Modern code for adults with incapacity

Principles

The new Act commences with four general principles. As stressed in the first article in this series, they are of major importance to all aspects of the Act. Beyond that, they have relevance to all measures and techniques for anticipating or responding to impairment of capacity (in relation to matters of personal welfare, or property and financial management, or both), whether within the scope of the Act or not, and they have immediate relevance in advance of formal commencement of the Act’s provisions.

There are four principles. Put simply, they require that any intervention must be shown to be necessary; that the option least restrictive of the adult’s freedom must be selected; that the adult’s present and past wishes and feelings must if at all possible be ascertained and taken into account, and that others should be consulted; and that exercise and development of the adult’s skills should be encouraged when reasonable and practicable. These requirements correspond with existing well-established principles of good practice that when special measures in consequence of impairment of capacity are needed, they should be applied, but only to the minimum necessary extent; that there should be no unnecessary disqualification or special treatment; that on the contrary such capacity as the adult may have should be respected and its exercise facilitated and encouraged; and that even in areas of incapacity, the adult’s views should nevertheless be ascertained and respected. If the emphasis of child law is upon the best interests of the child, the emphasis of adult incapacity law is upon protecting and respecting the right of all adults to autonomy, rather than substituting, except to the minimum necessary extent, anyone else’s view of what is best for the adult. “Best interests” do not feature in the new Act.

Section 1 provides that the first three principles apply to “any intervention in the affairs of an adult under or in pursuance of this Act, including any order made in or for the purpose of any proceedings under this Act for or in connection with an adult” (section 1(1)). “Intervention” is not defined. It is clear that the term means not only procedures under the Act, but the acts and decisions of relevant appointees and others, including decisions not to do something as well as decisions to do something.

The first principle

“There shall be no intervention in the affairs of an adult unless the person responsible for authorising or effecting the intervention is satisfied that the intervention will benefit the adult and that such benefit cannot reasonably be achieved without the intervention” (section 1(2))

“Benefit” is not defined but can reasonably be interpreted as including overcoming the limitations created by incapacity, so as to permit something which the adult could reasonably be expected to have chosen to do if capable. An example would be making a gift. A narrow interpretation of “benefit”, excluding making a gift, would be inconsistent with provisions such as section 66, which deals with gifts from the estate of an adult under guardianship.

The second principle

“Where it is determined that an intervention as mentioned in subsection (1) is to be made, such intervention shall be the least restrictive option in relation to the freedom of the adult, consistent with the purpose of the intervention” (section 1(3))

The “options” include measures outwith the scope of the Act. For example, financial guardianship under the Act is unlikely to be appropriate where a social security appointee could adequately meet all needs. The “options” also include the range of powers available under a given measure, so that – for example – when a financial guardian is required, only the powers shown to be necessary will be conferred. Moreover, appointees with powers conferred upon them must still select the least restrictive options in the exercise of those powers.

The “freedom” referred to is the adult’s, not anyone else’s, and it must be borne in mind that an adult’s freedom is severely restricted if someone else exercises de facto powers such as guardianship powers without legal authority, without any procedure to determine whether and to what extent such powers are needed and upon whom they should properly be conferred, and without the attendant régime of supervision and accountability, in relation to an adult who may appear to be compliant but who lacks capacity to act independently or to assert such independence.

The third principle

“In determining if an intervention is to be made and, if so, what intervention is to be made, account shall be taken of –

• the present and past wishes and feelings of the adult so far as they can be ascertained by any means of communication, whether human or by mechanical aid (whether of an interpretative nature or otherwise) appropriate to the adult;
• the views of the nearest relative and the primary carer of the adult, in so far as it is reasonable and practicable to do so;
• the views of –
(i) any guardian, continuing attorney or welfare attorney of the adult who has powers relating to the proposed intervention; and
(ii) any person whom the sheriff has directed to be consulted, in so far as it is reasonable and practicable to do so; and
• the views of any other person appearing to the person responsible for authorising or effecting the intervention to have an interest in the welfare of the adult or in the proposed intervention, where these views have been made known to the person responsible, in so far as it is reasonable and practicable to do so.” (section 1(4))

