Powers of Attorney Bill

Peter Gibson Excerpts

2nd reading
Friday 9th December 2022 Commons Chamber

[Stephen Metcalfe (South Basildon and East Thurrock) (Con)]

I beg to move that, That the Bill be now read a Second time.

Powers of attorney are important legal arrangements that allow people to appoint others—the donees of the power, known as attorneys—to act on their behalf. The powers normally relate to financial matters, and the attorney must act on instructions from the donor of the power—the person who made it.

Lasting powers of attorney, or LPAs, are a specific type of power of attorney with even wider scope. Such arrangements allow someone to appoint another to act on their behalf after the donor has lost the mental capacity to make their own decisions and give instructions. LPAs can apply to not just financial decisions but health and welfare decisions too.

Powers of attorney generally, and lasting powers of attorney specifically, are incredibly powerful and useful appointments. They allow people to retain control over aspects of their lives, in circumstances where they might not otherwise be able to make decisions or take actions. LPAs, in particular, ensure that people have the opportunity to make provision for a future where they may no longer have the mental capacity to understand what is happening to them and therefore to make decisions about the things they care about.

With the prevalence of dementia increasing and our population ageing, these documents will become ever more important in ensuring that people can continue to live the lives they want to. They will be even more important in protecting people who might otherwise be the target of fraud, scams and abuse. I have seen that in my constituency and on a personal level. These are powerful documents, and they need to be used carefully.

Lasting powers of attorney are part of the toolkit to ensure that people can live the lives they want to. That is why I am delighted to bring forward this Bill in my name. It delivers two important changes to legislation around powers of attorney. First, it will reform the process of making and registering a lasting power of attorney to make it safer, easier and more sustainable. Secondly, it will widen the group of people who can provide certified copies of powers of attorney to include chartered legal executives.

Before I get into the detail of this Bill, I will set out the history of these documents and the problems that have arisen as a result. Under the Power of Attorney Act 1971, the power of attorney is a formal appointment whereby one party, the donor, gives another party, the attorney or donee, the power to act on their behalf and in their name. Power of attorney, in contrast to appointing an agent, can only be created and valid where certain legal formalities are observed, and they must be granted by deed. The ordinary or general power of attorney is for when the donor only needs help temporarily, for example when people are in hospital or abroad and need help with everyday tasks such as paying bills.

Ordinary powers of attorney are common in the commercial world, where they may be used in a number of ways, most typically to enable another person to execute documents on the donor’s behalf or in a transactional context. Another use is in appointing a power of attorney to manage financial or property matters in a donor’s absence. However, there were issues with these powers of attorney, as the power ceases to have effect when the donor lost mental capacity to make decisions and give instructions. As the Law Commission pointed out in 1983:

“at a time when the assistance of the attorney has become for the donor not merely desirable but essential, the attorney has no authority to act.”

This resulted in the introduction of the Enduring Powers of Attorney Act 1986. As the name suggests, enduring powers of attorney endure past the loss of mental capacity, allowing an attorney to continue acting on a donor’s behalf. Individuals concerned about their ability to control their own lives in future could now ensure that the people making those decisions were the people they had chosen and that they trusted.

[Peter Gibson (Darlington) (Con)]

My hon. Friend is making an important speech and highlighting the legislation that brings us to today and his important Bill. I just put on record the importance of those enduring powers of attorney that predate the current lasting powers of attorney and to highlight to the House the necessity for people to register them when capacity is lost. Many mistakenly believe, where an enduring power of attorney is in place, that there are no steps to take in order for it to be used.

[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.

--- Later in debate ---

[Peter Gibson (Darlington) (Con)]

It is a pleasure to be called to speak for the third time this day; I draw the House’s attention to my entries in the Register of Members’ Financial Interests. As a solicitor, I have prepared many hundreds of lasting powers of attorney for both health and welfare and property affairs and, before their advent, many enduring powers of attorney. I still act on a regular basis to take care of the affairs of individuals who have appointed me as their attorney, often in circumstances where they had no family to act for them or they did not want to entrust such responsibility to a family member. Indeed, I know I have many more future nominations that will require me to act.

I welcome the steps the Bill takes to update the process of preparation for LPAs, which have been around for well over a decade, and I congratulate my hon. Friend the Member for South Basildon and East Thurrock (Stephen Metcalfe) on bringing it forward. An LPA is a very powerful document, and we should always be aware, in making changes to them, that they can, in the wrong hands, be open to abuse.

