·      Introduction

·      Economic analysis

·      What impact will BREXIT have on art transactions?

·      Revisiting the Artist’s Resale Right Regulations 2006 through reform or abolition

·      Artist’s Resale Right (‘ARR’)

Introduction

It is an economic fallacy to suppose that by freeing the UK art market from the shackles of ARR through post-BREXIT reform, that the overall volume of art transactions in the UK will increase, thereby swelling the coffers of the treasury to fund public services.

Based upon the expert sectoral market analysis referred to below, it is evident that the opposite is likely to result, because BREXIT will result in an increased regulatory burden and higher transaction costs.

In any event transformation cannot occur during a transition period, and politically ARR is unlikely to be high on the political agenda of whichever party or coalition is in power when BREXIT is implemented.

Liberalisation of Britain’s international trade in art also overlooks the policy rationale underlying the Artist’s Resale Right Regulations 2006 (the ‘Regulations’) (outlined toward the end of the post), which is to give artists an on-going royalty stream from their work – in the same way as authors, musicians and film directors receive royalties from their work – and to enable artists to benefit from the resale of their artworks in the secondary market.

Paragraph 7.1 of the Explanatory Memorandum to the Regulations states, ‘The purpose of the Directive is to reduce distortions in competition resulting from the fact that resale right presently exists in only some Member States (and exists in different forms), while enabling artists to share in the economic success of their works.’

Therefore if ARR is abolished in the UK, art markets elsewhere in the EU will suffer a competitive disadvantage relative to London, because what will emerge will be an unequal playing field for the sale of art in Europe.

Economic analysis

‘In order for the UK to maintain its status in the global art market it must attract the highest priced art available for sale worldwide by providing the most favourable and most competitive conditions. Fine art (paintings, drawings, prints and sculpture) dominates the art market, accounting for 64% of all sales by value in the UK in 2016. The analysis of fine art sales at auction … demonstrates the significance of high value art sales to the British art market … In the UK, although 89% of the volume of all transactions in the market was accounted for by works priced at less than $50,000, they made up just 10% of the value of all sales. 90% of the overall value of the market was accounted for by individual sales of over $50,000. Works priced at over $1 million represented a 57% share, despite accounting for just under 1% of the number of individual transactions. In the market for works priced below $50,000, the US, UK and China accounted for a 67% share by value and 51% of all individual transactions. However in the market priced over $1 million, their combined share rose to 94% (by value) and 92% (by volume).For individual sales over $1 million, the UK accounted for a 22% share by value and 21% by volume of the world market. Within the EU as a whole, 81% of the number of transactions at this level in 2016 were in the UK and an 87% share by value. For individual works sold for over $10 million, the UK accounted for a 24% share by value and volume in 2016. Only 2% of the total value of auction sales over $10 million took place outside the top three markets, and just 3% of all individual transactions. Within the EU as whole, the UK accounted for 91% by value and 89% of all individual transactions above $10 million. Although HMRC’s official figures suggest that the bulk of the trade both in and out of the UK by value is with countries outside the EU, with just 16% of imports into the UK coming from within the EU, and just under 3% of exports destined to countries within the Single Market, this picture is incomplete. HMRC statistics understate the extent of intra-EU trade, because many EU sales under the VAT margin scheme are not necessarily recorded. Additional research carried out in the auction sector in 2016 showed that while the US was the most important trading partner by value, for some of the major auction houses, consignments from EU member states accounted for up to 25% of their UK sales on average, while up to 20% of their exports were destined to EU buyers. In the dealer sector also, the main dealer associations reported that on average between 10% and 22% of dealers’ purchases for subsequent sale were made in the EU, and EU purchasers accounted for 15% – 20% of all their sales. The art market contributes to the UK economy through taxes and levies paid to the Exchequer on sales, trade, incomes and profits. These amounted to an estimated £1.46 billion in 2016. It is worth noting that the fiscal contribution of the art trade has grown at more than double the rate of underlying sales since 2013: sales in the art market increased in value by 15% between 2013 and 2016, whereas the contribution made through taxation increased by 22%.

