Guernsey has modernised its approach to decision making and personal autonomy through the Capacity (Bailiwick of Guernsey) Law, 2020 (the "Capacity Law"), and the Capacity (Lasting Powers of Attorney) Ordinance, 2022, which came into force on 1 April 2022. This legislation introduced lasting powers of attorney ("LPA") to the Bailiwick, giving islanders the opportunity to plan for the management of their affairs should they lose capacity or require formal assistance, even prior to any potential incapacity.
Powers of attorney in Guernsey
A power of attorney ("POA") is a legal document through which an individual (the grantor) authorises another person (an attorney) to act on their behalf. Traditionally, standard POAs end automatically if the grantor loses mental capacity. This limitation meant that families in Guernsey often had to apply for guardianship, a lengthy and costly process, when a relative lost capacity to make decisions. The LPA regime was therefore introduced to close this gap, and offer a further layer of security to individuals wishing to plan for the future.
LPAs in Guernsey
An LPA is a specific type of power of attorney that continues to have legal effect even if the grantor loses capacity. Following in the footsteps of England and Wales, Guernsey introduced two types of LPA - one for property and financial affairs ("PFA") and one for health and welfare ("HW").
The prospective grantor of an LPA for PFA may elect for it to take effect upon registration. This can assist if the grantor becomes physically impaired or frail but does not lack mental capacity. The alternative is for the power to take effect upon incapacity. By contrast, an LPA for HW can only become effective upon mental incapacity.
LPAs are the physical embodiment of principles introduced by the Capacity Law, aiming to empower individuals to make their own decisions where possible, whilst ensuring that any decisions made on behalf of those who are frail or without capacity are made with respect to their rights and wishes.
LPAs created and registered outside of the Bailiwick
Where a person has created a foreign lasting or enduring power of attorney in their home jurisdiction, and later needs it recognised in Guernsey, typically because they have assets or affairs in the island, the document must first be formally recognised by the Royal Court of Guernsey (the "Royal Court") before it can be used or relied on locally. This typically relates to foreign LPAs for PFA, where non-residents have elected to hold moveable property in Guernsey (e.g. savings in a bank account).
Before applying in Guernsey, the foreign LPA must already be activated and registered in the jurisdiction where it originated. This is a prerequisite, and without it the Royal Court will not proceed.
When considering the application, the Royal Court will consider the test outlined in the case of Haug v Royal Bank of Canada Investment Management (Guernsey) Limited [2000-02 GLR 217] (cumulatively, the "Haug test") requiring that:
(a) the [grantor] was resident and domiciled overseas;
(b) there were no parallel or proposed protection proceedings in Guernsey;
(c) there was no intention to appoint a Guernsey [attorney] and no local issue requiring one to be appointed;
(d) the [grantor's] title to the property was clear;
(e) the property was movable; and
(f) the [attorney] had been properly appointed and empowered by the foreign jurisdiction to recover property in Guernsey.
The Haug case concerned a foreign guardianship order, and therefore an instance where the patient (equivalent to "grantor") had already lost capacity. As outlined above, for an LPA, the document can become "live" upon registration or upon incapacity. Therefore, whilst Haug was originally concerned with a foreign guardianship order, the transition of the applicability of the Haug test to foreign LPAs where the grantor was incapacitated was largely the same, save for some discussion as to whether a local guardian needed to be appointed in Guernsey. In Haug, the Royal Court established that no local guardian would be required and therefore gave the attorney powers as if they were operating in their home jurisdiction.
Until recently, the Royal Court had not considered a case where the grantor is not incapacitated.
Bedell Cristin recently acted for an attorney, in what we understand to be the first case of its kind in the jurisdiction, who had been appointed under an LPA registered in England and Wales. The grantor had elected for the document become live upon registration and they did not lack capacity. However, circumstances had arisen which meant that without an order from the Royal Court of Guernsey, the grantor and the attorney were unable to access or manage a bank account in Guernsey held in the name of the grantor. An application for an order recognising the LPA was therefore required and made. In addition to the attorney swearing an affidavit, the grantor themselves prepared an affidavit outlining their understanding, consent to and support for the application.
As there has not been an instance previously dealing with a grantor of sound mind, the onus was on the attorney to persuade the Royal Court there was no difference between an LPA which enacts on registration as opposed to incapacity. It was submitted that the Haug test could be applied to the facts of the case and even extended to cover such an eventuality. Ultimately, the Royal Court was convinced that in the circumstances of the case, that it was appropriate to extend the Haug test and grant an order recognising the LPA in question. The Royal Court noted the importance of the inclusion of the affidavit sworn by the grantor, which was evidence that they fully understood the purpose of the application, consented to it, and were in full support of it being made.
Conclusion
In summary, the introduction of Guernsey's LPA regime represents a significant and practical evolution in how the island supports autonomy, dignity and forward-planning for its residents. By enabling individuals to appoint trusted attorneys for both financial and welfare matters, whether immediately upon registration or in anticipation of future incapacity, the law now provides clearer, more flexible mechanisms for managing personal affairs. The Royal Court's willingness to recognise foreign LPAs, even in novel circumstances where the grantor remains capacitated, demonstrates a further development in the law and the statutory principles outlined in the Capacity Law.
Together, these developments strengthen the island's commitment to protecting individuals' wishes, reducing administrative barriers, and ensuring that support is available when most needed, whether capacity has been lost or challenges simply arise earlier than expected.
If you have any queries or concerns regarding LPAs, please get in touch with your usual Bedell Cristin contact, or one of the contacts listed.
