Lasting Powers of Attorney: Still a Useful Tool?

The potential dangers associated with Powers of Attorney made the headlines on 15 August 2017 with the comments made by the retired Judge, Denzil Lush, who for years had been presiding over many sad cases involving misuse of Powers of Attorney ("POA"). In his role as a Court of Protection Judge, he heard cases where the persons granted POA had acted dishonestly and used it for their own financial benefit and this, no doubt, has very much tainted his view on POAs.

Judge Lush even went as far as to say that he would not have a POA, preferring the Deputyship process, which is generally an excessive approach in our experience.

There are in the region of 2.5 million Powers of Attorneys registered in England and Wales. The overwhelming majority of POAs are used in accordance with the law and are incredibly helpful to people who are physically or mentally unable to take care of things for themselves. Acting as Attorney allows someone to communicate with and give instructions to official organisations on your behalf.

However, there are some bad eggs out there. As much as the current system has safeguards in place, we agree with Judge Lush that perhaps there could be more safeguards to protect vulnerable people and this would bring it further in line with the Deputyship system.

Where someone has lost capacity and they have not made a POA, then an application can be made to the Court of Protection for someone to be appointed as a Deputy. However, in comparison, this is a longwinded, expensive and complicated process. Once appointed, a Deputy is required to submit an annual report to the Office of the Public Guardian, which is the government agency that manages Lasting Powers of Attorney ("LPAs") (annual fees are payable). However, isn't it better for you to choose who will act as your Attorney and make decisions on your behalf?

Some of the basis of the criticism that Judge Lush has made is directed at the Ministry of Justice's campaign to provide access to 'justice for all'. This means that the person making the POA and/or the Attorneys can create or register a POA without seeking independent legal advice which makes the system far more open to exploitation, both in terms of undue influence and financial abuse.

We work closely with our clients to make sure that they fully understand the POA and the consequences of having one. We regularly advise on both Enduring Powers of Attorney (made before 1 October 2007) and creation and registration of LPAs. We also specialise in Deputyship applications to the Court of Protection.

LPAs have many safeguards to protect vulnerable people, in that they have to be registered with the Office of the Public Guardian before they can be activated with the banks etc. To help prevent fraud, a certificate of fitness is required, which must be signed by a suitably qualified independent third party (called a 'Certificate Provider'), very often a solicitor, confirming that you fully understand what is involved in making a LPA, its nature and consequences, and that no fraud or undue influence has been used. Also, you may name people to be notified that the compulsory registration process has started, and they will have the opportunity to object on certain grounds if they suspect any foul play.

If, when the LPA is being utilised, either the Donor or anyone connected with the Donor suspects that it is being used in an incorrect way, then a complaint can be made to the Safeguarding Team at the Office of the Public Guardian which is the government agency that manages LPAs.

The Future...

Obviously, the comments that Judge Lush made are based on his real-life experiences of presiding over disputed LPA matters and there is still scope for Attorneys to misuse LPAs. It may be that in the future, further safeguards are put in place and these could include:

• The compulsory notification of certain family members when an LPA is registered with the Office of the Public Guardian.
• Reducing the list of the types of people that can be a Certificate Provider to qualified lawyers and doctors.
• A joint task force between the OPG and the police to investigate suspected cases of Attorney fraud.
• Making it a requirement that Attorneys submit annual accounts to the OPG.
• Providing an insurance bond for Attorneys so that if something does go wrong, the Donor's finances are protected.

As with any system, LPAs need to be constantly monitored and improved upon, but it is apparent that more regulation and supervision is needed rather than less.

For most of our clients we tend to advise that making a Lasting Power of Attorney is simpler, quicker and cheaper.

At Band Hatton Button, we can give you professional advice about making Lasting Powers of Attorney, both for Property & Financial Affairs and for Health & Welfare, registration of Enduring Powers of Attorney and Deputyship applications.