Of these provisions the most significant, demanding a fundamental change of attitudes, is paragraph (a). Note that the qualification “in so far as it is reasonable and practicable to do so”, which appears in all of the other paragraphs, does not appear in paragraph (a). The duty to take account of the adult’s wishes and feelings, if ascertainable, is absolute. The reference to “any means of communication ….” etc. merely adds emphasis. If advanced modern neuro-psychological techniques would allow wishes and feelings to be accessed, then those techniques must be applied, even if to anyone unskilled in such matters the adult might appear to be in something very close to a vegetative state. In this context note also the provisions of section 3(5) empowering the sheriff to appoint, in addition to a safeguarder, someone else (described in the official Explanatory Notes as a curator ad litem) for the purpose only of conveying an adult’s views to the sheriff.

The fourth principle

The fourth principle (in addition to the first three) applies to guardians, attorneys and managers of establishments exercising functions under the Act or under any order of the sheriff. Such appointees must “in so far as it is reasonable and practicable to do so, encourage the adult to exercise whatever skills he has concerning his property, financial affairs or personal welfare, as the case may be, and to develop new such skills”. This also requires a fundamental change in attitudes. Instead of appointments imposing artificial incapacity which may exceed actual incapacity, as happens at present under curatory, there is instead now an obligation to encourage the exercise and development of skills. In the case of guardianship, this should be read in conjunction with section 64(1)(e), under which guardians may be empowered to authorise the adult to carry out transactions, and section 67(1), which limits the extent to which the guardianship order results in legal incapacity.

Effect beyond the Act?

The relationship between the Act’s general principles and techniques and measures outside the scope of the Act is two-way. In one direction, section 1(3) requires us to consider and assess options outwith the scope of the Act. In the other, the Parliament has given statutory authority to accepted standards of good practice, and thus set a standard against which performance under arrangements outwith the Act’s scheme can be measured. Failure to attain those standards by trustees, by appointees under various statutory provisions for administration of particular kinds of assets, or others, would be likely to justify sanctions and remedies appropriate to the technique in question, or the application of interventions under the Act either to supersede existing arrangements or alternatively to safeguard the adult’s interests under them.

Immediate effect?

Let us take the example of an adult who is capable, perhaps with some help, of managing existing assets and affairs, but some particular matter arises beyond the adult’s capability (such as a need to pursue a claim, or to manage complex inherited assets). Hitherto, a curator bonis might have been appointed. After 1st April 2002 a financial guardian would be appointed, but under the Act’s principles the guardian’s powers would require to be limited to the minimum necessary. If, with the Act now in force, a curator were to be appointed, that curator would have unlimited powers and would totally supersede the adult in the management of the adult’s assets, including those which the adult is in fact capable of managing. On 1st April 2002 that curator would become a financial guardian with unlimited powers. But the essential principles of good practice now given force of law by the Scottish Parliament would have been disregarded. Such an appointment would clearly represent an excessive restriction of the adult’s freedom to act as far as he can for himself. Under the transitional provisions the curator would in due course become a guardian obliged to comply with section 1, yet by exercising his responsibilities in relation to the whole estate he would be in breach of section 1.

The answer, it would seem, is that even now, still in advance of commencement, curators bonis should only be appointed where the court is satisfied that the adult is not capable of managing any of the adult’s assets and affairs, however simple, and that an appointee with unlimited powers – who will in due course become a financial guardian with unlimited powers – is necessary and represents the option least restrictive of the adult’s freedom. Otherwise, a tutor-dative with powers tailored and limited to actual need would be more appropriate. The tutor-dative would then become a guardian with equivalent powers on 1st April 2002. It seems reasonable to suggest that the enactment of the general principles should immediately affect other matters, such as the view taken of the duties of curators ad litem to adults with incapacity (contrasting in emphasis with those of curators ad litem to children).

