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Managing a missing person's financial affairs

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The Guardianship (Missing Persons) Act 2017 Act received royal assent in April, establishing a new legal mechanism to deal with the property and financial affairs of a missing person. Lesley King looks in greater depth at the provisions within the act.

The Presumption of Death Act 2013 came into force on 1 October 2014. It allows the court to make a declaration that a person who is thought to have died, or has not been known to be alive for a period of at least seven years, is presumed to be dead. The declaration is effective for all purposes.

The procedure was used in 2016 by the son of the missing Lord Lucan. Although a grant of representation was obtained in 1999, it did not permit the son to inherit the family title or take his father’s seat in the House of Lords. A more recent example is Greathead v Greathead [2017] EWHC 1154 (Ch), which contains some helpful clarification of the way in which the procedure works.

The government agreed to introduce a procedure for appointing a guardian to deal with the missing person’s assets, but delayed implementation to allow it to carry out further consultation.

On 27 April 2017, the Guardianship (Missing Persons) Bill received royal assent and became the Guardianship (Missing Persons) Act 2017. It was supported by the government, the Labour party and the charity Missing Persons. It has come to be referred to informally as Claudia’s Law in reference to Claudia Lawrence, who went missing in 2009.

Before the act, there was no process for authorising someone to manage or protect the property or financial assets of a missing person. This could lead to the dissipation of assets (for example, through direct debits that could not be cancelled) and their deterioration or loss (for example, through lack of maintenance or failure to meet mortgage payments). A disappearance could also deprive dependants of support they had been receiving from the missing person, and leave third parties unable to conclude ongoing business with the missing person or make sensible arrangements with those left behind. The act makes provision for a court to appoint a guardian for a missing person in respect of their property and financial affairs and creates a regime for supervising and regulating the way that guardians exercise their powers.

The substantive provisions will come into force at a later date.

The Ministry of Justice estimates that it is likely there will be between 50 and 100 applications a year for a guardianship order, with the possibility of an early spike when the system goes live, covering applications for existing cases.

The act is modelled, in part, on the provisions for the appointment of deputies in the Mental Capacity Act 2005 (MCA 2005). So the guardian is to be treated as the agent of the missing person and must act in the best interests of the missing person.

However, ‘best interests’ does not simply mean preserving and protecting – and, where possible, augmenting – the assets of the missing person. It extends to the support of dependants of the missing person. The intention is that the guardian will be able, subject to the tests in the act and the terms of the guardianship order, to use the missing person’s assets for the benefit of people who the missing person would have supported.

The procedure for hearing the application will be governed by rules of court, which are yet to be written.

Section 1 defines ‘missing’. For the purposes of the act, a person is missing if absent from his or her usual place of residence and day-to-day activities, and either

  • the person’s whereabouts are not known at all, or are not known with sufficient precision to enable the person to be contacted for the purposes of decisions relating to his or her property and financial affairs; or
  • the person is unable to make decisions relating to his or her property and financial affairs or to communicate such decisions with a view to their implementation (or both), and the reason for that is something beyond the person’s control, other than illness, injury or lack of capacity in relation to a matter (within the meaning of the MCA 2005).

Section 1(4) provides that a person who is detained, whether in a prison or another place, is to be treated for the purposes of the act as absent from his or her usual place of residence and usual day-to-day activities. This is designed to deal with situations such as a person being kidnapped or held hostage.

A guardian is appointed for the period specified in the guardianship order, which cannot be more than four years, although the guardian can apply to be reappointed (section 7). The order does not automatically cease when the missing person is found. However, a guardian who has reasonable grounds to believe that the person is no longer missing, must apply to the court as soon as reasonably practicable for the revocation of the order (section 13).

Section 14 provides for automatic revocation of a guardianship order:

‘(a)       on the death of the missing person;

(b)       on the making of a declaration of presumed death in respect of the missing person under section 2 of the Presumption of Death Act 2013;

(c)       on the death of the guardian;

(d)       on the expiry of the guardian’s period of appointment.’

Section 18 deals with ‘best interests . It provides that in determining what is in a missing person’s best interests, the court or a guardian must consider all the relevant circumstances of which the court or guardian is aware.

In particular, section 18(2) requires the court or guardian to consider, so far as is reasonably ascertainable:

‘(a)       any relevant wishes and feelings expressed by the missing person at any time, including any relevant written statement made by the missing person,

(b)       the beliefs and values that would be likely to influence the missing person, and

(c)       any other factors that the missing person would be likely to consider.’

Section 18(3) requires the court or guardian to take into account the views of any persons of whom the court or guardian (as appropriate) is aware with a relevant interest in relation to the missing person’s property or financial affairs, where it is reasonably practicable and appropriate to do so.

Underlining the point that this is a best interests test rather than one of substituted judgement, section 18(5) provides that the court or a guardian is not required to decide a matter by reference to the decision the missing person is likely to have taken in relation to the matter, or to consider any question as to whether or when the missing person might cease to be missing.

Once in force, the act will obviously be extremely helpful.

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