FREE CHAPTER from ‘A Practical Guide to Elderly Fraud’ by Justin Patten

CHAPTER TWO – CONDUCT OF ELDERLY FRAUD CASES

TIP An important fact to keep in mind is that Elderly Fraud case have a number of unique characteristics which we will cover below. One of the most important skills you can possess as a lawyer is an ability to detach yourself, obtain information, keep an open mind and not rush in such a case. Ultimately what you are trying to do is work out what has happened and then develop a game plan to help your client find the best possible solution. At all points you should be humble enough to change course if the facts from your point of view change. An open minded, low key yet where necessary decisive mentality will serve you and your client well. We are specialists and our clients want us to act forcefully but we need to stay detached, calm and be open.

THE SEVEN INHERENT DIFFICULTIES OF ELDERLY LAW FRAUD CASES

1. COMPLEX – Elderly fraud cases can encompass situations which have happened over years and require significant financial information which is not always easy to discover and can even be time barred. Your client is unlikely to have unlimited resources so you need to be careful before jumping in and making serious allegations. You need to get an overview and ultimately work out what is important.
2. EMOTIONAL – As lawyers we are used to our clients being emotional but Elderly Fraud cases really do up the ante. You need to be careful about being sucked in to this and stay detached. The very nature of these kind of cases are fraught with intense emotions. As a consequence it is easy for your client and perhaps you as the lawyer to make a misstep. You need to be calm and think of long term objectives. In the face of provocative and sometimes emotional opponents and their lawyers, your calmness will serve you well and help you and your client if this matter goes to Court.
3. COVER MULTIPLE LEGAL DISCIPLINES – An Elderly Fraud case can involve a series of different legal arenas including criminal, inheritance, banking and civil law amongst others. Even within these parameters there are a number of possible legal steps that you can take and some of them can be time consuming and expensive. You may need to obtain legal support as and when and/or do your research. The selection of the legal steps is a critical skill.
4. VERY PSYHCOLOGICAL – With elderly fraud cases there is a lot going on beneath the surface. You do not need to understand precisely why but if there is client or oppositional behaviour which does not apparently make sense there may be reasons for this. By way of example, motivations of parties within Inheritance and Elderly Fraud cases can stem from issues related to childhood.
5. STRONG FINANCIAL EMPHASIS – Given that we are dealing with allegations of fraud one of the issues we face is management of financial transactions. This poses issues on obtaining those financial transactions and identifying anything illicit that has gone on a and then presenting the information. This is not necessarily an easy thing to do and an important skill set.

 

TIP Use of money arguments. Particularly when you are dealing with a Judge, how you present information is a critical skill for proving illegal conduct. One of the key skills is to be succinct with the information and highlight clearly alleged financial impropriety.

6. CAN RUN AND RUN – Due to the wide nature of elderly fraud cases and the emotions you can find yourself in a situation where even a case has come to an apparent conclusion your client wants to keep going even when it is clear that they should not. For example, you win on a removal of executor case but there is still some money outstanding and the client is looking to obtain these monies elsewhere or seeks to enforce costs when it is not viable.
7. POSE PRESENTATIONAL DEMANDS WITH THE JUDGE – Even though this is a book about elderly fraud it is worth bearing that judges from our experience do not look like the term fraud and do not like you making these allegations.

TIP One of the biggest errors that we see from barristers and solicitors is the tendency to use the fraud against others. This can manifest in pre-action correspondence or in Appearance documents when one is lodging a Caveat. We will briefly cover Fraudulent Calumny elsewhere but even in the face of strong evidence be very careful how you put allegations of illegality.

A PRACTICAL GUIDE TO DEALING WITH ELDERLY FRAUD CASES

Keep an Open Mind

Evaluate Your Dispute (and Consistently Do So). Due to the emotional nature of elderly fraud disputes and the fact that as a beneficiary you often have limited information, it is very easy to misinterpret what the Executor is up to and to make poor judgment calls as to what are the strengths and weaknesses of a case and what you should do. Effective evaluation comes from consistent probing and a willingness to look at all available facts and ask searching questions of your situation. When we advise on a dispute what we are looking to do is to develop what we call a “Helicopter view” which means, rather than getting sucked into the detail of the case, we are seeking to find a clear and calm overview and help you understand how we think your situation will play out.

