Less cost, more control: should everybody draw up lasting powers of attorney?

The Public Guardian wants to encourage every adult in England to draw up lasting powers of attorney. The reason is simple: to cut down on the cost of administering incapacity and give individuals greater control over how their affairs should be managed if they lose capacity.

Where no such instrument is in place and an individual becomes incapacitated, whether as a result of old age or after an accident, the responsibility is on the public guardian, usually at the family’s request, to secure the appointment of a deputy to supervise them. For both the individuals involved and their families, and the Office of Public Guardian, drawing up an LPA is a far cheaper option. The cost of a ‘property and financial affairs’ LPA – the most common LPA – is only £130 if applicants directly submit the form without the assistance of a professional such as a solicitor. In comparison, the cost for their family to have a deputy appointed is at least twelve times as much, starting at around £1,200 in the first year in application, hearing and assessment fees (see figure 1 below). There is also an annual supervision cost and – an occurrence less likely where an LPA is in place – the risk that the deputy may be abusing their position.

From an practical point of view having an LPA addresses another issue: control. Rather than letting a third party decide who and how your affairs should be administered, the donor, through an LPA, can decide in advance and appoint an attorney of his choosing.

The problem for Alan Eccles (pictured), who took over from Martin John as public guardian in April, is that it is not the sort of campaign that captures the public’s imagination. The number of LPAs registered with the OPG has increased significantly over the past few years. Last month alone the OPG received 21,000 applications to register LPAs, bringing the total number to 605,243 since the office opened in 2007. For the current financial year, the OPG expects numbers to reach 225,000 (see figure 2).

“Every year that number goes up and we are expecting to double the number of registered LPAs within a three-year period,” says Eccles.

Demand in relation to the appointment of deputies is also rising, requiring further resources at the OPG and providing further impetus for the OPG to raise awareness of LPAs among the general public. There are presently just under 45,000 deputies – 90 per cent of whom are solicitors – and an additional 6,000 every year.

The only way around the resultant pressure on OPG resources is to make the drawing up of an LPA an ordinary step for everybody.

“Our ambition is for every member of the adult population – that’s every adult over 18 – to be aware that [LPA] is a vehicle available to them and be able to make an informed decision as to whether it is appropriate for them to have one or not,” says Eccles.

The rise is the elderly population is one particular concern, including issues surrounding dementia, but the former barrister says other groups are equally important. These include individuals with acquired brain injury, those with learning disabilities or mental illness, and people with variable capacity because of their state of health.

Eccles concedes that individuals are usually only prompted to make a will or LPA when faced with a ‘life incident’ which makes them reflect and take action on how they would like their affairs organised in case they lost capacity.

“Those sorts of events can happen anytime in someone’s life,” he says. “Everybody knows that when someone gets their first driving licence, the risk of accident is significantly higher until they get some experience, and that may not be a ‘life moment’ but might trigger someone to think about what might happen if they I had a serious road accident and as a result of that lost capacity. That would result to problems for the family too, as they would be forced to go to the court of protection to make an application to get a deputy appointed.

“So for me it’s a matter of awareness, that people can just think that [an LPA] is available to them and they can specify what they would like in certain circumstances.”

Barriers to take up

Solicitors are a main conduit of LPA registration. The OPG estimates that about 75 per cent of LPAs are registered with the assistance of professional advisers, most of whom are solicitors.

But solicitors are well aware of the difficulties of getting clients through the door to arrange a will, let alone an LPA. Most people agree LPAs are a good idea but few take the next step but for solicitors. It is often only when a client asks about making a will that practitioners will suggest that they should draw up an LPA at the same time.

But Eccles suggests that there are other touch points aside from distress purchase which should provide a trigger to arrange an LPA.

A younger couple thinking about having a family and maybe reviewing their mortgage and how they’re going to provide, is a typical moment involving planning for the future which is a logical start for a conversation about LPAs. Or when an individual or couple are buying their first home, where the solicitor doing the conveyancing will probably advise about future protection. “How would a client protect themselves if they’re taking on a large mortgage, or, if they lost capacity, how would their co-dependent cope with the situation?”, asks Eccles.