Powers of attorney

The “enduring” power of attorney was introduced by the Law Reform (Miscellaneous Provisions) (Scotland) Act 1990 (section 71) and is now substantially reformed with effect from 2nd April 2001 by the new Act. The effect of the 1990 Act is reversed in that under it powers survive incapacity unless the contrary is expressed in the power, whereas under the new Act they will not survive incapacity unless the power expressly stipulates that they should. Otherwise, any commentary on the subject of enduring powers must first address the disappointing extent to which practice has not yet fully caught up with the 1990 Act, in matters which will remain fully relevant under the new Act.

Three characteristics of enduring powers of attorney, now known as continuing powers of attorney and welfare powers of attorney (CPA’s and WPA’s respectively), are crucially important. Firstly, granters have wide scope for granting whatever powers they choose. Secondly, powers are strictly construed and none are implied. Thirdly, there is no mechanism for granting additional powers after loss of incapacity. Obviously, it is essential to take careful instructions when the document is prepared. Sadly, the obvious is not always reflected in practice. Far too many powers fail to address matters which, one strongly suspects, the granter would have wished to cover if asked. An omission which causes considerable and frequent problems to the Office of the Solicitor to the Advocate General for Scotland is the failure to cover pensions, state benefits, allowances and the like. In circumstances where it would have been predictable that a decision might in due course have to be made about whether or not to claim legal rights, attorneys are left either with no direction as to the granter’s wishes or no powers to proceed appropriately, or both. Likewise in situations where it is predictable that it might become appropriate to take tax-planning measures, attorneys are given inadequate powers. Where it is predictable that the attorney might require to have access to the granter’s Will or other confidential information, the attorney is given no explicit power to do so. And so on. Of course, one sees many powers of attorney which, self-evidently, have been well and carefully prepared following careful discussion with the granter and consideration of the granter’s existing and likely future circumstances; and of course one can never foresee all possibilities, and one will never be able to eliminate the cases which raise difficult issues of interpretation of the powers granted, or which – under the new régime – may make it necessary for an attorney to seek an intervention order in order to do, as appointee under the intervention order, something not covered by the power of attorney. Nevertheless, many firms might find it beneficial to their clients, and potentially to themselves, to review their procedures and practices when consulted about the possible granting of a power of attorney. While an “office style” may be a useful starting-point, it is most unlikely to be appropriate and adequate, without adaptation, in all or even most cases. While the examples quoted above mainly relate to financial powers, there tends to be even greater diversity in wishes and needs in relation to welfare powers.

New powers – procedure

CPA’s and WPA’s granted from 2nd April 2001 will require to contain an explicit statement that they are to be continuing powers. They must incorporate a certificate by a solicitor or other prescribed person, and of course the certifier must not be an appointee under the power. A partner of the appointee may be the certifier. The certificate must confirm that the solicitor (or other person) interviewed the granter immediately before subscription, is satisfied that the granter understood the nature and extent of the document, and has no reason to believe that the granter was under undue influence or that any other factor vitiates the grant of the power. The certifier must state that capacity is certified either from his own knowledge or by named persons who have been consulted. Although the Act states them as alternatives, the proposed prescribed form of certificate envisages that both alternatives could be ticked. Note however that the second alternative refers to “other persons” in the plural, so there must be at least two of them.

