A Continuing Power of Attorney in a bank’s standard form registered with the Office of the Scottish Public Guardian (‘the OPG’) has been held by a Sheriff not to have been validly constituted, and the court held that even if the form had been validly constituted, proposed Guardians should be preferred to administer the Adult’s affairs so that the Continuing Power of Attorney would have been revoked. The Guardianship application was granted.

The Continuing Power of Attorney had been granted by the Adult, Mrs W, in favour of a bank in 2008 shortly after the death of Mrs W’s husband. Mrs W subsequently lost capacity and her niece and cousin (being unaware of the existence of the Power of Attorney) applied for Financial & Welfare Guardianship of Mrs W under Sections 57 & 58 of the Adults with Incapacity (Scotland) Act 2000 (‘the Act’). As part of the statutory procedure, the application was intimated to the OPG. When responding to the Applicants’ solicitor, the OPG advised that they already held a Continuing Power of Attorney granted by the Adult in favour of the Bank on their register. Despite the Applicants having alerted the local branch of the Bank to Mrs W’s deteriorating mental health in 2013, the Bank had taken no steps to exercise their powers as Continuing Attorney and the Applicants were left to assist the Adult with her financial affairs on an informal basis pending the outcome of the Guardianship application.

In light of the information received from the OPG, the Applicants amended their application to seek revocation of the existing Continuing Power of Attorney in terms of Section 20(2)(e)(ii) of the Act. The Bank opposed the application for revocation and a hearing was held at Glasgow Sheriff Court on 29 April 2014 before Sheriff Baird to determine the matter. Sheriff Baird held that, despite having been registered with the OPG, the Continuing Power of Attorney in favour of the Bank had not been validly constituted in terms of Section 15 of the Act. He noted that there was no express statement that Mrs W had intended the powers to be continuing powers in terms of Section 15(3)(b) of the Act. In addition, there was no statement within the Power of Attorney in terms of Section 15(3)(ba) of the Act that Mrs W had considered how her incapacity was to be determined. As such, there was no need to revoke the Power of Attorney and the Applicants were appointed as Mrs W’s joint Financial Guardians. Given that the Continuing Power of Attorney was in the Bank’s standard form, the decision raises questions about whether a large number of Powers of Attorney prepared in the Bank’s standard form are in fact valid.

Interestingly, Sheriff Baird indicated that even if there had been a validly constituted Power of Attorney, he would have been persuaded to revoke it and appoint the Applicants as Mrs W’s Financial Guardians as the Bank had not taken steps at any time to exercise their powers as Mrs W’s Attorney. In the circumstances, he was prepared to treat the parties as being competing applicants and apply the criteria for appointment of guardians contained in Sections 59(3) and 59(4) of the Act to both parties.

It is understood that a written decision will be issued in due course.