Knowledge

The English Court of Protection (the "CoP") has issued guidance which resolves a number of issues with certain bespoke clauses regularly inserted into Lasting Powers of Attorney (an "LPA"). While guidance from the CoP is not technically binding in Jersey, it will be persuasive and useful for Jersey practitioners as the CoP is a distinguished decision-making body of long-standing and many of the provisions of the Capacity and Self-Determination (Jersey) Law 2016 (the "Capacity Law") were modelled on the equivalent English legislative framework found in the Mental Capacity Act 2005.

LPAs and severance

An LPA is a document by which an individual may appoint another person (known as an "attorney") to make decisions for them at a time when they may be unable to do so for themselves due to a lack of mental capacity.

The advantage that an LPA has over an ordinary power of attorney is that it survives the supervening incapacity of the donor. In the event of the incapacity of a person resident in Jersey without an LPA, it may be necessary for someone (not necessarily of their choosing) to make an application to the Royal Court to be appointed as "Delegate" (formerly "Curator") to manage their property and financial affairs. The Delegate must submit valuations of assets and liabilities, annual accounts, plans, and reports to the Court. The Court may impose restrictions on the Delegate, so they may have to request Court permission to deal with certain assets. This is intrusive, onerous, can be expensive, and may lead to delays and disputes. Having an LPA in place avoids such complications and maintains the privacy of individuals.

An LPA must be registered with the Judicial Greffe to bring it into effect. The Judicial Greffe has a duty not to register an LPA if any of its provisions would render the LPA ineffective or invalid, although offending provisions can be severed by the Royal Court prior to registration.

In England, the Office of the Public Guardian ("OPG"), discharges a similar LPA registration function to that of the Judicial Greffe in Jersey. In Public Guardian's Severance Applications [2023] EWCOP 24, the OPG applied to the CoP seeking clarification as to whether certain bespoke clauses regularly included in LPAs are ineffective or would otherwise prevent the valid creation or operation of the LPA, and thus whether severance would be necessary. 

The CoP has now given guidance on those clauses. It prefaced its decision with a discussion of the core ethos of the LPA legislative framework, which is to empower and promote self-determination of individuals. It cited with approval Miles, Beattie v Public Guardian [2015] EWHC 2960 (Ch) which called for a flexible, purposive interpretation of the law to promote the objective of autonomy, and quoted Article 12 of the United Nations Convention on the Rights of Persons with Disabilities:

“[5.] … States Parties shall take all appropriate and effective measures to ensure the equal right of persons with disabilities to own or inherit property, to control their own financial affairs and to have equal access to bank loans, mortgages and other forms of financial credit, and shall ensure that persons with disabilities are not arbitrarily deprived of their property.”

The CoP then went on to examine and decide upon the relevant clauses which concerned the appointment and decision-making process of the attorneys. They can be conveniently divided into five categories:

1. Is it lawful to give primary power to one attorney above others on a joint and several appointment?

The CoP found that if a donor appoints more than one attorney on a joint and several basis, equality prevails. Thus, a provision such as “in the event of disagreement, A is to defer to B” or “B’s decision will be final” is irreconcilable with the phrase “jointly and severally”. Such provisions should be severed from the LPA.

2. Is it lawful to have a joint and several appointment with instructions for attorneys to deal with separately defined areas of the donor’s affairs?

Although many donors might contemplate separate individuals being instructed to regulate different spheres of their financial affairs, the CoP suggested that this superficially reasonable division was likely to be illusory in practice in many cases. Ultimately, there is only one estate, and its parts are inextricably connected. The CoP decided that the instruction was incompatible with the concept of “joint and several” because what is really contemplated in this clause is two attorneys acting severally.

The CoP advised that separate LPAs for the different spheres of the donor's financial affairs would provide a clearer and more effective route to achieve the donor's aims.

3.  Whether instructions to multiple attorneys to act on a majority basis ought to be permitted

The CoP cited DJ Eldergill at paragraph 124 of Re Public Guardian’s Severance Applications, [2017] EWCOP 10, on the issue:

"Under the general law of agency, a principal may appoint co-agents, giving power to a quorum to act on her or his behalf. It seems virtually eccentric that a person must authorise (say) four attorneys to all act jointly or all separately and cannot specify anything in between. The aim should be a statutory scheme that gives as much flexibility to donors to set out how they wish their affairs to be dealt with as possible."

Although the CoP sought to find a more flexible interpretation, it found that the English statutory bases upon which two or more attorneys may act are so tightly drafted that they leave very little scope. Majority rule is inconsistent with these bases, which the CoP ruled are exhaustive. The CoP did however acknowledge that the donor can achieve their objective by making separate LPAs instead.  The equivalent statutory basis in the Capacity Law is found at Article 12(2), and also does not seem to leave any room for majority rule:

"Where authority is conferred on more than one person, the instrument may provide that such persons are to act –

(a)     in respect of all matters either jointly, or jointly and severally; or

(b)     in respect of some specified matters, jointly and in respect of others, jointly and severally."

4. Does “should” or similar words constitute a binding instruction or a non-binding preference?

The CoP declared that this was a case of giving effect to the donor's intentions rather than statutory interpretation, and on the facts of the present case, the donor's words did not require severance. The CoP gave no wider guidance as to how the word "should" should be interpreted, as it depends on context, but that it will not automatically give rise to severance. 

5. Is it lawful for the donor to provide for successive replacement attorneys in the LPA? If not, can a replacement attorney appointed jointed and severally with another be reappointed to act solely?

Revisiting Re Boff [2013] MHLO 88 on this issue, the CoP was able to find an alternative purposive approach. It found an inherent ambiguity in the statute: the CoP was satisfied that the statute could be interpreted to allow the appointment of successive replacement attorneys. Had it been necessary to resolve the second limb of this question, the CoP would have concluded that a reappointment could be made. The equivalent provision of the Capacity Law can be found at Article 12(5)(b) and the same analysis would seem to apply:

"An instrument used to create a lasting power of attorney …

(b)     may itself appoint persons to act as substitutes…"

Analysis

It is disappointing that the CoP was not able to find a more flexible purposive interpretation to the relevant statutory provisions regarding issues numbered 1 to 3 above (concerning joint and several appointments of attorneys) to enable the donors to order their affairs as best suits themselves. In practice, we often find the provisions of Article 12(2) of the Capacity Law too rigid to meet the requirements of clients whose affairs are complex and require bespoke planning. As the CoP acknowledged, this is at odds with the central objective of the law to promote autonomy and self-determination and will require an update to the primary legislation. But the decision concerning successive replacement attorneys is to be welcomed as it allows a certain degree of flexibility for clients, as is the CoP's emphasis on the importance of the donor's intentions and their right to self-determination.