The speech made by Stephen Metcalfe, the Conservative MP for South Basildon and East Thurrock, in the House of Commons on 9 December 2022.
I beg to move that, That the Bill be now read a Second time.
Powers of attorney are important legal arrangements that allow people to appoint others—the donees of the power, known as attorneys—to act on their behalf. The powers normally relate to financial matters, and the attorney must act on instructions from the donor of the power—the person who made it.
Lasting powers of attorney, or LPAs, are a specific type of power of attorney with even wider scope. Such arrangements allow someone to appoint another to act on their behalf after the donor has lost the mental capacity to make their own decisions and give instructions. LPAs can apply to not just financial decisions but health and welfare decisions too.
Powers of attorney generally, and lasting powers of attorney specifically, are incredibly powerful and useful appointments. They allow people to retain control over aspects of their lives, in circumstances where they might not otherwise be able to make decisions or take actions. LPAs, in particular, ensure that people have the opportunity to make provision for a future where they may no longer have the mental capacity to understand what is happening to them and therefore to make decisions about the things they care about.
With the prevalence of dementia increasing and our population ageing, these documents will become ever more important in ensuring that people can continue to live the lives they want to. They will be even more important in protecting people who might otherwise be the target of fraud, scams and abuse. I have seen that in my constituency and on a personal level. These are powerful documents, and they need to be used carefully.
Lasting powers of attorney are part of the toolkit to ensure that people can live the lives they want to. That is why I am delighted to bring forward this Bill in my name. It delivers two important changes to legislation around powers of attorney. First, it will reform the process of making and registering a lasting power of attorney to make it safer, easier and more sustainable. Secondly, it will widen the group of people who can provide certified copies of powers of attorney to include chartered legal executives.
Before I get into the detail of this Bill, I will set out the history of these documents and the problems that have arisen as a result. Under the Power of Attorney Act 1971, the power of attorney is a formal appointment whereby one party, the donor, gives another party, the attorney or donee, the power to act on their behalf and in their name. Power of attorney, in contrast to appointing an agent, can only be created and valid where certain legal formalities are observed, and they must be granted by deed. The ordinary or general power of attorney is for when the donor only needs help temporarily, for example when people are in hospital or abroad and need help with everyday tasks such as paying bills.
Ordinary powers of attorney are common in the commercial world, where they may be used in a number of ways, most typically to enable another person to execute documents on the donor’s behalf or in a transactional context. Another use is in appointing a power of attorney to manage financial or property matters in a donor’s absence. However, there were issues with these powers of attorney, as the power ceases to have effect when the donor lost mental capacity to make decisions and give instructions. As the Law Commission pointed out in 1983:
“at a time when the assistance of the attorney has become for the donor not merely desirable but essential, the attorney has no authority to act.”
This resulted in the introduction of the Enduring Powers of Attorney Act 1986. As the name suggests, enduring powers of attorney endure past the loss of mental capacity, allowing an attorney to continue acting on a donor’s behalf. Individuals concerned about their ability to control their own lives in future could now ensure that the people making those decisions were the people they had chosen and that they trusted.
Peter Gibson (Darlington) (Con)
My hon. Friend is making an important speech and highlighting the legislation that brings us to today and his important Bill. I just put on record the importance of those enduring powers of attorney that predate the current lasting powers of attorney and to highlight to the House the necessity for people to register them when capacity is lost. Many mistakenly believe, where an enduring power of attorney is in place, that there are no steps to take in order for it to be used.
Stephen Metcalfe
I am grateful to my hon. Friend for his clarification. Obviously, he knows considerably more about the history of this than I have perhaps been able to gain during my research. In the 1990s, there were greater concerns about the abuse of enduring powers of attorney. I am told there was concern that between 10% and 20% of enduring powers of attorney were potentially being used in an abusive way. To resolve that, and following extensive work by the Law Commission, the Mental Capacity Act was passed in 2005. Enduring power of attorney was replaced by lasting power of attorney, or LPA, in 2007.
New safeguards were introduced—primarily the requirement for the LPA to be registered by and with the new Public Guardian and their office, the Office of the Public Guardian, before it could be used, whether before or after a loss of capacity; and the role of the certificate provider, who must confirm that the donor understands their LPA and that there was no fraud or undue pressure.
