How should banks, accountants, utilities and financial services advisers deal with England and Wales powers of attorney?
OPG issues guidance advising companies on how to deal with customers whose decisions are taken under power of attorney.
The Office of the Public Guardian (OPG) has recently issued guidance which advises the staff of financial services and utility companies how to deal with customers whose decisions are taken for them under a financial affairs power of attorney (LP1F), general power of attorney (PoA) or a deputy court order issued by the Court of Protection.
Legal professionals have long been calling for such guidance to be issued to enable legally appointed attorneys and deputies to meet with a more streamlined customer experience when trying to manage the donor’s affairs.
One of the main complaints raised by attorneys and deputies is that companies often insist on seeing an original document without this being a legal requirement, or will ask to see it on repeated occasions. This can often cause delays when carrying out important and often time sensitive actions on behalf of the donor.
Attorneys and deputies also often find companies' attitudes to these legal instruments both confusing and inconsistent. The guidance issued by the OPG aims to help regulated firms such as banks, accountants and financial advisors to provide a 'smoother, more uniform and straightforward' customer experience, while ensuring that safeguards against the exploitation of the donor/client are maintained.
So what should companies be focusing on when dealing with attorneys or court appointed deputies?
- The approach that should be adopted when dealing with customers appointed under LP1Fs, PoAs or deputy court orders is a matter of law (Mental Capacity Act 2005). Company employees should not try to assess the donor’s capacity themselves. It is only necessary for companies to check that relevant legal documents are genuine, read them to identify who has authority to make decisions for the donor and under what circumstances, and amend their records accordingly so that attorneys do not have to go through the same procedures several times.
- There is nothing in law that says companies must see the original LPA. Photocopies, scanned images and certified or office copies can be acceptable alternatives to original documents. Which documents a company chooses as acceptable is likely to depend on the level of risk involved in letting an attorney or deputy manage the donor’s account. Utility companies, for example, might assess the risk as being relatively low and as such may be prepared to accept a photocopy of an original document as proof of authority to act. Banking services on the other hand are likely to determine the risk as being much higher. It is recommended that companies should publish clear policies for accepting legal documents, so that attorneys and deputies know exactly what is expected of them.
- Appropriate training for staff members dealing with LP1Fs, PoAs or deputy court orders is essential. Staff members need to understand the policy that exists within their own organisation and how to effectively communicate those requirements to their customers. Staff also need to able to check a legal document to identify that it is genuine and be able to identify who has authority to make decisions for the donor and under what circumstances.
The Wills, Trusts and Estates team at Weightmans has specialist solicitors across the UK who can provide training, assistance and support to company employees who are dealing with these issues as well as reporting concerns about attorneys' actions; dealing with joint LP1Fs, PoAs and deputy court orders; replacement attorneys; the donor's preferences and restrictions; and Enduring Powers of Attorney. Weightmans can also assist with writing policies and internal guidance notes for companies.
Year on year the number of people creating and registering Lasting Powers of Attorney has risen exponentially. In 2018, the Independent newspaper reported that the number of people formally assigning emergency decision-making to those they trust with a lasting power of attorney soared by more than 180 percentage points in the last five years. What this means for companies such as utility and financial service providers is that there is an increased likelihood of them needing to deal with these documents.
Given the importance of maintaining good customer relationships and the retention of customers in such challenging and competitive markets, companies should be asking themselves whether they can really afford to get this wrong.
If you have any questions or would like to know more about our update, please contact Sally Cook (Solicitor) on 0161 214 0597, or firstname.lastname@example.org.