Capacity and undue influence

Every solicitor taking instructions in any situation where there could be elements of incapacity or undue influence should have regard to the findings and comments of the Mental Welfare Commission for Scotland (“MWC”), published on 13 February 2012 in their report on “Powers of attorney and their safeguards: An investigation into the response by statutory services and professional to concerns raised in respect of Mr and Mrs D”.

Although the report, and its title, focus on continuing and welfare powers of attorney granted under part 2 of the Adults with Incapacity (Scotland) Act 2000, the issues are potentially relevant every time a solicitor interviews a client, over a wide area of practice including wills and gifts, sometimes presenting to tax specialists as tax planning, to company lawyers as the restructuring of a business, and so forth. They are however particularly important to solicitors who prepare and/or certify continuing and welfare powers of attorney.

Salient facts

The 82-page report, as published, is anonymised. It centres upon prolonged coercion, detriment and abuse sustained by Mr and Mrs D, who both have mild learning disabilities. They married in 1982 and managed well with the informal help of Mr D’s father until he died in 1997. Thereafter the local authority received many reports of dominant and bullying conduct, and financial, emotional and alleged physical abuse, by Mr E, a brother of Mr D.

In 2003 Mr E went to his own solicitor and instructed her to prepare continuing and welfare powers of attorney in his own favour by Mr and Mrs D. She was concerned about issues of capacity and corresponded with Mr and Mrs D’s GP. She prepared what appears to have been lengthy and complex power of attorney documents but advised the GP that in view of her concerns she would wish the GP to certify. She met Mr and Mrs D only once, at the GP’s surgery, on the day when the documents were signed and certified. She spent 45 minutes going over the documents with Mr and Mrs D. Mr E was present throughout, but did not participate in the discussion.

A summary by MWC continues as follows: “Although Mr D cannot read and Mrs D has limited reading skills, the couple signed the papers without the advice of their own choice of lawyer or independent advocate. They did not even know they were going to a meeting to sign the documents.

“Although social work staff had reported incidents about emotional coercion before the forms were signed, this information was not passed to the GP who deemed them capable of giving consent to the power of attorney.

“In the years that followed, Mr E coerced the couple and threatened to have at least one of them taken into care. He opened credit cards and loans in their name and ran up thousands of pounds of debt. He used their money to buy groceries, but made the couple go to his house to ask for toilet rolls and did not allow them to eat pudding, claiming that they were too fat. He did not allow them to leave the house after 9pm, opened their mail and told them they were not allowed friends unless he approved them. He also blocked their access to health and social care services.

“No fewer than 40 concerns were recorded in the intervening years, but it took until 2009 for the power of attorney to be revoked. The law on power of attorneys contains safeguards to protect those who use them and sets out duties for local authorities. The council could have asked the sheriff to remove Mr E’s powers, or for his powers to be supervised, but it was left up to the couple, with the support of another relative, to get the help of a solicitor to revoke the powers. Since then, Mr and Mrs D have regained their freedom and have gone from strength to strength.”

In 2008 the Office of the Public Guardian (“OPG”) was asked to investigate. It made some investigations but did not pursue them further because it took the view that Mr and Mrs D had capacity and that OPG accordingly did not have status to investigate; and also (it said) because there was no evidence of financial loss. In addition, OPG encountered difficulty because the Department for Work and Pensions (“DWP”) refused to release relevant information to OPG, apparently on the grounds that it was prevented from doing so on grounds of confidentiality, to which exceptions for public bodies exercising functions conferred by “enactments” did not apply because legislation of the Scottish Parliament does not constitute “enactments” as defined in the Interpretation Act 1978.

US guidance

The following is an excerpt from the report:

“The National Committee for the Prevention of Elder Abuse in the US in writing on Mental Capacity, Consent and Undue Influence says: 'Simply stated, undue influence is when an individual who is stronger or more powerful gets a weaker individual to do something that the weaker person would not have done otherwise.' They go on to state that: 'The stronger person uses various techniques or manipulations over time to gain power and compliance. They may isolate the weaker person, promote dependency, or induce fear and distrust of others.' They further comment: 'Diminished capacity may contribute to a person’s vulnerability to undue influence’.”

