Joint Committee on the Draft Mental Incapacity Bill First Report

9 Chapter 9: (Clauses 8-13) Lasting Powers of Attorney

134. In 1995, the Law Commission stated that its main policy aim was:

    "…to encourage people to take for themselves those decisions which they are able to take. This should cover "anticipatory" decision-making by people who, knowing or fearing that their decision-making faculties may fail, wish to make plans for what is to happen at that time."[149]

135. Currently, the Enduring Powers of Attorney Act 1985 enables an individual (the donor) to appoint an attorney to take decisions concerning the management of the donor's property and financial affairs. Under the provisions of the draft Bill, a new system of Lasting Powers of Attorney (LPAs) will allow individuals, whilst competent, to appoint a donee (or donees) to take decisions should the donor lose capacity in the future. The areas of decision-making are extended to include the donor's personal welfare (including healthcare), in addition to property and affairs. Clause 8(1) of the draft Bill provides that certain procedural requirements must be fulfilled in order to constitute a valid LPA, which then has the effect of conferring authority on the donee to make the types of decisions specified in the LPA when the donor no longer has capacity to make those decisions himself.

136. When the donor has capacity, even temporarily, decision-making authority remains with the donor. However, except for healthcare decisions, an LPA can operate as an ordinary power of attorney, in certain circumstances, when the donor has full mental capacity. An LPA will continue to operate after the donor has lost capacity when the donee will have the full decision-making powers set out in the LPA document.

137. The majority of evidence received by the Committee generally welcomed the inclusion of LPAs in the draft Bill:

    "One of the major attractions of a Lasting Power of Attorney (LPA) is that it involves the Donor, whilst he or she has capacity, in nominating the person they would wish to make decisions about personal welfare and property and financial affairs."[150]

138. The oral evidence sessions, in particular, revealed dissatisfaction with the present system of Enduring Powers of Attorney (EPA). We were very concerned by evidence presented to the Committee indicating that financial abuse occurs in approximately 10-15% of cases involving EPAs.[151] Further evidence estimated that abuse was as high as 20%.[152] A precise figure for the amount of financial abuse is, however, difficult to calculate as it is unclear exactly how many EPAs are in existence since they must only be registered at the point at which the donor is, or is becoming, mentally incapable of managing his own affairs. Some concern was expressed that unregistered EPAs were being used to take advantage of donors who were beginning to lose capacity or were continuing to be used even after the donor had lost capacity. Denzil Lush, the Master of the Court of Protection stated in his submission:

    "I don't believe that, when it published its report on Mental Incapacity in 1995, the Law Commission was fully aware of the extent of financial exploitation, particularly affecting the elderly mentally infirm. Certainly, the more important surveys on abuse have post-dated that report. But, even if it was aware, it failed to address the problem by providing adequate, private law safeguards."[153]

139. The draft Bill attempts to remedy the situation by requiring an LPA to be executed and registered before it can be used,[154] thereby reducing the difficulties associated with the monitoring of EPAs.[155]

140. The main differences between EPAs and LPAs are:

  • LPAs will be able to apply to welfare (including healthcare) matters as well as finances;
  • different attorneys can be appointed to make different types of decisions;
  • an LPA must include a certificate signed by someone whose qualifications will be set out in Regulations confirming the capacity of the donor to make the power;
  • an LPA must be registered with the Public Guardian before it can be used;
  • the Public Guardian must notify the donor, donees and other people named by the donor, of an application to register the power; and
  • an LPA can appoint a replacement attorney if the donee originally appointed is unable to act for specified reasons.

141. Although LPAs were seen as an improvement on the present system of EPAs, the evidence received by the Committee revealed a recurring theme that clarification of the extent of the powers and further safeguards were required in the draft Bill. The Making Decisions Alliance (MDA) stressed that a greater understanding of the powers under LPA arrangements were needed to emphasise that they were only effective at such times as they were active, namely when the donor lacked capacity. At other times, the donor would be in control of decisions in those areas of life otherwise covered by the relevant LPA, unless the donor had chosen to delegate those decisions to his donee.

142. The draft Bill makes it clear that an LPA relating to personal welfare decisions confers authority on the donee to give or refuse consent to medical treatment,[156] but only when the donor lacks capacity to consent for himself.[157] In addition, decisions concerning the refusal of or consent to life-sustaining treatment can only be taken by a donee when the donor lacks capacity and where an LPA contains an express provision that the donee is authorised to make those decisions.[158] The MDA have, however, stated that further clarification is needed in relation to other personal welfare decisions[159] (for example, decisions about where to live) since, by clause 8 of the draft Bill, an LPA can also act as ordinary power of attorney in relation to matters concerning both personal welfare and property and affairs.