Fifteen years on, the system is in need of an update. The Government’s 2021 consultation on modernisation clearly set out the issues, and media coverage over the past year has further emphasised the need for reform. First, people wishing to make LPAs struggle to understand the system and to complete their LPA accurately. Guidance can be overwhelming and full of jargon such as “donor”, “attorney”, “certificate provider”, “execution” and “jointly and severally”. This is specifically daunting in urgent circumstances—for instance, due to a recent diagnosis of dementia or terminal illness.
The reliance on paper also makes it more complicated than necessary. The legislative framework and operational process involved mean that, even where the LPA is filled in online, each LPA has to be printed off and signed on paper in five places in a specific order by at least three people to be valid. The possibility for error to creep in is high, and the Office of the Public Guardian indicates that as many as 11% of LPAs sent to the OPG cannot be registered because of signing mistakes. Donors cannot understand why the LPA process does not make use of technological improvements since 2007. They want to use a digital system to fill in, sign and submit documents. As the Government set out in their consultation, that would allow a speedier process, reduce the administrative burden on people and help to reduce or even remove many of the errors in the process.
Secondly, the OPG is drowning in paperwork, and that does not allow the OPG to deliver the service that its fee payers expect. Many in this place will know about the media reports on the backlog in registrations. The OPG reports that it is taking up to 20 weeks on average to process an LPA application, against its target of eight weeks. Others will be receiving letters from constituents asking for assistance, as they are left unable to support their loved ones because an LPA is currently sitting in that backlog.
We all agree that this situation is unsustainable. The OPG carries out manual administration checks. It stores 11 tonnes of paper at any one time, and LPA applications are generally increasing, with the number of LPAs submitted for registration more than doubling between 2014-15 and 2019-20. That is creating an ever increasing need for staff, equipment and storage space. The ability to use a digital channel—alongside, I stress, a paper route—to make and register an LPA would help to resolve some of those issues. Most of the current manual checks could be automated. Physical storage requirements could be reduced and, critically, it would increase the OPA’s resilience to backlogs caused by the disruption of paper processing.
The third point, and probably the most important one, is that while a digital channel is desirable for donors, attorneys and the OPG, it must be balanced against the need for suitable safeguards. The risk of fraud is small, but it is a real risk. The BBC Radio 4 programme “You and Yours” reported last year on the case of Marie—not her real name—who was a victim of LPA fraud when someone took out an LPA in her name and attempted to sell her home. Concerns about undue pressure and abuse are also common. Earlier this year, in parallel with another report by “You and Yours”, a debate was held in the other place on LPAs and the economic abuse of older people.
I firmly believe that LPAs are a positive way for people to control what happens if they lose mental capacity. They are an insurance policy that people should take out to appoint people they trust to make decisions in their best interests, should the worst happen. But I cannot ignore that there must be protections in the system to reduce the chance of it being manipulated by those who intend ill will towards others.
James Sunderland (Bracknell) (Con)
I am not a lawyer—heaven forbid!—but my understanding of the Bill is that it will do a number of really important things. It will provide much better safeguards on financial and property issues, and it will provide safeguards where there is loss of mental capacity and against abuses of power. It will also make the process a bit more streamlined, as we will not be so dependent on expensive lawyers now that legal executives can do this. My question for my hon. Friend is, will it be any cheaper?
Stephen Metcalfe
My hon. Friend asks a very good question. Although I cannot guarantee it will be cheaper, I can say that it will be no more expensive. We need to make the system sustainable and the relatively straightforward reforms in my Bill will allow that to happen, while keeping the price competitive, as it is at the moment.
