Guidance related to Rule B1.5: Vulnerable Clients Guidance
1. This guidance applies whenever a client or prospective client of whatever age may lack full capacity, whether having attained the legal age of capacity or not, to instruct a solicitor, or to instruct and validly carry through the contemplated act or transaction, or may be subject to undue influence or other factors which might vitiate that act or transaction. Such a client or prospective client is termed a "vulnerable client". "Vulnerable" is used as a convenient comprehensive term, not limited to any definition of that term for any other purpose. "Vulnerability" is used accordingly. "Client" includes a prospective client. "Other vitiating factors" include facility and circumvention; force, fear or fraud; and misrepresentation. "Initiator" refers to a person other than the client who initiates any proposed engagement, instructions or process to which it is contemplated that the client will be a party. "Appointee" means someone to be appointed in a fiduciary role, such as an attorney, executor or trustee. "Donee" means someone likely to benefit personally.
2. "Rule" and "Rules" refer to the Law Society of Scotland Practice Rules 2011. "Must" refers to a binding obligation under statute, regulations, Rules or the like. "Should" refers to good practice: failure to comply may be taken into account in disciplinary or other proceedings. Where a solicitor considers that particular circumstances justify departure from this guidance, a written record of those circumstances and the reasons for the departure should be kept.
3. Both this guidance and the “Guidance on Continuing and Welfare Powers of Attorney” (“the POA guidance”) were issued following publication of reports from other stakeholders and consultations that raised issues regarding vulnerability. Vulnerability may be relevant to any contemplated act or transaction about which a solicitor may be consulted or instructed. This guidance seeks to address vulnerability generally.
4. This guidance should be read subject to the terms of relevant Rules and guidance published by the Society thereon. It is not the purpose of guidance to state or interpret the law, and it should not be read as seeking to do so: this guidance assumes compliance with Rule B 1.10 - see paragraph 11 below.
Capacity and incapacity
5. Solicitors should balance the positive obligation to facilitate valid and competent acts and transactions against the negative obligation to avoid purported acts or transactions which are incompetent, void or voidable.
6. Solicitors should as far as reasonably practicable assist vulnerable clients to express their wishes, understand relevant advice, give valid instructions, and carry through valid acts and transactions. Where appropriate, solicitors should take advice as to optimum place, time and other arrangements for advising and taking instructions. A person confused by a lengthy or complex document, or unable to sustain the concentration necessary to understand it, may nevertheless be able to understand (and if so desired, validly execute) a simple and straightforward document which is nevertheless adequate for its intended purpose. Under Rule B 1.9.1 solicitors must communicate effectively with their clients; therefore if a client is capable of understanding, a solicitor must communicate by whatever means is necessary to enable the client to understand. Assistance with communication is addressed in paragraph 15 below.
7. The definition of incapacity in the Adults with Incapacity (Scotland) Act 2000 ("2000 Act") applies for the purposes of that Act, but it may reasonably be referred to for guidance in determining capacity for other purposes. Note that the definition includes "incapable of acting", which may include acting to resist undue influence or other vitiating factors, or acting so as to adhere to and implement otherwise valid decisions, or to maintain consistency.
8. A solicitor may, and in some circumstances should, seek and carefully consider expert guidance. However the solicitor retains responsibility for compliance with all relevant Rules and should not abdicate responsibility to the expert. Solicitors should not simply rely upon the legal presumption of capacity. On the contrary, they "must …. be satisfied when taking instructions, that his or her client has the capacity to give instructions in relation to that matter" (guidance related to Rule B 1.5).
9. In cases of doubt as to the extent to which, and circumstances in which, capacity can be exercised, or conversely as to the extent to which incapacity prevents a contemplated act or transaction, the advice of a medical practitioner or clinical psychologist should be sought. It may be necessary to approach someone with particular specialist expertise. The solicitor should not seek a generalised and simplistic verdict of "capable" or "incapable". The solicitor should explain the act or transaction contemplated and the legal requirements for it to be valid. The solicitor should explain any indications of relevant capacity or incapacity of which the solicitor is aware, and any steps which the solicitor proposes in order to facilitate exercise of capacity.
10. The possibility of vulnerability should be considered whenever a solicitor is consulted or instructed in any matter. Often the solicitor will be able to decide quickly and confidently that there is no question of vulnerability; but solicitors should always be alert to any indications of possible vulnerability.
