Powers of attorney02 Oct 2018
The Powers of Attorney (Jersey) Law 1995 (the "Powers of Attorney Law"), which came into force on 1 October 1995, and the Capacity and Self-Determination (Jersey) Law 2016 (the "Capacity Law"), which came into effect on 1 October 2018, effected a number of significant changes to the previous law on powers of attorney in the Island.
Prior to the introduction of the Powers of Attorney Law, all powers of attorney which appointed a person to effect (or give effect to) transactions in relation to either (i) movable or immovable property situate in Jersey; or (ii) contracts or other transactions governed by Jersey law, had to be prepared in accordance with Jersey law and had to be registered with the Royal Court in the Island before they became effective and could be used.
The Powers of Attorney Law significantly altered the category of powers of attorney which are required to be registered. Under the Powers of Attorney Law, a registrable power of attorney is a power which is intended to be used to effect a transaction which must itself be registered in the Public Registry in the Island, or a power which is required by statute to be registered. Essentially, therefore, it is now only powers of attorney which relate to transactions involving immovable property situate in Jersey which are required to be registered.
The Powers of Attorney Law provides separate rules for the preparation and execution of registrable powers of attorney from those which apply to all other powers of attorney.
Registrable powers of attorney
A registrable power of attorney has to be signed, or acknowledged by the donor to have been signed, in the presence of a qualified witness who must not be a party to the power. The list of competent witnesses differs, depending upon whether the power is executed in Jersey or elsewhere. For example, an advocate of the Royal Court is a competent witness to a power executed in the Island, whilst a solicitor of the Supreme Court of England and Wales is able to witness a power executed outside Jersey.
A company is able to execute a registrable power of attorney in accordance with its constitution (and is therefore not necessarily required to execute the power under seal), but its execution still has to be made, or be acknowledged to have been made, in the presence of a qualified witness.
Registrable powers of attorney have to be produced as separate documents rather than as clauses added to principal transaction documents and must be prepared in accordance with prescribed rules of presentation.
Other powers of attorney
The general rule is that all other powers of attorney are duly executed if they are either signed by the donor, or acknowledged by him to have been signed, in the presence of a witness who is not a party thereto. There is no witness qualification requirement.
A company is able to execute such powers of attorney in the manner prescribed by its constitution (and therefore execution does not necessarily have to be under seal) and, unlike other donors, a company does not require a witness to attest its execution.
Such powers of attorney become effective immediately upon execution, unless the powers themselves otherwise provide.
Security powers of attorney
The Powers of Attorney Law introduced the concept of an irrevocable security power of attorney into the Island for the first time. This operates as an exception to the general rule that powers of attorney are automatically revoked by the death, incapacity or bankruptcy of the donor or, if the donor is a company, by its bankruptcy or winding up.
Where a power of attorney is expressed to be irrevocable and is given either (i) for the purpose of facilitating the exercise of powers of a secured party under the Security Interests (Jersey) Law 1983 or of powers given pursuant to a security agreement, or (ii) pursuant to or in connection with or for the purpose of or ancillary to security governed by foreign law, then so long as the relevant security interest or foreign security is effective, the power of attorney will not be revoked by the donor without the donee's consent, or by the death, incapacity or bankruptcy of the donor or, if the donor is a company, by its bankruptcy or dissolution. Bankruptcy, in this latter context, includes insolvency proceedings outside the Island and is not limited to Jersey bankruptcy.
General powers of attorney
The Powers of Attorney Law introduced a prescribed form for a general power of attorney which enables a donee to do on the donor's behalf anything that the donor could lawfully do by an attorney. There are specific exceptions in respect of functions which the donor has as a trustee or personal representative.
If a power of attorney so allows, an attorney is able to appoint a substitute, provided that any such appointment of a substitute must itself be effected by means of a power of attorney.
Revocation and abandonment
The Powers of Attorney Law provides prescribed forms for the revocation and abandonment of powers of attorney. These require to be executed in the same manner as is required for the relevant power of attorney and, in the case of registrable powers of attorney, will not be effective until registered.
Lasting powers of attorney
Prior to the introduction of the Capacity Law, there were no powers of attorney which could survive the supervening incapacity of the donor (except irrevocable security powers of attorney). The Capacity Law has introduced for the first time lasting powers of attorney drawn under similar provisions to those set out in the Mental Capacity Act 2005 of England and Wales.
It is now possible to delegate to an attorney both property and financial decisions, and also health and welfare decisions, under Jersey lasting powers of attorney. Such powers must be drawn in the prescribed form and registered with the Judicial Greffe in the Island in order to bring them into operation.
The Capacity Law also provides that, where a person not resident in Jersey has given a lasting power of attorney in compliance with the laws of the United Kingdom, Guernsey or the Isle of Man, the Royal Court is to order the registration in the Island of such power. Regarding Lasting Powers of Attorney (or their equivalent) made elsewhere, the Royal Court will continue to order the registration for use in the Island on grounds of comity outside of the new Capacity Law.