Julia and Aman’s article was published in International Adviser, 13 March 2023, and can be found here.
Modernising Lasting Power of Attorneys
Lasting powers of attorney (LPAs) were first introduced in 2007 to replace enduring powers of attorney (EPA). LPAs were designed to provide more flexibility than their predecessor and greater protection to the person making them (“the donor”). While the number of LPA applications has increased significantly, rising from just over 390,000 LPAs in 2014/15, to 920,00 by 2019/20, few changes have been made to the process of preparing and registering LPAs. However, society has changed considerably since 2007 and, with the increased demand for digital services, changes are afoot.
What is an LPA?
An LPA is a legal document which allows one or more people (the ‘attorneys’) to make decisions on behalf of the donor and to manage his/her affairs if the donor no longer has the mental capacity to do so. To be effective, an LPA must be registered with the Office of the Public Guardian (the ‘OPG’).
There are two types of LPAs:
- Lasting power of attorney – financial decisions – this allows the attorney(s) to make decisions about a donor’s money and property. This includes looking after their bank accounts, other financial affairs and buying and selling property on their behalf.
- Lasting power of attorney – health and care decisions – this allows the attorney(s) to make decisions about the donor’s day-to-day care, and whether or not a donor should receive life-sustaining treatment.
What happens if you lose capacity and don’t have an LPA?
If an individual loses capacity without an LPA in place, their relatives or friends would have to make an application to the Court of Protection for someone (known as a ‘deputy’) to manage their affairs. Such applications are expensive requiring payment of various application/supervision fees, legal costs for instructing a solicitor to assist with the application and a security bond must be paid for property and financial affairs deputies. The Court can also take many months to process the application which can be problematic if no one can access the donor’s bank accounts to pay their bills.
The current system
Under the current system, an LPA has to be signed by the donor and their witness, a ‘certificate provider’, and the attorney(s) and their witnesses using a paper form. To further complicate matters, everyone has to sign the same document in a specific order. It can also take several months for the OPG to register the LPA, which can prove difficult if a donor has lost capacity and the attorneys are unable to make decisions on their behalf pending registration.
Following the “Modernising LPAs consultation” in May 2022 the Government introduced the Powers of Attorney Bill which received its second reading on 9 December 2022. The Bill proposes significant changes to the Mental Capacity Act 2005 with the intention of making the LPA process more streamlined, easier to access and increasing safeguards for the donor. These changes will include:
- Only allowing the LPA to be registered by the donor (not the attorneys as is currently the case);
- Enabling the LPA to be made on paper or online, or by a combination of the two;
- Introducing new identity verifications checks which need to be met to apply to register an LPA to safeguard against fraud;
- A notification process requiring the OPG to notify parties when an application is complete and when the registration process is starting;
- A widening of the group of people who can raise objections, including people not named in the LPA and widening the scope to make objections (currently limited to ‘factual’ objections with ‘prescribed’ objections going to the Court of Protection);
The above changes will provide much needed improvement to the LPA system. Digitisation will also contribute towards reducing the scope for errors in the execution process and will hopefully result in a reduction in the amount of time it will take to prepare and register an LPA.
When will the changes come into force?
It is not yet known when these proposed changes might come into effect and in the meantime people should continue to make their LPAs in the usual way (whilst ensuring they check the OPG’s official website for any updates).
Overall, the changes will be a positive step towards improving the process of making and registering LPAs. However, a fully digitised platform could mean that vulnerable people are more open to being targeted by fraudsters. It is crucial therefore that before the Bill receives Royal Assent care is taken to ensure that the benefits of digitalisation do not inadvertently compromise the safeguarding of the donor who is granting life-changing powers.