Kramer on the abuse of power of attorney

8.01.54pm GMT Tue 24th Jun 2008

' . . I want to focus on a yet narrower area of financial abuse of older people: the potential to abuse power of attorney . . '

[June 17] Susan Kramer (Cabinet Office; Richmond Park, Liberal Democrat): I appreciate the opportunity to have this debate, which I welcome, as do a number of my constituents. I also appreciate the Minister's attending.

Abuse of the elderly, which we might perhaps narrow to financial abuse of the elderly, is often considered to be a stranger danger. In the media, people tend to read about cowboy builders who take advantage of older people, rogue traders, phoney charities and various get-rich-quick schemes that attempt to draw older people in and sometimes-although perhaps it is not abuse to the same degree-even mis-selling by normally reputable financial institutions. However, a form of abuse that is far less discussed is abuse that happens nearer to home.

Family and friends are often the greatest risk to older people, sometimes out of weakness and sometimes from a lack of understanding or a lack of respect. Obviously, older people who are subject to dementia or any kind of mental frailty are among the most vulnerable. I suspect that the Minister will be familiar with statistics put together by Action on Elder Abuse and other groups, including Age Concern, for example, which essentially show that dementia affects one in 20 people over 65 and one in five of those over 80. Some 750,000 people with dementia live in England and Wales at the current time.

As we all live longer, the number of people suffering from dementia in the United Kingdom is expected to rise to an astonishing £1.8 million by 2050. Many of those people will have more resources. In the past, old age has tended to be associated with poverty, but with more households comprising two earners and with many people-certainly, those of our generation-benefiting from the rise in the value of their homes, elderly people often have substantial resources, much of which they have saved through programmes and plans with the intention that those should provide for them in their old age.

The Action on Elder Abuse research paper, "The cost of living: growing up is free, growing old is expensive", reports that most victims of financial abuse are women over 81 and that most perpetrators are sons and daughters of those people, aged 41 to 60. Given that information, hon. Members can sense how sensitive, complex and difficult this issue is. However, I want to focus on a yet narrower area of financial abuse of older people: the potential to abuse power of attorney and the difficulties in challenging the way in which those powers are used.

Some recent cases have been mentioned in the newspapers. Let me open with one, after which I shall talk about the experience of one of my constituents. The Daily Telegraph on 12 June, just a week or so ago, reported that a Mrs. Garbutt was murdered. I am not suggesting that most cases end that way, but the court heard, in the general description of what had happened in the family context, that Mrs. Garbutt's daughter

"had been granted power of attorney over Mrs. Garbutt's savings of approximately £100,000 and had withdrawn and transferred substantial sums".

The case that drew my attention to this subject was mentioned to me by a constituent of mine. Perhaps if I say a little bit about that case it will give some sense of its scope and dimension. I shall not use names because although some family members are willing to be identified not all are. I think that the relevant Department is well aware of the case. In this instance, the underlying issue is perhaps the most common one: an alleged conflict of interest where a relative who is the attorney under the old enduring power of attorney system and is in a position to make significant decisions about the life of an older person, particularly the way in which their money is spent, is also the executor and sole heir under the will. The case was brought to my attention by a stepdaughter of the elderly lady concerned: she was not a blood relative and not an heir and had no intention of making any claim on the estate, but had, because of ties of family, spent time visiting this older lady, caring for her and advocating for her welfare on her behalf to nursing homes and others.

As I suggested earlier, the victims of this kind of abuse often are not one's typical picture of the impoverished and vulnerable. This older lady had enjoyed a successful career in the world of finance and her estate in old age was considerable and indeed bolstered by a good pension and income from a trust. She was, in her active professional life, profiled in major national publications and was once quoted as saying, "I appreciate the things that money can buy." In other words, she lived life well when young and in her prime and she intended to live life well, having ensured, as her deceased husband had done, that the resources were available to her.

The lady was diagnosed as being in the early stages of Alzheimer's and although for a while she continued to live independently, it was evident to relatives that her dementia was taking a rapid toll, although her physical health remained excellent. Two years after the diagnosis, suddenly and to the surprise of most of her relatives, she signed an enduring power of attorney giving power to her closest blood relative, and within a matter of hours was removed to a care home. Shortly afterwards, she made further alterations to her will. The EPA was registered with the Office of the Public Guardian, but not for another two years. Therefore, there was a two-year period in which, in a sense, this lady is supposed to have been in full charge of her mental capacity. Yet, as far as I understand it, there are serious questions about whether that is true. Indeed, in that period she was moved between homes because the home that she had been placed in initially was unable to cope with the severity of her dementia.

Immediately, we have two questions. First, we need to find out whether this lady was capable of signing the EPA in the first place. Secondly, we have to try to account for the delay in registration, given her condition.

The lady was moved through a couple of nursing homes, but she finally ended up in a comfortable but expensive facility with a specialist dementia unit, where she did reasonably well. The family's general understanding was that she had found a suitable place in which to get the necessary care. That home was expensive, but was well within the capacity of her substantial estate.

The circumstances of the case are disputed by the different sides, because five years later the lady was abruptly removed, under instructions from the attorney, to a far less expensive facility, which at the time had no specialist dementia registration. It later acquired such registration, but from what I have read I doubt that it would have described itself as a care home that specialised in dealing with dementia. My constituent saw her stepmother deteriorate quite rapidly: dramatic weight loss, a series of falls, loss of memory, and physical deterioration, including serious infections requiring hospitalisation. Within 18 months she was bed-bound and within two years she died.

