Flora’s article was published in the FTAdviser, 23 January 2022, and can be accessed here.
Lasting Powers of Attorney – a new digital service
With the ageing population and rise in dementia, lasting powers of attorney (‘LPAs’) are becoming increasingly more important in today’s society. Yet, with the growing digitalisation of services accelerated in particular by the pandemic, it is vital that the LPA system can keep up in order to continue to meet peoples’ needs and protect those vulnerable from fraud and abuse.
LPAs – what are they?
An LPA is a legal document which allows an individual (the ‘donor’) to appoint one or more trusted people (known as the ‘attorneys’) to manage their affairs and make decisions on their behalf in the event that they lose mental capacity. To be effective, the LPA must be registered with the Office of the Public Guardian (the ‘OPG’) and an application fee paid of £82. There are two types of LPA:
- Financial LPA – this allows the attorney(s) to make decisions about an individual’s money and property, which could include paying their bills, selling their property and investments;
- Health and Care LPA – this allows the attorney(s) to make decisions about an individual’s medical treatment and day-to-day care. It also allows the donor to choose whether or not they want to give their attorney(s) the power to make decisions as to whether they should receive life-sustaining treatment (i.e., any care, surgery or medication that is needed to keep them alive).
The parties to an LPA are the donor, the attorney(s) being appointed, and a certificate provider, who is asked to confirm that the donor understands the nature and scope of the LPA and that the donor has not been coerced into making it.
If someone loses capacity without an LPA (or its predecessor, an Enduring Power of Attorney, which can no longer be made) in place, their loved ones would have to make an application to the Court of Protection for an individual (known as a ‘deputy’) to manage their affairs. Such applications however are very costly – you have to pay an application fee (currently £371 per deputyship order), an assessment fee (if you are a new deputy), an annual supervision fee, and if you are a property and financial affairs deputy, pay a security bond. This is excluding any costs for instructing a solicitor to assist you. The application can also be complex and take several months to be processed, during which time it may not be possible for anyone to manage the person’s affairs or make decisions on their behalf.
The current LPA system:
Whilst the number of people acting under an LPA has risen significantly in the past few years to more than five million, the process of making an LPA has hardly changed since it was first introduced and it retains many paper-based features which are over 30 years old.
Although the OPG did introduce a digital tool to allow attorneys to contact organisations more easily, the final stages of the process (e.g., the signing, witnessing, attesting and delivering the LPA) still need to be completed on paper. The registration period can also take a long time (lasting up to 20 weeks on average), which can be problematic when a donor has since lost mental capacity and the attorneys are unable to make decisions on their behalf until the LPA has been registered.
Introducing the new Powers of Attorney Bill:
Faced with this mounting criticism and following publication of the government’s response to the ‘Modernising LPAs’ consultation in May 2022, a new Powers of Attorney Bill has been introduced, having received its second reading in the House of Commons on 9 December 2022. Once enacted, the Bill will introduce substantial changes to the Mental Capacity Act 2005 with the aim of making the LPA process easier to access, simpler and more secure from fraud and abuse. These changes will include:
- Only permitting the donor to apply to register an LPA, removing the ability for attorneys to do so under the current rules;
- Enabling the parties to an LPA (the donor, attorney(s) or certificate provider) to choose whether to sign the LPA digitally or on paper, or by a combination of the two.
- With the aim of simplifying the registration process and ensuring that notifications have been sent, requiring only the OPG to notify named persons that an LPA is being registered (rather than this being the responsibility of the donor);
- With a view to strengthening safeguards to protect against fraud and abuse, bringing in new identification requirements. The regulations will set out how this will be achieved (e.g., by requiring official documents or information, such as a driving licence, passport or Government Gateway account) and who involved in the registration process will need to have their identity checked;
- Widening the group of people who can raise objections, including people not named in the LPA;
- Enabling the OPG to receive all objections (rather than only ‘factual’ objections, with ‘prescribed’ objections having to go to the Court of Protection under the current rules);
- Enabling objections to be raised at any point after the OPG is aware that the donor intends to create an LPA (rather than only during the statutory waiting period);
- Enabling for the electronic form of the LPA registered to be evidence of registration rather than a paper ‘office copy’; and
- Outside the MCA 2005, amending the Powers of Attorney Act 1971 to allow Chartered Legal Executives to certify copies of the LPA.
The above changes will significantly reform the LPA system and bring it in line with the recent changes to the Court of Protection and wider court system. Given the recent challenges brought about by the postal strikes, the newly digitised service will likely be welcome news for many who may have lost confidence in the postal service.
However, whilst the system will become predominantly digital, the paper-based option will remain available for those unable to use the internet or who still prefer to work on paper.
By making the system quicker and easier to use, it is hoped that many more people will consider making an LPA. Yet with the ever-increasing trend towards the use of digital technology, identity fraud is becoming more sophisticated and widespread, and, given many people do not think about LPAs until later on in life, it is often the elderly who find themselves the victims of such fraud. It is therefore imperative that the safeguards are not diluted in the process of simplifying the system and that an appropriate balance is met between the safety of the donor and efficiency of the digital service.
What are the next steps?
We do not yet have a timescale as to when the changes will be implemented and for the time being people should continue to make LPAs in the usual way (whilst ensuring they check the official OPG guidance on Office of the Public Guardian – GOV.UK (www.gov.uk) for any updates).
In the meantime, the government will be carrying out further research into other proposals made in the consultation, which they have not currently taken forward but have not totally ruled out. For instance, the parties to the LPA are currently required to sign the LPA in the presence of a witness and it is being discussed whether the witness could be replaced by using technology with a similar (digital) function. The government is also querying whether the role of the certificate provider and the witness should be combined as it is felt that having the certificate provider present during the execution of the LPA would help to strengthen safeguards. It is also being considered whether the Financial LPA should be registered immediately upon execution or whether there should still be the ability to delay registration (the former being the preferred approach, given this will not only enable queries to be dealt with while the donor still has capacity but it would also avoid delays when the attorneys wish to rely on the LPA following a donor’s loss of capacity.)
Overall, the reforms to the LPA system will be a positive step towards the modernisation and efficiency of LPAs and it will be interesting to see what the system will look like in practice. Nevertheless, whilst the increased speed and accessibility of the newly modernised service will be beneficial for many, it is essential that strong and effective safeguards remain in place to ensure that donors are protected when granting these far reaching powers to individuals who will potentially decide how the donor’s money is spent, influence how and where they live, and in some cases decide whether or not they should receive life sustaining treatment.