REPRESENTING CLIENTS WITH DIMINISHED...

REPRESENTING CLIENTS WITH DIMINISHED CAPACITY

INTRODUCTION

How lawyers advise clients with diminished capacity has generally received insufficient

attention from the profession but is of increasing importance. Although capacity can be

diminished in many ways it most commonly occurs with aging. With an older population and

improvements in health care, lawyers will be increasingly required to provide legal advice to

clients with diminished capacity. The problem is compound by the potential for litigation arising

from the significant accumulation and transfer of inter-generational wealth.

The first source used in the preparation of this paper is the Federation of Law Societies proposed

Model Code of Professional Conduct.

A second valuable source is the American Bar Association and other American authorities. I

strongly recommend reviewing the following articles:

1. "Assessment of Older Adults with Diminished Capacity; A Handbook for

Lawyers", American Bar Association and the American Psychological

Association. http://www.apa.org/pi/aging/diminished_capacity.pdf

2. "Assessing Clients with Diminished Capacity", Bifocal, American Bar

Association. .http://www.abanet.org/aging/publications/bifocal/summerOl.pdf

3. "ACTEC Commentaries on the Model Rules of Professional Conduct:

MRPC1.14 Clients with Diminished Capacities". American College of Trust and

Estate Counsel. WWW.actec.org

4. American Bar Association Model Code of professional Conduct.

http://www.abanet.org/cpr/mrpc/rule 1 14 comm.html

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5. "Representing a Client with Diminished Capacity. Where the Law Stands and

Where it Needs to Go". Georgetown Journal of Legal Ethics. Summer 2003

Model Code of Professional Conduct

The proposed code finally has guidance for lawyers acting for clients with diminished capacity.

Keep in mind that Codes of conduct, by there nature, are intended to create standards for the

profession to aspires to rather than to create a textbook on practice. The Rule in Section 2.02

states that'

"when a client's ability to make decisions is impaired because of minority, mental

disability or for some other reason, the lawyer shall as far as reasonably possible

maintain a normal lawyer client relationship."

The lengthy commentary following and explaining the rule reads as follows:

A Lawyer and client relationship presupposes that the client has the requisite

mental ability to make decisions about his or her legal affairs and to give the

lawyer instructions. A Client's ability to make decisions depends on such factors

as age intelligence, experience, and mental and physical health and on the advice

guidance and support of others. A Client may be mentally capable of making

some decisions but not others. The key is whether the client has the ability to

understand the information relative to the decision that has to be made and is able

to appreciate the reasonably foreseeable consequences of the decision or lack of

decision. Accordingly, when a client is, or comes under a disability that impairs

his or her ability to make decisions, the lawyer will have to assess whether the

impairment is minor or whether it prevents the client from giving instructions or

entering into binding legal relationships.


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A lawyer who believes a person to be incapable of giving instructions should

decline to act. Where however, a lawyer reasonably believes that the persons has

no other agent or representative and a failure to act could result in imminent and

irreparable harm, the lawyer may take action on behalf of the person lacking

capacity only to the extent necessary to protect the person until a legal

representative can be appointed. A Lawyer undertaking to so act has the same

duties under these rules to the person lacking capacity as the lawyer would to any

client.

Where a client's incapacity is discovered or arises after the solicitor client

relationship is established the lawyer may need to take steps to have a lawfully

authorized representative appointed, for example a litigation guardian, or to obtain

the assistance of the office of the Public Trustee to protect the interests of the

client. Whether that should be done depends on all relevant circumstances

including the importance and urgency of any matter requiring instructions. In any

event the lawyer has an ethical obligation to ensure that the client's interests are

not abandoned. Until an appointment of a legal representative occurs, a lawyer

should act to preserve and protect the client's interests.