Sales in the art market are divided into those related to Fine art, which includes paintings, sculptures and works on paper (including watercolours, prints, drawings and photographs); and Decorative art, which includes furniture and decorations (in glass, wood, stone, ceramic, metal or other material), couture, jewellery, ephemera and textiles. The fine art sector dominates in terms of values and accounted for close to 64% of all sales by value in the UK in 2016. Given the significance of the fine art sector, the analysis in this section looks at the sectors that comprise the fine art market. While both dealer and auction data is used to research trends within the market and estimate total sales, precise analyses of prices and individual sales within sectors of the art market relies primarily on auction data, which provides the only large scale, global and publicly available information on individual transactions. The sectoral analysis that follows is based only on auction results In the UK fine art auction sector, Modern and Post War & Contemporary art accounted for a 75% share of sales by value in 2016, a percentage which reflects the global market as a whole. Considering both dealers and auctions, these two sectors represented just over half of the value of the UK art market in 2016. While Post War & Contemporary art remained the largest sector of the fine art market in the UK (with a share of 45%), after two years of growth from 2013 to 2015, sales declined significantly in 2016 (by 32%) to $976 million. Worldwide, sales in this sector also fell in 2016 by 18%. Sales in this sector in the UK are now 37% lower than their peak in 2008 of $1.6 billion. The UK’s share of global sales in the Post War & Contemporary sector fell 3% in 2016 to 14%, and has declined ten percentage points since its high point in 2008 of 24%. However, the UK is by far the largest Post War and Contemporary market in the EU, accounting for 65% of the value of sales and 24% of all transactions in 2016. Within the Post War & Contemporary art sector, sales of work of living artists at auction accounted for 20% of total sales in UK fine art auctions in 2016 (or 44% of the Post War and Contemporary sector by value). Sales in this sub-sector reached $434 million in 2016, a decline of 41% year-on-year (against a global decline of just 7%). The UK accounted for 19% global share of the value of living artists sales at auction in 2016, down from 30% in 2015. Within the EU, the UK accounted for the largest share of sales, with 72% by value and 30% by volume in 2016. European Old Masters dominate the Old Master sector in the UK, accounting for 94% of the value of Old Master sales in 2016, with only 6% of sales accounted for by non-European artists. The UK was the largest sales centre for European Old Master works at auction in 2016 with a share of 43% (up 4% year-on-year). Sales of European Old Masters increased in the UK by 16% in value in 2016, by far the best performing of the fine art sectors. The UK also has the highest share of sales in Europe in the sector, accounting for 71% of the value of EU sales of European Old Master works and 40% of number of lots sold.’

The British Art Market 2017 – An Economic Survey prepared for The British Art Market Federation by Arts Economics.

What impact will BREXIT have on art transactions?

In ‘Brexit: opportunity or threat for the Art industry?’ Macfarlanes LLP conclude: https://www.lexology.com/library/detail.aspx?g=8aec652d-d856-4708-abc1-ec73a6e9882b

‘It is likely that Brexit will make the movement of art between the UK and EU more burdensome and costly, but there are also certain opportunities for the UK art market to benefit from Brexit. However, such changes are unlikely to take effect for some time, particularly as the government has announced its proposal for a transitional / implementation period of “around two years” (which may ultimately be considerably longer than that). If that position can be agreed with the EU, the UK would, during such transitional period, continue to be bound by the existing structure of EU rules and regulations, which would include continued membership of the Customs Union and the Single Market.

This transitional / implementation period would be welcome in providing more much needed time to agree and implement a new trade agreement between the UK and the EU as well as to consider necessary amendments to domestic UK law and the UK’s future relations with other countries. We have in this note considered just a few potential impacts Brexit will have on the art market, but there are many others, including restitution claims for cultural property illegally removed between EU member states and the anti-money laundering regime, which will need to be considered once the position is clearer.’

Revisiting the Artist’s Resale Right Regulations 2006 through reform or abolition

A key opportunity is that Brexit gives the UK Government the opportunity to revisit the Artist’s Resale Right Regulations 2006, either through reform or abolition. The results of a survey of the PAIAM members on ARR are set out before the Appendix to the PAIAM note ‘What impact might Brexit have on the Artist’s Resale Right?’

The artists’ resale right (ARR) gives creators of original works of art (including paintings, engravings, sculpture and ceramics) a right to receive a royalty each time one of their artworks is sold on the secondary market in the UK by an art market professional (e.g. an auction house, gallery or dealer) for more than €1,000. There is an exception: no ARR is due if the seller acting in the course of business acquired the artwork directly from the artist less than 3 years before the sale and the sale price does not exceed €10,000.

