Stubbornly rooted

It has now been almost eight years since the introduction of lasting powers of attorney (LPAs) in England and Wales, which replaced enduring powers of attorney (EPAs) in 2007. The change was intended to protect against perceived 'abuse', but few practitioners have welcomed it.

Lawyers and lay people alike have struggled with the statutory forms and many have fought bureaucratic battles with staff within the Office of the Public Guardian (OPG). Moreover, an interventionist approach to LPAs by the Public Guardian has made it increasingly difficult for donors, particularly those who are not professionally advised,
to be sure that their objectives will be achieved.

With the introduction of new statutory forms in July 2015 and the recent landmark Court of Protection decision in the case of Re XZ [2015] EWCOP 35, LPAs are in the spotlight. This may be an opportune moment to consider whether the current arrangements are fit for purpose.

LPA forms

The new statutory forms are less voluminous than their predecessors,
the main saving in paper coming from the fact that the separate forms formerly used to apply for registration have been abandoned. However it remains the case that the forms used to create LPAs are over 10 pages long. This compares unfavourably with the concise forms that could be used to create EPAs previously.

The previous LPA forms required either two certificate providers to verify that the donor understood the authority he was giving under the LPA, or one certificate provider coupled with a nomination of persons who would be notified of the application for registration. The current LPA forms require just one certificate provider, which is an obvious improvement.

Execution

It remains the case that the various parts of the LPA form needs to be signed in a specific order. Any failure to comply with the strict requirements for execution of the form tends to be treated severely, with the application for registration being rejected. The usual result is that the whole process has to be started again, incurring further fees payable to the OPG, for what may be a trivial technical defect - for example, a manuscript amendment being initialled by the donor, but not by the corresponding witness.

As a result, more often than not, donors are forced to obtain professional assistance in completing the forms, leading to an unwelcome (and arguably unjustifiable) additional cost to the exercise, which can act as a deterrent to putting LPAs in place at all.

The new forms are welcome, but they need to be coupled with a sympathetic approach to minor deficiencies.

Inflexibility

The donor-attorney relationship is essentially one of agency. It should therefore be possible for a donor to grant an authority to act on his behalf which is subject to such restrictions or conditions as he deems fit, provided that no law is being infringed. In practice, however, it can be very difficult for donors to put LPAs in place that fully reflect their personal wishes. The following are just a selection of the problem areas.

Joint appointments

Donors have the option of appointing attorneys to act jointly (i.e. unanimously) or jointly and severally (i.e. independently of each other).

If one attorney under a joint appointment is unable to act for any reason (i.e. as a result of their death or mental incapacity), the donor would often wish that the remaining original attorney(s) continue to act. However in Re Druce (2011), the Court of Protection held that if one attorney under a joint appointment is unable to act, the entire joint appointment comes to an end.

This is troubling for donors. In theory, this problem can be circumvented through the use of multiple LPAs. The idea is that a clutch of LPAs are put in place concurrently, each one appointing the same set of individuals as attorneys in the first instance, and appointing various combinations of some of those individuals as replacement attorneys.

There is nothing in the legislation to prevent this, but it is understood that the Public Guardian is currently seeking to challenge multiple LPAs of this kind. So unless the matter is litigated and the Public Guardian's position on this is shown to be wrong, there are practical difficulties with this approach.

Many practitioners consider the decision in Re Druce to be incorrect.
It is certainly difficult to comprehend the mischief that it is supposed to address.

Majority decision-making

It is currently impossible for donors to appoint attorneys to act by majority (which is in contrast to the position with trustees, directors etc). Again, there appears to be no good reason for this. It is a reasonable thing for a donor to want.

Interaction with Advance Decisions

Donors often wish to appoint attorneys under a Health and Welfare LPA to make medical decisions on their behalf, while retaining the flexibility to also put in place an Advance Decision (refusing consent to certain treatments in certain circumstances) to operate in conjunction with the LPA.

This may be attempted through a restriction in the LPA, confirming that the power conferred on the attorneys is subject to any Advance Decision already in place, or is put in place in the future.

The Public Guardian's stance on such restrictions is inconsistent. In some cases, the restriction is accepted and in others, the Public Guardian contends that the restriction is only valid to the extent that an Advance Decision is already in place. There appears to be no legal basis for this, particularly if the interaction of the attorneys' authority with the Advance Decision is clear in the LPA itself.

Third party verification of incapacity

Donors, particularly wealthy ones, often have concerns about giving attorneys control over their finances in circumstances where there may be some doubt as to whether mental capacity has been lost.

To alleviate their concerns, they may wish to impose specific conditions in the LPAs (for example in relation to medical opinions which must be sought regarding incapacity) before the attorneys have authority to act.

Such restrictions are often (purportedly) struck out by the Public Guardian as being 'ineffective' or 'unworkable', notwithstanding that there is no legal basis for striking out LPA provisions on these grounds. This was the premise of the recent case of Re XZ. Rather unusually, the donor in that case had the financial resources and inclination to challenge the Public Guardian's.

In a landmark decision, the court held that the restrictions in the LPA were valid, as they did not infringe any provision of the MCA 2005 or the common law of agency. It was confirmed that, fundamentally, a donor is free to decide on the conditions he wishes to include in an LPA, and it is irrelevant that a provision may be onerous for his attorneys or may appear unworkable to the Public Guardian.

The court further reminded the Public Guardian that his role is limited to considering whether restrictions and conditions are, in law, incapable of being included in an LPA - it is not for the Public Guardian to consider whether restrictions are workable or sensible.

The decision in Re XZ is a significant step in the right direction, where the interpretation of LPAs is concerned. However, clearly it does not, by itself, address the various other practical and legal issues noted above.

Donors rights

Most other jurisdictions allow donors almost complete freedom as to the content of enduring/lasting power of attorney documents. It is regrettable that in England, we seem to have somnambulated into the creation of a regime under which donors are constrained to use restrictive statutory forms, and in which reasonable wishes are so frequently thwarted by unhelpful interpretations of statute and by bureaucratic obstructiveness.

It is, perhaps, paradoxical that a country that holds testamentary freedom to be sacrosanct has so lightly thrown away the freedom for an individual to grant powers of attorney which reflect his wishes about how his property should be dealt with, and how he should be looked after, while he is still alive.

The oppressive LPA regime which is currently in place is, surely, difficult to justify. English donors should have the same freedoms and rights, where LPAs are concerned, as their European and North American counterparts. It is hoped that the court decision in Re XZ will prove to be a turning point. 

Dominic Lawrance is a partner at Charles Russell Speechlys and Radhika Mehta is an associate at the firm

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