Some questions to ask –

• What evidence is there that something untoward has happened?
• To what extent are my views of this matter clouded by my emotions?
• Am I taking a fair stance in making steps to resolve this problem?
• How does any evidence stack up?
• Is there missing evidence I need to have a full picture?
• How will a judge see this if this did go to Court?
• What are my legal and negotiation options?
• What are the costs / benefits of the different options I can take?
• What are the specific legal costs which can be incurred?

Obtain as Much Key Evidence As You Can and Seek to Present It Compellingly

The nature of being in an inheritance dispute is there can be a lot of information which is not within your current knowledge. This can include evidence of the Deceased such as bank statements, medical records and other financial information.

A key skill which can make a significant difference to long term outcomes is the ability to obtain useful (possibly pivotal) evidence which you should be able to do at low cost. The more the beneficiary does this prior to instructing the lawyer the better the outcome. Also we are being honest here but the factual material within inheritance disputes can be, dare we say it, both unnecessarily long and boring. Not only is this potentially expensive for the beneficiary but is an expense which can be avoided. Thus, mastery of evidence and an ability to present this in a compelling and interesting way is a skill which can not only save time and cost in helping your lawyer be informed but also can influence the other side and a Judge.

Keep Emotions In Check

The nature of inheritance disputes often contains family history, and this makes it easy to make overly emotional decisions in dealing with your inheritance problem. This can lead to poor judgment calls and making rash decisions which can hurt you later such as making a judge unimpressed with your conduct. How you (and your solicitor) behave can be a critical component of how successful you will be if the matter goes to Court. Generally, in the face of provocation it will serve your interests to be calmer and it help you and your lawyer make better.

TIP The term “Keep Emotions in Check” is watchword not just for you but primarily your client. Even in the face of strong evidence of elderly fraud it is very easy for our clients to damage their cases(possibly fatally) by even one misstep such as an errant email or a meeting which goes wrong. It is important for you to keep a close eye on your client behaviour and to manage your PR. When can make this difficult is what we see as an increasing tendency of clients to think their views trump your experience.

Narrow The Issues.

From experience we find on elderly fraud case we find a lot of information emerges and sometimes a number of issues emerge. Despite the client pressure to argue points what your objective is to narrow the issues of dispute and not expand them. This helps you keep control of the case.

On elderly fraud cases what I am always trying to do is to identify the core issues (typically no more than five or six) and then focus on these.

Make Thoughtful Open Offers

One of the most important skills a solicitor can make is to make tactical offers which may go before the Court. Traditionally lawyers like to make solely Without Prejudice offers which are not seen by the Judge until after the main issue is determined at Court. I am a firm believer that where you are dealing with an inheritance dispute you should try to put as much as pressure as possible on the opponents by making offers to resolve your inheritance case which you want the Judge to see if the matter goes to Court.(e.g. highlighting your reasonable approach). For an example, even on fraud cases you should be seeking to explore mechanisms to narrow issues. Such an approach can lead to costs awards being awarded in your favour and protecting your client financially.

Select Negotiation and Legal Methods Carefully

As we have demonstrated when you have inheritance problems there are often in fact a number of legal and tactical options which you can use.

Sometimes errors can be made about which is the best method to select. It can be very tempting to jump in to what on the surface looks an appealing option when in fact what you should do is take a different course. The key step which will enable you to make a better decision is doing the Evaluation process thoroughly and then trying to work out what legal and negotiation step is going to get you where you want to be given your situation. That requires good background knowledge of legal and negotiation steps within this arena and an open mind.