In my personal opinion, the engagement of a legal professional to assist in the preparation can be invaluable, but not essential. My own uncle, always keen to save a bob or two, especially in order to avoid legal bills, recently prepared powers of attorney and decided to do it himself, which in actuality involved him making many telephone calls to me while he filled the forms in. Sadly, his forms were rejected by the Office of the Public Guardian and he had to start all over again. At the end of the saga, he concluded that he wished he had gone to a lawyer to get the job done in the first place. I welcome the measures in my hon. Friend’s Bill, which would certainly have streamlined the process for my uncle.

My final point is about we are with powers of attorney in respect of the high street financial institutions. There seems to be a great lack of training among our high street banks on how to engage with people who have been appointed as attorneys and the security measures involved. They make it almost impossible to deal with them in a co-operative way as an attorney, and I would welcome the Minister’s comments on that. I wish my hon. Friend well with his Bill and, should he require assistance on his Bill Committee, I would be delighted to serve.

Powers of Attorney Bill

Peter Gibson Excerpts

Committee stage
Wednesday 1st March 2023 Public Bill Committees

[Stephen Metcalfe (South Basildon and East Thurrock) (Con)]

It is a pleasure to serve under your chairmanship, Mrs Murray, I think for the first time. I also give my huge thanks to all the Members who have turned out to help with this short but important Bill.

Clause 1 will facilitate three things: first, improvements to safeguards in creating a lasting power of attorney; secondly, a simpler process for making and registering an LPA, increasing access for all involved; and, thirdly, making the Office of the Public Guardian more sustainable.

My Bill will increase access by allowing LPAs to be made and registered electronically, while—I emphasise this—also facilitating a new paper process. It is important not to overcomplicate the service, to ensure that everyone who wants an LPA has access to make one. In the new system, donors, attorneys and others involved will be able to use the channel—digital or paper—that best suits their needs. It will be a fluid system.

The new system must be balanced against the need for suitable safeguards, which my Bill also provides for through the introduction of identity verification; changes to the objection process, to ensure a more straightforward process aligned with the system that the Public Guardian operates now; and restricting who can apply to register the LPA to just the donor.

Finally, to ensure the sustainability of the Office of the Public Guardian, it is vital to reduce its reliance on paper. My Bill allows for a future system in which the LPA will be registered as an electronic document, and that electronic document will be used as evidence of registration, while still allowing physical proof for those who need it. The combination of changes realised by the schedule will enable the development of an easier but more secure process for people wishing to make and register a lasting power of attorney.

Clause 2 amends section 3 of the Powers of Attorney Act 1971 to enable chartered legal executives to certify a copy of a power of attorney. The process to certify a copy of a power of attorney does not require specialist legal skills, yet, under the existing legislation, chartered legal executives—lawyers who provide mainstream legal services—are not included among those who are able to do that. That does not make any sense and is not in line with the evolution in the legal services sector that has allowed chartered legal executives to carry out many of the same functions as solicitors. Indeed, during the pandemic, the Land Registry used its discretionary powers to accept copies of lasting powers of attorney certified by chartered legal executives.

For clarity, clause 2 extends to Scotland and Northern Ireland. The Government’s position is that no legislative consent motion is needed as the changes are consequential to the legislation in England and Wales. By amending the current legislation and enabling chartered legal executives to certify copies of powers of attorney, we will remove the barrier facing chartered legal executives in the provision of this service, increase the channels through which consumers can certify a copy of a power of attorney, and promote consumer choice and generate competition in the legal services market.

Clause 3 confirms the Bill’s short title, makes provision for the Bill to come into force and sets out its territorial extent. Clause 2, relating to chartered legal executives, will come into force two months after the Bill receives Royal Assent, while the remaining provisions, which relate to modernising lasting powers of attorney, will come into force by regulation.

Clause 1 and the schedule extend to England and Wales, save in respect to evidence of registration, dealt with by paragraph 8 of the schedule, which extends to Scotland and Northern Ireland. That relates to what can be accepted as evidence of an LPA registered in England and Wales and so aligns the new provisions for evidence with the territorial extent of the existing provisions of the Mental Capacity Act 2005 that are being amended.