11. A solicitor "must only act in those matters where you are competent to do so" (Rule B 1.10). However solicitors must not discriminate contrary to Rule B 1.15.1. They may accordingly require to refer to another solicitor whose particular skills are required in determining capacity, identifying vulnerability, or in advising and acting for a particular client (including the requirement to communicate effectively - see paragraph 6 above).
12. Indications of possible vulnerability may arise from the normal process of ascertaining a client's wishes and intentions, exploring circumstances, and advising as to merits, risks, advantages and disadvantages of a proposed act or transaction, or of alternatives. However, on the one hand an apparently unwise act or transaction may represent a client's valid and competent choice; while conversely an apparently wise act or transaction could be invalid through lack of relevant capacity, or undue influence, or other vitiating factors.
Influence and undue influence
13. Influence, even powerful influence, is not necessarily undue influence. A client may attend to make a Will or grant a Power of Attorney only because someone has strongly influenced them that they ought to do so. Influence may be powerful but benign. Or it may be subtle, but undue. Influence to make a Will, but not as to who should benefit or who should be appointed executor, or to grant a Power of Attorney, but not as to whom to appoint, is unlikely to be undue. If however (in those examples) influence seeks to affect choice of beneficiaries, executor(s) or attorney(s), it is likely to be undue, particularly where the influencer or someone connected to the influencer so benefits, though the extent of realistic (or sensible) choice in the matter may also be relevant. The solicitor should use reasonable endeavours to ascertain such matters from the client.
14. While a solicitor must not act in accordance with purported instructions which the client does not have capacity to give validly, there is no equivalent direct prohibition where the solicitor detects undue influence or other vitiating factors. Where a solicitor believes that a purported act or transaction will be voidable on grounds of undue influence or other vitiating factors, the solicitor may decline to act in accordance with such instructions, but is not bound to do so unless the solicitor reasonably considers that to facilitate the act or transaction would put the solicitor in breach of the requirement of Rule B 1.4.1 to act in the best interests of the client. If the solicitor declines, the solicitor should explain the reasons. If the solicitor acts, the solicitor should warn the client that the purported act or transaction may be voidable and (if such be the case) may prove to be contrary to the client's interests. The solicitor should also obtain the client's authorisation to disclose such advice and the reasons for it, should the validity of the act or transaction be put in issue following impairment of capacity or death of the client.
15. A dominated client may deny or conceal undue influence. Where there is a possibility of vulnerability, the client should be seen alone except where the client reasonably prefers someone to give support, or to assist communication, in which case such third party should if at all possible be neutral in relation to the matter in hand. Undue influence can be exercised regardless of presence, though the effect may be greater if the influencer is present, or present elsewhere in the building, or is the initiator, or brings the client and then leaves.
16. A client who is subject to two different spheres of influence may express different, or even contradictory, wishes or make contradictory purported decisions when the client perceives himself (or herself) to be within each of those spheres of influence. This is a clear indication of incapacity to resist influence. However, while inability to resist influence may indicate incapacity, the concepts of undue influence and other vitiating factors are of course not dependent upon incapacity and may apply in cases where capacity is not impaired.
Who is my client?
17. The granter of a Power of Attorney, Will, guarantee, a document (including a Deed of Trust) incorporating a gift, or other document is the solicitor's client. All relevant Rules should be complied with in relation to that client - including Rule B 4.2 (providing written intimation in accordance with that Rule "when tendering for business or at the earliest practicable opportunity upon receiving instructions"); Rule B 6.23.1 (compliance with Money Laundering Regulations); and Rules B 1.4.1, 1.9.1, 1.10 and 1.15.1 (all referred to above). Of particular importance in the context of vulnerable clients are Rule B 1.5.1: "You are the agent of your client and must have the authority of your client for your actings …."; Rule B 1.7.1, under which solicitors must not act where there is a conflict of interest; and Rule B 1.7.2, under which solicitors must exercise caution where there is a potential conflict of interest and, if the potential for conflict is significant, not act for both parties without the full knowledge and express consent of the clients. If there is doubt as to capacity to instruct, that should be resolved before accepting engagement if a new client, or before accepting instructions from an existing client.
