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.