Super powers of attorney: the digital miracle?
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Making lasting powers of attorney easily available online shouldn't mean we forget that they raise complex issues or result in the lowering of safeguards, writes Jean-Yves Gilg
The number of lasting powers of attorney registered with the Office of the Public Guardian has shot up dramatically in the past few years. The latest figures show applications for the registration of LPAs rose by more than a third last year, to 533,229, with 1,870,393 powers of attorney on the OPG’s register at the end of March. Since then, the OPG has received an average of 11,191 applications per week, putting the 2016/17 accounting period on course to reach a record 581,900 applications.
In many respects, this is good news, especially in the light of cases such as Briggs or Conway, which have highlighted the practical and emotional challenges in circumstances where there are no LPAs in place.
But the success of the new powers of attorney, introduced by the Mental Capacity Act 2005 to replace enduring powers of attorney, means there are now ‘an awful lot of attorneys who don’t always know what to do’, according to Heledd Wyn, a solicitor at Mowbray Woodwards. What’s more, the apparent ease with which they can be filled in online raises serious concerns over whether donors truly understand the legal implications.
Growing popularity
Powers of attorney have long been a favourite option for donors seeking to delegate the management of financial affairs in the event that they lose capacity. Their effectiveness varied. With no mandatory registration, the old EPAs could end up forgotten in a drawer, and their relative simplicity meant they sometimes lacked clarity when it came to the detail. And to have any effect, they had to be filed with the OPG at the time the donor lost capacity.
The Mental Capacity Act replaced EPAs with LPAs: one for property and financial affairs, and a new one for health and welfare. Registration is now compulsory. The forms are also three times longer, and the OPG is – or at least was initially – particularly strict about the way they should be completed.
Despite the complexity of the new regime, however, LPAs appear to have met with unexpected popularity, especially since the forms became available online three years ago. Members of the medical profession and the charity sector also appear to play a much greater part in raising awareness and as referrers to the legal profession.
‘There’s been a real mentality shift, especially with health and welfare LPAs, where clients now come to us saying they’ve been advised by their doctor or social worker to look into it,’ Wyn says. At the same time, there are still misconceptions about their purpose. ‘People often say they don’t need it because they have family who know what they would want. Then there are cases like Briggs, which show that it’s really not as straightforward as they think.’
Digital traps
For donors wishing to actively plan for the unexpected, having access to the forms online has marked a step forward. In the main they are quite user friendly, despite their length – 24 pages compared with just seven for the old EPAs.
In addition, the availability of cheap LPA forms and guidance online via third-party providers – with or without a telephone conversation with a lawyer – has reinforced the impression that LPAs are a simple data-filling exercise. ‘It’s not,’ says Wyn. ‘There are lots of practical questions surrounding the drafting of LPAs, starting with who you would like to appoint as attorney and what exactly you would like them to do. And for attorneys it’s a lot of responsibility: the fiduciary duties are quite high, and people don’t necessarily understand what it entails.’
Then there is the critical issue of capacity. ‘It’s hard to assess a person if you’re not meeting them,’ says Jessica Beddows, a solicitor at Lodders. ‘A huge part of preparing wills and LPAs is ensuring that the client has capacity and understands what they are doing: meeting them, going through the issues with them, and documenting that process, so that if there is a problem in the future there is a trace of that process. The danger with online services is that sometimes there’s just a telephone interview with a client, whereas a conversation face to face will trigger other questions and altogether this will build a proper picture of what the client needs.’
The digital agenda has wider drawbacks, too. ‘It’s unfair to expect people to file forms online on their own when the vast majority of donors who make LPAs are older and not always familiar with the technology; it opens the door to abuse,’ says Richard McDermott, a solicitor at Farrer & Co and director of Solicitors for the Elderly.
Meanwhile, Gary Rycroft, a partner at Joseph A Jones, warns that ‘lawyers aren’t averse to doing things online but there are serious issues that are being overlooked. The way it’s presented makes people think they don’t need legal advice, when in fact there are already serious pitfalls for members of the public doing it themselves online. What is being proposed next is even more worrying. At the moment LPAs must be signed by hand by witnesses but the OPG has suggested getting rid of this “wet signature” and doing it all online. There would be no way of checking capacity. That would be a line in the sand.’