One may dispute the issues of the case, but my constituent, who had absolutely no financial or other interest in the will or the way in which resources were disposed of, sought to find ways of challenging the care that her stepmother was receiving. She sought advice from the Court of Protection, but all the responses indicated that if she brought a successful challenge she would not be financially at risk, whereas if there were any question about the challenge or she was not successful, she would face severe legal costs. As she pointed out to me, to expect people who may not be the closest blood relative to put themselves at such a risk is unrealistic, so the opportunities for challenge are extremely limited.

My constituent was extremely persistent, and finally persuaded the Office of the Public Guardian to arrange for a Lord Chancellor's visitor to visit the lady, but the process was so extenuated, so long drawn out and so delayed that it occurred only about six weeks before she died.

The Minister will be aware of articles, for example in The Daily Telegraph on 31 May 2008, about the general logjam, but I do not know whether people understand that it extends to this aspect of the Office of the Public Guardian's work. It does not apply just to legal processing, and there seems to be an inherent delay in following up any monitoring and investigation. That is inexcusable when people are in the last years of their lives. My constituent has been informed by the Court of Protection and the OPG that following the death of her stepmother they have no jurisdiction to proceed with their inquiry. She has been told that the matter has effectively been closed by the death of her stepmother.

Many of the problems in this case are associated with enduring power of attorney, which I accept has been replaced by lasting power of attorney, but EPAs in existence prior to October 2007 are still in effect under the old arrangements. I am anxious for the Minister to provide some clarity on how legacy EPAs are being monitored. She will be aware that, according to the charity Action on Elder Abuse, when plans to change to lasting powers of attorney became clear, there was a rush to sign up EPAs ahead of the deadline. They were less costly and many solicitors, unfortunately, advised clients to sign under the old system, and relatives who may have been aware of the differences between the regimes may have encouraged the same. I understand that. The reason for changing the system-which runs counter to the notion of people rushing to sign up- was general concern about whether the person signing was capable of understanding the consequences and delays in registration. I understand that under that system there are no penalties for non-registration, so it is ineffectual.

I have asked the Department whether anyone has ever been deregistered for power of attorney. If they have, no one is aware of it because the information does not seem to be available to anyone, which is somewhat alarming. I should be interested to know whether there really is absolutely no knowledge of whether anyone has ever been deregistered. That would be extraordinary.

EPAs have been ripe for all kinds of abuse. The Minister will remember that the barrister, Tom Dumont, in an article in 2001 on "The Misuse of Enduring Powers of Attorney" estimated that about 15 per cent. of EPAs may be abused, or more than 100,000 at any one time. He pointed out that few financial institutions have any meaningful training on EPAs or the concerns about unregistered EPAs. The system exists in name, but not in practice.

I accept that lasting power of attorney is an improvement on the old EPA system because it provides a more rigorous certification and registration process. However, it is far from iron-clad, and we must recognise that in the past doctors and solicitors were hesitant to step into family relationships and to suggest that a power of attorney might be inappropriate or that the wrong person was being given power of attorney. Certificates of capacity are now required, but solicitors, doctors and friends are still hesitant to interfere in family relationships and are unlikely to challenge whether someone's mental capacity suggests that they are capable of even a lasting power of attorney. The safeguards have increased, but the underlying flaw that people are hesitant to challenge family relationships remains deeply embedded in the system.

We are aware that LPAs can have much greater scope than the old EPAs. In the situation that I described, it was clear that an EPA was being used to make decisions about welfare as well as finance. It is hard to unravel the two, but that is now formalised in the new lasting power of attorney because it can be made to extend to personal welfare.

Perhaps the Minister will tell us what monitoring should take place post-registration. The whole focus seems to be on the registration process rather than on registration following by ongoing monitoring, and whether the new system will offer better opportunities for external challenge. I cannot see that that will be real while the threat of heavy legal costs remains.

On education, most people are not introduced to the notion of power of attorney until they are frail, which is probably the worst time to have to understand it. Surely, more effective mechanisms should be available to advise people, for example, that they may appoint more than one attorney, that they could include an independent non-beneficiary, and that they could set out preferences and guidance in a more substantial way. That issue does not seem to have been taken up with the legal profession or any other body.

As the Minister will be aware from yesterday's article in The Daily Telegraph, headed, "Whitehall blamed for elderly dying before financial affairs are sorted", the new lasting power of attorney mechanism has hit a logjam. I am sure that she will tell us about resources to relieve that logjam. Many others, like me, are concerned that the anxiety to get through the logjam does not lead to a quick dusting over of the registration process. That would defeat the whole point of having made the changes.

It is obviously necessary to ensure that there is an effective mechanism for power of attorney for people as they become older, but surely as the number of older people increases, particularly of those with substantial financial resources, we must look beyond registration and put in place better monitoring and an education mechanism. Perhaps there should be greater and more stringent requirements on solicitors to set out the options as people start to consider whether they should enter a power of attorney, and how they could be framed. We must have a special programme in place to deal with the legacy of the old EPAs, which will continue to have an impact on the lives of so many people today.