Lasting power of attorney
Lasting powers of attorney (LPAs) in English law were created under the Mental Capacity Act 2005, and came into effect on 1 October 2007. The LPA replaced the former enduring powers of attorney (EPA) which were narrower in scope. Their purpose is to meet the needs of those who can see a time ahead when they will not be able – in the words of the Act, will lack capacity – to look after their own personal and financial affairs. The LPA allows them to make appropriate arrangements for family members or trusted friends to be authorised to make decisions on their behalf.
The LPA is a specific form of the more general power of attorney which is widely used in countries which have a common law system. The word attorney in this context is someone (or in some circumstances an organisation such as a company) legally appointed or empowered to act for another person. The person giving the power is known as the donor. The word 'lasting' in the context of an LPA means that the power may continue even if the person (though still alive) no longer has capacity to exercise the power.
The former EPA was simple to administer, but failed to provide for some decisions which may have to be made in circumstances that preclude their being made by the person principally affected. In particular, the attorney's powers under the EPA were largely defined in terms of money and property, and were not related to decisions on medical matters such as the continuation or otherwise of life-sustaining treatment, or welfare matters such as a move to a different kind of accommodation. The primary purpose of the changes under Mental Capacity Act 2005 (MCA 2005) was to rectify this omission, by creating two LPAs: one for property and financial affairs (the LPA(PFA)) and one for Health and Welfare (the LPA(H&W)). The opportunity was also taken to make further changes, whose principal effect was to make the whole apparatus very much more complex, and correspondingly more expensive to administer.
Administrative and legal background
The LPA system is administered by the Office of the Public Guardian (OPG), an agency of the Ministry of Justice of the United Kingdom. Its contact details are explained in section 2.2 below headed 'The role of the OPG in relation to Lasting Powers of Attorney'. The OPG was set up in 2007 under the MCA 2005, replacing the similarly-named Public Guardianship Office which had a more limited range of responsibilities. It is headed by the Public Guardian, whose main role is the protection of people who lack mental capacity.
The MCA 2005 provides a statutory framework to empower and protect vulnerable people who are not able to make their own decisions. It makes clear who can take decisions on their behalf, in which situations, and how they should do so. Through the LPA, the Act enables people to plan ahead for a time when they may lose capacity. Detailed guidance is provided by a Code of Practice to the MCA 2005 to the Act, which people working as professionals in this field are required to 'have regard to': that is, to observe, unless (having decided in specific circumstances not to do so) they are prepared to explain afterwards – most probably in a post-incident inquiry – why not.
Where there are suspicions that an attorney might not be acting in the best interests of the donor, the OPG will arrange an investigation. If the OPG decides that formal action is required, and more generally if any disputes arise on subjects covered by the MCA, the matter is referred to the Court of Protection (CoP), which is part of the Family Division of the High Court and was set up under the MCA for this purpose. The role of the CoP in decision-making is complementary to that of the OPG in relation to matters of regulation and supervision.
The 'five rules'
- A person must be assumed to have capacity unless it is established that he lacks capacity.
- A person is not to be treated as unable to make a decision unless all practicable steps to help him to do so have been taken without success.
- A person is not to be treated as unable to make a decision merely because he makes an unwise decision.
- An act done, or decision made, under this Act for or on behalf of a person who lacks capacity must be done, or made, in his best interests.
- Before the act is done, or the decision is made, regard must be had to whether the purpose for which it is needed can be as effectively achieved in a way that is less restrictive of the person’s rights and freedom of action.
The test so defined is 'decision-specific'. It can indicate an answer to the question 'Can he any longer use a gas ring safely when unsupervised?', but does not allow for wider questions to be given a firm yes/no answer when the real answer is that he has restricted capacity and so can deal with some aspects but not others. As stated in an official summary of the Act, it is 'a single clear test for assessing whether a person lacks capacity to take a particular decision at a particular time'.
The role of the OPG in relation to lasting powers of attorney
From the point of view of someone who needs (or may perhaps need) one or both LPAs, the Office of the Public Guardian should be the first point of contact. Its two key booklets are entitled 'Guidance for people who want to make a lasting power of attorney for…', respectively, 'Property and Financial Affairs' and 'Health and Welfare'. These booklets provide all the information required about the legal aspects of the LPA application procedure, and many but not all of the practical aspects as well; they are the source for the great majority of the material which follows here. There is a considerable amount of technical trust and probate type law which can be very important, is hard to follow without legal experience and is beyond the scope of opg guidance. Lasting powers of attorney are very powerful instruments.
The booklets can be obtained in several ways:
- on line in pdf format or
- in printed form and free of charge, by request either
- on line or
- by post from The Office of the Public Guardian
Most users, particularly when completing an application form without previous experience of LPAs, will find the printed format an advantage.
As well as obtaining copies of the forms in these ways, copies may be downloaded or requested of other booklets and the corresponding application forms, such as those relating to registration and the payment of fees. Full information is on the appropriate website; first-time users will find it most convenient either to download or request by post a full set, covering everything needed for each LPA.
The OPG does not have its own website, but uses part of the main UK Government information site.
A fee is payable at the time of registration: it is currently £110, or £220 for both LPAs, but exemption or reduction is allowed in defined cases.
An LPA is not only a legal document: it is a plan of action, to be put into effect in an ordinary family situation which may have its share of stresses and problems. Any such matters will affect the outcome, and so need to be taken into account in the drafting of the application. The primary source of help and advice for this process is the appropriate OPG booklet.
Using the lasting power of attorney
Once the donor has created a lasting power of attorney and it has been registered with the Office of the Public Guardian, the attorneys specified can in theory act on behalf of the donor, for example, paying the donor's bills, managing investments, and so on. However, in practice, this can prove much harder than it may sound.
The powers granted by the property and financial affairs LPA require the relevant institution (for example, the bank or insurance company) to accept the power of attorney and allow the attorney to act. Many institutions, whilst in theory accepting the power, make it extremely difficult to put in practice. Many claim that this is to protect the donor or to comply with money laundering regulations, but whatever the reasons, it can make the whole process very challenging and stressful, especially if the donor themselves is by this time unable to support the process, for example, from failing mental capacity.
Ways in which institutions can obstruct the process include:
- requiring identity verification of the donor (which is not required in law and may in practice be very difficult if utility bills have already been redirected to the attorney's address and the donor is now mentally or physically frail)
- by insisting on seeing the sole original copy of the power of attorney, rather than accepting a certified copy
- questioning the identity of the attorney and requiring substantial proofs via certified copies of documents such as passports, even where the address of the attorney remains as stated on the LPA
Even once the authority of the attorney is accepted by the institution, they may choose to limit what the donor can do, for example by:
- not supporting a full range of services, such as internet banking and telephone banking, or refusing to issue cheque books or debit cards to attorneys
- continuing to send correspondence to the donor's address instead of the attorney's
- refusing to accept the attorney's instructions without the confirmation of the donor
The only recourse in these cases is to complain first to the institution in question, and if this fails to the Financial Ombudsman Service.
- Code of Practice to MCA 2005, published by the Ministry of Justice:
- Mental Capacity Act 2005 section 1: The guiding principles
- Mental Capacity Act 2005: summary by the Department of Health
- Government website for OPG information
- Gov.uk: Make a lasting power of attorney