My hon. Friend has hit upon the point at which I am going to describe some of the detail of the Bill and how it resolves some of the issues to which I have alluded. It makes a number of changes to the Mental Capacity Act 2005, specifically to schedule 1, which covers provision for the making and registration of LPAs. The most crucial change is that the Public Guardian will verify the identity of certain parties as part of the registration. It is important to strengthen safeguards in that way on a document that can confer such wide powers on access to savings, investment and property. The Government’s consultation indicated that these proposals were well received by respondents, including the public, as a necessary safeguard. This will be a key protection against the horrible position Marie found herself in, by increasing confidence that the people named in the LPA have actually been involved in the process of making it. This provision is even more important now, with identity fraud on the rise and perpetrators making use of ever-more sophisticated methods for targeting their victims. Removing loopholes in the system before they can become further exploited and other members of the public are put at risk is one reason I chose to take this Bill through Parliament.
The second main change is on the requirement for the application to register, requiring the donor to apply and changing what must accompany the application—currently, the instrument intended to create the LPA and the fee. This will facilitate a flexible system, so that instead of just a paper channel or a digital channel, each actor, whether they are the donor, the attorney or the certificate provider, can use the method that best suits their needs to complete a single LPA. This will reduce the administrative burden on donors and attorneys, while automated and early error checking will help to reduce the potential for signing and other errors that prevent registration.
Changes to the notification system will also facilitate this flexibility. The system requires that people the donor named in the LPA are informed by the applicant when the LPA is sent for registration, so that they can raise any objections. In the future, the Public Guardian will send these notifications. This change is made for three reasons. First, the Public Guardian can be certain that the notifications have been sent, increasing the protection provided. Secondly, it removes the administrative burden from the donor. Thirdly, the Public Guardian will be co-ordinating the execution of the document, so is best placed to send these in a timely manner.
That links to changes to the process for objecting to the registration of an LPA. The current process is complex, with different routes for different people, depending on the type of objection. People and organisations not named in the LPA do not even have a formal route to raise objections. That group currently includes organisations such as local authorities, which have a statutory safeguarding duty but no formal way of raising related concerns about an LPA’s registration with the Public Guardian. Although the Public Guardian currently processes these objections, because it is the sensible thing to do and offers the best protection for the donor, the scope of the current legislation is limited and creates ambiguity. To rectify this issue, the Bill introduces a single route for all objections, starting with the Public Guardian and ending at the Court of Protection, if that is required. It applies to all individuals and organisations, even if they are not included in the original LPA. So there is more clarity about where and how to raise concerns about the registration.
Let me turn to increased protection for donors. Finally, to modernise LPAs the Bill changes the evidence of registration of the LPA. As I said, LPAs are currently paper documents. That means that if there are changes—for instance, if an attorney is removed because of abuse—the Public Guardian needs to amend the paper documents. As I am sure the House can imagine, why would someone who has been removed from an LPA because of abuse want to return it to the Office of the Public Guardian? The LPA will therefore be registered as an electronic document. That will create a single source of truth that can be accessed in real time by third parties, but more importantly, updated in real time by the Public Guardian without requiring the paper to be returned.
I recognise, however, that some individuals and third parties will remain unable to use an electronic system. For that reason, the Bill also provides for other methods of physical proof. I believe that those will be set out further in regulations.
As I stated, my Bill seeks not only to modernise LPAs, but to amend section 3 of the Powers of Attorney Act 1971 to enable chartered legal executives to certify copies of a power of attorney. That Act sets out how a copy of a power of attorney can be made and who can certify or sign copies, stipulating that only
“the donor of the power…a solicitor, authorised person or stockbroker”
can sign or certify
“that the copy is a true and complete copy of the original”.
The Bill seeks to include chartered legal executives among those who can certify a copy of a power of attorney.
We have come a long way since 1971; it is more than half a century since that Act came into force. Chartered legal executives are allowed to provide legal services under the Legal Services Act 2007 and now provide many of the same legal services as solicitors. It is therefore completely right that chartered legal executives have the ability to certify copies.
I am conscious of time, so I will draw my remarks to a close. I have outlined a number of specific changes that the Bill will make. It is a relatively straightforward piece of legislation, but is important none the less. It will make the Office of the Public Guardian more sustainable; streamline the process; increase the number of people who can authorise copies of lasting powers of attorney; and introduce some important safety checks. I very much look forward to hearing what the Minister has to say. I thank him and his Department for working with me to bring the Bill to this stage and I hope that, after today’s debate, we can take it further forward. I commend the Bill to the House.
