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Feature

posted 1 May 2000 in Volume 5 Issue 4

Incapacity: An examination of the proposed changes in Scotland

It has long been felt that the law in Scotland relating to the protection of adults with incapacity has been unsatisfactory. After some considerable lobbying for change, the Adults with Incapacity (Scotland) Bill is now making its way through the Scottish Parliament and it is hoped it will become law later this year.

The Bill as drafted proposes fundamental changes to the law in this difficult area. As the it extends to seventy eight clauses and six schedules, this article is not intended to be a comprehensive or exhaustive overview of its provisions. Rather, it will concentrate on the proposed introduction into Scots law of the new concepts of continuing powers of attorney and welfare powers of attorney. It will be seen that these are intended to provide additional safeguards for the administration of financial affairs and to codify as far as possible rules which currently exist in no coherent form.

It will initially be of assistance to those not familiar with the existing provisions if a brief summary of the law at present is first provided.

The law at present

There is currently no legislation which lays down detailed provisions regarding the legal status of attorneys in Scotland, or which affords protection to those granting powers of attorney to others. Indeed, until the passing of the Law Reform (Miscellaneous Provisions) (Scotland) Act 1990, there was no prospect of an attorney appointed by someone in sound mind continuing in office beyond the supervening incapacity of the granter. Section 71 of that Act provided that for powers of attorney executed on or after 31st December 1990, it would be implied, unless otherwise stated in the document, that the attorney could continue to act on behalf of the granter notwithstanding the granter's subsequent incapacity.

This provision, of itself, raised a number of possible difficulties: What if the granter initially was happy to allow the attorney to continue to act but subsequently did not wish the power to continue in those circumstances?

Who was to define when the granter became incapax and when the attorney was entitled to continue to administer the granter's affairs without his or her consent? The latter has been a particular problem, as there has until now been no single recognised definition of incapacity in Scots law. The Bill, as drafted, proposes to change that, but it is against this background of uncertainty that the suggested reforms will take place.

General principles and fundamental definitions

These form the first part of the Bill. The overriding principle is that no-one is to intervene in the affairs of an adult (this emphasises that the Act will apply only to those over the age of 16 in Scotland) unless the person responsible for authorising or carrying out the intervention is satisfied that it will benefit the adult and that the benefit cannot be reasonably be achieved without it. In addition, the intervention has to be the least restrictive of the adult s freedom. It is also provided that any guardian, attorney or manager of, for example, a nursing home is to encourage the adult concerned to exercise whatever skills he possesses concerning his property, financial affairs or personal welfare. The emphasis is therefore upon allowing and indeed positively encouraging the adult to continue taking responsibility for his own affairs for as long as is possible.

Essential to the Bill is the definition of incapacity contained within Clause 1 (6). For the purposes of the Bill, incapable means that an adult is incapable of acting, making decisions, communicating decisions, understanding decisions or retaining the memory of decisions. An attempt to provide a proper legal definition of incapacity is to be welcomed, but in relation to the test of memory it could be argued that a better definition has been provided before by Gordon Ashton when he described the test as 'the ability to retain the knowledge and understanding [of the nature of the transaction and of the relevant circumstances] for long enough to make a decision (Solicitors Journal 1995 1074).

Continuing and welfare powers of attorney

It is, though, in Part 2 of the Bill that the concepts of continuing powers of attorney (CPAs) and welfare powers of attorney (WPAs) are introduced.

Whereas the position in Scotland at present is that a power of attorney will automatically continue following the incapacity of the granter, unless there is a specific statement within the document which disallows the attorney from acting in those circumstances, the Bill proposes that the granter requires to be more explicit in his declaration of wish to have the power of attorney continue in force following any supervening incapacity.

In particular, Clause 13 confirms that a CPA is to be valid only if it is expressed in a written document which is subscribed by the granter and incorporates a statement which clearly expresses the granter's intention that the power be a continuing power of attorney. It must also include a certificate in the prescribed form by a solicitor (or member of another prescribed class) that he has interviewed the granter immediately before the granter subscribed the document; is satisfied because of his own knowledge of the granter or because he has consulted others whom he names in the certificate and who have knowledge of the granter that at the time the CPA is granted the granter understands its nature and extent; and that he has no reason to believe that the granter is acting under undue influence or that any other factor vitiates the granting of the power. This is clearly a rather strenuous test, most especially for the solicitor to fulfil. It should be questioned whether solicitors will be hesitant about advising clients to grant CPAs if they are to have specific obligations in relation to the certification of a granter's ability to give instructions. Indeed, it could be questioned whether a solicitor has the ability to make such a decision, without at least first consulting the client's own medical adviser or an independent specialist.

