Before we look at the impact of the proposed changes to the Powers of Attorney Act 2023, we will briefly outline the basics of what an LPA is and the current legislation concerned with the application and registration process.
A Lasting Power of Attorney (‘LPA’) is a legal document that enables a person (the ‘Donor’) to delegate decision making powers about their health and welfare and/or financial and property affairs to another person or people (the ‘Attorney’ or ‘Attorneys’).
The documents come with important legal consequences, so must be submitted to the Office of the Public Guardian (OPG) for scrutiny and registration before they can be used.
An LPA is generally a paper-based document, signed by the Donor and then the Attorneys to confirm they understand and accept the responsibilities imposed upon them.
The document must also be signed by a Certificate Provider, who is a relevant professional, or a person who has known the Donor for more than two years. This is to confirm they are satisfied the Donor understands the nature of the document and the powers conferred; that there is no undue influence on the Donor; and that there is nothing to prevent the LPA from being created.
A time-consuming process
The process is typically arduous, heavy on paperwork and susceptible to simple human errors, which can delay an already prolonged affair that regards a 16-week timescale as the norm rather than the exception.
There are two types of LPA:
- The Health & Welfare LPA enables Attorneys to make decisions regarding healthcare decisions, and allows the Donor to decide whether their Attorneys should be able to give or refuse consent to life-sustaining treatment on the Donor’s behalf. This document can only be used where the Donor lacks the mental capacity to make decisions for themselves.
- The Property & Financial Affairs LPA enables Attorneys to make financial decisions on behalf of the Donor and can be used as soon as the document is registered if the Donor wishes (and with their consent).
Both documents can be very useful when undertaking estate planning, empowering trusted relatives, friends or business partners to deal with the Donor’s affairs, if they become too sick or frail, without resorting to best interest decisions or blocking potentially essential access to liquid assets or property.
It is perhaps not surprising then, that the power of these documents, coupled with an outdated registration process, has created potential for misuse or fraud.
One such case, explored in December 2023 by BBC Radio 4 reporter Shari Vahl, detailed how a listener had discovered a stranger had been granted a genuine LPA over her financial affairs. The fraudster, who had achieved this by using fake names and signatures, then tried to sell the listener’s home without her knowledge. The situation was saved only by a quick-thinking firm of Manchester-based solicitors.
To help address these concerns, on 19 September 2023, Royal Assent was given to the Powers of Attorney Act 2023 which intends to introduce a digital application process for an LPA, designed to help shorten timescales and reduce errors, whilst creating new defences to protect against fraud and abuse.
Practical steps in a digital age
To make it easier to apply for an LPA, whilst adding new measures to protect against fraud and abuse, the process will become predominantly digital. It will build upon the ‘Use of an LPA’ service introduced in 2020, with banks, financial institutions, healthcare providers, etc., able to check the registration of an LPA digitally and securely.
It will be possible to create an LPA completely online, although the paper-based system will continue and be improved upon, to ensure documents remain accessible for those organisations that currently require paper copies.
Importantly, the changes will allow errors in applications already submitted to the OPG to be rectified online by the OPG themselves, while the list of ‘authorised persons’ who can certify copies of registered documents will be extended to include Chartered Legal Executives.
One of the most significant proposed changes is designed to combat identity fraud. The verification of identification documents of certain parties to the LPAs (such as the Donor, Attorneys, Replacement Attorneys and Certificate Provider) will now be undertaken by the OPG.
To further protect the Donor, an Attorney will be unable to make an application to register an LPA, which must be done by the Donor themselves.
The proposed changes also introduce a system for dealing with any objections raised against the registration of a particular LPA. If the objection is supported by the OPG, then the Donor or an Attorney must apply to the Court of Protection to register the LPA.
Overall, this legislation moves the LPA process in the right direction by reducing the use of paper, the time taken to register, the impact of human error and the scope for fraud.
Can the secondary legislation achieve its aims?
The OPG’s new responsibility to verify the identification of all concerned parties seems at odds with the commitment to speeding up the process. Also, whilst the paper procedure remains (for now), it’s not clear whether the verification of identification documents can be done by practitioners, or if it must be performed online to obtain a registered LPA.
There are also concerns for those without access to the necessary forms of identification required by a digital application process. Furthermore, it’s not clear how an LPA will be registered if the Donor faces physical barriers to registration (such as difficulty accessing or completing an online form), if the Attorney is barred from doing this for the Donor.
Lubna Shuja, president of the Law Society, has also raised concerns. She believes the Act should go further to provide additional support for Certificate Providers and the legislation “fails to make it clearer that the Certificate Provider has the responsibility to confirm the Donor’s mental capacity and set out the requirements for fulfilling this role”.
The legislation unfortunately falls short of requiring Certificate Providers to ask questions that would help them form an opinion about the Donor’s Mental Capacity, then retain a record of the information that shaped their opinion for future reference, if ever needed.
The aims of the legislation are welcome, especially as the number of LPAs sent to the OPG has more than doubled from 390,000 in 2014/15, to 920,000 by 2019/20, with these numbers only expected to rise thanks to our aging population and vastly increasing variety of digital assets.
However, it’s not clear how the OPG intends to implement the legislation, given that Amy Holmes, the Public Guardian for England and Wales recently stated: “Our focus now is on continuing to develop, test and refine a new online platform and improved paper process to ensure we provide a service that will include additional safeguards and suit the needs of all our customers”.
Despite the limitations, these reforms will improve protection for vulnerable individuals and help prevent them falling victim to abuse or fraud. Until the new legislation comes into force, it remains important for people to seek independent legal advice on the best course for dealing with their personal and financial affairs should they lose capacity to manage them.
If you have any issues or questions surrounding LPAs, then please contact our team Lasting Powers of Attorney | Buckles (buckles-law.co.uk)
REFERENCES:
- Powers of Attorney Act 2023 | The Law Society
- Powers of Attorney Act 2023 (legislation.gov.uk)
- Step forward to online lasting powers of attorney – GOV.UK (www.gov.uk)
- Estate Research – Julie Bell – Powers of Attorney Act 2023 – what does this mean for the public and practitioners
- Lasting Power of Attorney revamp to improve safety and efficiency – GOV.UK (www.gov.uk)
- BBC Radio 4 – You and Yours, Lasting Power of Attorney Fraud
