Validity of LPAs

 In Elderly/Vulnerable Client

Disclaimer: LawSkills provides training for the legal industry and does not provide legal advice to members of the public. For help or guidance please seek the services of a qualified practitioner.

Now can an original attorney be reappointed to act alone when a joint appointment has failed?

Miles & Beattie v PG [2015] EWHC 2960

Somewhat unusually the High Court has overturned two decisions of Senior Judge Lush on the validity of LPAs with identical provisions regarding the reappointment of one of the original attorneys when a joint appointment has failed. Nugee J disagreed with Lush SJ and held that there was nothing in the form to prevent a donor appointing one of the original jointly appointed attorneys as a replacement on the joint appointment failing providing suitably clear wording was used. Usefully for practitioners he agreed suggested wording which would be effective.

Lush SJ had a different way of achieving this objective: to execute two LPAs – the first appointing the attorneys to act jointly and the second one to come into effect only when the first LPA fails which appoints the attorneys to act jointly and severally. Nugee J agreed that this method was possible, but was expensive and unsatisfactory.

The factsCase Summary from LawSkills | Private Client specialist trainers

In Re Miles [2014] EWCOP 40 Senior Judge Lush had held that certain replacement attorney provisions of Mrs Miles’ (M) LPA were ineffective and severed them. There was no separate judgment by him in the Re Beattie case as the LPAs were drafted by the same solicitor with identical wording as in Re Miles and he severed those replacement attorney provisions in the same way. Appeals were made in both cases and were heard together by Nugee J in the High Court.

On 27 November 2013 M executed a property and financial affairs LPA and a health and welfare LPA. Under both she appointed her husband and daughter as her attorneys to act jointly for specific listed decisions and jointly and severally for other decisions. The survivor was to act if the joint appointment failed. She also appointed her son as a replacement attorney if both her husband and daughter could not act. Both LPAs contained restrictions and conditions and set out her guidance to her attorneys. David Satchell, a solicitor, drew up both LPAs, witnessed M signing them and acted as the certificate provider.

FREE monthly newsletter

Wills | Probate | Trusts | Tax  | Elderly & Vulnerable Client

  • Relevant learning and development opportunities
  • News, articles and LawSkills’ services
  • Communications which help you find appropriate training in your area

An application was made to register both LPAs, but the Public Guardian (PG) had concern about the wording of some of the provisions. He considered it would be in M’s best interests to register the LPAs and then apply to court for a ruling on the provisions, rather than leave M without the support of the LPAs while the matter was decided. They were therefore registered on 17 June 2014.

It was the section 4 joint appointment provision which concerned the PG. On the property and financial affairs LPA M had ticked the box for ‘Jointly for some decisions, and severally for other decisions’ and then specified:

“My attorneys may act jointly and severally save with regard to:

  1. any sale of my property at address (or any property which may subsequently replace it); and
  2. any transaction in excess of £10,000

when all surviving attorneys who are capable of acting (whether originally appointed or who have been appointed by and are acting in substitution) shall act jointly insofar as there may be more than one of them able to do so but in the event that there is only one of them capable of acting I expressly re-appoint that attorney to act alone.

My replacement attorney shall only act in the event that both of my originally nominated attorneys shall have died before me or are otherwise unable or unwilling to act or the appointment of them fails for any other reason.

In the event of any difficulty arising with the operation of the provisions above then my attorneys should act jointly and severally and in the event of any replacement attorney acting because of failure of the above provisions my originally nominated attorneys who are still capable of acting shall be reappointed to act with them insofar as it shall be possible to do so and on a joint and several basis.”

There was a broadly similar provision on the health and welfare LPA whereby the attorneys were to act jointly and severally apart from regarding decisions on withdrawing life sustaining treatment when they were to act jointly. The provision for the replacement attorney to act and the final provision regarding any difficulties were repeated.

The PG applied to the Court of Protection for a ruling on the validity of the provisions.

David Satchell gave evidence that he always encouraged clients to provide as many safeguards as possible in their LPAs to protect them from abuse, which was all too common, from their trusted attorneys. This was the purpose of the provisions in question. He pointed out that executors are obliged to act jointly, but that if one of them died or became incapable of acting, the survivor was entitled to continue acting alone. The MCA provides expressly for jointly appointed attorneys being unable to act once one becomes incapable of acting, but it makes no mention of whether the remaining attorney can then be reappointed.