The provisions concerning the proposed WPA are the same, in relation to the requirements for creation. However, Clause 14 of the Bill goes on to confirm that a WPA may be granted only to an individual (as opposed to a 'person' referred to in relation to CPAs). In addition, the clause is specific about what a welfare power cannot do, but perhaps surprisingly silent about what a welfare attorney is able to do. He would for example be unable to place the adult in hospital for the treatment of a mental disorder against the adult's wishes. His role would, though, appear principally to be firstly, refusal of consent to medical treatment and, by implication, presumably to give consent to such treatment; and, additionally, to consent to medical research.

The law at present requires that any powers to be given to an attorney must be explicitly stated in the grant, and that all the provisions of the power of attorney are to be strictly construed. It must be assumed that the Bill proposes this to continue to be the law, although it does not explicitly indicate such.

The Bill provides also that a continuing or welfare attorney is not obliged to do anything which he would otherwise be entitled to do if it would be unduly burdensome or expensive in relation to the value or utility of the act for him to do so.

Neither a continuing or welfare attorney has any authority to act until the document which confers the power has been registered with the Public Guardian, the officer who is currently the accountant of court in Scotland. There are detailed rules concerning the formalities for registration and the powers of the Public Guardian to refuse to register the document granting the power. Any change of address of the granter or the attorney, or the death of the granter, must be reported to the Public Guardian, who will enter the appropriate particulars in the register he will maintain.

Similarly, the Public Guardian requires to be advised by a continuing or welfare attorney if he wishes to resign office. Notice is to be given to the granter of the power of attorney (although presumably not in a situation where the granter has become incapable), and to the Public Guardian and others who have responsibility for the welfare of the granter, such as the local authority. The Public Guardian must register the notice giving intimation of the attorney's intended resignation. There are, however, further provisions which allow for the continuance in office of a pre-existing joint attorney who remains willing to continue to act, or for the appointment of a substitute attorney identified in the original power who is willing to act following resignation of the original attorney.

In certain circumstances, a CPA or WPA will automatically come to an end in other ways. The Bill specifies these to be where the granter and the attorney are married to each other and a decree of separation or divorce has been granted to either party or where the marriage has been declared null.

Authority to administer funds

The Bill does also provide for a less comprehensive arrangement than the granting of a power of attorney, by allowing an individual to apply to the Public Guardian for the authority under Part 3 to deal with funds held by a person or organisation on behalf of an adult resident in Scotland, who is incapable of making, communicating or understanding, or of retaining the memory of, decisions about his funds, or is incapable of safeguarding his interest in the funds, and who is the sole holder of an account in his name.

These arrangements would go some way towards removing the present, frustrating anomaly which exists within Scots law, requiring an individual either to continue to administer all of his affairs himself or to grant a power of attorney which would authorise someone else to do so at that time if he wishes and/or when he became incapable. It is well established that the Department of Social Security will sometimes allow an appointee to collect pensions and benefits due to an individual who is otherwise incapable of managing his affairs, but banks, building societies and other investment organisations habitually refuse to accept the authority of anyone other than the account holder to administer accounts unless they have been granted power of attorney entitling them to do so, or otherwise have been appointed the individual's curator bonis.

Once more, there are detailed provisions relating to the granting of the foregoing authority by the Public Guardian and the Bill details safeguards in relation to the actions of the individual, if authority is granted. The application must be countersigned by a member of a prescribed class of people confirming to the Public Guardian that he has known the applicant for at least two years prior to the application, that he knows the adult who lacks capacity and that he is not related to the applicant, or is a director or employee of the organisation holding the account, or a solicitor acting for the adult or a medical practitioner who has signed a certificate (which is also required) confirming the adult is incapable.

Conclusion

It can be seen from the foregoing analysis of the draft provisions that the proposed changes to the way in which attorneys are to be appointed, and thereafter to be responsible for an individual's affairs, will be dramatic if the Bill becomes law. Many of the changes are to be welcomed, and the attempt to contain everything within a single piece of legislation dealing with this area of law is long overdue. However the Bill at present does contain provisions which should be of concern, not least to solicitors requested by clients to prepare powers of attorney, particularly in a situation where the solicitor is asked to be a sole or joint attorney. The terms of Clause 13 of the Bill suggest that it would be appropriate for a solicitor in those circumstances to require that the power of attorney be prepared by another on behalf of the granter in order to ensure no possibility of a conflict of interest arising. It is suggested that it would be inappropriate for a solicitor to appoint himself as attorney and at the same time provide a certificate confirming that he was satisfied the granter understood the nature and extent of the document he was signing. That would seem to represent a conflict of interest between the solicitor's obligation to his client and his appointment as an attorney.

However, overall a cautious welcome should be given to a bold and ground-breaking piece of legislation which it is hoped will once enacted, provide suitable protection for those for whom it has until now been largely unavailable.