On Monday 18th September 2023, the Powers of Attorney Bill received Royal Assent and became an Act of Parliament.
Its main goal is to protect against fraud and abuse relating to Lasting Power of Attorney (LPA).
In this article, we'll provide a summary of the Act and what it might mean for you.
What is the Powers of Attorney Act 2023?
The Powers of Attorney Act 2023 has updated the Mental Capacity Act 2005 to make key changes to how lasting powers of attorney are created in the future.
The updated service aims to make the LPA process safer, easier, faster, and more suitable for the future.
What are the changes in the Power of Attorney Act 2023?
The new Powers of Attorney Act 2023 introduces an online system and a simpler LPA process.
This includes:
Online checks to confirm the identity of applicants;
Digitisation of the LPA process.
Under the new laws, individuals will be able to make an LPA application either online, on paper, or a bit of both.
The Act also streamlines the objection process, allowing anyone to raise valid concerns directly with the Office of the Public Guardian.
What is the goal of the new legislation?
The new legislation aims to improve protection against fraud and abuse by verifying the identity of those involved in the LPA process.
It also aims to speed up the LPA process, which has often been lambasted as outdated and unfit for purpose considering the vast amount of applications every year.
What was wrong with the old LPA system?
From April 2019 to October 31st 2022, 15 fraudulently created LPAs were removed from the register after investigation.
While it would perhaps be unfair to say fraud was a major problem in the LPA system (fraudulent LPAs made up less than 0.1% of all registered LPAs, which exceed 6 million) it was certainly big enough to try and fix it through the new law.
Notably, an investigation by BBC Radio 4 consumer programme You and Yours highlighted the plight of one victim of LPA fraud whose empty home was targeted by fraudsters.
The criminals were able to obtain an LPA fraudulently by using false names and addresses and forging the victim's signature. Shockingly, they were still able to secure the LPA despite getting the victim's date of birth wrong on the application.
This case highlights that the old system did indeed have vulnerabilities that left it wide open to abuse, prompting the new changes that aim to make the system more secure and less open to abuse.
The second big problem with the old LPA scheme was that it was, incredibly, still paper-based. This meant the process was slow and prone to errors due to the OPG processing 80,000 sheets of paper every day.
A Freedom of Information (FOI) request revealed the average time it took to register an LPA was 91.5 working days in 2022-23, and nearly 30,000 LPA applications were rejected in the timeframe due to mistakes.
It is anticipated that the new legislation will speed up registration time by picking up errors earlier and allowing them to be fixed online, rather than having to send documents back by post for amendments to be made.
How has the Powers of Attorney Act 2023 been received?
By and large, the Powers of Attorney Act 2023 has been received positively.
Granting lasting power of attorney to someone is not without its risks. The process essentially gives an agent complete power over another person's assets, an opportunity that could be exploited by bad actors.
The president of the Law Society, Lubna Shuja, welcomed the Act and praised its efforts to minimise the risk of fraud and financial abuse, as well as the preservation of the paper process to help those who may struggle to use an online service.
Having said that, concerns remain around support for certificate providers, the independent people who verify a donor is making an LPA willingly, and that they have the mental capacity to do so.
Legal experts say it's a big ask to expect someone, who might not be a professional, to check if the person creating an LPA has the mental capacity and isn't being coerced. They argue that checks and support should be in place to make sure certificate providers can make a proper capacity assessment and recognise signs of control or coercion to prevent fraud or financial abuse.
What's next?
While the Powers of Attorney Act 2023 has received Royal Assent, the new process hasn't yet been introduced.
At the time of writing, the online system is being developed and tested by the OPG to make sure it works as intended from a user experience and security perspective.
Until then, the current online service for making an LPA remains in place.
Need help and advice with a lasting power of attorney?
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We understand that getting your head around what a power attorney does can be difficult, with lots of conflicting information out there.
For help, information, and a free case assessment, contact our legal assessment team today.