Making financial provision for children – how should the s4 exercise work?

Re X,Y and Z (Minors)   [2014] EWHC 87 (COP)  (Baker J)


This case relates to the authorisation of payments made to facilitate the care of children from funds held in trust by their mother.

The mother, P (who was 36 at the time of the hearing before Baker J), married a man, F, in 1998 and had three children, X, Y and Z.  The marriage was characterised by repeated acts of serious physical violence perpetrated by F upon P, resulting in divorce proceedings and a series of applications for injunctions and ultimately criminal proceedings as a result of which F was convicted and sentenced in July 2003 to a total of 42 months imprisonment.    In the interim, P had been involved in a catastrophic road accident when P was one of three passengers in a motor car being driven by her sister. The other three occupants of the car were killed. P survived but sustained very serious injuries, including a spinal fracture resulting in complete paraplegia, a range of other fractures and internal injuries, and a significant and severe head injury which has affected her personality leading to very challenging behaviour over the years since the accident.   P’s children were looked after by a team of nannies employed by the mother, of whom one, S, had formed a particular relationship with the children.

Personal injury proceedings brought on her behalf by a deputy appointed by the COP in 2009 resulted in a settlement of a lump sum totalling £4.25 million, together with periodical payments for care to age 60 in the sum of £175,000 per annum and thereafter in the sum of £215,000, such sums to be increased in line with inflation.  The lump sum awarded included compensation for the cost of employing nannies to look after the children prior to the settlement in a sum of approximately £508,000 and future payments for employment of nannies capitalised at approximately £400,000. The terms of the settlement did not provide that this sum should be “ring fenced” for the exclusive use of meeting child care expenses.    Whilst the cost of employing nannies had been very close to the estimated figure, P’s own care costs, however, were significantly greater than anticipated, leading to a shortfall in the periodical payments which in turn had obliged the deputy to make further drawings on the capital lump sum.   It therefore appeared that P’s capital sum would be exhausted within (at the very most) 10 years, there being no suggestion that her life expectancy being significantly affected as a result of the accident.

As a result of P’s difficulties in caring for her children arising out of her injuries, the local authority brought care proceedings.   It was clear that the best outcome for the children would be a care order placing the children with S as foster carer.  S was, however, unwilling to taken on the responsibility unless she received a further payment from P over and above the fostering allowance which will be paid by the local authority under the care order.   This insistence – described as perfectly understandable by Baker J – was supported by the local authority and the children’s guardian.

In the care proceedings, P’s deputy, however, argued (non-adversarially) that such payments might not be in P’s best interests, having regard to the fact that there was currently a shortfall between P’s income and expenditure on her own needs. Secondly, it was contended that there were insuperable legal difficulties militating against P continuing to employ S under a contract of employment.   Baker J therefore invited the local authority to file an application in the Court of Protection seeking a declaration that the continued employment of S as the children’s nanny was appropriate expenditure from the funds held on the P’s behalf and administered by her deputy.  That application was transferred to him and listed alongside the care proceedings.

Baker J endorsed the agreed position that P lacked the requisite decision-making capacity.   Turning to the best interests analysis, he noted that, whilst the specific provisions relating (inter alia) to payments for benefits of the patient’s family in ss. 95 and 96 MHA 1983 (as it stood prior to 1 October 2007), no party had suggested that the general powers under ss.16 and 18 MCA 2005 did not extend to permitting the court to make orders for payment for the benefit of P’s children, provided the court was satisfied that such payments are in P’s best interests.

Baker J further derived assistance from a number of observations from first instance judgments as to the application of the best interests test.   I return to these in the comment section.

Baker J had no hesitation in concluding that the proposed payments to S from P’s estate were in P’s best interests, holding thus at paragraphs 45-7:

45… I accept that the court has power under the 2005 Act to approve payments for the maintenance or other benefit of members of P’s family, notwithstanding the absence of an express provision to that effect in the Act, provided such payments are in P’s best interests. Such payments might be called altruistic, but are more characterised as falling within the broad meaning of the concept of “best interests” under the Act. Where a parent loses mental capacity at a time when she is still responsible for her children, those responsibilities are part of her “interests” which have to be addressed by those making decisions on her behalf, and payments to meet the reasonable needs of those children are manifestly capable of being described as in her “best interests”. As set out above, the powers available to the court and the deputy under s.18 when acting in her best interests include the power to discharge any of P’s obligations, “whether legally enforceable or not” and the settlement of any of P’s property, whether for P’s benefit or for the benefit of others. Whether or not such payments are in her best interests depends on all the circumstances, applying the criteria in the Act.