Where there is a legal representative, in some circumstances, the lawyer may

disagree with the legal representatives assessment of what is in the best interests

of the client under a disability. So long as there is no lack of good faith or

authority, the judgment of the legal representative should prevail. If a lawyer

becomes aware ofconduct or intended conduct of a legal representative that is

clearly in bad faith or outside that person's authority and contrary to best interest

of the client with diminished capacity, The lawyer may act to protect those

interests. This may require reporting the misconduct to a person or institution

such as family members or the Public Trustee.


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Where a lawyer takes protective action on behalf of a person or client lacking

capacity the lawyer should be guided by the provisions under rule 2.03

(Confidentiality). If the court or other counsel becomes involved they ought to be

informed of the nature of the lawyer's relationship with the person lacking

capacity

General Principles

The Rule itself is a statement of general principle admonishing lawyers to maintain normal

lawyer-client relationships with persons with diminished capacity to the extent possible. The

starting point is identification of the client. Often there are others, usually family members,

assisting the client with diminished capacity. The code reinforces the idea that lawyers must be

careful to distinguish between the client's interests and instructions and the care-givers interests

and instructions. Maintaining a normal relationship means that the lawyer must respect the

autonomy of the client; hold all communication in confidence and carry out all reasonable

instructions. At the same time, the lawyer must protect the client both from themselves and

others.

The Commentary provides some assistance in making this often difficult analysis.

Assuming Capacity

The commentary begins with the statement that the lawyer-client relationship presupposes the

requisite mental ability. Assumption of capacity is also part of the A.B.A. reports. This means

that lawyers may begin with the assumption that clients have capacity. Unless substantial

evidence of diminished capacity is apparent, no further inquiry is required.

The statement seems at odds with reality. Lawyers usually engage in a form ofprofiling with the

major factor being age. All elderly clients are subject to the scrutiny of an informal evaluation


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even though there is no apparent sign of incapacity. This is probably a wise procedure given that

many learn how to adapt to impairment and mask the signs. Assuming competence may not

meet the standard of care imposed by the courts.

Assessing Capacity

1. Definition of Capacity

The model code provides some assistance defining capacity in a two prong test. First, the client

must be capable of understanding the relevant information. Second, the client must be able to

appreciate the consequences of the decision. The model code also wisely advises that other

factors such as intelligence, experience and health should be considered.

The definition is not comprehensive, but is similar to the usual understanding of lawyers as

enunciated by Maurice J. in Pickering v. Pickering (1985) 38 Sask. R 211 that:

A person is in law mentally incompetent when he is by reason of his mental state

unable to understand the nature and effect of the contract.

The ABA publications listed at the outset have more comprehensive discussions of the objective

signs and the subjective evaluations that are required to determine capacity. For example, the

Bifocal article adds another test by suggesting that lawyers should also consider the client's "set

of values and goals" as a measure. For example in preparing a will, instructions to exclude

family members and leave everything to a charity could either be a sign of great enlightenment

or a sign of impairment. Understanding the gesture requires knowledge of the client's values and

goals.

Another significant area of greater emphasis in the American literature is on emotional factors.

For example person who is grieving may not be in the best position to make decisions and

therefore lacks capacity. This is even more important when emotional issues are compounded by

other factors such as poor health or declining cognitive abilities.


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The model code makes several other important points with respect to the assessment of capacity

as follows.

2. Capacity may Change

Capacity can change for better or for worse and must be continually monitored. For example, if a

person already suffering from diminished capacity becomes ill capacity may be further reduced.

If that person is then prescribed some new pharmaceuticals, the problem may be further

compounded to the extent that the person is no longer able to give instructions. After the illness

subsides and the pharmaceuticals are discontinued the person may regain capacity. It is helpful to

identify the source of the incapacity in order to determine if change is possible.

It may also be possible to compensate for diminished capacity by simply adjusting physical

surroundings. Some clients benefit greatly from consideration of the following:

1. Scheduling meetings early in the day;

2. Scheduling meetings in the client's home;

3. Lengthy or additional interviews to allow the client to process information;

4. Working in quite well lit surroundings.

3. Capacity is task specific

The model code states that the client may be capable of making some decisions but not other. A

good example of this is the way that courts scrutinize an intervivios gift to a much greater extent

then they scrutinize a will.