Keep In Mind CPR for Negotiation

The Civil Rules state the following:

Settlement and ADR^[1]

8. Litigation should be a last resort. As part of a relevant pre-action protocol or this Practice Direction, the parties should consider whether negotiation or some other form of ADR might enable them to settle their dispute without commencing proceedings.
9. Parties should continue to consider the possibility of reaching a settlement at all times, including after proceedings have been started. Part 36 offers may be made before proceedings are issued.
10. Parties may negotiate to settle a dispute or may use a form of ADR including—

(a) mediation, a third party facilitating a resolution;

(b) arbitration, a third party deciding the dispute;

(c) early neutral evaluation, a third party giving an informed opinion on the dispute; and

(d) Ombudsmen schemes.

(Information on mediation and other forms of ADR is available in the Jackson ADR Handbook (available from Oxford University Press) or at—

https://www.gov.uk/guidance/a-guide-to-civil-mediation

11. If proceedings are issued, the parties may be required by the court to provide evidence that ADR has been considered. A party’s silence in response to an invitation to participate or a refusal to participate in ADR might be considered unreasonable by the court and could lead to the court ordering that party to pay additional court costs.

Within elderly fraud cases you can use mediation and explore other ADR tools.

In my view, this helps your PR.

 

Explore All ADR Methods

One example of ADR is Early neutral evaluation (ENE) is where the parties appoint a neutral third party to give an expert opinion on the probable outcome of the case or particular aspects of the case. The evaluator will usually be a lawyer or an expert in the field and ENE can take place outside of or within the court process. For example, this can be a barrister.

You can arrange ENE yourself or you can see if a Court offers this.

ENE is offered in the Chancery Division by all judges and if it is unsuccessful the judge that undertook ENE will have no further involvement in the case (unless the parties agree otherwise). ENE is usually without prejudice. The opinion of the evaluator is generally non-binding unless the parties agree it should be binding. The evaluator will be more interventionist than a mediator. Instead of acting as a go-between to the parties, the evaluator will state what they think the correct decision is. This may assist in bringing about a settlement, especially if the parties are locked.

ENE is particularly suited to cases where the dispute turns on a point of law or construction.

In the Chancery Guide it states: ‘Although ENE may be unsuitable for multi-faceted complex claims, if a particular issue lies at the heart of the claim an opinion could help unlock the dispute in a way which a mediator cannot. It is particularly suitable where the claim turns on an issue of construction, an issue of law where there are conflicting authorities…’

In 2019 in Lomax v Lomax,^[2] the Court of Appeal held that ENE can be ordered as part of the case management function of the court and the parties do not have to consent. The courts can order the parties to undertake ENE under CPR 3.1(m).

Think Outside The Box

With ADR you can always using barristers as a means to explore viewing documents. Below is part of a draft agreement that we used for attempting to settle a case and illustrates how ADR can be used on a case where as a beneficiary we sought access to bank statements which the Executor was not providing.

1. The agreement is in full and final settlement of all and any claims and applications between the parties, and between your client and the estate.
2. Your client consents to the approval of the final estate accounts as per my clients’ claim and agrees to the final distributions indicated by those accounts subject to the provision for litigation costs immediately below and any further administration expenses incurred.
3. Your client will bear her own costs including her costs of the claim, her application and intended Part 20 claim. My clients’ costs of the claim, the application and the intended Part 20 claim will be borne by the estate subject to detailed assessment on the indemnity basis if not agreed.
4. My clients, through me, will provide to you (and for your eyes only) the bank statements for the deceased’s bank accounts covering the period of the seven years up to the deceased’s death. They will do so within 7 days of your confirmation for your client of the acceptance of these terms.
5. Neither the bank statements nor their contents are to be provided to, seen by, communicated to or in any other way shared with, your client or any third parties save, of course, that you are free to discuss them with me as my clients’ legal representative should you wish to do so, and to state your position as to any inaccuracy in the IHT403 as below. The same confidentiality applies to any additional information which may be volunteered by my clients to you in connection with the accounts. Cheque stubs are not required.
6. The purpose of the provision of such bank statements is for you to consider whether the contents of the form IHT403, identifying the gifts made by the deceased in the last 7 years of her life, are materially inaccurate – which means the omission of any gift or gifts amounting individually to £10,000 or more. Hence your analysis of the bank statements is confined only to those payments in the sum of £10,000 and above, and payments shown in the bank accounts of under £10,000 will, as you say, be ignored. Our clients will nonetheless, and for transparency, provide you with unredacted bank accounts for the 7-year period showing all payments, of whatever sum.

