Caregivers are increasingly being held to a higher legal standard. They are now generally regarded as a “fiduciary” to the person to whom they provide care. A fiduciary has higher obligations legally – caregivers are now in that category.
Historically there are general categories of fiduciary relationships that have evolved in Ontario. They include: agent to principal; lawyer to client; trustee to beneficiary; business partner to partner; and, director to corporation.
Generally, a fiduciary obligation on a person will be imposed when:
- The fiduciary has scope for the exercise of some discretion or power;
- The fiduciary can unilaterally exercise that power or discretion so as to affect the beneficiary’s legal or practical interests; and
- The beneficiary is peculiarly vulnerable to, or at the mercy of, the fiduciary holding the discretion or power.
Vulnerability of the other person is often a key consideration.
This is important if a caregiver, for example (which may include a family member) is added to a bank account of a person in need of care, handles finances for a parent or generally provide financial assistance to, for example, an elderly parent or disabled person.
A recent case in British Columbia illustrates this trend in the law: Reeves v. Dean.
In this case, the caregiver was found to have misappropriated money from a bank account to which the caregiver was added by the person in need of the caregiver services.
There are special remedies available from the Court when it is found that a fiduciary has acted unlawfully. They include: a constructive trust, accounting for profits, compensation to to the aggreived person (to restore them to their former position) and others. Generally, the remedies are identified by the Supreme Court of Canada in Frame v. Smith (1987).
Therefore, if you act as a caregiver, be very mindful of your higher duty.
On the other hand, if you receive, or you know someone who receives, caregiver services (particularly if they related to handling personal finances), be sure to speak to a qualified lawyer if you suspect there has potentially been wrongdoing by the caregiver.
This WARDS PC BLAWG is for general information only. It is not legal advice, or intended to be. Specific or more information may be necessary before advice could be provided for your circumstances.
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