Law Society (England & Wales) practice note

The following is a further excerpt from the report. “Donor” means granter.

“The Law Society (England & Wales) has a quite extensive practice note on Lasting Powers of Attorney which addresses this and other practice issues. Specific caution is urged in respect of the granting of welfare powers in this practice note as a welfare (lasting) power of attorney ‘could be a very powerful document because of the wide ranging decisions that could be made on behalf of the donor and therefore clients need to make an informed decision about the scope of the power.’ The Ds recalled no discussion about welfare powers even though the document was read to them by the solicitor.

“It is also of interest that The Law Society (England & Wales) practice note also states that: ‘When advising clients of the benefits of LPAs (lasting powers of attorney), the solicitor should also inform them of the risk that the attorney(s) could misuse the power.’ The practice note also outlines questions the solicitor should address with the granter as to how they might wish to frame the powers of attorney.

“The practice note further advises that ‘Solicitors should discuss with the donor appropriate measures to safeguard against the power being misused or exploited. This could include notifying other family members or friends (who are not named on the prescribed form as someone to be notified) of the existence of the power, why they have chosen the attorney(s) and how the donor intends it to be used. This may help to guard against the possibility of abuse by an attorney and may also reduce the risk of conflict between family members at a later stage.”

Recommendation to the Law Society of Scotland

The report includes a recommendation that the Society should:

“Update existing guidance for solicitors in respect of powers of attorney to take account of the changes in the AWI Act. Such guidance should address situations where the process of granting a power of attorney is initiated by a party other than the granter, as well as situations where there may be some question as to the granter’s capacity, the presence of undue influence, or other vitiating factors. Guidance should also emphasise the different ethical considerations involved for the granter in delegating welfare as opposed to financial powers.”

The Society’s response

The Society has commended the report without accepting the accuracy of everything in it. The Society’s existing rules and guidance are robust. However, as is acknowledged in the report, the Society has already in its educational programme been addressing developing awareness of inter-related questions of capacity and undue influence, and other factors, in the light of increasing evidence as to how pervasive influence can be, whether benign or undue. The Society has undertaken to develop further guidance to assist solicitors in identifying and addressing such issues. MWC has offered, and agreed, to work with the Society in this. MWC has welcomed the Society’s response.

Existing guidance, regulations, cases

Concerns about circumstances such as those in which Mr and Mrs D granted powers of attorney did not arrive with the passage of the Act. Prior to the Act, powers of attorney automatically had continuing effect unless the contrary was declared, without any of the Act’s safeguards.

During the 1990s the Society ran a series of seminars across the country addressing the issues. The Society’s “Guidelines on Powers of Attorney”, issued in July 1998 and still in force, were worded as a reminder of the existing position. They followed allegations that a solicitor had prepared a power of attorney document and given it to family, who had it signed by the granter in hospital, without satisfying himself that the granter had capacity to grant it.

The guidance “reminds solicitors (a) that a solicitor must have instructions from his or her client; (b) that the client is the granter of the power of attorney; and (c) that solicitors are not the judges of mental capacity. That is for the medical profession from whom advice should be sought if there is any doubt as to a client’s capacity.”

Elements (a) and (b) remain entirely valid and are now reinforced by rule 4(1) of the Standards of Conduct Rules: “Solicitors are agents of their clients and must have the authority of clients for their actings”. Also relevant are rule 6(1), prohibiting acting for two or more clients in matters where there is a conflict of interest between the clients (which could include conflict of interest between granter and attorney); the requirement in rule 10 for solicitors only to act in matters in which they are competent; and the requirement in rule 15(1) not to discriminate on grounds of (inter alia) disability or age. Moreover the granter of a power of attorney is the client to whom money laundering requirements and the provisions of the Solicitors (Scotland) (Client Communications) Practice Rules 2005 apply.