Attorneys under CPA’s and WPA’s will have no authority to act until the document has been registered with the Public Guardian. The document may contain provisions to trigger registration. WPA’s may only take effect following loss of capacity. In relation to powers of attorney which do not contain welfare powers, there are three possibilities. Firstly, the power does not provide that it should continue in force following any loss of capacity: it is not a CPA, the new Act does not apply, and therefore neither certification nor registration is required. Secondly, the power is a CPA but is to come into force immediately: it must be registered before it can be operated, even though the granter has not (yet) lost capacity. Thirdly, it is a CPA which will come into force only upon loss of capacity: it must be registered upon loss of capacity, and the application for registration must be accompanied by evidence of incapacity and/or evidence of occurrence of the granter’s “trigger mechanism”. One unresolved point on certification is that clarification is awaited as to how the certificate is to be “incorporated” in the power of attorney. There is an awkward circularity in that the certificate is required to state “that at the time the continuing power of attorney is granted the granter understands its nature and extent”, indicating that certification follows execution, but the certificate requires to be “incorporated”, indicating that it already forms part of the document when the document is granted. Certainty on this point is essential, because granters are entitled to be reassured that their intention will not be defeated upon a technicality of statutory interpretation.

Welfare attorneys cannot be empowered to supersede Mental Health Act provisions on detention and treatment.

The sheriff has jurisdiction to put attorneys under the supervision of the Public Guardian, or terminate any powers, or revoke the appointment. Part 2 contains no provisions enabling the sheriff to confer additional powers. Attorneys under CPA’s are subject to investigation of complaints by the Public Guardian (section 6(2)(c)) and attorneys under WPA’s to investigation by the Mental Welfare Commission (section 9(1)(d)) and by local authorities (section 10(1)(c)). Attorneys may receive guidance and advice under sections 6, 9 and 10.

Note the various notification provisions in Part 2; and also that a CPA or WPA in favour of a spouse will terminate on separation, divorce or declarator of nullity. WPA’s will not terminate in the event of the bankruptcy of the granter or the attorney.

Authority to intromit

This new technique, which also comes into force on 2nd April 2001, is designed to meet what the Scottish Law Commission described as “a need for a fairly simple method of withdrawing money from an incapable adult’s bank account”. The scheme is indeed basically simple, but it is important to be clear about the terminology. The adult’s existing account is called the “specified account”, and the bank, building society or the like holding the specified account is called the “fundholder”. The person who wishes to be able to access funds in the account on behalf of the adult is called the “withdrawer”. The withdrawer applies to the Public Guardian for certificate of authority to withdraw specified sums from the specified account for authorised purposes. Normally, the withdrawer will open a new account called the “designated account”. This author’s understanding is that the specified account will be frozen (as regards payments out of it) except only for authorised transfers to the designated account, or transfers under section 33. The designated  account may be used only for purposes authorised by the certificate (section 26(6)), which must be within the range of purposes permitted under the scheme (section 28). The Public Guardian may authorise other methods of payment, and may under section 33 authorise transfers between accounts. No specified account or designated account may be overdrawn. This description of the modus operandi corresponds with the draft application form issued for consultation, but there are at present some inconsistencies in the draft Guidance Notes and draft form of certificate.

Section 26 sets out the procedure for obtaining authority to intromit. The application to the Public Guardian must state the purpose of the proposed intromissions, itemised with specific sums. It must give particulars of the nearest relative and principal carer, if known. It must identify the specified account and contain an undertaking to open the designated account. The application must be accompanied by a medical certificate, in prescribed form, of incapacity in relation to making decisions about the funds, or safeguarding them, or promoting the adult’s interests in them. The application must be countersigned by someone within a prescribed class and must be sent to the Public Guardian within 14 days of countersignature. The Public Guardian intimates the application to the adult (subject to section 11), nearest relative (subject to section 4), primary carer and anyone else whom the Public Guardian considers appropriate. There are provisions about hearing objections, determining the application and appeal to the sheriff. The purposes for which this new authority may be used are set out in section 28. The certificate is valid for three years from date of issue, unless the Public Guardian reduces or extends the duration. The Public Guardian may suspend or terminate the authority.

While the scheme is basically simple and user-friendly, note that care must be taken to list all required intromissions in the application. If anything is omitted, there is no procedure to have further authorised intromissions added, and an entirely fresh application would be required.