The law

Section 10(4) of the Mental Capacity Act 2005 (MCA 05) provides:

The instrument may appoint [attorneys] to act—

(a) jointly,

(b) jointly and severally, or

(c) jointly in respect of some matters and jointly and severally in respect of others.

Section 10(8) of the MCA provides:

An instrument used to create a lasting power of attorney—

(a) cannot give the donee (or, if more than one, any of them) power to appoint a substitute or successor, but

(b) may itself appoint a person to replace the donee (or, if more than one, any of them) on the occurrence of an event mentioned in section 13(6)(a) to (d) which has the effect of terminating the donee’s appointment.

Section 13 of the MCA provides:

(1) This section applies if –

(a) P has executed an instrument with a view to creating a lasting power of attorney, or

 (b) a lasting power of attorney is registered as having been conferred by P, and in this section references to revoking the power include revoking the instrument.

(5) The occurrence in relation to a donee of an event mentioned in subsection (6) –

(a) terminates his appointment, and

(b) except in the cases given in subsection (7), revokes the power.

(6) The events are –

 (a) the disclaimer of the appointment by the donee in accordance with such requirements as may be prescribed for the purposes of this section in regulations made by the Lord Chancellor,

(b) subject to subsections (8) and (9), the death or bankruptcy of the donee or, if the donee is a trust corporation, its winding-up or dissolution,

(c) subject to subsection (11), the dissolution or annulment of a marriage or civil partnership between the donor and the donee,

(d) the lack of capacity of the donee.

(7) The cases are –

(a) the donee is replaced under the terms of the instrument,

(b) he is one of two or more persons appointed to act as donees jointly and severally in respect of any matter and, after the event, there is at least one remaining donee.

Section 23(1) of the MCA 05 provides:

The court may determine any question as to the meaning or effect of a lasting power of attorney or an instrument purporting to create one.

The Court of Protection decision

The question Lush SJ had to answer was whether more than one attorney can be appointed to act jointly with a survivorship provision expressly reappointing the continuing attorney or attorneys.

Historically the Court of Protection had had the power to appoint receivers to act jointly with survivorship, but this was not possible under the MCA for deputies which replaced receivers, nor in his opinion, for the appointment of attorneys. Section 10(4) sets out the basis for how joint attorneys can be appointed.

The LPA form guidance too was clear and states:

“Bear in mind that if one of your attorneys dies (or can no longer act on your behalf), the other attorney will not be able to make the decisions you have specified to be taken jointly. In this situation it is advisable to have a replacement attorney. The surviving original attorney(s) may act with the replacement attorney in making decisions which may be taken jointly and severally, but cannot continue to make decisions which were to be taken jointly. The replacement attorney will make those decisions.”

Lush SJ held that the appointment of replacement surviving attorneys to act jointly and severally could not be made in the same instrument as the appointment of those attorneys to act jointly. There was no facility for this by the design of section 4 on the prescribed LPA 2015 version of the form. The 2015 version of the forms state that if attorneys are appointed to act jointly and the joint appointment failed (such as on the death of one of the attorneys) a provision to reappoint the survivor to act alone before any substitute attorney is appointed would be invalid.

“In my view, the safest way of achieving the effect of joint attorneyship with survivorship would be for the donor to execute two LPAs: the first appointing the attorneys to act jointly, and the second appointing them to act jointly and severally with a condition that the second LPA will come into operation when the first LPA fails for any reason. The second LPA could also provide for the appointment of one or more replacement attorneys, if that is what the donor wishes.”

Lush SJ did not agree with David Satchell that as the MCA 2005 did not expressly state that there was a restriction on reappointing an attorney this meant that it was possible. If Parliament had intended that donors could appoint attorneys to act jointly with survivorship, it would have expressly provided for this in section 10(4) of the Mental Capacity Act 2005.”

Lush SJ held that part of the wording in M’s LPAs was ineffective and he severed it by deleting the paragraph starting “when all surviving attorneys who are capable of acting…” and the last paragraph starting “In the event of any difficulty arising…”. Similar deletions were made to the health and welfare LPA to sever the ineffective words.

The High Court decision

On appeal, Nugee J disagreed with Lush SJ.

Nugee J took a different view of the MCA. He held that as there was nothing in it which stated that it was not possible for an original jointly appointed attorney to act as the replacement attorney on the joint appointment failing, therefore it was possible under s10(8)(b) of the MCA to provide for such a replacement.