143. If a personal welfare LPA is only to be effective when the donor lacks capacity, then it is essential that a donee does not take such decisions when there is capacity, unless delegated to do so. The conditions for decision-making will be particularly important for those who suffer from fluctuating capacity. Donees will be required to make decisions in the best interests of the donor, which will include a requirement to permit and encourage the donor to participate as fully as possible in the process, and to have regard to the donor's past and present wishes and feelings.[160] It will nevertheless be essential that adequate guidance and training are in place, especially for donees of LPAs, in order that they are able to make the distinction; and for health and social care professionals to understand that the creation of a personal welfare LPA does not necessarily confer permanent decision-making authority on a donee.[161]

144. We recommend that the Bill should make clear whether it is intended that personal welfare decisions, excluding those relating to medical treatment, may be taken when a donor retains capacity. Further, clarification of the extent and limitation of the powers, as well as adequate guidance and training for donees, are also strongly recommended.

145. The need for further safeguards was also highlighted by a number of witnesses.[162] Particularly, in relation to financial affairs, the Committee were warned that unless further safeguards were included in the draft Bill, individuals would be reluctant to create an LPA.[163]

146. By clause 9(2), the draft Bill limits who can be appointed as a donee for property and affairs by excluding bankrupts. The Committee considered whether excluding other groups would provide additional safeguards. However, the evidence we received did not support this option:

    "….we want more emphasis on reviewing and checks and balances and safeguards rather than carte blanche excluding groups of people because I think what we do want is people to be able to choose who they want as their LPA."[164]

147. Several witnesses, although supporting the right of the individual to choose their own donee, agreed that there was a potential for conflict in some cases if the same donee was responsible for both financial and welfare matters, particularly if they had a vested interest in both areas.

    "I think we are in a situation where the patient needs to have health warnings similar to those on the existing enduring powers of attorney to highlight the potential conflict and if they make the decision that they want to appoint a spouse, a partner, a child or somebody in whom they have an enormous amount of trust to be the person to make the decision and they are satisfied in their own mind that when they are able to make that decision the individual will not exploit the situation to their own ends, then that is the free choice that they will make at that stage."[165]

    "We would be very inclined to advise donors that it would be essential to think very carefully if they want a lasting power of attorney to have both a financial and a welfare voice on their behalf or appointing two people for the separate roles."[166]

    "… there do need to be regular checks on how that [the LPA] is working and that is very much a court of protection/public guardian office role."[167]

148. The British Psychological Society commented:

    "Basically some sort of mechanism to ensure further safeguards potentially needs to be incorporated in a Codes of Practice."[168]

149. The Health Minister, Ms. Rosie Winterton acknowledged the need, in some cases, to appoint different donees in relation to different affairs:

    "From the health care side it may be that people might want different attorneys for different decisions. Somebody that you trust with your finances may not be the same as somebody that you wanted to make decisions about your health and welfare."[169]

150. Whilst we support the intention of the draft Bill to allow individuals the freedom to choose their donee(s) when making an LPA, we recommend that further guidance is provided to warn donors of the potential for conflict. Furthermore, we recommend the inclusion, in Codes of Practice, of an additional safeguard mechanism by which the Court of Protection or the Public Guardian could monitor the use of LPAs with a view to preventing the abuse and exploitation of a donee's powers.

151. We received a number of submissions which queried whether donees acting under an LPA would be subject to a common law duty of care. The British Psychological Society stated that they would welcome a specific provision in the draft Bill to that effect.[170] The Master of the Court of Protection expressed some concern at this omission:

    "If you actually read through that legislation, the only people who are required to act reasonably are those under a general authority. That is the only time the word "reasonably" arises. Theoretically you do not have that with deputies and LPAs. …... So you could have somebody who is appallingly incompetent in terms of providing financial needs and requirements but I am not sure I can get rid of them purely on the best interests test as laid out in the Bill."[171]

152. The British Psychological Society submitted that the draft Bill:

    "… should include specific provisions to ensure that recipients of donee powers are placed under an obligation to fulfil these duties properly and that a mechanism for monitoring donees is established, in order to ensure that individuals who are no longer competent to make decisions, are protected from exploitation, abuse and neglect."[172]

153. Further witnesses stressed the need for a greater degree of accountability for donees to reduce the potential for abuse.[173] Suggestions put forward to the Committee included the requirement of an audit on the basis of a donor's annual accounts[174] or the imposition of a greater responsibility on financial institutions to monitor accounts, particularly those of old or vulnerable people.[175]

154. We strongly recommend that an express duty of care is incorporated into the draft Bill in respect of donees acting under an LPA (and for Court Appointed Deputies). We further consider that a greater degree of accountability is required from those groups in order to limit the potential for abuse of their powers and therefore, we recommend the exploration of effective methods to achieve that end.[176] In particular, we recommend that specific requirements in the form of a standard of conduct should be included in the Codes of Practice, aimed at those exercising formal powers under the draft Bill.[177]

