Jessica Jarvis

Lumb v NHS Humber and North Yorkshire ICB & Anor [2024] EWCOP 57 has become a lightning rod for scrutiny across Court of Protection practice. At its core, the case raised a deceptively simple question: can a professional deputy act as the recipient of direct payments (DPs) and charge P for related management, without express authority from the Court of Protection?

The judgment, though fact-specific and not declaratory in scope, has cast doubt over longstanding arrangements across hundreds of deputyship cases. This post offers a critical review of the case and practical recommendations for those managing direct payment packages.

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What the Court Did (and Didn’t) Say

Direct Payments Are Not P’s Money

The Court confirmed that DPs, whether under the Care Act 2014 or the NHS Act 2006, are not P’s personal funds. Instead, they are a statutory mechanism by which a public body delegates control of its duty to meet care needs. The funds remain public in nature, with the recipient acting in an administrative capacity rather than as a beneficiary.

This principle alone has significant implications for how deputies perceive their role. Managing DPs is not merely assisting P with their property – it involves executing a public function.

Deputies Need Express Authority

One of the most striking elements of the judgment is HHJ Hilder’s view that a standard property and affairs deputyship order does not confer sufficient authority for a deputy to be appointed as the DP recipient. Even where a local authority names a deputy as the authorised person, this does not permit the deputy to charge P for the work.

The judge was particularly critical of arrangements where:

• Deputies charged for DP-related work without separate approval.
• Deputies became the de facto employer of care staff, without clear agency authority.
• P incurred costs solely because a deputy was appointed, whereas others in similar situations would not.

“The fact that a person has a deputy… should not automatically result in higher costs for them in the same publicly funded care situation.”

These were strong obiter comments, not a definitive ruling for all cases. However, the direction of judicial travel is clear.

Critical Implications for Professional Deputies

Retrospective Risk

Deputies who have managed direct payments and charged fees without specific Court approval are now in uncertain territory.

Even where the SCCO has assessed costs, this does not cure the lack of authority. The deputy may have acted without jurisdiction, particularly if they were the named DP recipient or operated firm accounts in this role.

Key Risks Include:

• Repayment of previously charged fees.
• Exposure to employer liabilities (if deemed the principal).
• Regulatory scrutiny from the OPG or SRA.
• Loss of public trust in the deputyship framework.

Agency vs Principal

A major thread in the judgment is the blurred line between agency and control. Deputies acting on behalf of P must avoid stepping into a principal role, particularly where this creates legal obligations under employment or tax law.

If a deputy is not explicitly acting as P’s agent, they may find themselves legally liable for employment contracts, HMRC duties, and disputes with staff; matters clearly outside the scope of a typical deputyship order.

This distinction isn’t merely academic. Deputies who step outside their role as P’s agent and act as principal may unwittingly assume personal liability for employment law compliance, tax obligations, or contractual disputes. The judgment reinforces the need for absolute clarity in how arrangements are structured, documented, and understood by third parties.

Deputies should therefore ensure:

• All care arrangements and contracts are made explicitly on behalf of P – not in the deputy’s own name.
• Direct payments are received into an account belonging to or clearly managed for P, not into the law firm’s or deputy’s own account.
• Employment contracts name P as employer (or a third-party case manager, if appropriate) – never the deputy.
• Correspondence and engagement with statutory bodies consistently frames the deputy’s role as agent, using best-interests language where appropriate.
• Authority is sought from the Court of Protection where any ambiguity exists, especially in relation to receiving funds, managing payroll, or charging fees.
• A clear paper trail evidences that all actions taken were on P’s behalf, not as principal decision-maker or contracting party.

What acting as a principal looks like
A deputy risks being treated as a principal where they:

• Accept direct payments into a personal or firm account as the named recipient.
• Sign employment contracts in their own name or on behalf of the firm.
• Make unilateral decisions about care or staffing without clearly identifying them as best-interests decisions made as P’s agent.

In these cases, legal liability may attach to the deputy or firm, not P. This includes:

• Employer status under law.
• HMRC obligations (PAYE, pensions, National Insurance).
• Tribunal claims or employment disputes.
• Breaches of solicitor account rules if funds are mishandled.

To mitigate risk, deputies should:

• Decline to act as DP recipient unless explicitly authorised and indemnified.
• Avoid signing contracts unless P is named as the employer.
• Keep language in correspondence clearly rooted in best-interests framing.
• Maintain a transparent paper trail.
• Where necessary, apply to the Court for clarification and formal authorisation.

In short, clarity of role is not optional. Deputies must take active steps to stay within the limits of lawful agency, or risk personal and professional consequences.ds are absent, the line between acting for P and acting in one’s own capacity may become blurred.

Sector-Wide Uncertainty

Despite the scale of concern, there remains:

• No Practice Direction from the COP.
• No formal policy from the OPG or MoJ.
• No definitive test case beyond Lumb.

However, interim best practice is beginning to emerge. The recent PDF Lifetime Lawyers webinar by Victoria Butler-Cole KC and Arianna Kelly outlined sensible steps for regularising past and future arrangements. Deputies are advised to act promptly and transparently.

A Note of Caution

Practitioners should avoid treating Lumb as conclusive precedent. The judgment was careful not to make sweeping legal determinations applicable to all DPs. Rather, it underlined the need for careful case-by-case analysis and the importance of:

• Express COP authority;
• Transparent funding arrangements;
• Justification of additional costs.

As such, deputies retain some room for argument in borderline or historic cases, particularly where the local authority was involved in designing the arrangement.

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Practical Steps for Deputies: A Two-Track Strategy

For Existing Packages

• Audit your current caseload: Identify all clients where you act as DP recipient or oversee such funds.
• Review deputyship orders: Is there express authority to manage or charge for DP-related work?
• Disentangle costs: Separate private care from public-funded elements. Avoid cross-subsidisation without a clear basis.
• Prepare retrospective applications: Explain how the arrangement benefited P, why alternatives weren’t viable, and how costs were controlled.
• Engage statutory bodies: Local authorities and ICBs are more likely to support regularisation where transparency and collaboration are evident.

For New or Renewed Arrangements

• Do not agree to act as the authorised person unless:
  • The COP has granted expres authority;
  • Fee structures are clear and approved;
  • Employment responsibilities are explicitly addressed.
• Explore whether a family member or case manager might act as recipient instead. This often reduces both cost and complexity.
• Consider whether direct commissioning by the funder would better protect P and avoid liability risks.

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What Comes Next?

There is growing pressure on the Court of Protection to issue formal guidance, or for a Practice Direction to clarify the legal framework for DPs under deputyship. Sector bodies (PDF, COPPA, STEP) are encouraging submission of anonymised test cases to shape this process.

It is also possible that future litigation may challenge the retrospective recovery of fees or define clearer parameters for separating lawful agency from unauthorised control.

Conclusion

Lumb signals a fundamental shift in how the intersection between public funding and private deputyship is viewed. It highlights the ethical and legal discomfort of charging P for public care arrangements, and the urgent need to ensure robust, transparent, and Court-authorised structures.

Deputies must not only future-proof their arrangements but also critically examine their past practices. The Court has signalled that the days of informal, assumed authority over DPs are over.