LPAs: Safeguarding the client or facilitating abuse by attorneys?

In the last few years the Office of the Public Guardian (OPG) has reported a significant increase in the number of lasting powers of attorney (LPAs) registered. To coincide with the UN’s World Elder Abuse Awareness Day today, it is worth reflecting on whether the much-heralded LPAs are still able to provide the necessary protective measures which the government introduced back in 2005 with the passing of the Mental Capacity Act.

The 2015/16 OPG annual report showed that a total of 533,229 LPAs were registered with the OPG in that year. This was an increase of 36.31 per cent over the previous year. There is reason to be heartened that so many are executing LPAs and having them registered. LPAs provide a legal framework for delegating decision making which will endure through a donor’s mental incapacity. There is now, however, a concern that some attorneys are taking advantage of the ease with which LPAs can be prepared and how they can offer unlimited access to the donor’s property and finances.

The Law Commission report no 231 in 1995 had recommended (see paragraph 7.27) creating much more stringent formalities for execution than those that had been imposed in relation to enduring powers of attorney. The original format of LPAs included protective measures to ensure that notice of registration was given to a third party and that the qualification to act as the certificate provider was stated on the form. There are notes now provided by the OPG that positively discourage donors from taking legal advice.

That Law Commission report had provisionally proposed that the donor’s capacity to execute should be certified by a solicitor and a doctor at the time of execution. Clearly that was too burdensome to be practical. However, the removal of any requirement now for any professional input in the execution of LPAs is a step too far. It is difficult to see how this affords any protection to the donor or how the OPG can police abuse of the execution process. LPAs are not supervised unless and until the OPG has been notified that there are suspicions of abuse taking place.

It is of concern to practitioners that the drive towards digitisation of government services is now being extended to the creation of LPAs. The forms can now be downloaded, printed off, and signed without any professional advice. Furthermore, the online search facility is open to the public. This allows anyone to find out key personal details about another person’s private legal affairs. For example, it is possible to find out the names of someone’s attorneys, how they are to take decisions, and whether any conditions or restrictions apply. Surprisingly, the Data Protection Act does not apply to this information.

Concerned practitioners rightly see that increased digitisation (for example, the OPG wants the removal of wet signatures from the forms) will assist the fraudulent creation of LPAs, discriminate against the elderly, and avoid obtaining legal advice. It would be helpful if the OPG online guidance gave donors warnings about the possibility of financial abuse by their attorneys. The ease with which attorneys can redirect funds to their own accounts, arrange sales of property and investments, and make gifts without any supervision must be a cause of concern where so many have now signed LPAs. An OPG strategy to address this problem would be welcomed by professionals and an indicator that financial abuse of the elderly is being taken seriously by the OPG and the government.

Ann Stanyer is a partner in the private client team at Wedlake Bell and the author of Financial Abuse of Older Clients: Law, Practice and Prevention (Bloomsbury Professional 2017)

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