“… it does seem to me that it is right that the Act should be construed in a way which gives as much flexibility to donors to set out how they wish their affairs to be dealt with as possible, the Act being intended to give autonomy to those who are in a position where they can foresee that they may in the future lack capacity to specify who it is that they wish to act for their affairs. It would be unduly restrictive to require the Act to be interpreted in such a way in the circumstances which I have outlined, that is where a donor selects two people, A and B, to make a joint decision in relation to important decisions, that the donor should not be able in those circumstances to say that if one of them was unable to act she wished the remaining of the two original attorneys to make the decision alone.”

Bearing in mind that view of the MCA, where there was a ‘hybrid’ appointment of attorneys to act jointly for important decisions and jointly and severally for other more minor decisions, Nugee J held that there was nothing in the form (either in the space in section 4 of the form or on continuation sheet A2) to preclude survivorship provisions. Nugee J agreed with suggested wording being effective:

 “I wish my attorneys A and B to act as follows:

(1) So long as both attorneys are able and willing to act, I wish them to make the following decisions jointly: sale of the house; transactions over £10,000 [or the like] but all other decisions to be made jointly and severally;

(2) In the event that one of my original attorneys A and B is unable or unwilling to act, I then appoint the remaining of my original attorneys A or B, as the case may be, as replacement attorney to act solely;

(3) In the event of both my original attorneys being unable or unwilling to act, I appoint C as a replacement attorney to act solely [with whatever variations the case requires].”

The correct place for such wording was on continuation sheet A2.

Nugee J held that although the second part of the first paragraph on M’s LPA starting “when all surviving attorneys who are capable of acting …..” was not as clear a form of words as he had suggested, it nonetheless achieved the objective in practical terms. This paragraph, with the deletion of the words in brackets which were unhelpful, was reinstated.

The third paragraph starting with the words “In the event of any difficulty arising…” was unnecessary, rendering it ineffective and it would therefore remain struck out.

Similar alterations were made to M’s health and welfare LPA and to the power of attorney in Mrs Beattie’s case.

Nugee J referred to Lush SJ’s preferred method of two LPAs. He agreed that this would be possible, but it would be expensive and unsatisfactory as it would be “a cumbersome and potentially confusing method…”.

He agreed with Lush SJ that replacement attorneys should be named and could not be referred to merely by a title or holding an office, such as the senior partner in a firm of solicitors, as they would not be ascertainable at the time the power was executed and would not be signing the power. Nugee J held that this consideration did not mean that there was anything in the form to prevent a donor appointing one of the original jointly appointed attorneys as a replacement on the joint appointment failing, providing suitably clear wording was used. He agreed suggested wording which would be effective:

“I appoint the named individuals A and B to act jointly and in the event of one of them ceasing to be capable or willing to act, I appoint the surviving one, A or B as the case may be, to act alone”.

The appeal was therefore allowed.

Practice points

  1. Be aware that the more restrictions and conditions there are in an LPA, the greater the chance of a delay in its registration. The provision itself may not be permitted so could be severed and thus be ineffective.
  1. Be careful when appointing attorneys to act jointly for some decisions and jointly and severally for others. Are the provisions workable in practice?
  1. Be aware that this case does not match the LPA form guidance. The guidance goes into some detail about the difficulties of replacing attorneys appointed jointly as opposed to jointly and severally with some of the original attorneys, but as per Lush, it recommends making two LPAs instead of it being possible in the one document. Watch to see if the guidance is now amended on this point.
  1. Consider whether you will be one of the first to include survivorship provisions in a single LPA following Nugee J’s decision and his approved wording and test the OPG’s registration approach. Alternatively should you continue to draw up two LPAs as recommended by Lush SJ at least until there is certainty that the OPG will register a single LPA with such provisions?
  1. Lush SJ was critical of the solicitor drafting provisions which attempted, in his opinion, to circumvent the legislation. Despite his decision being overturned it is important to remember to still keep any provisions within the statutory framework.

The LawSkills Monthly Digest

Subscribe to our comprehensive Monthly Digest for insightful feedback on Wills, Probate, Trusts, Tax and Elderly & Vulnerable client matters

Not complicated to read  |  Requires no internet searching |  Simply an informative pdf emailed to your inbox including practice points & tips

Subscribe now for monthly insightful feedback on key issues.

All for only £120 + VAT per year
(£97.50 for 10+)

Lawskills Digest
Recommended Posts
Book reviewMental capacity