Legal

UK Sets Out Lasting Power Of Attorney Reforms

Tom Burroughes, Group Editor, 21 July 2021

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The use and potential misuse of LPAs has been a subject of controversy in the private client legal and wealth management field for some time. The pandemic - and how it has disrupted normal commercial life - has also added urgency to the need to bring LPAs into a more digital world.

The UK government intends to overhaul how people use the lasting power of attorney and make the process more digital. The power is a topic that has flared up in recent years amid concerns about the potential for abuse of LPA as well as how the system works amidst the pandemic.

The Ministry of Justice yesterday launched a 12-week consultation to examine the entire LPA process. The government wants to boost the Office of the Public Guardian’s powers to prevent fraud and abuse and introduce a mainly digital service, the Ministry said in a statement yesterday. 

“The number of registered lasting powers of attorney (LPA) has increased drastically in recent years to more than five million, but the process of making one retains many paper-based features that are over 30 years old,” it said. 

The consultation will look at how technology can be used to reform the process of witnessing, improve access and speed up the service. 

“A lasting power of attorney provides comfort and security to millions of people as they plan for old age. These changes will make the service quicker to use, easy to access and even more secure from fraud,” Justice Minister, Alex Chalk MP, said. 

The consultation comes just over a year after the OPG launched a new digital service called “Use a lasting power of attorney”. 

The consultation will examine the following areas:
-- How witnessing works, and whether remote witnessing or other safeguards are desirable; 
-- How to reduce the chance of an LPA being rejected due to avoidable errors; 
-- Whether the OPG’s remit should be expanded to have the legal authority to carry out further checks such as identification verification; 
-- How people can object to an LPA and the process itself, as well as when is the right time for an objection to be made; 
-- Whether a new urgent service is needed to ensure that those who need an LPA granted quickly can get one; and 
-- How solicitors access the service and the best way to facilitate this.

The government said that any substantial changes would require it to amend the Mental Capacity Act 2005 which brought in the current system. 

Tim Snaith, partner in the private client team at the law firm Winckworth Sherwood, said: “The Lasting Power of Attorney system, launched in 2007, was a significant change to the old system of Enduring Powers of Attorney.”

“It brought with it a new approach and a far more collaborative way of working with those suffering from illnesses involving a decrease in or loss of mental capacity and was undoubtedly a change for the better. The issue, however, was (and remains) complex. Each form is over 20 pages long, requires in excess of six signatures (sometimes this can reach in excess of 10), and must be signed in a strict order. Lasting Powers of Attorney must also be registered with the Office of the Public Guardian (OPG) before they become effective,” he continued. 

“Even if no mistakes have been made on the forms, there is a minimum waiting period of four weeks before registration to allow for any objections, and due to delays at the OPG, it commonly takes around 12 weeks before the documents can be used,” Snaith said. 

“The world has moved forward significantly in terms of technology since 2007, and this may present a solution to the above issues. However, this has to be balanced against the scope for abuse. One of the reasons the more rigorous LPA forms were introduced in 2007 and registration became compulsory was to prevent abuse, but this has in turn made it more difficult to create the power. It is a fine balance and the consultation will I am sure shine a bright light on the risk of abuse and how this might be managed if the process is made simpler,” Snaith added. 

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