Clause 2 also extends to Scotland and Northern Ireland, because it is about the acceptance of certified copies of powers of attorney made in England and Wales and therefore has the same territorial extent as the provision in the Powers of Attorney Act 1971 that is being amended.

Overall, the Bill relates to the process of making and registering an LPA in England and Wales. It will not affect the making of LPAs in Northern Ireland and Scotland, as they have their own mental capacity legislation, which makes similar provisions in those territories.

I will now talk in detail about each of the changes set out in the schedule, which fall loosely into five categories: simplifying the process of applying to register a lasting power of attorney; changing how people are notified that a lasting power of attorney has been submitted for registration; introducing identity checks; streamlining how objections to the registration of an LPA can be made; and providing for electronic evidence of the LPA, alongside physical evidence.

To make the application process simpler for donors, I am introducing three changes. My Bill removes the ability of an attorney to apply to register an LPA, thus maintaining donor control of the process. In the future, the donor will apply at the point they execute the document, and the signatures of other parties will be co-ordinated through the Office of the Public Guardian. The Bill also allows the fee to be taken at a different point. In combination, these changes will facilitate a hybrid system that allows different actors to use different channels and will therefore improve access to LPAs.

My Bill makes a small but necessary change to the notification process by requiring the Public Guardian, instead of the donor, to notify named persons, donors and attorneys when a completed LPA is ready to start the registration process. That simplifies the process for those applying to register their LPA and means that the Public Guardian can be certain that notifications have been sent to all parties so that they have the opportunity to raise any objections. That is a key safeguard. In exceptional circumstances, the Bill will allow the donor to ask the Public Guardian to disapply the notification requirements.

The change that will have the biggest impact on enhancing safeguards for the donor is the introduction of identity verification. My Bill gives the Public Guardian the ability to conduct identity checks on individuals involved in making, or who are named in, the lasting power of attorney, as a condition of its registration. If the identity cannot be verified, the LPA must not be registered without a direction from the Court of Protection. Regulations will set out the detail of who will be checked, when and how. I am confident that this will reduce the chances of any fraudulent LPAs being registered, and ultimately increase user confidence in LPAs and the system as a whole.

The Bill also strengthens safeguards through changes to the objection process. To simplify the process and to avoid discouraging genuine objections, I am introducing three changes. My Bill will allow anyone with an objection to register it. All objections will be directed to the Public Guardian in the first instance to be triaged and investigated where necessary. That formalises the process that the Public Guardian already operates. Additionally, third parties will now be able to lodge an objection from the time the Public Guardian is aware of the donor’s intention to make an LPA. Conditions for that will be set out in regulations. These changes will strengthen safeguards for the donor, particularly against abuse and undue pressure, by providing a clearer and more streamlined process for anyone objecting to the registration of a lasting power of attorney.

[Peter Gibson (Darlington) (Con)]

I commend the work that my hon. Friend is doing on this important Bill. I declare an interest as a former solicitor. Having prepared many hundreds of lasting powers of attorney, I strongly welcome the changes that the Bill will make in terms of safeguards and improvements in processes.

However, I recently met Age UK, and I share some of its concerns about keeping access to paper-based systems for those who are digitally disadvantaged or not familiar with digital processes. Could my hon. Friend reassure us that those systems will remain accessible? I would also be failing in my duties as a lawyer, with my years of experience, if I did not put on record the recommendation that legal advice should, wherever possible, be taken to look at these documents.

[Stephen Metcalfe]

I am grateful to my hon. Friend for his intervention. He makes two important points. On the first, I emphasise that there is no intention at all—in my Bill or in any other thinking—to do away with the paper-based system. People will still be allowed to apply for an LPA using the paper-based system. However, the Bill introduces an electronic system, which will hopefully streamline the process and reduce the paper burden on the Office of the Public Guardian, making it more sustainable in the long term.

On my hon. Friend’s second point, seeking legal advice is a sound recommendation in many areas, but, particularly when creating something as powerful as a lasting power of attorney, it cannot be a bad idea to seek the advice and guidance of someone with professional qualifications and experience. For many people involved in making a lasting power of attorney, it may well be the first time they have done anything like it. Seeking the advice of an expert is sensible.

Finally, as we all know, LPAs are currently paper documents. To reduce reliance on paper, the schedule provides that all future LPAs will be electronic documents accessed through electronic means, as well the paper channel. The effects of that change will be increased efficiency, accessibility and confidence for users in the new system.