ARR affects two major areas of the UK art market – Modern art and Post War & Contemporary.

However as the PAIAM Note states,

‘Despite fears that the introduction of ARR would negatively impact the UK art market and divert sales to non-ARR markets, there has been no evidence to date to support this. In 2006 when ARR came into play in the UK, The European Fine Art Federation (TEFAF) published a report that valued the UK art market at over £8.5 billion.61 Although the global art market felt the impact of the recession – contracting 41% in 2009 from its peak in 2007, by 2010 the global art market was in recovery and rose by 51% to €43 billion.

In 2011, the European Commission’s report on ARR concluded that “no clear patterns can be established to link the loss of the EU’s share in the global market for Modern and Contemporary art with the harmonisation of provisions relating to the application of the resale right in the EU on 1 January 2006.”

Looking at the recent figures in TEFAF’s latest report, the global art market in 2014 has reached its highest ever-recorded level – a total value of €51 billion worldwide and a 7% year-on-year increase from the 2007 pre-recession level.

This growth trend was also evident in the UK which grew 17% in 2014, increased its own market share by 2% and was valued at €11.4 billion (approximately £9 billion and higher than its value in 2006 when ARR was introduced). In context, the ARR royalties distributed by DACS represent just 0.1% of the total market value in 2014. Auction sales are also on the rise. According to the report, public auction sales accounted for 48% of the overall market in 2014 with total sales exceeding the peak in the market in 2007 and have recovered value by 88% since their low point in 2009.

Post War and Contemporary art sales at auctions, which make up 48% of all global fine art sales followed by modern art at 28%, have grown to record levels as well. In 2014 Post War and Contemporary sales saw an all-time high of €5.9 billion globally, which has sharply risen since its post-crash low of €1.42 billion in 2009. These two sectors are predominately responsible for ARR royalties with modern art covering artists born between 1875 and 1910 and Post War and Contemporary for artists born after 1910. In the UK Post War and Contemporary art sales represent €1.1 billion and modern art sales €753 million – both increasing on the previous year’s figures.

Compared to ARR royalties DACS collected in 2014, this represents just 0.64% of the Post War and Contemporary and Modern art sales in the UK. The royalties collected and distributed for ARR are only a minor fraction of a strong Contemporary and Modern art market. Furthermore, a survey of art dealers at the London Art Fair revealed that their biggest concerns are business rates and rents; nonetheless, 85% of those surveyed believed that the British Modern and Contemporary art market in 2016 would remain strong or fare better.

Lastly, visual arts as part of the wider UK creative industries is immensely valuable to the UK economy. For every £1 of Gross Value Added (GVA) by the arts and culture industry, an additional £1.43 of GVA is generated in the wider UK economy. Overall, visual arts contribute US $3 billion GVA to the UK economy each year and employs more than 37,000 people.’

Artist’s Resale Right (‘ARR’)

In the UK, the Regulations created an intellectual property right (“resale right”) which was previously unknown to United Kingdom law.

The Regulations implemented Directive 2001/84/EC of the European Parliament and of the Council on the resale right for the benefit of the author of an original work of art (‘the Directive’).

The Directive entered into force on 13 October 2001 and required transposition into national law by 1 January 2006.

The Directive was an internal market measure adopted under Article 95 of the EC Treaty which required Member States to introduce a harmonized right for authors of an original work of art, and their successors in title, to benefit from a share of the proceeds when the artists’ works are resold on the art market.

The Regulations introduce a new right which has not previously existed in the UK, although it has existed in several other EU Member States. The Directive has also been extended to the European Economic Area.’

Article 3 of the Regulations states,

‘3.

(1) The author of a work in which copyright subsists shall, in accordance with these Regulations, have a right (“resale right”) to a royalty on any sale of the work which is a resale subsequent to the first transfer of ownership by the author (“resale royalty”).

(2) Resale right in a work shall continue to subsist so long as copyright subsists in the work.

(3) The royalty shall be an amount based on the sale price which is calculated in accordance with Schedule 1.

(4) The sale price is the price obtained for the sale, net of the tax payable on the sale, and converted into euro at the European Central Bank reference rate prevailing at the contract date.

