A Jersey Lasting Power of Attorney (an "LPA") is a legal document that enables a natural person (known as the "donor") to appoint one or more people (known as "attorneys") to make decisions and act on the donor's behalf. LPAs survive the supervening mental incapacity of the donor, and so they give control in the event of mental impairment as a result of accident or illness. Experience has shown that they are also useful where a donor becomes physically impaired or frail on reaching advanced age.
LPAs have been designed to be easy to make, with guidance available on the Jersey Court Service website and a small registration fee of £25. However, creating an LPA understandably involves a lot of trust. It is important to carefully consider who is appointed as an attorney and whether appropriate safeguards should be put in place.
The recent case of Paul Flowers in the UK demonstrates this. Mr Flowers was jailed for stealing from his friend, Margaret Jarvis, using a power of attorney. Ms Jarvis had known Flowers for decades and she gave him power of attorney over her financial affairs. Flowers was a former Chairman of the Co-Operative Bank, Councillor and Methodist minister; Ms Jarvis must have believed that she was fortunate to have such a competent and trustworthy friend to act as her attorney. But Flowers abused this trust and, as Ms Jarvis developed Alzheimer's, he used her money to fund extravagant holidays, events, alcohol, and home improvements. Flowers was caught and pleaded guilty to multiple counts of fraud. He was jailed for three years and ordered to pay compensation to the beneficiaries of Ms Jarvis' estate.
What safeguards can be used to guard against the risks of fraud?
Simply choosing an attorney who is trustworthy is not sufficient. The proposed attorney might be disorganised, indecisive, challenging, self-serving, domineering, or easily influenced by others, which impacts on their ability to make good decisions. There is also a phenomenon known as "entitled-itis" whereby children who are appointed as attorneys do not understand their fiduciary and statutory duties, asserting such things as 'Mum wanted me to have the house', 'I'll inherit it all in the end' or 'I deserve it because of everything I do'.
Taking legal advice on the creation of an LPA is a safeguard. Lawyers are subject to stringent regulatory duties to ensure that the donor is not acting under coercion and that they understand the LPA. They can also educate the attorneys as to their fiduciary and statutory duties and advise on appropriate safeguards to put in the LPA tailored to the donor's specific circumstances. For example, if the donor is appointing one of their children as their financial attorney, they ought to consider appointing all their children as attorneys together, so that they can oversee each other and prevent the onset of entitled-itis. The donor may consider inserting in their LPA an instruction that the attorneys must provide another trusted friend, relative or adviser with bank statements and accounts so that they can oversee their conduct and raise the alarm if necessary.
What if there are concerns about the conduct of an attorney?
The Viscount has powers to investigate complaints or concerns raised by interested parties.
In Jersey, the number of complaints dealt with increased in 2024 to seventeen (from thirteen in 2023). There has been a similar increase in England and Wales, where the Office of the Public Guardian ("OPG") is authorised to investigate allegations of abuse by attorneys. Concerns raised with the OPG increased to 11,266 from 10,577 last year, representing a 6.5% increase, corresponding with the increase in the number of LPAs registered.
What might be the outcomes?
The good news is that the OPG reports that 73% of investigations undertaken in the reporting year required no further action.
However, 24% of complaints did result in Court of Protection action and 3% of investigations resulted in alternative remediation (such as requiring attorneys to provide a revised account to demonstrate how they are adhering to the code of practice.)
Some examples of actions taken by the OPG from previous investigations are as follows:
- It was alleged the donor was in residential care and the attorney had moved into the donor's property, claiming it was now their property and using the donor's funds to renovate it. An investigation by the OPG included a visit to the donor by an official visitor to confirm the donor no longer had mental capacity to manage their own affairs, and that the donor would not have had capacity to agree to either the attorney living in the property or to agree to paying for any renovations. The donor was deprived of any potential rental income from the property that could have gone towards paying for their ongoing care needs. There was another attorney who had not taken appropriate steps to safeguard the donor. Therefore, neither attorney was acting in the donor's best interests. The attorneys were invited to address these issues but chose not to. Consequently, an application was made by OPG to the Court to remove both attorneys from the LPA.
- An investigation was launched that involved communicating with the attorneys and carrying out a visit to the donor to confirm that the donor had lost capacity to manage their property and financial affairs. A financial analysis revealed some transactions did not appear to have been made in the donor's best interests. The attorney who had made these transactions was contacted by OPG and then returned these funds to the donor's finances. The attorney was provided with advice and guidance on keeping financial accounts and permitted gifts from the donor's finances and expenses. Based on the information, the investigation concluded no further action was required. The investigation had shown through evidence that no intentional wrongdoing had occurred, and the attorney had returned the funds in question.
The number of LPAs being registered in Jersey is steadily increasing, so it is more important than ever to put the appropriate safeguards in place in order to maximise the benefits they can provide.
If you have any queries or concerns about Lasting Powers of Attorney, please do get in touch.
