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The Role of Attorneys: With Great Power Comes Great Responsibility

Usual practice for solicitors has always been, of course, to stress to proposed attorneys under any LPA (lasting power of attorney) the significance of the role and the serious responsibility they will be taking on. However, in light of the dawn of online LPAs which are being advertised as easy and simple, a reminder never hurts.

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The Public Guardian vs DY, YS and EA

Senior Judge Lush (ever reliable) has recently dealt with an example that acts such as a reminder in the case of The Public Guardian and DY, YS, and ES (here’s the link: http://www.bailii.org/ew/cases/EWCOP/2015/41.html). Perhaps he too is mindful of the need for a reminder as he begins his judgement with the following quote:

"An attorney takes on a role which carries a great deal of power, which they must use carefully and responsibly": Mental Capacity Act Code of Practice, paragraph 7.58

It’s not unlike Uncle Ben’s famous Spiderman quote. Unfortunately whilst attorneys are unlikely to develop any superhuman abilities, they should nevertheless see their powers as the type of great power that necessarily comes with great responsibility.

In the case at hand, OL (who we’ll call Olivia) had an LPA for property and affairs in which two of her three children (let’s call them Danielle and Yaniv) were appointed as attorneys. Her eldest son, who we’ll call Edward, was not appointed. The validity of the LPA was not in dispute although Olivia had suffered a stroke a little over a year before its creation and been diagnosed with dementia around a year before her stroke. The LPA was registered two months after its creation, which is not unusual.

At the time the LPA was registered (December 2013) Danielle had already been living with Olivia in Olivia’s maisonette, ostensibly to look after her, for some three years. In June 2014 they moved from the maisonette in London SW9 to a house in Croydon.

Office of the Public Guardian (OPG)

Edward raised concerns with the OPG over this when he questioned Danielle about these transactions (laid out in in more detail below, as discovered by the OPG investigations officer) and was told by her it was none of his business.

The maisonette was sold for £730,000, and the house purchased for £430,000, entirely with Olivia’s own funds. At face value that leaves a surplus for Olivia of approximately £300,000, and yet Danielle and Yaniv arranged for a firm of solicitors to draw up a declaration of Trust showing that Olivia owned only 20% of the property and that they each respectively owned 40%. This represents an outright gift of £172,000 to the attorneys, and Olivia owning a share worth only £86,000 in the house in Croydon – rather a drastic step down from a maisonette in a desirable area worth almost a million pounds. It should be noted that the attorneys did go to a solicitor to have the trust drawn up, and they did argue that this was done wholly and completely with the involvement of Olivia (clearly they mean she gave capacitous instructions) through solicitors, which does all sound – in theory – the responsible way to do things.

After Edward raised his concerns, the OPG wrote to the attorneys in both July and August 2014 asking them to produce a full account of their dealings. With the type of funds involved, they should have been keeping detailed accounts (the Mental Capacity Act 2005 Code of Practice says a record of transactions like bank statements will be acceptable when someone has relatively simple affairs, although given the level of funds involved here I cannot imagine that would be the case). The OPG received no answer to their enquiries.

£127,885 of Olivia’s money was spent to pay off Danielle’s mortgage on her property in South Northwood, in which she lived before moving in with Olivia. That property was divided into two flats (and a further £80,000 of Olivia’s money was spent on building work and a loft conversion at the South Northwood property, perhaps to facilitate this division). One of the flats was let at a rent of £850 a month, but this was not paid to Olivia.

Within a period of around 6 months from the date of registration of the LPA, Olivia had just £7,000 left in her bank account.

Attorney’s failure to act responsibly

A Court of Protection general visitor attended Olivia in July 2014 and found she did not have capacity to revoke the LPA. Apparently Danielle and Yaniv spoke with the visitor and felt that by doing so they had answered the OPG’s queries. According to the investigating officer, they “did not seem bothered” about the prospect of an application to the Court.

Unsurprisingly Senior Judge Lush found the attorneys had behaved in a way contravening Olivia’s best interests. The failure to keep accounts would in and of itself have been sufficient to warrant the revocation of their appointment (and attorneys should take careful note of that point) but both attorneys, especially Danielle, had taken colossal advantage of their position. Neither had they managed to keep Olivia’s money and property separate from their own.

The important thing to note here is that whilst it is true that in this case the level of funds was high, should attorneys fail in their duties, the LPA can be revoked, regardless of the level of funds involved. This may be of some comfort to anyone who has set up an LPA, but it must be noted, Olivia’s funds have still been massively depleted, and arguments about that may continue in other Courts for months or even years: it is not always a matter of simple reimbursement. This is even when solicitors have been used (to draw up the Trust) and the attorneys have argued that Olivia made that decision herself.

A panel Deputy was appointed for Olivia, as it was considered Edward could not be impartial enough, as Senior Judge Lush sensed he was motivated partly by a desire to salvage his own inheritance and partly by a desire for revenge against his sister and brother. The panel deputy was authorised to take such steps as are necessary or expedient to restore Olivia’s estate so far as possible to the position in which it would have been before the attorneys began acting so recklessly and irresponsibly.

Attorneys and potential attorneys should therefore take note, and consider carefully whether they want to act as attorneys before agreeing to do so. Similarly, anyone making an LPA should think carefully about the type of power they are bestowing on their attorneys, and whether the attorneys will be able to manage it.