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Asset manager appointed by linked trust corporation held to be conflict of interest

In Irwin Mitchell Trust Corpn v PW [2024] EWCOP 16, a trust corporation, appointed as property and affairs deputy for a protected person under the Mental Capacity Act 2005, appointed an asset management company that was part of same corporate group as the trust corporation to manage the investment of the protected person’s funds. The Court of Protection held that that appointment operated to the financial advantage of the trust corporation, clearly breaching the rules against conflict of interest, and as such required ratification by the court. The court rejected the trust corporation’s arguments that the potential for conflict had been extinguished by the appointment process and that the appointment had already been authorised by an earlier court decision. The court adjourned the issue of ratification pending further evidence as to whether the appointment would be in the best interests of the protected person.

 

The court acknowledged that this was the first English case on the question of whether the engagement by a fiduciary of a related investment company presented a real possibility of conflict of interest. Although not a pensions case, this decision is likely to be relevant to the question of whether professional pension scheme trustees associated with firms providing other professional services can properly appoint those firms to provide those services to their schemes.

 

A transcript of the judgment can be found here.


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