(5) For the purposes of paragraph (1), “transfer of ownership by the author” includes in particular—

(a)      transmission of the work from the author by testamentary disposition, or in accordance with the rules of intestate succession;

(b)      disposal of the work by the author’s personal representatives for the purposes of the administration of his estate; and

 

(c)       disposal of the work by an official receiver (or, in Northern Ireland, the Official Receiver for Northern Ireland) or a trustee in bankruptcy, for the purposes of the realisation of the author’s estate.

Regulation 9(1) further provides ‘Subject to regulation 10(2), resale right in respect of a work is transmissible as personal or moveable property by testamentary disposition or in accordance with the rules of intestate succession; and it may be further so transmitted by any person into whose hands it passes.’

Resale right may be transmitted to:

1.      a natural person (and where it is transmitted to more than one person, it shall belong to them as owners in common); or

2.      a qualifying body.

Regulation 11 further provides that nothing in Regulation 9 prevents a resale right from being held, and exercised in respect of a sale, by any person acting as trustee for the person who would otherwise be entitled to exercise the right (“the beneficiary”), or from being transferred to such a trustee, or from the trustee to the beneficiary.

ARR entitles visual artists or their heirs to receive a royalty payment each time their work is sold on the secondary market in the UK through an auction house, gallery or dealer. The royalty is calculated as a percentage of the sale price, on a sliding scale ranging from 0.25 per cent to 4 per cent, subject to exemptions and a cap of €12,500 – see Schedule 1 of the Regulations.

The right lasts for as long as the copyright in the work subsists, which is normally for 70 years after the death of the artist. It may accordingly be

inherited by the artist’s successors. Two points arise from the fact that resale right was previously unknown to United Kingdom law. The first is that, where an artist dies before the Regulations come into force, there will at that time have been no resale right to pass to a successor. In regulation 16, the Regulations accordingly make provision for which of the artist’s successors is to be regarded as holding resale right in such circumstances. The second point is that the Article 8(2) of the Directive provides a special derogation which is limited to those Member States which did not previously have resale right in their national law. Such a State may prevent the successors of a deceased artist from exercising their resale right until 1st January 2010. Regulation 17 takes advantage of that derogation.

Resale right is declared by the Directive to be inalienable, and accordingly may neither be assigned nor waived. This principle is implemented in regulations 7 and 8. The limited exceptions provided by regulation 7(3) (transfer between charities) and regulation 11 (transfers of legal title to trustees) are not in reality a derogation from that principle, as the beneficial ownership of resale right is not thereby affected.

The Regulations also impose certain nationality requirements on the enjoyment of resale right (see regulation 10) . Only an EEA national, or a national of a country specified in Schedule 2, may benefit from resale right. This reflects the fact that (leaving aside EEA nationals, who must be treated equally with United Kingdom nationals) resale right is a right enjoyed on the basis of reciprocity. Thus only the nationals of countries which make resale right available to EEA nationals may benefit from the rights given under the Directive. That principle is also applied to charitable bodies, which may benefit from resale right only where they are based in such a country.

I have been invited to write an article for publication in the Autumn edition of the Expert Witness Journal, ahead of the Bond Solon annual international Expert Witness Conference in London on 9 November 2018, entitled, ‘The Advocate and the Expert in the Court of Protection’. The following is an extract from the first draft which was submitted to the publisher 13.02.2018, and the final draft which will take into account all cases decided in the Court of Protection up to July 2018, is scheduled for submission on 30 August.

For more information about Mental Capacity Law and Practice please visit the Court of Protection and Judicial Review Proceedings page at www.carlislam.co.uk

Inquisitorial method

In contrast to the adversarial method, which aims to get at the truth by two competing parties arguing their case and the judge deciding whose case is the strongest, the COP operates an ‘inquisitorial’ method, the aim of which is to get at the truth through extensive investigation and examination of all of the evidence. The opinions of professionals will be admitted as ‘expert’ evidence but considered alongside factual evidence from those who know the individual and will only be persuasive if the experts have been given all relevant information and applied the appropriate legal test. The starting point for assessing someone’s capacity to make a particular decision is always the assumption that the individual does have capacity.