However, I have never agreed with element (c). As long ago as The Power to Act (1990) I wrote: “It seems to me that doctors give too much deference to lawyers, and lawyers give too much deference to doctors”. In these matters doctors and lawyers need to work together, both contributing towards achieving an appropriate outcome. In doubtful cases they need to discuss, not simply to receive written opinions. In a recent case I agreed with a consultant, in a long and helpful discussion, criteria which if consistently met in my discussions with my client would enable me to prepare and certify a power of attorney.

Sadly, the experience of Mr and Mrs D is not the sole recent cause for concern. Another recent example is Public Guardian, Applicant, Glasgow Sheriff Court, Sheriff J A Baird, 30 June 2010 (2010 GWD 34-712). The Public Guardian sought directions under s 3(3) of the Act as to whether she should register a purported revocation of a previous power of attorney by X in favour of solicitor C and a purported new power of attorney in favour of a friend of X, both prepared by solicitor D. Solicitor C was concerned that the friend was exercising undue influence and if appointed might cause X’s estate to be diminished.

A consultant psychiatrist gave evidence that X lacked capacity for the revocation and fresh grant, and in particular that X was unable to recall having done so, or to understand that the friend would have full power over X’s finances and that solicitor C would no longer have such authority. The sheriff noted that solicitor D had been introduced to X by the friend; had failed to investigate suggestions (in fact unfounded) of misappropriation by solicitor C; and had not enquired into X’s medical history or background. The sheriff directed the Public Guardian not to register the revocation or the new power of attorney.

Undue influence and other factors

Powerful influence is not necessarily undue influence. Which of us has not eventually sheepishly done something which we always knew we ought to do, only because of the persistent bullying of family or colleagues? The difference is if we should be bullied into doing something which otherwise we would not have done at all.

Influence, whether benign or undue, can be far-reaching and invisible. Mr and Mrs D were not necessarily free from Mr E’s influence because he was silent but present when his solicitor interviewed them. There is increasing evidence that influence can be powerful and far-reaching whatever may be done to distance the influencer.

That was brought home to me last year in two separate situations, both of which I discussed informally with MWC. The adult in one case had vascular dementia, and in the other a learning disability. Both could, and did, often present as clear and rational in their decisions and wishes. Unfortunately both of them repeatedly alternated between incompatible expressions of what they wanted. It emerged that in both cases there were two areas of influence in the adult’s life, that even in the absence of either the adult would see any situation as falling within one or other area, and would make decisions and express wishes which the adult thought would be consistent with what that area of influence would wish.

It became clear that this is the way in which influence can operate in such cases, whether the influence is benign or malign or even unintended. Indeed, in both cases there were “influencers” who were actively trying to be neutral because they were perplexed by the inconsistencies and sought only to ascertain the adult’s true position.

I believe that the best analysis of such situations is to concentrate on the definition of incapacity in s 1(6) of the Act. Elements (b)-(e) of the definition relate to decisions, but element (a) refers to being incapable of acting. An adult who has made an otherwise capable decision may be incapable of acting in accordance with that decision. One is not incapable because one changes one’s mind, though to do so without memory of the previous decision might involve element (e) (“retaining the memory of decisions”). To alternate between conflicting decisions, or be unable to act in accordance with an otherwise competent decision, or unable to resist influence, all point towards incapacity; and as the report points out, this can be a link between incapacity and undue influence.

However, that is not a necessary link. A mental disorder or complete inability to communicate is a prerequisite for incapacity within the Act’s definition. A mental disorder, or complete inability to communicate, or even incapacity, is not a necessary prerequisite for undue influence (see the definition quoted by MWC with approval under “US guidance” above). Facility and circumvention is a third potentially relevant concept. Identifiable “facility” is a prerequisite, but that could be (for example) a debilitating physical condition, and not necessarily a mental disorder or incapacity. The prescribed form of certificate for powers of attorney requires the certifier to certify that the certifier has no reason to believe that no “other factor” vitiates the grant. Facility and circumvention could be such a vitiating factor. The report also refers to “duress” and “misrepresentation”.