Rycroft also rejects the premise that guidance available on the internet will empower people to make informed decisions, suggesting that the government is more focused on process than outcome. ‘Digital is good but it minimises the value of legal advice. And so much of life is now online that people don’t realise there could be a heightened risk of fraud and that there is a need for safeguards. Are a few fraudsters here and there really an acceptable price to pay for the sake of having a more accessible system?’
Better than cure
If anything, one good reason for donors to seek legal advice is that prevention is better than cure. In the LPA context, legal advice will ensure that the documents will not be rejected by the OPG or challenged at a later stage, or simply that they cover all the bases. Sometimes, this can also involve drawing up separate documents alongside the LPA, whether that is a statement of wishes or just a letter.
‘If you have an LPA, additional information is often essential in practice,’ says Wyn. ‘The really important section in the LPA is the one on instructions and preferences, where the donor can explain what they would like the attorney to do in a set number of circumstances. For people who can’t quite get around to putting too much detail in there, they should write it out for them in a separate statement. If you’d like somebody to manage your affairs, they need to know a lot about you; it’s down to simple things like whether you prefer tea or coffee in the morning.’
Beddows also discusses statements of wishes with clients: ‘It’s important to provide guidance to your attorney, and – unlike LPAs which cannot be amended – you can easily change it if you change your mind about something, provided you’re still happy with your choice of attorney.’ A further benefit of having a solicitor to advise, she says, is that they will be able to point out provisions that could be difficult to implement, such as an advance directive that the donor would like to be taken to the Dignitas clinic, which could cause the attorney to commit an offence under the Suicide Act.
More positively, Beddows says, solicitors are able to suggest workable solutions based on experience incorporating Court of Protection decisions that may not be obvious to non-specialists. More and more, for instance, the advice is now to appoint two attorneys. In financial matters, a common recommendation is that an attorney may only be authorised to act on their own up to a certain limit per quarter, with decisions for amounts above that limit to be made jointly with another attorney. And for health and welfare, a popular clause when deciding whether to move the donor to a care home is to make the decision subject to a doctor’s assessment as to whether the donor could continue living on their own if a carer visited a few days a week.
Reducing challenges
McDermott suggests that as much as possible should be written in the LPA as a binding instrument, but he agrees statements of wishes can be useful. ‘Usually they are about non-legal points, for instance the people the donor would like the attorney to consult before making a decision. Or if the donor appoints two attorneys jointly and severally, he may want to make clear that he would prefer them to act jointly but that in some circumstances it would be appropriate for one to act alone if, say, the other one is out of the country and a document such as a tax return needs to be signed and filed by a particular deadline.’
The new process, he says – while ‘more fiddly’ – offers greater protection for donors and makes LPAs less susceptible to challenges. Any area of uncertainty in this regard remains mostly around the way attorneys use their powers.
‘They’re stepping into the shoes of someone who’s lost mental capacity and are meant to act in the donor’s best interest, but you see people who act negligently or in their own interest. The key for the “best interest” test is not what the person who’s lost capacity would have liked to do, but it is what objectively is in their best interest. You can take account of what you think their wishes would be but the overriding requirement is what’s objectively in their best interest. The donor has the right to make any decision they like, even bad ones, but as an attorney or deputy you can’t make subjective decisions in the way the donor could.’
With close to two million powers of attorney on the OPG’s books, the agency looks to be on track to making LPAs a mainstream component of the care-planning process. Along the way, however, it needs to address the issues raised by practitioners about the risk inherent in a digital environment. Lawyers also report that while health and welfare LPAs are becoming more popular, they still lag behind finance LPAs. Not everybody has assets worth making an LPA about, but everybody gets old and the elderly population is growing, as is the percentage of the population affected by a capacity-limiting condition.
Jean-Yves Gilg is editor-in-chief of Solicitors Journal