Simplifying the LPA process has increased the risk of fraud and abuse.
The new Lasting Power of Attorney (LPA) process, provided by the Office of the Public Guardian (OPG) in July, removes certain safeguards that could lead to abuse of the system.
The new process is intended to increase take-up of LPAs, which is woefully low, with only around 15% of people aged over 75 having one. We believe there are many reasons why the take-up of LPAs remains low, including a general lack of awareness of LPAs, a lack of willingness to accept that one might need an LPA, and the perceived or actual complexity of putting one in place for some people.
The idea is that more people will be able to make an LPA themselves without having to instruct a lawyer. However, because of the simplification, critical consumer safeguards for the most vulnerable people in society have been lost.
Of greatest concern is the fact that a certification page exists where a third-party certificate provider signs to say that the donor understands what is being signed and that no one has pressured them into signing it. However, there is now no way of checking whether the person who is signing this part of the form has the relevant qualifications to do so, or is even allowed to do so, under the law.
Second is the removal of the need to notify third parties of the fact that an LPA has been registered, thus removing a safety net whereby coercion or fraud may be identified. Families are complex and sometimes members being aware of what is going on may make the difference between everyone being happy and arguments breaking out.
Third, there is the likelihood that those without the benefit of legal advice will not want the attorneys to act until they become mentally incapable, when in fact they might want help just because they have become frail or physically incapable of dealing with their finances.
Common issues with the incorrect completion of an LPA include:
- Incorrect use of specific terminology, such as the use of ‘must’ or ‘shall’ as a definitive statement;
- Restrictions that seemed to be a good idea but do not allow the attorneys to be able to assist when they need to;
- Use of ambiguous phraseology that is open to debate where one or more attorneys are appointed;
- Incorrect or conflicting appointments of attorneys that could prevent the effective or total ongoing management of a person’s property and financial affairs or decisions relating to their health and welfare; and
- Failure to take account of the abilities of attorneys, whether it is their own health, desire or time and ability to manage what can often be challenging emotional or financial decisions.
At Moore Blatch we welcome any initiative that encourages people to put in place an LPA, but simplification must not mean greater scope for fraud or abuse. There are safeguards for people who create LPAs so that in the event of any fraud or abuse there is a system in place to allow the attorneys to be investigated.
It would, however, be better to have a system which made it harder to allow such fraud and abuse to happen in the first place rather than try to fix the problem after the event. Given the nature of an LPA, such abuse may not be discovered until it is too late, especially where the person who gave the attorneys power may never be in a position to expose the fraud.
LPAs are complex and, while it is good news that many people will now be able to create these documents themselves, there are many people who would benefit from legal advice because it is easy to get them wrong and many people do.
The OPG is there to police LPAs that are not made in accordance with the legislation. Unfortunately, people think if the LPA is registered it is all OK. That may not be the case, and they often find this out when it is too late.
Fiona Heald is head of the Court of Protection team at Moore Blatch