Public Guardian must register LPA despite multiple complex conditionals

The donor of an English lasting power of attorney (LPA) has the right to impose any number of conditions specifying when and how it can be used, the Court of Protection has declared.

The decision by Lush J came in the case of Re XZ (2015 EWCOP 35), where the donor was a wealthy London resident in his 70s who owns properties in several countries. In December 2013 he executed an LPA for property and financial affairs. He appointed as his attorneys three close friends and business associates – two Americans and one Canadian. However, being of a cautious nature and preferring to be in control of his own affairs as much as possible, he was only willing to sign the LPA if certain safeguards were in place.

These safeguards were so extensive that they required seven continuation sheets to be added to the standard LPA form. Among other things, they forbade the attorneys to make a decision for XZ unless they reasonably believed at the time of the decision that he lacked capacity, and that two psychiatrists agreed with them. Even then they could not act for him until 60 days had passed since his loss of capacity, except in specified emergencies.

Moreover, XZ also appointed an old college friend as his 'protector' with the power to overrule the psychiatrists' certification of his loss of capacity.

These caveats were drafted by solicitors at the leading London law firm Speechly Bircham, who said they were designed to prevent the attorneys taking hasty actions during a period of merely temporary incapacity, or when there was doubt of incapacity.

The firm spent a good deal of time and effort in polishing these conditions before submitting the LPA to the Office of the Public Guardian. Accordingly there was considerable surprise when the OPG refused to register the document, on the grounds that the conditions imposed an unreasonable fetter on the attorneys' power to act and were, therefore, ineffective as part of an LPA.

Speechlys asked the OPG to reconsider. But the Public Guardian himself, Alan Eccles, replied that he was not prepared to budge. Thus, in January this year, XZ applied to the Court of Protection for a declaration that his LPA was valid as drafted, and asking for an order directing the Public Guardian to register it.

The OPG defended its position by citing Schedule 1, paragraph 11(3)(b) of the Mental Capacity Act 2005. This states that the OPG must not register an instrument containing provisions which would be ineffective as part of an LPA. The OPG regarded the 60-day time delay, the need for two doctors' opinions, and the nomination of the 'protector' as unworkable in this sense.

However, Lush J disagreed. He accepted a submission by XZ's counsel that 'it is no part of the OPG's statutory duties to police the practicality or utility of individual aspects of an LPA'. To be ineffective as part of a lasting power of attorney under the MCA 2005, a provision would have to be not capable of taking effect. It was not enough that they posed practical difficulties.

Lush duly ruled that the Office of the Public Guardian had no right to make a 'paternalistic judgement' on behalf of the wealthy donor. He accordingly ordered the OPG to register the LPA.

• Lush also noted that the new LPA form that comes into force on 1 July deals with the same difficulty. It asks the donor 'When can your attorneys make decisions?', the permitted answers being 'As soon as my LPA has been registered (and also when I don't have mental capacity)', and 'Only when I do not have capacity.' On this form, beneath the second option, is a 'health warning' stating 'Be careful – this can make your LPA a lot less useful. Your attorneys might be asked to prove you do not have mental capacity each time they try to use this LPA.' Essentially, said Lush, 'this warning is what the case of Re XZ is all about.'

Sources

• BAILII