In Re XZ  EWCOP 35 the Court of Protection criticised the Office of the Public Guardian (OPG) for refusing to register a property and financial affairs LPA that contained detailed restrictions and held that the role of the OPG should not extend to policing restrictions that may prove difficult in practice if such restrictions do not contravene the Mental Capacity Act 2005 (MCA 2005). When reviewing restrictions contained in an LPA the OPG should limit its function to considering whether restrictions are capable of being given legal effect as part of a valid LPA. The OPG’s statutory duties do not extend to policing the practicality of individual aspects of an LPA.
XZ, an international high net worth individual, drafted his LPA to include a number of restrictions. The restrictions were designed to ensure that his attorneys, save for certain emergency situations, could not act until he had been mentally incapable for a period of at least 60 days. Additionally, in order for his two attorneys to act, XZ’s loss of capacity would need to be confirmed by the professional opinions of two experienced psychiatrists. Furthermore, the professional opinions would need to be reviewed and approved by an independent protector (an old college friend) with the power to approve or overrule the psychiatrist’s certification of XZ’s loss of capacity. The restrictions were carefully drafted to ensure that the attorneys could not take hasty action during a period of XZ’s temporary incapacity or if there was any doubt about his capacity. The OPG refused to register the property and financial affairs LPA because it concluded that the restrictions imposed an unreasonable fetter on the attorneys’ power to act and were ineffective as part of an LPA. XZ applied to the Court of Protection for a declaration that his LPA was valid as drafted.
COURT OF PROTECTION DECISION
Lush SJ held that XZ’s LPA did not contain restrictions that would be ineffective or unworkable as part of an LPA. The restrictions would not prevent the LPA form operating as a valid power of attorney and the OPG was ordered to register the LPA. XZ had acknowledged that his LPA would be less effective as a result of including extensive restrictions; however it was of utmost importance to XZ that the restrictions were included in the LPA for his own peace of mind and reassurance in relation to management of his financial affairs. Lush SJ stated: “It is [XZ’s] will and preference and it should be treated with respect. The Public Guardian has no right to make a paternalistic judgment on his behalf and decide that it would be in his best interests for these [restrictions] to be severed”. Under the MCA 2005, a restriction would need to be not capable of taking effect to be considered ineffective as part of an LPA. It is not sufficient for a restriction to merely pose practical difficulties. Lush SJ noted that the new LPA forms (in force from 1 July 2015) take steps to address similar issues. The form now gives a “health warning” if donors elect for their attorneys to act only when they do not have capacity stating that this can make the LPA “a lot less useful” as attorneys might be asked to prove the donor does not have mental capacity each time they need to use the LPA.
Practitioners can confidently advise individuals who prefer to keep tight control over their financial affairs that a compromise can be reached by including extensive restrictions in their LPAs governing when their attorneys can act. “For further information, please speak to Helen Freely, partner, or Katie Underhill, solicitor, in Druces LLP’s Private Client team.”This note is not intended to be taken as legal advice. It is guidance only and reflects the law as at July 2015.