According to Stephen Metcalfe MP, who proposed the bill, it brings two key changes to the law of making and registering a Lasting Power of Attorney (“LPA”):

1. It will reform the process “to make it safer, easier and more sustainable” by using a digital platform;
2. Legal executives (not just solicitors) will be able to certify copies of powers of attorney.

A more sustainable process

The UK Government’s 2021 consultation on modernisation referred to a need to reform the process for making and registering LPAs, citing in particular too much jargon, complexity and paperwork.

The Powers of Attorney Bill 2022 recently had its second reading and is on track to become law in 2023.  This comes at a time when the Ministry of Justice has also reformed the process for applying to the Court of Protection for deputyship, which will “go digital” for applications made by solicitors from January 2023.

Today, even where an LPA is completed online, each LPA has to be printed off and signed in five places in a specific order by at least three people to be valid. It is easy for errors to creep in; Office of the Public Guardian (“OPG”) estimates they are unable to register 11% of LPAs because of signing errors. 

LPA applications have doubled between 2014 and 2019/20.  OPG stores 11 tonnes of paper at any one time and with LPA applications increasing, this is unsustainable.

OPG has been unable to meet its targets for registration of LPAs for some time now (current estimates are 20 weeks, more than double its target of 8 weeks and slower than online Court of Protection deputyship timescales).  It gives the impression of drowning in paperwork.

Proposed attorneys are unable to support their loved ones in managing finances or assisting with health and welfare decisions if an LPA is sitting in that backlog, so reform to reduce the paper burden would be welcome.  A paper-based system will apparently remain available for those who require it because not everyone can get online.

The idea is to automate most of the manual checks and reduce paper storage requirements, which should reduce delays in processing applications.

But will it be safer?

LPAs give wide powers to attorneys to access a person’s savings, income and property.  A digitised system could lead to more fraud, undue pressure and financial abuse.  The average age of someone making a LPA is currently 74 and most are over 65.

So what protections are there in the new system?

Identity checks

The Bill introduces identity checks prior to registration. The Public Guardian will be required to verify the identity of parties, which is intended as a safeguard against identity fraud.

Regulations will set out that the donor and the certificate provider will have their identity checked, how the ID checks will be carried out and which documents will be needed but this is likely to be a form of photo ID which can be checked automatically against the person’s current image and a form of address check.

Another big change is what gets sent to OPG when you apply to register the LPA.  The donor, attorney and certificate provider can each choose to send their parts of the form back digitally or by post. This is supposed to reduce the administrative burden all round and OPG’s automated error checks should reduce signing and other errors that currently prevent registration.  But it remains to be seen in practice how easily this will be for them to coordinate if some parts of an LPA are sent back in the post and others online.

Changes are also proposed to the notification requirements, with OPG taking on more of the administrative burden in notifying and co-ordinating execution of the document. 

Currently, the person making the LPA names who should be informed when the LPA is sent for registration, and those notified have the right to raise any objections. Under the new system, the Public Guardian will send these notifications out. In theory this means that OPG can be certain that the notifications have been sent ‘in a timely manner’ and more difficult for people to claim they have not been notified.

Objecting to registration of an LPA

The Bill introduces a single channel for all objections to OPG. Any individual or organisation could object, even if they are not included as notified parties in the LPA, which is much broader than the existing law.

This means that third parties such as social workers, health staff, care workers, the police, solicitors or financial institutions could all become “concern raisers.”  New paragraph 7(2) of schedule 1 to the Mental Capacity Act will set out the process for third parties to object formally to registration.  In theory, it should be easier than the current system, but in practice this may mean an increase in objections for OPG to process.

Increased protection for donors?

In 2021-22, the OPG investigated 2,408 cases where concerns were raised about LPAs. Of those, the OPG took action in 649 cases, ranging from applying to the Court of Protection to remove an attorney or revoke an LPA, to working with the attorney to provide education and guidance on how to carry out their role. 

It is not clear whether OPG could or should have taken action in more cases but could not do so because they were swamped by their workload.  If the LPA registration process is streamlined, this could free up resources to deal with processing concerns and lead to an increase in investigations and court applications.

Once the Bill has been enacted, LPAs will be registered as electronic documents which can be updated by the Public Guardian without requiring the paper document to be returned.  That will provide greater certainty to e.g. banks and local authorities when it is unclear whether an LPA has been suspended or revoked and an attorney is being uncooperative.

Because some individuals and third parties will remain unable to use an electronic system, the Bill also provides for other methods of physical proof which will be set out further in regulations.

Certificate provider

The role of certificate provider and witness will be combined, which has been a source of controversy.  This important safeguard could be enhanced by appropriate regulations being enacted to set out the need for the certificate provider to be sure that the person making the LPA has capacity to do so.

Conclusions

Those of us who cringe at the ecological waste of mountains of paper created when a single legal document is required will welcome the move to a more digitised process for LPA creation and registration.  With any big reforms of process in government agencies, there are likely to be teething problems when the changes come into play.  The idea of allowing different parts of the LPA to be returned online or by post may appear helpful from the point of view of flexibility but in practice, this creates more moving parts than in the current system where everything is returned as one document and this may be a problem area.

At Setfords, we are a remote business and our consultants have already embraced digital technology so we will be well placed to advise clients on the new processes.  We are also able to advise anyone in relation to concern raising or defending OPG investigations and Court of Protection applications, which could become more commonplace as OPG rebalances their working practices.