Enduring Powers of Attorney: Guidelines for Solicitors, September 1999

Feature

posted 1 Nov 1999 in Volume 5 Issue 1

Enduring Powers of Attorney: Guidelines for Solicitors, September 1999

The Mental Health and Disability Sub-Committee of the Law Society has just published an update on its previous (1996) guidelines for solicitors. It contains a number of additions to the original guidelines which focus, almost exclusively, on the scope for abuse offered by EPAs in respect of vulnerable clients. Para 3.1 states: 'Many EPAs are made when the donors are already losing capacity, consequently they could be unaware of the implications of their actions and are more likely to be vulnerable to exploitation'.

These days it seems to be the received wisdom that EPAs offer considerable scope for financial abuse. The guidelines themselves say that 'the Master of the Court of Protection has estimated that financial abuse occurs in 10 to 15% of cases of registered EPAs, and even more often with unregistered powers' . (Para 4.1.) With all due respect to the Master, this is anecdotal evidence, and no reference is made to any objective research evidence which might lend support. This is important because the guidelines now constantly refer to the 'risk' of abuse (e.g. paras 4.1, 5.3, 5.10) and to the need for a solicitor to discuss with the donor of a power ways of preventing abuse (e.g. paras 4.1and 5.13). Given that such advice is likely to raise clients' levels of anxiety and uncertainty, it would be helpful to have a clear idea as to what the risks actually are. Evidence-based practice is now considered to be of prime importance for the medical profession, and legal practitioners should, surely, be moving in the same direction.

The specific practice issues highlighted by the new guidelines are as follows:

i) Para 2.3 reminds us that where a solicitor is instructed to prepare an EPA, the donor is the client. This remains the position throughout, although instructions may be accepted from the attorney. In addition, it now emphasises that before the EPA is registered it may be advisable for the solicitor, where appropriate, to satisfy him/herself that the donor continues to have capacity and to confirm instructions with the donor.

ii) Para 3.2 reiterates the need to obtain a medical opinion as to the donor's mental capacity to make an EPA wherever this is in doubt.

iii) Para 4.1 suggests that 'written information for clients on both the benefits and risks of EPAs, whether in a brochure or correspondence, may also be helpful'.

iv) Para 4.2 does not appear at all in the 1996 guidelines. It states that, during the initial stages of advising a client, the solicitor should consider:

1) That there may be circumstances where an EPA may not be appropriate and receivership, with oversight by the Court of Protection may be preferable (for example where there are persistent family conflicts, or where assets are substantial or complex).

2) That the use of an unregistered EPA as an ordinary power of attorney for vulnerable elderly clients should be discouraged. It is suggested that a restriction might be included in the instrument itself, or that the donor might be advised to lodge the power with the solicitor, with instructions that it is not to be used until the donor is, or is becoming incapable.

As regards (2) many practitioners already do keep EPAs, but the absence of a general power of attorney will create financial management problems, as, for example, where an older person is mentally alert but physically frail, or is admitted to hospital for an extended period, or indeed may induce premature registration of an EPA. Clearly practitioners will always need to balance the risks which are emphasised in the new guidelines against the practicalities which originally brought EPAs into being.

v) It is suggested that the donor should be advised that the appointment of a sole attorney may provide greater opportunity for 'abuse and exploitation' than appointing more than one attorney. (Para 5.1.) The solicitor should always ask questions about the donor's relationship with the proposed and whether the attorney has the skills required to manage the donor's financial affairs. The donor should also consider the suitability of appointing a family member, or someone independent of the family, or a combination of both. 'Joint appointments may provide a safeguard against possible abuse, since each attorney will be able to oversee the actions of the other(s)'.

vi) Para 5.4 states that 'improper gifting is the most widespread form of abuse in attorneyship'. It is suggested that donors should consider restricting or excluding the authority which is available to attorneys under section 3 (5) of the EPAA 1985. Para 5.4 makes no reference to section 3 (4) of the Act, which permits an attorney to act under the power so as to benefit himself, and also appears to offer scope for abuse.

vii) Paras 5.10 and 5.13 suggests that solicitors should discuss with donors appropriate measures to safeguard against an EPA being misused or exploited, and that it may be helpful to notify other family members of the existence of an EPA at an early stage. Solicitors could also consider 'offering an auditing service, by inserting a clause into the power requiring the attorney to produce to the solicitor on a specified date each year, an account of his/her actions'.

viii) Para 12.1 which, like para 4.2 was not to be found in the previous guidelines says that where solicitors suspect that an attorney may be abusing an EPA, they should try to facilitate the donor's remedies where the donor is unable to take action, and should, in the first instance, seek guidance from the Court of Protection as to how to proceed. Action by a solicitor might involve an application to cancel registration of the power; allegations to the police of theft of fraud; and, in the case of residential care, using the local authority's complaints procedure or involving the registration authority (use of the complaints procedure presupposes arrangements under the National Assistance Act 1948; the complaints procedure would not be available where the arrangements are privately made).

More generally, the guidelines refer to the implementation on 1st January 2000 of the Trustee Delegation Act 1999, which repeals section 3(3) of the EPAA 1985. In addition the Financial Services and Markets Bill (due to come into effect in mid-2000) is flagged up.

As already indicated, the effect of the amendments and additions to the guidelines is to emphasise the risks involved where very vulnerable clients create EPAs, rather than the factors which brought the EPAA into operation in the first place. One problem with this sort of approach is that the baby may be thrown out with the bath water and receivership under the Court of Protection given a new lease of life without addressing the reasons why it was so problematic in the 1980s. It would be reassuring to feel that receivership offers protection from financial abuse, but again the evidence is lacking.

It is important, however, for practitioners to be encouraged to reappraise their professional responsibilities and their practice in this most complex and sensitive area, and this last output of the Mental Health and Disability Sub-Committee is timely and welcome.

Margaret Richards, Solicitor and Community Care Adviser, Tel: 0113 278 1810