personal finance

Legal actions relating to powers of attorney rising

Court actions against people with lasting power of attorney for vulnerable people have jumped in the past year, with cases against individuals rising by 71 per cent.

The Office of the Public Guardian (OPG) made 465 applications to the Court of Protection to censure or remove attorneys in 2017-18, up from 272 in the previous year. Making improper gifts and not acting in the vulnerable person’s best interests were two of the main reasons for having attorneys censured or removed.

The data, obtained under a freedom of information request by law firm Nockolds, also found that the OPG launched 1,886 safeguarding investigations in 2017-18, where a vulnerable person is at risk from their nominated attorney. This was an increase of 48.9 per cent from the previous year.

Experts say most misconduct by attorneys does not come to light during the donors’ lifetime. The OPG is often tipped off by relatives, care homes and local authorities, but these organisations have limited capacity to identify whether inappropriate transfers have been made, or whether attorneys are acting in the best interests of vulnerable people.

Peter King, partner at Nockolds, said: “While action by the OPG may be increasing, misconduct is notoriously difficult to detect, so these numbers likely represent the tip of the iceberg.”

He says the system is clearly open to abuse. “Attorneys have legal responsibilities under the Mental Capacity Act, which are summarised in five core principles, but with do-it-yourself documentation there are no checks and balances to ensure attorneys understand them, let alone having any familiarity with the code of practice which accompanies the Act and extends to 300 pages.”

One of the most common mistakes attorneys make is assuming they can make decisions on behalf of a relative, without the relative’s approval, rather than helping the relative to make their own decisions.

Mr King explained: “As my colleagues are finding, improper gifts are a growing problem and cases are now frequently reported on in the press of financial abuse by attorneys.

“Attorneys often fail to understand that they have to act in the interests of the vulnerable person and cannot simply second guess their wishes and, for example, claim that paying university fees for the attorney’s children is ‘what they would have wanted’.”

Lasting power of attorney is a legal document that allows you to appoint one or more people to help you make decisions or to make them on your behalf. There are two types, one covering property and financial affairs and one covering health and welfare. When used correctly, lasting power of attorney can ensure that the interests of vulnerable people are safeguarded but it is important to choose attorneys wisely.

“Sometimes people feel obliged to act as attorney for a relative and later find that they don’t have the time or the energy to discharge their duties adequately. It’s better to be honest about this from the start while the relative is still in a position to consider alternatives,” said Mr King.

It has also emerged that only a small minority of the nearly 2m people who could be entitled to apply for a government redress scheme have done so. The scheme was introduced in February after people were overcharged for setting up a power of attorney. A Freedom of Information Act request by pension provider Royal London revealed that out of 1.9m people who could be entitled, just 203,000 had claimed by August 28.

The refunds apply to powers of attorney registered between April 1 2013 and 31 March 31 2017 in England and Wales. Depending on the year of application, refunds will vary — reaching a maximum of £54 per attorney — plus 0.5 per cent interest.

Helen Morrissey, spokesperson at Royal London, said: “The refund option has been available for some time now and as yet only a small proportion of people have submitted a claim. The onus really is on the government to sort it out. It should be contacting people who have not yet claimed a refund to make sure they get their money back.”


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