If that disclosure does not demonstrate any material inaccuracy in the IHT403 (and ‘demonstrate’ for these purposes means as would be found by the court applying the civil standard of proof) then a consent order reflecting paragraphs 1 to 3 above shall be filed immediately. To that end those instructing you are invited to sign the attached draft Tomlin order by consent on behalf of your client to be held by my instructing solicitors on the strict basis that it is only to be filed upon your confirmation that the disclosure demonstrates no material inaccuracy in the form IHT403. Obviously we would appreciate it if your confirmation (or any queries you may have prior to that confirmation) be provided as soon as possible but in any event within 14 days of the receipt of the bank statements.

If you are unable to provide that confirmation then you are to identify any alleged inaccuracy and paragraphs 1 to 3 will only apply subject to determination (within the existing proceedings) of any remaining dispute between the parties as to whether or not there is any material inaccuracy in the IHT403 as alleged; and any correction of the estate accounts which may resulting from that alleged inaccuracy.

Litigate Smartly

This means your lawyer trying to retain maximum control and discipline within the litigation process. It requires the solicitor to be successfully and consistently evaluating your case and being discerning in using expert evidence (such as barristers and financial experts). We believe if you are going to use any legal process you have to be extremely careful in the forum you use so time and cost are not unnecessarily wasted especially as there are significant differences in the time frames / service delivery of the Court you can use. e.g. mediation with a good mediator and the High Court with electronic and prompt Court filing are dispute resolution methods we do support provided it is the best option for you at a given me. Litigate Smartly involves skilful wording in correspondence which has maximum influencing impact. Our firm offers clients fixed fees for litigation so we have every motivation to act in a disciplined way on your case.

Manage Cost

You have a professional duty to update your client on the costs position. A key skill is to maintain perspective and not get sucked into endless litigation which means the costs are completely unjustified.

Be Forensic But Not Boring

Within elderly fraud cases it is necessary to be restrained and factual and succinct. However, ensure that you keep your presentation interesting. After all you are trying to apply influence over the other side(their advisors) and ultimately the Judge.

TIP Elderly fraud involve serious allegations Keep yourself anonymous and maintain respect for the other Side. What you do not want to do is to is to make yourself a factor in the case. As a consequence(even in the face of provocation and possible pressure from your client), maintain a low key position.

APPENDIX Extract The Business and Property Courts of England & Wales Chancery Guide 2022

Early neutral evaluation (‘ENE’)

10.18 ENE is a simple, independent evaluation of the merits of a dispute or a particular issue, by a judge or someone with relevant expertise. This evaluation is non-binding and without prejudice unless the parties agree otherwise. It is given after time-limited consideration of core materials, the judge having read or listened to concise submissions.

10.19 The court may order ENE at a case management conference if it deems it appropriate. Following Lomax v Lomax [2019] EWCA Civ 1467, this may be ordered even if one or more party does not consent.

10.20 There is no one type of case which is suitable, though complex factual and legal disputes are generally unsuited to ENE. It can be particularly effective where the claim turns on an issue of interpretation or an issue of law, where the case involves the court forming an impression about infringement of intellectual property rights, or where the case is an appeal against a decision of a lower court, tribunal or office holder.

10.21 ENE may be provided by appropriate third parties or by the court pursuant to its powers under rule CPR 3.1(2)(m) of the Civil Procedure Rules (‘CPR’). If it is provided by the court, the ENE will generally be conducted by a judge of the same level as would be allocated to hear the trial (or appeal), but the parties may agree otherwise.

10.22 There are no set procedures for ENE. The judge who is to conduct the ENE will give such directions for its preparation and conduct as they consider appropriate. The court will usually direct the parties to provide and exchange written position papers and to agree a bundle of core documents. The ENE can be on paper but in some cases the judge will direct a short hearing of up to half a day (2.5 hours).