The basic test of capacity for gift by will as enunciated in Banks and Goodfellow (1870) L.R 5

Q.B. 549.is


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... in order to establish knowledge and approval , a testator must be shown to have

understood the nature of the act and its effects, the extent of the property being

disposed of and the claims to which consideration ought to be given.

The courts have taken a different approach to challenges of wills and challenges of gifts based on

incapacity. For example in Vout v. Hay [1995] 2 S.C.R. the court restated the law for both the

burden ofproof and evidentiary standard for determining the validity of a will. Once the

propounder has proved the execution of the will it is presumed that the testator had capacity,

barring suspicious circumstances.

With Gifts, the Donee has the onus of proving free will. The Saskatchewan Court of Appeal in

Casada v. Casada (1984) S.l No.925 approved the following from Inche Noriah v. ShaikAllie

Din Omar [1929] AC 127, as follows:

It is necessary for the donee to prove that the gift was the result of the free

exercise of independent will. The most obvious way to prove this is by

establishing that the gift was made after the nature and effect of the transaction

had been fully explained to the donor by some independent and qualified person

so completely as to satisfy the court that the donor was acting independently of

any influence from the donee and with the full appreciation of what he was

doing...

The point is that evaluating capacity for a gift is a much more rigorous than evaluating

capacity for a will.

Recognizing Clients with Diminished Capacity

It is difficult for lawyers to recognize diminished capacity. lawyers are not specifically trained to

do assessments. In addition, lawyers usually spend a very limited amount of time with the client.

While the client's friends or family are able to observe the difficulties on a daily basis, these

difficulties may not be apparent during the course of an interview. Finally, capacity is a sliding

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scale ranging from communication deficits to problems which are so severe that a court will strip

the client of all decision making and appoint a guardian. It is difficult and often subjective to

determine where on that continuum the lawyer should decline instructions.

Assessing capacity is a complex subject and not within the scope of this paper. I strongly

recommend reading the A.B.A study and designing a similar checklist. The A.B.A. study lists

red flags including cognitive, emotional and behavioural signs such as memory loss,

communication problems lack ofmental flexibility, calculation problems and disorientation.

The checklist also provides vital documentation of the assessment which must be retained.

Medical Assessment

The A.B.A. paper is once again a helpful authority. It points out two considerations for an

outside assessment. The first is obviously when the lawyer has any doubt as to capacity. The

second is when an extra measure of caution is required. For example, if there is some suggestion

that the content of the will or family dynamics may cause estate litigation. The paper discusses

choosing the clinician, instructing the clinician and interpreting the clinicians work.

The last point, interpreting the clinicians work, is an interesting challenge. In the final analysis,

capacity is a legal issue and not a medical issue. The Lawyer must make the final determination

but should of course exercise great caution if disagreeing with a medical opinion.

Imminent or irreparable harm

The model code allows that where the lawyer:

... reasonably believes that the person has no other agent or representative and a

failure would result in imminent harm, the lawyer may take action on behalfof

the person lacking capacity only to the extent necessary...


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This passage is clearly of benefit to both the lawyer and the client but raises many concerns.

First the phrase "no other agent or representative". Does this include family members? Does

this authorize a lawyer to contact family members and potentially breach solicitor client privilege

for the protection of the client?

The following paragraph of the commentary dealing with abuse by a trustee specifically

authorizes a lawyer to report misconduct to a family member or the Public Trustee.

The last paragraph of the commentary advises that a lawyer taking protective action must be

guided by the confidentiality provisions.

The American Model Code is much more specific and appears to allow for limited contact of

others.

Although we must await further rulings, my view is that the family can be an important resource,

but extreme caution must be used.

