there is no legal obligation for these forms to be completed. A tenancy will exist, provided that the essential elements prevail. It is not necessary for tenancies to be in writing. Nor must they be signed by the tenant. The Official Solicitor has indicated that he believes a tenancy could be granted to a person even where they have limited mental capacity. If someone doesn’t have capacity, but a signed (or unsigned) tenancy exists, then that tenancy is voidable.

14. Can the tenant be bound by the terms of the tenancy? A person who has given someone agency over their affairs and then lost capacity can have their tenancy signed by that attorney on their behalf, even though the incapacitated adult may not understand it personally and it will be binding. Where a previously incapacitated adult later, having regained capacity, validates the agreement then it will be a valid contract and the tenant will be bound by all the terms. where a tenant remains incapacitated he is probably still liable to pay a reasonable fee for the services or accommodation that they’ve benefited from. Difficulties arise for providers in enforcing good behaviour covenants. If the tenancy was signed by a properly authorised agent these covenants are effective. The agent isn’t able to force the tenant to conform to the covenants, but any breach is actionable in damages. However, a landlord may not be able to seek possession without acting contrary to obligations imposed by the DDA, and liable to actions by other tenants who can reasonably expect him to enforce such terms. Providers will need to be clear what limitations or terms they can lawfully include within a tenancy for those with limited capacity and what actions are available to them should the incapacitated person breach those terms.

15. Can an incapacitated tenant surrender their tenancy? An incapacitated person will automatically lose their right to remain in occupation if the tenancy is void, but an authority/provider will have to assess the person’s capacity to voluntarily surrender their own tenancy or accept a third parties authorisation. A local authority has no power to surrender a tenancy on behalf of someone incapacitated. An attorney or receiver could, if one was in place, surrender the tenancy on the person’s behalf. Under the MCA the Court of Protection will be able to determine where a person should live in their best interests. They will also be able to authorise a deputy to make this decision, but without Court approval a decision resulting in the incapacitated persons change of residence may be unlawful if it deprives that person of their liberty Providers will need to know whether: they can accept a purported surrender of a tenancy where the person has an incapacity; and whether any proposed actions will qualify for immunity under s5 of the MCA and, if not, how they can indemnify themselves against later actions,

16. Can a provider impose restrictive terms into a contract in the person’s best interest? Under the Disability Discrimination Act 1995 it is unlawful to discriminate against disabled people, including those suffering from a mental incapacity, in the selling, letting or management of residential premises. Any differential treatment will only be lawful if justified by one of the provisions in the DDA. It is not a justification that the discrimination was in the persons best interest. The inability for person to make capacitated enforceable agreement is a justification under the DDA for less favourable treatment, so a refusal to accept someone with an incapacity as a tenant might be lawful A provider will not have the authorisation to restrict a person’s autonomy within their home, where this would amount to restraint (unless necessary and proportionate) or a deprivation of liberty. So where the provider has adult protection concerns they may be unable to act without authorisation from the Court of Protection. The MCA entitles the Court of Protection (and only the court) to make an order preventing the incapacitated person from having contact with specific people. Questions arise for providers as to what actions amount to restraint, when might this be necessary, what is proportionate and in what circumstances would a provider be limiting a person’s freedom.

17. How does the MCA affect care/ support providers liability? The MCA sets out, at s.5, that those acting in connection with the care or treatment of an incapacitated adult will not incur liability provided that they reasonably believe the person lacks the capacity to consent and the acts are in the person’s best interests. The term ‘acts in connection with the care or treatment’ is not further defined by the Act, but the Code of Practice make clear that informal and paid carers are able to rely on this immunity. Case law and guidance suggest that it is unlikely that actions taken by landlords even if in the person’s best interest would not be considered as “in connection with care or treatment” and as such providers will not benefit from s.5 immunity. The Act and Code specifies that acts which have the affect of restraining an individual won’t be covered by this immunity unless additional safeguards are met and actions restricting the person’s liberty will never benefit from s.5. Providers must ensure that provision doesn’t result in a deprivation of liberty and what actions support staff will be able to undertake lawfully to protect against liability for breach of a incapacitated person’s civil rights and possible criminal liability.

18. Care planning for people with incapacities Capacity to contract is central to the idea of care planning. The very basis of a care plan is a contract between the authority with the statutory duty and the service user, often with the authority having a statutory duty to recover costs for these services from the person. In addition a care plan often involves contracting with third parties to provide services directly to an incapacitated person. An incapacity may mean that any contract between the incapacitated person and the care provider is unenforceable, but guidance is clear that it is only if an incapacitated person has a willing and able relative to contract for them directly, that an authority can cease to contract on their behalf. How then do care providers ensure that they are acting lawfully and that any contract they enter into on behalf of the service user is enforceable?

