January 2015 – Continuing The Conversation

Author: Mitchells Roberton
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Many will be aware of the powers of attorney advertising campaign with the catch-phrase “start the conversation”. The campaign encourages people to think about granting “powers of attorney”. This Note first says something about powers of attorney generally. It then turns (with somewhat strained humour) to the question of continuing – and ending – a somewhat different “conversation”.

Powers of Attorney generally

• A “power of attorney” is a legal document used by a person to authorise another individual to take financial, medical or welfare decisions on his or her behalf. It enables a person to plan for future decision-making in the event of their becoming unable to make decisions for themselves as a result of injury or illness (or loss of capacity).

• If a person becomes unable to make decisions for themselves – because of illness, injury or loss of capacity – no-one else is automatically empowered to make those decision for them unless they have been given the legal authority to do so.

• A power of attorney is a reasonably straightforward and cost effective way of such legal authority being conferred. The alternative way of conferring such authority generally involves court procedures which take time, cost money and may prove stressful.

• The power of attorney may cover property or financial affairs (e.g. managing your bank account). Such a power is called a “continuing power of attorney”.

• It may also cover welfare powers (e.g. deciding where you will live if you are no longer able to decide for yourself). Such a power is (predictably enough) called a “welfare power of attorney”.

• Of course, if a person grants a continuing and/or welfare power of attorney they must have the capacity to do so at the time of granting it.

• A continuing power of attorney is often made so as to be operable by the attorney from the date it is granted even if, in fact, the granter continues to deal with all or most of their property or financial affairs on their own without any intervention from the attorney. A key aspect of a continuing power of attorney however is that it will continue to be operable by the attorney even where the granter no longer has the capacity to deal with matters for him or herself.

• In contrast, welfare powers of attorney only come into force when the granter has lost capacity (or the attorney reasonably believes that to be so).

• Importantly however, in order to be effective such powers of attorney need to conform with the requirements of the Adults with Incapacity (Scotland) Act 2000 (“the 2000 Act”).

“Continuing the conversation”

• As just mentioned, powers of attorney need to be granted in accordance with the 2000 Act if they are going to be valid as “continuing and/or welfare powers of attorney”.

• As regards continuing powers of attorney those requirements include in particular the following under section 15 of the 2000 Act (emphases added):

“A continuing power of attorney shall be valid only if it is expressed in a written document which–
(a) is subscribed by the granter;
(b) incorporates a statement which clearly expresses the granter’s intention that the power be a continuing power;”

• A case arose last year in Glasgow where the relevant part of the power of attorney in question was worded as follows:

“I, [name], residing at [address] appoint Clydesdale Bank Public Limited Company, having its registered office at Thirty Saint Vincent Place, Glasgow to be my continuing Attorney (“my Attorney”) in terms of section 15 of the Adults with Incapacity (Scotland) Act 2000 …”

• The sheriff held that his was not good enough. The 2000 Act required that the power “clearly expresses the granter’s intention that the power be a continuing power.” In other words, it needed, one way or another, to express specifically that the power was to continue notwithstanding the granter’s future loss of capacity because, in his view, that is what the wording of the Act demanded.

• That caused a bit of a “stooshie”. In particular the 2000 Act also provided for the establishment of the Office of the Public Guardian (“OPG”) one of whose functions is to register powers of attorney granted in terms of the Act. Helpfully enough the OPG also provided sample powers of attorney documents on the OPG website which people were welcome to use. And many did. The sample documents however replicated, in substance, the words quoted above which the sheriff found to be deficient. In other words if the sheriff’s decision were to stand there would be many powers of attorney in operation which were, according to his decision, “invalid” in terms of the 2000 Act.

• So a quite different “conversation” to that envisaged by the advertising campaign for powers of attorney began to take shape in the legal press. It might, perhaps, have been described as a “consternation conversation”.

Ending the “consternation conversation”

• Happily the matter ended up in the Appeal Court whose decision dispelled the consternation. The case in the Appeal Court concerned a different power of attorney but the appointment was expressed in substantially the same way as in the sheriff court case referred to above. The key point is summed up in the following passage from the opinion of the court:

“ … we are of opinion that the power of attorney granted in favour of the first party is unquestionably a valid continuing power of attorney for the purposes of s.15. The document must obviously be construed objectively. Its opening sentence, read short, provides that “I [the granter] appoint [my wife] whom failing … Great Stuart Trustees Limited … to be my continuing attorney in terms of section 15 of the Adults with Incapacity (Scotland) Act 2000”. That sentence, which is clearly the fundamental provision of the document, uses the expression “continuing attorney”, which is defined in [the 2000 Act] as a person on whom a continuing power of attorney is conferred. That by itself points strongly to the conclusion that the document was intended to confer a continuing power of attorney. Then the sentence makes express reference to s.15. It is difficult to imagine what function that reference would have served if there had been no intention to create a continuing power of attorney within the meaning of that section. These two factors, the use of the expression “continuing attorney” and the express reference to s.15, are in our opinion sufficient by themselves to satisfy the [relevant] requirements … : the statement made in the opening sentence “clearly expresses the granter’s intention that the power be a continuing power”. We cannot give it any other construction.”

Note: This material is for information purposes only and does not constitute any form of advice or recommendation by us. You should not rely upon it in making any decisions or taking or refraining from taking any action. If you would like us to advise you on any of the matters covered in this material, please contact Kathryn Bready: kathryn@mitchells-roberton.co.uk

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