What you are asking the judge to decide

‘[All] Courts make decisions on the evidence that is presented [and] to that extent, the Court is the servant of the evidence that is provided by the parties … [Whilst] the Court has an overall directing role in identifying the type and nature of evidence that it requires to make decisions, [because] ultimately those decisions must be faithful to the evidence that is capable of being accepted … It would … be illogical for the Court to arrive at a different position from that which is jointly argued for on the basis of evidence which is jointly accepted as valid.’ (Her Honour Judge Parry in MB v Surrey County Council [2017] EWCOP B27 (16 October 2017). While it is difficult for a court to take a different approach to that of the parties, the court’s jurisdiction is ultimately an inquisitorial one, and ultimately capacity is a question of fact for the court to decide itself, on the balance of probabilities, taking into account the asymmetry introduced by the presumption of capacity. An adult is presumed to have the mental capacity to make a particular decision, until the contrary is proved, Mental Capacity Act 2005 (‘MCA 2005’), Section 1(2) (the ‘Statutory Presumption’). The burden of proof rests on those asserting that the individual does not have the capacity to take the particular decision in question. In deciding whether or not someone has capacity to enter into a particular transaction or make a particular decision, the standard of proof is the civil standard, the balance of probabilities, MCA 2005, Section 2(4). In other words having decided what the facts are, and having applied the law to those facts, the judge must decide whether on balance the individual is more likely to have capacity, or more likely to lack capacity to do something.

As observed by District Judge Glentworth in SL, Re [2017] EWCOP 5 (31 March 2017):

‘In CC v. KK and STCC [2012] EWHC 2136 (COP) Mr Justice Baker set out what is required of the court when assessing capacity at paragraph 24 as follows, “… when assessing the ability of P to (a) understand the information relevant to the decision (b) retain that information, and (c) use or weigh that information as part of the process of making the decision, the court must consider all the evidence, not merely the views of the independent expert. In many cases, perhaps most cases, the opinion of the expert will be confirmed by the other evidence, but inevitably there will be cases where the court reaches a different conclusion.’

… Bailey v. Warren [2006] EWCA Civ 51 also makes it clear that the judge is best placed to consider how the nature of the particular proceedings impacts on the issue of capacity as well as the type of decisions which are likely to arise as part of the proceedings. Reference is made to the Civil Procedure Rules 1998 (CPR) and specifically to rule 21 which has now been amended to take account of the provisions of the MCA. Rule 21.2 CPR provides that a protected party must have a litigation friend to conduct proceedings on her behalf. A protected party is defined at rule 21.1 as, ‘a party or an intended party who lacks capacity to conduct the proceedings’. Rule 21.1(c) provides that the phrase ‘lacks capacity’ means lacks capacity within the MCA.’

Where having regained capacity to make decisions about his care P, refuses care resulting in loss of capacity to make decisions about care, the court has the power to make ‘contingent’ declarations and decisions in order to put in place a safety net regime.

Best interests decision-making

The defining characteristic of proceedings in the Court of Protection (‘COP’) is ‘best interests’ decision making, which requires that P’s interests are paramount. The legal framework was recently stated by Mr Justice Hayden in Abertawe Bro Morgannwg University Local Health Board v RY & Anor (Rev 1) [2017] EWCOP 2 (08 February 2017) as follows:

‘The starting point for consideration of “best interests” is s4 Mental Capacity Act 2005. In this case a number of the s4 provisions require to be highlighted:

(6)     He must consider, so far as is reasonably ascertainable—

(a)     the person’s past and present wishes and feelings (and, in particular, any relevant written statement made by him when he had capacity)

(b)     the beliefs and values that would be likely to influence his decision if he had capacity, and

(c)     the other factors that he would be likely to consider if he were able to do so.

(7)     He must take into account, if it is practicable and appropriate to consult them, the views of—

(a)     anyone named by the person as someone to be consulted on the matter in question or on matters of that kind

(b)     anyone engaged in caring for the person or interested in his welfare,

(c)     any donee of a lasting power of attorney granted by the person, and

(d)     any deputy appointed for the person by the court,

The Code of Practice to the Mental Capacity Act also require careful consideration…

I note that in Wye Valley NHS Trust v B [2015] ECOP 60 Peter Jackson J was also able to identify what he termed P’s “intrinsic nature” and “core qualities” which weighed heavily in the balance when evaluating ‘best interests’.

In London Borough of Brent v NB [2017] EWCOP 34 (25 October 2017), Her Honour Judge Hilder summarised the law as follows:

‘Fundamental to the Court’s consideration of DY’s [the case manager] proposal is the principle set out at section 1(5) of the Mental Capacity Act 2005: an act done, or decision made, under this Act for or on behalf of a person who lacks capacity must be done or made, in his best interests.

