Powers of Attorney: Charter for Abuse or Necessary Aspect of Daily Life?

The independent South Australian Law Reform Institute (SALRI) based at the Adelaide University Law School is presently examining the law regarding Powers of Attorney.

SALRI is keen to hear from the community as well as legal, medical and allied health practitioners and any other interested parties.

Powers of Attorney (POAs) – more formally called Enduring Powers of Attorney – are legal documents which allow an individual (known as a principal) to confer authority upon another person (their attorney) to make financial decisions in accordance with the individual’s values, preferences and directions. POAs enable principals to choose to appoint a trusted person in anticipation of losing decision-making capacity and take affect at the point at which the principal loses that capacity. These laws are set out in the Powers of Attorney and Agency Act 1984 (SA) (POA Act) and seek to ensure that vulnerable people, often older people, are protected and to prevent financial abuse.

“POAs are widely used and provide an important means by which individuals can control their future” says SALRI’s Deputy Director, Dr David Plater.

“They are excellent tools for planning ahead for later life and enable many people to effectively manage their financial affairs. It is important that, whilst suitable measures and safeguards are in place to protect principals, the utility and effectiveness of POAs is also maintained. This is a difficult balance”.

However, the increasing concern over the misuse of POAs is highlighted by the lead author, the University of Adelaide’s Dr Sylvia Villios.

“There are real concerns where the principal lacks decision-making capacity, and the POA can become a charter for abuse where the attorney misuses their role to receive an ‘early inheritance’ or otherwise misuses the principal’s funds. SALRI has heard, consistent with wider research, that the financial abuse, particularly of Powers of Attorney, is widespread and is often perpetrated by a close family member.”

Dr Gabrielle Golding of the Adelaide Law School notes that the present civil and criminal law remedies to prevent and address the misuse and financial abuse of powers of attorney are of limited effect.   

“The abuse of a POA typically involves elderly victims. In many ways, it is the perfect crime. The victims will rarely complain, and if they do, their complaints are rarely heard. If anyone listens, effective redress is unusual, not to mention there being widespread confusion as to the type of redress that could be sought, either civilly or criminally. The victim may die, or be unable or unwilling to testify, in any event.”

SALRI will examine whether civil or criminal law remedies are sufficient to prevent or address the misuse or abuse of powers of attorney.

Associate Professor Bernadette Richards of the Adelaide Law School identifies capacity as another vital issue in this reference. 

“The principal must have the capacity to make a valid POA, while the absence of capacity is the trigger for activation of the POA. The definition and assessment of capacity is thus integral to powers of attorney, both in making and activation of the power. Capacity sits at the intersection of the medical and legal roles and raises the question of who should assess and determine capacity and how, and whether, the requirements for assessment are the same at both creation and activation.”

People interested in making a submission have until 4 September 2020 to give their feedback via the YourSAy website which also includes further background and Fact Sheets to assist parties in responding to the issues being examined.  A Discussion Paper, primarily for legal practitioners, has also been prepared.

Subject to the lifting of COVID-19 restrictions prior to August 2020, SALRI also hopes to host community roundtable consultations in Adelaide, Berri, Mount Gambier, Port Lincoln and Port Pirie. Details of these roundtables will be made available on the YourSAy website, as well as advertised in local papers and community radio and on the SALRI website.

SALRI will identify the problems or concerns with the current law, gather and consider the views of the community about how the law could be improved and will consider alternative options implemented elsewhere. SALRI will then provide a report to the South Australian Government by the end of 2020 with recommendations about how the law can be improved. It is then a decision for the Government and Parliament.

Submissions or comments may be made by:  

1. Completing any of the following surveys via the YourSAy site: 

2. Sending us an email or written submission to salri_poa@adelaide.edu.au;

3. Arranging to speak to us by sending a request to salri_poa@adelaide.edu.au

The closing date for comments is 5pm on Friday 4 September 2020.

Tagged in News, South Australian Law Reform Institute, Research, Impact

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