Digital lasting power of attorney pitfalls
Lasting Powers of Attorney (LPAs) were introduced in 2007 to replace Enduring Powers of Attorney. An LPA gives the attorney, or attorneys, authority to make decisions on behalf of an individual – also known as the donor. It is only effective once it has been registered with the Office of the Public Guardian (OPG).
The current process for putting an LPA in place requires it to be completed by the donor, attorneys, and a certificate provider using a paper form, which follows a strict ‘wet signature’ signing process, write Anna Davies, senior associate and Annabella King, trainee at Boodle Hatfield.
The government is consulting on moving to an online system for creating LPAs, with a view to modernisation. The stated key aims are to increase safeguards, improve the process of making and registering LPAs, and to improve the sustainability of the process, whilst ensuring it remains affordable.
The government has identified that there is an increased demand for a digital LPA service, as donors and attorneys have reported that they find the current process of making an LPA cumbersome and complex.
The demand for a digital service has been accelerated by the pandemic, when traditional signing formalities were difficult in the context of social distancing measures. Many are of the view that technology has progressed, and that there are now effective forms of identity and information verification other than wet ink signatures.
What are the risks?
One of the stated aims of modernising the LPA system is not only to simplify the process, but also to increase safeguards for the donor. Care will therefore need to be taken to ensure that effective safeguards are put in place so that the proposed online LPA system does not increase the scope for fraud and coercion.
One proposal considered in the government’s consultation is to remove the requirement for a donor’s signature to be witnessed, or for the witnessing to be done remotely. This is on the basis that the witness is not currently required to confirm the donor’s identity, nor confirm their understanding of the LPA – as that is the role of the certificate provider – and so their role does not add additional protection.
The intention behind the proposal for remote witnessing – such as by video call – is to make the process logistically easier to complete.
But it could be argued that the witness does currently provide some protection for the donor at the time of signing, because although it is not a requirement of their role, the witness may be alert to any undue pressure being put on the donor at the time of signature, and they may also be alert to potential abuse.
The witness currently confirms that they saw the donor sign the LPA form themselves, which prevents anyone else fraudulently signing the LPA on their behalf. Removing the witness, or allowing witnesses to act remotely, could therefore increase the scope for abuse here.
The government’s preferred option in the consultation document is removing the need for a witness to the donor and attorneys signatures, but using an Advanced or Qualified Electronic Signature or equivalent to verify the donor’s identity instead.
Using this process will provide evidence about the time and details of signing, but it cannot pick up on any undue influence or pressure the donor may be under to use the electronic signature. Although, arguably, it is the role of the certificate provider to be comfortable that there is no undue influence on the donor.
The government’s proposals also include reducing or removing the statutory waiting period which currently exists during which time objections to an LPA can be made before it is registered.
This could limit the opportunity for people to object where they are concerned, for example, that a family member has been coerced into making an LPA or does not have capacity to make one.
It could also provide greater opportunities for abuse if, for example, the LPA would be able to be used immediately after it is executed.
Whilst increasing the speed at which LPAs can be made could be beneficial for individuals who are about to lose capacity, it could also limit legitimate objections from being raised and facilitate people making rushed and ill-thought through decisions about who to appoint as attorney and how they should be instructed to act.
The correct balance needs to be found between time efficiency and protection of donors.
Effective and robust ID checks would need to be introduced to replace the requirement for donors and attorneys to sign in the presence of a witness. A sophisticated electronic signing system would be required which would gather data points such as time stamps and the location of the signatory, to effectively verify an individual’s identity.
There would need to be increased clarity on the process for objecting to LPAs if the statutory period for raising objections was shortened or removed, which is acknowledged in the consultation.
Furthermore, the government would need to ensure that there was an alternative system in place for those who are not familiar with technology, or do not wish to use it.
Otherwise, some of the most vulnerable in society, and those who might most be in need of putting in place an LPA, could be excluded from the process.
Pros and cons
An online system would be more sustainable and cost effective. The current process involves a large number of paper documents being sent to the OPG. An online system would save the OPG the costs of storing and processing the forms, and the postal costs which are incurred by individuals in the application process.
An online system would also enable LPAs to be made and registered more quickly. The signing process would undoubtedly be faster online and the removal/reduction of the objection notice period would also contribute to this.
Error checks in the forms would be automated, which would help to reduce the number of applications which contain mistakes. This would save resources for the OPG which should again speed up the process, as well as helping to alleviate situations where errors are found too late and the donor has already lost capacity and cannot neither correct the error, nor register the LPA.
Accessibility needs to be kept in mind, to ensure that everyone is able to access the system, nothing that not everyone has access to technology, or does not feel comfortable using it.
Overall, the proposals in the consultation are a positive step towards the modernisation and efficiency of LPAs, but maintaining safeguards for donors must remain of paramount importance when the new process is being implemented.
This article was written for International Adviser by Anna Davies, senior associate and Annabella King, trainee and published on 11th November 2021.