A Power of Attorney (POA) is an amazing thing in that it can give a very ordinary person a superpower – to be in two or more places at the same time.
You will need time to digest that extraordinary claim, so whilst you shake your head in disbelief, let me explain.
A POA is a legal agreement between two adult people that grants one individual, the “agent“, the legal power to act on behalf of the other individual, usually called the “principal.”
The powers granted can range from the very general (“deal with my property”) to the very specific – aimed at a single isolated transaction – (“close my bank account”).
These are very handy in business as it means you can have agents all over the place conducting business on your behalf, whilst you sit tight back at headquarters, bringing in more business. Or, if you are lazy like me, you can have people all over the place conducting business in your name and making money for you, whilst you sip that ice cold Guinness.
In theory these agreements can be oral or written, but it is highly advisable to have them in writing.
The biggest problem with the POA is that it is only as good as its maker. When the principal loses his or her capacity, the POA is useless and cannot be acted upon. If the agent continues to act on the POA whilst aware that the principal has lost their capacity, that agent might find himself/herself personally liable for all the deals they have done or transactions they have performed.
The Enduring Power of Attorney
The Enduring POA was created to get around this problem. The Enduring POA authorises an agent to make decisions for the principal even after the principal’s incapacitation. For instance, in cases where an individual develops a mental illness like Alzheimer’s or loses mental capacity due to an accident, an Enduring POA agreement authorises the agent to continue to make decisions on behalf of the principal, despite the principal losing capacity.
This allows people to prepare for their future incapacity. Whilst they are still lucid, they can choose a person or persons they trust to make those decisions on their behalf when and if they lose capacity.
Enduring POAs are currently created in terms of the Powers of Attorney Act 1996 (“the 1996 Act”). This did not prove a popular mechanism and a relatively small percentage of the population have used this device, which is a tragedy, as they have the potential to be really useful at a relatively low cost.
The first practical problem was that the Enduring POA created under the 1996 Act was only allowed to deal with “property and affairs”. It could not be used to deal with healthcare decisions. The second problem was that the safeguards under the 1996 Act were either impractical or were too complicated which meant that any small defect could result in the Enduring POA being declared invalid.
Enduring POAs and the Assisted-Decision Making (Capacity) Act of 2015
Under the Assisted-Decision Making (Capacity) Act of 2015 (“the 2015 Act”), Enduring POAs have been extended to cover “personal welfare” decisions.
“personal welfare” is defined in the 2015 Act (where the ‘relevant person’ is the person who is incapacitated or is facing incapacity), as including the following matters:
“(a) accommodation, including whether or not the relevant person should live in a designated centre ;
(b) participation by the relevant person in employment, education or training;
(c) participation by the relevant person in social activities;
(d) decisions on any social services provided or to be provided to the relevant person;
(f) other matters relating to the relevant person’s well-being.”
What this means is that, in addition to dealing with other personal aspects of their life, a person can appoint someone to act on his or her behalf in respect of healthcare decisions when they lose capacity to make those decisions themselves.
The obvious question: What sort of decisions are we talking about?
The term “healthcare” is not defined in the 2015 Act, but it is worthwhile having a look further on in the 2015 Act to see what is allowed to be covered by an Advance Healthcare Directive (AHD)(often incorrectly called a ‘Living Will’).
We can reasonably assume that if specific issues are listed as only being allowed to be dealt with by an AHD, then anything else that is not specifically ring-fenced can be covered by the Enduring POA.
If only life was that easy. Unfortunately, the 2015 Act does not really itemise what sort of things can be dealt with in the AHD. However, a reading of the Act makes it clear that the Advance Health Directive can be about many aspects of healthcare treatment. However, only the AHD can be about refusing life-sustaining treatment, which is what the “Living Will” was all about.
For example, Section 85(3) and (4) say:
“(3) An advance healthcare directive is not applicable to life-sustaining treatment unless this is substantiated by a statement in the directive by the directive-maker to the effect that the directive is to apply to that treatment even if his or her life is at risk.
(4)(a) An advance healthcare directive is not applicable to the administration of basic care to the directive-maker.”
Similarly, Section 86(1) says:
“A specific refusal of treatment set out in an advance healthcare directive is as effective as if made contemporaneously by the directive-maker when he or she had capacity to make that decision.”
Finally, the clincher is provided in Section 62(5) which says that a appointer must not include in an Enduring POA a relevant decision relating to the refusal of life-sustaining treatment, or a decision which is the subject of an advance healthcare directive (AHD) made by him or her. To the extent that an Enduring POA includes such relevant decisions, the power is null and void.
In other words, whilst the Advance Healthcare Directive can have other stuff in it, it is the only legal instrument that can deal with the refusal of life-sustaining treatment.
Accordingly, it can be argued that all health treatment decisions that do not involve refusal of life-saving treatment can be dealt with by an Enduring POA under the ‘ordinary’ health treatment provision as defined.
It also means that a person needs to be careful if they create both an Enduring POA and an Advance Healthcare Directive. This is because it is possible that both an Enduring POA and the Advance Healthcare Directive made by the same person might cover similar areas, but say different things. The 2015 Act says that if these two legal documents contradict each other on any aspect of health treatment, the Advance Healthcare Directive will be given precedence. In other words the AHD trumps the Enduring POA.
Practically speaking, if you want to create both devices, then try and do them at the same time, and make sure that they do not contradict each other. If you do the one and then the other later on, check what the first one says before starting on the second.
The other big improvement on the 1996 Act is that the 2015 Act contains safeguards, which are more extensive than the 1996 Act, but at the same time are more practical and easier to implement successfully. The judgment of In the Matter of an Application for Registration of an Enduring Power of Attorney of SCR  IEHC 308 is a good example of the problems often experienced by a person creating an Enduring POA under the 1996 Act. The Enduring POA seemed to be good in all respects, but was declared invalid because the maker of the instrument failed the ‘all or nothing’ capacity test (and because the doctor took the word of the solicitor rather than properly examining the maker of the Enduring POA).