10.23 Unless the parties have agreed that the ENE will be binding, the court will not retain on the court file any of the papers lodged for the ENE or a record of the judge’s evaluation.

10.24 The judge conducting the ENE will have no further involvement with the claim unless both parties agree otherwise.

10.25 A draft ENE order can be found at Appendix K.

Chancery Financial Dispute Resolution (‘Ch FDR’)

10.26 Ch FDR is a form of ADR in which the court facilitates negotiations and may provide the parties with an opinion about the claim or elements of it. It is without prejudice and non-binding and will not be ordered unless all parties consent.

10.27 It is generally necessary for the parameters of the dispute to have crystallised before a Ch FDR takes place. This will generally not be before completion of statements of case or the exchange of evidence in a Part 8 claim.

10.28 However, if once acknowledgments of service have been filed, the parties consider that an early Ch FDR would be beneficial, they do not need to wait for the first hearing but can make an application using form N244. They should file a consent order substantially in the form to be found at Appendix L.

10.29 At all stages the parties should give careful consideration to what information may need to be exchanged in advance of any Ch FDR to facilitate any negotiations and enable the court to provide an opinion on the claim or particular issues. This may include agreeing to early limited disclosure or expert evidence (see paragraph 10.36). This is particularly important if the Ch FDR is to take place at an early stage.

10.30 The parties should consider who needs to participate in the Ch FDR to ensure it is effective. This includes ensuring all relevant decision makers are present and/or whether representation orders are necessary or appropriate and/or how different interests are to be represented at the Ch FDR.

10.31 If non-parties are to attend (by agreement between the parties) the parties should notify the court and seek permission by letter filed on the CE-File. Usually the court would expect this to be limited to, for example, a family member or close friend supporting a party to the claim. They would have to sign a confidentiality agreement.

10.32 However, if the parties consider it necessary for a non-party to be present for the purposes of the negotiations because they have an interest in or are necessary for any overall resolution of the dispute, but are not a party to the claim itself, consideration should be given to the need for them to sign a confidentiality agreement and/or what role they are to have at the Ch FDR. It may affect the terms and form of any agreement reached by the parties at the Ch FDR and how it is to be approved or implemented.

10.33 Ch FDR has been particularly effective in resolving disputes about shares in property, business partnerships, probate and inheritance.

10.34 Ch FDR will usually be undertaken in London by a Mast Master or an Insolvency and Companies Court Judge and in the B&PC District Registries by specialist B&PC District Judges, or where the case warrants it by a Section 9 Judge.

10.35 Ch FDR is a dynamic process. There will be a Ch FDR meeting in which the court plays the role of both facilitator and evaluator. Parties must be present at this meeting. The court will try to lead the parties to agree terms but will not make a determination. If the parties request it, the court may express an opinion about an issue or the claim as a whole.

10.36 In advance of the Ch FDR meeting the court will give directions which may include directing the parties to exchange and file without prejudice position papers (and direct what is to be addressed) and to lodge a bundle. If expert evidence is likely to be required or helpful for the Ch FDR, the court may permit that evidence to be filed and exchanged for the purposes of the Ch FDR without the need for a CPR compliant report.

10.37 The court will allocate time for initial discussions between the parties before the commencement of the Ch FDR meeting.

10.38 Unless the parties have agreed otherwise, the court will not retain on the court file any of the papers lodged for the Ch FDR or a record of the judge’s opinion.

10.39 The judge conducting the Ch FDR will have no further involvement with the claim.

10.40 A draft Ch FDR order can be found at Appendix L.

MORE INFORMATION / PURCHASE THE BOOK ONLINE

[1]    https://www.justice.gov.uk/courts/procedure-rules/civil/rules/pd_pre-action_conduct#:~:text=Settlement%20and%20ADR,-8.&text=As%20
part%20of%20a%20relevant,their%20dispute%20without%20commencing%20proceedings.

[2]    Lomax v Lomax [2019] EWCA Civ 1467