155. One of the significant differences between EPAs and LPAs, as stated above, will be the requirement that an LPA should be registered when the power is granted as opposed to when the donor loses capacity. This would create a situation where an ordinary power of attorney might be created on registration and when the donor still has capacity. The potential consequences for personal welfare LPAs were mentioned in paragraphs 142-144 above. In relation to financial affairs, a number of groups have expressed concern as to the operational difficulties for financial institutions in determining the point at which the donor is actually incapable and therefore, it is correct to only deal with the donee.[178] Although there is a general presumption of capacity throughout the Bill, it is highly unlikely that financial institutions will have sufficient expertise to determine whether a donor has capacity at any material time. The British Bankers' Association has urged the Committee to leave unaltered the current process for registration of a power of attorney, namely when the donor of the power is, or is becoming, mentally incapable.[179] However, some witnesses commented that the cost might deter individuals from registering LPAs, which they might never need to use because they might not lose capacity:

    "….they think they will leave it and they can register it if ever they do need it, so you are back to the old EPA issue about who decides when you lose capacity enough to get it registered."[180]

156. Under the new system of LPAs, the requirement that a certificate of capacity is required on registration[181], would, however, prevent registration if the donor had already lost capacity.

157. We have concluded that the proposed system requiring the registration of LPAs before use will assist in monitoring the use of LPAs and detecting possible abuse. However, we recommend that donees should be placed under an obligation to notify both the donor and the Public Guardian that the donor is, or is becoming incapacitated, thereby putting this information on the public record and opening it up to challenge. We further recommend that guidance should be provided to assist financial institutions to deal with the operational realities of LPAs.

158. Schedule 1 of the draft Bill contains the requirements for executing LPA instruments. The donor of an LPA must state, inter alia, the names of a person or persons he wishes to be notified of any application to register the instrument[182], or that there are no such persons.[183] The Law Society have expressed concern that 'extreme caution should be taken where there are no named persons for notification' as it could be an indication that the LPA was not made or registered with the donor's own free will.[184] Although there is a requirement that, on registration, an LPA must be accompanied by a certificate from a prescribed person as to the capacity of the donor,[185] that safeguard would not necessarily preclude the presence of duress. Accordingly, the Law Society have recommended that:

    "An application for registration without persons named for notification should be witnessed in the presence of the person who certifies capacity and two other persons."[186]

159. We believe that the additional safeguard of requiring two additional persons to witness the certification of capacity should be included where there are no named persons for notification of the registration of an LPA.

149   Law Commission Report No 231 para 7.1 Back

150   Ev 30 MIB 950 para 4.6 Back

151   Q505 (Mr Lush) Back

152   Ev 203 MIB 1030 para 3.1 Back

153   Ev 183 MIB 1049 para 4 Back

154   Clause 8(2)(b) Back

155   Q753 (Lord Filkin) Back

156   Clause 10(3) Back

157   Clause 10(4)(a) Back

158   Clause 10(4)(b) Back

159   Ev 30 MIB 950, para 4.6.6 Back

160   Clauses 4(2)(b) & (c)  Back

161   Ibid, para 4.6.13 Back

162   Ev 183 para 8, Ev 219 Q620 Back

163   Q540 (Professor Williams) Back

164   Q125 (Ms Wilmington) Back

165   Q620 (Mr Raymond) Back

166   Q124 (Mr Goss) Back

167   Q125 (Ms Thompson) Back

168   Q338 (Dr Ehlert) Back

169   Q754 (Rosie Winterton MP, Minister for Health) Back

170   Q336 (Dr Kinderman) Back

171   Q51 (Mr Lush) Back

172   Ev 120 MIB 1205 Back

173   Q540 (Professor Williams) Back

174   Q338 (Dr Ehlert) Back

175   Q507 (Mr Lush) referring to recommendations in the Consultation Paper on 'Law and the Elderly' issued by the Law Reform Commission of Ireland  Back

176   See para 87 Back

177   See 13 chapter on Codes of Practice Back

178   For example, Ev 30 MIB 950 Ev 464 MIB 1220 Back

179   Ev MIB 1220 Back

180   Q126 (Ms Thompson) Back

181   Schedule 1, para 2(e) Back

182   Schedule 1, para 2(1)(c)(i) Back

183   Ibid, para 2(1)(c)(ii) Back

184   Ev 203 MIB 1030 para 4.3 Back

185   Schedule 1, para 2(e) Back

186   Ev 203 MIB 1030 para 4.3 Back

previous page contents next page

House of Lords home page Parliament home page House of Commons home page search page enquiries index

© Parliamentary copyright 2003
Prepared 28 November 2003