18. Where a solicitor issues any document for signature to a party or prospective party "to a transaction of any kind" the solicitor should consider Rule B 2.1.7. "Issue" means issuing in any way, including giving the document to the client or other third party to take to the proposed signatory. In the case of continuing and/or welfare Powers of Attorney, Wills and gratuitous documents, these should only be prepared by a solicitor acting for the granter or donor. A solicitor may occasionally prepare a Power of Attorney for commercial purposes, which is not a continuing or welfare Power of Attorney, or include such power in a longer document, when not acting for the proposed granter. Even in that situation, the solicitor should carefully consider whether he or she can properly proceed if the proposed granter is not separately represented. In any event, the solicitor should consider Rule B 2.1.7. Similar considerations may apply in relation to other documents, such as guarantees.
19. Proposed appointees under the Adults with Incapacity (Scotland) Act 2000 should be referred to relevant Codes of Practice and other material available on the Public Guardian's website, as may be appropriate.
20. The following possible situations and indicators are offered as examples, not as a comprehensive list.
Some categories of situations
The situations are described simplistically in that they are stated as applying with certainty, whereas in practice they will present with varying degrees of probability.
Type A: Capable client making own independent decisions, has justified faith in competence and trustworthiness of proposed appointee. (Capacity and no undue influence)
Type B: Client dominated by proposed appointee, nevertheless capable and proposed appointee competent and motivated to act properly. (Capacity and influence, influence not undue or malign)
Type C: Client capable and not subject to undue influence, but instructions seem unwise. (The solicitor's role is to advise, perhaps in strong terms, but in this situation there are no grounds for refusing to act. It is wise to record concerns, advice given, and reasons for acting. See also paragraph 12 above)
Type D: Client of limited but sufficient capacity, vulnerable to undue influence but not in fact unduly influenced. (The solicitor must respect and if necessary support the client's capacity, without discrimination on grounds of the client's disability)
Type E: Client subject to influence which is undue and malign, not benign, and unable to resist it through incapacity or facility or the dominance of the influencer(s). (Regardless of level of capacity to consult and instruct, the solicitor will not be able to implement instructions)
Type F: Presents as any of types A - D, but there is in fact undue and malign influence which may be covert or deliberately concealed (including by the person influenced)
Type G: Client aged 15 years wishes separate legal advice about a matter that concerns them; client dominated by parents, nevertheless capable and parents competent and motivated to act properly. (Capacity and influence, influence not undue or malign)
Type H: Client aged 13 years wishes to appeal detention to the Mental Health Tribunal for Scotland; supported by independent advocacy worker to contact solicitor, which worker is present during the meeting with the client and speaks regularly for the client. Client of limited but sufficient capacity, vulnerable to undue influence but not unduly influenced. (The solicitor must respect and if necessary support the client’s capacity, without discrimination on grounds of the client’s mental disorder. Care needed to ensure the instructions are clear)
Difficulty: Strong influence is not necessarily undue influence (see paragraph 13 above). It may be necessary to try to assess the motives and intentions of an influencer (or influencers) whom the solicitor may not even have met.
Who has approached the solicitor ("initiator")?
- Client who is well known? Be alert to possible changes in capacity, vulnerability
- A new client? Be alert to possible incapacity or vulnerability
- Neutral person on behalf of the client? Be careful - see below if there is possible significant influence
- Proposed appointee or donee on behalf of the client? Be very careful - (but this could still be a type A or B, or even D, situation)
- Initiator reluctant to "stay completely out of the way" when instructions are taken? Be very careful
- Initiator resistant to possibility of joint appointment or additional donees? Be very careful
Other possible indicators
- Any references to family disunity? Be very careful
- Initiator a dominant personality? Be very careful
- Client appears to be very influenced by initiator? Be very careful, and if initiator is proposed appointee or donee - danger sign!
- Client "doesn't want to upset" proposed appointee or donee? Danger sign!
- Client "doesn't want to upset" family or others? Be very careful
- Proposed appointee or donee seems largely motivated by need to mitigate tax, avoid means-testing? Danger sign!
Possibility of some form of "mental disorder" (broadly defined)? Investigate
Diagnosis or information that there is some degree of "mental disorder"? Enquire, take great care, but the solicitor has a duty to help clients exercise such capacity and autonomy as they can. Consider simple form of document.
Illiteracy, communication difficulties, sensory impairments, other physical issues, frailty? The solicitor's approach needs to be supportive, facilitative, well-informed and careful.