Powers of Attorney Bill

James Sunderland Excerpts

2nd reading
Friday 9th December 2022 Commons Chamber

[Stephen Metcalfe]

I am grateful to my hon. Friend for his clarification. Obviously, he knows considerably more about the history of this than I have perhaps been able to gain during my research. In the 1990s, there were greater concerns about the abuse of enduring powers of attorney. I am told there was concern that between 10% and 20% of enduring powers of attorney were potentially being used in an abusive way. To resolve that, and following extensive work by the Law Commission, the Mental Capacity Act was passed in 2005. Enduring power of attorney was replaced by lasting power of attorney, or LPA, in 2007.

New safeguards were introduced—primarily the requirement for the LPA to be registered by and with the new Public Guardian and their office, the Office of the Public Guardian, before it could be used, whether before or after a loss of capacity; and the role of the certificate provider, who must confirm that the donor understands their LPA and that there was no fraud or undue pressure.

Fifteen years on, the system is in need of an update. The Government’s 2021 consultation on modernisation clearly set out the issues, and media coverage over the past year has further emphasised the need for reform. First, people wishing to make LPAs struggle to understand the system and to complete their LPA accurately. Guidance can be overwhelming and full of jargon such as “donor”, “attorney”, “certificate provider”, “execution” and “jointly and severally”. This is specifically daunting in urgent circumstances—for instance, due to a recent diagnosis of dementia or terminal illness.

The reliance on paper also makes it more complicated than necessary. The legislative framework and operational process involved mean that, even where the LPA is filled in online, each LPA has to be printed off and signed on paper in five places in a specific order by at least three people to be valid. The possibility for error to creep in is high, and the Office of the Public Guardian indicates that as many as 11% of LPAs sent to the OPG cannot be registered because of signing mistakes. Donors cannot understand why the LPA process does not make use of technological improvements since 2007. They want to use a digital system to fill in, sign and submit documents. As the Government set out in their consultation, that would allow a speedier process, reduce the administrative burden on people and help to reduce or even remove many of the errors in the process.

Secondly, the OPG is drowning in paperwork, and that does not allow the OPG to deliver the service that its fee payers expect. Many in this place will know about the media reports on the backlog in registrations. The OPG reports that it is taking up to 20 weeks on average to process an LPA application, against its target of eight weeks. Others will be receiving letters from constituents asking for assistance, as they are left unable to support their loved ones because an LPA is currently sitting in that backlog.

We all agree that this situation is unsustainable. The OPG carries out manual administration checks. It stores 11 tonnes of paper at any one time, and LPA applications are generally increasing, with the number of LPAs submitted for registration more than doubling between 2014-15 and 2019-20. That is creating an ever increasing need for staff, equipment and storage space. The ability to use a digital channel—alongside, I stress, a paper route—to make and register an LPA would help to resolve some of those issues. Most of the current manual checks could be automated. Physical storage requirements could be reduced and, critically, it would increase the OPA’s resilience to backlogs caused by the disruption of paper processing.

The third point, and probably the most important one, is that while a digital channel is desirable for donors, attorneys and the OPG, it must be balanced against the need for suitable safeguards. The risk of fraud is small, but it is a real risk. The BBC Radio 4 programme “You and Yours” reported last year on the case of Marie—not her real name—who was a victim of LPA fraud when someone took out an LPA in her name and attempted to sell her home. Concerns about undue pressure and abuse are also common. Earlier this year, in parallel with another report by “You and Yours”, a debate was held in the other place on LPAs and the economic abuse of older people.

I firmly believe that LPAs are a positive way for people to control what happens if they lose mental capacity. They are an insurance policy that people should take out to appoint people they trust to make decisions in their best interests, should the worst happen. But I cannot ignore that there must be protections in the system to reduce the chance of it being manipulated by those who intend ill will towards others.

[James Sunderland (Bracknell) (Con)]

I am not a lawyer—heaven forbid!—but my understanding of the Bill is that it will do a number of really important things. It will provide much better safeguards on financial and property issues, and it will provide safeguards where there is loss of mental capacity and against abuses of power. It will also make the process a bit more streamlined, as we will not be so dependent on expensive lawyers now that legal executives can do this. My question for my hon. Friend is, will it be any cheaper?

[Stephen Metcalfe]

My hon. Friend asks a very good question. Although I cannot guarantee it will be cheaper, I can say that it will be no more expensive. We need to make the system sustainable and the relatively straightforward reforms in my Bill will allow that to happen, while keeping the price competitive, as it is at the moment.