There is no suggestion on the facts that there was any funny business going on. It was just a case of the person being declared incapable of entering into such an arrangement. On the facts it can be argued that the maker would have easily passed a functional test for capacity, as he seemed well aware of the nature and consequences of what he was asking the agent to do.
Suitability of the Agent
The 2015 Act also looks closely at the people who are appointed to act on behalf of another.
In terms of the 2015 Act, an adult person who is appointed to make decisions on behalf of another adult person is known as an “intervener”. The Act says that all interveners are legally obligated, under the threat of penalty, to carry out the will of the incapacitated person as much as possible, and to at all times act in good faith and for the incapacitated person’s benefit.
Similarly, the safeguarding provisions regarding the suitability, eligibility and disqualification for other types of interveners (known as ‘decision-making assistants’, ‘co-decision-makers’ and ‘decision-making representatives’) also apply to agents appointed under an Enduring POA.
Section 60 of the 2015 Act says that the content of the instrument creating the Enduring POA must include the statements by the appointer that he or she:
“(i) understands the implications of creating the power,
(ii) intends the power to be effective at any subsequent time when he or she lacks capacity in relation to one or more relevant decisions which are the subject of the power, and
(iii) is aware that he or she may vary or revoke the power prior to its registration.”
This requirement is far more extensive than the 1996 Act. The 1996 Act simply says that the document must state that the person making the document (“the appointer”) has read the information about the effect of creating the power or that such information has been read to the appointer. There is no requirement saying the appointer must actually understand what they are reading or having read to them!
The 2015 Act also requires that a legal practitioner (either a practising solicitor or barrister) must be satisfied that he or she has no reason to believe that the instrument is being executed as a result of fraud, coercion or undue pressure. The Act also requires a statement by a registered medical practitioner that in his or her opinion at the time the power was executed, the appointer had capacity to understand the implications of creating the power. This is essentially the same as the requirement regarding lawyers and GPs in the 1996 Act.
Section 60(1)(e) of the 2015 Act says that when he or she is appointed to be an agent under an Enduring POA, “the attorney” must state that he or she:
(i) understands the implications of undertaking to be an attorney for the appointer and has read and understands the information contained in the instrument creating the enduring power of attorney,
(ii) understands and undertakes to act in accordance with his or her functions as specified in the instrument,
(iii) understands and undertakes to act in according with the guiding principles in s.8 of the 2015 Act,
(iv) understands and undertakes to comply with the reporting obligations and
(v) understands the requirements in relation to registration of the power of attorney.
This is a lot more detailed than the 1996 Act which merely asks the attorney to state that he or she understands the duties and obligations of an attorney and the requirements of registration. This increased security and accountability is as a result of hard lessons learned, as there have been many cases of dishonesty and abuse under the 1996 Act, another reason that a relatively small proportion of people used the device.
In relation to “property and affairs”, Section 63 of the 2015 Act says that an attorney may not dispose of the property of the appointer by way of gift unless specific provision to that effect is made in the Enduring POA. And even where gifting is authorised by the document, the attorney’s power to gift shall be limited to gifts made on customary occasions to persons who are related to or connected to the appointer and in relation to whom the appointer might be expected to make gifts, and gifts to any charity to which the appointer might or might be expected to make gifts. In other words, no huge gifts being given to strangers! Relatively small gifts given to family members and close friends are the order of the day.
Finally, the 2015 Act provides more stringent requirements at both the execution and registration stages.
Remember that the Enduring POA only becomes effective when the appointer loses capacity. This does not just happen exactly at the time the appointer becomes incapacitated. Rather, the Enduring POA must be registered properly before it can be acted upon.
Section 68 of the 2015 Act says that the attorney can apply to have the Enduring POA registered when “he or she considers that the appointer may no longer have capacity”, and the application to register is made to and is considered by the Director of the Decision Support Service.
The Director must consider, at the time of the application for registration of the Enduring POA, whether the criteria set out in the 2015 Act have been complied with and whether the person or persons (the proposed attorney or attorneys) making the application for registration are “suitable”.
Section 72 says that the Director must also establish and maintain a register of instruments creating Enduring POAs. The Director must make the Register available for inspection and may issue an authenticated copy of an Enduring POA for a prescribed fee. The Director must also keep a record of those who inspected the Register or who received an authenticated copy of an Enduring POA.
Section 75 of the 2015 Act says that within three months of registration, the attorney must submit to the Director of the Decision Support Service a schedule of the appointer’s assets and liabilities and a projected statement of the appointer’s income and expenditure. Section 75 also says that an attorney must keep proper accounts and financial records and submit such accounts and records to the Director periodically, or make them available for inspection at any reasonable time.
This is in stark contrast to the 1996 where there is no provision for supervision of the attorney by the Registrar of Wards of Courts who has responsibility for registering EPAs under the 1996 Act.
Hopefully this considerable beefing-up of security and accountability will restore public confidence in the Enduring POA, as it is something that could be a huge benefit for people who are facing incapacity and are desperate to get their affairs in order before the dark cloud descends.
Unfortunately, as mentioned in a previous blog; the government are really dragging their heels in getting the 2015 Act operational. Only this year were positive moves made towards setting up the offices of the Decision Support Service, the national body responsible for the implementation and monitoring of the Act – albeit on a shoestring budget.
Again this is a disgusting state of affairs, as so many people could benefit from this very useful legal device, but we still seem a long way off from its implementation. With an election on the horizon, now would be a good time to discuss this with your local TD.