In September, a Powers of Attorney Bill achieved Royal Assent, consequently becoming an Act of Parliament; the Powers of Attorney Act 2023. What do the reforms mean for individuals considering a Lasting Power of Attorney?
A Lasting Power of Attorney is a legal document that allows a person (the donor) to appoint someone they trust (the attorney) to handle their affairs, making decisions on their behalf if they no longer possess the mental capacity to do so.
The decisions that the attorney is permitted to make are broadly financial and/or health and welfare matters, but the specific responsibilities vary depending on the circumstances.
For millions of people in the UK, accessing this legal process is incredibly important for their wellbeing, safety, and financial security. Crucially, it gives peace of mind that their personal and financial affairs will be dealt with in an orderly manner if they lose mental capacity.
However, the appointment and management of LPAs is a system that has long received criticism due to its outdated rules and processes. The Powers of Attorney Act 2023 has been introduced in direct response to this call for reform.
What are the changes to Powers of Attorney in 2023?
The new Powers of Attorney Act 2023 focuses on digitalising the LPA process, ensuring that the current system of appointment is faster and easier to use, as well as more secure and accessible. These reforms are essentially changes to the Mental Capacity Act 2005, improving the way in which LPAs are made, and how the associated legal processes work.
Here are the key things you should know about the changes to Lasting Powers of Attorney:
Improved safeguards to prevent abuse and fraud
The changes aim to protect those who are vulnerable from falling victim to abuse or fraud. The proposed plans include improved identity checks to ensure a more robust verification process. The identity regulations will apply to any person associated with the process, such as certificate providers, attorneys, the donor, and replacement attorneys. If the ID requirements are unfulfilled for any party, the Office of the Public Guardian would not have permission to register the Lasting Power of Attorney.
The requirements to incorporate identity checks in the process are, on the whole, a positive step although, in some respects, they will add to the complexity of finalising LPAs. Perhaps this is a necessary complication.
Change to who can apply to register and LPA
LPAs have to be registered by the Office of the Public Guardian before they can be used. Under the current system, both donors and attorneys have the power to register LPAs with the OPG. A major change that will be introduced by the new Powers of Attorney Act 2023 is that it will only be the donor who will be able to register an LPA.
The implementation of this will be interesting to see and, while understandable, is likely to cause a problem in practice. It is unclear at this stage who will have the power to register the LPA if the donor has lost capacity before the application to register the LPA is made. It is also unclear whether this now removes the ability for a donor to create an LPA now and choose not to register it immediately so that it is registered when they lose capacity.
Digital system to reduce errors and streamline process
Before the new act was introduced, the Lasting Powers of Attorney application was paper based, with the OPG processing almost 20 million forms using an offline system. It’s anticipated that a new online system will speed up processing times, as well as reduce errors.
The Interim Public Guardian for England and Wales, Stuart Howard, has commented that the reforms will enable the OPG to modernise the LPA process to ensure that the service is fit for the future.
Changes in objecting to an LPA
The new Power of Attorney Act 2023 will also allow a larger group of interested persons to object to the appointment of an attorney if there are concerns of abuse or fraud. The process of objecting to registration has been simplified to allow initial objections to be made to the OPG, who will assess whether there is evidence to support the concerns raised.
If the Public Guardian takes the view that there is no evidence in support of the concerns, the LPAs will be registered. If, on the other hand, the Public Guardian takes the view that there is evidence which supports the objection, the LPA will only be registered if the donor or the attorney applies to the Court of Protection.
While the changes will simplify the objection process, it probably swings the pendulum too far in favour of those objecting to the registration of the LPA. It will more than likely put a disproportionate burden on donors or attorneys to make the application to the Court of Protection if they wish to go ahead with the registration of the LPA.
This will be problematic for families with historic tensions. LPAs can be extremely emotive, and the underlying issues are not always straightforward.
What are the limitations of the Powers of Attorney Act 2023?
While moving to a digitised system is a welcome change likely to bring vast improvements to the current process, many who need to appoint an LPA may not have the access to, or capability to use, technology or the internet.
For this reason, it is important that those who need to access an LPA via the paper process can still do so and are supported. The government have assured that this will be the case.
The OPG and the government do not make it a legal requirement for people to access legal support during the LPA process. However, without legal advice, it is difficult for individuals to receive clear and independent advice on who is an appropriate attorney, and for possible abuse to be identified.
Looking to the future of LPAs
The idea is that these changes will benefit vulnerable members of our society, safeguarding those who may otherwise have been financially taken advantage of.
While these key reforms are welcomed, limitations remain, and so it is important that we continue looking for any opportunities to better our LPA system and process, ensuring that it is working as it should be for those people who need it most.
The Powers of Attorney Act 2023 will be followed by further direction (secondary legislation) from the government on how it will be implemented and will come into force at a date yet to be set. Until the Powers of Attorney Act is in force and the new systems are in place, it is business as usual.
As part of their overall planning, donors should continue to take independent legal advice on how their personal and financial affairs will be dealt with if they lose capacity to manage their own affairs.
Suzgo Kaluluma is an expert LPA solicitor at Rollits LLP
