Lasting Powers of Attorney came into the media spotlight recently following a revelation by recently retired Court of Protection Judge, Denzil Lush, that he would personally never make a Lasting Power of Attorney. He explained that he prefers the Court of Protection Deputyship option instead, because it is more tightly regulated.
So what is the difference between a Lasting Power of Attorney and a Court of Protection Deputyship and why were Denzil Lush’s comments controversial?
A Lasting Power of Attorney (LPA):
An Attorney is a person who is chosen by somebody else to look after their financial affairs, or to make health and welfare decisions on their behalf. An attorney can be appointed when making an LPA. However, before an LPA can be used it needs to be registered with the Office of the Public Guardian (OPG).
If there are any suspicions about an Attorney, it is the OPG who will investigate complaints about misconduct, take action through the Court of Protection to resolve problems, and remove wrongdoing Attorneys from their role. However, the OPG will only take action against an Attorney if they are notified that there is a problem. There is no statutory requirement for an Attorney to provide regular accounts or reports of their actions.
There is widespread concern in the legal profession that financial abuse of the elderly by the use of Lasting Powers of Attorney is growing. As more people move towards creating LPAs digitally it seems likely that this will continue to grow, particularly as the OPG is hoping to move towards digital signatures in the not too distant future. This will mean that the process is completely digitalised.
As Solicitors, our concern over this process is firstly that Donors (the person making the LPA) with fluctuating or borderline mental capacity are not being properly assessed before they sign, and secondly that the Donor is not being fully advised of their options and the potential drawbacks or advantages of what is available to them. If a document is “ordered” for them online by their proposed Attorney, it can be too late to rectify problems which later occur because the LPA was set up in an inadvisable or incorrect way. It is true that Lasting Powers of Attorney are more open to abuse than the alternative deputyship regime.
A Court of Protection Deputyship:
A Deputy is a person who is appointed by the Court of Protection to manage finances or make health and welfare decisions for an individual when that individual is not capable of making a Lasting Power of Attorney. This is because they lack the mental capacity to do so, and also lack the capacity to make day to day decisions for themselves.
The powers of a Deputy are very similar to those of an Attorney, but the supervision regime is very different. A Deputy is required to prepare accounts and submit a report to the OPG every year. They are also required to take out insurance to reimburse the patient in the event that any abuse or mismanagement occurs. The OPG scrutinises the accounts and provides regular support and guidance to the Deputy.
How does Attorneyship and Court of Protection Deputyship differ?
If we stop the comparison here, it would certainly seem to me that it would be better to have a Deputy than an Attorney. No doubt Denzil Lush saw the worst of Attorney behaviour coming through the Court of Protection, which would have influenced his view. However, I firmly believe that LPAs perform a helpful and even critical role in empowering individuals to make choices about their lives, both as a matter of simple convenience and also when planning ahead for more vulnerable times. The majority of harmonious families get along very well with LPAs and they are a far cheaper, faster, and generally a more convenient way of managing a person’s affairs during that twilight period of vulnerability where they haven’t yet lost mental capacity. During this period a person cannot access Court of Protection Deputyship but they may still need support.
*What’s the difference in cost?
The average cost of appointing an Attorney in a simple LPA is around £600, if a Solicitor is used, plus an £82 registration fee. There are no further ongoing costs and it takes roughly 2-4 months to prepare and register an LPA.
The average straightforward application to appoint a Deputy in the Court of Protection is around £1,700. As most applications are not simple, and involve a number of family issues which need to be included in the application, it is not uncommon for it to cost more than this. Additionally, there are court fees of £400, medical practitioners fees of anywhere between £150 and £850, an admin fee of £100 from the OPG to appoint a Deputy, and an annual OPG supervision fee of £320. There is also the insurance bond, which usually costs between £50 and £350 per year, depending on the level of the patient’s assets. The timescale is currently anywhere between five months and a year to obtain a final order which appoints a Deputy. During this period of limbo no one has the right to access the patient’s funds or pay for their care and it can be a very stressful time for families.
You might share Denzil Lush’s view that these downsides are outweighed by the added protections that a patient will receive by having a court appointed Deputy. I would disagree, and believe that, provided full legal advice is taken, an LPA is a low risk, low cost, versatile, quick and convenient solution to the problems raised by loss of mental capacity.
Which is the right option to choose?
There’s no right or wrong answer with this decision; it’s down to the individual whether to make an LPA or not. However, in the most recent report by the OPG, it was stated that there are 2,478,758 Lasting Powers of Attorney on their register. By contrast, only 5,327 concerns were passed to the OPG investigations team or alternative agencies. This might not tell the whole story (unreported abuse, for example) but it does help to put into context how uncommon it is for a LPA to be misused.
Whilst the Court of Protection serves a vital role in protecting the vulnerable and appointing people to make decisions when someone would otherwise have nobody to make those decisions for them, Powers of Attorney also perform a vital function in giving relatively fast, individually tailored solutions for people at a fraction of the cost of applying to the Court of Protection. An LPA also enables people to choose for themselves who they would trust to look after their affairs when they are vulnerable, rather than having a court decide this for them.
For more information and guidance on Lasting Powers of Attorney and Court of Protection Deputyships, please contact Genevieve Powrie in our Elderly, Care & Mental Capacity team on 01625 442146.
*Costs listed in this blog are correct at the time of publishing, September 2017.