19. Does a provider have to take into account the views of others? Until now providers have been used to very limited involvement of those acting on behalf of incapacitated person’s. Good practice has encouraged providers seeking the views of those closest to the individual, but with the exception of a nearest relative under the MHA and agents acting with authority under either the Court or a Power of Attorney in respect of financial and property affairs, there was no legal obligation to consider their position. The MCA sets out clearly the way in which others can lawfully take over the welfare decision making functions for those who lack capacity. The MCA establishes a hierarchy of whose views should be sought in what matters, clearly impacting on the management of the lives of incapacitated people, including those in independent living projects. Providers will therefore need to have a clear understanding of the role of LPA’s, the new Court of Protection and deputies, as well as the limitation of their own powers to act. In particular, where there is disagreement between service providers and LPA’s/ deputies as to what is in the best interest of the incapacitated person or adult protection issues, the service provider will need to be fully aware of their obligations and available options under the MCA to ensure they fulfil their statutory obligations without acting unlawfully.

20. Can incapacity trigger a need for accommodation to be registered? The Care Standards Tribunal has acknowledged that the legal difference between registered and unregistered care has nothing to do with mental capacity as such, however in practice a tenant’s capacity as well as level/type of support provided may raise registration issues. The courts, in the Alternative Futures case, considered whether care homes could be de-registered and the residents accommodated through tenancies with a separate company providing care. The Care Standards Tribunal stated people should not be moved into tenancy-based supported accommodation unless it is clear that they have had an opportunity to exercise ‘real’ informed choice. However, the High Court in Moore v CST held that ‘choice’ was legally irrelevant and the only test is whether care was provided together with the accommodation, this a matter of fact. In this case, the Court found no significant or real difference in the care regime before and after the grant of the tenancy, as the input was ‘care’ before, the ‘support’ given afterwards was still ‘care’. The Court of Appeal upheld this approach. Any arrangement that requires the tenant to accept and pay for hands on care as part of the agreement for accommodation is likely to require registration. Providers will need to know how to ensure the support and accommodation package provided is lawful and how the capacity of the purported tenant could affect this.

21. How will the new Court of Protection be able to assist? The new Court of Protection will consider issues relating to the health, welfare and financial matters of those aged over 16 who lack mental capacity. It will not affect those receiving treatment under part 2 of the MHA. The MCA establishes a new Superior Court of Record which will hear matters in a number of venues throughout England and Wales. Matters will be heard before district judges, circuit judges and High Court judges (determined by the Court at the first direction hearing) or, if it is an uncontroversial property matter, before a court official/decided on the papers The Court of Protection will have the power to: Make declarations regarding a person’s capacity to make a specific decision, or on a range of issues and on the lawfulness of acts done, to be done, or omission to a person without capacity Consider the legality of advanced decisions concerning medical treatment, Make decisions on behalf of the incapacitated adult. Appoint a deputy to act as an agent on behalf of the incapacitated adult. Police Lasting Powers of Attorneys. The Draft Court Rules provides the Court with clear powers to manage cases, including the power to give directions regarding disclosure, expert evidence and determining relevant parties. It also has guidelines for establishing timetables for the proceedings.

22. Limitations under the MCA for you to consider You will have to first comply with a pre-action protocol You are likely to have to seek permission to apply to the court for an order Cost - parties will generally expected to pay their own costs The MCA is clear that no- one, including the Court or it’s deputies, can make decisions on behalf of another in certain circumstance (e.g. where they have capacity or are required to act with capacity and autonomy i.e. voting). By implication anyone taking such decisions, including carers, will be acting unlawfully and will not be afforded the impunity under s5 MCA, including signing a tenancy for someone else, or seeking to lock them into the terms of the contract.

23. One further consideration Section 44 of the MCA creates a new offence which will come into effect in April ’07 permitting the prosecution of anyone caring for a person who lacks mental capacity or is reasonably believed to lack mental capacity, if they ill-treat or wilfully neglect that person. There is currently no detailed statutory definition of ‘ill treatment and neglect’ The maximum penalty for such an offence is a fine and/or up to 5 years in prison Is it possible that support staff/ providers could be held to account under this provision and, if so what positive action is necessary to minimise any possible criminal liability?

24. Thanks for listening Further information is available at: www.careandhealthlaw.com free and chargeable information on the legal framework and an email alert service so that you get to hear of developments. www.careandhealthlaw.com www.dh.gov.uk/MentalHealth www.dca.gov.uk/capacity/index.htm