The deregulation of legal services could provide an alternative channel to help the OPG deliver its message. Membership organisations and retailers entering the market have unique, regular access to thousands of individuals. It is easy for them to include that message in their newsletters as one of a range of services, legal or otherwise. A lot easier than law firms, who only intermittently contact clients to remind them, for instance, to review their wills. Saga, which launched its Legal Essentials service in October, can easily reach out in this way to its 2.7m customers to remind them that it charges just under £260 for legal advice over an LPA. Some law firms charge similar prices, many charge more, while some top end firms can charge as much as £1,000. There is nothing stopping the Co-op communicating in similar ways with its 6m members.

The complexity of the old EPA forms caused significant frustration with both the public and solicitors. This was seen as a major barrier to the take up of EPAs, and the new LPA forms have been simplified, although both lawyers and the OPG say they could be simplified further.

Even now people try to fill the forms themselves but end up turning to a solicitor for advice, lawyers say. There are also stories of individuals applying to have an LPA registered and paying the £130 fee, only to be told the form has not been filled in properly and asked to pay the fee a second time.

A consultation on that very issue closed on 19 October and the OPG will shortly be analysing responses. A full report is scheduled for the end of January next year. But already work has started on making them available online and more accessible. A live digital pilot involving law firms and charities began on 19 November and will run until February 2013 with a view for the new digital portal being open to all in April 2013. With the number of deputy investigations on the rise, there is urgency in the OPG converting the population to planning for their future.

Deputy investigations

The number of investigations has risen dramatically in the past four years but Eccles says this has been in proportion with the number of applications the OPG is receiving (see figure 3 below for a breakdown of investigations by types and their outcomes).

“Last financial year we did just over 450 investigations,” says Eccles. “If you put that in proportion with the number of applications we’re getting through it’s very small. We also have a lot of safeguarding referrals but a lot of them are not for the public guardian and we pass them on to other agencies. So the 450 investigations completed last year were for matters that fell within our jurisdiction.”

This aside, Eccles has initiated a review of the supervision regime which he hopes will lead to more effective supervision.

The supervision regime is not prescribed in detail in the Mental Capacity Act, which just provides that the public guardian is responsible for supervising deputies, “so to an extent the regime is within my gift, and the review will look at what supervision means,” he says. “It’s that balance between giving support and giving protection to the incapacitated person, and whether our response is proportionate. With more than 40,000 deputies to supervise we have to have a model that can cope with the numbers and is proportionate.”

Already 1,300 deputies have been contacted; this will be followed shortly by one-to-one interviews. “We are already committed to move to segmented supervision: at the moment it is based on risk assessment of the case. The new model will look at type of deputies: professional deputies, subdivided into panel deputies, other professional deputies and local authorities; and we’ll have a supervision regime for lay deputies.”

Jean-Yves Gilg is editor of Solicitors Journal

Case study 1

•          OPG received concerns about the Deputy’s management of the client’s affairs. The Deputy is the client’s husband. Whistleblower accusations:

–         Deputy spending the client’s money on lavish lifestyle for himself & mistress 

–         Deputy paying mistress a carers wage when she was not caring for client

–         Failure to pay client’s fees for her day centre meant she was refused entry

•          PG investigation large sums of money had been misappropriated to the amount of £600k

•          PG applied to court to have the deputy dismissed and a professional appointed

•          Putting things right:

–         Husband / former deputy jailed for 30 months for financial abuse of the client                

–         Professional deputy has settled debts to ensure that the client can attend her day centre

–         Recouping client’s stolen money is ongoing, the deputy missed instalments on the security bond

Case study 2

•          Donor of an EPA resides in her own home and is stated as an alcoholic. The attorney is an accountant who acts on the advice of the family.

•          The whistleblower was an advocate for the donor, who complained that:

-         She had not been consulted by her (EPA) attorney about the sale of some of her  jewellery

-         The attorney was holding the rest of her jewellery refusing to return it

•          Attorney claimed that she had sold some of the jewellery to clear debts in order to protect the donor’s business from going into liquidation. The attorney stated that the rest of the donor’s jewellery was being held to prevent her from selling it to buy alcohol.

•          The MCA is very clear when it states that if the donor has the capacity to make a decision, then the attorney should not over-ride their wishes no matter how unwise the attorney views the decision.

•          Putting things right:

-         The attorney has complied with advice from the OPG legal advisors that the remaining jewellery should be returned to the donor in stages as suggested by  the Donor’s psychiatrist.