Section 4 of the Act provides that

(1)     In determining for the purposes of this Act what is in a person’s best interests, the person making the determination must not make it merely on the basis of –

(a)     The person’s age of appearance, or

(b)     A condition of his, or an aspect of his behaviour, which might lead others to make unjustified assumptions about what might be in his best interests.

(2)     The person making the determination must consider all the relevant circumstances and, in particular, take the following steps.

(3)     He must consider –

(a)     whether it is likely that the person will at some time have capacity in relation to the matter in question, and

(b)     if it appears likely that he will, when that is likely to be.

(4)     He must, so far as is reasonably practicable, permit and encourage the person to participate, or improved his ability to participate, as fully as possible in any act done for him and any decision affecting him.

(5)     Where the determination relates to life-sustaining treatment he must not, in considering whether the treatment is in the best interests of the person concerned, be motivated by a desire to bring about his death.

(6)     He must consider, as far as is reasonably ascertainable –

(a)     the person’s past and present wishes and feelings (and, in particular, any relevant written statement made by him when he had capacity),

(b)     the beliefs and values that would be likely to influence hid decision if he had capacity, and

(c)     the other factors that he would be likely to consider if he were able to do so.

(7)     He must take into account, if it is practicable and appropriate to consult them, the views of –

(a)     anyone named by the person as someone to be consulted on the matter in question or on matters of that kind,

(b)     Anyone engaged in caring for tha person or interested in his welfare,

(c )    Any done of a lasting power of attorney granted by the person, and

(d )    Any deputy appointed for the person by the court,

as to what would be in the person’s best interests and, in particular, as to the matters mentioned in subsection (6).

In seeking to apply the provisions of section 1 and section 4 of the Act, I derive some assistance from the judgment of Munby J (as he then was) in the matter of ITW v. Z, M & Ors [2009] EWHC 2525 at paragraphs 32 – 36:

“[32] i)….the statute lays down no hierarchy as between the various factors which have to be borne in mind, beyond the overarching principle that what is determinative is the judicial evaluation of what is in P’s “best interests”.

ii)…the weight to be attached to the various factors will, inevitably, differ depending upon the individual circumstances of the particular case. A feature of factor which in one case may carry great, possibly even preponderant, weight may in another, superficially similar, case carry much less, or even very little, weight.

iii)….there may, in the particular case, be one or more features of factors which….are of “magnetic importance” in influencing or even determining the outcome….

[35] i).. P’s wishes and feelings will always be a significant factor to which the court must pay close regard:

1. ii) …the weight to be attached to P’s wishes and feelings will always be case-specific and fact-specific… One cannot, as it were, attribute any particular a piori weight or importance to P’s wishes and feelings: it all depends, it must depend, upon the individual circumstances of the particular case. And even if one is dealing with a particular individual, the weight to be attached to their wishes and feelings must depend upon the particular context; in relation to one topic P’s wishes and feelings may carry great weight whilst at the same time carrying much less weight in relation to another topic.

iii)…in considering the weight and importance to be attached to P’s wishes and feelings the court must of course, and as required by section 4(2) of the 2005 Act, have regard to all the relevant circumstances. In this context the relevant circumstances will include, though I emphasis that they are by no means limited to, such matters as:

1. a) The degree of P’s incapacity, for the nearer to the borderline the more weight must in principle be attached to P’s wishes and feelings…
2. b) The strength and consistency of the views being expressed by P;
3. c) The possible impact on P of knowledge that her wishes and feelings are not being given effect to…
4. d) The extent to which P’s wishes and feelings are, or are not, rational, sensible, responsible and pragmatically capable of sensible implementation in the particular circumstances; and
5. e) Crucially, the extent to which P’s wishes and feelings, if given effect to, can properly be accommodated within the court’s overall assessment of what is in her best interests.