The task of formulating guidance to help solicitors navigate through these difficult areas has been passed initially to the Society’s Mental Health and Disability Subcommittee, though the formulation and issue of guidance will be a matter for the Professional Practice Committee. It may be appropriate to issue two sets of guidance, one on the general subject of taking (or not taking) instructions in situations where there may be incapacity, undue influence or other “vitiating factors”; and the other specific to continuing and welfare powers of attorney. It may be less of a general instruction manual than the 28-page English guidance, and may be more targeted upon these specific issues. It is most unlikely to provide mechanistic criteria guaranteed to eliminate such issues in every individual case; but one hopes that it may help reduce the incidence of such factors.

The tragedy of Mr and Mrs D’s case was that everything which could have gone wrong did go wrong and for six years none of the mechanisms to put it right was triggered, despite ample evidence that they should have been, until a solicitor acted in the revocation of the powers of attorney. Revocation raises the same issues, with similar certification requirements, as initial grants.

Decision of OPG not to investigate

One might query the apparent view of OPG that it only has power to investigate in relation to powers of attorney if the granter is incapable. Relevant provisions in s 6 of the Act relate to “complaints about the exercise of functions relating to the property or financial affairs of an adult made... in relation to continuing attorneys” (s 6(2)(c)), who may in terms of the legislation be acting prior to or in absence of impairment of relevant capacity; and “any circumstances... in which the property or financial affairs of an adult seem to [her] to be at risk” (s 6(2)(d)). The references are to an adult, not to an adult with incapacity.

One might also query the interpretation that under item (c) of s 6(2) there can only be investigation where there is financial loss. That is so under (d), but not under (c), which refers simply to “any complaints”. That would include a complaint that the conduct of the continuing attorney, though not causing financial loss, is causing other detriment, such as psychological damage. That obviously crosses what is sometimes an artificial border into welfare matters, but the purpose of s 12(2) is to render investigations “seamless” in that regard.

Recommendations to Scottish Government

Regarding the well-known absurdity that granters of powers of attorney are required only to state that they have considered how incapacity should be determined, the report recommends that they be required to specify how incapacity should be determined. The report recommends clarification as to whether certifiers who consult another person about capacity should be able to consult only the proposed attorney. It recommends review to improve the efficiency and effectiveness of notification of registration of powers of attorney by OPG to MWC and local authorities.

Regarding guidance and codes of practice, it recommends further guidance for medical practitioners on the element of capability of acting in the definition of incapacity; guidance on the issues faced by persons other than the proposed granter who initiate and/or take forward the process of granting powers of attorney; and better guidance on practice issues faced by certifiers, especially where the initiator is not the proposed attorney, and including concise guidance for general practitioners asked to certify.

Finally, the report recommends that the Scottish Government should request DWP to share with OPG information required for investigations, and should approach the UK Government about whether the Interpretation Act 1978 needs to be amended to include enactments comprised in, or in instruments made under, an Act of the Scottish Parliament in the definition of “an enactment” in that Act.

Critique of report

This article is not intended as a review of the report. There are however some blemishes. Statutory guardianship under the Mental Health (Scotland) Act 1984 ended when part 6 of the Incapacity Act came into force on 1 April 2002, and not on introduction of the Mental Health (Care and Treatment) (Scotland) Act 2003. The report’s summary of the provisions of s 3 of the Act omits reference to the important power to give directions under s 3(3). The report succumbs to an unhelpful but not uncommon misconception by referring on p 3 to a power of attorney as an “order”. Statements that the granter has considered how incapacity should be determined, under s 15(3)(b) of the Act, require to be contained in the power of attorney document, not in the certificate, and as noted, provisions for a certifier to consult another person about capacity apply to continuing as well as welfare powers of attorney. More generally, in recommending further guidance for solicitors, the report does not take account of the various requirements in addition to the 1998 guidelines mentioned under “Existing guidance, regulations, cases” above.

Such blemishes do not significantly detract from the value and importance of the report; and they are no doubt outshone by the re-enactment on Reporting Scotland showing Mr and Mrs D executing (English) lasting powers of attorney.