The 'five principles'

The guiding principles of the MCA 2005^[7] are set out in five principles which indicate how the term 'capacity' (implying in this context mental capacity) is to be interpreted:

1. A person must be assumed to have capacity unless it is established that he lacks capacity.
2. A person is not to be treated as unable to make a decision unless all practicable steps to help him to do so have been taken without success.
3. A person is not to be treated as unable to make a decision merely because he makes an unwise decision.
4. An act done, or decision made, under this Act for or on behalf of a person who lacks capacity must be done, or made, in his best interests.
5. Before the act is done, or the decision is made, regard must be had to whether the purpose for which it is needed can be as effectively achieved in a way that is less restrictive of the person’s rights and freedom of action.

The test so defined is 'decision-specific'. It can indicate an answer to the question 'Can he any longer use a gas ring safely when unsupervised?', but does not allow for wider questions to be given a firm yes/no answer when the real answer is that he has restricted capacity and so can deal with some aspects but not others. As stated in an official summary of the Act,^[8] it is 'a single clear test for assessing whether a person lacks capacity to take a particular decision at a particular time'.

Creating an LPA

From the point of view of someone who needs (or may potentially need) one or both LPAs, the Office of the Public Guardian is one of the first points of contact.

To apply for a Lasting Power of Attorney, the donor has to fill in the application forms giving details for themselves, the attorneys and another person known as the certificate provider to witness that the decision has been made with the donor's understanding and agreement. An LPA cannot be created once the donor has lost capacity.

A Lasting Power of Attorney is made by filling in a form in a prescribed manner, signed and witnessed in a prescribed order. There is a Web site^[9] which allows data to be filled in, and provides a filled-in form ready to be signed and witnessed in printable PDF format. Detailed instructions are provided for both types of LPA, 'Property and Financial Affairs' and 'Health and Welfare', in document form (on request, or by download), or on the Web site.^[10] Alternatively a solicitor can be engaged to prepare the LPA.^[11]

The OPG documentation provides some help and advice on drafting the LPA in a way which best meets the requirements of the donor when the LPA needs to be activated.

A fee is payable at the time of registration: as of 2022^[update] it is £82 for either of the two types of LPA, with exemption or reduction in some cases.^[12]

Using the lasting power of attorney

Before 1 January 2016 the original registered power of attorney had to be presented to an institution for it to accept the attorneys' instructions. An electronic procedure was then implemented^[13] whereby it became possible for donors, attorneys and other people or organisations to view a summary of an LPA and to monitor who has been given access to it, using an access code supplied by an attorney. This "Use a lasting power of attorney service" originally applied to LPAs registered from 17 July 2020, with plans to extend it to earlier ones. The electronic procedure replaced the lengthy and often problematic process of requesting power of attorney documents by post for verification purposes.^[14][15][16]

Once the donor has created a lasting power of attorney and it has been registered with the Office of the Public Guardian, it can be activated when required, allowing the attorneys to act on behalf of the donor, for example, paying the donor's bills, managing investments, and so on. However, in practice, this can prove much harder than it may sound.

The powers granted by the property and financial affairs LPA require the relevant institution (for example, the bank or insurance company) to accept the power of attorney and allow the attorney to act. Many institutions, while in theory accepting the power, make it extremely difficult to put in practice. Many claim that this is to protect the donor or to comply with money laundering regulations, but whatever the reasons, it can make the whole process very challenging and stressful, especially if the donor themselves is by this time unable to support the process, for example, from failing mental capacity.^{[citation needed]}

Ways in which institutions can obstruct the process include:

• requiring identity verification of the donor (which is not required in law and may in practice be very difficult if utility bills have already been redirected to the attorney's address and the donor is now mentally or physically frail)
• by insisting on seeing the sole original copy of the power of attorney, rather than accepting a certified copy
• questioning the identity of the attorney and requiring substantial proofs via certified copies of documents such as passports, even where the address of the attorney remains as stated on the LPA

Even once the authority of the attorney is accepted by the institution, they may choose to limit what the donor can do, for example by:

• not supporting a full range of services, such as internet banking and telephone banking, or refusing to issue cheque books or debit cards to attorneys
• continuing to send correspondence to the donor's address instead of the attorney's
• refusing to accept the attorney's instructions without the confirmation of the donor

The only recourse in these cases is to complain first to the institution in question, and if this fails to the Financial Ombudsman Service.

Sources such as The Guardian^[17] and The Telegraph^[18] have reported on these challenges.

Disclaiming a lasting power of attorney

The Office of the Public Guardian refers to the process by which someone may wish to cease to be an attorney under a lasting power of attorney as "disclaiming" the power.^[19]