Helpful case gives LPA donors more choice and control

In brief

LPA donors are now able to appoint attorneys through advance specification in their LPA so that a surviving jointly appointed attorney can continue to make decisions on their own should the other co-attorney be unable to act.

Comment

We have compiled a list of practical points to consider that arise from this case. This list is posted at the end of this article.

Background

Appointing joint attorneys (or jointly for some decisions and jointly and severally for other decisions) has always carried with it the risk of the power coming to an end should either of the attorneys become unable to act.  Joint attorneys are treated as a single ‘unit’ and therefore if one attorney is unable to act it was previously the case that the whole ‘unit’ must stop acting.  Where a replacement attorney(s) has been appointed by the donor they will step up and begin to make decisions on behalf of the donor, overriding the remaining joint attorney who is still capable of acting.

This can be an unsatisfactory outcome, especially where a donor appoints their children as joint attorneys and a friend or more distant relative as a replacement attorney for a ‘fail safe’ option.  In this situation, if one of the joint attorneys were unable to continue acting then although the remaining child is still capable of acting (and it may have been the donor’s wish that the remaining child would continue to make decisions on their own) they would be replaced by the friend or more distant relative.

The suggested course of action to avoid the above scenario prior to Miles & Beattie v Public Guardian was to make two LPAs.  The first LPA would appoint the children as joint attorneys.  The second LPA should then appoint the children jointly and severally and only come into affect upon the failure of the first LPA.  The remaining child could continue to make decisions for the donor in preference of the replacement.  However, in Miles & Beattie v Public Guardian this approach was found by Mr Justice Nugee to be a ‘cumbersome’ and ‘potentially confusing’ solution that would also involve more expense to the donor.

The facts

The case surrounded two separate applications to register LPAs which had been drafted by the same firm of solicitors.

In the case of Mrs Miles’ LPA, her attorneys were appointed jointly for decisions relating to the donor’s property and any transaction over £10,000.  For all other decisions the attorneys could act jointly and severally.

The provisions relating to the re-appointment of attorneys were as follows:

“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.”

Similar provisions were included in a Health and Welfare LPA relating to the decision to withdrawal life sustaining treatment.  Mrs Beattie’s LPAs also had similar provisions.

Senior Judge Lush held the above provisions to be ineffective and removed them from the LPA finding that the provisions attempted to provide for survivorship which the Mental Capacity Act 2005 (MCA 2005) did not allow.  The Senior Judge 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.

Both cases were appealed and were heard together by Mr Justice Nugee in the High Court.

High Court Decision

In the appeal, Mr Justice Nugee disagreed with Senior Judge Lush that the provisions should be severed.

Nugee J found that there is nothing in the MCA 2005 that prevented an original jointly appointed attorney being re-appointed as a replacement attorney on the joint appointment failing. Therefore it was possible under s10(8)(b) of the MCA to provide for such a replacement provided that the instructions in the LPA were sufficiently clear.

The appeal was allowed and amended versions of the provisions were included in the LPAs.

Points to consider

• The greater flexibility when appointing joint attorneys following this case must be welcomed.  The previously suggested method of re-appointing joint attorneys ahead of replacement attorneys has always seemed to be a complicated process.  In my experience this has lead to donors changing their instructions or appointing attorneys jointly and severally to avoid additional cost and complexity even though this may not always be ideal.
• The LPA forms used in the case of Miles & Beattie v Public Guardian have since changed.  The forms discussed by Mr Justice Nugee in the case are now no longer valid and this has the potential to cause confusion.
• The new forms were introduced at the same time that this case was being heard by the Court of Appeal. They have not therefore been updated in accordance with the case.  The new forms still specifically state if one jointly appointed attorney dies or is unable to act then the LPA will stop working unless a replacement is named.   The guidance from the OPG is also yet to be updated and still states that the preferred way of allowing jointly appointed attorneys to continue acting in the event of one being unable to is to make two LPAs.
• Although Miles & Beattie v Public Guardian still represents good law, caution should be exercised when drafting an LPA containing the new provisions.  They should be sufficiently clear and follow the wording helpfully suggested by Mr Justice Nugee in the case.
• As the guidance is yet to be updated, there is uncertainty about how the OPG will react to an application to register an LPA which contain survivorship provisions.  Until this issue is clarified, it may be prudent to anticipate queries being raised by the OPG during the registration process.
• It is important that any survivorship provisions are drafted correctly to avoid them being rejected by the OPG at registration.  You should therefore take advice from a solicitor when drafting your LPA.

Case report

Miles & Anor v The Public Guardian [2015] EWHC 2960 (Ch) (01 July 2015)