"Essentially, the Lasting Powers of Attorney scheme is based on trust and envisages minimal intervention by public authorities," Senior Judge Lush said in a recent judgment. The Court will not normally exercise its supervisory powers unless it has reason to do so, possibly because of concerns raised by the Office of the Public Guardian (OPG). A Lasting Power of Attorney (LPA) is seen as a private arrangement between a donor and attorney.
This can leave donors open to abuse by unscrupulous attorneys. How can abuse be avoided and what should be done where there are concerns?
Choosing an Attorney
Choosing an attorney requires careful consideration. Anyone aged 18 or over can be appointed, including the donor's spouse/civil partner, a family member, a professional or a friend. When choosing an attorney it is important to consider the following:
- Does the donor know the attorney well?
- Is the attorney competent and reliable?
- Does he trust the attorney to use his money to meet his needs?
- Will the attorney act in the donor's best interests?
- Is the attorney happy to take on the role?
A donor might wish to appoint two attorneys, to prevent either one taking advantage of their position.
Concerns of abuse
While the majority of attorneys act with integrity, sometimes there can be concerns over how an LPA is being used, either deliberate abuse or where an attorney does not know how to act correctly. Areas of possible concern include:
- Misuse of the donor's money;
- The attorney not acting in the donor's best interests;
- Unpaid bills;
- The attorney opening a credit card account for the donor: or
- The attorney stopping friends/ family contacting the donor.
If the donor has capacity to do so, he can revoke the LPA. If not, those with concerns about the behaviour of an attorney should contact the Compliance Unit of the OPG. The OPG will then investigate and can refer matters to the police where necessary. The OPG can give an attorney instructions on how they should be exercising their powers, instruct the attorney to provide information/documents, or order a report from a Court of Protection Visitor. If, as a result of the investigation, the OPG wishes to take action against the attorney it can apply to the Court of Protection. If the Court of Protection is satisfied that an attorney has behaved, or proposes to behave, in a way that contravenes his authority or is not in the donor's best interests it may, if the donor lacks the capacity to do so, revoke the LPA.
Some donors appoint a replacement attorney in their LPA to replace the original attorney on the occurrence of certain events. However, the appointment of a replacement attorney would not be triggered if the Court of Protection revokes the original attorney's appointment because he has behaved in a way that contravenes his authority or is not in the donor's best interests. Instead, a deputy needs to be appointed.
In the matter of Harcourt: Public Guardian v A
This recent Court of Protection matter involved a property and affairs LPA made by Mrs Harcourt (Mrs H) appointing one of her daughters as her sole attorney. The LPA was registered by the OPG two months later. Mrs H lived in a rest home and the manager became concerned when:
- Fees were left unpaid;
- Mrs H was not receiving an adequate personal allowance;
- Mrs H received a letter from a bank confirming a loan to her of £5,000; and
- Mrs H received letters from two entities regarding credit card applications that had been made in her name.
Concerns were raised with the OPG which opened an investigation and asked a Court of Protection Visitor to visit Mrs H. The OPG discovered that there had been frequent cash withdrawals since the LPA had been registered.
A directions order was made but the attorney failed to comply with it. Over six months she requested three adjournments and extensions of time for producing proper accounts and explaining her actions. Her fourth application for an indefinite adjournment was refused. A hearing in the Court of Protection before Senior Judge Lush took place in July 2012; the attorney did not attend.
The first question the Court considered was whether Mrs H had the capacity to:
- require her attorney to produce accounts/ financial records,
- examine those accounts/ records and
- call for an explanation of any queries.
Senior Judge Lush found that she did not and said that accordingly, the Court had discretion to intervene. The Court then considered what would be in Mrs H's best interests using the checklist set out in section 4 of the Mental Capacity Act 2005. The fact that the attorney had a job as an auditor was a relevant factor as it would be reasonable to expect a higher standard of care from her in terms of awareness of her fiduciary duties. Senior Judge Lush said that "the factor of magnetic importance…. is that [Mrs H's] property and financial affairs should be managed competently, honestly and for her benefit."
It was held that the attorney was deliberately obstructing the investigation into the donor's financial affairs by the OPG, that she had failed to comply with the directions order and was not behaving in Mrs H's best interests. As Mrs H lacked the capacity to revoke the LPA, the Court revoked it on her behalf, in order to facilitate the appointment of a deputy, and directed the Public Guardian to cancel its registration.
It is vital for the donor of an LPA to choose their attorney carefully. Most LPAs are used for their proper purpose. However, there are instances where LPAs have been misused and it is therefore important for family members and others to raise any concerns they may have about the behaviour of an attorney to ensure that the relevant authorities and the OPG can take the necessary steps.
This article by Jessica Negyal was first published in Private Client Practitioner and in Spear's Wealth Management on 18th September 2012