The second difficulty is the nature of imminent and irreparable harm. It encompasses a

significant range of events without much guidance

Trustee Acting in Bad faith

Finally if a trustee is appointed the code states that the lawyer should respect the trustee's

decisions unless, " ... the conduct of the representative is clearly in bad faith or outside the

persons authority and contrary to the best interests of the client. .. " The lawyer's obligation to

the person with diminished capacity after the appointment of a trustee appears to be permissive

rather than mandatory. The lawyer may report the trustee to the public trustee or other family

members if the trustees conduct is in bad faith or outside the authority of the appointment. The

lawyer must also make the determination that the conduct is not in the best interest of the person

with diminished capacity.

This section gives the Lawyer some much needed protection to prevent elder abuse.

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Conclusion

Advising the elderly and those with diminished capacity remains part of the general practice of

law. As the number of theses clients grow and the economic value of the issues increase the

practice will evolve into a specialization. Lawyers that want to continue in this area ofpractice

must keep up to date. A good start is reviewing some of the recent literature and creating

checklists.


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APPENDIX

American Bar Association Model Rule

Model Rules of Professional Conduct

Client-Lawyer Relationship

Rule 1.14 Client With Diminished Capacity

(a) When a client's capacity to make adequately considered decisions in connection with a

representation is diminished, whether because of minority, mental impairment or for some other

reason, the lawyer shall, as far as reasonably possible, maintain a normal client-lawyer

relationship with the client.

(b) When the lawyer reasonably believes that the client has diminished capacity, is at risk of

substantial physical, financial or other harm unless action is taken and cannot adequately act in

the client's own interest, the lawyer may take reasonably necessary protective action, including

consulting with individuals or entities that have the ability to take action to protect the client and,

in appropriate cases, seeking the appointment of a guardian ad litem, conservator or guardian.

(c) Information relating to the representation of a client with diminished capacity is protected by

Rule 1.6. When taking protective action pursuant to paragraph (b), the lawyer is impliedly

authorized under Rule 1.6(a) to reveal information about the client, but only to the extent

reasonably necessary to protect the client's interests.

Model Rules of Professional Conduct

Client-Lawyer Relationship

Rule 1.14 Client With Diminished Capacity - Comment

[1] The normal client-lawyer relationship is based on the assumption that the client, when

properly advised and assisted, is capable of making decisions about important matters. When the

client is a minor or suffers from a diminished mental capacity, however, maintaining the ordinary


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client-lawyer relationship may not be possible in all respects. In particular, a severely

incapacitated person may have no power to make legally binding decisions. Nevertheless, a

client with diminished capacity often has the ability to understand, deliberate upon, and reach

conclusions about matters affecting the client's own well-being. For example, children as young

as five or six years of age, and certainly those of ten or twelve, are regarded as having opinions

that are entitled to weight in legal proceedings concerning their custody. So also, it is recognized

that some persons of advanced age can be quite capable of handling routine financial matters

while needing special legal protection concerning major transactions.

[2] The fact that a client suffers a disability does not diminish the lawyer's obligation to treat the

client with attention and respect. Even if the person has a legal representative, the lawyer should

as far as possible accord the represented person the status of client, particularly in maintaining

communication.

[3] The client may wish to have family members or other persons participate in discussions with

the lawyer. When necessary to assist in the representation, the presence of such persons generally

does not affect the applicability of the attorney-client evidentiary privilege. Nevertheless, the

lawyer must keep the client's interests foremost and, except for protective action authorized

under paragraph (b), must to look to the client, and not family members, to make decisions on

the client's behalf.

[4] If a legal representative has already been appointed for the client, the lawyer should

ordinarily look to the representative for decisions on behalf of the client. In matters involving a

minor, whether the lawyer should look to the parents as natural guardians may depend on the

type of proceeding or matter in which the lawyer is representing the minor. If the lawyer

represents the guardian as distinct from the ward, and is aware that the guardian is acting

adversely to the ward's interest, the lawyer may have an obligation to prevent or rectify the

guardian's misconduct. See Rule 1.2(d)~


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Taking Protective Action

[5] If a lawyer reasonably believes that a client is at risk of substantial physical, financial or other

harm unless action is taken, and that a normal client-lawyer relationship cannot be maintained as

