Former Senior Judge at the Court of Protection, Denzil Lush, recently gave his opinion regarding Lasting Powers of Attorney (LPAs) and the potential for fraud in a radio interview for BBC Radio 4 and the BBC published the article here. Below experts at Humphries Kirk discuss.
Whilst reading this article may encourage fears that making an LPA will automatically lead to fraud and abuse, Former Senior Judge Lush’s comments must be taken in context. Following a career spanning 20 years at the Court of Protection, Former Senior Judge Lush will have seen the worst situations of financial abuse that can arise between families and this will shape his own view.
However, significant numbers of LPAs are created every year. Many will not cause issues and work in the way that they are intended to. Naturally success stories are not going to make the headlines in the same way and it is misleading to assume that making an LPA will lead to fraud.
Former Senior Judge Lush has advocated the Deputyship route over making an LPA. In terms of avoiding financial abuse his comments are correct. Those people subject to a Deputyship Order can be assured that their Deputies must fulfil reporting requirements from the Office of the Public Guardian (OPG), they are supervised in their activities and required to enter into a security bond in case the Donor’s assets are mismanaged.
There has so far not been any mention of the costs of obtaining a Deputyship Order, in our experience this can be between £1,200 and £1,500 + VAT of legal costs and a £400 court fee, or the fact that obtaining an order from the Court of Protection usually takes 6 – 9 months.
In our opinion, Former Senior Judge Lush’s comments should be interpreted to highlight the need for professional advice when considering an LPA. Solicitors have a role to play in ensuring that the public understands the nature and extent of the power that is granted and the pitfalls of not carefully considering the choice of Attorney(s) before completing the arrangement.
The OPG and Ministry of Justice have been keen to advertise the LPA as a simple document that anyone can prepare. This strategy, whilst having the positive effect of bringing LPAs into public consciousness, fails to identify the issues that need to be considered when making one and is only likely to lead to personal applications for basic LPAs which make no provision for differing situations and no advice has been taken on their merits. Such LPAs may later be found to have led to fraud and financial abuse.
Another serious flaw in the OPG’s message, is that in suggesting that anyone can make an LPA and it is easy to do so, vulnerable people may find themselves pressured to enter into an arrangement allowing financial access to difficult family members, carers or friends that do not have their best interests at heart.
A clear way to address this issue and the concerns that Former Senior Judge Lush clearly has voiced, would be to reiterate the role of the Certificate Provider (a person that signs the LPA to state that those making the document understand the nature of it) and to require that the Certificate Provider be a trusted professional, such as a solicitor or doctor, rather than a friend or neighbour.
All too often a Certificate Provider will be appointed who will not be aware of their responsibilities. This Certificate Provider will not necessarily be able to judge capacity or spot signs of undue influence.
There are undoubtedly issues with the current LPA system and the ‘dumbing down’ of its importance perpetuated by the Ministry of Justice and OPG. However, an LPA remains an essential tool in the armoury of protecting and safeguarding affairs of the elderly and vulnerable and Former Senior Judge Lush’s comments should be seen as a warning against the system, not against the concept of an LPA.
Our message is clear – obtain legal advice and speak to a professional and we can ensure that the LPA you make is right for you. Contact your local branch and speak to the Private Client department to find out more about the process of creating an LPA.
