Court makes judgment on level of capacity required to execute Lasting Power of Attorney (LPA)

By Ann-Marie Aston, Partner at The Wilkes Partnership

The case of The Public Guardian v RI & Ors [2022] EWCOP 22 came before District Judge Poole in May of this year. This was a case where the court had to decide whether an LPA executed in 2009 was valid or not due to whether the donor had the mental capacity to execute it. Similar cases have come before the court to determine, retrospectively, whether the donor has the mental capacity to execute an LPA but there has been very little in the way of published cases for the benefit of practitioners to learn from. District Judge Poole relied heavily on the judgment of Senior Judge Lush.

In the matter of Collis, decided in 2010, which was still an unreported case, an extract of the judgment is available.

The current case concerned a man (Mr D) now aged 60 who has a learning disability and a diagnosis of chronic schizophrenia. He is currently living in a care home and is subject to a deprivation of liberty order meaning he is not free to leave the care home unless under supervision.

Up until around 2014, Mr D lived with his mother where his brothers reported that he would go out and about on his own including to the shops and was able to use the local buses to get around. He enjoyed reading and had a love of the arts and also played the banjo. He was also able to cook for his mother when at home.

However, Mr D’s mother became unwell in around 2014 and she was no longer able to support him. At this point, Mr D moved into the care home where he now resides.

Sadly, Mr D’s mother died in 2015 leaving Mr D and his two brothers surviving her.

In 2011, Mr D’s mother took him to a firm of solicitors and Mr D executed a Lasting Power of Attorney appointing his mother and two brothers as his attorneys, jointly and severally, covering his property and financial affairs.

The question of the validity of the LPA came before the court due to a concern raised with the Office of the Public Guardian (OPG) by the manager of Mr D’s care home.

The care home were arranging to take Mr D on holiday to Blackpool, presumably with other residents, which needed to be paid for by Mr D. The attorneys were approached for the contribution to the holiday by the care home and apparently refused. The care home also questioned and raised with the OPG whether Mr D had received an inheritance from his late mother’s estate under the terms of her Will.

The OPG duly carried out an investigation and as part of the investigation, sent a Court General Visitor to visit Mr D at the care home. The Court General Visitor’s conclusion was such that, at the present time, Mr D had a learning disability (which is lifelong), lacked the mental capacity to manage his finances, and also lacked the mental capacity to revoke the LPA.

Because of the Court General Visitor’s conclusions, the OPG then requested a medical visitor to assess Mr D’s mental capacity. A consultant in Old Age Psychiatrist attended upon Mr D and also concluded that Mr D lacked the mental capacity to manage his finances and also to revoke the LPA. He also opined that it was “most likely” that Mr D would have lacked the mental capacity to execute the LPA in the first place because Mr D’s learning disability was lifelong.

On examination of the LPA itself, the judge considered the identity of the certificate provider for the LPA. The certificate provider, is the independent person who verifies that the donor of an LPA has the requisite understanding of the LPA and is not under any pressure to sign. The prescribed LPA form itself is clear what the purpose of the certificate provider is and what they must satisfy their minds on when agreeing to act as certificate provider for the donor. The certificate provider for an LPA can either be “someone who has known the donor personally for at least 2 years such as a friend, neighbour, colleague or former colleague”. Or, the certificate provider can be “someone with relevant professional skills, such as the donor’s GP, a healthcare professional or a solicitor”.

At the time the prescribed form for LPAs it was necessary to identify under which capacity the certificate provider was acting. In Mr D’s case, it was a Legal Executive (LE) in the firm of solicitors who dealt with the LPA for Mr D. In the relevant box, LE wrote “Executive in legal firm – Long term experience in creating EPA’s and LPA’s and ability to assess donor’s capacity to understand what an LPA is – its importance – and the effect of the powers that are being given”. Unfortunately, LE was unavailable to provide evidence. The firm LE worked for had since closed and LE could not be traced.

The only vague contemporaneous evidence that was available to the court was the evidence of Mr D’s sister-in-law who attended with Mr D and his mother at the solicitors’ offices. She stated to the court that Mr D’s mother had arranged the appointment for Mr D to attend at the solicitor’s office on their advice when she had instructed them to prepare her Will. Mr D had travelled to the office independently, meeting his mother and sister-in-law there. The court learned that LE saw Mr D on his own to execute the LPA and that no-one else was present.

After completing matters at the solicitors’ offices, Mr D together with his mother and sister-in-law went for coffee afterwards and Mr D was describing how he had just signed some very important papers so that his mother and brothers could look after his money.

Mr D’s brothers and sisters-in-law all stated to the court that Mr D had deteriorated significantly since 2009 but in particular since moving into the care home in 2014 and the death of his mother in 2015. However, it was not disputed that at the present time, Mr D lacks the mental capacity to make an LPA or revoke the current one.

District Judge Poole proceeded to review the applicable law relating to the requirements to create an LPA which is contained in the Mental Capacity Act 2005 (MCA2005) and the LPA, EPA and Public Guardian Regulations 2007 as well as the extract from the case of Collis referred to above.

The judge, agreeing with counsel for the OPG, stated that the donor of an LPA must understand:

1. The effect of the LPA.
2. Who the attorneys are.
3. The scope of the attorneys’ powers and the MCA2005 restricts the exercise of their powers.
4. When the attorneys can exercise those powers, including the need for the LPA to be executed before it is effective.
5. The scope of the assets the attorneys can deal with under the LPA.
6. The power of the donor to revoke the LPA when he has capacity to do so.
7. The pros and cons of executing the particular LPA and of not doing so.

In reviewing the Collis case which itself reviewed the case of Re K, Re F [1988] 1 All ER 358 the judge in the latter case stated:

“Finally, I should say something about what is meant by understanding the nature and effect of the power. What degree of understanding is involved? Plainly one cannot expect that the donor should have been able to pass an examination on the provisions of the 1985 Act {now revoked but re-enacted in the MCA2005}. At the other extreme I do not think it would be sufficient if he realised only that it gave Cousin William power to look after his property.”

In applying the principals of the MCA2005, previous cases and the above criteria the judge found that Mr D, on the balance of probabilities, lacked the mental capacity to execute the LPA due to an “impairment in the function of his brain”. However, he was satisfied that there was no undue influence or suggestion of any wrongdoing on Mr D’s mother or brothers’ part. He also confirmed that there was no suggestion of any wrongdoing in relation of Mr D’s mother’s Will.

The outcome was that an independent deputy should be appointed to manage Mr D’s finances.

The conclusion that can be drawn from this case is that when taking instructions from a client who does have a cognitive impairment, the above criteria must be covered and the certificate provider must be satisfied that the donor understands all aspects of it. However, it is clearly not always an easy task to judge understanding of a matter and ensuring that a donor who does have a cognitive impairment understands all of the above. The MCA2005 prescribes that “capacity should be presumed unless proven otherwise” so by going through the above criteria and writing down everything said by the donor to evidence their understanding is essential so that, if months or years down the line if the validity of the LPA is questioned, good quality contemporaneous evidence is available to assist the court.

You can contact Ann-Marie Aston, Partner at The Wilkes Partnership on 0121 733 8000 or email [email protected].

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This article was submitted by The Wilkes Partnership as part of their sponsorship package for the 2022 SWW Conference. The views expressed in this article are those of the submitter and not those of The Society of Will Writers.