The Mental Capacity (Amendment) Bill 2016 (“Bill”), read for the first time in Parliament on 29 February 2016, was passed on 14 March 2016. It seeks to amend the existing Mental Capacity Act (“MCA”) to better protect individuals who have lost mental capacity.
Passed in 2008, the MCA was enacted to put in place a legal framework for proxy decision-making that safeguards the interests of individuals who lack mental capacity. It enables individuals, called “donors”, to execute a Lasting Power of Attorney (“LPA”) to allow them to appoint a “donee” to make decisions for them in the event they should lose their mental capacity. For those who have lost mental capacity but have no LPA, the MCA allows someone, such as a family member, to apply to Court to be their deputy to make decisions on their behalf. The MCA created the Office of the Public Guardian (“OPG”) to supervise deputies and investigate complaints pertaining to the exercise of donees’ and deputies’ powers.
Since the coming into operation of the MCA on 1 March 2010, there have been socio-legal issues relating to the ageing population of Singapore that need to be addressed. For example, there is an increasing number of elderly individuals who do not have relatives who could act as their donees or deputies. People with mental incapacity are also vulnerable to abuse by their donees and deputies.
The amendments to the MCA were introduced to meet these and other emerging needs of Singaporeans, particularly the elderly, and to strengthen the law’s protection capability.
Fundamental principles underlying the MCA
The MCA is founded on three fundamental principles:
- Respecting the autonomy of persons who are mentally capacitated - Persons who have mental capacity make choices on their own. One cannot assume a donor lacks capacity simply because others think he or she could make a better decision, including that with respect to the choice of a donee. For this reason, one of the golden principles in the MCA is that before the act is done, and decision made, regard must be had to whether the purpose for which it is needed can be as effectively achieved in a way that is less restrictive of the person’s rights and freedom of action (section 3(6), MCA).
- Family as first line of support - Family should be the first line of support for persons who have lost their mental capacity. Next to the family, the community should also play a part in supporting those who do not have a familial support when they lose capacity.
- Sufficient checks and balances - The State must put in place a system with sufficient checks and balances to optimally protect individuals who lack mental capacity from abuse or exploitation, or from having their interest compromised.
These have been the principles that guided the Ministry of Social and Family Development (“MSF”) in proposing changes to the MCA. In preparing the Bill, MSF had taken into account feedback from organisations in the legal, banking, insurance, medical and social service sectors, as well as the public. It also studied the experience in countries that have legislation similar to the MCA, such as England and the US (particularly Florida).
Key Amendments to the Mental Capacity Act
The key amendments to the MCA are set out below.
Introduction of Professional Deputies and Donees
Based on the “Fact Sheet on Mental Capacity (Amendment) Bill 2016” published by MSF, there is an increasing number of elderly singles or childless elderly couples who may not have family members or close friends who could be potential proxy decision-makers. To address this trend, the Bill has introduced the concept of “professional deputies” and “professional donees”.
A Professional Deputy is a Court-appointed individual who provides deputyship services for a fee. He must not be related to the person for whom he is appointed to act for and he must be registered with the OPG. MSF envisages that the Professional Deputies would include licensed trust companies, and professionals such as lawyers and accountants. Although the registration framework for Professional Deputies has not been finalised, MSF has initially indicated that to be considered for registration, the person must be of sound financial standing and must not have a criminal record. The registration may be cancelled if certain events occur, such as when the Professional Deputy becomes bankrupt.
A Professional Donee provides doneeship services for remuneration. Unlike a Professional Deputy who is appointed by the Court after the donor has lost individual capacity, a Professional Donee is chosen by that individual when he still has capacity. He must not be related to the person for whom he is appointed to act. The Bill limits Professional Donees to two groups: (i) registered Professional Deputies with the OPG; and (ii) certain prescribed classes of persons such as licensed trust companies. Licensed trust companies are regulated by the Monetary Authority of Singapore under the Trust Companies Act.
Mentally incapacitated persons being extremely vulnerable, the regulatory framework to be put in place must ensure that a Professional Deputy or Professional Donee is competent, of suitable character, and is accountable to the relevant authorities for what he does. This is achieved through the criteria set out above.
Better protection from abuses by Deputies or Donees
The aim of this key amendment is to permit pre-emptive actions to better protect the individuals who lack mental capacity from abuses by their donees or deputies. The amendments will allow the Court to revoke a deputy’s or donee’s powers if there is a significant risk of the deputy or donee abusing the donor, such as when the latter is convicted of an offence involving dishonesty or fraud. The revocation of the deputy’s or donee’s power eliminates the possible risk of the deputy or donee exploiting the mentally incapacitated donor.
The amendments will also allow the Court to suspend the powers of the deputy or the donee in the absence of any prior application. This emergency power is especially important where there is a need to preserve the donor’s assets while investigations with respect to the deputy or donee are ongoing.
Commercial certainty in the use of LPAs in transactions
This amendment was explained by Mr Tan Chuan-Jin, the Minister for Social and Family Development, at the Second Reading of the Bill on 14 March 2016. Currently, the MCA protects a donee or third party who has entered into a transaction with respect to a donor, if the third party genuinely does not know that an LPA has not been validly created. To illustrate, an LPA could be invalidly created if the donee handling the subject property was an undischarged bankrupt at the point in time when the LPA was created. The third party transacting with the donee may not know of the donee’s bankruptcy, thereby rendering the LPA invalid. The third party in this scenario is protected under the current law.
The amendment extends this protection to situations where the donee or third party did not know that the LPA had been revoked or suspended (due to the circumstances set out in the second key amendment above). This amendment will provide greater commercial certainty when transacting with donees using the LPAs. It will not only cover situations where third parties are not aware that an LPA has not been validly created, but also instances where the LPA has been revoked or suspended.
Improve the operations of the Office of the Public Guardian
The legislative reform will introduce some measures to improve the operations of the OPG to serve the public better. These include the appointment of an Assistant Public Guardian to assist the Public Guardian (“PG”) in carrying out his functions. The Assistant Public Guardian will exercise all the powers of the PG, except the power of delegation. The PG will also be allowed to appoint an auditor to assist him in the exercise of his investigative functions. This is especially relevant in investigations involving fraud and financial exploitation committed against a donor.
In his Opening Speech at the Second Reading of the Bill, Minister Tan Chuan-Jin mentioned that the average life expectancy of Singaporeans is now 83 years. He then cited a study conducted by the Institute of Mental Health, which shows that the prevalence of dementia was 10% amongst persons 60 years and above. Given this, Singaporeans, while still young and able to make full use of their cognitive ability, should take advantage of the MCA by executing their LPAs. It was reported that the number of LPAs registered with the OPG has increased significantly from 480 in 2010 to 8,400 in 2015. To encourage more people to make LPAs, the OPG has waived the prescribed fee of $50 for Singaporeans who register LPAs until September 2016.
By planning in advance and making their wishes known through the LPA, Singaporeans can potentially avoid the costs and time taken in a court-appointed deputy process. This would also avoid acrimony between family members who cannot agree on who can be appointed as a deputy amongst themselves. However, in the event that deputyship must be resorted to to protect the interests of persons who have lost their mental capacity, the Bill, with the introduction of professional deputies and donees, and making available pre-emptive actions, provides better protection to them so they can continue to live meaningful and dignified lives.