My hon. Friend has hit upon the point at which I am going to describe some of the detail of the Bill and how it resolves some of the issues to which I have alluded. It makes a number of changes to the Mental Capacity Act 2005, specifically to schedule 1, which covers provision for the making and registration of LPAs. The most crucial change is that the Public Guardian will verify the identity of certain parties as part of the registration. It is important to strengthen safeguards in that way on a document that can confer such wide powers on access to savings, investment and property. The Government’s consultation indicated that these proposals were well received by respondents, including the public, as a necessary safeguard. This will be a key protection against the horrible position Marie found herself in, by increasing confidence that the people named in the LPA have actually been involved in the process of making it. This provision is even more important now, with identity fraud on the rise and perpetrators making use of ever-more sophisticated methods for targeting their victims. Removing loopholes in the system before they can become further exploited and other members of the public are put at risk is one reason I chose to take this Bill through Parliament.

The second main change is on the requirement for the application to register, requiring the donor to apply and changing what must accompany the application—currently, the instrument intended to create the LPA and the fee. This will facilitate a flexible system, so that instead of just a paper channel or a digital channel, each actor, whether they are the donor, the attorney or the certificate provider, can use the method that best suits their needs to complete a single LPA. This will reduce the administrative burden on donors and attorneys, while automated and early error checking will help to reduce the potential for signing and other errors that prevent registration.

Changes to the notification system will also facilitate this flexibility. The system requires that people the donor named in the LPA are informed by the applicant when the LPA is sent for registration, so that they can raise any objections. In the future, the Public Guardian will send these notifications. This change is made for three reasons. First, the Public Guardian can be certain that the notifications have been sent, increasing the protection provided. Secondly, it removes the administrative burden from the donor. Thirdly, the Public Guardian will be co-ordinating the execution of the document, so is best placed to send these in a timely manner.

That links to changes to the process for objecting to the registration of an LPA. The current process is complex, with different routes for different people, depending on the type of objection. People and organisations not named in the LPA do not even have a formal route to raise objections. That group currently includes organisations such as local authorities, which have a statutory safeguarding duty but no formal way of raising related concerns about an LPA’s registration with the Public Guardian. Although the Public Guardian currently processes these objections, because it is the sensible thing to do and offers the best protection for the donor, the scope of the current legislation is limited and creates ambiguity. To rectify this issue, the Bill introduces a single route for all objections, starting with the Public Guardian and ending at the Court of Protection, if that is required. It applies to all individuals and organisations, even if they are not included in the original LPA. So there is more clarity about where and how to raise concerns about the registration.

Let me turn to increased protection for donors. Finally, to modernise LPAs the Bill changes the evidence of registration of the LPA. As I said, LPAs are currently paper documents. That means that if there are changes—for instance, if an attorney is removed because of abuse—the Public Guardian needs to amend the paper documents. As I am sure the House can imagine, why would someone who has been removed from an LPA because of abuse want to return it to the Office of the Public Guardian? The LPA will therefore be registered as an electronic document. That will create a single source of truth that can be accessed in real time by third parties, but more importantly, updated in real time by the Public Guardian without requiring the paper to be returned.

I recognise, however, that some individuals and third parties will remain unable to use an electronic system. For that reason, the Bill also provides for other methods of physical proof. I believe that those will be set out further in regulations.

As I stated, my Bill seeks not only to modernise LPAs, but to amend section 3 of the Powers of Attorney Act 1971 to enable chartered legal executives to certify copies of a power of attorney. That Act sets out how a copy of a power of attorney can be made and who can certify or sign copies, stipulating that only

“the donor of the power…a solicitor, authorised person or stockbroker”

can sign or certify

“that the copy is a true and complete copy of the original”.

The Bill seeks to include chartered legal executives among those who can certify a copy of a power of attorney.

We have come a long way since 1971; it is more than half a century since that Act came into force. Chartered legal executives are allowed to provide legal services under the Legal Services Act 2007 and now provide many of the same legal services as solicitors. It is therefore completely right that chartered legal executives have the ability to certify copies.

I am conscious of time, so I will draw my remarks to a close. I have outlined a number of specific changes that the Bill will make. It is a relatively straightforward piece of legislation, but is important none the less. It will make the Office of the Public Guardian more sustainable; streamline the process; increase the number of people who can authorise copies of lasting powers of attorney; and introduce some important safety checks. I very much look forward to hearing what the Minister has to say. I thank him and his Department for working with me to bring the Bill to this stage and I hope that, after today’s debate, we can take it further forward. I commend the Bill to the House.