Part 13 – Persons who lack capacity to manage their affairs

June 2014 

19.213 Introduction

The Insolvency Rules 1986 make special provision for a person affected by the proceedings who appears to the court to lack the capacity to manage and administer his/her property and affairs, either by reason of lacking capacity within the meaning of the Mental Capacity Act 2005 or owing to a physical affliction or disability. In the insolvency proceedings the person is referred to as "the incapacitated person" [Note 1].

19.214 Mental Capacity Act 2005 – definition of “lack of capacity”

According to the Mental Capacity Act 2005 a person lacks capacity in relation to a matter if at the material time he/she is unable to make a decision for himself/herself in relation to the matter because of an impairment of, or a disturbance in the functioning of, the mind or brain [Note 2]. The impairment or disturbance may be permanent or temporary, and the decision as to whether a person lacks capacity will be made on the balance of probabilities [Note 3]. 

19.215 Appointment of person to act on behalf of an incapacitated person

Where a person is incapacitated, the court may appoint a person to appear for, represent or act on his/her behalf [Note 4]. The appointment may be made either generally or for the purpose of a particular application or proceeding, or for the exercise of particular rights or powers which the incapacitated person might have exercised except for his/her incapacity [Note 5].

19.216 Who may make an application for a representative for an incapacitated person?

The court may make the appointment itself or on an application by:  

• a person who has been appointed by a court in the United Kingdom or elsewhere to manage the affairs of, or to represent, the incapacitated person;
• any relative or friend of the incapacitated person who appears to the court to be a proper person to make the application, or
• the official receiver, or, if not the official receiver, the office holder [Note 6].

19.217 Application without notice

An application to appoint a representative for an incapacitated person may be made without notice. In considering the application the court has the power to order notice to be given to the person alleged to be incapacitated, or to any other person, and may adjourn the hearing of the application to enable such notice to be given [Note 7].

19.218 Witness statement in support of an application

An application for the appointment for someone to act as the representative of the incapacitated person must be supported by a witness statement by a registered medical practitioner as to the mental and physical condition of the incapacitated person [Note 8].

19.219 Service of notices to the appointed representative of an incapacitated person

Any notice served on, or sent to, a person appointed to represent an incapacitated person has the same effect as if it had been served on, or given to, him/her [Note 9].

19.220 Official receiver and an incapacitated person

Where the official receiver is dealing with a person mentally or physically incapable of dealing with the proceedings, where possible, this should be dealt with on an informal basis. This should avoid any necessity to apply to court for the formal appointment of a representative, without forgetting the underlying seriousness of the overall situation. Once evidence is produced to satisfy the official receiver of a person’s incapacity, an informal approach should be made to their spouse or other relative or a person who is likely to be able to provide the official receiver with the information required.

[Back to Part 12 – Court records] [On to Part 14 – Other matters]