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Record rise in legal action against powers of attorney

10 October 2019

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Court action against people acting with power of attorney on behalf of vulnerable people leapt by 55 per cent in the last year – a record high.

The data obtained by law firm Nockolds, revealed that the Office of the Public Guardian (OPG) made 721 applications to the Court of Protection to censure or remove attorneys in 2018/19, up from 465 the previous year.

The number of legal actions taken against people with power of attorney has more than doubled over the past two years.

Making improper gifts and not acting in the vulnerable person’s best interests were two of the main reasons for having attorneys censured or removed.

In addition to these actions, the OPG launched 2883 safeguarding investigations in 2018/19 – an increase of 54 per cent from the previous year (1871).

According to Nockolds partner Peter King (pictured), it is likely that most misconduct by attorneys does not come to light during the donors’ lifetime and that prosecutions and investigations of attorneys by the OPG represent the “tip of the iceberg”.

The OPG is often tipped off by relatives, care homes and local authorities but these organisations have limited opportunities to identify whether inappropriate transfers have been made, or whether attorneys are really acting in the best interest of vulnerable people.

King said: “The sharp rise in legal actions against attorneys is vastly greater than the increase in the number of attorneys on the register, which suggests that there are some fundamental questions about how the current system operates and whether there are sufficient safeguards at the point at which people register.

Misconduct among attorneys is very difficult to detect, he said, and many LPAs are now created without any professional advice.

“The safeguards introduced in 2007 were watered down from the start meaning that an LPA can be registered after someone known to the donor, but without any relevant professional skills, certifies that the donor understands the purpose of the LPA and the scope of the authority they are giving as well as being sure that no one has unduly  pressured the donor to sign it .”

He said with most banking now conducted online, there is little to no oversight of the transactions that take place, which leaves the system wide open to abuse.

“Attorneys have legal responsibilities under the Mental Capacity Act, which are summarised in five core principles, but with DIY documentation there are no checks and balances to ensure attorneys understand them let alone having any familiarity with the code of practice which accompanies the Act and extends to 300 pages.”

A common mistake attorneys make is assuming they can make decisions on behalf of a relative, without the relative’s approval, rather than helping the relative to make their own decisions, he said. “Attorneys often fail to understand that they have to act in the interests of the vulnerable person and cannot simply second guess their wishes and, for example, claim that paying university fees for the attorney’s children is ‘what they would have wanted’.”

When used correctly, power of attorney can be vital to ensuring the interests of vulnerable people are properly safeguarded, he continued, but the rise in relatives acting as attorneys highlights how important it is to choose wisely when making the appointment – care should be taken where the interests of the attorney are likely to conflict with those the person granting the power.

He concluded: “People often feel obligated to act as attorney for a relative and later find they don't have the time or the energy to discharge their duties adequately. It's better to be honest about this from the start while the relative is still in a position to consider alternatives. Typically, adult offspring are appointed as attorneys, but donors need to be brutally honest with themselves about whether they are suitable. A better alternative might be a professional attorney, who is neutral and can be counted upon to act in the donor’s best interests.”

Categorised in:

Technical legal practice Private client Wills, Trusts & Probate Vulnerable Clients