46.  Plainly P’s wishes and feelings are of great importance in determining whether in these circumstances it would be in her best interests for payments to be made. She has expressed the wish that her funds should be used in support of the children. It is said that, in expressing that view, she does not appreciate the fact that her own care needs are now costing more than her income. In my judgment, however, were she to have a full understanding of the shortfall, she would nevertheless support the payment of sums to S to safeguard the future of her children, preferring to make savings in the costs of meeting her own care needs. The new arrangement will significantly reduce the sums being paid towards the children out of her estate, and as a result the deputy and those responsible for managing her affairs will have greater flexibility in adjusting arrangements to enable her to make savings. I find that P’s wishes and feelings are, in the words of Munby J Re M, ITW v Z at paragraph 35, “responsible and pragmatically capable of sensible implementation in the circumstances” and ‘can properly be accommodated within the court’s overall assessment of what is in her best interests’.

47. Furthermore, by agreeing to an order of the sort proposed by Mr. Burns [specialist employment Counsel who had provided advice for the benefit of the Court as to the arrangements that would need to be in place vis-à-vis S] the court is enabling the deputy (subject of course to any application to the Court of Protection) to retain the power to terminate or reduce the payments to S, should P’s own care needs justify that course.

Baker J therefore endorsed a detailed order in the Court of Protection proceedings before proceeding to approve a final order in the care proceedings.


There can be no sensible disagreement with the best interests decision made by Baker J. I would, however, wish to pick up on the observations made by Baker J in relation to the approach to be adopted to the best interests exercise, where:

  1. Relying upon observations of Munby J (as he then was) in Re M: ITW v Z [2009] EWHC 2525 (Fam), Baker J held that is no hierarchy between the various factors that had to be borne in mind under the s.4 exercise, and the second is that “under s.4(6) P’s wishes and feelings, and the beliefs and values that will be likely to influence her decision if she had capacity, must be considered by the court, so far as reasonably ascertainable. Although part of the relevant considerations, they are not, however, determinative of the matters but, rather, factors to be considered as part of the overall best interests analysis. Whilst P’s wishes and feelings will always be a significant factor to which the court must have regard, the weight to be allocated to those wishes and feelings will, as with any other factor, always be case-specific and fact-specific” (paragraph 30);
  2. Relying upon observations made by Lewison J in Re P (Statutory Will) [2009] EWHC 163 (Ch) [2010] Ch 33, he noted that the best interests test is materially different to the test applied under the previous law of substituted judgment where by the court identified and adopted the decision that the incapacitated individual would have made if he had capacity;
  3. Relying upon observations of Morgan J in Re G (TJ) [2010] EWHC 3005 (COP), he noted that the concept of ‘substituted judgment’ may have some relevance where it is possible to identify what decision P would have been likely to have made, such decision being a matter that can be taken into account.

I would respectfully suggest that these dicta – and in particular those of Munby J in Re ITW –require revisiting in light of the clear dicta of Baroness Hale in Aintree as to the purpose of the best interests test, namely “to consider matters from the patient’s point of view,” so as to make “the choice which is right for him as an individual human being” (paragraph 45).  As discussed in more detail in an article that I have written with Victoria Butler-Cole and Vikram Sachdeva on the Aintree case forthcoming in the next issue of the Elder Law Journal, I would suggest that fidelity to the structure of the MCA 2005 and of the UN Convention on the Rights of Persons with Disabilities means that (1) there is, in fact, a hierarchy within the s.4 exercise; (2) where it is possible reliably to identify what choice P would have made between the options available to them, then that should give the answer as to what is in their best interests; and (3) in such a case the distinction between an objective best interests test and a substituted judgment all but collapses.   In this case, the alignment between what could be identified as being P’s choice and what objectively appeared ‘right’ was – fortunately – exact.   The much harder cases, and the ones that rightly challenge both practitioners and the judiciary, are where there is a mismatch.

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