I also have regard to the decision of the Supreme Court in Aintree University Hospitals NHS Foundation Trust v. James [2013] UKSC 67. Baroness Hale noted that the Act gives limited guidance about best interests. At [39] she said:

“The most that can be said, therefore, is that in considering the best interests of this particular patient at this particular time, decision-makers must look at his welfare in the widest sense, not just medical but social and psychological; they must consider the nature of the medical treatment in question, what it involves and its prospects of success; they must consider what the outcome of that treatment for the patient is likely to be; they must try and put themselves in the place of the individual patient and ask what his attitude to the treatment is or would be likely to be; and they must consult others who are looking after him or interested in his welfare, in particular for their view of what his attitude would be.”

As she went on [44 – 45], the purpose then of the best interests test is “to consider matters from the patient’s point of view.”

Where the protected person is able to express wishes and feelings about the decision in issue, the Court must decide what weight to give them. I have regard to the decision of Jackson J in X NHS Trust v. B (by his Litigation Friend, the Official Solicitor [2005] EWCOP 60. He concluded that Mr. B lacked capacity to make a decision concerning surgery, and went on to consider the weight to be given to his expressed wishes, in particular at paragraph 10:

“…there is no theoretical limit to the weight or lack of weight that should be given to the person’s wishes and feelings, beliefs and values. In some cases, the conclusion will be that little weight or no weight can be given; in others, very significant weight will be due.

This is not an academic issue, but a necessary protection for the rights of people with disabilities. As the Act and the European Convention make clear, a conclusion that a person lacks decision-making capacity is not an ‘off-switch’ for his rights and freedoms. To state the obvious, the wishes and feelings, beliefs and values of people with a mental disability are as important to them as they are to anyone else, and may even be more important…. For people with disabilities, the removal of such freedom of action as they have to control their own lives may be experienced as an even greater affront than it would be to others who are more fortunate.”

I have considered also the decision of the Court of Appeal in K v. A Local Authority [2012] EWCA Civ 79. The circumstances of that case included a concern that P was in an environment in which he could not articulate his own wishes, as opposed to what he believed to be the wishes of his father; and the proposal in issue was a move to supported living on a trial basis. The first instance judge had cited with approval the following passage from another case:

…it is very much the approach when dealing with incapacitated adults that the medical, educational and social authorities do their very best to nurture and facilitate any skills which the incapacitated adult may have to help them in moving, where possible, towards a greater degree of independence in the way they live their lives. Thus whilst in many cases the family may be the providers of care and nurture for such adults, there seems to me to be a philosophical and practical shift towards ensuring as great a degree of independence in living arrangements as is possible.”

In the Court of Appeal, Thorpe LJ said at paragraphs 30 and 35:

“In my judgment it is unnecessary to enter any investigation of social care policy or whether have been philosophical and practical shifts. …. The safe approach of the trial judge in Mental Capacity Act cases is to ascertain the best interests of the incapacitated adult on the application of the s 4 checklist. The judge should then ask whether the resulting conclusion amounts to a violation of art 8 rights and whether that violation is nevertheless necessary and proportionate.”’

In DM v Y City Council [2017] EWCOP 13 (15 June 2017), commenting upon the weight to be attached to P’s wishes and feelings The Honourable Mr Justice Bodey remarked:

‘A major consideration under S4 of the Act is the individual’s past and present wishes and feelings and the beliefs, values and other factors which the individual would be likely to consider if he had the capacity to do so.  Plainly the weight to be attached to those wishes and feelings is case specific and fact specific.  Everything depends on the individual circumstances of the particular person concerned and the particular case.  I have to bear in mind how near to the borderline of capacity [P] is; the nearer the line the more weight may be attached to his wishes and feelings.  I must also pay regard to the strength and consistency of the views which he has expressed about being able to drink, together with the possible adverse impact on him (anger, disappointment, frustration etc) of knowing that his wishes and feelings have not been allowed to prevail.

The purpose of the ‘best interests test’ is to look at matters from the incapacitated person’s point of view (Aintree University Hospitals NHS Foundation Trust -v- James [2013] UKSC 76).  As Munby J, as he then was, said in Local Authority X -v- MM & Another [2007] EWHC 2003 at paragraph 120: “Physical health and safety can sometimes be bought at too high a price in happiness and emotional welfare.  The emphasis must be on sensible risk appraisal, not striving to avoid all risk whatever the price, but instead seeking a proper balance and being willing to tolerate manageable or acceptable risks as the price appropriately to be paid in order to achieve some other good – in particular to achieve the vital good of the elderly or vulnerable person’s happiness.  What good is making someone safer if it merely makes them miserable?”’