provided in paragraph (a) because the client lacks sufficient capacity to communicate or to make

adequately considered decisions in connection with the representation, then paragraph (b)

permits the lawyer to take protective measures deemed necessary. Such measures could include:

consulting with family members, using a reconsideration period to permit clarification or

improvement of circumstances, using voluntary surrogate decision making tools such as durable

powers of attorney or consulting with support groups, professional services, adult-protective

agencies or other individuals or entities that have the ability to protect the client. In taking any

protective action, the lawyer should be guided by such factors as the wishes and values of the

client to the extent known, the client's best interests and the goals of intruding into the client's

decision making autonomy to the least extent feasible, maximizing client capacities and

respecting the client's family and social connections.

[6] In determining the extent of the client's diminished capacity, the lawyer should consider and

balance such factors as: the client's ability to articulate reasoning leading to a decision,

variability of state of mind and ability to appreciate consequences of a decision; the substantive

fairness of a decision; and the consistency of a decision with the known long-term commitments

and values of the client. In appropriate circumstances, the lawyer may seek guidance from an

appropriate diagnostician.

[7] If a legal representative has not been appointed, the lawyer should consider whether

appointment of a guardian ad litem, conservator or guardian is necessary to protect the client's

interests. Thus, if a client with diminished capacity has substantial property that should be sold

for the client's benefit, effective completion of the transaction may require appointment of a legal

representative. In addition, rules of procedure in litigation sometimes provide that minors or

persons with diminished capacity must be represented by a guardian or next friend if they do not

have a general guardian. In many circumstances, however, appointment of a legal representative

may be more expensive or traumatic for the client than circumstances in fact require. Evaluation

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of such circumstances is a matter entrusted to the professional judgment of the lawyer. In

considering alternatives, however, the lawyer should be aware of any law that requires the

lawyer to advocate the least restrictive action on behalf of the client.

Disclosure of the Client's Condition

[8] Disclosure of the client's diminished capacity could adversely affect the client's interests. For

example, raising the question of diminished capacity could, in some circumstances, lead to

proceedings for involuntary commitment. Information relating to the representation is protected

by Rule 1.6. Therefore, unless authorized to do so, the lawyer may not disclose such information.

When taking protective action pursuant to paragraph (b), the lawyer is impliedly authorized to

make the necessary disclosures, even when the client directs the lawyer to the contrary.

Nevertheless, given the risks of disclosure, paragraph (c) limits what the lawyer may disclose in

consulting with other individuals or entities or seeking the appointment of a legal representative.

At the very least, the lawyer should determine whether it is likely that the person or entity

consulted with will act adversely to the client's interests before discussing matters related to the

client.·The lawyer's position in such cases is an unavoidably difficult one.

Emergency Legal Assistance

[9] In an emergency where the health, safety or a financial interest of a person with seriously

diminished capacity is threatened with imminent and irreparable harm, a lawyer may take legal

action on behalf of such a person even though the person is unable to establish a client-lawyer

relationship or to make or express considered judgments about the matter, when the person or

another acting in good faith on that person's behalf has consulted with the lawyer. Even in such

an emergency, however, the lawyer should not act unless the lawyer reasonably believes that the

person has no other lawyer, agent or other representative available. The lawyer should take legal

action on behalf of the person only to the extent reasonably necessary to maintain the status quo

or otherwise avoid imminent and irreparable harm. A lawyer who undertakes to represent a

person in such an exigent situation has the same duties under these Rules as the lawyer would

with respect to a client.


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[10] A lawyer who acts on behalf ofa person with seriously diminished capacity in an

emergency should keep the confidences of the person as if dealing with a client, disclosing them

only to the extent necessary to accomplish the intended protective action. The lawyer should

disclose to any tribunal involved and to any other counsel involved the nature of his or her

relationship with the person. The lawyer should take steps to regularize the relationship or

implement other protective solutions as saari as possible. Normally, a lawyer would not seek

compensation for such emergency actions taken.


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