A clean bill of health

Following publication of the Mental Incapacity Bill, Nicola Plant advises solicitors on the proposed changes to this area of law

The long-awaited Mental Incapacity Bill has now been published, having been based on a 1995 draft bill from the Law Commission and drawing on the subsequent consultation report in 1999, Making Decisions.

Clause 1 of the proposed legislation lays down a statutory definition of incapacity, namely that: 'A person lacks capacity in relation to a matter if, at the material time, he is unable to make a decision for himself in relation to the matter because of an impairment of or a disturbance in the functioning of the mind or brain.

It does not matter whether the impairment or disturbance is permanent or temporary.'

Clause 2(1) then provides further guidance as to the circumstances that might lead to the conclusion that an individual lacks capacity - for example, that the individual is unable to understand information relevant to the decision; retain the information relevant to the decision; use the information relevant to the decision as part of the process of making the decision; or communicate the decision by whatever means.

The legislation will also codify the duty to act in the person's 'best interests' when acting, or making decisions on behalf of another individual.

Clause 4 provides guidance as to the factors that should be taken into account when considering whether an act or decision is in a person's best interests.

On a practical level, decisions will now be made in four different ways:

- The Court of Protection will be abolished in its current form.

The new Court of Protection, supported by the renamed Office of the Public Guardian, will retain a central registry in London, but it will be able to sit in any location in England and Wales through nominated District, Circuit and High Court judges.

This is to be welcomed following recent successful trials of this scheme and it is to be hoped that it will make the process more accessible to individuals at a local community level.- The new Court of Protection will have the power to appoint 'deputies' as opposed to receivers.

Clause 24 stipulates that when appointing a deputy, the court must have regard to the principle that a decision by the court is preferable to that of a manager and, therefore, powers conferred on deputies should be limited in both scope and possibly duration.- Under Clause 6(1) there will be a new 'general authority to act' so that it will be lawful for any person to do an act when providing any form of care for another person, if that person lacks, or is reasonably believed to lack, capacity in relation to the matter in question, having regard to what is reasonable in the circumstances.However, clause 7(2) stipulates that a person acting under this informal general authority has no power to overrule the authority of an attorney or deputy appointed by the court.While this general authority may be useful in circumstances where there is no individual officially appointed to look after the individual's best interests, it remains to be seen who will police actions taken under the general authority and who will have authority to assume a general power in a situation of conflicting interests.- The most important change to practitioners will be the repeal of the Enduring Powers of Attorney Act 1985, which will be replaced by provisions for the creation of Lasting Powers of Attorney (LPA).

LPAs will allow attorneys to make decisions on behalf of the donor relating to all aspects of personal welfare, health care and their property and financial affairs.

It will also give attorneys authority to conduct legal proceedings on behalf of the donor.

In practice, as well as extending attorneys' powers to enable them to make decisions relating to matters of health and personal welfare, there are a number of other changes to the existing procedures:

- The donor of the power will be able to appoint a substitute attorney to act in certain circumstances;- Divorce will not automatically revoke the appointment of a spouse attorney, unless specifically stated that it should;- Unless specifically stated otherwise in the instrument, co-attorneys will be appointed on a 'joint' basis;- The instrument will state the names of those individuals that the donor wishes to be notified in the event of registration, or alternatively that there is no one he wishes to be notified;- As with Enduring Powers of Attorney (EPA), the LPA must be in the prescribed form, but will also have to include a certificate, signed by certain prescribed individuals, as to the capacity of the donor.

This requirement will surely mean that practitioners must satisfy themselves as to their suitable qualification to make such a declaration.

It will also undoubtedly raise concerns as to the duty of care owed by the solicitor to the donor should an attorney later abuse his powers in circumstances where questions are raised as to the donor's capacity at the time of creation;- When an application is made to the public guardian to register the power, notification will be made by the public guardian and not the attorney, as is now the case.

While this is a logical, independent, protective step in removing any conflict of interests, it will, no doubt, increase the costs of registration and it is hoped that it will not create further delay in the process.

The Bill will not be publicly debated, but will be scrutinised by a joint committee of both Houses of Parliament, which will hear evidence from interested parties.

While a statutory definition of incapacity is welcome, practitioners will be only too aware of how, in practice, few cases can be so easily and conveniently pigeonholed.

The Court of Protection will have to provide further clarification in individual cases and it is hoped that the new regime will allow this to be done in a swift and accessible way.

It is accepted that an overhaul of existing procedures is long overdue.

It has been recognised for some time that a worrying number of EPAs are used as tools to inflict financial abuse on vulnerable individuals.

The draft Bill proposes the creation of a criminal offence where an attorney or deputy, or someone who has care of a person who lacks capacity, ill-treats, or wilfully neglects that individual.

The public guardian's role will also be extended, giving it powers to call for independent reports to be prepared on incapacitated individuals.

Nevertheless, the proposed legislation raises concerns as to the increased costs of both creating and registering the LPAs, which may further undermine the client's incentive to put such measures in place for their future protection.

It is also unclear as to how we should now advise existing and new clients concerning EPAs.

While no new EPAs can be created after the Act comes in to force, the Bill contains transitional provisions recognising, for the time being, the validity of EPAs created before that date.

In the meantime, practitioners will be left with the decision as to how to advise clients of the impending changes and whether they should continue to prepare the more limited EPAs in the interim.

One cannot help feeling that clients may then feel inconvenienced if we are later recommending that they execute the new form of LPA.

LINKS: www.lcd.gov.uk

Nicola Plant is a solicitor in the private client department at Lewes-based Adams & Remers and an associate of both the Society of Trust and Estate Practitioners and Solicitors for the Elderly