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The Public Guardian is the official who has responsibility for registering Lasting Powers of Attorney (LPAs). Since the introduction of LPAs in October 2007, the Public Guardian has taken a rather interventionist approach to his role, being rather eager to strike out provisions of LPAs which he has deemed to be unworkable or inconsistent with the nature of an LPA. To date, such decisions of the Public Guardian have tended not to be challenged by donors.
However, Charles Russell Speechlys LLP have recently been involved with a successful challenge to such a decision. In the recent Court of Protection case Re XZ (2015 EQCOP 35), the Court directed the Public Guardian to register a Property and Financial Affairs LPA which contained complex restrictions, despite the Public Guardian’s concerns regarding the workability of the LPA. The Court took the opportunity to remind the Public Guardian of its role in connection with the registration of LPAs.
The donor, “XZ”, (a client of the firm) is a high net worth individual who wished to put in place a Property and Financial Affairs LPA, to take effect in the event that he lost capacity. However, XZ had concerns about giving his attorneys control of his financial affairs in circumstances where there might be any room for doubt as to whether mental capacity had genuinely been lost. XZ was also worried about his attorneys making hasty decisions which he might not agree with in the event that, following a loss of capacity, he regained capacity.
To address these concerns, an LPA was put in place with extensive conditions which had to be met before the attorneys had authority to act under the LPA.
Unfortunately, the Public Guardian refused to register the LPA in the form in which it had been signed, asserting that most of the restrictions in the document were “ineffective” as part of an LPA. The Public Guardian would only permit the LPA to be registered if these restrictions were struck out.
With advice and assistance from Charles Russell Speechlys LLP and David Rees, XZ applied to the Court of Protection to challenge the Public Guardian’s decision.
The provisions of the LPA to which the Public Guardian objected consist of quite elaborate conditions which, except in certain “emergency” situations, need to be satisfied before the attorneys have the power to take actions in relation to XZ’s financial affairs. The essence of the conditions (simplifying them greatly) is that:
The Public Guardian argued that these restrictions were “ineffective” as part of an LPA, asserting that:
As a matter of law, an LPA can only be invalid if:
The Court held that the Public Guardian had failed to identify any legal basis for striking out provisions of the LPA or refusing to register the document.
In particular, it was noted that:
Accordingly, the Court held that the LPA was valid and directed the Public Guardian to register it.
The Court reminded the Public Guardian that his role is limited to considering whether restrictions and conditions are incapable as a matter of law of being included in an LPA. It is not for the Public Guardian to consider whether the restrictions and conditions are workable or indeed sensible.
Provided a donor does not include any provisions which are contrary to the law, he is free to include any pre-conditions as to the use of the LPA, no matter how unwise they may seem. For example, a donor could include a pre-condition under which the attorneys have no authority to act unless Plymouth Argyle have won the Premiership. While such a pre-condition may be ill-advised, may detract from the usability of the LPA, and may even mean that there is very little chance of the attorneys ever being able to act, the pre-condition would not contravene the law and would not result in the LPA being invalid.
The case is a very welcome result for individuals who understand the value of putting LPA documents in place to cover the position in the event that they lose capacity, but who reasonably wish to include safeguards against their attorneys taking actions prematurely, before incapacity has been conclusively proved, or where there may be a possibility of capacity being restored. The case can be a seen as a significant step towards the liberalisation of what has become a very restrictive area of English law.
This article was written by Dominic Lawrance and Radhika Mehta. For more information please contact Dominic on 020 7427 6749 or email@example.com or Radhika on 020 7427 6476 or firstname.lastname@example.org